Page 1 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel

]

[Economy 4 Newbies via Diagrams] WTO & Doha
made easy by Mrunal Patel PrefaceAlmost every magazine / UPSC related book / Newspaper Editorials talk about WTO frequently. but they all use extremely complicated language,(assuming that a reader is already knowing the basic concepts of WTO & free trade. but its not true in most cases- that’s why WTO becomes a boring topic for most candidates & they end up trying to cram up Doha conference etc. with out understanding the basic concepts on WTO. so here I try to explain WTO in as simple manner as i can. Complicated things are intentionally left out, Many examples here, will be politically & technically ‘not correct’ but I’ve wrote it in that way so new comers can understand basic things about WTO easily.

Contents
Tariff barriers..........................................................................................................................................................2 Non-Tariff barriers. .................................................................................................................................................2 what was happening before WTO. ...............................................................................................................................3 Why agreements? ......................................................................................................................................................3 Annex ........................................................................................................................................................................5 #1 Annex : GATT .........................................................................................................................................................5 #2 : Annex of GATS (services)...................................................................................................................................6 TRIPS =Trade related intellectual property rights ..........................................................................................................6 What is TRIPS all about?..........................................................................................................................................6 why TRIPS is imp? ...................................................................................................................................................6 India's Problem with GI ...........................................................................................................................................7 Time limit...............................................................................................................................................................7 What is the Use of these agreements? / What are the trading principles in WTO?..........................................................8 Without Discrimination ...........................................................................................................................................8 Freer Trade (bringing down barriers in international trade) – ....................................................................................8 Predictability ..........................................................................................................................................................9 Fair compitition ......................................................................................................................................................9 Economic Reforms ..................................................................................................................................................9 Get my articles in your Email-inbox- absolutely free : to subscribe- click Me or Visit my blog www.mrunal-exam.blogspot.com

........................................................................................................mrunal-exam.......................................................................................................................................... Non-Tariff barriers.................... (and there will be smuggling of foreign items! Like Gold watches/ perfumes etc in the 80s.......... 11 items for new negotiations in Doha............................................................................................................ Get my articles in your Email-inbox...............................click Me or Visit my blog www........................................................................... 12 Timeline – Evolution of WTO ........................................................................... 14 before we understand WTO.........................................................................................) from competition from foreign players......................................................................... 13 1986.......... 13 1994 (Marrakesh......................................................................... When Desi players are given subsidies / preference over the foreign players by Govt.................................................................. 10 DOHA...................................................... 11 SSM=special safeguard mechanism ......................... 11 What was India's Problem in Doha? ........ 13 1947:...................................................... 10 What did India Gain from WTO? ...... 12 Criticism of WTO.............................. 13 1944.............................................................................................................................................................. 10 what is DOHA?..................blogspot.............................................................................................................................................................. For example................ lets see Tariff barriers - Tariff = A government tax on imports or exports When Indian Govt........absolutely free : to subscribe.................................................................................................... of India.................................................... .................................................................................. puts heavy import duty / custom duty on Foreign Products – either that import item becomes very costly so people will buy desi* items....................................................... 14 2004 .......................................... 11 so concessions were given to them...................................................................................................................Page 2 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] What was before WTO? ....................................................................) *Desi= domestic / indian - This protects domestic players............................................................................................................................................................................ 11 More trouble for India ................................................................................................................. (= industrialists/ businessmen...........................................................................................................................................................................................................com .. Morocco) ........ 10 What were they talking in Doha? .........9 so WTO is better than GATT? ...........................................................................................................................9 India & WTO...........................................................................................................................................

are 3. compareo prices of Mobiles in 1999.blogspot. doesn't put high custom / import tax on it.absolutely free : to subscribe. but most imp.com .products will be expansive & customer won't have much choice. Here no tariff (=tax/money) is involved but still there is a barrier for foreign players.this is called 'protectionism / Tarrif Barriers'   this all sounds good from patriotic point but When there is less competition . (no high tarrif barriers) So.how expensive was it!) o talk-time plans (in 1999 it was about 7 Rs. The Primary objective of WTO is to remove the tarrif barriers / Custom duties.Camera. what was happening before WTO. now its around 50 Paisa / minute + Free incoming/) Today we have this fun. (to protect the domestic / Swadeshi industries). Why agreements? there are total 19 Agreements in WTO. because of globalization + import of foreign products & Govt. That’s why its called Non-Tariff barrier. and will make legally binding agreements. if yes.Page 3 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] o when Govt.mrunal-exam./minute + incoming wasn't free. = integrate all nations in international economy. with current prices! o features of current mobiles with 1999 (was there any MP3. for Example….. o making polices in such a way that its hard for foreign player to start factory / introduce his product in India o Intentionally setting the Quality standards so high that certain players can’t sell their products here. (i'll explain it later in this article. Color Screen etc features.) Get my articles in your Email-inbox. in the tender it’ll mention that only Domestic companies can fill the tender.  Nations would put heavy custom duties on foriegn items. radio. WTO will consult with all member-nations. For this. is buying some phones/ Xerox Machines.click Me or Visit my blog www.

