ASSIGNMENT ON WTO AND ITS ROLE

Submitted to University of Petroleum and Energy Studies, Dehradun

In the partial fulfilment of the requirement for degree of BA.LLB (Hons.)

Supervised by: Submitted by:

Parth Sharma Vishesh Singh R450219113

Assistant Professor Anubhav Shukla- R450219149

Shabaz - R450219157

University of Petroleum and Energy Studies, Dehradun

December 2020
Introduction

The World Trade Organization (WTO) is an intergovernmental organisation dedicated to

international trade regulation between nations. On 1 January 1995, the WTO officially started
to work under the Marrakesh Agreement, signed by 123 countries on 15 April 1994,
replacing the General Agreement on Tariffs and Trade (GATT) which had begun in 1948. In
the world, it is the biggest international economic organisation.

The WTO deals with the regulation of trade in products, services and intellectual property
between participating countries by creating a mechanism for negotiating trade agreements
and a dispute settlement process aimed at ensuring the adherence of participants to WTO
agreements signed by representatives of Member States and ratified by their parliaments. The
WTO forbids discrimination between trading partners, although it makes exceptions for
protection of the environment, national security and other essential objectives.Trade-related
disputes are resolved by impartial WTO judges through a dispute settlement mechanism.

The new Director-General of the WTO is Roberto Azevêdo, who heads a team of more than
600 in Geneva, Switzerland. The Trade Facilitation Agreement, part of the Bali Decision
Package, was decided on 7 December 2013 by all members, the first substantive agreement in
the history of the organisation. The amendment to the WTO Trade-Related Aspects of
Intellectual Property Rights (TRIPS) Agreement, on 23 January 2017, represents the first
time that WTO agreements have been amended since the organisation opened in 1995, and
this move could provide developing countries with a legal avenue to access affordable
remedies under WTO law.
Studies show that the WTO enhanced trade, the absence of the WTO, would also lead trade
barriers higher. The text of trade agreements has been highly influenced by the WTO, as
"nearly all recent [preferential trade agreements (PTAs)] reference the WTO explicitly, often
dozens of times across multiple chapters... in many of these same PTAs we find that
substantial portions of treaty language—sometime the majority of a chapter—is copied
verbatim from a WTO agreement."

WTO ROLE IN WORLD POLITICS

Sustainable development and protection and preservation of the environment are fundamental
goals of the WTO. They are enshrined in the Marrakesh Agreement, which established the WTO, and
complement the WTO’s objective to reduce trade barriers and eliminate discriminatory treatment in
international trade relations. While there is no specific agreement dealing with the environment,
under WTO rules members can adopt trade-related measures aimed at protecting the environment
provided a number of conditions to avoid the misuse of such measures for protectionist ends are
fulfilled.
The WTO contributes to the protection and preservation of the environment through its objective of
ensuring sustainable development and avoiding protectionism, through its rules and enforcement
mechanism, and through work in different WTO bodies.

Since its foundation the World Trade Organization has received much criticism. The inefficient and
undemocratic voting process, the current stall of the Doha Round of negotiations, and the
shortcomings of its Dispute Settling Understanding have tarnished the organization’s previous
achievements (Lester, Mercurio & Davies, 2012 and Breuss, 2001). Founded in 1995, the WTO is a
multi-lateral international body that regulates trade among nations. The organization provides a
forum for its current 160 members to discuss and agree on progressive tariff reductions in order to
achieve overall sustainable economic development and improved standards of living. However, the
current policy of non-discrimination on traded goods based on their likeness compromises these
goals. In particular, the currently used definition of “like goods” undermines the competitiveness of
products manufactured with sustainable and environmentally friendly techniques. These products
can’t compete with equally tariffed output of large-scale industrial companies, which often exploit
cheap human labor in order to keep their costs of production low. Although this would imply a
distortion of the free market economy, a more active role of the WTO in protecting corporate
responsible products would help the organization achieve its declared goal of higher standards of
livings through sustainable development.

The WTO was formed following the 1986-1994 Uruguay Round of tariffs negotiations, thereby giving
an institutional dimension to the General Agreement on Tariffs and Trade (GATT), the legal principles
which have regulated trade since 1947. The preamble of the Agreement Establishing the World
Trade Organization clearly states the objectives of this international body, which include “raising
standard of living, ensuring full employment […], expanding the production of and trade in goods
and services” (WTO, 1994). In order to achieve these objectives, the WTO relies on the same
principles laid out by the GATT: non-discrimination of traded goods and the Most Favored Nation
treatment. The non-discrimination principle states that “the products of the territory of any
contracting party imported into the territory of any other contracting party shall be accorded
treatment no less favorable than that accorded to like products of national origin” (GATT). In simple
terms, no country can charge higher tariffs on two identical goods based on their origin. This is one
of the key principles on which the global post-WWII trade system rests. Not surprisingly, the
definition of like products is highly debated, as this pivotal element has sparked numerous legal
controversies. Usually, four principles are considered when assessing whether two products are “like
goods” or not: the physical appearance of the products, the extent to which they serve similar end-
uses, extent to which consumers see them as alternatives to satisfy particular wants, and the
international classification for tariff purposes (Porges & Meltzer, 2014). Furthermore, if two distinct
products were deemed directly competitive and substitutable, they would fall under the same non-
discriminatory rule.

