Meaning of WTO

It is an international trade organization having set of rules and principles, mutually designed and agreed upon to promote international trade in general and reduction of tariff barriers and removal of import restrictions in particular . It is the new world trade system. WTO is the new globally recognized trade organization replacing GATT. It has a new vision and strong enforcement power to promote international trade.

Features of WTO
It is an international organization to promote multilateral trade. It has replaced GATT. It promotes free trade by removing tariff and non-tariff barriers. It has fixed set of rules and regulations designed mutually by the member nations. Agreements agreed upon by the members of WTO are binding upon all its member countries.

WTO has large Secretariat and huge organizational set-up. It includes:

Trade in goods.

Trade in services.
Protection of Intellectual Property Rights. Foreign Investment.

Objectives of WTO
To implement new trade agreements. To promote multilateral trade i.e. the trade among many nations. To promote free trade by abolishing tariff and non-tariff barriers. To promote world trade in a manner that benefits every member country. To remove all the hurdles in open world trading system.

To ensure that the developing countries get a better share in the advantages resulting from the expansion of international trade. To expand and utilize world resources in an optimum manner. To enhance competitiveness among all the trading members so as to benefit consumers.

WTO- Agreement relating to IPRs

Trade Related Intellectual Property Rights (TRIPS)

TRIPs agreements are related with intellectual property rights. The intellectual property rights can be with regard to patents, copyrights and trademarks etc. Under TRIPs, the owner of patents gets his patent registered for a particular period of time. Any person who wants to use patent, can use it by paying royalty to the owner of the patent.

The underdeveloped countries who do not have patent rules in their countries, are to enact patent rules within a period of 10 years. Only those intellectual properties can be patented which are new, involve research and can be put to industrial use. Under TRIPs, the life of patents has been fixed as follows:1. General Patents 20 years 2. Copyrights- 50 years 3. Trademarks- 7 years 4. Industrial Design- 10 years 5. Medicines- 10 years

WTO and India

Arguments against Indias membership with WTO or Disadvantages to India

1. Disadvantage to Agricultural Sector By including agreements relating to agriculture, Indian farmers are becoming more dependent on MNCs for improved seeds and agricultural technology. The farmers will be compelled to buy at high rates , the fertilizers, insecticides, agricultural machinery. Only the big farmers will be able to take the advantage of improved farm technology. The cumulative effect of all these will be that the small farmers who are in large number will be forced to sell their lands.

2. Reduction in subsidy Critics are of opinion that after concluding GATT and WTO agreements, subsidy to agricultural sector will be slashed. This will adversely affect the poor farmers.

3. Import of Food grains By entering into with WTO agreements, surplus food grains of developed countries will be imported on large scale. It will adversely affect countrys balance of payments.

4. Arguments against TRIMS In terms of WTO, India cannot impose any restrictions on foreign investment. It means that MNCs are free to establish their industries in India. It will harm domestic industries. Domestic industries will suffer as they have little capacity to compete with the MNCs. The dominance of MNCs will rise and their profit margins will also aggravate.

5. Agreements related to TRIPS TRIPS will discourage the process of research and innovation in the country. Critics are of opinion that it is unjust to have uniform standards for all member countries because the standards vary with the economic and technical development of each country. The level of development found in developed countries can never be reached with the developing countries. India, therefore, stands to loose in matters related to TRIPS.

6. Patents of Indian herbs by foreign companies

Foreign companies are trying to get patent of Indian herbs/ food grains like Haldi, Neem, Tulsi, Basmati Rice etc. An American company had taken the patent of haldi in 1955. India challenged to it and WTO cancelled the patent of haldi to American company. Another American company has taken the patent of Basmati Rice in the name of Kasmati and Texmati. If Indian herbs/grains get patented by foreign companies, then Indians have to make heavy payments as royalty to the patent holders for using these herbs/food grains.

Arguments in favour of Indias membership with WTO or Advantages to India

1. Increase in foreign trade As a member of WTO, it will be possible for India to enter into trade agreements with other 123 member countries. The custom tariffs will fall and it will open new markets for India. It will result into increase in foreign exchange in India.

2. Increase in Agricultural Exports As a result of reduction in subsidies on agricultural goods given by developed countries, demand for the variety of Indian food grains will rise in International market. WTO has recommended a cut in custom duties and reduction in import restrictions on agricultural products. It will provide an opportunity to India to increase the export of agricultural products.

3. Benefits for Cotton and Textiles Industry Under MFA, the clothes and fibers were subjected to quota restrictions. As a result of WTO, all these restrictions were removed. It has helped to increase the export of Indian exports and textiles. Withdrawal of quota restrictions has encouraged our exports to American and European countries. It has promoted textile industry and created new employment opportunities.

4. Inflow of better technology and better quality products With increase in foreign trade and foreign investment, there will be inflow of better technology and better quality products. It will improve standard of living of the masses and promote industrial growth.

5. Improvement in Services According to WTO, developed countries will establish large number of trade and service establishments like- business outsourcing, information technology, banking, insurance, transport, hotels etc. On one hand, better quality services will be available in India and on other hand, millions of unemployed persons will get employment.

6. Increase in inflow of Foreign Investment Under TRIMs, the govt. has removed all the barriers to foreign investment. It has attracted foreign investment in India and improved the level of investment in the economy.

7. Restricts Dumping If a country dumps its excess production in other nation so as to damage its domestic industry, then the affected country can lodge a complaint with WTO in this regard. WTOs dispute settlement body takes action against such nation.