GATT and WTO

Globalization, Deglobalization and Reglobalization

The idea of globalization

Free Trade Vs Protectionism

Barriers of Trade

Stages of Economic Integration

World Trade Organization, as an institution was established in 1995. It replaced General Agreement on Trade and Tariffs (GATT) which was in place since 1946.

About WTO: The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations.
At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments.
The goal is to ensure that trade flows as smoothly, predictably and freely as possible.

GATT vs WTO:

	GATT	WTO
Purpose	To strengthen international trade	To govern GATT and international trade practices.
Framework	No permanent structure or framework	Has a permanent structure with a permanent framework
Scope	Trade in goods	Trade in goods; trade in services and trade-related aspects of intellectual property rights
Dispute resolution	Has a permanent appellate body to review findings and settle disputes	Disputes are resolved faster as settlement system has a select time frame

Currently, WTO has 164 members. It is located in Geneva, Switzerland. It was established on 1 January 1995. 

Uruguay Ministerial Conference (1986 – 93)

The Uruguay Round, the eigth and most ambitious Round of multilateral trade negotiations under the auspicious of the GATT which involved 117 countries, concluded on December 15, 1993 after more than 7 years of often contentions trade talks. The Final Act was signed at Marrakesh on the fifteenth day of April, 1994. The major themes of the Final Act are as follows:

• World Trade Organisation (WTO): GATT has been converted from a provisional agreement into a formal international organisation called WTO. The World Trade Organisation will serve as a single institutional framework encompassing GATT and all the results of the Round.
• Industrial Products (Market Access): Under this agreement, tariffs on industrial products are to be reduced by more than 1/3 on average. In industrial countries, tariff would be eliminated in several sectors (for example, steel, pharmaceuticals, and wood and wood products). Developing countries would both lower their tariff barriers significantly and increase the number of their ‘bound’ tariffs.

What is the WTO?

Who we are: The WTO has many roles: it operates a global system of trade rules, it acts as a forum for negotiating trade agreements, its settles trade disputes between its members and it supports the needs of developing countries.
What we do: All major decisions are made by the WTO’s member governments: either by ministers (who usually meet at least every two years) or by their ambassadors or delegates (who meet regularly in Geneva).
What we stand for: A number of simple, fundamental principles form the foundation of the multilateral trading system.
Overview: The primary purpose of the WTO is to open trade for the benefit of all.

Objectives of WTO

• Raise living standards
• Ensure full employment
• Ensure a large and steadily growing volume of real income and effective demand
• Expand the production of and trade in, goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development.

 Decision-making

• Organization chart: The WTO’s top decision-making body is the Ministerial Conference. Below this is the General Council and various other councils and committees.
• Ministerial conferences: Ministerial conferences usually take place every two years.
• General Council: The General Council is the top day-to-day decision-making body. It meets a number of times a year in Geneva.

Whose WTO is it any way?

The WTO is run by its member governments. All major decisions are made by the membership as a whole, either by ministers (who meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva).
Decisions are normally taken by consensus. In this respect, the WTO is different from some other international organizations such as the World Bank and International Monetary Fund.

Organizational hierarchy:

The Ministerial Conference: So, the WTO belongs to its members. The countries make their decisions through various councils and committees, whose membership consists of all WTO members. Topmost is the ministerial conference which has to meet at least once every two years.
The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.

Second level: General Council in three guises: Day-to-day work in between the ministerial conferences is handled by three bodies:

• The General Council
• The Dispute Settlement Body
• The Trade Policy Review Body

All three are in fact the same — The General Council acts on behalf of the Ministerial Conference on all WTO affairs. It meets as the Dispute Settlement Body and the Trade Policy Review Body to oversee procedures for settling disputes between members and to analyse members’ trade policies.

Third level: councils for each broad area of trade, and more: Three more councils, each handling a different broad area of trade, report to the General Council:

• The Council for Trade in Goods (Goods Council)
• The Council for Trade in Services (Services Council)
• The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council)

As their names indicate, the three are responsible for the workings of the WTO agreements dealing with their respective areas of trade. Again they consist of all WTO members.
The three also have subsidiary bodies. 

Who are the developing countries in the WTO? There are no WTO definitions of “developed” and “developing” countries. Members announce for themselves whether they are “developed” or “developing” countries. However, other members can challenge the decision of a member to make use of provisions available to developing countries.

What are the advantages of “developing country” status? Developing country status in the WTO brings certain rights. There are for example, provisions in some WTO Agreements which provide developing countries with longer transition periods before they are required to fully implement the agreement and developing countries can receive technical assistance.

Least-developed countries: The WTO recognizes as least-developed countries (LDCs) those countries which have been designated as such by the United Nations. There are currently 48 least-developed countries on the UN list, 36 of which to date have become WTO members.

Developed countries: All the countries other than developing and least developing countries are automatically considered as developing countries.

Principles of WTO

• Non-discrimination: Non-discrimination is a fundamental principle of the WTO. It has two components:
• The Most-Favoured Nation (MFN) principle: treating other WTO members equally.
• The National Treatment Principle: treating foreigners and locals equally

These two principles apply to trade in goods, trade in services as well as trade related aspects of intellectual property rights.

Principle of Most Favoured Nation: If a WTO Member grants to a country an advantage, it has to give such advantage to all WTO Members. The MFN principles ensures that every time a WTO Member lowers a trade barrier or opens up a market, it has to do so for the like goods or services from all WTO Members – without regard of the Members’ economic size or level of development. However, there are exceptions allowed for preferential treatment of developing countries, regional free trade areas and customs unions.

If a country gives favourable treatment to one country (Member or Non-Member) regarding a particular issue, it must handle all Members equally regarding the same issue. A WTO Member could give an advantage to other WTO Members, without having to accord advantage to non- Members (only WTO Members benefit from the most favourable treatment).

Exceptions to MFN:

• A member may provide preferential treatment only to some countries within a free trade area or customs union, without having to extend such better treatment to all members.
• Developed members may give “unilaterally” preferential treatment to goods imported from developing countries and least developed countries (LDCs), without having to extend such better treatment to other members.

Principle of National Treatment: Under the principle of national treatment, a WTO member should not discriminate between imports and like domestic products from a WTO member. This means that for trade in goods, the national treatment principle prohibits a WTO Member from favouring its domestic products over the imported like products of other Members. The national treatment applies to only internal measures, as opposed to border measures (e.g. tariffs).
It covers:

• Internal taxation (e.g. sales, value added tax), and
• Internal laws, regulations and requirements affecting the internal sale, transportation, distribution or use of products
• The General Agreement on Trade in Services (GATS) and the TRIPS Agreement have similar provisions.

In the area of services, the national treatment principle refers to non-discrimination between, on the one hand, domestically produced services or domestic service providers and, on the other hand, imported services or foreign services providers.