But there will be some bad-nations who won't play by the rules & try to cheat such agreements. ( only TRIPS doesn’t have any annex) Get my articles in your Email-inbox. - The Secretariat of WTO keeps an eye on every nation – seeing whether agreements are followed or not. So second objective of WTO is 'Dispute Resolution' that's like an international civil court.Page 4 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] - these agreements talk about what is compulsory & what is non-compulsory for each nation.in that you'll find the detailed provisions & items included in the agreements. And what will be the penalties if a nation doesn't follow these agreements.com . Every Agreement has an 'Annex'.absolutely free : to subscribe. Now lets see the 3 most imp agreements of WTO.mrunal-exam.blogspot. they’ve annexes which provide operation details about how to implement these agreements.click Me or Visit my blog www. See this chart Like I said ago.

Green & Amber list) – see this chart- Apart from this.mrunal-exam.blogspot.com .click Me or Visit my blog www.absolutely free : to subscribe. SCM = subsidies & counter veiling measures (=the Red. shipment inspection and anti-dumping are also included in GATT annex.Page 5 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] Now lets see their annex 1 by 1 via charts. Get my articles in your Email-inbox. Annex #1 Annex : GATT 1 – SPS came after Doha Now another mimp annex of GATT is.

click Me or Visit my blog www. TRIPS doesn’t have any annex! But TRIPS is very imp agreement in today’s world full of technologies-so lets see what’s it about t. TRIPS doesn’t have any annexes.blogspot.com .  there are certain items whose actual price can't be counted based on 'physical material used in it' (e. under TRIPS agreement. Books are not sold based on number of pages/ cost of paper but content & fame of author.mrunal-exam. What is TRIPS all about?  In short. there will be wide spread piracy & then Inventors of 1st world won't invest / come in 3rd world market. every member-nation has to make laws and tough punishments for anyone who breaks / copies other people's copyright / patent etc.(R&D) o it takes years and billions of rupees to make a new drug. TRIPS =Trade related intellectual property rights Its one of the agreement between WTO member nations.Page 6 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] #2 : Annex of GATS (services) #3 : TRIPS – like I said ago.absolutely free : to subscribe. Get my articles in your Email-inbox.g. why TRIPS is imp?  otherwise.) so we can't apply GATT (which is for physical goods ) and Book is not a 'service' either (so can't apply GATS)  Research & Development. o but retail price of one tablet of that drug would be about 5 Rs.

GATS.click Me or Visit my blog www.  the GI (Geographical indicator) o like Darjiling tea.only the tea made in Darjiling can be sold as 'Darjiling tea' o otherwise.mrunal-exam. Time limit     it came in force from 1st January 1995.Page 7 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] o here. but now the time is extended upto 2016 for pharmaceutical patent laws. if the patent / copyright wasn't protected.com . Apart from above 3 agreements (GATT. and according to its provision Developed nations have to make such laws within 1 year. India's Problem with GI   Pakis also claim GI for their Basmati Rice.& then world will be deprived of better products. then inventors will not invest in R&D. Least Developing countries (like Zimbabway/ Somalia) were given time limit upto 11 years (=2006) .absolutely free : to subscribe. developing nations (like India) have to make such laws within 5 years. TRIPS doesn't talk about trans-border GIs. TRIPS) other 3 imp agreements are-(see this diagram) Get my articles in your Email-inbox.blogspot. Britishers would also sell their tea claiming it to be 'Darjiling variety' and then our tea makers will face unfair compitition.

