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World Trade Organization and India

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Executive summary

Introduction to WTO

Performance appraisals and its History

Meaning and Objectives

Overview and Methods


Scope and Objectives of study


Research Methodology


Data collection and analysis


Overview of performance appraisal in Wipro



Suggestions and Conclusion





Executive Summary

The World Trade Organization (WTO) is among the most powerful, and one of the most
secretive international bodies on earth. It is rapidly assuming the role of global government,
as 161 nation-states, including the U.S., have ceded to its vast authority and powers. The
WTO represents the rules-based regime of the policy of economic globalization. The central
operating principal of the WTO is that commercial interests should supersede all others. Any
obstacles in the path of operations and expansion of global business enterprise must be
subordinated. In practice these "obstacles" are usually policies or democratic processes that
act on behalf of working people, labour rights, environmental protection, human rights,
consumer rights, social justice, local culture,

The Report explores a range of questions, starting with a Contentious issues on WTO, how
disputes are resolved in WTO, the benefits it brings, the challenges it poses and what role
trade plays in this world of ever-growing interdependency. We ask why some countries have
managed to take advantage of falling trade costs and greater policy-driven trading
opportunities while others have remained largely outside international commercial relations.

From India's perspective it would be most crucial during the Doha negotiations to protect the
interests of its farmers, even at the cost of foregoing benefits that might have otherwise been
made in services and NAMA negotiations

Introduction to WTO

The World Trade Organization (WTO) is an international trade institution. The WTO
superseded and replaced the GATT. The GATT was a provisional, multilateral agreement
governing international trade from 1947 until January 1, 1995. The creation of the WTO was
negotiated in the final GATT round, the Uruguay Round.

The WTO inherited a number of core principles from the GATT. These principles include:

Non-discrimination, which in practice means two things. The first principle is MFN most favoured nation treatment. Any trade concession a nation offers to one member, it
must offer to all. The second principle is national treatment. This means that imported

products must be treated the same as domestic goods.

Reciprocity of Trade Concessions.
Trade Liberalization.
Transparency and predictability in import and export rules and regulations.
Favourable treatment to less developed countries.

Although built on the GATT legacy, the Uruguay Round and WTO added many new issues
and features. To begin with, many older agreements were replaced by new, stronger
agreements. For example, the Agreement on Textiles and Clothing established a time-table to
liberalize textile trade, while the Agreement on Sanitary and Phytosanitary Measures
established a more transparent regime for trade in agricultural goods and ensures plant and
animal health standards are followed. The WTO also broke new ground, adding a number of
trade sectors and issues not addressed by the GATT:

The General Agreement on Trade in Services (GATS) adds services.

Trade in Intellectual Property Rights (TRIPs) adds copyrights, trademarks and patents.
Trade Related Investment Measures (TRIMs) sets rules for Foreign Direct Investment.
Government Procurement (GPA) & the Information Technologies (ITA) agreements also
international rules on new product areas.

These new agreements are ambitious issues additions to the rule governing the world trading
system. However, at this stage there are significant enforcement problems and numerous
loopholes that countries use to evade their obligations. It is not yet clear if these agreements
will benefit the US in the long run.

The WTO differs from the GATT not only in scope, but in institutional functioning. The
WTO has two significant functions that the GATT did not. First, the WTO has a Trade Policy
Review Mechanism. This process periodically accesses a country's trade policies and notes
any changes. It is a non-judgmental, non-confrontational process.

More controversial is the Dispute Settlement Body and its dispute settlement panels. These
panels, composed of economists, hand down binding judgments in trade disputes. Several
cases have already gone against the US, raising concerns among some Americans that the
WTO is eroding US sovereignty. As the world's largest economy and export market, however,
the US maintains considerable influence on the shape of the world trading system.

The WTO currently has 161 members, and 31 nations are actively seeking to join. The US
plays an important role in all accession negotiations, ensuring that US economic interests are
well represented

The WTO is attempting to complete negotiations on the Doha Development Round, which
was launched in 2001 with an explicit focus on developing countries. As of June 2012, the
future of the Doha Round remained uncertain: the work programme lists 21 subjects in which
the original deadline of 1 January 2005 was missed, and the round is still incomplete. The
conflict between free trade on industrial goods and services but retention of protectionism
on farm subsidies to domestic agricultural sector (requested by developed countries) and
the substantiation of fair trade on agricultural products (requested by developing countries)
remain the major obstacles.
This impasse has made it impossible to launch new WTO negotiations beyond the Doha
Development Round. As a result, there have been an increasing number of bilateral free trade
agreements between governments. .As of July 2012, there were various negotiation groups in
the WTO system for the current agricultural trade negotiation which is in the condition of

The WTO's current Director-General is Roberto Azevdo, who leads a staff of over 600
people in Geneva, Switzerland. A trade facilitation agreement known as the Bali Package was
reached by all members on 7 December 2013, the first comprehensive agreement in the
organization's history.

History of WTO
The WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), was
established after World War II in the wake of other new multilateral institutions dedicated to
international economic cooperation notably the Bretton Woods institutions known as
the World Bank and the International Monetary Fund. A comparable international institution
for trade, named the International Trade Organization was successfully negotiated. The ITO
was to be a United Nations specialized agency and would address not only trade barriers but
other issues indirectly related to trade, including employment, investment, restrictive business
practices, and commodity agreements. But the ITO treaty was not approved by the U.S. and a
few other signatories and never went into effect.

In the absence of an international organization for trade, the GATT would over the years
"transform itself" into a de facto international organization.

Tokyo Round
Seven rounds of negotiations occurred under GATT. The first real GATT trade rounds
concentrated on further reducing tariffs. Then, the Kennedy Round in the mid-sixties brought
about a GATT anti-dumping Agreement and a section on development. The Tokyo Round
during the seventies was the first major attempt to tackle trade barriers that do not take the
form of tariffs, and to improve the system, adopting a series of agreements on non-tariff
barriers, which in some cases interpreted existing GATT rules, and in others broke entirely
new ground. Because these plurilateral agreements were not accepted by the full GATT
membership, they were often informally called "codes". Several of these codes were amended
in the Uruguay Round, and turned into multilateral commitments accepted by all WTO

Only four remained plurilateral (those on government procurement, bovine meat, civil
aircraft and dairy products), but in 1997 WTO members agreed to terminate the bovine meat
and dairy agreements, leaving only two.
Uruguay Round
Well before GATT's 40th anniversary, its members concluded that the GATT system was
straining to adapt to a new globalizing world economy In response to the problems identified
in the 1982 Ministerial Declaration (structural deficiencies, spill-over impacts of certain
countries' policies on world trade GATT could not manage etc.), the eighth GATT round
known as the Uruguay Round was launched in September 1986, in Punta del
Este, Uruguay.