Exceptions to National Treatment Principle

• Government procurement
• Subsidies to domestic producers
• Internal maximum price control measures
• Cinematographic films

 Transparency and predictability

• Traders and Members need to know what are the trade rules around the world (transparency) and that trade measures will not be raised arbitrarily (predictability).
• Special treatment for less developed Members: Least developed Countries face more challenges before they start benefiting from trade liberalization therefore, they have more time to adjust to the rules, greater flexibility and other special rights.

Major agreements of WTO:

1: Agreement on Agriculture (AoA):
Agreement on agriculture stands on 3 pillars viz.
Domestic Support, Market Access, and Export Subsidies.
Domestic Support – It refers to subsidies such guaranteed Minimum Support Price (MSP) or Input subsidies which are direct and product specific. Under this, Subsidies are categorized into 3 boxes –

• Green Box – Subsidies which are no or least market distorting includes measures decoupled from output such as income-support payments (decoupled income support), safety – net programs, payments under environmental programs, and agricultural research and-development subsidies. Such as Income Support which is not product specific.
  Like in India farmer is supported for specific products and separate support prices are there for rice, wheat etc. On the other hand income support is uniformly available to farmers and crop doesn’t matter. US has exploited this opportunity to fullest by decoupling subsidies from outputs and as of now green box subsidies are about 90% of its total subsidies. It was easy for USA because it doesn’t have concern for food security. Further, it has prosperous agro economy, and farmers can better respond to markets and shift to other crops.
  But in India, domestic support regime provides livelihood guarantee to farmers and also ensures food security and sufficiency. For this MSP regime tries to promote production of particular crop in demand. And this makes decoupling Support with output very complicated.
  USA was also in position to subsidies R&D expenditure in agriculture as almost all the farming in US is capitalist and commercial. Big agriculturists spend substantial amount on technology upgradations and R&D. But in India about 80% of farming is subsistence and hence, India & other developing countries can use this opportunity.
• Blue Box – Only ‘Production limiting Subsidies’ under this are allowed. They cover payments based on acreage, yield, or number of livestock in a base year. ‘Targets price’ are allowed to be fixed by government and if ‘market prices’ are lower, then farmer will be compensated with difference between target prices and market prices in cash.
  This cash shall not be invested by farmer in expansion of production. Loophole here is that there no limit on target prices that can be set and those are often set far above market prices deliberately. USA currently isn’t using this method, instead here EU is active.
• Amber Box – Those subsidies which are trade distorting and need to be curbed. It contains category of domestic support that is scheduled for reduction based on a formula called the “Aggregate Measure of Support” (AMS).

What is AMS: The AMS is the amount of money spent by governments on agricultural production, except for those contained in the Blue Box, Green Box. It required member countries to report their total AMS for the period between 1986 and 1988, bind it, and reduce it according to an agreed upon schedule. Developed countries agreed to reduce these figures by 20% over six years starting in 1995. Developing countries agreed to make 13% cuts over 10 years. Least – developed countries do not need to make any cuts.

De-Minimis provision: Under this provision developed countries are allowed to maintain trade distorting subsidies or ‘Amber box’ subsidies to level of 5% of total value of agricultural output. For developing countries this figure was 10%. So far India’s subsidies are below this limit, but it is growing consistently. This is because MSP are always revised upward whereas Market Prices have fluctuating trends. In recent times when crash in international market prices of many crops is seen, government doesn’t have much option to reduce MSP drastically. By this analogy India’s amber box subsidies are likely to cross 10% level allowed by de Minimis provision.

Market Access: The market access requires that tariffs fixed (like custom duties) by individual countries be cut progressively to allow free trade. It also required countries to remove non-tariff barriers and convert them to Tariff duties.

Earlier there were quotas for Imports under which only certain quantities of particular commodities were allowed to Import. This is an example of Non-tariff Barrier. India has agreed to this agreement and substantially reduced tariffs. Only goods which are exempted by the agreement are kept under control.

Maximum tariff has been bonded as required by WTO, under which a higher side of tariffs is fixed in percentage that should never be surpassed. Generally actual tariffs are far below this high limit. This makes custom policy transparent and tariffs can’t be fixed arbitrarily. If India is able to diversify its production and add value by food processing, then this is a win-win deal for India. A number of commodities are exported to West and low tariffs in west will benefit Indian suppliers.

Export Subsidy: These can be in form of subsidy on inputs of agriculture, making export cheaper or can be other incentives for exports such as import duty remission etc. These can result in dumping of highly subsidized (and cheap) products in other country. This can damage domestic agriculture sector of other country.

These subsidies are aligned to 1986-1990 levels, when export subsidies by developed countries were substantially higher and Developing countries almost had no export subsidies at that time.

What are safeguards? In WTO’s terms, safeguards are contingency or emergency restrictions on imports taken temporarily to deal with special circumstances such as a surge in imports. Contingency restriction means imposition of an import tax if the imports are causing injuries to domestic agricultural sector. The original GATT itself allows such restrictions to protect domestic economy.

Following are the important safeguards:
Anti-dumping actions: If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product. The WTO agreement does not pass judgement. Its focus is on how governments can or cannot react to dumping — it disciplines anti-dumping actions, and it is often called the “Anti-Dumping Agreement”. (This focus only on the reaction to dumping contrasts with the approach of the Subsidies and Countervailing Measures Agreement.)

The WTO agreement allows governments to act against dumping where there is genuine (“material”) injury to the competing domestic industry. In order to do that the government has to be able to show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporter’s home market price), and show that the dumping is causing injury or threatening to do so.

Countervailing duty (CVD): It is an additional import duty imposed on imported products (by the importing country) when such products enjoy benefits like export subsidies and tax concessions in the country of their origin (i.e., where it is produced and exported). CVD is thus an import tax by the importing country on imported products. It is an attempt to ensure fair and market oriented pricing of imported products and thereby protecting domestic industries and firms.

The most popular example for CVD is the imposition of additional duty by an importing country when the product has given export subsidy by the exporter/producer country. In India, the CVD is imposed as additional duty of customs on imported products when such products are given tax concession at the country of their origin. On the other hand, the Indian goods have to give excise duties. The CVD effectively nullifies the low-price advantage of the imported products (that doesn’t pay any excise duties in the foreign country).

Special Safeguard Mechanism: It is a protection measure allowed for developing countries to take contingency restrictions against agricultural imports that are causing injuries to domestic farmers. The contingency measure is imposition of tariff if the import surge causes welfare loss to the domestic poor farmers. The design and use of the SSM is an area of conflict under the WTO.

Doha Development Agenda and the origin of the SSM: At the Doha Ministerial Conference, the developing countries were given a concession to adopt a Special Safeguard Mechanism (SSM) besides the existing safeguards (like the Special Agricultural Safeguard or the SSG).

This SSM constituted an important part of the promises offered to the developing world at Doha (known as Doha Development Agenda) and the Doha MC became known as a development round. As mentioned, the Special Safeguard Mechanism (SSM) allowed developing countries to raise import duties on agricultural products in response to import surges.

