Here you will study all these in detail:-
- History And Development
- Objectives of The World Trade Organization
- Working of WTO
- Negotiations on Agriculture
- WTO and India
- Indian Agriculture and WTO
No country in the world is self-sufficient today. All countries have to have trade relations with other countries in some form or the other. Therefore, GATT was established to facilitate and organize international trade. Along with globalization, the size of international trade increased. Therefore, on December 15, 1993, 117 countries of the world accepted the GATT Agreement and approved the largest multilateral trade agreement in the history of international trade. As a result and in January 1995, in place of “GATT“, “WTO” (W.T.O.) was established. With its establishment, the difficulties of international trade will be removed and its area will be wide. Its scope of work includes Intellectual Property Rights (TRIPS), Foreign Capital Investment Measures (TRIMS), General Agreement on Trade in Service, Market Access, Textile Industry and Agriculture and Institutional Affairs. has been done . The WTO also has the statutory right to oblige member countries to make changes in their internal national rules and domestic policies. By this, it can compel the member countries to amend the internal rules of the country hindering world trade.
India is an agricultural country. India is one of the founding members of the World Trade Organization. After becoming a member of the WTO, it has become mandatory for India to follow its provisions. With the matters related to agriculture coming under the jurisdiction of WTO, its provisions will be applicable to Indian agriculture. Which will affect the Indian agricultural system. From this point of view it is necessary to study the effects of WTO on Indian agriculture.
In 1947, at the Geneva Convention, the participating member countries decided to establish an institution which was named “GATT”, “General Agreement on Tariff Rates and Trade”. This organization was functioning since 1948. Initially the number of its members was 23 which later increased to 102. No country could become its new member until two-thirds of the current members gave their consent to it. All members were expected to abide by the Code of Conduct given in the agreement.
The need was felt to establish a more powerful and empowered institution in place of “GATT” to remove the barriers to international trade, widen its scope and expand trade. In this context, the eighth session of GATT, “Uruguay Round” and after that after 6-7 years of deliberations, it was decided to establish “World Trade Organization” (WTO) in place of GATT. In April 1994, the final draft of the Uruguay Round (UR) was signed by the GATT member states, paving the way for the establishment of the WTO. From January 1, 1995, the World Trade Organization duly started its work. The headquarters of the World Trade Organization is located in the city of Geneva, Switzerland. By ratifying the WTO agreement on December 30, 1994, India became its founding member. According to estimates by the World Bank (WB), OECD and the GATT Secretariat, the establishment of the WTO will result in an increase in trade in commodities by $745 billion by 2005. The GATT Secretariat has estimated that the maximum growth (60%) will be in the textile trade. Apart from this, there will be an increase of 20% in agriculture, forestry and fishery products and 19% in the trade of processed food and beverages.
Functions of the WTO The main functions of the WTO are as follows:-
- To provide an appropriate forum to the member countries for discussion on issues related to tariffs and trade.
- Optimum use of world resources.
- To implement the rules and provisions related to the review and procedure of business policy.
- To cooperate with the International Monetary Fund, the World Bank and other international institutions to bring about greater harmony in the formulation of economic policies at the world level.
- To provide necessary facilities for the implementation, administration and operation of the World Trade Agreement and other multilateral agreements.
- To implement rules and procedures for the settlement of disputes between the member countries of WTO.
The following are the objectives of the establishment of the World Trade Organization:-
- To implement the new system of world trade.
- To improve the standard of living of the people in the member countries through a steady increase in real income and effective demand.
- Eliminating tariff and trade barriers and discriminatory practices in foreign trade relations.
- To increase the production and trade of goods and services.
- To increase the level of employment in the world by increasing the level of production and productivity.
- To increase world trade in such a way that each member country is benefited.
- To expand and consume the maximum amount of world resources.
- Developing a multilateral trading system.
- To promote competition among trading partners so as to benefit the consumers.
- To be associated with sustainable development of business and environmental policies.