It was the biggest negotiating mandate on trade ever agreed: the talks were going to extend
the trading system into several new areas, notably trade in services and intellectual property,
and to reform trade in the sensitive sectors of agriculture and textiles; all the original GATT
articles were up for review. The Final Act concluding the Uruguay Round and officially
establishing the WTO regime was signed April 15, 1994, during the ministerial meeting at
Marrakesh, Morocco, and hence is known as the Marrakesh Agreement.

The GATT still exists as the WTO's umbrella treaty for trade in goods, updated as a result of
the Uruguay Round negotiations (a distinction is made between GATT 1994, the updated
parts of GATT, and GATT 1947, the original agreement which is still the heart of GATT
1994). GATT 1994 is not however the only legally binding agreement included via the Final
Act at Marrakesh; a long list of about 60 agreements, annexes, decisions and understandings
was adopted. The agreements fall into a structure with six main parts:

The Agreement Establishing the WTO

Goods and investment the Multilateral Agreements on Trade in Goods including

the GATT 1994 and the Trade Related Investment Measures (TRIMS)

Services the General Agreement on Trade in Services

Intellectual property the Agreement on Trade-Related Aspects of Intellectual

Property Rights (TRIPS)

Dispute settlement (DSU)

Reviews of governments' trade policies (TPRM)

In terms of the WTO's principle relating to tariff "ceiling-binding" (No. 3), the Uruguay
Round has been successful in increasing binding commitments by both developed and
developing countries, as may be seen in the percentages of tariffs bound before and after the
1986-1994 talks.

Ministerial conferences
The topmost decision-making body of the WTO is the Ministerial Conference, which usually
meets every two years. It brings together all members of the WTO, all of which are countries
or customs unions. The Ministerial Conference can take decisions on all matters under any of
the multilateral trade agreements. The inaugural ministerial conference was held in Singapore
in 1996. Disagreements between largely developed and developing economies emerged
during this conference over four issues initiated by this conference, which led to them being
collectively referred to as the "Singapore issues". The second ministerial conference was held
in Geneva in Switzerland. The third conference in Seattle, Washington ended in failure, with
massive demonstrations and police and National Guard crowd control efforts drawing
worldwide attention. The fourth ministerial conference was held in Doha in the Persian Gulf
nation of Qatar. The Doha Development Round was launched at the conference. The
conference also approved the joining of China, which became the 143rd member to join.
The fifth ministerial conference was held in Cancn, Mexico, aiming at forging agreement on
the Doha round. An alliance of 22 southern states, theG20 developing nations (led by India,
China, Brazil, ASEAN led by the Philippines), resisted demands from the North for
agreements on the so-called "Singapore issues" and called for an end to agricultural subsidies
within the EU and the US. The talks broke down without progress.

The sixth WTO ministerial conference was held in Hong Kong from 1318 December 2005.
It was considered vital if the four-year-old Doha Development Round negotiations were to
move forward sufficiently to conclude the round in 2006. In this meeting, countries agreed to
phase out all their agricultural export subsidies by the end of 2013, and terminate any cotton
export subsidies by the end of 2006. Further concessions to developing countries included an
agreement to introduce duty free, tariff free access for goods from the Least Developed
Countries, following the Everything but Arms initiative of the European Union but with
up to 3% of tariff lines exempted. Other major issues were left for further negotiation to be
completed by the end of 2010. The WTO General Council, on 26 May 2009, agreed to hold a
seventh WTO ministerial conference session in Geneva from 30 November-3 December
2009. A statement by chairman Amb. Mario Matus acknowledged that the prime purpose was
to remedy a breach of protocol requiring two-yearly regular meetings, which had lapsed
with the Doha Round failure in 2005, and that the scaled-down meeting would not be a
negotiating session, but emphasis will be on transparency and open discussion rather than on
small group processes and informal negotiating structures. The general theme for discussion
was The WTO, the Multilateral Trading System and the Current Global Economic

Doha Round (The Doha Agenda)

The WTO launched the current round of negotiations, the Doha Development Round, at the
fourth ministerial conference in Doha, Qatar in November 2001. This was to be an ambitious
effort to make globalization more inclusive and help the world's poor, particularly by slashing
barriers and subsidies in farming. The initial agenda comprised both further trade
liberalization and new rule-making, underpinned by commitments to strengthen substantial
assistance to developing countries.

The negotiations have been highly contentious. Disagreements still continue over several key
areas including agriculture subsidies, which emerged as critical in July 2006.According to a
European Union statement, "The 2008 Ministerial meeting broke down over a disagreement
between exporters of agricultural bulk commodities and countries with large numbers of


subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmers
from surges in imports." The position of the European Commission is that "The successful
conclusion of the Doha negotiations would confirm the central role of multilateral
liberalisation and rule-making. It would confirm the WTO as a powerful shield against
protectionist backsliding." An impasse remains and As of June 2012, agreement has not been
reached, despite intense negotiations at several ministerial conferences and at other sessions.

Contentious issues on WTO and


Environmental groups argue that globalization harms the environment; they want the
WTO to change its rules so that trade sanctions can be used to enforce environmental

They blame global corporations for global warming, depletion of natural resources,
production of harmful chemicals and destruction of organic agriculture.

They have particular criticism against global investment, which they argue takes
advantage of the lack of regulation in poorer developing countries. Hence, global
companies may locate polluting industries in poor countries, log tropical forests, or
develop mines with inadequate controls.

They oppose production, use and global trade in toxic chemicals, nuclear materials and
other products of which they do not approve, such as GM foods, or endangered wildlife,
including fish.

They oppose the existing rules of the WTO, which do not allow countries to ban imports
of goods just because their production may have damaged the environment in the country
of origin.


Environmental groups argue that WTO rules are unacceptable from the environmental
perspective and they want the rules amended to give them the right to present arguments
in its appeals court.

Other groups share a concern that global financial institutions, such as the IMF and the
WB, are not doing enough to alleviate poverty and, indeed, may be contributing to it.
They argue that poor countries should have their debts to international banks excused.

Some are critical of the WTO saying that its rules favour companies from wealthy
countries. They argue that by making it difficult for countries to protect their own
industries with discriminatory tariffs, it is hard for poor countries to build domestic

Allegation as the spread of capitalism, in which the labour of the poor is exploited for the
benefit of the rich.

