Developing Countries and the WTO: Issues of Implementation

Journal of World Trade

Volumn 34, Issue 6, 2000, Pages 33-374

  Mukerji, Asoke ^a  

^a Indian Foreign Service   (India)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0346276592     PISSN: 10116702     EISSN: None     Source Type: Journal    
DOI: 10.54648/313133     Document Type: Article

References (115)

1. "Singapore Ministerial Declaration", WTO Document WT/MIN(96)/DEC, dated 18 December 1996, para. 3, p. 1.
2. GATT, Analytical Index: Guide to GATT Law and Practice, (6th edition, 1994), pp. 3-6. The ITO Charter was finally agreed at a United Nations Conference on Trade and Employment held in Havana from 21 November 1947 to 24 March 1948. However, it never entered into force. No acceptances of the Charter were received by the Secretary General of the United Nations. On 6 December 1950, the United States Department of State issued a statement of policy indicating that the Havana Charter would not be submitted again to the United States Congress.
3. As note 2, above, pp. 331-359, 460-474.
4. As note 2, above, pp. 460-461. This point was examined in depth by the Report of the Review Working Party on "Quantitative Restrictions", GATT Document L/332/Rev.1 and Addenda, adopted on 2, 4 and 5 March 1955.
5. The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts (Geneva, The GATT Secretariat, 1994), hereafter cited as The Legal Texts. "The General Agreement on Tariffs and Trade", Article XVIII, pp. 511-518.
6. The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts (Geneva, The GATT Secretariat, 1994), hereafter cited as The Legal Texts. "The General Agreement on Tariffs and Trade", Article XVIII, pp. 511-518.
7. As note 5, above, "The General Agreement on Tariffs and Trade", Article XV.2, p. 507.
8. The most recent example of this approach has been the dispute raised against India's Quantitative Restrictions by the United States, which was decided by the WTO Dispute Settlement Body in favour of the United States. See WTO Dispute Settlement Body Report WT/DS90/AB/R, dated 23 August 1999.
9. The first two years of the WTO witnessed attempts by industrialized countries to make the IMF an integral part of the new dispute settlement mechanism of the WTO. This was strongly resisted by several developing countries. The eventual decision was to make any role of the IMF in the WTO Dispute Settlement Body and dispute settlement panels conditional on the agreement of all the governments represented in the WTO. See WTO Document WT/L/194, "Agreements between the WTO and the IMF and the World Bank: Decision adopted by the General Council at its meeting on 7, 8 and 13 November 1996", dated 18 November 1996, paras 4(a) and (b), p. 2.
10. The Legal Texts, "The General Agreement on Tariffs and Trade," Article XXIV.4, p. 523.
11. The Multilateral Trading System: 50 Years of Achievement, (WTO, 1998), p. 20.
12. As note 10, above, p. 10.
13. The Legal Texts "Marrakesh Agreement Establishing the World Trade Organization", p. 6.
14. As note 12, above, "Declaration on the Contribution of the World Trade Organization to achieving Greater Coherence in Global Economic Policymaking", pp. 442-443.
15. The Multilateral Trading System: 50 Years of Achievement, (WTO, 1998), p. 5.
16. Singapore Ministerial Declaration, WTO Document WT/MIN(96)/DEC, dated 18 December 1996, para. 10, p. 3.
17. Ramakrishna Hegde, Union Minister of Commerce, Government of India, "WTO Issues and India's Concerns: Speech at the Second Ministerial Conference of the WTO in Geneva, 18-20 May, 1998". India and the WTO: A Monthly Newsletter of the Ministry of Commerce (hereafter India and the WTO) Vol. 1, No. 2 (February 1999), p. 2.
18. The Legal Texts, "Agreement on Trade-Related Intellectual Property Rights", Article 7, p. 370.
19. In this context, the attempt by industrialized countries in the WTO to demonstrate concern regarding the problems of least-developed countries is instructive. Although the WTO organized a High-Level Meeting on Integrated Initiatives for Least-Developed Countries' Trade Development on 27-28 October 1997, the main outcome was to provide greater technical assistance to such countries. The Director-General of the WTO reported that on the issue of providing greater market access to these countries, "The response we received at the High-Level Meeting was not discouraging, but I continue to feel that much more can be done in this area." (emphasis added). See WTO Document WT/MIN(98)/2, dated 28 April 1998, para. 7, p. 3.
