• The market access commitments sought to be imposed by the European Union (EU) and the United States (US) on developing countries completely disregard the interests and concerns of developing countries with regard to their agriculture. The response proposes Uruguay Round approach to tariff reduction by developing countries and steeper reduction by the developed countries using, among others, the Swiss formula.
• The proposed reform of agriculture in the EU-US proposals to eliminate subsidies (both domestic support and export subsidies) and distortions completely fails to meet the requirements and objectives of the Doha Ministerial mandate on agriculture. Therefore, it proposes time-bound elimination of all export subsidies by developed countries; substantial reduction in all forms of trade distorting domestic support, including elimination of Blue Box measures (i.e. subsidies meant to limit production in developed countries); and capping of specific Green Box measures such as payments decoupled from prices and production.
• It emphasizes the need to build in specific elements of the Special & Differential (S&D) Treatment requirements of developing countries such as maintaining and enhancing support programmes for low income and resource poor farmers; to maintain marketing and transport subsidies on exports by developing countries; and to incorporate the market access instruments of Special Products for rural development and food security and new special safeguard mechanism for developing countries to safeguard against price variations/ volatility and import surges.

It may be mentioned that the EU-US joint paper on agriculture which was presented to the WTO on 13th August, 2003 had the following major elements:

• A combination of Uruguay Round tariff reductions, Swiss formula based tariff reductions and zero duty in respect of the remaining tariff lines for all countries. (The Uruguay Round reductions involve lesser reduction commitments while the Swiss formula leads to steeper reductions in tariffs).
• Special safeguard mechanism enjoyed by the developed countries would continue while developing countries would have a special safeguard mechanism on import sensitive items only.
• All countries are required to offer additional market access through tariff rate quotas.
• Export subsidies would not be eliminated except for few products and export credits which are primarily given by developed countries will have corresponding lower disciplines.
• Most trade distorting Domestic support is sought to be only minimally reduced while Blue Box payments are sought to be retained.
• Non-trade concerns, such as animal welfare payments, and the peace clause (which prevents other members from raising disputes against subsidies which are provided not in conformity with the rules) would be left open for further negotiations.

The text of the joint proposal submitted by India and other developing countries to the WTO in Geneva on 20/8/2003 is attached. The text of the joint EU-US paper of 13th August, 2003 on Agriculture is also attached.

1. The basic issue in agriculture negotiations is the extent to which the reform process in agriculture, initiated in the Uruguay Round through agreed reduction commitments in both support and protection will be continued and incorporated in the negotiated outcome of the Doha Work Programme.
2. Another equally important issue, not necessarily in conflict with the one above, is securing flexibility in domestic agriculture policies aimed at enhancing food and livelihood security and for rural development of developing countries.
3. Additionally, the EC, other continental Europe and Japan, are likely to condition their ability to undertake additional commitments in agriculture on securing a negotiating mandate on environmental issues, in particular labeling requirements to address food safety, the precautionary principle, as well as satisfactory resolution of the Singapore issues, at the Cancun Ministerial.
4. The Chairman of the Committee on Agriculture (COA) presented an overview paper on 18 December 2002, incorporating the discussions held until the 18-22 November 2002 Special Session of the COA. Thereafter, the first draft on modalities for negotiations was presented by him on 17 February 2003, followed by an initial limited revision on certain elements on 18 March 2003. The deadline for establishment of modalities could not be met, and Members have agreed to continue work on technical aspects simultaneously with key unresolved issues with a view to reaching an agreement as soon as possible. However, establishment of the modalities by or at Cancun will in large part be determined by the flexibility accorded to the EC negotiators through the EC’s domestic CAP reform announced on 26 June 2003, and other Members assessment of its implications for the key outstanding issues. India’s Position
5. India’s position is underpinned by the recognition that developing countries can be expected to reciprocate in market access, subject to their economic and social conditions, development needs, food and livelihood security and rural development requirements, only if they get adequate concessions and commitments by developed countries in all three pillars.
6. Specifically, any reductions in tariffs by developing countries should be based on an approach that secures an overall average reduction in bound rates for them which is significantly lower than that by developed countries and preferably with no minimum reduction on each tariff line, irrespective of the approach for reduction in tariffs followed by developed countries. India, along with 74 other WTO Members, have agreed on an ECled initiative to suggest the Uruguay Round modalities for the further tariff commitments to be agreed now as well. We also seeks agreement on a sufficiently large number of Special Products (SP products), which will attract a lower rate of tariff reduction of 10% with a minimum per tariff line of 5%, and of SSM products, which will attract invocation of the proposed new Special Safeguard Mechanism (SSM)for developing countries. Moreover, these products should be selected on the basis of self-declaration and without the requirement to negotiate specific criteria for determining either SP products or SSM products.
7. On domestic support, India has proposed steep reduction in all forms of trade-distorting domestic support by developed countries, including in production-limiting Blue Box measures and direct payments to producers and decoupled income support currently classified under the Green Box. Flexibility to address food and livelihood security and improvements in agriculture sector for developing countries has also been proposed, along with immunity from challenge for support measures falling under this umbrella. In export subsidies, India has proposed steep, time-bound reductions in all forms of export subsidies, and establishment of multilateral disciplines for indirect export subsidies provided through credit, loans, guarantees, insurance, food aid and state-trading enterprises. For developing countries, retention of marketing and transportation subsidies on exports has been proposed, along with immunity from challenge for these support measures.