WTO Law: The Uruguay Round of multilateral consultations resulted in the Treaty of WTO. The brief details of the agreements included in this treaty are as follows:-
(1) Multilateral agreements on trade in goods – These include the following:-
(a) GATT 1994 (GATT 1994) The provisions of balance of payments have been made in the GATT 1994 agreement. This treaty sets out the settlement criteria and procedures of Custom Unions and Free Trade Zones (FTZs).
(b) Agriculture Agreement The talks about agriculture under WTO have been the most discussed and controversial. In the WTO’s final act, rules have been made regarding agriculture for the following three areas
(i) Domestic support:- To help in agricultural production, almost every country arranges domestic support. According to the provisions of the WTO, all member countries will have to reduce the domestic support price. It has been termed as a holistic measure for support. If it exceeds 5% of the total value of production. (for developing countries this limit is 10%) then it will have to be reduced. Apart from this, non-customs duties will also have to be replaced by import-export taxes.
(ii) Market Access:- Rules have been made by the World Trade Organization for market access trade policy review mechanism. These rules are administered by the WTO. Market access is improved by reducing trade barriers and eliminating discrimination.
(iii) Export Competition :– One of the objectives of the World Trade Organization is to increase export competition. It encourages this through rules and procedures administered by the WTO.collagestudy.com
(B) Agreement on Textiles and Textiles :- This agreement has been made to integrate the textile and clothing sector into GATT – 1994. Those constraints of the Multi – Fiction Agreement ( MFA ) which were adopted on December 31 , 1994 , have been incorporated into the new GATT Agreement . According to the new agreement, a provision has been made to abolish MFA in various phases by the year 2003 and bring it under the ambit of GATT. –
(C) Agreement on Technical Barriers to Trade:- This treaty of the WTO ensures that technical barriers do not interfere with international trade.
(D) Treaty of Trade-Related Appropriation Measures- According to the provisions of TRAIMS of WTO, each member country should abolish all restrictions on foreign investment. Every country should provide all the facilities to the foreign investors which it is giving to the domestic investors.
(2) General Agreement on Trade in Services (GATS) :-
This is the second important agreement under WTO. Under this agreement has been made to end the restrictions on foreign trade of services. GATS covers only those services which require high quality technology. For example, banking, insurance, shipping, transportation, telecommunication etc. GATS provides that all restrictions on trade in services should be removed and foreign companies should have complete freedom to provide these services. The General Agreement on Trade in Services (GATS) covers all services, including financial services.
GATS is based on two elements: –
- The rules and regulations that apply to WTO members, and
- Specific commitment schedules.
(3) Intellectual property rights related to trade (TRIPS Agreement) :- 7 types of property copyrights and related rights, trademarks, patents, geographical indications, industrial designs, organized circuits and trade secrets under the TRIPS Treaty has been included. This treaty has been made with the aim of preventing the misuse of intellectual property rights. This will encourage discussions between the governments of the member countries. Patents and standards have been arranged under the TRIPS Treaty.
(4) Dispute settlement system :- Rules and procedures have been provided in the agreement to settle disputes arising between the members of WTO. A Dispute Settlement Body has been established under the WTO. Efforts have been made to protect the interests of developing countries in the dispute settlement system. Arrangements have been made for automatic access to the office of the Director General of the World Trade Organization so that the disputes can be resolved satisfactorily in a short time.
(5) Trade Policy Review Mechanism :- In the WTO agreement, necessary mechanisms have been arranged for the review of the trade policy of the member countries. Under this, the member countries are supported to implement the policy of liberalization and globalization.
The highest policy regulatory body of the WTO is the Ministerial Conference, which meets bi-annually. The signing of the WTO in Marrakesh was followed by the first and second conferences in Geneva and Singapore. The Third Ministerial Conference of the World Trade Organization was held in the city of Seattle, USA in 1999.
The Fourth Ministerial Conference of the WTO was held in 2001 in Doha, the capital of the Arab country Qatar, from 9 to 14 November. Every decision in the ministerial conference is taken by consensus. Developed countries do the work of forming a consensus. Euro-American countries were successful in building consensus in the first two conferences after the Uruguay Round. But in the third conference, the developing countries organized and raised their voice. The US and the European Union refused to listen to the voice. As a result, the Seattle Conference was unsuccessful.
