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India & WTO: The History of Disputes andthe Commitments of Future
World Trade Organisation (WTO) was established to replace the General Agreement on Tariffs and Trade (GATT) on January 1 1995 for the purpose of supervision and liberalization of International trade. The two major functions of WTO are to oversee the implementation, administration & operations of the trade & tariff agreements among the member nations and to provide a platform for negotiations and settling disputes among member nations. The ulterior objective of the whole system and functioning of the WTO is to let the trade flow among nations without any direct and indirect obstacles. However, this does not mean absence of trade rules; rather it seeks more transparency and certainty in the global trade for faster economic growth and overall prosperity.
The supreme decision making body of the World Trade Organization is the Ministerial Conference which meets at the interval of two years. In this conference all the member countries come together to help WTO take steps for multilateral trade agreements. Headquartered in Geneva, Switzerland it has 159 member states - with 2/3rd members being developing countries - and 640 people as staff members. The official languages of this global organization are English, French & Spanish. The first ministerial conference of WTO took place in Singapore in the year 1996. Since then nine conferences have taken place in various nations of the world.
Source: The Economist
India has been an enthusiastic participant of WTO negotiations. In the year 2001, India, Brazil and South Africa took initiatives which led to the adoption of a Declaration on TRIPS (Trade-related Intellectual Property Rights) and public health by the WTO ministerial conference. With General Agreement on Trade in Services (GATS) still in progress, Mode 1 (cross-border supply of service) and Mode 4 (provision of services requiring the temporary movement of natural persons) are advantageous for India; though the European Union and the US are pushing India for greater commercial presence rights (Mode 3).
In the fifth ministerial conference which was held at Cancún, Mexico, the G20 nations – a group of developing countries led by India, China, and Brazil – took a stand against the group of Developed nations. This was done regarding agreements on the issues which had caused bitterness between the developed and developed countries in Doha rounds of talks. The developing countries called for an end to agricultural subsidies in the European Union and the United States which was sorted out after the former gave concession to the goods imported from the least developed Countries.
The Ninth Ministerial conference of the WTO held at Bali, Indonesia intended to take a pledge against red tape at custom posts across the globe where India withdrew its support resulting in the collapse of talks. However, on November 13, 2014, India and the United States signed a deal on Trade Facilitation Agreement (TFA) on the sidelines of East Asia Summit sealed the deal for streamlining the global custom rules. TFA relates to the streamlining of custom rules by the WTO member countries so as to improve the international movement of goods and bring down the costs. During the Bali Conference, India refused to compromise on food security issue linking it with TFA and demanded that interim pact food subsidies should continue beyond 2017 if a permanent solution is not reached by then.
In November 2014, WTO helped settling a dispute between India and US. The dispute began with India blaming several US laws and regulations governing countervailing duty measures on the products imported from India like hot-rolled carbon steel flat products. The WTO Panel’s findings resulted in rejection of most of the challenges made by India. But panel found breach in WTO rules while assessing measures allowing for cross-accumulation of dumped and subsidized imports in the US.
Developing nations have always enjoyed ‘special attention’ at WTO. However, off late there has been a growing concern among the third world nations over its being biased towards the developed countries. Nonetheless, WTO’s significance cannot be denied in the contemporary global economic scenario as conflicting interests are bound to take place in multilateral and bilateral trade relations.
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