1. At this stage of the negotiations Members are aiming to reach an agreement on the modalities that would be used for the actual tariff negotiations. Several formulae have been proposed. These include the compression mechanism suggested by EC whereby tariffs of all WTO Members would range between 2 – 15%. The US proposed a tariff free world by 2015.
2. The Chairman of the NAMA negotiating group presented his own set of modalities on 16 May 2003. The gist of the proposal made by the Chairman is –

   (a)

   The core modality consists of a formula and a sectoral tariff elimination initiative. The formula is a Swiss type formula with two elements determining the reduction coefficient. The first element is “ta” which is the average tariff of each Member, the calculation of the average includes the bound tariffs for bound tariff lines and twice the applied tariff as in 2001 for unbound tariff lines. The second element is a factor ‘B’ which is the ambition factor – this has to be unique for all Members. A lower value of ‘B’ will mean greater reductions and a higher value lesser reduction requirement.

   (b)

   The Chairman has also proposed mandatory tariff elimination on seven sectors identified by as been of export interest to developing countries. Sectors proposed are: Electronics & Electrical goods; Fish & Fish products; Footwear; Leather goods; Motor Vehicle parts & components; Stones, Gems, & Precious Metals; and Textiles & Clothing. The proposal is that the tariff reductions will occur in three phases of equal durations with: developed participants and other participants who so decide eliminating tariffs at the end of the first phase; other participants are to achieve tariff reduction and elimination as follows: 1) tariff reduction to a proposed level of not more than 10 percent at the end of the first phase; 2) maintain this level during the second phase; and 3) achieve elimination of tariffs at the end of the third phase.

3. Following the discussions in the last meeting of the NGMA (9-11 July 2003) the Chairman will now put together all the options on each element indicated by different Members to help Members come closer. The next meeting of the NGMA is scheduled for 13-15 August 2003.

• The Guidelines and Procedures for the Negotiations (NGP) on trade in services which were finalised and adopted in March 2001, define the aims, scope and modalities of negotiations in the services sector. The aim of the negotiations is to achieve progressive liberalisation of trade in services while giving due respect to the national policy objectives and level of development of member countries. Negotiations cover all services sectors and all modes of supply, with special attention to be given to sectors and modes of supply of export interest to developing countries.
• Negotiations would also cover formulation of rules relating to Emergency Safeguards Measures, Government Procurement, Subsidies and Domestic Regulations.
• The main method of negotiation is the requestoffer approach, in which each country lays on the table its “requests” (i.e. demand lists from other trading partners) and in turn, also places its “offers” (i.e. the concessions it is willing to offer). This will be followed by negotiations between countries either bilaterally or between Groups of Countries. Any commitments agreed to during this process will be made applicable in respect of all other member-countries of the WTO at the end of negotiations.

