The Uruguay Round’s Final Act will boost the level of world trade by 10%

According to IMF estimates, the Uruguay Round’s Final Act will boost the level of world trade by 10% and raise world income by $ 250 billion a year. Out of this, the incomes of developing countries will increase by over $ 70 billion a year. The benefits of developing countries as well as India are as given below:

1. Developing Countries:

(a) The efficiency in the use of domestic resources will increase as tariffs and non-tariffs barriers are reduced,

(b) Economies of scale are realised,

(c) Technology transfers resulting from increased openness and global cooperation are increased.

(d) These benefits will also help to improve the performance of the low-growth countries, depending upon the success of domestic adjustments to make these economics more responsive to the potential new trading opportunities that will open up.

(e) The reduction or elimination of protection and price support schemes in industrial countries is likely to stimulate food production in the developing countries, many of which have a comparative advantage in agricultural production.

2. General Benefits to India:

(a) India can increase its exports by $ 1.5-2.0 billion per annum due to a general expansion of world trade following lowering of tariffs.

(b) India will benefit from a multilateral trading system,

(c) India will be protected by a multilateral dispute settlement system.

3. Textiles:

Agreement on textiles will strengthen the areas of comparative advantage for India.

4. TRIPs:

(a) Product patents would not affect majority of drugs,

(b) Flow of foreign direct investment and technology will increase,

(c) Farmer’s right to produce and exchange seeds will not be affected; only commercial sale of branded seeds will be affected.

(d) Indian laboratories engaged in path breaking research in plant varieties and seeds for tropical regions would benefit.

5. Agriculture:

(a) Reduction in export subsidies on agriculture by developed countries will make Indian agricultural exports more competitive in world markets,

(b) Clubbing of product and non-product agricultural subsidies will allow much greater flexibility to provide subsidies for agricultural production,

(c) Consumer subsidies under public distribution system for the rural and urban poor are legitimate and are permitted.

6. Services:

Access of service personnel into the member countries will be possible on a non-discriminatory basis. India can now open services sector on MFN basis as opposed to bilateral agreements.