Write a note on World Trade Organisation Agreements.

Published: 23rd March 2011
Views: N/A

World Trade Organisation AGREEMENTS:
INTRODUCTION :
The world Trade organization was established on 1st January, 1995 as a permanent body to deal with all the major aspects of international trade.
In fact, it is defined as the legal and institutional foundation of the multi lateral trading system.
WTO AGREEMENTS :
The WTO agreements are the result of the important issues discussed and negotiated by the members in the Uruguay round .
These agreements are the commitments made by the member nations to lower their tariffs and other trade barriers. The important WTO agreements are :
AGREEMENT ON TRADE RELATED INTELLECTUAL PROPERTY RIGHTS (TRIPS) :
Intellectual Property Rights seek to protect the interest of investors and developers of products and processes so as they are not copied by others.
The main features of the TRIPs agreement are :
1) Minimum standard of protection to be provided by each member.
2) Domestic procedures must be require enforcement of intellectual property rights by each member.
3) Domestic settlement between WTO members.
The following are as are covered by TRIPs Agreement :
Copy right and related rights, trademarks (including service marks , geographical indications, industrial designs, layout designs, protection of undisclosed information and trade secrets.
All developing nations are given a tramition period of five years to implement the provisions of the TRIPs agreement.
The TRIPs agreement attempts to narrow down the gaps and bring all the IPRs (intellectual property rights) under common international rules so as to give minimum levels of protection to member nations.
Disputes over TRIPs agreement are governed by WTO dispute settlement procedures.
IMPACT of TRIPs agreement:
Positive Impacts :
1) The TRIPs agreement gives protection against patents, copyrights, layout designs, etc. this has given a boost to Research and Development particularly in the field of pharmaceuticals, engineering, electronics, etc.
2) The TRIPs agreement recognized the need to protect public health and provide medicines for all. It has been agreed that countries possessing resources and technology to manufacture essential medicines and export these medicines without having to secure compulsory licensing from patent holders.
3) The WTO also provides Geographic Indication Status to certain items that are unique to a particular country. Eg: India has obtained GIS for Darjeeling Tea which indicates that Darjeeling Tea produced in India is unique.
Negative Impacts :
1) The TRIPs agreement favours developed countries as coupared to developing countries. This is because the developed countries hold large number of patents.
2) As the agreement on TRIPS extends to agriculture they have serious implications for developing countries. This transfers all the gains in the hands of MNG due to their huge financial resources and expertise.
3) The Agreement on TRIPs extend to micro- organisms hence it is closely connected with the development of agriculture, pharmaceuticals and industrial biotechnology. Patenting of micro-organisms benefits large MNG as they already have patents in several areas and they can acquire more patents at a faster rate.
AGREEMENT ON TRADE RELATED INVESTMENT MEASURES (TRIMs) :
Under Trade Related Investment Measures (TRIMs) Agreement, member nations adopt measures to treat foreign investment on par with domestic investment. These measures also remove quantitative restrictions on imports.
To encourage trade related investment, member nations have withdrawn certain investment measures that discriminate against foreign investment. These include :
Obligation on foreign investors to use local inputs.
Employment of local people.
Technology transfer requirement.
To produce for exports to obtain imported inputs.
Remittance restrictions on profits of foreign firms.
To meet export obligation.
Local equity requirement.
Control on use of imported inputs
Use of specific production technology.
IMPACT OF TRIMs agreement :
Positive impacts :
1) TRIMs agreement will encourage foreign firms to invest on developing countries. This will generate healthy competition
2) The efficiency and performance of domestic firms will improve.
3) Customers will enjoy better services.
Negative impacts :
1) The TRIMs agreement favours developed nations.
2) There is no provision made to deal with restrictive business practices of foreign investors.
3) This agreement may lead to foreign exchange drain from developing nations as foreign companies will be free to remit profits, dividends and royalties to the parent company.
AGREEMENT ON TRADE IN SERVICES (GATS) :
The General Agreement on Trade in Services (GATS) is the first multilateral agreement on trade in services.
All member nations are bound to open their services sector to domestic, private and foreign competition.
Objective of GATS :
To create a multilateral framework of principles and rules for trade in services.
2) to expand trade in services by introducing transparency and progressive liberalization.
3) to promote economic growth of all trading partners.
4) no restrictions on international payments and transfers.
* the General Agreement on Trade in services incorporates the following elements.
1) Complete coverage of all services.
2) To provide national treatment and market access to all member nations supplying services.
3) Increase participation in world trade in services for developing countries.
Impact of GATS
Positive Impact :
1) The foreign firms are allowed in a number of service sectors.
2) The foreign firms can enter through joint venture or partnership
3) This helps developing nations to expand and diversity their service activities.
Negative Impact :
1) Developing nations have to open up service sectors for foreign companies.
2) The domestic firms may not be able to compete with the giant foreign firms due to lack of resources and professional skills.
OTHER AGREEMENTS :
Other agreements include :
1) Agreement on manufactured goods (tariffs reduced by 40%)
2) Agreement on Agriculture : ( increase market orientation in agriculture, tariffs reduced by 36% (developed countries) and 24 % (developing countries), reduction in export subsidies, reduction in domestic subsidies)
3) agreement on textiles and Clothing : ( phasing out of import quotas )
4) agreement on Subsidies and Countervailing Measures : (prohibition of subsidies having high trade distorting effects, no action against subsidies that are not specific to an enterprise or industry, action taken by trading partners whose interests are adversely affected)
CONCLUSION :
Thus, WTO emerged at the initiative of advanced countries with a hidden agenda of serving their interests by increasing the scope for investment and market.
Developing countries had no option other than going along with the WTO, finding measures to derive maximum possible advantages and improve their economics both in quantity and quality.



Report this article Ask About This Article


Loading...
More to Explore