1. India is actively participating in bilateral negotiations on requests and offers as well as in the multilateral process. The need for greater flexibility to be shown to developing and least developed countries is being emphasized. Adequate flexibility must also be given to these countries while scheduling their commitments, both in the choice of sectors and the extent of commitments. This is enshrined in Article XIX of GATS and the Guidelines and Procedures for negotiations. We are in the process of domestic consultation on the components of the Indian initial offer and hope to be able to table this at an early date.
2. The initial offers tabled so far, particularly by developed countries are disappointing in that there is little tangible response to the requests made by developing countries on Mode 4. Many countries have made no improvement on the existing commitments while others have inscribed such complicated limitations to modified access that in practical terms, the access gained is limited.
3. Mode 4 is India’s main area of interest and constructive dialogue between the developed and developing countries for removal of barriers to supply of services through this Mode are of paramount importance. As such, we are looking for sector-specific commitments and for support for the removal of barriers such as economic needs tests, procedural difficulties associated with visas and work-permits and non recognition of qualifications.
4. Establishing Mutual Recognition Agreements (MRAs) between countries is the most important ingredient in realising access obtained under Mode 4.

• A long term waiver from the obligations under Article 31(f) of the TRIPS Agreement until an amendment;
• To include pharmaceutical products for treatment of diseases as recognized in para 1 of Doha Declaration;
• LDCs are eligible as importing countries while each developing country has to establish whether it has insufficient manufacturing capacity to become eligible to import medicines under this mechanism;
• Some safeguards to prevent diversion

In a meeting held on 20th December, 2002, all the countries expressed that they are willing to accept this text as a compromise text. However, US refused to join the consensus on this issue. US gave a proposal to restrict the disease coverage to HIV/AIDS, TB, Malaria and other infectious diseases of comparable gravity. It also proposed a list of 15 infectious diseases afflicting Africa for which this decision shall apply. They do not take into account other diseases, which afflict many LDCs and Developing countries.

The US proposal to restrict the disease coverage was unacceptable to the developing countries and Africa group. They stated that this would reduce the scope of Doha Declaration and is unacceptable. As no consensus could be reached by the December 2002 deadline, it was decided that the TRIPS Council would continue discussions on this issue.

The question of limiting the number of diseases was also not acceptable to India. The entire question was gone into in detail before the Doha Ministerial Conference and at the Conference itself. It was after much debate that the definition indicated in paragraph 1 of the Doha Declaration was accepted. In fact, developing countries had begun the debate seeking clarification on the flexibility of TRIPS in respect of public health and nutrition. Finally, the definition was confined to public health problems, as given in paragraph 1. Public health problems does not mean disease alone; it covers various other possible situations, such as natural disasters and man-made disasters, such as the Chernobyl nuclear disaster and the Bhopal gas tragedy. Nor can we anticipate the kind of public health problems that may arise from time to time. HIV/AIDS itself is a relatively recent phenomenon. SARS indicates how quickly a totally unanticipated situation may arise, threatening vast regions of the globe.

Doha Mandate

The Doha mandate on these issues is that negotiations “will take place after the Fifth Ministerial” based on explicit consensus on modalities of negotiations. This mandate was not clear and at the concluding Plenary Session the Chairman of the Conference clarified that as per his understanding negotiations would not ‘proceed’ unless there was explicit consensus on modalities of negotiations. Any individual Member could block the negotiation from proceeding. This mandate is being differently interpreted by the proponents, on the one hand, and by some of the developing countries, including India, on the other. EC, for example, has taken the stand that negotiations have already been mandated at Doha and that only modalities have to be agreed upon at Cancun, based on explicit consensus..

The Doha Ministerial Conference directed that until the Fifth Ministerial the Working Group on Trade and Investment and that on Trade and Competition Policy should discuss issues identified in the Doha Ministerial Declaration for clarification. Such discussions have taken place in the respective Working Groups.