Leftist organizations have mounted a series of 'global action days' starting with the WTO
Summit in Seattle in September 1999, and targeting meetings of the World Bank, the IMF
and the private business conference organization, the World Economic Forum.


Dispute settlement in the World Trade

In 1994, the WTO members agreed on the Understanding on Rules and Procedures
Governing the Settlement of Disputes (DSU) annexed to the "Final Act" signed in Marrakesh
in 1994. Dispute settlement is regarded by the WTO as the central pillar of the multilateral
trading system, and as a "unique contribution to the stability of the global economy". WTO
members have agreed that, if they believe fellow-members are violating trade rules, they will
use the multilateral system of settling disputes instead of taking action unilaterally.

The operation of the WTO dispute settlement process involves the DSB panels, the
Appellate Body, the WTO Secretariat, arbitrators, independent experts and several specialized
institutions. Bodies involved in the dispute settlement process, World Trade Organization
Dispute settlement is regarded by the World Trade Organization (WTO) as the central pillar
of the multilateral trading system, and as the organization's "unique contribution to the
stability of the global economy". A dispute arises when one member country adopts a trade
policy measure or takes some action that one or more fellow members considers to a breach
of WTO agreements or to be a failure to live up to obligations. By joining the WTO, member
countries have agreed that if they believe fellow members are in violation of trade rules, they
will use the multilateral system of settling disputes instead of taking action unilaterally
this entails abiding by agreed procedures (Dispute Settlement Understanding) and respecting
judgments, primarily of the Dispute Settlement Body (DSB), the WTO organ responsible for
adjudication of disputes. A former WTO Director-General characterized the WTO dispute
settlement system as "the most active international adjudicative mechanism in the world

In 1994, the WTO members agreed on the Understanding on Rules and Procedures
Governing the Settlement of Disputes or Dispute Settlement Understanding (DSU) (annexed
to the "Final Act" signed in Marrakesh in 1994). Pursuant to the rules detailed in the DSU,
member states can engage in consultations to resolve trade disputes pertaining to a "covered
agreement" or, if unsuccessful, have a WTO panel hear the case. The priority, however, is to
settle disputes, through consultations if possible. By January 2008, only about 136 of the
nearly 369 cases had reached the full panel process.
The operation of the WTO dispute settlement process involves the parties and third parties to
a case and may also involve the DSB panels, the Appellate Body, the WTO Secretariat,
arbitrators, independent experts, and several specialized institutions. The General Council
discharges its responsibilities under the DSU through the Dispute Settlement Body (DSB).
Like the General Council, the DSB is composed of representatives of all WTO Members. The
DSB is responsible for administering the DSU, i.e. for overseeing the entire dispute
settlement process. It also has the authority to establish panels, adopt panel and Appellate
Body reports, maintain surveillance of implementation of rulings and recommendations, and
authorize the suspension of obligations under the covered agreements. The DSB meets as
often as necessary to adhere to the timeframes provided for in the DSU.

The DSU addresses the question of compliance and retaliation. Within thirty days of the
adoption of the report, the member concerned is to inform the DSB of its intentions in respect
of implementation of the recommendations and rulings. If the member explains that it is
impracticable to comply immediately with the recommendations and rulings, it is to have a
"reasonable period of time" in which to comply. If no agreement is reached about the
reasonable period for compliance, that issue is to be the subject of binding arbitration; the
arbitrator is to be appointed by agreement of the parties. If there is a disagreement as to the
satisfactory nature of the measures adopted by the respondent state to comply with the report
that disagreement is to be decided by a panel, if possible the same panel that heard the
original dispute, but apparently without the possibility of appeal from its decision. The DSU


provides that even if the respondent asserts that it has complied with the recommendation in a
report, and even if the complainant party or the panel accepts that assertion, the DSB is
supposed to keep the implementation of the recommendations under surveillance.
Compensation and retaliation
If all else fails, two more possibilities are set out in the DSU:

If a member fails within the "reasonable period" to carry out the recommendations and
rulings, it may negotiate with the complaining state for a mutually acceptable
compensation. Compensation is not defined, but may be expected to consist of the grant
of a concession by the respondent state on a product or service of interest to the

complainant state.
If no agreement on compensation is reached within twenty days of the expiry of the
"reasonable period", the prevailing state may request authorization from the DSB to
suspend application to the member concerned of concessions or other obligations under
the covered agreements. The DSU makes clear that retaliation is not favoured, and sets
the criteria for retaliation. In contrast to prior GATT practice, authorization to suspend
concessions in this context is semi-automatic, in that the DSB "shall grant the
authorization within thirty days of the expiry of the reasonable period", unless it decides
by consensus to reject the request. Any suspension or concession or other obligation is to
be temporary. If the respondent state objects to the level of suspension proposed or to the
consistency of the proposed suspension with the DSU principles, still another arbitration
is provided for, if possible by the original panel members or by an arbitrator or arbitrators
appointed by the Director-General, to be completed within sixty days from expiration of
the reasonable period.

While such "retaliatory measures" are a strong mechanism when applied by economically
powerful countries like the United States or the European Union, when applied by
economically weak countries against stronger ones, they can often be ignored. Whether or not
the complainant has taken a measure of retaliation, surveillance by the DSB is to continue, to
see whether the recommendations of the panel or the Appellate Body have been implemented.


Like most of the agreements adopted in the Uruguay Round, the DSU contains several
provisions directed to developing countries. The Understanding states that members should
give "special attention" to the problems and interests of developing country members.
Further, if one party to a dispute is a developing country, that party is entitled to have at least
one panellist who comes from a developing country. If a complaint is brought against a
developing country, the time for consultations (before a panel is convened) may be extended,
and if the dispute goes to a panel, the deadlines for the developing country to make its
submissions may be relaxed. Also, the Secretariat is authorized to make a qualified legal
expert available to any developing country on request. Formal complaints against least
developed countries are discouraged, and if consultations fail, the Director-General and the
Chairman of the DSB stand ready to offer their good offices before a formal request for a
panel is made. As to substance, the DSU provides that the report of panels shall "explicitly
indicate" how account has been taken of the "differential and more favourable treatment"
provisions of the agreement under which the complaint is brought. Whether or not a
developing country is a party to a particular proceeding, "particular attention" is to be paid to
the interests of the developing countries in the course of implementing recommendations and
rulings of panels. In order to assist developing countries in overcoming their limited expertise
in WTO law and assist them in managing complex trade disputes, an Advisory Centre on
WTO Law was established in 2001. The aim is to level the playing field for these countries
and customs territories in the WTO system by enabling them to have a full understanding of
their rights and obligations under the WTO Agreement.
A unique contribution
Dispute settlement is the central pillar of the multilateral trading system, and the WTOs
unique contribution to the stability of the global economy. Without a means of settling
disputes, the rules-based system would be less effective because the rules could not be
enforced. The WTOs procedure underscores the rule of law, and it makes the trading system
more secure and predictable. The system is based on clearly-defined rules, with timetables for
completing a case. First rulings are made by a panel and endorsed (or rejected) by the WTOs
full membership. Appeals based on points of law are possible.
However, the point is not to pass judgement. The priority is to settle disputes, through
consultations if possible. By January 2008, only about 136 of the nearly 369 cases had

reached the full panel process. Most of the rest have either been notified as settled out of
court or remain in a prolonged consultation phase some since 1995.

