Essay on GATT

In the post-war era, under the disguise of GATT, both economics and politics are at war in determining the future of global economy. The GATT, in theory, only makes a tall claim of treating all contracting parties as equal.

In practice, however, the poor and small countries are ignored and never allowed to succeed in asserting themselves. The last Uruguay Round was essentially a game played by the rich countries in sustaining the interests of their multinational firms. This was clearly witnessed in the process and final results of the Uruguay Round.

The truth of the matter is that, the big bosses of the world economy have adopted double standards in matters of theory and practice of \ free trade. They preach liberalisation and free trade to increase their access to foreign markets in LDCs. But, at home, they introduce a high degree of protectionism and government intervention with regard to their new products, industries and technologies.

In the years to follow, in the NIEO envisaged by the URT, governments of the Third World Nations will have a restricted scope to act positively on the economic arena to improve the welfare of their people. They would be obliged to protect the interests of the mutinational firms and the TNCs more than required and also against their own citizens. The governments will have the prime duty to just maintain the internal law and order and keep labour under control for the sake of industrial harmony in the foreign firms operating in India and employing local workers. Virtually, they will act as colonial agents for the new economic rulers of the North rich.

On the issue of agriculture, the Dunkel Draft favours both the farmers as well as the scientists. The farmers will get a favourable price for their produce when they have free access to foreign markets. It, however, depends on their capacity to capture the export markets.

This is very doubtful in the case of India’s poor and marginal farmers. Only the rich and united farmers will enjoy the benefit of the Uruguay Treaty. Now, the agro-scientists also can earn royalties for developing hybrid seeds. On the other hand, the consumers of the world at large will be the losers when the prices of agricultural products will rise as a consequence of the implementation of Dunkel proposals.

The governments of poor nations will also lose on account of the increase in their expenditure necessitated by the increased food subsidy to help the poor people. Similarly, the local manufacturer of seeds based on pirated technology will be wiped out from the business in due course of time. In a way it may prove to be a costly affair for the less-developed countries in terms of rising unemployment, falling income and larger import bills for the imported seeds or royalty payments for using hybrid seeds developed by the foreigners.

In the Dunkel Draft, the term “intellectual property rights” is used in an all-embracing manner to include all kinds of industrial property rights by giving ‘trade secrets’ statutory honour. As a result, a firm can keep its “information” secret, but others using the information in their productive activities would be presumed to have pirated that if a local agent of a patent holder feels that his patent rights are being violated, he can simply sue the accused and the responsibility lies on the latter to disprove the allegation.

The DD, thus, requires amendments in the patent laws. Developing countries including India, should have refused to amend their patent laws to suit the complainant only. Moreover, ideas and mental contents should not be patentable. In all fairness, therefore, the developing countries should have insisted on the abolition of software patents.

One important lesson that should be learnt from the process of negotiations witnessed in the Uruguay Round is that ironically the South which had to seek equity and justice has miserably failed in bargaining due to the absence of leadership, unorganised behaviour and lack of unity and collective bargaining against the North rich who were increasingly united and coordinated in their bargaining approaeh.

As a result, the developing countries including India are likely to be worse off than before in the emerging NIEO to be shaped by the implementation of the new Treaty. Astonishingly, not only the opposition but even the non-governmental forces in India have missed the opportunity to persuade the government to take the necessary steps to safeguard the interests of the nation at large. No concrete efforts have been made by the developing countries to join hands to press their views strongly and unambiguously in the open meeting of the Uruguay Round to avoid decisions detrimental to their interests.

Leadership in the Third World countries is clearly lacking. India could have taken the lead by focussing on the crucial issues. Unfortunately, the ruling government took the Uruguay Round very lightly.

All these days its focus has been on retaining its power by solving the internal problems on a top priority basis and that too with a marginal success. Compared to what is gained, much is lost in signing the Uruguay Treaty due to the inaction and lack of solidarity of the Third World countries in safeguarding their own interests, future and destiny in the NIEO which is to emerge.

In the sum total, the overall implications of the Uruguay Round Treaty are likely to be more severe and adverse than probably what is perceived by the government economists, to the political and economic independence and autonomy in the development aspirations of the developing countries such as India; though, it cannot be denied that some of the outcomes of the Treaty in individual parts appear to be attractive and beneficial.

The developing countries, including India, will now find that the price of development is becoming high on account of the barriers to the access to technology. The ground rules and terms and conditions are likely to make the external environment more restrictive and hostile rather than friendly and supportive to the cause of economic progress of the LDCs. Tempted by the short-term gains and not paying serious attention to the process of negotiations in the Uruguay Round, the Government of India has landed the country in a terrible mess and mortgaged the future of the next generation in the 21st century.

Ostensibly, certain conditions of the new treaty need to be rectified by all developing countries. The remedy still lies in the sovereign powers for their respective parliaments. In our country, the Parliament should be firm in denying any unjust amendment or abrogation of the Indian Patent Act. Further, a joint parliamentary committee (JPC) should be formed to suggest necessary ramifications and rectification in the terms of agreement before the new GATT runs into practice.