India’s Position:

1. All the Singapore issues require much more analysis and study before we could think in terms of rule making, particularly in WTO. The Doha mandate is to provide technical assistance and capacity building to developing countries and LDCs to enable them to understand the implications of closer multilateral co-operation on these issues. While the discussions and clarifications in the Working Groups have been useful, things are far from being conclusive.
2. We need to carefully examine whether there is at all any rationale of bringing these issues into WTO. Rule making on these issues would affect the flexibility available to developing countries. These are development issues and are particularly sensitive areas and need to be dealt with care.
3. Principles like non-discrimination may be alright for trade but such WTO principles cannot be indiscriminately applied to investment or competition policy when countries are at different levels of development. It will have perverse effects.
4. In the case of investment, for instance, a multilateral agreement can promise no additionality of investment inflows. Entry and establishment conventionally remained in the sovereign domain of host country policy regime. External dispute settlement would question the sovereign power of host countries to regulate entry and establishment of foreign investment. Safeguards designed for trade does not automatically work in respect of investment.
5. Competition Policy, as distinct from Competition Law, is comprehensive and encompasses, besides trade, other macro polices like investment, industrial and other policies. The Doha mandate is for competition policy as promoting trade. However, the proposals by the proponents inside and outside the WTO fora have tended to focus on competition policy per se, which is not the concern on WTO. The proposal by the proponents is to have voluntary cooperation in respect of competition policy issues. In a situation of nonbinding arrangement in this area it is the less developed Members, with lower economic clout, that would stand to lose.
6. There is also no convergence of views even on the definition of hard-core cartels. We do not find any justification for exclusion of export cartels, (as argued by countries like the US) which do the maximum harm for developing countries.
7. On trade facilitation the issue is whether we need rules on customs clearance procedures under WTO. Different WTO Members are at different stages of development, have different duty structures, different concerns like safeguarding revenue and managing adverse security situation. Trade facilitation tools like risk assessment procedures acquire an altogether different complexion in this context. They also have different levels of infrastructural capacities. At this stage, therefore, India is not convinced that a case for a binding agreement in the WTO exists.
8. While India does not object to transparency in government procurement as such, or any requirement to provide information about its system of public procurement or about individual procurement opportunities, we are concerned about the attempt at prescribing certain procedures as being more transparent than others to Members, and requiring commitments to be undertaken to implement such provisions. Prescriptive provisions not only curtail the flexibility available to a Member but also may impose additional cost.

Current position in negotiations – focus on modalities

As decided at Doha, negotiations can take place after the Fifth Session of the Ministerial Conference only after a decision on modalities of negotiations by explicit consensus. Therefore, before negotiations are launched on a multilateral framework on investment, there has to be an agreement on modalities. This agreement has to be by explicit consensus.
,BR> The EC submitted a paper on modalities on Singapore Issues (WT/GC/W/491 on 27 February 2003). In this paper, EC has suggested that modalities based on the following be discussed and agreed to:

• Procedural issues pertaining to the negotiating phase: number of meetings, timing, internal deadlines for tabling proposals, legal texts, etc.
• The scope and coverage of the negotiating agenda: including elements to be included and addressed in the negotiations. On investment, EC has suggested that the list of issues included in the Doha Declaration (paragraph 22) be reproduced. On structuring obligations, the EC has suggested that this could cover possible exclusions or exemptions to horizontal obligations, such as the MFN principle.
• Special and differential treatment: This could be through provisions on different levels of commitments, on possible exemptions from certain commitments, differentiation in implementation periods, on trade related assistance and on phasing in assumption of obligations.

India’s position on modalities:

This is an important issue as it will come up for decision at the forthcoming Ministerial Conference at Cancun in September. India’s position on modalities is that currently there is inadequate clarity on any of the four issues and that given the low level of clarity and lack of convergence in views of Members, it is not in a position to take a decision on modalities at the Cancun Ministerial Conference. Our arguments briefly are:

1. Explicit consensus is needed on modalities- We have argued that any negotiations would take place only after explicit consensus both on the need for commencement of negotiations and the modalities. The process since Doha is a clarificatory process so that Members have a clearer idea of the obligations that any framework on investment would require them to undertake. India’s position is that the required clarity has not yet emerged and there is no convergence on any of the issues.
2. Simple procedural modalities or listing of issues is insufficient- The EC has submitted a paper on modalities. However, India has argued that the modalities suggested are too simple for Members to take a decision and detailed modalities would be needed for taking a decision.
3. Detailed modalities are required for a decision– This should indicate the structure, contours and nature of the proposed framework.
4. Each of the Singapore Issues needs to be treated separately– There is little in common between the Singapore issues. Each issue has its own particular aspects, complexities and effects and each is its own stage of discussion. Therefore, they cannot be treated together, either for a decision on modalities or otherwise.

