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30 yrs of  MARRAKESH AGREEMENT

 About:

 • Scope of Concerns:

 The development agenda encompasses issues advocated by developing and least developed nations, centering on vital aspects such as access to finance and technology, ensuring food security, and bolstering supply chain resilience. 

• India's Call to Action: 

  In a recent submission titled '30 years of WTO: how has the development dimension progressed? – A 'way forward' to the WTO General Council, India urged all members to present proposals addressing these pressing concerns. 

  The objective is to reignite attention towards the developmental dimension of the WTO and foster substantive discussions on pertinent issues.

 • Collaborative Engagement: 

  Collaboration among member nations is essential to formulate actionable proposals and initiatives aimed at addressing the development agenda within the WTO framework. 

  By actively engaging in dialogue and cooperation, nations can collectively navigate challenges and pursue equitable policies that prioritize the needs of developing economies

OVERVIEW OF THE MARRAKESH AGREEMENT AND THE ESTABLISHMENT OF THE WTO 

• Signing and Significance: 

  Date and Place: On April 15, 1994, in Marrakesh, Morocco, the Marrakesh Agreement, also known as the World Trade Organization Agreement, was signed. 

  Purpose:

  This agreement outlined the scope, functions, and structure of the World Trade Organization (WTO). 

  It includes various agreements negotiated under the General Agreement on Tariffs and Trade (GATT) and during the Uruguay Round of Multilateral Trade Negotiations. 

• Key Elements:   Annexes: The annexes to the Marrakesh Agreement include agreements from GATT and new accords from the Uruguay Round, now classified as WTO agreements.  Binding Nature: The Marrakesh Agreement is binding on all WTO members, including those who joined after its signing.

Historical Background: 

General Agreement on Tariffs and Trade (GATT) 1947:

Origin: GATT 1947 was signed in Geneva by 23 nations in 1947 and came into force on January 1, 1948.  Objective: Its primary goal was to phase out import quotas and reduce tariffs on merchandise trade. 

  Issues:  Despite numerous issues, such as non-inclusivity and institutional limitations, GATT 1947 conducted eight rounds of multilateral trade negotiations. 

  The last of these, the Uruguay Round (1986-1994), led to the Marrakesh Agreement and the establishment of the WTO.

 • Need for the Marrakesh Agreement: 

Limitations of GATT 1947: 

  Non-binding Nature: GATT 1947 was not a binding treaty; its provisions applied only if consistent with a country's laws. 

  Limited Participation: Initially signed by only 23 nations, GATT 1947 lacked inclusivity.

  Institutional Support: There was a growing need for a proper institutional organization to support and enforce trade agreements.

World Trade Organization (WTO):

• WTO is the international organization that deals with the rules of trade between countries. 

• Headquarters: Geneva, Switzerland • 

Member: The WTO is run by its 164 members. 

• Mandate: Its aim is to promote free trade, which is done through trade agreements that are discussed and signed by the member states.

 The preamble of the Marrakesh Agreement accords primacy to the developmental objectives of this organization.

 Organizational Structure of WTO: 

• Ministerial Conference: The WTO’s apex decision-making body is the Ministerial Conference, which usually takes place every two years. 

  All members of the WTO are involved in the Ministerial Conference and they can take decisions on all matters covered under any multilateral trade agreements. 

• General Council: 

It is just below the Ministerial Conference that meets several times a year at the WTO’s headquarters in Geneva. 

  It meets as the Trade Policy Review Body and the Dispute Settlement Body.

Trade Related Intellectual Property Rights (TRIPS) Council: 

It is for the Goods, Services, and Intellectual Property, and it reports to the General Council. 

India and WTO: 

• India has been a WTO member since 1 January 1995. 

• Peace Clause: WTO members at the Bali ministerial meeting in 2013 put in place a mechanism called the Peace Clause to tackle the differences between nations on food subsidy. 

  Under this clause, developing nations could not be dragged to arbitration if they did breach the prescribed limit of 10 per cent on support to farmers. 

  However, there was confusion over whether the temporary reprieve would continue after four years. 

• Concerns of Western nations:

Large agriculture commodity exporters such as the US and Canada are critical of such a move as they believe that higher subsidies are distorting agriculture prices in the global market. 

  It is also argued that public stockholding at administered prices gives countries such as India an unfair competitive advantage in trade, contradicting the WTO’s principles of open and fair trade. 

• Protectionist Measures:

India has expressed serious concerns in a WTO meeting over an increase in the use of trade protectionist measures by certain countries in the name of environment protection.

The Most-Favored Nation (MFN)

 clause mandates that a country must offer the same trade terms to all its trading partners. 

• The MFN clause is a core principle of the WTO, though there are specific exceptions allowed under WTO rules. 

• Losing MFN status subjects a country to discriminatory import tariffs on its goods. 

• If a country that is a member of the WTO reduces or eliminates a tariff on a specific product for one trading partner, it must extend the same tariff reduction to all WTO members.