20. Marcelo Raffaelli and Tripti Jenkins, The Drafting History of the Agreement on Textiles and Clothing, (ITCB, Geneva, November 1995), pp. 1-3.
21. For example, in India, the textile and clothing sector is the largest manufacturing sector, generating about 20 percent of industrial output, providing employment for about 30 million people and accounting for almost 27 percent of India's total export earnings. Any restrictions on market access for exports of textiles and clothing therefore has serious implications in terms of income and employment for India. See India and the WTO, Vol.1, No. 2, (February 1999), p. 1.
22. Major Review of the Implementation of the Agreement on Textiles and Clothing in the First Stage of the Integration Process, WTO Document G/C/W/105, dated 4 February 1998.
23. As note 21, above, para. 10, p. 3.
24. As note 21, above, para. 13, p. 4.
25. Testimony of Julia A. Hughes, Chairman, U.S. Association of Importers of Textiles and Apparel, Subcommittee on Trade, Committee on Ways and Means, U.S. House of Representatives, 1996, ITCB Document ITCB/INF/96/9, dated 11 September 1996.
26. As note 24, above.
27. Major Review of the Implementation of the Agreement on Textiles and Clothing in the First Stage of the Implementation Process, WTO Document G/C/W/105, dated 4 February 1998, para. 20, p. 5.
28. As note 26, above, para. 23, p. 6.
29. As note 26, above, paras 17-23, pp. 11-12.
30. Communication to the WTO from Cuba, Dominican Republic, Egypt, El Salvador, Honduras, India, Indonesia, Malaysia, Nigeria, Pakistan, Sri Lanka and Uganda, WTO Document WT/GC/W/354, dated 11 October 1999.
31. Major Review of the Implementation of the Agreement on Textiles and Clothing during the First Stage of the Implementation Process, WTO Document GC/W/105, dated 4 February 1998, para. 4, p. 7.
32. WTO Dispute Settlement Body Reports WT/DS24/AB/R, dated 10 February 1997 and WT/DS33/AB/R, dated 25 April 1997 respectively.
33. WTO Dispute Settlement Body Documents WT/DS141/1 and WT/DS140/1, dated 3 August 1998.
34. Press Remarks by Charlene Barshefsky, USTR, 15 November 1999, available at 〈www.ustr.gov/release/1999/11/cbchina〈.
35. In this context, Turkey, which introduced textiles and clothing quotas pursuant to its Customs Union with the EU, expanded the MFA-quota regime of the EU to developing country exporters such as India, which took recourse to the WTO dispute settlement system. The WTO ruled that Turkey could not introduce such quotas under the ATC. See WTO Dispute Settlement Body Report WT/DS34/AB/R, dated 22 October 1999.
36. For example, the agriculture sector, including forestry and fishing, accounts for about 29 percent of India's GDP, and provides direct employment to about 314 million people. Agricultural products formed about 17 percent of India's total merchandise exports in 1996-97. See Trade Policy Review of India Report by the Secretariat, WTO Document WT/TPR/S/33, dated 5 March 1998, paras 6 and 8, p. 108.
37. The Cairns Group was formed in 1986 at the initiative of Australia, and consisted of 15 developed and developing countries - Argentina, Australia, Brazil, Canada, Chile, Colombia, Fiji, Indonesia, Malaysia, New Zealand, Paraguay, Philippines, South Africa, Thailand and Uruguay - exporting agricultural products.
38. Trading into the Future: The World Trade Organization, (WTO, 2nd edition, February 1998), pp. 17-18.
39. The Legal Texts, "Agreement on Agriculture", p. 39.
40. India and the WTO, Vol. 1, No. 7, (July 1999), p. 4.
41. The EU spends US$ 7 billion in export subsidies to support 2 percent of its population involved in agriculture, accounting for 85 percent of all export subsidies in the world. See 〈www.usia.gov/topical/econ/wto99/pp1124a.htm〉.
42. For example, since the total aggregated measure of support in India, calculated on the basis of the base period of 1986-87 to 1988-89, is negative, the WTO disciplines with respect to cuts in domestic subsidies do not apply to India. Similarly, none of the seven types of export subsidies for which the WTO requires reduction commitments to be made are applied in India.
43. Communication to the WTO from India, WTO Document WT/GC/W/114, dated 18 November 1998 and Communication to the WTO from Cuba, Dominican Republic, Egypt, El Salvador, Honduras, India, Indonesia, Malaysia, Nigeria, Pakistan, Sri Lanka and Uganda, WTO Document WT/GC/W/354, dated 11 October 1999.