Principles: equitable, fast, effective, mutually acceptable

Disputes in the WTO are essentially about broken promises. WTO members have agreed that
if they believe fellow-members are violating trade rules, they will use the multilateral system
of settling disputes instead of taking action unilaterally. That means abiding by the agreed
procedures, and respecting judgements.

A dispute arises when one country adopts a trade policy measure or takes some action that
one or more fellow-WTO members considers to be breaking the WTO agreements, or to be a
failure to live up to obligations. A third group of countries can declare that they have an
interest in the case and enjoy some rights.

A procedure for settling disputes existed under the old GATT, but it had no fixed timetables,
rulings were easier to block, and many cases dragged on for a long time inconclusively. The
Uruguay Round agreement introduced a more structured process with more clearly defined
stages in the procedure. It introduced greater discipline for the length of time a case should
take to be settled, with flexible deadlines set in various stages of the procedure. The
agreement emphasizes that prompt settlement is essential if the WTO is to function
effectively. It sets out in considerable detail the procedures and the timetable to be followed
in resolving disputes. If a case runs its full course to a first ruling, it should not normally take
more than about one year 15 months if the case is appealed. The agreed time limits are
flexible, and if the case is considered urgent (e.g. if perishable goods are involved), it is
accelerated as much as possible.

The Uruguay Round agreement also made it impossible for the country losing a case to block
the adoption of the ruling. Under the previous GATT procedure, rulings could only be
adopted by consensus, meaning that a single objection could block the ruling. Now, rulings

are automatically adopted unless there is a consensus to reject a ruling any country
wanting to block a ruling has to persuade all other WTO members (including its adversary in
the case) to share its view.
Although much of the procedure does resemble a court or tribunal, the preferred solution is
for the countries concerned to discuss their problems and settle the dispute by themselves.
The first stage is therefore consultations between the governments concerned, and even when
the case has progressed to other stages, consultation and mediation are still always possible.

How are disputes settled?

Settling disputes is the responsibility of the Dispute Settlement Body (the General Council in
another guise), which consists of all WTO members. The Dispute Settlement Body has the
sole authority to establish panels of experts to consider the case, and to accept or reject the
panels findings or the results of an appeal. It monitors the implementation of the rulings and
recommendations, and has the power to authorize retaliation when a country does not comply
with a ruling.

First stage: consultation (up to 60 days). Before taking any other actions the countries in
dispute have to talk to each other to see if they can settle their differences by themselves.
If that fails, they can also ask the WTO director-general to mediate or try to help in any

other way.
Second stage: the panel (up to 45 days for a panel to be appointed, plus 6 months for the
panel to conclude). If consultations fail, the complaining country can ask for a panel to be
appointed. The country in the dock can block the creation of a panel once, but when the
Dispute Settlement Body meets for a second time, the appointment can no longer be
blocked (unless there is a consensus against appointing the panel).

Officially, the panel is helping the Dispute Settlement Body make rulings or
recommendations. But because the panels report can only be rejected by consensus in the
Dispute Settlement Body, its conclusions are difficult to overturn. The panels findings have
to be based on the agreements cited.


The panels final report should normally be given to the parties to the dispute within six
months. In cases of urgency, including those concerning perishable goods, the deadline is
shortened to three months.
The agreement describes in some detail how the panels are to work. The main stages are:

Before the first hearing: each side in the dispute presents its case in writing to the panel.
First hearing: the case for the complaining country and defence: the complaining country
(or countries), the responding country, and those that have announced they have an

interest in the dispute, make their case at the panels first hearing.
Rebuttals: the countries involved submit written rebuttals and present oral arguments at

the panels second meeting.

Experts: if one side raises scientific or other technical matters, the panel may consult

experts or appoint an expert review group to prepare an advisory report.

First draft: the panel submits the descriptive (factual and argument) sections of its report
to the two sides, giving them two weeks to comment. This report does not include

findings and conclusions.

Interim report: The panel then submits an interim report, including its findings and

conclusions, to the two sides, giving them one week to ask for a review.
Review: The period of review must not exceed two weeks. During that time, the panel

may hold additional meetings with the two sides.

Final report: A final report is submitted to the two sides and three weeks later, it is
circulated to all WTO members. If the panel decides that the disputed trade measure does
break a WTO agreement or an obligation, it recommends that the measure be made to

conform with WTO rules. The panel may suggest how this could be done.
The report becomes a ruling: The report becomes the Dispute Settlement Bodys ruling or
recommendation within 60 days unless a consensus rejects it. Both sides can appeal the
report (and in some cases both sides do).


Indian Agriculture and market access

Indias economic scenario
After growing at the so-called Hindu Rate of growth of 3.5%, Indias Gross Domestic
Product (GDP) growth accelerated to 5.6% in the 1980s and averaged an unprecedented 6%
in the period 1992-93 to 2003-04. The growth rate in 2005-06 was 8.4%, and expectations are
that India will be able to achieve a 10% rate of growth in the immediate future.

In terms of the sectoral shift in GDP, the share of agriculture fell from 58% to 25% between
1950 and 2001, while that of industry increased from 15% to 26%, and the share of services
increased from 27% to 49%. The service sector accounted for almost 54% of the countrys
GDP in 2005-06.

Indias export of services has displayed one of the fastest growth rates in the world -- that is,
over 17% per annum in the 1990s (when the world average was 5.6%). Service exports
showed significant buoyancy during 2004-05, doubling from US$ 25 billion to US$ 51
billion. They now account for 39% of Indias total exports.

The service sector boom in India in the post-Uruguay Round period shows that India has a
competitive advantage in several services sectors. However, employment in services has not
increased in proportion to the rising share in GDP and trade in India, unlike the situation in
the rest of the world. In 1999-2000, services contributed around 24% of employment in India,
in contrast to 30% in middle-income countries, 70% in Singapore and around 35% in
Thailand. This is perhaps the main reason why trade and economic growth in India has been
seen as jobless.


