Transcript
Overview of WTO Agreements: Past, Present and Future
Dr. Harish Anand
Economist
Presentation made to Faculty members of Master of Business Management, RIMT, Govindgarh,
Punjab
International trade : An engine of economic growth
Ricardo’s Comparative Advantage Theory
David Ricardo, 1772-1823
Evolution of WTO: The Rising of Expectations
1930’-1948s
1948 -1961
1964-1967
1973-79
Trend Continues…
ITOGATT
1986-94
1995-2001
Trend Continue…
Kennedy Round
Tokyo Round
Uruguay Round
WTO and Doha Round
What is expected from World Trade Organisation
Promotion of Free Trade
Trade Dispute settlement forum
Developmental concerns
Growing influences of developing countries
Whether ‘the expected’ is delivered: NAMA
Direction is right but process is slow
Difficulties are many on the road to free trade
1. Formula for tariff cut-Swiss formula, coefficient
contentious issue, LTFR for developed countries( 30%
Vs 60%)
2. Flexibility for DC from applying Swiss formula
3. Anti-concentration clause
4. Sectoral negotiations: USA identify four sectors
High Tariff and Tariff Peaks
USA EU India
Average Import Tariff* 3-4% 3-4% 15%
Tariff on Textile and clothing
9-32% Up to 12% 15%
Tariff on industrial products
* Based on average tariff of developed countries on import of developing counting , HDR 2005
Tariff Escalation
4%
9%-12%8%
12%-15%UP TO 12%
20%-32%
0%
5%
10%
15%
20%
25%
YARN FABRIC GARMENTS
IMPORT TARIFF ON TEXTILE PRODUCTS: PERVERSE GRADUATION
EU
USA
Whether ‘the expected’ is delivered: Agriculture
Market access
Level of export subsidy
Level of domestic subsidy Amber box Blue Box Green Box
No firm commitment by Developed countries EU USA –difficult demands
Whether ‘the expected’ is delivered: Other areas
Services sector Mode 3- commercial presence Mode 1- export of services Mode 4- Movement of natural person
Investment : Export obligations
Competition policy-Government procurement
Intellectual Propriety Rights- Essential Medicines
Trade and Environmental concerns
US President Trade Policy Agenda(2009): Making Trade Work for American Families
Trade is beneficial … it respects the right of workers…
Trade a tool kit to addressing environmental challenges
What United states would be expected to give is well
known but broad flexibilities available to other leaves
unclear the value of new opportunities for our workers
Government procurements and market regulations in
partner countries
Margin of preferences for poorest of countries
WTO: Is Doha Round failure is end of MTS under WTO
Principle of Non Discrimination: GATT Article-1
MFN tariff and National treatment. However, there are some exceptions:
BOP problem, Infant industry, Special and differential
treatment
GSP treatment
Reasons for RTAs
RTAs Limitations (Jacob Winner )
Whether “SPAGHETTI BOWL” PTAs are complementary or undermine MTS
Question 1: Will PTAs give incentive/disincentive to
members to bring in more non-members in PTAs
Question 2: Whether PTAs handicapped or prompt
member countries to liberalise trade to non member
countries
(WTO 1995 study and WTO 2005 study)
Non trade issues and MTS under WTO
How to deal with PTAs/RTAs
WTO and Sovereignty of Nations: A Real Concern or Hype overblown
WTO rules restrict ‘Policy Space’ for DCs.?
A challenge to traditional thinking on sovereignty
Regulating global companies, global factor, goods
and service markets
Sovereignty reclaimed
WTO: Coordination with other international organisations
Growing ‘internalization of world’ Global finance-Role of FII in Indian stock market
Growing need for WTO to co-ordinate with other international agencies like World Bank, IMF, ILO and UNEP
WTO Dispute Settlement Mechanism and emerging international trade flow
Growing use of DSM facilities with variegated level
of interest in WTO than GATT
Frequency of using DSM
Regime interplay –non economic factor
consideration
Way forward
WTO: Legitimacy concerns
Growing role of civil society (NGOs)
It reflects public opinion on trade, foreign, social, environmental policy areas and found to be useful
Issues like core labour standards have been raised in Ministerial Declarations
Public health and trade linkage is another issue especially in IPR e.g. Case of life saving medicines
WTO: Structural and procedural issues; Decision making and variable geometry
Structure and procedures need revisit-consensus
Variable geometry : Tokyo Round, PTAs, S&D treatment
Alternatives to Single Undertaking
Increased political reinforcement for commitment made at WTO
Tailoring Commitments for LDCs
Focus on capacity building
Contractual agreement for financial support
Technical assistance
Longer implementation period and lower
commitment
Complete waiver should be avoided to avoid
complacency
Some potential areas for WTO coverage
Excess supply to stressed supply: Food Security
Concerns-Bio-fuel
Oil and energy security-Oil cartels
Sovereign wealth funds and national security:
Excess liquidity leading to saving gut
Trade and environment concern linkages
WTO AGREEMENTS: INDIAN PERSPECTIVE
GOVERNMENT LEVEL China factor Growing interest in oversea markets
Exports, FDI, Service exports (Mode 4) Global finance –Mandi Govindgarh case To handle new challenges in emerging environment
INDUSTRY
ACADEMIC
Thank You
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