44. Communication to the WTO from India, WTO Document WT/GC/W/114, dated 18 November 1998 and Communication to the WTO from Cuba, Dominican Republic, Egypt, El Salvador, Honduras, India, Indonesia, Malaysia, Nigeria, Pakistan, Sri Lanka and Uganda, WTO Document WT/GC/W/354, dated 11 October 1999.
45. India and the WTO, Vol. 1, No. 2, (February 1999), p. 3.
46. WTO Dispute Settlement Body Reports WT/DS26/AB/R and WT/DS48/AB/R, dated 16 January 1998.
47. The Legal Texts, "Agreement on Technical Barriers to Trade", p. 138; and "Agreement on the Application of Sanitary and Phytosanitary Measures", p. 69.
48. The Legal Texts, "Agreement on Technical Barriers to Trade", p. 138; and "Agreement on the Application of Sanitary and Phytosanitary Measures", p. 69.
49. First Triennial Review of the Operation and Implementation of the Agreement on Technical Barriers to Trade, WTO Document G/TBT/5, dated 19 November 1997, para. 4, p. 1.
50. As note 46, above, para. 33, pp. 9-10.
51. Review of the Operation and Implementation of the Agreement on the Application of Sanitary and Phytosanitary Measures, WTO Document G/SPS/12, dated 11 March 1998, para. 4.
52. India and the WTO, Vol. 1, No. 7, (July 1999), p. 10.
53. Review of the Operation and Implementation of the Agreement on the Application of Sanitary and Phytosanitary Measures, WTO Document G/SPS/12, dated 11 March 1999, para. 13.
54. As note 50, above, para. 18.
55. Communication to the WTO from Cuba, Dominican Republic, Egypt, El Salvador, Honduras, India, Indonesia, Malaysia, Nigeria, Pakistan, Sri Lanka and Uganda, WTO Document WT/GC/W/354, dated 11 October 1999.
56. Agenda 21, (United Nations, June 1992), Chapter 2, pp. 19-26.
57. The Legal Texts, "Ministerial Decision on Trade and Environment", pp. 469-471.
58. As note 54, above, "The General Agreement on Tariffs and Trade", Article XX, pp. 519-520.
59. WTO Dispute Settlement Body Reports WT/DS2/AB/R, dated 29 April 1996 and WT/DS58/AB/R, dated 6 November 1998 respectively.
60. The Economist, (London, 9 October 1999), p. 17.
61. As note 57, above.
62. Report of the Committee on Trade and Environment 1996, WTO Document WT/CTE/W/40, dated 7 November 1996, para. 171, p. 39.
63. The Economist, (London, 9 October 1999), p. 104.
64. Report of the Committee on Trade and Environment 1996, WTO Document WT/CTE/W/40, dated 7 November 1996.
65. The Legal Texts, "Agreement on Trade-Related Aspects of Intellectual Property Rights", Article 7, p. 370.
66. As note 62, above, "Agreement on Trade-Related Aspects of Intellectual Property Rights", p. 366.
67. UNCTAD/ITE/1, The TRIPS Agreement and Developing Countries, "Competition Issues within the TRIPS Framework", (United Nations, New York and Geneva, 1996), para. 258, p. 53.
68. The Legal Texts, "Agreement on Trade-Related Aspects of Intellectual Property Rights", p. 366.
69. As note 65, above, Article 8.2, p. 370.
70. Adrian Otten and Hannu Wager, Compliance with TRIPs: The Emerging World View, Vanderbilt Journal of Transnational Law, Vol. 29, (1996), pp. 393 and 396.
71. Trading into the Future: The World Trade Organization, (WTO, 2nd edition, February 1998), pp. 25-28.
72. UNCTAD/ITE/1, The TRIPS Agreement and Developing Countries, (United Nations, New York and Geneva, 1996), para. 26, p. 7.
73. This was the main reason for the dispute raised by the United States against India's patent protection regime for pharmaceuticals and agricultural chemical products. The absence of a "mailbox" provision in India's Patents Act 1970 was found to be inconsistent with India's obligations under the TRIPs Agreement, and India had to amend its patent legislation in accordance with the WTO Dispute Settlement Body Report WT/DS50/AB/R, dated 19 December 1997.
74. The Legal Texts, "Agreement on Trade-Related Aspects of Intellectual Property Rights", Arts 23 and 24.2, pp. 376 and 367.