1. In the negotiations on the relationship between Multilateral Environment Agreements (MEAs) and the WTO (para 31(i)), the EC, Japan and Switzerland proposed that the CTE adopt an interpretative decision so as to consider specific trade obligations set out in the MEAs as ipso facto consistent with the WTO rules. They have also proposed for broad definition of what are specific trade obligations in the MEAs. This has been opposed by all the other countries, particularly US, Australia, Argentina, Korea, Taiwan, India and a large number of developing countries.
2. On the issue of market access for environmental goods and services, no progress has been achieved. The US has proposed that the APEC list of environmental goods should be taken as starting basis. This has not been agreed by other members. The EC has yet to propose any list. The developing countries have stated that the APEC list lacks balance for them. Countries other than EC and Switzerland have opposed inclusion of products based on npr-PPM. The US has now proposed that the participants in the negotiations could develop two lists of environmental goods: a core list and a complementary list. The core list would comprise products on which there is consensus that they constitute environmental goods, such as equipment for environmental remediation and pollution control and clean technologies. A second complementary list could be developed for additional products on which definitive consensus could not be reached but for which there is a high degree of acknowledgment that they can have significance for environmental protection, pollution prevention or remediation, and sustainability. Tariffs should be eliminated for all products on the core list by 2010. Tariff on X% of items in the supplementary list should be eliminated by 2010. Selection on which items the tariff should be eliminated in the supplementary list has to be done by each country. X for developing countries would be less than the developed countries.
3. The CTE has to submit a report under para 32 to the Fifth Ministerial Conference on the need for any clarification in WTO rules, including on the desirability of negotiations. This paragraph includes among others eco-labelling. In June 2003, the EC had submitted a proposal, for its inclusion in the report of the CTE to the Cancun Ministerial Conference and for a decision at Cancun (JOB (03)/130, 27 June 2003). The EC proposed that the Cancun Ministerial Conference should give a mandate to the CTE to carry out work on life cycle approach (LCA) based voluntary eco-labeling schemes in dedicated sessions. The CTE should make recommendations, as appropriate, for further action to the Ministerial Conference. It proposed that the CTE should in the year 2004 hold three dedicated sessions to engage in a positive dialogue on governmental or nongovernmental voluntary eco-labeling schemes, notably those based on LCA. These dedicated sessions should pay particular attention to 4 elements mentioned in the EC submission. The EC has now revised this proposal by deleting reference to ‘life cycle analysis’. The earlier EC proposal said that the work of the CTE should be on voluntary eco-labeling scheme, notably those based on life cycle analysis. The revised EC proposal thus proposes work on voluntary ecolabeling schemes without specifically referring to life cycle analysis.
4. Voluntary eco-labeling schemes could be based on product characteristics or npr-PPMs or a combination thereof. Usually, life cycle analysis based eco-labeling schemes include npr-PPMs. Thus, the revised EC proposal for work on voluntary eco-labeling schemes does include ecolabeling schemes based on life cycle analysis and npr-PPMs, however, it does not make a specific reference to them.
5. We have an in principle objection to any decision by the Ministerial Conference on eco-labeling because of this could be a first step towards more work and negotiations on eco-labeling particularly those based on life cycle analysis and npr-PPMs.