Doha Ministerial Conference:– The Fourth Ministerial Conference of the WTO was held on 9-14 November 2001 in Doha, the capital of Qatar. In which the outline of the future program of the WTO was decided. Due to the failure of the Third Ministerial Conference (1999) held in Seattle, some developed countries made special efforts to approve the expanded agenda of the WTO. Adequate importance was given to this conference and wide publicity was given to it. But all the major developing countries, including India, strongly opposed the efforts of some developed countries to start negotiations for a new agreement in the name of development issue. India had launched a special campaign to thwart this attempt of the developed countries. Commerce Minister Murasoli Maran succeeded in getting the G-77 countries and China on his side. India mobilized all the major developing countries and placed a demand before the WTO that the opinion of all countries should be taken in the selection of agendas and not of certain countries.
On June 25, 2001, at the General Assembly of the WTO in Geneva, India’s Commerce Secretary Praveer Sen Gupta had also said that the Doha Conference would not help with the agenda or the glut of issues. He said that the Doha Conference should only review the observance of the old agreement and give its opinion on the current policies and negotiations of the WTO. He also said that while reviewing agreements like TRIPS, it should also be kept in mind that every country should have the freedom to adopt and implement public health programs. India was of the opinion that the agreements agreed upon in the Uruguay Round of negotiations should be implemented and reviewed.
Fifth Ministerial Conference of the WTO:- The Fifth Ministerial Conference of the WTO was held from September 10 to September 14, 2003 in Cancun, Mexico. In this conference,
- (1) agriculture and agricultural product trade,
- (2) service rules, and
- (3) the safety of small scale industries were the main topics of debate.
The Cancun Conference was divided into two camps, first the alliance of developed countries, which included the countries of America and the European Union. The second group was of developing countries, which emerged as an informal organization of G21 developing countries. The major countries leading the G-21 were India, Brazil, China, Argentina and South Africa.
Expectations from the Cancun Conference:- The requests of the developed countries in this conference were related to new rules of capital investment, guidelines for government procurement and ensuring the facilities of trade. In the Cancun conference, the developed countries were expected to take concrete decisions regarding limiting the migration of workers and removing trade barriers to imports. Conversely, the Developing Countries Group demanded that developed countries make time-bound reductions in agricultural subsidies because the US and the European Union alone provide subsidies of $311 billion annually on agricultural products. Developing countries argue that if this subsidy continues, agricultural products of the US and EU will dominate the world market and developing countries will not be able to compete. Apart from this, developing countries are in favor of free movement of workers and security for the unorganized sector.
The G-21, an informal organization of developing countries, gained tremendous strength at the Cancun conference, when the exporting countries of agricultural products supported developing countries on the issue of agricultural subsidies, ignoring differences in access to the market. Australia’s trade minister Mark Valle, head of the Group of Exporting Countries of Agriculture, has warned that if the concerns of developing countries are not addressed at the Cancun summit, issues of disinvestment and competition will not be allowed to be discussed. The main concerns of developing countries were about export and domestic subsidies and market access on agricultural products.
The failure of the Cancun conference :- The Cancun conference of ministers from the member states of WETO failed. Earlier also the organization’s convention in Seattle had failed. The main reason for the failure of the Cancun conference was the lack of agreement between developed and developing countries on the issue of reducing subsidies in the agricultural sector. Agriculture is very important for developing countries because a large part of the population is dependent on it. In the beginning of the conference, even though the suggestions of developing countries were accepted for consideration, but later the draft of the declaration was in favor of developed countries. Countries like India and China in Asia, Brazil and Argentina in South America and South Africa in the continent of Africa were not ready to give up their right to formulate their agricultural policy. The solidarity of the third world countries remained till the end and the pressure efforts of the developed countries, especially the US and the European Union, did not succeed.