Difference between SSM and other safeguards under Agreement on Agriculture: The SSG was available to all countries- both developing and developed whereas the SSM is allowable only to the developing countries. It is to be mentioned that the SSG was available as it was inducted under the GATT agreement; whereas the SSM was the invention of the Doha MC.

2. General Agreement on Trade in Services – GATS

Main purpose of the GATS: The GATS was inspired by essentially the same objectives as its counterpart in merchandise trade, GATT: creating a credible and reliable system of international trade rules; ensuring fair and equitable treatment of all participants (principle of non-discrimination); stimulating economic activity through guaranteed policy bindings; and promoting trade and development through progressive liberalization.
While services currently account for over 60 percent of global production and employment, they represent no more than 20 per cent of total trade (BOP basis).

Which products are allowed to trade under GATS: Services negotiations in the WTO follow the so-called positive list approach countries specifically list which products or services they agree to lower tariffs on (or decrease non-tariff barriers on). The other approach, as contained in the General Agreement on Tariffs and Trade (GATT) treaty of the WTO, is called a negative list approach.

In this type of agreement, countries specifically list which products or services they will maintain trade barriers on. If a product is not listed, no restrictions exist and the product is subject to be traded openly. West is pushing hard to move from positive list approach to negative list approach.
India is against negative list approach as it will throw open almost whole Indian services sector to western multinational giants. The positive list approach discriminates against new products and services, which are not protected under past commitments.

Is it true that the GATS not only applies to cross-border flows of services, but additional modes of supply? The GATS distinguishes between four modes of supplying services: cross-border trade, consumption abroad, commercial presence, and presence of natural persons.

Mode 1: Cross-border supply is defined to cover services flows from the territory of one Member into the territory of another Member (e.g. banking or architectural services transmitted via telecommunications or mail);

Mode 2: Consumption abroad refers to situations where a service consumer (e.g. tourist or patient) moves into another Member’s territory to obtain a service;

Mode 3: Commercial presence implies that a service supplier of one Member establishes a territorial presence, including through ownership or lease of premises, in another Member’s territory to provide a service (e.g. domestic subsidiaries of foreign insurance companies or hotel chains); and

Mode 4: Presence of natural persons consists of persons of one Member entering the territory of another Member to supply a service (e.g. accountants, doctors or teachers). The Annex on Movement of Natural Persons specifies, however, that Members remain free to operate measures regarding citizenship, residence or access to the employment market on a permanent basis.

How India’s stand differs when it comes to services?
From India’s point of view, services present a different picture from agriculture and industrial tariffs. As an emerging global power in IT and business services, the country is, in fact, a demander in the WTO talks on services as it seeks more liberal commitments on the part of its trading partners for cross-border supply of services, including the movement of ‘natural persons’ (human beings) to developed countries, or what is termed as Mode 4 for the supply of services.

With respect to Mode 2, which requires consumption of services abroad, India has an offensive interest. In sharp contrast, the interest of the EU and the US is more in Mode 3 of supply, which requires the establishment of a commercial presence in developing countries.

Accordingly, requests for more liberal policies on foreign direct investment in sectors like insurance have been received. These developed countries are lukewarm to demands for a more liberal regime for the movement of natural persons. Unlike many developing countries, India has taken offensive positions in this area as it has export interests in information technology (Mode 1).
The country also seeks greater access to the EU and the US in terms of the movement of natural persons, or what is termed as Mode 4 in cross-border supply of services. Lack of movement in Mode 4 due to opposition by the US and the EU may affect India’s ability to offer much in other modes of services.

Some experts are of the view that under the Uruguay Round commitments, developed countries already have a liberal trade regime in Mode 1 (which covers Business Processing Outsourcing or BPOs) with regard to some of the service sectors of interest to India.

Further research needs to done to assess the extent of autonomous liberalisation undertaken by developed countries, which can be locked in during the negotiations, and consequent gains that can accrue to India.
Further, even in the absence of additional liberalisation, India’s service exports would continue to grow in view of its cost advantage and demography. India could also explore the possibility of finalizing mutual recognition agreements with the main importers of services, so that differences in national regulatory systems do not act as barriers to its exports.

Trade-Related Aspects of Intellectual Property Rights (TRIPS): The TRIPS is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Members. It was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.

It remains an issue between Developed and developing countries. TRIPS was fine tuned in favour of developing countries in 2003, as part of Doha development agenda, when all members agreed to compulsory licensing in certain cases. However, now U.S. and Europe remain unhappy about current strict terms of patent allowed by TRIPS.

Trade-Related Investment Measures (TRIMS): The TRIMS recognizes that certain investment measures can restrict and distort trade. It states that WTO members may not apply any measure that discriminates against foreign products or that leads to quantitative restrictions, both of which violate basic WTO principles. A list of prohibited TRIMS, such as local content requirements, is part of the Agreement. Recently India was dragged to WTO by U.S. over former’s specification of Domestic Content Requirement in relation to procurement of Solar Energy cells and equipment’s.

Agreement on subsidies and countervailing measures (SCM): The WTO SCM Agreement contains a definition of the term “subsidy”. The definition contains three basic elements: (i) a financial contribution (ii) by a government or any public body within the territory of a Member (iii) which confers a benefit. All three of these elements must be satisfied in order for a subsidy to exist.

In order for a financial contribution to be a subsidy, it must be made by or at the direction of a government or any public body within the territory of a Member. Thus, the SCM Agreement applies not only to measures of national governments, but also to measures of sub-national governments and of such public bodies as state-owned companies.
Further, Such Financial contribution must also confer benefit to the industry. Now, in cash grants, benefit will be straightforward to identify, but in cases where there is loan or capital infusion from government/ Public body, it will not be that easy. Such issues are resolved by appellate body of WTO.

Only “specific” subsidies are subject to the SCM Agreement disciplines. There are four types of “specificity” within the meaning of the SCM Agreement:

• Enterprise-specificity. A government targets a particular company or companies for subsidization;
• Industry-specificity. A government targets a particular sector or sectors for subsidization.
• Regional specificity. A government targets producers in specified parts of its territory for subsidization.
• Prohibited subsidies. A government targets export goods or goods using domestic inputs for subsidization.

Hence there are two types of prohibited subsidies –

• Subsidies contingent upon export performance.
• Subsidies contingent upon use of domestic content over imported goods.

Further, there is separate category of ‘Actionable subsidies’. These are not prohibited but countries can take ‘Countervailing measures’ against these subsidies or they can be challenged in ‘dispute resolution body’ of WTO.

For a subsidy to be actionable, 3 conditions should be present –

• Injury to domestic industry due to subsidized imports of other country.
• There is serious prejudice: Serious prejudice usually arises as a result of adverse effects (e.g., export displacement) in the market of the subsidizing Member or in a third country market. For e.g. If India starts subsidizing its textile sector heavily, then China can claim that this subsidy is causing serious prejudice to its textile industry.
• Nullification or impairment of benefits accruing under the GATT 1994. It means when benefit to be accrued from reduction of tariffs (under GATT) are nullified by increase in subsidies.

