World Trade In 2000.

According to the International Trade Statistics, 2001, published on October 25th,  growth in World trade slowed down  to 2% in 2001, compared to 12% in 2000.  During 2000, developing countries made an above average contribution to World trade. They accounted for 27% of the World exports of manufactures in 2000, a growth of over 50% over 1990. 
If World trade has shown such an impressive performance in 2000, compared  to a decade earlier both in absolute and relative terms, why then  criticisms that it has not delivered what it had promised at the time of its coming into being in 1995. The reasons are not far to seek. The major ones are that the average growth is not reflective of the performance of individual  countries, regions or even business segments . For example, high growth rates were seen in the fuel, energy and Information Technology Sectors, where except for a few countries active in the IT sector, only the oil exporting developing countries benefited. On the other hand, exports of agricultural products, the mainstay of most developing countries recorded the lowest growth of all categories, as low as 2% over 1999. In addition, while export growth was witnessed even in recession-driven Asian economies, they were far outpaced by imports. Yet another feature of the World trade was that in spite of globalisation, Regional Trading Blocks have dominated, leaving others out of the trade race. Intra-trade of major trading blocks, the NAFTA, EU, CEFTA, Mercosur and ASEAN expanded faster than inter-trade between them and other countries. In an analysis of World trade in 2000, by WTO, India has been rankled 31st in the World in merchandise trade  valued at $ 42.3 bio, far below China with $ 249.3 bio (7th rank) and even Malaysia ($98.2 bio), Thailand ($ 69.1 bio), and Indonesia ($ 62.1 bio). In imports, Indian rank was 26th, with a value of $ 50.5 bio, resulting in an overall negative trade balance of over $ 8 bio in 2000.

Case  For A Fresh Round Of Talks

The Secretary General of WTO, Mike Moore has eloquently pleaded that a fresh round of talks is an unavoidable imperative. He has advanced both economic as well as socio-political arguments. For example, if barriers to trade are cut by one third, he argues that the world economy will be boosted by $ 613 bio and  if trade barriers are cut completely, that will boost world economy by $ 1.9 trillion . If agricultural subsidies are withdrawn by just the OECD, that will lead to benefits in trade equivalent to two thirds of the GDP of entire Africa.
On the socio-economic side, it is argued that the multi-lateral trading system had dramatically helped the poor, in reducing child mortality and malnutrition and the providing safe drinking water to large populations.
Most of the developing countries, however, are not impressed with these arguments. For one thing, experience to-date has shown that newer trade practices under WTO has in fact widened the disparities between the rich and the poor nations. They feel that while there are pressures to ensure access to their markets for the developed countries, the same treatment has not been extended to them. Many tariff and non-tariff barriers still exist which have denied market access to products which are the mainstay of developing countries, eg, agricultural products and textiles. Development of minimum infrastructure to exploit market access opportunities are sadly lacking in developing countries and no amount of opening up markets will help, unless deficiencies are removed through higher investments.

Issues For The Ministerial Conference- Indian Stance

The broad areas to be discussed at the WTO Ministerial Conference in Doha pertain, among other things , to Intellectual Property Rights (TRIPS), the various negotiations completed, as well as on-going, the implementation status in various member  countries and other new issues impinging on TRIPS related matters. Some of the major areas to be discussed are,  Geographical Indications, a possible declaration on TRIPS and Health, Convention on Biodiversity and TRIPS, Technology transfer and a technical issue termed Non-violation cases.
Indian authorities responsible for the analysis of the various issues to be discussed at the Ministerial Conference have not made public, the approaches they are to adopt during the Conference. The Indian Commerce Minister reportedly has taken the stand that since the developing countries had little say, while fixing the Agenda, India may go to the extend of even not participating in the discussions. That indeed would be unfortunate and unprecedented, since, in the past, whatever decisions were made, they were taken with the concurrence of all members. If India or any other member country has not received fair treatment, it was largely because of our inability to put across   convincing arguments while presenting our case. The Indian case would have been representative of the majority of developing countries, who constitute three fourths of the 142 membership of  WTO. In the recent past, except for Brazil and to some extent Egypt,  India has not been able to command  major support from any other country for effecting  changes in the form or substance of Agreements , under WTO.
What should be the Indian stance on issues which will come up for discussion at the 4th Ministerial Conference, outside the contentious issues on Environment, Labour Standards, Agriculture,etc, on which our stance is clear.

Geographical Indications 

Protection under Geographical Indications is defined under Art. 22 and Art. 23 of TRIPS, the former laying down the principles of the need for such protection and the latter restricting current protection on Wines and Spirits. India and many other countries feel that many more products related to agriculture, food, industrial merchandise, objects of art and utility should be protectable and should be included in Art. 23. In India, the importance of this was realised when the issue of Basmati had come up, which led to  legislating the Geographical Indications Act, even though it is yet to be implemented. The fact that often times other legislations such as Trade Marks Law, the Consumer Protection Law or the Common Law can be applied to protect Geographical Indications does not dilute the need for a specific legislation. However, to be effective, it is not sufficient to have a national law in place, there has to be multilateral agreements on registering such indications among all the member countries. 
India needs to analyse the implications not only for domestic protection, but also for global competitiveness and exclusivity, through this legislation.