Sixth Ministerial Conference- The adoption of the Framework Agreement in relation to the Doha Round of trade-related negotiations in August 2004 by the WTO member countries again gained momentum. The agreement outlined the components and principles that would pave the way for further negotiations. The framework was an internal phase and it was decided to conduct further negotiations before the WTO’s Sixth Ministerial Conference (Hong Kong), including the preparation of detailed modalities and specific commitments of each member regarding non-agricultural market access.
The negotiations on agriculture, which are underway in special sessions of the WTO Committee on Agriculture, focus on achieving gradual and significant reforms across the global agricultural sector. The post-Cancun discussions have strengthened the G-20 alliance and also emphasized their access to other countries, especially the G-33 Alliance of Developing Countries on Special Products, the Africa Group and the Cancun Group of Agricultural Export Countries. has given .
The Framework also expressly agrees to do away with export subsidies by a specified deadline. There is a provision for immediate repayment of 20% on the overall trade-distorting domestic support in the first year of implementation. In addition, the blending of reductions, discipline and monitoring requirements across various components of the domestic support pillar and tariff deficiencies based on the proportionately lower commitments made by developing countries than developed countries are examined. Formula is included.
The framework recognizes the importance of agriculture to the economic development of developing countries in the city and the need to enable them to adopt agricultural policies that address their development goals, poverty alleviation strategies, food security and livelihood concerns. including measures taken through a new special safeguard mechanism against a potential increase in imports, such as special products.
Non-Agriculture Market Access (NAMA) :- This framework identifies initial components for future work on modalities for negotiations under non-agriculture market access. These negotiations naturally focus on achieving the objective of reducing or eliminating tariffs, including higher tariffs, higher tariffs and tariff increases, and non-tariff barriers.
Sectoral Initiatives :- On the proposal for regional initiatives, India, like most other developing countries, emphasized that the main modality for the dialogue should be the formulaic approach. Once a clear formula has been decided, the regional aspect should be considered. India’s view has been that regional aspects, if any, on the designated areas of interest to the developing nations with a notion of ‘less than full reciprocity’ in the reduction commitments being made for such initiatives. Should be focused.
The Services Component :- Framework The key features of the service component of the agreement include:-
- Increasing competition among members for high-quality proposals in supply methods to the areas of interest to developing countries, so as to produce adequate production and access for all members. To ensure market access.
- To pay special attention to the ways of supplying the regions and export interest of developing countries.
- To find out the interests of developing countries, certain developed countries in the law (movement of natural persons).
- Stipulation of a time limit for submission of revised proposals by May 2005 and identification of interests in increasing discussions.
India has been an active member of the World Trade Organization and GATT since its inception. India has not only participated in the tariff and trade consultations organized under the WTO agreement, but has also clearly presented the problems and perspectives of the developing countries in the meetings of various committees.
During the period from the Uruguay Round to the establishment of the World Trade Organization, various political parties and many thinkers expressed apprehension that the establishment of WTO would harm the economic interests of the agrarian countries, especially India. So India should boycott WTO. In the opinion of the critics of the WTO, exports of many goods manufactured in agrarian countries will be adversely affected. Because developed countries will put many restrictions on these items under the guise of environmental protection. The service sector of developing countries is very backward as compared to the service sector of developed countries and the interests of developing countries will be ignored as a result of competition. The interests of developing countries will be ignored even in the name of intellectual property rights. The economic aid (subsidies) that the developing countries are giving to boost their agricultural exports will have to be cut or eliminated. This will reduce their exports. Agricultural inputs will become expensive in agricultural and developing countries. The above criticisms of WTO cannot be said to be completely meaningless, member countries will only benefit from it. Can There is a considerable degree of truth in these criticisms, however, in the long run, its member countries will only benefit from it.
WTO has urged India to improve the tax structure and duty policy by reducing subsidies and reduce the fiscal deficit by speeding up the privatization process. The WTO, in its review of the Indian economy, said that the economic reform program started in India in 1991 is a sign of progress. Due to this, India was successful in making rapid economic growth. The slowdown in the Indian economy in the years 2001 and 2002 was a part of the overall global recession. It also signifies the need to continue improving. According to the WTO, reducing the fiscal deficit will improve the investment climate and mobilize resources for investment in the infrastructure sector. In this context, the power sector context is important, which is very important for economic growth and requires investment. According to WTO, despite some liberalization in foreign direct investment (FDI) rules, India has not been able to attract more investment. But the steps taken for protection of intellectual property rights will help in attracting investment. While import license and duty barriers are generally being eased in India, there are increasing cases of resorting to anti-dumping measures. From 1995 to 2001, 250 anti-dumping cases have been initiated.