Against such subsidies members can take Countervailing Measures, such as imposing countervailing duties or antidumping duty. These can only be done in a transparent manner and a sunset period should be specified. Recently, India imposed Anti- Dumping duty on imports of stainless steel from China.

Countervailing Duty – It is imposed on imported goods to counterbalance subsidy provided by the exporter country.

Anti-Dumping Duty – At times countries resort to subsidize production or exports so heavily that exporters are able to sell goods below domestic price or even cost of production in foreign markets. It is aimed at wiping out target country’s industry. Anti-Dumping Duty is aimed at counterbalancing such subsidization.

Sanitary and Phyto- Sanitary Measures: This agreement was one of the results of Uruguay Round of negotiation entered into force with the establishment of the World Trade Organization on 1 January 1995. The Agreement sets out the basic rules for food safety and animal and plant health standards. It allows countries to set their own standards.
But it also says regulations must be based on science. They should be applied only to the extent necessary to protect human, animal or plant life or health. And they should not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail.

Multifibre Arrangement and Agreement on Textiles and Clothing: The most favored nation (MFA) was introduced in 1974 as a short-term measure intended to allow developed countries to adjust to imports from the developing world. Developing countries and countries without a welfare state^] have an absolute advantage in textile production because it is labor-intensive and they have low labor costs. The Arrangement was not negative for all developing countries.

For example, the European Union (EU) imposed no restrictions or duties on imports from the emerging countries, such as Bangladesh, leading to a massive expansion of the industry there. It was decided to bring the textile trade under the jurisdiction of the World Trade Organization. The Agreement on Textiles and Clothing provided for the gradual dismantling of the quotas that existed under the MFA. This process was completed on 1 January 2005. However, large tariffs remain in place on many textile products.

Some Important Ministerial Meets:
Singapore ministerial meet and ‘Singapore issues’ – 1996: The ‘Singapore issues’ term refers to areas of

• Trade and investment;
• Trade and competition policy;
• Trade facilitation; and
• Transparency in government procurement

These four issues have collectively come to be known as the Singapore issues in the context of the WTO, because it was at the first ministerial conference of the WTO in Singapore in 1996 that they were first brought up as possible areas on which the multilateral body could initiate negotiations.

What was India’s stand? On issues like investment and competition policy, India feels that having a multilateral agreement would be a serious impingement on the sovereign rights of countries. To an extent, of course, this is inherent in any multilateral treaty, but investment is seen as an area in which ceding sovereign rights would leave governments, particularly developing country governments, with too little room for manoeuvre in directing investments into areas of national priority.

Doha Ministerial meet and ‘Doha Development Agenda’ – 2001

Agriculture – First proposal in Qatar, in 2001, called for the end agreement to commit to substantial improvements in market access; reductions (and ultimate elimination) of all forms of export subsidies (including under Green and blue box); and substantial reductions in trade-distorting support.

Access to patented medicines – A major topic at the Doha ministerial regarded the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The issue involves the balance of interests between the pharmaceutical companies in developed countries that held patents on medicines and the public health needs in developing countries. On 30 August 2003, WTO members reached agreement on the TRIPS and medicines issue. Voting in the General Council, member governments approved a decision that offered an interim waiver under the TRIPS Agreement allowing a member country to export pharmaceutical products made under compulsory licenses to least-developed and certain other members. It also allows members to not to allow evergreening of Patents.

Special and differential treatment (SDT) – SDT as a principle has been there since 1970’s in multilateral negotiations under GATT. In Doha round, members agreed that Developing and Least developed countries will continue to be eligible for a favorable treatment. However, of late developed countries are dragging their feet here too.

They now claim that big developing countries like India, China, Brazil and South Africa are unreasonable in their demand and only least developed countries are rightful claimant of differential treatment. Here it is inconceivable that poor countries like India are to be treated at par with western developed world. At the December 2005 Hong Kong ministerial, members agreed to five S&D provisions for least developed countries(LDCs), including the duty-free and quota-free access.

Implementation issue: Developing countries claim that they have had problems with the implementation of the agreements reached in the earlier Uruguay Round because of limited capacity or lack of technical assistance. They also claim that they have not realized certain benefits that they expected from the Round, such as increased access for their textiles and apparel in developed-country markets. They seek a clarification of language relating to their interests in existing agreements.

Bali Ministerial Meet and ‘Bali Package – Trade Facilitation and Peace Clause’ – 2013: Bali Package includes following three agreements,

LDC exports: Exporters from Least developing countries, will get Duty free, quota free (DFQF) access to markets in foreign countries.

Peace Clause: It was agreed that all nations for adjustments/adaptations to limits under Agreement on Agriculture (de minimis provisions); a ‘Peace clause’ was agreed at. Peace clause gave countries 4 year times to adjust to the limit and avoid sanctions.

What is peace clause: No member, can drag any developing country to Dispute settlement mechanism of WTO, for violation of De-minimus limits in Agreement on Agriculture (AoA). Provided that the said developing country is paying subsidies for staple food crops, for public stockholding program, for food security purpose is providing annual information of its food security Program to WTO. Permanent solution will be taken no later than 11^th ministerial conference i.e. at December 2017.

Trade Facilitation: It aims to reduce red tapes and bureaucratic hassles in customs clearance at ports and airports. It requires member countries to invest in Infrastructure that facilitates Imports and exports, simplify custom procedures and remove other non-tariff barriers. Date for ratification of Bali agreement was 31 July, 2014, on which India declined to ratify unless a ‘permanent solution’ is reached. After this, in November, India – US reached understanding in which time limit of 4 years was removed and in return Trade Facilitation was agreed to by India.

It should be noted that development of Infrastructure is already a priority for government and it is much desirable in agriculture too, as India is net exporter of agri products. But issue was of 4 years of ‘peace clause’, which now stands removed. ‘Trade facilitation deal’ was marketed by developed countries as a progressive and much needed deal for good of all type of countries.

It is being said that it will boost up Global GDP by $1 Trillion and will add millions of new job. This argument has a little or no empirical backing and it is feared that western supplier will invade domestic markets of developing and underdeveloped countries. ‘Trade facilitation’ along with ‘special package’ is like saying that gains of developed countries will be so big, that losses of under-developed countries will be lucratively compensated by them.

Latest – Nairobi Ministerial Meet – 2015: Recently concluded Nairobi meet was a huge disappointment for the developing and under developed world. Here, U.S. trade Representative unabashedly called Doha Development Agenda a dead, outdated and undesirable course. West is desperately trying to set aside development aspect of negotiations, to which it had agreed in Doha. Its focus is now on Trade Facilitation Agreement which was agreed to in Bali meet. Further, they are trying to introduce new issues (including some Singapore issues) such as Government Procurement, E-commerce, Investment, Competition policy. To this India and other developing countries took strong objection.

