WORLD TRADE WT/MIN(98)/ST/36
18May1998
ORGANIZATION(98-2030)
Original: English MINISTERIAL CONFERENCE
Second Session
Geneva, 18and20May1998
INDIA
Statement Circulated byMr.Ramakrishna Hegde,
Minister ofCommerce
1. Itisanoccasion ofrareprivilege andhonour formetobepresent attheSecond Ministerial
Conference oftheWTO, asitcoincides withthe50thAnniversary oftheGeneral Agreement onTariffs
andTrade. Distinguished delegates, wehavecome alongwaysince GATT wasinitially established
in1947. During thelast50years, wehavestriven progressively tolower barriers totrade allover
theworld. Wehavenegotiated longandhardandwehaveendeavoured tounderstand andaccommodate
theinterests ofallcountries andgroups ofcountries. TheUruguay Round Agreements represent a
major stepforward inourefforts. Theestablishment oftheWorld Trade Organization hascreated
aforum forcontinuous negotiations toreconcile thesometimes conflicting interests oftrading partners.
2. India isproud tohavebeenafounder Member bothofGATT andofWTO. Over theyears,
ournegotiators haveplayed aprominent roleinshaping thecontours ofthemultilateral trading system
asitexists today. Wehavecontributed significantly tothesuccessful conclusion ofalltradenegotiations.
Wehavehelped invarious waystoreconcile seemingly irreconcilable positions. Wehaveparticipated
effectively intheformulation ofallmajor tradeagreements. Since theformation ofWTO, ourdelegation
hasbeenactive atalltimes inalldeliberations andwehaveplayed apartinbringing difficult negotiations
toasatisfactory conclusion.
3. Themultilateraltradingsystem,whichtheWTOadministers,representsabalanceofconcessions
which, ifimplemented inletterandspirit, could bring about orderliness, transparency andpredictability
inglobal trade. Theprinciple ofmost-favoured-nation treatment ofallMember countries byeach
country, more freetrade through reduction oftariffs andprogressive removal ofnon-tariff barriers,
elimination oftrade distorting measures, including subsidies, systems ofrules toserve asguidelines
fornational legislation tobring about uniformity inlawsandregulations everywhere andsimplification
ofborder measures aresome ofthegains ofthesystem.
4. The50thAnniversary ofGATT should beanoccasion forintrospection andreflection onwhat
thesystem stands for,itsobjectives anditsshortcomings. Wehavetobeclearinourmind regarding
themanner inwhich wearegoing totakethesystem forward andhowwearegoing tostrengthen
it.Wehavetosetatrestapprehensions regarding thelackoffairness ofthesystem. Forthesystem
tobestrong andeffective, allMember countries mustbeassured thattheyhaveanequal andeffective
roletoplayinitsevolution andthattheirconcerns willbeviewed withunderstanding andaspirit of
mutual accommodation.
5. Inorder tomake WTO aneffective multilateral body, which serves theobjectives forwhich
itwassetup,itisnecessary togobacktothebasic principles. TheUruguay Round negotiators had
stated theirintentions quiteclearly inthePreamble totheMarrakesh Agreement Establishing theWorld
Trade Organization. They recognized "thattheirrelations inthefieldoftradeandeconomic endeavourWT/MIN(98)/ST/36
Page2
should beconducted withaviewtoraising standards ofliving, ensuring fullemployment andalarge
andsteadily growing volume ofrealincome andeffective demand, andexpanding theproduction of
andtradeingoodsandservices,whileallowingfortheoptimaluseoftheworld'sresourcesinaccordance
withtheobjective ofsustainable development, seeking bothtoprotect andpreserve theenvironment
andtoenhance themeans fordoing soinamanner consistent withtheirrespective needs andconcerns
atdifferent levels ofeconomic development. They recognized also"that there isneedforpositive
efforts designed toensure thatdeveloping countries, andespecially theleastdeveloped among them,
secure ashare inthegrowth ininternational trade commensurate withtheneeds oftheireconomic
development".
6. Itisveryclear thattheintention ofthenegotiators wastousetrade asaninstrument for
development, toraisestandards ofliving, expand production, keeping inview, particularly, theneeds
ofdeveloping countries andleast-developed countries. TheWTO mustnever losesightofthisbasic
principle. Every actofimplementation andofnegotiation, every legaldecision, hastobeviewed in
thiscontext. Trade, asaninstrument fordevelopment, should bethecornerstone ofallourdeliberations,
decisions andactions. Besides, thesystem should beseentobeequitable andfair. Itmustbeused
insuchamanner thattheletter andspirit oftheAgreements isfullyobserved. TheWTO Members
mustmutually support andencourage eachother toachieve thefinalgoal. Itmustberecognized that
allMembers should assume anegotiating rather thananadversarial posture. Itshould alsoberecognized
thatdifferent economies havedifferent features andstructures, different problems, different cultures.