This rule was well intended, as it prevents domestic countries from putting imported goods at a
disadvantage by charging higher tariffs. A clear example of a country attempting to disobey this
regulation can be seen in the WTO case “Japan-Alcohol”, in which Japan was found guilty of charging
a differential taxation on imported Russian vodka over the domestic shochu. The judicial panel
deemed the two alcoholic beverages “like goods” for all tariff purposes (Lester, Mercurio & Davies,
2012). In a similar case, Chile was held responsible for the de facto discrimination against imported
liquor in order to protect the domestic wine industry. Regardless of its good intentions, however,
this likeness definition ignores the methods of production, penalizing goods manufactured in fair
and respectable ways when they are forced to compete with multi-national corporations’ (MNC)
efforts to cut costs regardless of the social impacts

WTO and Indian economy

The World Trade Organization (WTO) was made on January 1, 1995 to advance world trade. The
multilateral trade arrangements remember the General Agreement for Tariffs and Trade (GATT)
1994 and its connected arrangements; the General Agreement on Trade in Services (GATS); and the
Trade-related Intellectual Property Rights (TRIPS). Notwithstanding these arrangements, Annexures
1 and 2 cover the debate settlement component and Annexure 3 the trade strategy system. An
imperative component is that these three Annexures are essential for a "solitary endeavor"
approach. The essential standards of the system are: most preferred country (treating all nations
similarly); public treatment (treating outsiders and local people similarly); and more liberated trade
(decreases in taxes and expulsion of non-tax hindrances).

The WTO has 153 individuals and around a 66% of them are non-industrial nations. The exceptional
and differential treatment arrangements permit the created nations to treat the agricultural nations
more well than the other WTO individuals. Agricultural nations face a few difficulties in adapting up
to the trade system. They are: satisfying responsibilities under WTO arrangements which require
lawful and managerial changes; limit working to express concerns and trade-offs during the dealings;
transformation and moderation approaches to contain the unfriendly impacts of globalization; and
the contracting of strategy space as a result of the worldwide responsibilities. They are cognizant
that they didn't accomplish the preliminary work at the arrangements stage. They were reluctant
about the GATS and the TRIPS, however acknowledged them since all the arrangements shaped a
"solitary endeavor". Further, they see that the globalization cycle is slanted (more noteworthy
portability of products and capital and lesser versatility of work) and that the vast majority of the
S&DT arrangements are not obligatory. The Doha ecclesiastical meeting (2001) attempted to join
advancement worries in the new round of trade arrangements.

Viewpoint

This book, which is an accumulation of 18 papers, gives the non-industrial nations' point of view,
arranging alternatives and systems, market access, trade assistance and government obtainment,
TRIPS and GATS, and development, destitution and imbalance. Manoj Pant noticed that, with the
single-undertaking statement permitting cross-sectoral dealing, the specialty of exchanges is
something that non-industrial nations need to learn.

Arvind Panagariya contends that, the proceeded with deviations in the impact of the rich and
helpless nations in any case, the WTO is by a wide margin India's best trust in ensuring its exchanging
rights. He says India, while developing its arranging methodologies, should contemplate the
immediate advantages that stream from the requests set forward, characterize its arranging
positions emphatically as opposed to contrarily, and really investigate the endgame.
With respect to showcase access, non-industrial nations need trade in farming to be liberated from
homegrown backings and other non-tax mutilations and the tax accelerations for work concentrated
items —, for example, material and apparel and cowhide items — in created nations to be taken out.

The TRIPS understanding has been an antagonistic issue for the non-industrial nations since it
influences the structure and working of the drug business, which has genuine ramifications for
medical care.

Presentation

The activities taken by Brazil, India, and South Africa prompted the reception of a Declaration on
TRIPS and general wellbeing by the WTO ecclesiastical gathering in 2001. This presentation
recognizes the power of the nations' entitlement to allow obligatory licenses and the opportunity to
decide the grounds on which such licenses are conceded and furthermore the option to figure out
what comprises a public crisis or different conditions of outrageous earnestness to actualize the
TRIPS arrangement.

In regard of GATS, India's relative favorable circumstances rest with Mode 1 (cross-outskirt supply of
administration) and Mode 4 (arrangement of administrations requiring the impermanent
development of characteristic people).

Agreement

The European Union and the United States have made plurilateral solicitations to India for more
prominent business presence rights (Mode 3). Rashmi Banga inspects the seriousness and readiness
of various assistance areas in India for conveying the advancement cycle forward, other than
featuring the homegrown and outside limitations. There is by all accounts an agreement that, in the
long haul, development in trade will quicken financial development and may diminish pay imbalance
and that, for the time being, there is a chance of the disparity enlarging without suitable homegrown
arrangements.

In general, the book gives a thorough and clear record of the WTO issues, the view of the created
just as the non-industrial nations on different trade issues, and how public conditions of nations
impact exchange procedures and arrangements of alliances. Notwithstanding, it doesn't manage the
ongoing worldwide soften down and its suggestions for the worldwide exchanging system. Trade-
related policymakers and understudies inspired by strategy issues influencing global trade will
discover the distribution helpful.