Highlights of Nairobi outcomes:

1. There was a commitment to completely eliminate subsidies for farm exports: Under the decision, developed members have committed to remove export subsidies immediately, except for a handful of agriculture products, and developing countries will do so by 2018. Developing members will keep the flexibility to cover marketing and transport costs for agriculture exports until the end of 2023, and the poorest and food-importing countries would enjoy additional time to cut export subsidies.
2. Ministers also adopted a Ministerial Decision on Public Stockholding for Food Security Purposes. The decision commits members to engage constructively in finding a permanent solution to this issue. Under the Bali Ministerial Decision of 2013, developing countries are allowed to continue food stockpile programmes, which are otherwise in risk of breaching the WTO’s domestic subsidy cap, until a permanent solution is found by the 11th Ministerial Conference in 2017.
3. A Ministerial Decision on a Special Safeguard Mechanism (SSM) for Developing Countries recognizes that developing members will have the right to temporarily increase tariffs in face of import surges by using an SSM. Members will continue to negotiate the mechanism in dedicated sessions of the Agriculture Committee. (This means issue is not closed and still under negotiation).
4. There were other decisions of particular interests of least developing Countries. One of them is Preferential Rules of Origin. It entails that ‘Made in LDC’ products will get unrestricted access to markets of non-LDCs.
5. There was affirmation that Regional Trade Agreements (RTAs) remain complementary to, not a substitute for, the multilateral trading system (WTO).
6. Ministers acknowledged that members “have different views” on how to address the future of the Doha Round negotiations but noted the “strong commitment of all Members to advance negotiations on the remaining Doha issues.

Impact of Reginal trade agreements on WTO

Regional Trade Agreement (RTA): In the WTO, regional trade agreements (RTAs) are defined as reciprocal trade agreements between two or more partners. They include free trade agreements and customs unions.

Preferential Trade Arrangements (PTA): Preferential trade arrangements (PTAs) in the WTO are unilateral trade preferences. They include Generalized System of Preferences schemes (under which developed countries grant preferential tariffs to imports from developing countries), as well as other non-reciprocal preferential schemes granted a waiver by the General Council.

Are RTA/PTA are allowed under WTO: Non-discrimination among trading partners is one of the core principles of the WTO; however, RTAs constitute one of the exemptions and are authorized under the WTO, subject to a set of rules. In line with these rules, and also recognizing the need to enhance transparency and increase understanding of RTAs’ impact on interests of WTO members, the WTO Secretariat was instructed by WTO members to gather information on RTAs.

Their Impact: Association of South East Asian Countries (ASEAN), European Union, North American Union etc. are some associations that provide more liberal and seamless access of member’s markets to fellow member countries. This runs counter to objectives of WTO which seeks to establish a global rule based system of trading with minimal barriers.

However, for so many different countries at different stages of socio-economic development, it is highly impossible to agree to a common trading regime. Consequently, countries lobby with group of likeminded countries and aim at arriving at a mutually symbiotic agreement which ensures a win-win deal for all participants.
Entering into a free trade agreement or formation of custom union may at times violate ‘Most favorable Nation’ principle of WTO. Hence, most such agreements are entered into keeping in mind exceptions allowed by MFN principle. Agreements while giving preferential treatment to few members must not create new trade barriers for non-members.

Recently, 12 nations led by United States concluded a Trans Pacific Partnership Treaty (TPP). Treaty includes both developed and developing nations (like Vietnam, Peru, and Chile). The contents of this treaty are on the lines of stand taken by U.S. in WTO negotiations. It provides stringent provisions for Labor Standards, Environment Standards and Intellectual Property. Further, it gives power to private corporations, to sue member countries for violation of terms of treaty. US’s biggest trade partner China is not party to treaty.

Negotiations led by US are underway for a similar treaty with European countries, dubbed as Trans-Atlantic partnership. On the other hand India and China are participating in and leading negotiations of Regional Comprehensive Economic partnership (RCEP) Agreement. This agreement is likely to reflect interests of developing countries in its final draft.

It is said that when such strong regional agreement (TPP and RCEP) will emerge reflecting different positions taken by different countries, negotiations will start among these two groups and over time they will be subsumed under WTO. However, it is feared that US is likely to use its dollar muscle to lure developing and least developed countries to join these not so fair treaties. It is best said that course of multilateralism is evolving and only time will tell whether WTO will ever be able to provide a common trading platform aimed towards development or not.

Cases of Complaints against India

1. India — Certain Measures Relating to Solar Cells and Solar Modules (Complainant: United States).
2. India — Anti-Dumping Duties on USB Flash Drives from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Complainant: Chinese Taipei).
3. India — Measures Concerning the Importation of Certain Agricultural Products (Complainant: United States).
4. India — Certain Taxes and Other Measures on Imported Wines and Spirits(Complainant: European Communities)

 Cases of Complaints by India

1. United States —Countervailing Measures on Certain Hot-Rolled Carbon Steel Flat Products from India (Complainant: India).
2. Turkey —Safeguard measures on imports of cotton yarn (other than sewing thread)(Complainant: India).
3. European Union and a Member State —Seizure of Generic Drugs in Transit(Complainant: India)

Hence, WTO is a body which provides opportunity to aggrieved country to bring unfair trade practices to notice of Dispute Settlement body and to bring an end to such unfair practice. This dimension of WTO makes it a desirable and neutral body as it seeks to create a just global trading system.

What is Indo – US’s WTO problem?

Since end of cold war both countries have witnessed a spectacular improvement in bilateral relations in almost all spheres. However, at WTO platform two countries remain arch rival and leaders of opposite camps. U.S. has severe disliking for India’s position in at least two spheres – Agriculture and Intellectual Property.

Agriculture: We have already seen that Agreement on Agriculture which was hatched in Uruguay round negotiations is heavily tilted in favor of developed world. For balancing this India as part of Group of developing and least developed nations (G-33) proposed amendment to AOA in 2008. Current quest of G-33, toward achieving permanent solution is follow up story of this proposal only. As of now, Peace Clause agreed to in 2013, allows us perpetually to continue our food stocking program at administered prices, without being dragged into WTO for violation of AOA.

Intellectual Property: Further, as part of Doha Development Agenda, developing countries managed to tweak ‘Agreement on Trade related aspects of Intellectual Property’ (TRIPS) in favor of developing countries by allowing compulsory licensing in certain circumstances. First compulsory license was granted by Indian Patent Office to NATCO for ‘nexavar’ drug produced originally by German firm Bayer AG.

Since then US pharma industry has been apprehensive of frequent evocation of this principle in developing world. US not only want this concept to be done away with, it also wants a liberal IPR regime which allows evergreening of patents.

Indian Patent Act as amended in 2005 allows protection of both product and process, but it allows patent only when there is enhanced efficacy of the substance. If a company re-invents a previously known substance in to new form e.g. from Solid to Liquid, then protection can’t be granted. India due to its promising pharmaceutical industry exploits these powers religiously. Since India’s course is not violative of TRIPS, question of India being challenged in WTO doesn’t arise

Domestic Content Requirement in Solar Panel: Recently, India lost this case to US in WTO’s dispute resolution body. India has prescribed ‘domestic content requirement’ for procurement of Solar cells/panels for its target of installing 100 GW of solar power by 2022. Under this some (about 5%) procurement was reserved to be bought from Indian vendors, to promote indigenous industry. US alleged that this is against principles of Non Discrimination and National Treatment.

