International Organizations Flashcards
Bretton Woods Conference why and what?
The representatives of 44 Allied Nations met to regulate the international monetary and financial order after the 2nd World War. They proposed the following:
1. Creation of an International Trade Organization (ITO) to establish rules and regulations for international trade.
2. Creation of International Bank for Reconstruction and Development (IBRD) to help in the reconstruction of nations devastated by the 2nd World War.
3. Creation of International Monetary Fund (IMF) to monitor exchange rates and lend reserve currencies to nations with trade deficits.
General Agreement on Tariffs and Trade (GATT) 1947
First round of negotiations among countries resulted in this and a a package of trade rules and 45,000 tariff concessions. Attempted to establish ITO but failed
Uruguay/ Eighth Round when and notable decisions
1.Agreement establishing the WTO (WTO Agreement)
2.Updated General Agreement on Tariffs and Trade (GATT) 1994
3.General Agreement on Trade in Services (GATS)
4.Trade Related Aspects of Intellectual Property Rights (TRIPS)
5.Trade Policy Review Mechanism
6.Dispute Settlement
7.Agreement on Agriculture
Free Trade Agreements (FTA)
A free trade agreement is a preferential arrangement in which members reduce tariffs on trade among themselves, while maintaining their own tariff rates for trade with non-members.
Customs Union (CU)
A customs union is a free trade agreement (FTA) in which members apply a common external tariff (CET) schedule to imports from non-members.
Common Market (CM):
A common market is a customs union (CU) where movement of factors of production is relatively free amongst member countries.
Economic Union (EU):
An economic union is a common market (CM)where member countriescoordinate macro-economic and exchange rate policies.
Reasons for creation of WTO
GATT provisional and outdated, and to coordinate international trade rules and regulations.
Why is WTO often described as “rules-based”?
the rules are actually agreements that governments negotiated.
Principles of WTO Trade?
1.Trade without discrimination
Most Favoured Nation (MFN): Under WTO agreements, countries cannot normally discriminate between their trading partners, equal policies. But exceptions- 1. FTA, but gradually without any time limit do this for all trade partners 2. Security clause eg, India against Pak after Pulawama 3.Generalized system of Preferences- developed countries offer non- reciprocal preferential treatment (such as zero or low duties on imports) to products originating in developing countries.
National Treatment (NT): It says that imported and locally produced goods should be treated equally after the foreign goods have entered into the domestic markets.
2.Free Trade (gradually through negotiation) Lowering trade barriers is one of the most obvious means of encouraging trade.
3.Binding and enforceable commitments
4.Transparency:WTO members are required to publish their trade regulations and to make sure decisions affecting trade are notified to other
5.Single Undertaking: All WTO agreements are held together as a single undertaking. This means that member countries cannot selectively choose which agreement they will join.
Decision making in WTO
First consensus, then vote of not possible, and one country one vote
Other Agreements on Goods trade under GATT 1994- Sanitary and Phytosanitary (SPS) Measures
The Agreement on the Application of Sanitary and Phytosanitary Measures sets out the basic rules for food safety and animal and plant health standards. The Agreement allows countries to set their own standards. But it also says regulations must be based on science.
Other Agreements on Goods trade under GATT 1994- Agreement on Agriculture (AoA)
To discipline and limit the amount of state support by devising categories of acceptability. Green box allowed under WTO, Blue box too and includes de-minimis support, amber box restricted under WTO.
Total Aggregate Measurement of Support (AMS) and De-minimis level
Every member country is required to calculate their aggregate measurement of support. AMS is less than 10% of the value of the production then there is no penalty and comes under “De-minimis support” under point 2 above, but if it is more than 10% then it will come under point 3 above and the countries must try to bring it under 10% (for a developed country this cap is 5%).
AMS and India
Peace Clause: During Bali Conference (Dec 2013), the member countries agreed to a “peace clause” which refers to a time period during which the member countries would refrain from seeking penalty against countries which still breach the 10% domestic support (total AMS) cap. But India bargained hard in further negotiations and now the temporary peace clause has been replaced with an open-ended statement - “until a permanent solution to the issue of public stockholding and agricultural subsidies is arrived at, no member country can challenge other members for crossing the 10% subsidy cap”
Can countries export PDS food grains?
As per the WTO norms, countries are not allowed to export foodgrains from public stockholdings as they are procured at regulated/subsidized rates and there is subsidy in storage also.
Other Agreements on Goods trade under GATT 1994-Information Technology Agreement (ITA) and India
The ITA requires each participant to eliminate and bind customs duties at zero for all products specified in the Agreement. Accordingly, India agreed to eliminate import duties on several IT products by 2005. But Government of India has decided not to participate in the ITA expansion (ITA-II) negotiations for the time being.
Other Agreements on Goods trade under GATT 1994-Trade Related Investment Measures (TRIMS) and India
The Agreement on TRIMs of the WTO is based on the belief that there is a strong connection between trade and investment. Restrictive measures on investment are trade distorting. WTO gives a list of prohibited investment measures or TRIMs like local content requirement, export obligation, domestic employment, technology transfer requirement etc. that violates trade. Few exemptions to developing countries India has made several foreign investment liberalisation measures since the launch of the New Industrial Policy in 1991.
General Agreement on Trade in Services (GATS)
Negotiated in the Uruguay round. GATS does not require any service to be deregulated or privatized.Government services are specially carved out of the agreement and are defined in the agreement as those that are not supplied commercially and do not compete with other suppliers but must be rationalized and be made transparent.
Intellectual Property Rights (IPR)
Intellectual Property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce. Intellectual property rights (IPRs) are the protections granted to the creators of IP which enable people to earn recognition or financial benefit from what they invent or create. Usually limited time.
IPR in India
1.Copyright: Copyrights protect the “expression of ideas”. Copyright Act 1957. 60 years.
2.Patents: A patent is a right, granted by the government, to exclude others from making, using, or selling your invention. “Indian Paten Act 1970”. 20 years.
3.Trademarks: Trademark is typically a name, word, phrase, logo, symbol, design, image or a combination of these elements. The Trade Marks Act 1999”. Can be Indefinite.
4.Trade Secrets: Broadly speaking, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret. Are protected without any procedural formalities and can be protected for an unlimited period of time.
5.A geographical indication is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. 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. Trade Marks Act, 1999. Eg Basmati Rice, Banglar Rasogolla of West Bengal. 10 years.
6. Industrial Designs: In a legal sense, an industrial design constitutes the ornamental or aesthetic aspect of an article. Design Act 2000. 10 years.
“Ever greening of Patents” meaning
is referred to the practice whereby pharmaceutical firms extend the patent over products that are about to expire by doing minor reformulations or other iterations of the drug, without necessarily increasing the therapeutic efficacy.
Trade Related Aspects of Intellectual Property Rights (TRIPS)
establishes a minimum level of protection that each member country has to give to the intellectual property of fellow WTO members. Protection, Enforcement and technology transfer.
Generic Drugs:
A generic drug is a medication that has exactly the same active ingredient as the brand name drug and yields the same therapeutic effect. They do not need to contain the same inactive ingredients as the brand name product, say colour or taste can be different. However, a generic drug is generally marketed after the brand name drug’s patent has expired, which may take up to 20 years. So, during the protection period of 20 years, the patent owner tries to recover its cost which it has spent on research and development.