Thepaceofchange mustbecarefully calibrated totakeintoaccount suchdifferences. AllMembers
should guard against unilateral action thatcutsattherootofmultilateralism.
7. Developing countries havegenerally beenapprehensive inparticular about theimplementation
ofspecial anddifferential treatment provisions invarious Uruguay Round Agreements. Fullbenefits
ofthese provisions havenotaccrued tothedeveloping countries, asclear guidelines havenotbeen
laiddown onhowthese aretobeimplemented. Acaseinpoint isArticle 15oftheAnti-Dumping
Agreement, which explicitly saysthat"special regard mustbegiven bydeveloped country Members
tothespecialsituationofdevelopingcountryMembers"inapplyingsuchmeasuresandthat"constructive
remedies provided forbythisAgreement shallbeexplored before applying anti-dumping duties where
theywould affect theessential interests ofdeveloping country Members". Inactual practice, wehave
faced situations inwhich ourproducts havebeensubjected torepeated anti-dumping actions andlevy
ofprovisional duties, creating anatmosphere ofuncertainty andinstability inthemarket, thusresulting
inclosure ofsmaller unitsandunemployment. Another example isArticle XVIII:B ofGATT which
provides foraspecial dispensation fordeveloping countries intheinstitution andmaintenance of
quantitative restricts onimports. ThisArticle clearly laysdown thatquantitative restrictions maybe
imposed andmaintained byadeveloping country "toensure alevel ofreserves adequate forthe
implementation ofitsprogramme ofeconomic development". However, inactual practice wefind
thatthedevelopment dimension istotally ignored while assessing theadequacy orotherwise offoreign
exchange reserves, withtheresult thatthere isnodistinction between Articles XIIandXVIII. All
developing countries arefirmly oftheviewthatdevelopment hastobebrought backtothecentre stage
ofWTO activities, aswasintended bytheUruguay Round negotiators.
8. Anotherissueofdeepconcernisthetrendtowardsunilateralactionbycertaindevelopedcountries
intotaldisregard ofprovisions laiddown intheUruguay Round Agreements. Weareforced, atgreat
expense andconsiderable difficulty, totakesuch issues tothedispute settlement mechanism.
Distinguished delegates areaware thatdeveloping countries andleast-developed countries havetobattle
against resource constraints andshortage ofskills andexpertise inthese areas. Suchunilateral action,
Ihavenohesitation tosay,brings todisrepute theentire multilateral trading system which wehave
struggled tobuild overtheyears. Thiswould necessarily slowdown theimpetus forreform inall
developing countries.WT/MIN(98)/ST/36
Page3
9. There hasalsobeenanincreasing trend intherecent pastinfavour ofregionalism. While
regional economic groupings haveresulted inincreased trade among countries intheregion, there is
inherent danger ofdiscrimination against thirdcountries. Article XXIV ofGATT specifically recognizes
regional arrangements asanexception tothemultilateral system. While werecognize thepositive
effect ofregional groupings thatareconsistent withtheprinciples ofthemultilateral trading system
andalsothespecial needs ofdeveloping countries asenunciated intheEnabling Clause, wefearthat
theproliferation ofsucharrangements mayweaker theframework ofthesystem. Therulesrelating
tosuchregional arrangements needtobeclearandprecise andshould ensure thatmarket access for
thirdcountries isnotdenied orreduced. Otherwise, wewill,overtheyears, haveasituation where
themultilateral system becomes largely irrelevant.
10. TheimplementationaspectsoftheUruguayRoundAgreementsneedtobegivenspecialattention.
WehavebeenarticulatingfromtimetotimeourconcernsregardingtheimplementationoftheAgreement
onTextiles andClothing. AttheSingapore Conference, wehaddrawn theattention ofMembers to
theadverse impact onourexports ofactions taken under thisAgreement, suchastheseries oftransitional
safeguard measures, which were subsequently found tobeinconsistent evenwiththeprovisions of
theAgreement. Wehavetaken careful noteoftheFirstMajor Review oftheAgreement conducted
bytheCouncil forTrade inGoods earlier thisyear. Itisamatter ofdeepconcern toustonotethat,
inspite oftheprovisions negotiated byustoensure acommercially meaningful phasing outofrestrictions
maintainedundertheMFAregime,thereviewconfirmedthatthebulkofrestrictionswouldgetintegrated
intotheGATT 1994onlyattheendofthetransition period. Thisisindeed aserious matter, considering
thattheMembers resisting progressive liberalization oftradeinthissector aredemanding fromcountries
likeIndia faster andmore "broad-based" liberalization inother sectors. Obviously, inthiscontext,
wemust seeasymmetry ofconcessions asfarastrade liberalization isconcerned. Ihavereferred
elsewhere inmyaddress tothepernicious effect oftheuseofanti-dumping measures byamajor trading
partner onourtextile andclothing exports. Inthecontext oftheAgreement onTextiles andClothing,
theuseofanti-dumping measures ontextile andclothing exports which arealready under aquota regime,
isaclear caseofprotectionism andneeds tobedeplored inthestrongest terms. Wearegladthat
Members have decided toentrust theCouncil forTrade inGoods withthetaskofkeeping the
implementation oftheATC under regular review. Wereaffirm ourcommitment tofulfilthismandate
given totheCouncil, especially intheprocess wewould beinitiating withrespect toevaluating the
overall implementation ofWTO Agreements. Iwould liketoemphasise thatthetextiles andclothing
sector isanextremely significant partofourowneconomy accounting for20percentofnational
industrial output andproviding means ofliving to30million people. Anyrestriction ofmarket access
forourexports oftextiles andclothing products would, therefore, haveveryserious implications for
usinterms ofincome andemployment andjeopardize theverycredibility ofthemultilateral trading
system.