1. The Implementation Issues were given “utmost importance” by the Ministers at Doha who were “determined to find appropriate solutions” to them “as a matter of priority”. These Issues can be categorized into three groups - (i) Specific decisions were taken at the Doha Ministerial Conference in respect of certain issues and these required further consideration by the subsidiary bodies for a final decision. (ii) Issues included in paragraph 12 (a) of the Doha Ministerial Declaration have been referred to the negotiating bodies and (iii) Issues under paragraph 12 (b) required consideration by subsidiary bodies for final decisions.
2. While issues in paragraph 12 (a) have been referred to the negotiating bodies, to be resolved as a matter of priority, there are about 23 issues under paragraph 12 (b) read with paragraphs 18 and 19 of the Doha Ministerial Declaration that need to be resolved. A controversy has emerged, initiated by certain developed countries that paragraph 12 (b) issues are not for negotiations. Ministers had clearly intended that negotiations on outstanding implementation issues shall be an integral part of the Work Programme being established. Therefore, there is no doubt whatsoever on the need to negotiate 12 (b) issues. The outstanding Implementation Issues which are not being addressed in the negotiating bodies, are now with the Chairman, Trade Negotiating Committee, who proposes to hold discussions thereon.
3. In respect of the Implementation Issues in the first group, a lot of discussion has taken place. We have also submitted detailed proposals. A few issues of marginal importance alone have been addressed. Of meaningful importance among these would be those, including operationalising Article 15 of the Anti-Dumping Agreement, countervailing duty investigations procedure and issues relating to sharing of information on export values. These issues can be successfully addressed prior to the Cancun Ministerial Conference, only if the developed countries show political will.

1. The Doha Ministerial Conference had instructed the Committee on Trade and Development (CTD) to examine the entire S&DT clauses in the WTO Agreements in the following context:

   (i).  Identify the non-mandatory or best endeavour clauses;

   (ii). How to make the “non mandatory” or ‘best endeavour’ clauses mandatory and make them precise, effective and operational

2. The CTD was required to report to the General Council with clear recommendations for a decision by July 2002.
3. Of the 88 issues for consideration India either own its own or along with like-minded Members had submitted 11 proposals in the Committee on Trade and Development.
4. Even though July 2002 deadline was initially fixed for the Committee on Trade and Development to report with recommendations for adoption, no progress could be made by that time. By the end of 2002 there were only 4 out of more that 80 proposals on which understanding could be reached. The deadline was, therefore, revised to February 2003. In May 2003 GC Chairman circulated a list of proposals on S & D, classified into three overall categories:
   • Category 1 includes 14 proposals that were agreed ‘in principle’ plus 24 additional proposals on which the Chair feels “there appears to be a greater likelihood of reaching agreement” and that “have a developmental value” that in his view makes it necessary that Members try to address them and make progress “whether in their current form or otherwise”.
   • Category 2 comprises 38 proposals, including those that are being discussed as part of mandated negotiations, which are due to be considered as soon as possible in the relevant WTO bodies, which should report back to the General Council just prior to the Cancun Ministerial. It is expected that possible recommendations from these discussions could be included in an early harvest – which could potentially add to the proposals to be agreed upon by the time of the Ministerial
   • Category 3 comprises 12 proposals on which delegates have had most difficulty in finding consensus. These are due to be examined to explore how they might be redrafted in a way more suitable to agreement, while preserving the concepts they embody.
5. The Chairman of GC has come up on 16th July with a package on the Category I issues. Chairman has now suggested possible formulations for each proposal which, if agreed, could be recommended for adoption at Cancun.

• Location: Geneva, Switzerland
• Established: 1 January, 1995
• Created by: Uruguay Round negotiations (1986-94)
• Membership: 146 countries (as of 12 August, 2003)
• Head: Supachai Panitchpakdi (Director General)

Functions:

• Administering WTO trade agreements
• Forum for trade negotiations
• Handling trade disputes
• Monitoring national trade policies
• Technical assistance and training for developing countries
• Cooperation with other international organisations

The multilateral trading system The World Trade Organisation (WTO) came into being in 1995. WTO is the successor to the General Agreement on Tariffs and Trade (GATT) which was established in the wake of the Second World War.

So, while the WTO is still young, the multilateral trading system that was originally set up under GATT is well over 50 years old.

The multilateral trading system prescribes the rules of the game for international trade. These rules are continuously evolving. The first major effort to evolve such rules was in the post-World War II era which resulted in the establishment of GATT in 1948.

The system was developed through a series of trade negotiations, or rounds, held under GATT. The first rounds dealt mainly with tariff reductions but later negotiations included other areas such as antidumping and non-tariff measures. The last round – the 1986-94 Uruguay Round – led to the WTO’s creation.