India now has appealed against this decision and can get 2 year reprieve from rolling back of scheme. Earlier this year, WTO had ruled against the Indian ban on import of poultry meat, eggs and live pigs from the US, stating that it was not consistent with international norms.

Visa problem: Recently, U.S. has double the fees for certain categories of H1B and L1 visas to $4,000 and $4,500 respectively. H1B and L1 visas are temporary work visas for skilled professionals. India is the largest user of H1B visas (67.4 per cent of the total 161,369 H1B visas issued in FY14 went to Indians) and is also among the largest users of L1 visas (Indians received 28.2 per cent of the 71,513 L1 visas issued in FY14). India is likely to pursue bilateral discussions over the issue, but as last resort it may head to WTO if nothing comes out.

WTO and TRIPS

There are different subject matters of intellectual property like Patents, Copyright, Trademarks, Industrial design, Plant Varieties etc. Need for protection in these different subjects arose in different periods. These are reflected in different treaties. Agreement on TRIPS, under aegis of WTO, remains most influential, comprehensive and inclusive of all. Other treaties that are adopted before TRIPS Agreement is adopted are,

Paris Convention for Industrial Property, 1883 – Since it deals only with Industrial property, it covered only Patents and Trademarks. The Paris convention sets out a range of basic rules relating to patents, and although the convention does have direct legal effect in all national jurisdictions, the principles of the convention are incorporated into all notable current patent system. It was among first treaties to recognize various principles of international trade like National Treatment, Right of Priority, Common rules etc.

Berne convention for literary and artistic works, 1886 – deals with the protection of works and the rights of their authors. It provides creators such as authors, musicians, poets, painters etc. with the means to control how their works are used, by whom, and on what terms. It is based on three basic principles and contains a series of provisions determining the minimum protection to be granted, as well as special provisions available to developing countries that want to make use of them. It means that your work, if original, is already protected. You can claim that you have copyright.

Madrid Agreement, 1881 – concluded in 1891, and the Protocol relating to that Agreement, concluded in 1989. The system makes it possible to protect a mark in a large number of countries by obtaining an international registration that has effect in each of the designated Contracting Parties. Governs the international recognition of trademarks. Made international fillings easy and cheap.

Patent co-operation treaty, 1970 – The Patent Cooperation Treaty (PCT) assists applicants in seeking patent protection internationally for their inventions, helps patent Offices with their patent granting decisions, and facilitates public access to a wealth of technical information relating to those inventions. By filing one international patent application under the PCT, applicants can simultaneously seek protection for an invention in a very large number of countries.

Budapest Treaty of 1980 – Adopted in 1977, the Budapest Treaty concerns a specific topic in the international patent process: inventions involving microorganisms. All states party to the Treaty are obliged to recognize microorganisms deposited as a part of the patent disclosure procedure with an international Depositary Authority (IDA), irrespective of where the depository authority is located. In practice this means that the requirement to submit microorganisms to each and every national authority in which patent protection is sought no longer exists.

Trademark Law Treaty, 1994 – Harmonized administrative procedures and introduced ‘service marks’ in ambit of trade marks. Earlier trademarks were accorded only to goods. The aim of the Trademark Law Treaty (TLT) is to standardize and streamline national and regional trademark registration procedures. This is achieved through the simplification and harmonization of certain features of those procedures, thus making trademark applications and the administration of trademark registrations in multiple jurisdictions less complex and more predictable.

The Hague agreement concerning the International Deposit of ‘Industrial Design’ 1925 – The Hague Agreement governs the international registration of industrial designs. First adopted in 1925, the Agreement effectively establishes an international system – the Hague System – that allows industrial designs to be protected in multiple countries or regions with minimal formalities. It created International Design Bureau of WIPO. World Intellectual Property Organization (WIPO) under UN administers 1-7 treaties mentioned above.

International Union for protection of new varieties of plants, 1961 – This provides breeders and farmers right to new plant varieties. UPOV’s mission is to provide and promote an effective system of plant variety protection, with the aim of encouraging the development of new varieties of plants, for the benefit of society. This treaty is independent of any organization.

TRIPS Agreement

TRIPs is considered as a major achievement of the Uruguay Round as an international trade agreement. At the trade negotiations, the developed countries were succeeded in linking intellectual property rights with trade. With TRIPs, the WTO also emerged as the institution for the protection and promotion of intellectual property globally. The three main features of the Agreement are:

Standards: In respect of each of the main areas of intellectual property covered by the TRIPS Agreement, the Agreement sets out the minimum standards of protection to be provided by each Member. Each of the main elements of protection is defined, namely the subject-matter to be protected, the rights to be conferred and permissible exceptions to those rights, and the minimum duration of protection.

Enforcement: The second main set of provisions deals with domestic procedures and remedies for the enforcement of intellectual property rights. The Agreement lays down certain general principles applicable to all IPR enforcement procedures.

Dispute settlement: The Agreement makes disputes between WTO Members about the respect of the TRIPS obligations subject to the WTO’s dispute settlement procedures.

In addition the Agreement provides for certain basic principles, such as national and most-favoured-nation treatment, and some general rules to ensure that procedural difficulties in acquiring or maintaining IPRs do not nullify the substantive benefits that should flow from the Agreement. The obligations under the Agreement will apply equally to all Member countries, but developing countries will have a longer period to phase them in.

Special transition arrangements operate in the situation where a developing country does not presently provide product patent protection in the area of pharmaceuticals. The TRIPS Agreement is a minimum standards agreement, which allows Members to provide more extensive protection of intellectual property if they so wish.

Members are left free to determine the appropriate method of implementing the provisions of the Agreement within their own legal system and practice. The areas of intellectual property that it covers are copyright and related rights (i.e. the rights of performers, producers of sound recordings and broadcasting organizations); trademarks including service marks; geographical indications including appellations of origin; industrial designs; patents including the protection of new varieties of plants; the layout-designs of integrated circuits; and undisclosed information including trade secrets and test data.

Development of Intellectual property rights in India:
India has been a World Trade Organization (WTO) member since 1995. WTO member nations must include some Intellectual Property (IP) protection in their national laws. This means that if you are doing business with India, you will find some similarity between local IP law and enforcement procedures, and those enforce in the UK.