Trade already accounts for more than 30% of Indias GDP, an increase of almost 10
percentage points since 2002. Therefore, the final outcome of the WTO negotiations would
be an important determinant of overall economic growth in India.

A major constraint facing the country is the persistence of infrastructure deficits: lack of
reliable power supply which dampens growth impulses in different sectors of the economy, as
well as inefficient and high cost of infrastructure such as roads, railways, airports, seaports
and electricity. According to various estimates, in view of its needs, India is currently
spending a miniscule amount on infrastructure. In contrast, China spends seven times as
much as India in absolute terms.

Indias negotiating stand at the WTO should be viewed within this context. This study does
not question the rationale for Indias continued engagement at the WTO. Instead, it seeks to
explain developments in three areas of negotiation: agriculture, Non-Agricultural Market
Access (NAMA). It also attempts to capture Indias negotiating position on these issues,
highlighting significant shifts on specific issues wherever these have occurred.

Doha negotiations: Agriculture, NAMA and services

In November 2001, following up on the Doha Ministerial Declaration, WTO members
launched an ambitious Work Programme covering negotiations on agriculture, NonAgriculture Market Access (NAMA), services, dispute settlement, antidumping duties,
subsidies, etc. In addition, intense work was envisaged in new areas of investment,
competition policy, transparency in government procurement and trade facilitation, with the
objective of initiating negotiations in 2003. In the Doha Ministerial Declaration, WTO
members expressed their resolve to find appropriate solutions to the implementation-related
concerns raised by developing countries. These concerns emerged out of the problems
encountered by developing countries in the implementation of agreements finalised during
the Uruguay Round.

When launched, the Doha Round of trade negotiations was scheduled to be completed by
January 1, 2005. However, like the preceding Uruguay Round, the Doha Round has
encountered many roadblocks, and progress has been slow. Unable to bridge the gap between
differing positions on agriculture and what are known as the Singapore issues (investment,
competition, transparency in government procurement, and trade facilitation), the Cancun
Ministerial Meeting, held in 2003, ended without any results on the issues on the negotiating
table. However, some of the contentious issues were settled in the July Framework
Agreement of 2004.

Expectations from the Hong Kong Ministerial meeting, held in December 2005, were scaled
down in advance of the meeting. Decisions on most of the contentious and substantive issues
were postponed until 2006. These included decisions on the formula, specific numbers and
timeframe (commonly referred to as modalities) for reduction in agricultural subsidies, and
agricultural and non-agricultural tariffs. Despite major players in the WTO negotiations
meeting at regular intervals, consensus on the modalities continues to be elusive. Since July
24, 2006, WTO negotiations have gone into suspension mode. Doha negotiations:
Agriculture, NAMA and services

Agriculture under GATT

Under GATT, agriculture was subject to soft disciplines compared to industrial products. In
1955, the United States obtained a permanent waiver from substantial obligations in
agriculture. The European Union implemented an elaborate system of protection for its
farmers through huge subsidies. This resulted in severe distortions in the production and trade
of agricultural products. Some degree of discipline in agriculture was introduced through the
Uruguay Round Agreement on Agriculture. When the Doha Round was launched, it was
expected that a significant reduction, if not full elimination of the distortions, would be
achieved in the negotiations. These hopes may be belied.


Opinion on the utility and effectiveness of the WTO as a forum for negotiating rules on
agricultural tariffs and subsidies is split. According to one view, in most developing countries
agriculture is not so much a matter of commerce as one of livelihood. It may, therefore, not
be appropriate to treat it on a par with industrial goods. Accordingly, disciplines on
agriculture should not be included in trade agreements at the WTO. However, a contrary view
also exists which perceives WTO negotiations as the only available vehicle for seeking a
reduction in developed-country subsidies, which have significantly distorted global trade and
agricultural production.

Of all the issues being negotiated under the ongoing Doha Work Programme, none would
have deeper implications for the vast multitude of poor around the world than the
negotiations on agriculture. Agricultural development represents a convergence of the main
objectives of economic policy in developing countries: growth, stability and poverty
alleviation. As trade can interact with these objectives in complex ways, the results of the
agriculture negotiations could crucially determine the extent of policy flexibility available to
developing countries to pursue these goals in a manner consistent with WTO obligations.

Agriculture negotiations: Progress achieved

Negotiations towards an Agreement on Agriculture are being undertaken on what are called
three pillars -- domestic support, market access, and export competition. With respect to each
of these pillars, different developing countries have differing interests, often conflicting in
nature. The July Framework and the Hong Kong Ministerial Declaration leave open a wide
range of options within each pillar of the agriculture negotiations, which provide both risk
and opportunity for developing countries. This has brought a considerable degree of
complexity to the negotiations. Different country groups have been formed, based on
commonality of interests on specific issues, the most important among them being the G20
and the G33. India is a member of both these groups.

Domestic support


It is generally accepted that the agricultural subsidies provided by developed countries not
only restrict the access of developing-country exports, but have also depressed world food
prices. Subsidised exports by developed countries also pose a threat to food and livelihood
security in developing countries by depressing domestic market prices. Reduction of
agricultural subsidies by developed countries is, therefore, a crucial goal that is being pursued
by developing countries.

The July Framework distinguishes between two broad categories of domestic support. Tradedistorting support and non-trade-distorting support (that is, support with no or minimal
impact on trade and production).

Trade-distorting support is made up of various components. The July Framework foresees a

substantial reduction of overall trade-distorting support, as well as each component of such
support. The framework further states that there will be a strong element of harmonisation of
trade-distorting support among developed members because higher levels of permitted tradedistorting support are required to be subject to deeper cuts.

It has been estimated that under the existing WTO regime, the EU and the US have the
flexibility to provide $ 100 billion and $ 48.22 billion, respectively, of trade-distorting
support. The actual level of trade-distorting subsidy provided by them is less than the ceiling
under the WTO. During negotiations in July 2006, the US offered to reduce the ceiling on its
overall trade-distorting support by 53%, from $ 48.22 billion to $ 22.5 billion. Developing
countries had proposed a limit of $ 10.5 billion.

The US offer must also be seen in light of the fact that its actual level of trade-distorting
subsidies in 2005 was about $ 19.7 billion, and in some previous years substantially less than
that. As the existing level of trade-distorting subsidies is below $ 22.5 billion, the 53%
reduction in ceiling would have resulted in only paper reduction, without any actual cut on


the ground. In fact, the US would have the space to increase trade-distorting subsidies from $
19.7 billion to the ceiling of $ 22.5 billion.