Uruguay Round to Doha
The Uruguay Round of Multilateral Trade Negotiations, the 8th Round under GATT 1947, was launched at Punta del Este in Uruguay in September 1986 at a special session of the GATT Contracting parties held at Ministerial level. These negotiations were the most ambitious and complex until then. Negotiations covered not only the traditional GATT subjects such as tariff and non-tariff measures and the improvement of GATT rules and disciplines on subsidies, safeguards etc. but also extended to new areas not dealt with by GATT, such as Trade Related Aspects of Intellectual Property Rights (TRIPs), Trade Related Investment Measures (TRIMs) and trade in Services. Although the negotiations were to conclude in four years, the Uruguay Round was formally concluded at Marakkesh only on 15 April 1994.

In 2000, new talks started on agriculture and services. These have now been incorporated into a broader agenda launched at the fourth WTO Ministerial Conference in Doha, Qatar, in November, 2001. The deadline for the negotiations is 1 January, 2005.

Objectives & principles of the multilateral trading system / WTO
The basic objective of he multilateral trading system, in general, is to create conditions of fair and undistorted competition in which the member countries could trade among themselves. With this objective in mind GATT/ WTO lays down four basic rules of the game:

• Protection to domestic industry through tariffs and limiting of quantitative restrictions (QRs) on trade only to bare minimum,
• Reduction of tariff levels and binding of tariffs at reduced levels as well as removal of non-tariff barriers (NTBs) to trade;
• Most favoured nation (MFN) treatment which requires that tariff and other regulations should be applied to imported or exported goods without discrimination among countries, and
• National treatment rule, which prohibits countries from discriminating between imported products and equivalent domestically produced products. Besides, there are rules of general application which include those related to:

(a) determination of dutiable value of imported goods where customs duties are collected on an ad valorem basis;

(b) application of mandatory product standards and sanitary and phytosanitary (S&PS) regulations to imported products, and

(c) issue of import licences

(d) In addition, there are rules governing:

(i) Government subsidy; (ii) Measures to protect domestic industry consisting of ‘safeguard actions’ and ‘anti-dumping and countervailing duties’ and (iii) Investment measures that are likely to have adverse impact on trade (TRIMS).

The rules prescribed by GATT 1994 and its associate agreements viz. GATS and TRIPS are to be subscribed to by all the member countries of WTO as a ‘Single Undertaking’. The Members are, therefore, required to adopt national legislation and regulations to implement the rules. However, developing countries, least developed countries and transition economies have been allowed longer transition periods for the implementations of some of the obligations imposed by the agreements.

The objective of the multilateral trading system is to ensure enhanced market access among all the member countries of WTO. The obligations arising out of the agreements, however, may not in themselves ensure that the market access commitments are fulfilled by the members in practice. This requires effective monitoring of the trade policies and practices of members as well as provisions for settlement of disputes. While the Trade Policy Review Mechanism (TPRM) ensures the former, the Dispute Settlement Undertaking guarantees the latter.

Benefits from WTO Agreements / Membership

• WTO provides a rule based, transparent and predictable multilateral trading system which protects the member countries from the pressures of their stronger trading partners.
• WTO works on the principle of one country one vote and as such India as well as other members have a say in the rule making process in WTO. The convention is that decision making is done by consensus.
• A major advantage arising from WTO is that it automatically guarantees Most Favored Nation (MFN) treatment implying that Members cannot discriminate between various WTO Members in their tariff regimes. In the absence of the MFN Clause, which flows from Membership of the WTO, India would have had to negotiate bilaterally with all Members for obtaining such MFN treatment.
• The agreement also ensures national treatment for our exports, in all WTO Member countries. National Treatment ensures that our products once imported into the territory of other WTO members would not be discriminated vis-à-vis domestic products in those countries.
• Another important benefit accruing is the availability of a strong and effective Dispute Settlement Mechanism (DSM) under the WTO. Out of 30 disputes involving India, 8 were won by India and 6 were lost. Of these, 7 disputes were won against US and the EC and 6 were lost against them. 8 cases were settled amicably. The remaining 8 disputes are continuing.
• There are contingency protection provisions built into WTO rules, enabling Member countries to take care of exigencies like balance of payment problems and situations like surge in imports. In case of unfair trade practices causing injury to the domestic producers, there are provisions to impose Anti-dumping or Countervailing duties as provided for in the Anti- Dumping Agreement and the Subsidies and Countervailing Measures Agreement. As per the WTO Annual Report for the year 2000, India was the 2nd highest user of the Anti-dumping measures amongst all the WTO members.
• The reduction in export subsidies on Agriculture by developed countries if effected through the Agreement on Agriculture will make Indian agricultural exports more competitive in world markets.
• The commitment of certain developed countries under Agreement on Textiles and Clothing (ATC) to finally phase out the Textile Quotas as were being maintained by them under Multi Fibre Arrangement (MFA) by 1st January 2005 is a positive gain for Indian textile exports.
• 
  From Singapore to Cancun
  
