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International Trade and Finance

Notes Critics of this agreement argue that libralising trade in special products like palm oil, coffee,
tea, coconut etc will have serious implications on livelihood of farmers engaged in the production
of these commodities.
2. India-South Korea Comprehensive Economic Partnership Agreement (CEPA) : The Agreement
was signed on August 7, 2009. This happens to be India’s first FTA within OECD country.
Under this agreement tariff will be reduced or eliminated on 93 per cent of Korea’s tariff lines
and 85 per cent of India’s tariff lines.
3. India-Japan CEPA : Agreements in goods, services and investment are under negotiation. So
far more than a dozen meetings of Joint Task Force have taken place in this regard.
4. India-EU Trade and Investment Agreement : A broad-based bilateral Trade & Investment
Agreement is being negotiated with the EU. Negotiations cover trade in goods, services and
investment, sanitary and phyto sanitary measures, technical barriers to trade, rules of origin,
trade facilitation and customs cooperation, competition, trade defence mechanism, Government
procurement, dispute settlements, Intellectual Property Rights (IPR) and Geographical
Indications (GIs).
There are many issues of concern in the EU-India FTA. According to the critics this FTA is going to
have an adverse impact on livelihood of Indian people. According to a study commissioned by the
European Commission itself, the FTA would increase EU exports to India by $17-18 billion while
India’s export would increase by around $5 billion only. The impact of reducing as many as 95% of
our import duties down to zero or close to zero percent in seven years will result in import surges—
especially since EU agriculture imports in particular are heavily subsidized in a wide range of products
such as sugar, dairy, tomato paste, poultry, to name a few. Because the EU FTA will do nothing to
curb EU subsidies—farmers and farm workers will be hard hit by our steep reduction of import
duties. Moreover, a rapid reduction of import duties, combined with ease of entry of European agro-
processing and retail Firms through the services and investment chapter of the FTA will dramatically
impact how food is produced and sold in this country. Indian farmers and workers will not be able to
bargain against the power of Europe’s multinational retail firms.
29.3 WTO

The World Trade Organization (WTO) is an organization that intends to supervise and liberalize
international trade. The organization officially commenced on January 1, 1995 under the Marrakech
Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in
1948. The organization deals with regulation of trade between participating countries; it provides a
framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed
at enforcing participants' adherence to WTO agreements, which are signed by representatives of
member governments and ratified by their parliaments. Most of the issues that the WTO focuses on
derive from previous trade negotiations, especially from the Uruguay Round (1986-1994).
The organization is attempting to complete negotiations on the Doha Development Round, which
was launched in 2001 with an explicit focus on addressing the needs of developing countries. As of
June 2012, the future of the Doha Round remains uncertain: the work programme lists 21 subjects in
which the original deadline of 1 January 2005 was missed, and the round is still incomplete. The
conflict between free trade on industrial goods and services but retention of protectionism on farm
subsidies to domestic agricultural sector (requested by developed countries) and the substantiation
of the international liberalization of fair trade on agricultural products (requested by developing
countries) remain the major obstacles. These points of contention have hindered any progress to
launch new WTO negotiations beyond the Doha Development Round. As a result of this impasse,
there has been an increasing number of bilateral free trade agreements signed. As of July 2012, there
are various negotiation groups in the WTO system for the current agricultural trade negotiation
which is in the condition of stalemate.
WTO's Current Director-General is Pascal Lamy, who leads a staff of over 600 people in Geneva,
Switzerland.

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