This has been a matter of considerable disappointment for developing countries like India and
other G20 members, particularly because the US is seeking effective tariff reduction from
developing countries in exchange for paper reduction in its subsidies.

The on-going agriculture negotiations also provide an opportunity for review and clarification
of criteria of green box subsidies -- the so-called non-trade-distorting subsidies -- with a
view to ensuring that these subsidies have no, or at most minimal, trade-distorting effects, or
effects on production. Under the Uruguay Round commitments, countries can provide green
box subsidies without any ceiling, provided these subsidies have no trade- or productiondistorting effects.

It has been estimated that, under the green box category, almost US$ 90 billion subsidies are
provided by the US, the EU and Japan. There are considerable theoretical arguments and a
certain amount of empirical evidence that establish that green box subsidies significantly
enhance production through different economic effects. In short, green box subsidies
provided by developed countries are adversely affecting the interests of farmers in developing
countries. While the Doha Round negotiations do not envisage any reduction commitment or
ceiling on green box subsidies, proposals have been made by G20 countries to limit such
payments to farmers with low levels of income, landholding and production. This might
indirectly prevent big farmers and agri-business from receiving handouts under green box.

A point that bears highlighting is that even if the most ambitious proposal of reducing tradedistorting domestic support is agreed upon -- which appears to be an unlikely outcome -- it
would still provide considerable leeway to developed countries to grant billions of dollars of
farm support. Further, the absence of strict disciplines on green box could undermine gains


that may be achieved through a reduced ceiling on trade-distorting subsidies. This should be a
matter of concern for developing countries.

Market access
Developed countries have consistently demanded that developing countries, including India,
reduce their agricultural tariffs. However, it is widely understood that tariff liberalisation by
developing countries could have severe consequences -- such as large-scale unemployment,
poverty and hunger -- unless they are accompanied by a substantial reduction in, if not
removal of, developed-country farm subsidies.

It was agreed in the 2004 July Framework, and further elaborated in the 2005 Hong Kong
Declaration, that developing countries would have the right to self-designate certain products
as Special Products (SPs). SPs would be subject to flexible tariff reduction. Self-designation
of SPs is required to be guided by indicators based on criteria such as food security,
livelihood and rural development concerns. While most developing countries have favoured
broad coverage of products under SPs, some developed countries have suggested that SPs be
restricted to not more than five products. The latter proposal would severely undermine the
ability of developing countries to protect the livelihood of their farmers against a surge in
cheap and subsidised imports from developed countries.

It is sometimes argued that, in order to address food shortages in India, the country should not
be averse to reducing agricultural tariffs during the WTO negotiations. This argument is
fallacious, as India can apply low customs duty to facilitate food imports while continuing to
keep high bound rates on agricultural products.

Export competition


The export competition pillar includes various forms of direct and indirect export subsidies,
export credits, export insurance, food aid, etc. The most significant development in the export
competition pillar has been the decision at the Hong Kong Ministerial meeting to eliminate
export subsidies by 2013. However, the actual impact of the elimination of export subsidies
may be rather limited, given the fact that the amount of these subsidies -- less than $ 10
billion per year -- is significantly less than the amount of domestic support.

Agriculture negotiations: Indias stand

he agricultural sector is Indias most vulnerable sector. With the livelihood of around 650
million people in the country being dependent on agriculture, Indias interests in the
negotiations on agriculture are mainly defensive. Indias offensive interests lie in reducing the
heavy subsidisation in developed countries.

Indias interests in agriculture have always been dictated by the need to safeguard millions of
small farmers who operate the majority of farm holdings in the countryside. Agriculture
determines the very social fabric of India and is more a way of life and means of livelihood
than a question of commerce. Further, India has 25 agro-climatic zones that, on the one hand,
provide diversity to crop cultivation and, on the other, make crop rotation within a farm
extremely difficult. Given these complexities in agriculture, India has essentially defensive
interests in agriculture. Indias bound rates and applied agricultural tariffs are among the
highest in the world.

Further, the government has considerable flexibility to increase customs duties on most
agriculture products, as there is a substantial gap between the existing bound rates and
applied customs duty. To illustrate, the bound rate on some edible oils is 300%, but the
applied customs duty is 100%. Thus, the government has the flexibility to raise customs duty

on some edible oils. However, in respect of certain products like olive oil, the bound rate and
applied customs duty are the same -- 45% -- leaving almost no flexibility for raising customs
duty, even if the need were to arise in the future.

Keeping its agrarian crisis in view, India had made a strong pitch for according adequate
tariff protection to certain products by designating them special products. The products within
agriculture regarding which India is extra sensitive with respect to trade liberalisation -- due
to their potential for huge employment-generation and livelihood concerns -- include cereals,
edible oils and oilseeds and dairy products. Other agricultural products produced by small
farmers and, therefore, sensitive for India are spices, ginger, cane sugar, etc. These need to be
protected against deep tariff reduction.

As part of G33, India has strongly supported the need for developing countries to have a
Special Safeguard Mechanism (SSM) which would allow them to impose additional tariffs
when faced with cheap imports or when there is a surge in imports. However, developed
countries and some developing countries have sought to impose extremely restrictive
requirements for invoking SSM, which would render this instrument ineffective.

As far as agriculture is concerned, overall there does not appear to have been any major shift
in Indias negotiating stand. It has firmly resisted making deep tariff cuts on agricultural
products. At the same time, it is aggressively pushing developed countries to reduce their
farm support. However, as part of the G20 it has diluted its stand on green box and blue box
(subsidies provided for limiting production) subsidies. At the Cancun Ministerial meeting in
2003, the G20 had sought a cap on green box subsidies and rejected any expansion of blue
box subsidies. However, by the time the 2004 July Framework was concluded both these
demands appear to have been abandoned. India also does not seem to have made any
headway in obtaining the right to apply quantitative restrictions on agricultural imports, a
demand repeatedly made by stakeholders such as farmers organisations and NGOs.


While Indias negotiating strategy has been defensive, in general, there are several products
in which it may have an export interest. These include cereals, meat, dairy products, some
horticultural products and sugar, which may see a growth in export opportunities with
reductions in tariff. Indias negotiating strategy should also be cognizant of the export
opportunity that may be unleashed in the processed food sector, which has seen significant
growth over the past few years. It is here that the decision at Hong Kong to eliminate export
subsidies by 2013 assumes importance.