75. As note 71, above, p. 366.
76. Proposals to examine the compulsory licensing provisions (Article 31) and the term of protection (Article 33) of the TRIPs Agreement to ensure the transfer of environmentally-sound products and technologies to developing countries were rejected by industrialized countries in the CTE. See Report of the Committee on Trade and Environment 1996, WTO Document WT/CTE/W/40, dated 7 November 1996, paras 137-138, pp. 31-32.
77. For a discussion of these issues, see Communication from India to the WTO, WTO Document WT/GC/W/352, dated 11 October 1999.
78. India and the WTO, Vol. 1, No. 3, (March 1999).
79. Report of the Committee on Trade and Environment 1996, WTO Document WT/CTE/W/40, dated 7 November 1996, para. 149, p. 34.
80. GATT Document MTN.GNS/W/120, dated 10 July 1991.
81. The Legal Texts, "The General Agreement on Trade in Services", p. 327.
82. As note 78, above, Article XIX, p. 343.
83. As note 78, above, Article IV, p. 330.
84. For example, India committed itself to open its banking sector market to 12 branches per year for both new entrants and existing banks, whereas in actual practice, India has allowed more than 12 branches to open annually. See WTO Document S/FIN/W/12/Add.47.Rev.1, dated 12 December 1997. Similarly, in the basic telecoms sector, India committed itself to allow 25 percent foreign equity in investment in private operations, whereas in terms of national policy, 49 percent foreign equity participation is permitted. See WTO Document S/GBT/W/1/Add.24.Rev.1, dated 14 February 1997.
85. For example, India committed itself to open its banking sector market to 12 branches per year for both new entrants and existing banks, whereas in actual practice, India has allowed more than 12 branches to open annually. See WTO Document S/FIN/W/12/Add.47.Rev.1, dated 12 December 1997. Similarly, in the basic telecoms sector, India committed itself to allow 25 percent foreign equity in investment in private operations, whereas in terms of national policy, 49 percent foreign equity participation is permitted. See WTO Document S/GBT/W/1/Add.24.Rev.1, dated 14 February 1997.
86. For example, in the basic telecoms sector, India committed to review its long-distance service beyond service area in 1999, and its international service in 2000. For its cellular service operations, India is committed to review its commitment for two service operators in each service area after 10 years. See WTO Document S/GBT/W/1/Add.24.Rev.1, dated 12 December 1997.
87. For example, in the basic telecoms negotiations, India was able to negotiate its commitment to open up its basic telecoms sector while maintaining its right to provide "universal service obligation", i.e. to continue government support for provision of basic telecoms services in priority areas such as the rural hinterland.
88. WTO Document GATS/SC/31/Suppl.2, dated 28 July 1995.
89. The Legal Texts, "Ministerial Decision on Professional Services", p. 462.
90. Disciplines on Domestic Regulation in the Accountancy Sector, WTO Document S/L/64, dated 14 December 1998.
91. According to WTO Document S/NGMTS/W/2/Add.36, dated 30 October 1995, for example, 77 percent of India's total foreign trade was transported by sea. India's steps to autonomously liberalize and modernize its maritime transportation sector, including the enactment of a Multi-Modal Transportation Act in 1993, showed its awareness of the opportunities for it of streamlining trade in this crucial sector.
92. A Review of Statistics on Trade Flows in Services, WTO Document S/C/W/27, dated 10 November 1997, p. 5.
93. See also UNCTAD/SDD/SER/1, dated 15 September 1993, p. 3.
94. WTO Documents S/GBT/W/1/Add.1 Rev.2, dated 15 February 1997 and S/GBT/W/1/Add.24 Rev.1, dated 14 February 1997 respectively.
95. WTO Documents S/GBT/W/1/Add.1 Rev.2, dated 15 February 1997 and S/GBT/W/1/Add.24 Rev.1, dated 14 February 1997 respectively.
96. WTO Document S/GBT/W/1/Add.2 Rev.1, dated 12 February 1997.
97. A Review of Statistics on Trade Flows in Services, WTO Document S/C/W/27, dated 10 November 1997, p. 5.
98. See: Statement of the United Nations Statistical Division, circulated as WTO Document S/CSC/W/13, dated 17 February 1998.
99. The Legal Texts, "The General Agreement on Trade in Services", Article X, p. 336.
100. Jeffrey Lee Gertler, Dispute Settlement in the WTO, The International Review of World Trade 1996 (London, Sterling Publications Limited), pp. 29-31.