According to the World Trade Organization, due to price control of fertilizers, petroleum products and some agricultural products, the burden on the economy increases. India responded by complaining that its exports were being banned by developed countries on grounds including scientifically unreasonable health standards. India’s textile export The country’s total export of the country is taking the mold in implementing the agreement. 30 percent and it is facing sanctions in developed countries. Developed countries are taking steps to implement the agreement.
WTO will have the following impact on Indian agriculture:-
- Seeds produced in India shall be patented. On being patented, those seeds can also be exported, but the farmer will not be able to sell the crop (seed) produced from imported or patented seeds as seed in the market. Due to this poor farmers will get the seeds expensive and their economic interests will be adversely affected.
- According to the World Trade Organization agreement, the subsidy given by the Government of India for the production and export of agricultural products will have to be cut. Due to this, agricultural inputs will be expensive in the country and the export of agricultural commodities will be adversely affected.
- Under the guise of environmental protection, the import of many agricultural products manufactured in India by developed countries will be reduced.
- According to the Federation of Indian Chambers of Commerce and Industry (FICCI), many types of non-trade barriers will be created by the developed countries on the basis of child labour, human rights, environment and other social issues. The above criticisms clearly point towards the present truths. International pressure on Indian agriculture and industries is clearly visible. India’s export of textile goods, tea-coffee and other items are being hindered in some way or the other by the developed countries. In developing countries, efforts are being made to prevent low cost goods made at low wages cost from reaching foreign markets in the name of environmental protection. Non-trade barriers created by developed countries are being opposed by other developing countries including India. Governments and companies of developing countries are taking the ISO-14000 certificate for environmental standards seriously.
- If environmental regulations are included in the GATT, it will adversely affect India’s export-oriented sectors like food processing and horticulture. For example, US health regulations require the level of pesticide residues in food to be zero, but Indian products do not meet this condition.
The WTO periodically reviews the trade policies of its member countries under the Trade Policy Review Mechanism. There is a provision to review India’s trade policy after every four years. Therefore, the third review of India’s trade policy, behavior and measures was done by the WTO on 19 and 21 June 2002. In this review, the WTO has expressed concern about subsidies on agricultural products and inputs. In this review of WTO, it has been said that due to agricultural subsidies, a huge stock of food grains has accumulated in India. The WTO in its review has also objected to the restrictions imposed by India on the export of agricultural commodities. In this review, emphasis has been laid on bringing more liberalization in the agriculture sector.
According to the Doha Mandate, by March 31, 2003, the outline of Negotiation in agriculture had to be done. Based on this framework, it prepares a schedule of commitments by September 2003. India has presented its detailed proposals in this regard. In these proposals, keeping in view the food and livelihood security of the large poor farming community, there has been a demand to cut the high tariffs and subsidies prevalent in the developed countries with a view to increase the export opportunities of Indian agricultural products to the maximum extent.
It is clear that there are wide differences of opinion regarding various issues related to agriculture (tariff cuts, market penetration and export subsidies) regarding various member countries and groups of WTO. An acceptable settlement can be reached. It is hoped that the WTO will take into account the reasonable demands of all parties. keeping any service in the agriculture sector
Establishment of Agricultural and Non-Agriculture Market Access Modalities :- In Hong Kong in December 2005, WTO Minister to establish Agricultural and Non-Agricultural Market Access (NAMA) Modalities by April 30, 2006, July 31, 2006 agreed to submit draft schedules by the end of 2006 and to conclude negotiations in all areas of the Doha Round by the end of 2006. Regarding the service, all the members had to submit their revised proposals, 31 July, draft schedules. It was to be submitted by 2006 and October 31, 2006 but till this deadline the work could not be completed despite intense negotiations. Intensive discussions between January and July 2006 focused mainly on the tripartite issues of domestic assistance, agricultural access and NAMA. At an informal meeting of the Trade Negotiating Committee held on 24 July 2006, the Director-General of the WTO Minister, who is also its chairman, informed that it had become clear that the differences were substantial and recommended that the reason for the postponement of the Doha Round was serious differences among the partners. . Members agreed to suspend negotiations in all areas of the Doha Work Program, particularly because of the disruption in agriculture, and with the Doha Round of negotiations unlikely to conclude by the end of 2006, and to resume negotiations when the negotiating environment is favorable. But agreed.
