WTO

The potential and promise of the Chinese El Dorado is spellbinding but the murkier side is well-hidden.

At a recent meet in Mumbai highlighting the disinvestment route taken by several countries in the developing world, Italian trade delegates to these countries emphasised the role of privatisation in opening up the economy as well as in helping the government raise resources.

Under a fully WTO-compatible trade regime, to which India is committed, the only weapon available in normal circumstances to check imports which damage domestic industry is flexibility in fixation of customs duties subject to the committed bound rates. But as imports under the export-linked schemes are duty-free, a surge in such imports cannot be arrested through the tariff rate mechanism. It is necessary, therefore, to rationalise the duty exemption and remission schemes in the EXIM Policy 2002-07 to be announced shortly.

Although social clause as an issue related to international competition and trade has a rich history and has been pursued haltingly by the US ever since the pre-Tokyo GATT rounds, it is topical today because of the prospect of labour standards becoming a formal instrument of trade policy through incorporation in the rules-based WTO. What are the moral, economic and political cases for and against bringing a controversial social clause into the WTO rubric?

To ensure that patent-abusive situations, such as the ones that occurred in South Africa, do not repeat themselves, member countries of the WTO must draft balanced domestic patent legislations based on a rational interpretation of the TRIPS text.