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Unit 29 : Functions of WTO/GATT

The anti-dumping laws of the US were another painful thorn in the flesh of countries like India Notes
in respect of steel and other allied items of manufacture. This was taken up strongly by India
and other member countries. The pressure built on US was so strong that the US was forced to
promise a toning down of its policies and I legislation pertaining to anti-dumping laws.
Now that the WTO has appointed a 9-member committee to which the key issue of Trade
Related Intellectual Property Rights (TRIPS) has been referred to, it is hoped that the WTO will
find a structural change in its functioning and decision-making. The agenda, henceforth, will
not be set by the US and European Union (EU), but the developing countries would also be able
to air their views more freely so that the WTO does not operate to the dictates of US and the
European Union, but becomes a more democratic forum, in the real sense of the term. India and
Brazil are members of the committee and they would be able to place the view of developing
countries with the same strength with which they presented and articulated the arguments in
the WTO Conference at Doha.
29.2 Geneva Framework of WTO and India

India along with the group of G-20 countries took the initiative to voice the strong feeling of the
majority of developing countries at Cancun in 2003. Mr. Arun Jaitley, the then Commerce and Industry
Minister speaking on the 10th September 2003 stated :
“The plight of farmers in developing countries was directly linked to the level and kind of subsidy
extended to farmers in the advanced countries.”
“OECD governments support sugar producers at the rate of $ 6.4 billion annually—a sum nearly
equal to all developing countries exports. Subsidies to cotton growers in a developed country totalled
$ 3.7 billion last year, which is thrice the country’s foreign aid to Africa. The agricultural subsidies
provided by OECD countries are more than six times what they spent on official development
assistance for developing countries.” It was alleged that the OECD countries provided domestic
support of the order of $ 320 billion to their farmers, thus enabling them an unequal bargaining
power against farmers of developing countries. OECD farmers were thus able to push subsidised
agricultural exports to the developing countries impacting adversely on the interests of farmers in
developing and least developed countries. The Cancun round ended in fiasco because of the stubborn
attitude of the representatives of US and EU countries, not to discuss reduction of agricultural subsidies,
but to push the Singapore issues, viz. investment, competition, government procurement and trade
facilitation. Since India, Brazil, China, Indonesia, Egypt, Malaysia, Philippines, Bangladesh including
other developing countries voiced their strong opposition to the Cancun (2003) draft, the negotiations
ended in total failure.
At the Geneva meeting in July 2004, efforts were made to discuss the concerns of the developing
countries. India was represented by Commerce and Industry Minister Mr. Kamal Nath. The Indian
Government has claimed that it has been able to extract substantial gains on the export of industrial
goods and services. It has also been able to safeguard the interests of the farmers. The major gains
claimed are :
Firstly, out of four contentious issues which the developed countries wanted to be included in the
Doha Round, three issues, namely, investment, competition policy and government procurement
have been dropped from the agenda. Only trade facilitation will be taken up for consideration.
Secondly, developed countries have agreed to do away with direct and indirect subsidies provided
to their exports. They have also promised to bring about substantial reduction of domestic support
provided to their farmers. In particular, the Geneva framework requires that there would a minimum
reduction in such support to 80 per cent of the pre-existing levels in the very first year and throughout
the period of implementation.
Thirdly, the developed countries have recognised the need for special and differential treatment for
developing countries in terms of quantum of tariff reduction, tariff rate quota expansion, number
and treatment of sensitive products and the length of implementation period.
Fourthly, developing countries have the right to identify the number of special products, based on

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