101. The first stage of any attempt to settle a dispute is to hold consultations between the governments concerned. If no resolution is reached within 60 days, the complaining country can ask the WTO to appoint a Panel to help make rulings or recommendations. Members of the Panel are usually chosen in consultation with the countries to the dispute. Panels consist of three (occasionally five) experts from different countries who examine the evidence and decide on who is right and who is wrong. Panellists are chosen in their individual capacities from a permanent list of well-qualified candidates nominated by WTO member governments, or from elsewhere. They cannot receive instructions from any government. In disputes involving technical or scientific issues, the Panel has the right to seek expert advice from any individual or body, or request an advisory report in writing from an expert review group established by it. Normally, the Panel holds one hearing to hear the case for the complaining country and the defending country, and another hearing to hear the rebuttal arguments of the complaining and defending countries. The Panel can schedule more hearings, if it so decides, to listen to expert advice. Prior to each hearing, the Panel receives written presentations from the complaining and responding party respectively, setting out in detail the basis for their divergent views leading to the dispute. Between six to nine months from the date of composition of the Panel, its report is submitted to the WTO, which has to adopt it, unless the Panel report is appealed against by one of the parties to the dispute on issues of law covered in the Panel report and legal interpretations developed by the Panel. Such an appeal is heard by three members of a permanent seven-member Appellate Body set up by the WTO, which is supposed to represent the range of the WTO's membership. Members of the Appellate Body are individuals with recognized standing in the field of law and international trade, and are not affiliated with any government. Within 90 days of such an appeal, the WTO's Appellate Body reviews the panel report and upholds, modifies or reverses the legal findings and conclusions of the Panel. The WTO is required to adopt the Appellate Body's report and seek its implementation within a "reasonable period of time", normally 15 months. Thus, the entire period for the WTO to consider the dispute is between a year to 15 months (depending on whether or not the Panel's report has been appealed), and for the party losing the dispute the period given to implement the WTO's decision is an additional 15 months. In case the losing party does not implement the WTO's decision, then the DSU provides for either compensation pending full implementation, or allows the victorious party to retaliate pending full implementation by taking trade measures such as sanctions, initially in the same sector in which the dispute occurred (goods or services or intellectual property), and then in other sectors and agreements, i.e. "cross-retaliation".
102. "Overview of the State-of-Play of WTO Disputes", dated 19 October 1999, available at 〈www.wto.org/wto/dispute/bulletin.htm〉.
103. WTO Dispute Settlement Body (DSB) Document WT/DS1.
104. WTO DSB Report WT/DS27/AB/R, dated 9 September 1997.
105. WTO DSB Report WT/DS2/AB/R, dated 29 April 1996.
106. WTO DSB Report WT/DS58/AB/R, dated 6 November 1998.
107. Working Procedures for Appellate Review, WTO Document WT/AB/WP/1, dated 15 February 1996, Part I, para. 4, p. 4.
108. The Legal Texts, DSU Article 8.3, p. 411.
109. The Legal Texts, "Decision on the Application and Review of the Understanding on Rules and Procedures Governing the Settlement of Disputes", p. 465.
110. Communication from India to the WTO, WTO Document WT/GC/W/108, dated 13 November 1998.
111. The Legal Texts, "The General Agreement on Trade in Services", Article XIII.2, p. 339.
112. Concluding Remarks by H.E. Mr. Yeo Cheow Tong, Chairman of the Ministerial Conference, Minister for Trade and Industry of Singapore, dated 13 December 1996, para. 8.
113. It is expected that one billion people will use the Internet by 2005. In the United States, e-commerce totalled just over US$ 50 billion in 1998, and is projected to reach US$ 1.4 trillion by 2003. See 〈www.usia.gov/topical/econ/wto99/pp1124a.htm〉.
114. Under the ITA, India is committed to a zero rate tariff import regime for 217 products by the year 2005; the reduction to zero duties will apply to 95 tariff lines by the year 2000, and reductions to zero duty on 116 tariff lines is left for the final year. See Trade Policy Review India: Report by the Secretariat, WTO Document WT/TPR/S/33, dated 5 March 1998, para. 119, p. 151.
115. See Remarks of Ambassador Charlene Barshefsky, Closing Plenary Session of WTO Ministerial Conference, (Seattle, 3 December 1999).