Health Related Issues

One of the most sensitive issues, which has surfaced in recent times has been access to medicines in times of acute needs such as in the case of AIDS/HIV and very recently for Anthrax. While all members concurred at the last round that protection of Intellectual Property Rights is an essential pre-requisite for the discovery of new drugs, the question of affordability by the poor nations of patented drugs has always remained a very sensitive issue. In fact, TRIPS does provide for flexibility in the matter of utilising the available provisions in this area, namely the authority of members to issue compulsory licences under conditions of National emergency. There is nothing in the TRIPS Agreements which bars parallel imports of drugs from markets where the prices are lower. These two provisions have led to considerable debates among many members. Like on many issues which are debatable, TRIPS is silent on the precise conditions under which these provisions can be invoked by Nation States.  The general feeling among most members is that there should a firm Declaration on this issue  which will be equitable, transparent and implementable.
Further, while on the question of the Declaration, many members are of the opinion that it should categorically endorse that WTO should not stand in the way of members resorting to the Compulsory Licences and Parallel Imports provisions, if they are part of the National Health Policies and the matter should not be a matter for disputes to the WTO. In order to ensure that such a Declaration will not strike at the roots of the Patent System, members should be willing  to use these most judiciously, when conditions warrant it, rather than using them to protect the domestic industry. In addition, there is general agreement that they be invoked only for meeting domestic emergencies , a view which will not go down very well with some of the Indian Companies, which have offeried patented  AIDS drugs for the global markets at lower prices.

Article 27.3 On Patentability

This Article stipulates that ‘ in general inventions eligible for patenting must be new, involve inventive step and be capable of industrial application.’ It also lists inventions which Governments are free to exclude from patentability. Article 27.3(b) is the one which has led to a high degree of ambiguity, particularly with regard to patentability of DNA Sequences, Genes and Genetically Modified life forms. While the Article  allows the exclusion of plants, animals and essentially biological processes from being patentable subject matter, Micro-organisms and non-biological and micro-biological processes are patentable. Whether deliberately or otherwise, micro-organisms have not been defined, which could be used to advantage by member countries to adopt their own interpretation and bring in appropriate legislations.  However , India , internally has to be clear as to how she wants to handle protection issues on DNA sequences, Genes, Stem Cells and products derived from these biological materials.
There are still several related matters which need deliberations, clarifications and decisions where needed.  Compatability of TRIPS provisions and standards with legislations based on the Convention on Biodiversity (CBD) and the Plant Varieties Protection through the patent system or as a ‘Sui Generis” system and others need  further discussions. While the latter which incorporates also the Farmer’s Rights have been legislated through  both Houses of Parliament, the CBD legislation is still to be presented for enactment. The present Draft which is very restrictive on the utilisation of the Country’s Bioassets even for R&D purposes, is likely to raise a number of problems and may not even help the other causes for which the CBD stood for, namely, Conservation of Bioassets and ensuring equitable rewards for owners of such assets.

Non-Violation Cases

Under the Goods Agreement and the General Agreement on Trade in Services (GATS), there is a provision under which even if there is no violation of any Agreement, members can still go the Dispute Settlement Body(DSB), if there is evidence that they have been denied legitimate benefits meant  to be accrued from these Agreements. However, TRIPS (Art.64.2) temperorily banned non-violation disputes being taken to WTO’s,  Dispute Settlement Body.
Opinions are divided among the members, as to whether the ban should be extended, lifted or strengthened . India, in her own interest, should ensure that Non-violation cases could be brought to WTO’s, DSB, so that  her trade in Goods and Services  are not affected by Countries bringing in sppecial legislations outside the scope of Agreements under WTO. It is not clear as to how the Conference is going to address these issues.   

Review of TRIPS Agreement

Article 71.1 of TRIPS stipulated that the TRIPS Agreement was to be reviewed in 2000 to ensure that both legislations and implementation steps have been carried out by member states as mandated by WTO.  It would have been prudent if India on her own carried out this exercise in order to evaluate the impact of various Articles  under the various Agreements  on the Country’s economy, trade, R&D and industrial production. It would appear from available information that no such exercise has been carried out. It is also a moot point whether India has utilised  the provisions under Art. 7 and Art. 8 of TRIPS, to the fullest extent permissable,  and, whether the steps taken so far are consistent with the objective of using WTO as a meaningful vehicle and a valuable Agency to promote Indian interests in promoting global trade.