non-tariff barriers* (explained later. so Americans will find it cheap to buy from China compared to other nations. if India grants a special favor to one nation – India will have to give that special favor to all membernations of WTO. you can’t have a system like Local businessman’s file will be cleared first or local man will be given preference in contract / tenders / 3G frequency allocation. so Indian toy makers collapse and toy market in India is captured by China.) Get my articles in your Email-inbox. red tape 6.blogspot. Country can give special favors to 3rd world / poor nations. A nation can impose high import duty/ prevent entry of goods from a nation that’s doing unfair trade practices (like dumping* / Products dangerous to health**) d. subsidies 4.com . Quota 3. ** Products dangerous to health like China’s milk powder which had melamine. (e. Freer Trade (bringing down barriers in international trade) –  WTO agreements try to abolish following things1.g. custom duties 2.Page 8 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] What is the Use of these agreements? / What are the trading principles in WTO? Without Discrimination    MFN = Most favored nation In WTO.mrunal-exam.  India will have to treat locals & foreign players equally. Artificially propped up exchange rates a.) 5.click Me or Visit my blog www. i. But there are strict conditions in WTO. ii. every nation is MFN So. c. before you can do above things. like China intentionally keeps the value of Yuan low. *Dumping =China intentionally sends extremely cheap toys in india. Group of nations can form FTA = Free trade agreements b.)  Exception to this principle a.absolutely free : to subscribe.

along with those goods. In WTO.) policy environment is predictable. the 3rd world nations have to change their policies. GATT talked only about goods (physical products) . subsidies.Page 9 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] Predictability  When there are legally binding agreements between member nations of WTO.inspctor raj) What was before WTO? Before WTO.      This gives confidence of foreign investors because of Promise of stability (=Ceilings on customs tariffs. even after change in Govt. but in WTO. The working of WTO is more transparent. so WTO is better than GATT? Yes.)  And foreign investment helps the domestic economy as well. bad nation has to pay high penalties for not following the rules. Fair compitition WTO agreements prevent unfair dumping.absolutely free : to subscribe.blogspot.it means. 3. there was GATT. in GATT.mrunal-exam.(= Transparency in trade rules) Equal treatment to Local players & foreign players. = reform (remember the pre-LPG Era . WTO dispute resolution is quicker than GATT (disputes have to be solved within 18 months) 2. because of following reasons. And if you cheat.com . BPO) & Intellectual property rights. 6. WTO talks about services (phone lines. the bad-nation was free to determine its own penalty. (=open access to markets) binding commitments (WTO keeps an eye on each nation – so Govt.you’ll have to pay fines. government procurement Economic Reforms to implement WTO Agreements. (BJP / Congress / whatever) – the Indian policy of international trades won’t alter very much.click Me or Visit my blog www. Unlike IMF where rich nations have more voting powers. 5. 4. can’t cheat. GATT was criticized for being 'Rich men's club' Everything in GATT used to work in a manner that'd suit the rich nations.licence.quota. 1. every nation has one vote only. Get my articles in your Email-inbox.

com . Mexico in September 2003. Get my articles in your Email-inbox.blogspot. ↑ flow of Foreign investment & technology. (because Foreigners established research labs/ manufacturing units in India & started selling their products here.) 8.and the talks continued. 4th Ministerial conference of WTO was held in that city in Nov. DOHA what is DOHA? Doha is capital city of a small nation called Qatar.mrunal-exam.absolutely free : to subscribe.22 billion in 1998-99.' aka "DDA = Doha Development agenda. India had to adopt international standards in Intellectual property rights.." Fifth Ministerial Conference was held in Cancun. our export was only $33. so this entire package is called 'Doha round of talks. India won multilateral dispute settlement against such powerful economies as USA 5.) otherwise previously UK and other nation had put quantitative limits on Indian Cotton's Entry in their market. right now India's exports are worth more than $100 billion 4. 2. 7. India got boom in exports because WTO gradually lowered Barriers internationally. 3. Textiles boom (because MFA = Multilateral Fiber Agreement was scrapped under WTO's ATC=Agreement on Texttile clothings.2001. What did India Gain from WTO? 1.= 6. and they (member nations) started talking about some new agreements & issues .click Me or Visit my blog www.Page 10 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] India & WTO first lets see what positive things happened then we talk of Doha Rounds and finally about What's India's problem in Doha rounds. because of TRIPS.