 Chronological development of IPR in India:

• 1947: Patents & Designs Act, 1911
• 1995: India joins WTO
• 1998: India joins Paris Convention/PCT
• 1999: Patent amendment provided EMR retrospectively from 1/1/95
• 2003: 2nd amendment in Patents Act
• Term of Patent – 20 years after 18 months publication
• Patent Tribunal Set up at Chennai
• 2005: Patents (Amendment) Act 2005
• 1999 – 2005: Plant Varieties and Farmers’ Rights Act & Biodiversity Act. Designs, TM/Copyright Acts updated GI Registry set up at Chennai. IP Acts TRIPS Compliant

Various subject matters of Intellectual Property in India

Copyrights
Law – Copyrights Act 1957, amended in 2012
Ministry – Copyright Office, Ministry of Human Recourse Development

The TRIPS agreement ensures that computer programs will be protected as literary works under the Berne Convention and outlines how databases should be protected. It also expands international copyright rules to cover rental rights. Authors of computer programs and producers of sound recordings must have the right to prohibit the commercial rental of their works to the public. A similar exclusive right applies to films where commercial rental has led to widespread copying, affecting copyright-owners’ potential earnings from their films.

The agreement says performers must also have the right to prevent unauthorized recording, reproduction and broadcast of live performances (bootlegging) for no less than 50 years. Producers of sound recordings must have the right to prevent the unauthorized reproduction of recordings for a period of 50 years. There have been disagreements over the question whether Softwares are eligible for copyrights or for patents. Copyright Office recently held that softwares, if are not in conjuncture with novel hardware should be protected by copyright. This is relief for software industry as Copyrights are cheap, automatically recognised and protects for 60 years while patents are only for 20 years.

Future challenge: It is the enforcement of copyright in digital platforms for which the statute has adequate provisions. Indian copyright owners are also victims of copyright violations and piracy. Apart from Copyrights Act, Information Technology Act, 2000 too has certain relevant provisions for copyright in electronics and digital field.

Patents
Law – Patents Act, 1970, amended in 2006
Ministry – DIPP, Ministry of Commerce and industry

Patents are a long-established ways to motivate innovation. This property right convenes to the holder the exclusive right of exploitation and enables them to exploit the invention by manufacturing, using, or selling products or processes incorporating the technology covered by the patent.
The owner may also allow the invention to be exploited by others over a set period of time, in return for fair remuneration to compensate them for the intellectual and material effort involved in its conception and production.
Patent protection provides the owner of the right with the means to prevent unauthorised use of the protected technology, to defend their rights in law and to initiate legal proceedings against any persons fraudulently using the patented invention.

The agreement says patent protection must be available for inventions for at least 20 years. Patent protection must be available for both products and processes, in almost all fields of technology. Governments can refuse to issue a patent for an invention if its commercial exploitation is prohibited for reasons of public order or morality.

Evergreening of patent is not allowed: In order to be patentable, an improvement on something known before or a combination of different matters already known, should be something more than a mere workshop improvement, and must independently satisfy the test of invention or an inventive step. It must produce a new result, or a new article or a better or cheaper article than before. The new subject matter must involve “invention” over what is old.

It allows Compulsory Licensing: TRIPS also allows for compulsory licensing under certain circumstances. Specific situations in which compulsory licenses may be issued are set out in the legislation of each patent system and vary between systems. Some examples are –

• Unaffordable prices of particular drug for masses or inability of patentee to fulfil demand in markets
• National emergency or extreme urgency or in cases of public non-commercial use.

This strikes balance between two objectives – Rewarding patentees for innovation and to make sure that patented products, particularly Pharmaceutical ones, are available to public in developing and underdeveloped countries at affordable prices.
In March 2012, India granted its first compulsory license ever. The license was granted to Indian generic drug manufacturer Natco Pharma Ltd for Sorafenib tosylate, a cancer drug patented by Bayer.

It allows both Product and Process patent: Prior to 2006 amendment of Indian Patent Act, only process was allowed to be patented. It means that if same product is manufactured using some process different than that was patented, there shall be no infringement. But now product is also allowed to be patented. It means patented product cannot be reproduced by using any method.

System of pre-grant and post-grant oppositions: Introduced in 2005, ensures that only deserving patents are granted. It is now possible to raise objection both before and after the patent has been granted. India has adopted a balanced approach towards patent law. It is committed to protect innovation while promoting the larger goal of welfare of its citizens.

Courts and tribunals have upheld key provisions of India’s patent law by their authoritative pronouncements. The system of pre-grant and post-grant oppositions introduced in 2005 ensures that only deserving patents are granted.
The progressive Act has been invoked in several judgments recently in relation to pharmaceutical patents — for example, the Supreme Court upheld the sale of a generic version of the cancer drug Nexavar in December 2014, and upheld the Indian patent office’s rejection of Novartis’s application for a patent for its anti-cancer drug, Glivec.

Compulsory Licensing:
What is compulsory licensing? Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner. It is one of the flexibilities on patent protection included in the WTO’s agreement on intellectual property — the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement.

Is this the same as tearing up the patent? No. The patent owner still has rights over the patent, including a right to be paid for the authorized copies of the products.

Does there have to be an emergency? Not necessarily. This is a common misunderstanding. The TRIPS Agreement does not specifically list the reasons that might be used to justify compulsory licensing. However, the Doha Declaration on TRIPS and Public Health confirms that countries are free to determine the grounds for granting compulsory licences.

Trademarks
Law – Trademark Act 1999
Ministry – DIPP, Ministry of Commerce and industry

A trademark is typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements. There is also a range of non-conventional trademarks comprising marks which do not fall into these standard categories, such as those based on color, smell, or sound (like jingles). A trademark cannot be offensive

India joins Madrid Protocol, 2013: The Madrid System for the International Registration of Marks offers trademark owners a cost effective, user friendly and streamlined means of protecting and managing their trademark portfolio internationally.

Designs
Law – Designs Act, 2000
Ministry – DIPP, Ministry of Commerce and industry

As per WIPO – ‘In a legal sense, an industrial design constitutes the ornamental or aesthetic aspect of an article. An industrial design may consist of three dimensional features, such as the shape of an article, or two dimensional features, such as patterns, lines or colour.’
In principle, the owner of a registered industrial design or of a design patent has the right to prevent third parties from making, selling or importing articles bearing or embodying a design which is a copy, or substantially a copy, of the protected design, when such acts are undertaken for commercial purposes.

Such rights are perpetual. Overall, the law of industrial designs and enforcement thereof has been quite positive. At present, approximately 8000 applications are filed annually. This is much below India’s potential and there is scope for considerable improvement. Concerted steps shall be taken particularly to increase sensitization to this law especially in the MSMEs and the informal sector.

Geographical Indications
Law – Geographical Indications of Goods Act, 1999
Ministry – DIPP, Ministry of Commerce and industry

A geographical indication (GI) is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. In order to function as a GI, a sign must identify a product as originating in a given place. In addition, the qualities, characteristics or reputation of the product should be essentially due to the place of origin.

Since the qualities depend on the geographical place of production, there is a clear link between the product and its original place of production. For example, in the jurisdictions in which the Darjeeling geographical indication is protected, producers of Darjeeling tea can exclude use of the term “Darjeeling” for tea not grown in their tea gardens or not produced according to the standards set out in the code of practice for the geographical indication.