  The highest decision making body within WTO is the Ministerial Conference. It meets at least once in every two years. Four Ministerial Conferences have already been held: Singapore (December 1996); Geneva (May 1999); Seattle (Nov-Dec 1999); and Doha (November 2001). The fifth Ministerial Conference is scheduled to be held at Cancun, Mexico during 10-14 September 2003.
  
  The Doha Ministerial mandate specifically provided for continuation of the concept of less than full reciprocity by developing countries as part of the negotiations. The mandated negotiations include market access issues including negotiations in agriculture covering domestic support, export subsidies and market access, market access for non-agricultural products and market access for services; issues of particular interest to developing countries like TRIPS and public health, review of Special and Differential Treatment (S & DT) provisions and Implementation issues; WTO rules including clarifying and improving Anti-dumping and Subsidies agreements, clarifying and improving disciplines on regional trade agreements and clarifying and improving of dispute settlement understanding; certain limited issues on environment; certain provisions in the TRIPs Agreement; new work programme related to Trade, Debt and Finance and Trade and Technology Transfer through the setting up of two separate Working Groups; Singapore issues requiring clarification of specified issues in each area viz. Trade and Investment, Trade and Competition Policy, Trade facilitation and Transparency in Government Procurement. In the case of Singapore issues a decision will be taken at the Fifth (Cancun) Ministerial on the start of negotiations on these issues, based on explicit consensus on modalities of negotiations.
  
  As per the Doha Ministerial Declaration, the Fifth Session of the Ministerial Conference now scheduled to be held at Cancun during 10-14 September 2003 will take stock of progress in the on-going negotiations under the work programme adopted at Doha, provide any necessary political guidance, and take decisions as necessary.
  
  

• The WTO’s top level decision-making body is the Ministerial Conference, which meets at least once every two years. The Fifth WTO Ministerial Conference will be held in Cancun, Mexico, from 10 to 14 September, 2003.
• Below this is the General Council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from members’ capitals) which meets several times a year in the Geneva headquarters. The General Council also meets as the Trade Policy Review Body and the Dispute Settlement Body.
• At the next level, the Goods Council, Services Council and Intellectual Property (TRIPs) Council report to the General Council.
• Numerous specialised committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, membership applications and regional trade agreements.

Committees under the WTO Council for Trade in Goods Committees on:

• Market Access
• Agriculture
• Sanitary and Phytosanitary Measures
• Technical Barriers to Trade
• Subsidies and Countervailing Measures
• Anti-Dumping Practices
• Customs Valuation
• Rules of Origin
• Import Licensing
• Trade-Related Investment Measures
• Safeguards

Doha Development Agenda: TNC and its bodies

Trade Negotiations Committee (TNC) : Special Sessions of

• Services Council
• TRIPs Council
• Dispute Settlement Body
• Agriculture Committee
• Trade and Development Committee
• Trade & Environment Committee

Negotiating Groups on

• Market Access
• Rules

Published by
MINISTRY OF COMMERCE & INDUSTRY, GOVERNMENT OF INDIA
Udyog Bhawan, New Delhi - 110 011

We welcome your comments and suggestions:
Telefax : 2301 2622
E-mail : sbiswas@ub.nic.in
Website : http//commerce.nic.in