In India’s context, the adjournment was disappointing. India has welcomed the resumption of negotiations on 16 November 2006, as well as a complete resumption of negotiations on 7 February 2007 on principles that could maintain the nature of the negotiations. The results of the progress made so far have been balanced, ambitious and development friendly.
India’s view on agriculture issues in WTO :- Background India’s total exports of agriculture and allied products including plantations were US$ 10.5 billion since 2005-06. This was 10.2% of the country’s export share. The share of India’s agricultural exports to the markets of developed countries has been around 35%. However, its contribution to the national economy is significant in terms of sustaining the livelihood of a large segment of the population, which includes productive and landless agricultural workers (who are considered low-income and resource-deficient). This section of the population lacks efficiency and is not covered under any security cover, while these factors are essential to ensure a minimum condition for the movement of labor from one place to another.
Like India, most of the developing countries are also in a similar situation which is in stark contrast to the reality of agriculture sector of developed countries. Apart from the diverse number of agricultural crops, many other products including livestock products are produced in hilly / hilly or other disadvantaged areas or by tribal communities and women. Therefore, India and other developing countries have been consistently emphasizing that special and differential treatment for developing countries should be an integral part of the relationship on all sides, including the outcome determined by negotiations on agriculture under the Doha Round in the WTO. Low income, resource constraints, impact on farmers’ livelihoods due to price drop, price rise and competition, and other market deficiencies, including subsidies that distort trade being provided by some developed countries to their agricultural sector It is also important to reduce the risks of Therefore, India along with other developing countries (particularly participating partners in G-20 and G-33) has been insisting that the Doha agricultural outcome should include the following in its important work.
- Eliminate distortion subsidies by developed countries and introduce uniform rates.
- Suitable provisions should be made to meet the needs of food and/or livelihood security and rural development in developing countries.
It is good for India and other developing countries that it was agreed in Hong Kong that special products and special safeguards would be an integral part of the modalities and outcomes of negotiations in agriculture. In addition, developing countries will have the right to self-designate an appropriate number of specific products, guided by indicators based on the three basic categories of food security, livelihood security and/or rural development needs. These designated products will help in a relatively flexible process. Developing member countries of the WTO will have the right to adopt special safeguard mechanisms based on import volume and value with concrete arrangements that will be defined later.
W.T.O Indian perspective on agriculture:-
- The overall tariff reductions at rates bound for developing countries should not exceed 36%.
- The four-band tariff formula with linear reductions will have very high thresholds, taking into account the highest constraints of developing countries.
- The self-designated G-33 has proposed 20 per cent agricultural tariff limits as specific products in a suitable number of specific products (SPs) determined by indicators based on three basic and agreed parameters of food security, livelihood security and rural development needs. out of which 40 percent will be exempted from any tariff deduction. India cannot accept TRQ commitments on specific products as this would be necessary to substantially reduce the existing applicable rates on most sensitive products, such as specific products.
- An operational and effective specific safeguard mechanism to prevent global price slides and import flows, which is more flexible than the existing safeguards available mainly to developed countries. G-33 and India are firm on the subject that the premature exclusion of any product, in particular the exclusion of specific products from the purview of SSM, cannot be considered just or acceptable.
- Overall business representation domestic assistance by the United States (70-75% reduction) and the European Union (75-80% reduction), including settling the issue of product specific limits on aggregate measurement support, and concrete and effective deductions.