Multilateral environmental agreements 2. 2.mrunal-exam. then India can put tariff barrier (= increase import duty on American Corn) so that prices become high again. so concessions were given to them. Fisheries subsidies =they harm environment. but they've to be scientific.click Me or Visit my blog www.blogspot.   Members were divided on competition policy & transparency in Govt.com . if USA sends so much cheap corn to India. Get my articles in your Email-inbox. items for new negotiations in Doha 1.Page 11 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] What were they talking in Doha? Developing nations were complaining that they're facing difficulties in implementing WTO agreements. What was India's Problem in Doha? SSM=special safeguard mechanism  its a measure designed to protect poor farmers by allowing countries to impose a special tariff on certain agricultural goods in the event of an import surge or price fall  For example. and our farmers will starve. no one would by Indian Corn. by encouraging too many fishermen to chase insufficient fish the Doha conference failed because it ended with out any consensus. that price of Corn become 50 paisa per kg. now it was relaxed. Trade barriers on environmental goods & services 3. SPS annex added under GATT (hope you saw the previous diagram of GATT annex) a. First world blames India to be the main villain for failure of Doha talks. Earlier TRIPS (intellectual property rights) was strict.   otherwise. United States arguing that the threshold had been set too low.and agreement changed saying that Laws should be made which supports existing medicines and public health interest at large. a. SPS: Sanitary+ Phytosanitary Measures Agreement (on farm products) b. 1. procurements.absolutely free : to subscribe. Each nation can make its own Quality control rules c.

WTO promotes industries.g. Because it increases employment. you’ll face such topics in mains / essay. But these MNCs sometimes are involved in bad things. more mobile companies are good. Eg. But same is not true in India. and employ forced laborers in it." Criticism of WTO Mostly comes from environment activities. They pay huge bribes to Burma’s military regime for operating the gas lines. nickel mines etc. (= read editorials. or you can start your own mobile repair shop and so on…) But same is not true about agriculture sector.mrunal-exam. if it was decided that if price fall to 5 Rs.absolutely free : to subscribe.blogspot. then it’ll create huge problem for their employment. since 70% of India’s population depends on one way or another with the agriculture sector. unless price of corn falls very low. However the problem of food-price inflation should also be taken into account. (you can be a representative of some mobile co.!)  India doesn't agree with US on this. India has insisted on a large number of special products that would not be exposed to wider market opening Like I said ago. 1. Apart from this. latest machinery. but US wants that India shouldn't be allowed to act. then India could do this. something like 50 paisa / kg. Get my articles in your Email-inbox. Its easy for each American farmer to produce tonnes of grain (and sell his produce cheap). failing which we will approach the WTO again. you can sell pre-paid cards etc. / kg corn. “We want India to get rid of its taxes on wines and spirits in different states to allow easier access to European wines.Page 12 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel]  (e. MNC (Multi-national corporations) a. because every farmer has huge farms.click Me or Visit my blog www.) More trouble for India NAMA= Non-agricultural market access negotiations European Union has threatened to approach the World Trade Organisation (WTO) again if India does not remove the inter-state tariff disparities. or if you’ve retail store. fertilizers & great seeds+ continuous water supply + subsidy. So if cheap foreign items are allowed.com .

when India was under British Rule. it wants the developing nations to stop polluting the world & cut their emissions! Timeline – Evolution of WTO 1944   Bretton Woods conference. 3. if we exported our Indian Textiles to Britain. then China will go to WTO. they wanted to make ITO (International Trade Org. as you know in colonial era. So even if there is no barrier today. so currently their products will be technically and in quality far superior than ours.Page 13 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] 2.absolutely free : to subscribe.g.) e. everyone agreed on it Get my articles in your Email-inbox. If they put some ban on it. thus the domestic industries face tough competition which sometimes ruins them. they’d put huge import tax on it.click Me or Visit my blog www.com . can do. This sort of ‘protectionism’ in old times (almost upto 1995) = their companies made lot of profit during that era & had lot profit invested in Research and technology. (=3rd world’s products lag in race in 1st world’s market. and WTO will impose heavy fines on India. So Britishers would only buy locally made cloths from Manchester.) but it didn’t happen.) and yet not much the Indian Govt. 3rd world has to open its market for first world product without much benefit in the reverse process. Thus our cloths would become very expensive in their market. its not possible for Indian Toy maker to compete with Chinese toys in retail price.blogspot. British people will buy their product and not ours. America allowed its factories to pollute the atmosphere and thus became a developed nation but now. (e.mrunal-exam. 4. This argument runs on the same line like of climate change. Its hard to put barriers on imported items. The infrastructure boom because of WTO (more foreign companies making factories in India) – leads to habitat / bio-diversity loss & pollution etc.g. 1947:   GATT (General Agreement on Trade & Tariffs) established It was criticized as being 'RICH MEN'S CLUB' 1986    Uruguay Round of Talks Service & Intellectual Property rights related topics included in the debate 1993.

blogspot.absolutely free : to subscribe.click Me or Visit my blog www. Morocco) All nations signed on agreement & WTO was established 2004 148 nations are members of WTO.com .mrunal-exam. covering 94% of international trade Get my articles in your Email-inbox.Page 14 of 14 [WTO & Doha Conference for Newbies by Mrunal Patel] 1994 (Marrakesh.