11. TheAgreement onAgriculture willcome upforreview intheyear2000. Wewillthenhave
anopportunity tohaveafresh lookatthisarea, keeping inviewthedevelopment perspective andthe
needs ofdeveloping countries. There stillremain anumber ofinequities asfarastheimplementation
oftheAgreement concerned. Forinstance, while themajority ofdeveloping countries areprohibited
from providing export subsidies, thedeveloped countries arepermitted toresort tosuchsubsidies
provided theirbudgetary outlays arewithin theirreduction commitment. Thisisobviously unfair in
thesense thatcountries which havebeendistorting themarket inthepastcancontinue tomaintain
subsidy regimes, while others areprohibited fromusing suchmeasures inthefuture. ThisAgreement
isbased ontherationale ofopen international trade intheagricultural sector. Itpresupposes the
supremacy ofanopenprice based system, thereby implying thatacountry should import agricultural
products iftheyareproduced cheaper elsewhere. India andcertain other developing countries have
beenstressing theneedforthemultilateral trading system torecognize theimportance offoodsecurity.
Acountry maynothavetheresources tobuyagricultural products from international markets even
iftheyareeasily available. Moreover, averylargepercentage oftheruralpopulation insuchcountriesWT/MIN(98)/ST/36
Page4
isdependent onagriculture andanymeasure thathasaneffect onemployment inthissector needs
tobecarefully examined. Itisnecessary alsotohaveaclose lookattheshortcomings inminimum
market access provisions, which arecircumvented inmany waysintheactual process ofimplementation
byvarious ingenious methods suchasaggregation oftarifflinesintoproduct groups. Theexemptions
given fordirect payments tofarmers anddeficiency payments fromtheambit ofreduction commitments
inrespect ofproduction subsidies alsoneedtobecarefully studied. There isalsotheissueofthepossible
negativeeffectsofthereformprogrammeonleast-developedandnet-food-importingdevelopingcountries
which hasnotbeeneffectively addressed asyet,despite aMinisterial Decision during theUruguay
Round negotiations.
12. TheGeneral Agreement onTrade inServices willalsobereviewed intheyear2000. Wewould
hopethatdeveloping countries willbeabletoachieve substantial improvement inmarket access during
thenegotiations. While there hasbeengreat focus onmovement ofgoods andcapital, particularly
from markets inthedeveloped world todeveloping countries, hardly anyattention hasbeenpaidto
market access toprofessionals fromdeveloping countries, ourengineers, ourdoctors, ourtechnicians.
Thefearexpressed inthedeveloped countries thatthere willbetransfer ofjobopportunities fromthe
North totheSouth paysscantregard tothefactthatthefreeinflow ofgoods andservices intodeveloping
countries canlikewise leadtodisplacement ofindustry, unemployment, decline ineffective demand,
fallinincomes andthedeprivation oftheglobally under privileged. Weareconcerned thatthe
comparative advantage ofourprofessionals isnotallowed tobeexploited infullmeasure, while, at
thesame time, there isunabating pressure onustoopenmarkets togoods andservices inwhich the
developed world hasadecisively comparative advantage.
13. Protectionist measures adopted bydeveloped countries invarious ways restrict market access
forgoods andservices produced indeveloping countries. Ananalysis ofIndian 'sexternal tradereveals
thatthesixteen countries orterritories towhich fourfifths ofourexports aredirected, maintain eight
major categories ofnon-tariff barriers restricting ourmarket access. These include restrictive import
policy regimes, standards, testing, labelling andcertification measures which aresetatunrealistic levels
fordeveloping countries orarescientifically unjustified, export subsidies, barriers onmovement of
services, unfavourable government procurement regimes, barriers toinvestment andother barriers
including anti-dumping measures andcountervailing measures. Intheareaofstandards, inparticular,
developing countries suffer bothatthestage ofstandard setting ininternational bodies andinactual
implementation. Article 12oftheAgreement onTechnical Barriers toTrade andArticle 10ofthe
Agreement onSanitary andPhytosanitary measures needs tobeimplemented inletter andinspirit.