Non-Agricultural Market Access(NAMA)

In GATT/WTO, the term tariff is used to refer to a customs duty levied at the time a product
is imported into the territory of any country. Tariffs generally have three functions: (i) to
provide revenue to the government; (ii) to protect the domestic product from competition
with the imported product, as the latter becomes more costly because of the tariff; and (iii) to
function as an instrument of development policy in discouraging non-priority imports (such
as luxury goods), while encouraging priority imports like capital goods and industrial
intermediates. As the imported product becomes more expensive with the levy of a tariff than
it would be without it, tariffs have a restraining effect on imports.

GATT/WTO requires member countries to bind their tariffs at mutually negotiated rates with
a commitment that the applied customs duty in a members territory will not exceed the
negotiated level, which is referred to as the bound level. When a country undertakes the
obligation to bind tariff on a product, it cannot raise the tariff on that product beyond the
bound level. It may, however, apply a lower tariff at its own discretion. If a country has not
bound the tariff on a particular product, it is free to put any level of tariff on it. The bound
levels for a country are included in that countrys tariff schedule, which is kept in the WTO as
a record.


The negotiations on industrial tariffs are mainly on two issues: how to reduce tariffs by
working out a formula for tariff reduction, and what percentage of products will be covered
by tariff binding (commitment on binding coverage -- that is, the obligation not to raise tariffs
beyond committed bound levels on a range of products that are not currently covered by

Under GATT/WTO, there are different approaches to commitments on tariff reduction. The
least onerous approach for tariff reduction is to reduce the average tariff, with low reduction
on products requiring high tariff protection and higher reduction on products not requiring
special protection. A more onerous approach is to reduce tariffs on each tariff line on the basis
of a linear formula, under which tariffs are proportionately cut by a fixed percentage. The
most onerous method for taking action on tariff reduction commitments is through a nonlinear formula under which higher tariffs are cut more than lower tariffs. To illustrate, a
product with an initial tariff of 70% will face a higher cut than another product with an initial
tariff set at 40%. The extent of tariff cuts under a non-linear formula depends on the value of
the coefficient. One commonly used non-linear formula is the so-called Swiss Formula (see

Under GATT negotiations, developing countries were not required to reduce tariffs on a
product-by-product basis. Under the Uruguay Round commitments, they were required to
undertake tariff cuts in the least onerous manner - through average tariff reductions.

NAMA negotiations: Doha and beyond

Paragraph 16 of the Doha Declaration, which is on NAMA, has the following four elements:
1. Reduction/elimination of tariffs, including tariff peaks, high tariffs and tariff escalation, as
well as non-tariff barriers, in particular on products of export interest to developing
2. Comprehensive product coverage without any a priori exclusions.
3. Special needs and interests of developing countries and Least Developed Countries
(LDCs) to be taken fully into account.

4. Less than full reciprocity by developing countries and LDCs in reduction of tariffs.

Certain features of the Doha mandate on NAMA bear highlighting. First, the Doha
Declaration did not specify whether tariff reduction should be undertaken on the basis of
average tariff cuts or line-by-line formula-based cuts. Thus, the possibility existed for
developing countries to seek tariff reduction through the least onerous method of average
tariff reduction. Second, although the coverage of products for tariff reduction would be
comprehensive without a priori exclusions, the possibility exists for keeping certain tariff
lines outside the scope of tariff reduction. Third, the mandate provides for the special needs
and interests of developing countries to be fully taken into account in the negotiations.
Fourth, under the concept of less than full reciprocity, developed countries could be
expected to undertake deep tariff cuts without commensurate concessions from developing

These four features of the Doha mandate would suggest that the interests of developing
countries would be protected during NAMA negotiations. However, subsequent
developments do not indicate that the negotiations are proceeding in a direction that would
address the main concerns of developing countries like India.

In the July Framework it was recognised that the formula approach is key to reducing tariffs.
It was specified that countries would continue to work on a non-linear formula, to be applied
on a line-by-line basis. Certain flexibilities for addressing the concerns of developing
countries were also envisaged in the July Framework. As far as NAMA negotiations are
concerned, the crucial point is that the July Framework should be viewed only as providing
initial elements for further work, and should not be treated as having been accepted.

At the Hong Kong Ministerial meeting of the WTO in 2005, it was decided that NAMA tariff
reductions would be undertaken through what is known as the Swiss Formula. Expressed
mathematically, the Swiss Formula is as follows:


t1 = (a X t0) / (a+t0), where t1 = new reduced tariff after application of the Swiss Formula;
t0 = original tariff on which the Swiss Formula is applied; a = coefficient which determines
how steep the tariff cuts will be: the lower the coefficient, the larger the cuts.

NAMA negotiations: Indias stand

From Indias submissions on NAMA to the WTO, it would appear that Indias negotiating
position has evolved considerably and changed significantly from its initial approach to tariff
reduction and its earlier stand on how unbound tariff lines should be treated for purposes of
tariff reduction.

Indias initial approach to NAMA negotiations is contained in its submissions TN/MA/W/10

(dated October 22, 2002) and TN/MA/W/10/ Add 1 (dated January 8, 2003). From the outset,
India does not appear to have supported the least onerous approach to tariff reduction through
average tariff cuts. Instead, it favoured the relatively more onerous approach of a simple
percentage cut on each product. In April 2005, even this approach was abandoned in favour
of a still more onerous formula -- the non-linear ABI (Argentina-Brazil-India) Formula,
which is a variation of the Swiss Formula. Thus, Indias approach has evolved from seeking a
less tedious approach to tariff cuts to proposing and accepting tariff cuts based on the Swiss
Formula, which would result in significant tariff reductions.

As far as unbound tariff lines are concerned, Indias initial negotiating stand was that
developing countries should have the flexibility not to bind certain tariff lines still considered
domestically sensitive or strategically important. However, in a joint submission by
Argentina, Brazil and India, TN/MA/W/54 (dated April 15, 2005), India has clearly stated
that, increasing the binding coverage to 100% is a desirable objective of this Round. This is
another instance of a significant shift in Indias negotiating stand between October 2002 and
April 2005.


In general, no country can be expected to adhere to its initial negotiating stand during the
course of trade negotiations. The process of negotiations involves trade-offs, with countries
conceding ground on certain issues in order to secure gains in other areas. It would, therefore,
be useful to assess what gains developing countries, including India, have made in the
NAMA negotiations.

The Doha mandate provided for the reduction or elimination of tariff and non-tariff barriers
on products of export interest to developing countries. This would have been an issue of
particular interest to India as its exports in competitive sectors like apparel, leather and
footwear, etc, face significant tariff barriers in developed-country markets. So far no proposal
has been made, either by India or any other developing country, seeking reduction or
elimination of tariffs on products of interest to developing countries. While tariff reduction
through the Swiss Formula would cut into developed-country tariffs, particularly tariff peaks
on apparel, footwear, etc, in the absence of product-specific proposals, developing countries
would lose an opportunity to seek deeper cuts on products of export interest to them.