Well-known other examples include “Champagne”, “Scotch”, “Tequila”, and “Roquefort” cheese. Wine and spirits makers are particularly concerned about the use of place-names to identify products, and the TRIPS Agreement contains special provisions for these products.
However, a protected geographical indication does not enable the holder to prevent someone from making a product using the same techniques as those set out in the standards for that indication. Protection for a geographical indication is usually obtained by acquiring a right over the sign that constitutes the indication.

Geographical indications are typically used for agricultural products, foodstuffs, wine and spirit drinks, handicrafts, and industrial products.

How are geographical indications protected? There are three main ways to protect a geographical indication:

• So-called sui generis systems (i.e. special regimes of protection): refers to a sui generis system, it implies that it has to be a form of intellectual property protection, an alternative (in relation to patents) intellectual property right specifically applying to plant varieties.
• Using collective or certification marks; and
• Methods focusing on business practices, including administrative product approval schemes.

Plant Varieties
Law – Protection of Plant varieties and farmers’ right Act, 2001
Ministry – Department of Agriculture and Cooperation, Ministry of Agriculture

With the advent hybrid and genetically modified plants, it is possible to create different quality of plants of same genus or species. There have been unending quest of developing plant varieties that are more productive, more fortified with nutrients, more resistant to vagaries of nature and are reasonably priced. Such development demands lot of expenditure and time just like any other patentable invention.
TRIPS agreement says that either a member should cover plant variety in domestic patent law or it should be provided a sui- generis protection. Accordingly, India’s patent law doesn’t cover plant varieties and PPVFR act provides a sui-generis protection.

Protection of Plant Varieties and Farmers’ Rights (PPVFR) Act 2001
The basic objective of the Protection of Plant Varieties and Farmers’ Rights (PPVFR) Act 2001 us to recognize and protect the rights of the breeders including farmers and stimulate investment for research and development in the public and private sector for the development of new plant varieties.

This act has nine specific rights; of which the most important are summarized as follows:

• National Gene Fund: The PPVFR act makes provisions to establish a National Gene Fund through which the conservation of varieties developed can be done, recognized and rewarded. This fund is made of the money as fees collected from plant breeders who are required to pay for benefit sharing. This money is used to support and reward the farmers who are engaged in plant verities conservation.
• Protection of Plant Varieties and Farmers’ Rights Authority: The act makes provisions to establish Protection of Plant Varieties and Farmers’ Rights Authority which oversees the implementation of this act. This authority publishes the list of registered varieties and invites claims for benefit sharing. Any person, firm, governmental organization or NGO can submit claim to benefit sharing.
  The Authority is to consist of a Chairperson and 15 members. One member is to be a representative from a national or state level farmers’ organisation, while one member is to be a representative from a national or state level women’s organisation working on agricultural issues. The seed industry and various government institutions are also to be represented.
  On the other hand, the farmers’ representative as well as the seed industry representative and the women’s organisation representative are to be nominated by the central government.

Analysis of the PPVFR Act: The Protection of Plant Varieties and Farmers’ Rights Act 2001 not only gives intellectual property protection to the plant breeders, but also upholds the legal space for farmers to save, use, exchange and sell the farm saved seeds.

Semi-conductors and integrated Layouts
Law – Semi-conductors and integrated Layout design Act, 2000
Ministry – Department of Electronics and I.T, Ministry of Communication and I.T.

A semiconductor layout design means a layout of transistors and other circuitry elements and includes lead wires connecting such elements and expressed in any manner in semiconductor integrated circuits.

The first registration under the Semiconductor Integrated Circuits Layout-Design Act, 2000 was granted in October 2014. It is expected that the industry will make increased use of this right to protect integrated circuit layout designs.

Under this, a SICLD registry has been created where layout designs of integrated circuit chips can be registered. The Registrar will determine the originality of the design based on the information available with him as also through the mechanism of advertisement of the application for registration of the layout-design and or any input he may receive. On registration, protection is granted for 10 years.

Traditional Knowledge
Traditional Knowledge Digital Library
A collaboration – between the Council of Scientific and Industrial Research (CSIR) and the Department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (Dept. of AYUSH), Ministry of Health & Family Welfare, Government of India.

There is considerable unexplored potential for developing, promoting and utilizing traditional knowledge, which is a unique endowment of India. Create a sui generis system for protection of traditional knowledge which will safeguard misappropriation of traditional knowledge as well as promote further research and development in products and services based on traditional knowledge.

The creation of the Traditional Knowledge Digital Library (TKDL) has been a major achievement for India which has a vast pool of traditional knowledge. India has been able to thwart attempts to misappropriate its traditional knowledge. The next challenge is to use India’s strength in traditional knowledge for its effective promotion, development and utilization.

It manages a database of knowledge that exists in various local languages such as Sanskrit, Urdu, Arabic, Persian and Tamil. TKDL has also converted the database into five international languages in patent application formats.

So far, over 2 lakh medicinal formulations have been transcribed and the database is present in 30 million A4-size pages.

A research council of AYUSH ministry has been implementing a Tribal Health Care Research Programme (THCRP) which aims at collecting information on folk medicines / traditional practices prevalent in different parts of the country besides extending health care services to tribal population.

Biological Diversity
Law –Biological Diversity Act, 2002 in pursuance of Convention on Biological Diversity, 1993

The Convention on Biological Diversity (CBD) is a legally binding multilateral environmental agreement that has 194 contracting Parties (Countries) as its members with three objectives –

1. Conservation of biological diversity,
2. Sustainable use of the diversity and
3. Ensuring fair and equitable sharing of benefits of such use.

Indo-US IPR problem

Special 301 Report: This report is a part of an annual review of intellectual property (IP) laws of the United States’ trading partners. India is among the 11 countries put on a ‘watch list’ for harsh IP enforcement and could result in sanctions.

The report ranks countries depending on the inadequacy of IP protection and enforcement into two categories –

• Priority foreign country (PFC) and
• Priority watch list (PWL).

While a PFC grading obligates the US Trade Representative (USTR) to initiate unilateral measures like suspension of trade concessions in case of failure of negotiation, the PWL increases “bilateral attention concerning the problem areas.” India is in the PWL category for more than 15 years.

The report notes the following reasons for India’s low rank:

• Patent protection in India remains outside of international best practices.
• Indian law does not provide adequate enforcement mechanisms to effectively combat online piracy.
• Among India’s key areas of weakness was the use of compulsory licensing (CL) for commercial and non-emergency situations, and the expanded use of CL being considered by the Indian government.
• Another area of weakness was poor application and enforcement of civil remedies and criminal penalties.
• The fact that India was not party to major international treaties, like the Trans-Pacific Partnership agreement, was also a consideration.

In backdrop of these concerns India has been placed under ‘Priority watch list’ in USA. If India is put under ‘priority nations list’ then US will impose trade sanctions on INDIA. But this is unlikely because India, so far, has not violated any of the clauses of TRIPS. That’s why US has negotiated ‘Trans – Pacific/Atlantic’ trade partnerships, which are expected to be ‘WTO+’. It will include stringent provisions guarding intellectual property by diluting flexibilities allowed by current TRIPS agreement, among other things.