14. Similar imbalances areseenintheTRIPS Agreement. Although Article 65oftheTRIPS
Agreement contemplates atransition period oftenyears forIndiaasadeveloping country tointroduce
product patent protection inareas oftechnology notsoprotected initsterritory ason1January 1995,
suchaspharmaceuticals andagro-chemicals, theobligation under Article 70.9togrant exclusive
marketing rights forpatents atanytimeaftertheentry intoforce oftheWTO Agreement effectively
neutralises thistransition period available tous.Intherealm ofgeographical indications, theadditional
protection available towines andspirits isnotapplicable totheregion specific products ofdeveloping
countries. Thecurrent debate inIndia ontheBasmati riceissue, involving thepassing offtypeof
activity indulged inbycertain foreign enterprises withregard tothiskindofricewhich isassociated
withcertain regions ofIndia, hasfocused attention ontheneedforhigher protection forproducts other
thanwines andspirits under Article 23oftheTRIPS Agreement.
15. Indeed, theissueofdevelopment ofproprietary patents byenterprises based onthetraditional
knowledge ofindigenous communities, nurtured through generations, without obtaining priorinformed
consent orwithout coming toanyagreement onbenefit sharing, havebeenviewed asiniquitous practices
bycountries suchasIndia, which arestorehouses ofsuchindigenous knowledge. Asituation, where
indigenous biotechnology, developed overtheagesincountries suchasIndia, isbeing usedwithoutWT/MIN(98)/ST/36
Page5
anyflowbackofbenefits from patentees tooriginal developers callsforamendments intheTRIPS
Agreement. Theimbalances intheTRIPS Agreement anditstiltagainst theholders ofindigenous
know-how,mainlybasedindevelopingcountries,misalignsitwithanothermajorinternationalagreement,
namely, theConvention onBiodiversity.
16. Moreover, where Multilateral Environmental Agreements, suchastheMontreal Protocol or
theFramework Convention onClimate Change settimebound targets foradherence tocertain
environmentalstandards,therealsohastobeprovisionfortransferofenvironmentallysoundtechnologies
andprocesses onfairandreasonable terms todeveloping countries builtintotheTRIPS Agreement.
Thesame mechanism oftransfer oftechnology onreasonable terms willhavetobeavailable where
developed countries laydown difficult mandatory national standards. Resources forcompensating
individual exporters fortransfer oftechnology atnon-commercial ratescould easily befound from
thefunds presently usedforproviding subsidies andsupport measures toproducers indeveloped
countries.
17. Thus, theagenda before usisheavy. Theshortcomings oftheUruguay Round Agreements
andproblems intheirimplementation havecome tolightinincreasing measure. These shortcomings
havenecessarily tobeaddressed inafairandobjective manner andsolutions found through negotiations
inaspirit ofmutual understanding. Developed countries, withfargreater experience inglobal trade
andastrong information infrastructure, areinamuch better position toexploit market access
opportunities provided bytheUruguay Round Agreements andtousethem totheiradvantage. Itis
forthisreason thatdeveloping countries havebeenresisting themove towiden theareaofactivity
oftheWTO. Thedeveloping countries arestillatapreliminary stageinunderstanding theAgreements,
implementing themastheycan,absorbing theirfullimplications andmeeting theonerous notification
requirements. Weconsider thatattention should befocused onimplementation issues andtheissues
relating tothebuilt-in agenda rather thantakeupnewissues atthepresent moment. Faith inthe
multilateral trading system willincrease manifold ifpeople perceive thatitissensitive totheirneeds
andconcerns.
18. Wearehowever deeply committed tothesuccess ofthemultilateral trading system. Webelieve
thattheWTO andthemultilateral trading system mustbeeffective instruments forserving theneeds
oftheweakest section ofthesociety inallparts oftheworld. Nosingle pattern, nosingle package
ofmeasures canbeconsidered tobeuniversally applicable. Wewould bedeluding ourselves bythinking
thatasingle remedy canbeapplied across theboard. What weshould strive toachieve isthe
amelioration oftheliving conditions ofallpeople, particularly thepoorest. Inthewords of
Mahatma Gandhi, "Idonotbelieve inthe'greatest goodofthegreatest number ',norcanIagree that
might isright. Forhuman beings, theobject inviewshould bethegood ofall,withtheweak being
served first." Onthis,the50thAnniversary ofGATT, letusresolve toforge ahead inaspirit ofmutual
accommodation andgoodwill, keeping inperspective atalltimes theneeds ofthepoorest, themost
underprivileged amongst us.
__________