The Doha mandate provided for developing countries to make less than fully reciprocal
commitments. This is likely to be reflected through developing countries retaining the option
to keep a certain percentage of products outside the scope of tariff reduction, or subjecting
them to less than formula cuts. While the exact percentage of these tariff lines remains to be
agreed upon, this should provide a certain amount of breathing space to India for protecting
sensitive products from the adverse impacts of tariff reduction.

In one of its initial negotiating submissions (TN/MA/W/10/Add 1 dated January 8, 2003),

India proposed that developing countries must get credit for autonomously binding their
tariffs after the Uruguay Round. Credit for autonomous liberalisation can be obtained in the
form of less onerous tariff reduction commitments. As India has bound a large number of
tariff lines autonomously, after the Uruguay Round, it stands to gain significantly if
agreement is reached on the methodology for getting credit. It is, therefore, surprising that
India made a proposal on this issue only in June 2006, more than three years after having

suggested the idea. As Indias proposal was made rather late, it does not appear to have been
discussed at the WTO so far.

In its submission TN/MA/W/10 (dated October 22, 2002), India emphasised the significance
it attaches to the removal of Non-Tariff Barriers (NTBs), particularly on products of export
interest to developing countries. However, progress achieved so far in this matter does not
hold out any promise for the removal of these barriers in the near future. In the Hong Kong
Ministerial Declaration, the ministers have only taken note of the work done for the
identification, categorisation and examination of notified NTBs and have recognised the
need for specific negotiating proposals, which should be submitted as quickly as possible.
There is, thus, no deadline even for the submission of proposals, let alone for the elimination
of NTBs. Clearly, from Indias perspective, one of its important objectives -- the removal of
NTBs -- has not seen the progress it might have desired.

It is clear that the main and substantial gain made by India so far in the NAMA negotiations
relates to having the flexibility to protect certain sensitive products by keeping them outside
the scope of the applicable tariff reduction formula.

Implications for India of NAMA negotiations

Empirical evidence suggests that the integration of a country into the global economy
provides both benefits and challenges for consumers, business and the government. In a
scenario where Indias economy no longer faces a foreign exchange shortage, it would be
crucial for the country to leverage NAMA negotiations in order to generate employment
through the expansion of trade. Given the relatively high level of NAMA bound tariffs in
India, compared to developed countries, tariff reduction through the non-linear Swiss
Formula would require India to make deeper tariff cuts than developed countries. In other
words, the extent of percentage points by which India would be required to reduce its bound
tariffs would far exceed the corresponding number for developed countries. Herein lies the
imbalance in the possible outcome of NAMA negotiations for India. Domestically, one


possible way of mitigating the adverse effects of tariff reduction could be by designing
appropriate safety nets for sectors likely to be adversely affected by reduced tariffs.

As commitments on bound tariffs are almost irreversible, deep cuts in bound tariffs would
make it difficult for India to use tariff protection as a tool for industrial policy in the future. In
other words, India may not be able to protect some sectors of its domestic industry through
appropriate levels of customs duty, even if there is a surge in imports of low-priced
manufactured goods.

Given the employment potential of some of the informal sectors, including fish, natural
rubber, etc, it is important for India to seek import protection in these areas. At the same time,
India should not ignore the possibility of enhanced exports generating additional employment
in other sectors.

Based on simulations undertaken, it is clear that the outcome of tariff reduction would not be
trade-neutral or universally beneficial for different sectors. Labour utilisation for both skilled
and unskilled labour falls in nine out of the 28 sectors, particularly in raw materials-based
sectors, metals and auto components. However, there could be significant gains in output and
labour use for textiles and apparel. As these gains are likely to accrue over a broad initial
base, tariff liberalisation in this sector under NAMA could provide an overall balance for the
country. For India, any sectoral initiative to reduce tariffs to zero in selected sectors would be
meaningful only if developed countries agree to zero tariffs in the textiles and clothing sector.

Unlike many developing and developed countries, India is not a member of many
regional/free trade agreements. Thus, Indias exports become uncompetitive to the extent of
margin of preference enjoyed by its competitors in the domestic market of preferencegranting countries. This disadvantage would be addressed after NAMA tariffs come down.



It is the place where the member country comes and talks together and shares their
grievance in order to resolve their problem related to International trade.

The countries make their decisions through various councils and committees, whose
membership consists of all WTO members.

The system helps promote peace, by handling Dispute of member countries. It provides
free trade which cuts the costs of living and provides more choice of products and
qualities and stimulates economic growth.

The WTO agreements cover goods, services and intellectual property. They spell out the
principles of liberalization, and the permitted exceptions. They include individual
countries commitments to lower customs tariffs and other trade barriers, and to open and
keep open services markets. They set procedures for settling disputes. They prescribe
special treatment for developing countries. They require governments to make their trade
policies transparent.

WTO deals with the special needs of developing countries as two thirds of the WTO
members are developing countries and they play an increasingly important and active role
in the WTO because of their numbers, because they are becoming more important in the

global economy, and because they increasingly look to trade as a vital tool in their
development efforts.

From Indias perspective it would be most crucial during the Doha negotiations to protect
the interests of its farmers, even at the cost of foregoing benefits that might have
otherwise been made in services and NAMA negotiations.

As far as agriculture negotiations are concerned, the playing field may be tilted further
against India if it is required to undertake deep tariff cuts without any concurrent
elimination of farm subsidies by developed countries. Even the most ambitious proposal
would permit the US and the EU to together provide trade-distorting subsidies to the
extent of $ 30 billion. Further, without strengthened disciplines on green box, developed
countries may be in a position to increase subsidies under this category beyond the
present levels of $ 90 billion. Such high levels of farm subsidies in developed countries,
accompanied with deep tariff reductions in India, could severely threaten the livelihood of
Indias farmers as well as the food security of its people. There is no requirement for India
to reduce bound rates to address the current food shortage.

As far as NAMA is concerned, without a steep reduction in tariffs in the textiles and
clothing sector in developed countries, India may not stand to gain significantly. In
respect of services, India would need to balance the incremental gains that might accrue
to it from liberalisation in developed-country markets with the adverse consequences of
making commitments to liberalise sensitive sectors. As Indias existing regime in some
service sectors (like telecom) is more liberal than its existing commitments at the WTO, it
could seek to leverage this by binding its existing regime, provided it obtains
commensurate reciprocal concessions.


Websites and references

Wikipedia :

WTO official website :