The main WTO agreement establishing the WTO consists of the negotiations, which incorporate the results of the Uruguay Round of the Multilateral Trade Negotiations.
Following are the basic broad lines of agreement reached in Uruguay round of negotiations. We also incorporate here some of the changes and amendments made in the original proposals.
(a) Understanding on Balance of Payment Provisions o f GATT:
The members imposing restrictions for correcting balance of payment deficits should give preference to price based measure. Such measures would give more stress on enhancement of economic efficiency.
(b) Agreement on Agriculture (A.O.A):
The agreement on agriculture seeks to open national markets to international competition (by replacing non-tariff measures with normal customs duties. The agreement also seeks to check overproduction by progressively reducing government assistance and subsidies, moreover it tries to reduce the subsidies to ensure fare price for agricultural produce. The Agreement on Agriculture relates to the following:
Subsidies fall into two categories, i.e., the non-product specific subsidies (given for all crops) and product specific subsidies (given for specific crops) for the purpose of calculating total subsides; both types of subsidies must be aggregated.
The total subsidies must not exceed 10% of the value of total agricultural production in that particular year in a country. As far India is concerned the total subsides on agriculture is less than 10% of total produce. But in Europe and America the subsidy is more than 45-55% which has detrimental impact on the farmers of developing countries.
(ii) Sanitary and Phytosanitary Measures:
This concern safety food of animal and plant health measures. The agreement lays down procedures and norms for the assessment of risk and determination of appropriate levels of phytosanitary or sanitary protection that could be offered.
(iii) Export Subsidies:
WTO members are required to reduce the value of direct export subsidies to a level of 36% below the 1986-90 base period level and to eliminate the subsidies in future course that is to be decided by the WTO authorities. Many countries have withdrawn export subsidies and cash compensatory support as well as reduced import duty.
(c) Agreement of Textiles and Clothing:
It has been decided that multifibre arrangements would be scrapped. This arrangement was against the most fundamental principle of non-discrimination in trade practices.
The developing countries which enjoyed certain quota in respect of exports will be facing certain problems in respect of their textile exports with the abolition of quotas. These multifibre arrangements will be phased out by 2005.
(d) Agreement on Trade Related Investment Measures (TRIMs):
TRIMs calls for the removal of all trade related investment measures within a period of five years.
TRIMs require foreign investment companies to be treated at par with national companies. The Agreement mentions that certain investment measures in many countries restrict and distort trade.
So it requires mandatory removal of all measures which are inconsistent with TRIMS proposals. Time frame fixed for such removal
(i) 2 years for developed countries
(ii) 5 years for developing
(iii) 7 years for LDCs.
An illustrative list identifies TRIMs such as Local content requirements (a part of input to be used locally) trade balancing requirements and domestic sales requirements, i.e., a company has to sell a certain part of its output locally are inconsistent with TRIMs proposal,
(e) General Agreement on Trade in Services (GATS):
The General Agreement on Trade in Services (GATS) provides legally enforceable rights to trade in all services. It is the world’s first multilateral agreement on investment, since it covers not just cross- border trade but every possible mean of providing a service.
All embargoes should be lifted and foreign companies should be allowed freely to do their business without any discrimination. The developing countries did not offer adequate market access to the developed countries. In the new regime such restrictions will be removed and in the case of delivery of services, cross border supply, FDI Movement, Tourism aspects and movement of personnel should be-brought under GATS agreement.
(f) Agreement on Trade Related Intellectual Property Rights (TRIPS):
Intellectual property means information with the commercial value. Innovation and creative expressions are within the ambit of intellectual property rights
Copyright Related Rights:
The rights of authors of literary and artistic works (such as books and other writings, musical compositions, paintings, sculpture, computer programs and films) are protected by copyright, for a minimum period of 50 years after the death of the author. In India the copy right is given for sixty years after the death of the author.
Any sign or combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings constitutes a trade mark. The owner of a registered trademark has the executive right to prevent third parties from using identical or similar signs for goods or services.
The protection of trademarks stimulates and ensures fair \ competition. ‘The protection may last indefinitely, provided the sign in question remains distinctive, such as HMV’s Trademark is famous all over world.
This refer to the identity of a product originating in territory a particular/region/locality where a given quality, a specific feature or reputation is essentially attributed to its geographical origin. Members are required to provide the legal means for interested parties to prevent the use of any indication which misleads the consumer as to the origin of commodities such as Scotch Whisky Darjeeling Tea etc.
The design means the features of shape, configuration, pattern, composition of lines or colours applied to any article whether in two dimensational or three dimentional or in both forms. The permissible time for a registered design is for fifteen years, from its data of composition developed.
Trips agreement provides the protection of independently industrial designs that are new or original.
The broad social purpose is to provide protection for the results of investment in the development of new technology, thus giving the required incentive and means to finance research and development activities. Maximum period protection available is for ten years.
Patents are given for inventions (whether products or processes) in the fields of technology a patent is a government granted and secured legal right (through the patent office of respective government) to prevent others from practicing, making, using, hiring or selling the invention covered by the patent.
The invention should be new and capable of commercial application. The patent owners can transfer the patent rights to conclude licensing contracts. The protection for patents is given for a period of 20 years.
An invention must satisfy following three conditions to be patentable, Novelty, Inventiveness and usefulness. For the drug, medicines or foods the patent right is granted for 14 years.
The Agreement provides protection to layout designs/topographies of integrated circuits for a period of ten years. The protection shall lapse 15 years after creation of the layout design.
Trade secrets having commercial value shall be protected against breach of confidence. The test data submitted to governments (in order to obtain marketing approval for pharmaceuticals and agricultural chemicals) shall be protected against unfair commercial.