A BRIEF OVERVIEW OF THE PREVIOUS CLASS & STRATEGY (05:01 PM)

REVISION OF WTO (05:12 PM)

• Special and differentiated treatment- It means developing countries will be given more time to implement the TRIPS [* Developed countries can implement it by the 2000s, Countries like India can implement by 2005, and LDCs like Bangladesh can implement it by 2016]. 
• Under TRIPS, it was asked to convert from the Process method to the Product method. 
• It was also asked to widen the scope of IPR by including Trade secrets, Industrial design, Copyrights, etc. 
• India amended the Patent Act in 2005 to make it in line with the TRIPS provision. 
• India was also conscious about welfare. So it inserted a clause in the Indian Patents Act. [* Section 3(d) of the Patent Act discouraged the evergreening of the patents].
• India also came up with certain protections 
• a) Compulsory licensing- When there is an urgent public requirement, the government can temporarily override the patents and issue the license to local manufacturers. [* Nexavar drug (cancer drug) created by Bayers company. Its price was very high so the government gave the license to a local manufacturer. Natco Pharma was also given a license ]. During this period, the royalty was paid to the original drug manufacturer. 
• b) Parallel imports
• India never mis-utilized this provision.  
• These safeguards did not violate the TRIPS provision as in the Doha Round of negotiations, these safeguards were included in the negotiations. 

TRIPS (05:19 PM)

• The two important agreements under TRIPS are 
• a) Agreement to shift from the necessity of Process patent to Product patent in the fields of Pharma, Food, Drugs, and Chemicals i.e. in the new regime the same product can not be produced using a different process.
• If a product is patented, it is valid for a period of 20 years while in the case of copyrights, the protection is generally for 50 years and at times life time of the author. 
• b) The scope of IPR is extended to cover patents, copyrights, GI, Industrial design, Layout designs of Integrated circuits, and also protection of undisclosed information. 
• The obligation is applicable equally to all member nations, However, the developing countries were allotted extra time to implement these changes to their national laws. The transition period for developing countries expired on 1st Jan 2005 and hence the regime of product patents has now been introduced in these countries.
• For LDCs, it is 2016 and currently extended to 2023 wrt certain aspects.

PATENTS AMENDMENT ACT, 2005 (05:30 PM)

• India passed this act with a focus on implementing product patents for food chemicals and drugs. India was required to introduce a product patent regime by the year 2005. Prior to 1970, 80 per cent of our pharma market was occupied by MNCs.
• 1970s patents act granted process patents i.e. India had permission to manufacture generic drugs beneficial not only for India but also for other third-world countries.
• Highlights of the amendments to the Patent Act
• Introduction of provision for enabling the right of compulsory licensing and parallel imports to meet the public health crisis. 
• The Discovery of a new form of a known substance does not qualify a product for a patent nor a mere discovery of a new use will qualify the product for a patent.
• Product patent protection for Pharma, food, etc.
• Safeguards
• 1) Compulsory Licensing
• The government may issue compulsory licenses to a company for producing generic drugs when faced with a public health crisis. Some amount of royalty or compensation is given to the patent holder. Example- Nexavar (cancer drug)
• 2) Parallel Imports
• These are drugs imported from other countries without the permission of the patent holder where they are sold at lower prices to meet a public health crisis. 
• These imports are allowed if there are no manufacturing companies in the country facing a public health crisis and the pharma company that holds the patent is reluctant to lower the prices of those drugs. 
• Way Forward
• It is a discussion and not a confrontation because India needs foreign technology and investment.
• Favouring India
• In India, patents are issued after due process and not arbitrarily and there are very few instances of using flexibility. This clearly indicates that India uses these safeguards seriously.
• In the recent past despite strong recommendations from the health ministry government refused to issue compulsory licensing for the production of Desatinium in India. [* Desatinium is also a cancer drug]. This clearly indicates that India did not mis-utilise its safeguards for vested interests. 

GATS- GENERAL AGREEMENT ON TRADE AND SERVICES (06:05 PM)

• It is the first and only multilateral agreement that governs international services trade. 
• It was negotiated as part of the Uruguay round in response to the growing importance of services in global trade and the rise of the service sector.
• Modes of services:
• GATS divides services into 4 categories 
• 
• Cross-border trade, Commercial presence, international consumption, and movement of human capital.
• Mode 1
• It includes the cross-border supply of services where the commercial presence of the service provider is not required.
• Ex- Distance learning, BPO services, etc.
• Mode 2
• It includes consumption abroad or services consumed abroad. For examples include tourism, education, medical treatment, etc.
• Mode 3
• It includes the commercial presence of service providers. For example- Hotels and banking, etc.
• Mode 4
• It includes the movement of natural persons. For example- A foreign national who works as a consultant or employee in another country delivering services such as a doctor, Nurse, IT engineer, etc
• The developed countries were more inclined towards liberalizing norms w.r.t. Mode 3 and Mode 2 but restricting services related to Mode 4. 

TRIMS (TRADE-RELATED INVESTMENT MEASURES) (06:13 PM)

• During the Uruguay round, the US proposed an agreement not only focussing on investment but also on national treatment.
• The proposals were rejected by many developing countries and the scope of TRIMS was thus restricted to 4 specific trade-related investment measures. 
• 1) No restriction on local content requirements i.e. use of local inputs by foreign nationals/companies. 
• 2) Trade balancing requirement-  The foreign investor should not be forced w.r.t. balancing trade i.e. forcing the foreign investor to produce for exports as a precondition to obtain imported goods as inputs. 
• 3) Export restrictions- Not to export more than a specific proportion of local production. 
• 4) Forex restrictions- Foreign players should have easy access to foreign exchange.
• Members states were given a transient period during which these notified TRIMS have to be implemented. For developed countries, this period was 2 years and for developing and LDCs it was 5 years and 7 years respectively. 

AGREEMENT ON AGRICULTURE (06:35 PM)

• Product subsidy/ Product taxes	Production Subsidy/ Production taxes
  These are trade distorting	They are non-trade distorting
  This increases the current production level. Example- MSP is given by the governmental	Rural infrastructure development, R&D subsidies, Go Green subsidies
  There is open-ended procurement only for Rice and wheat. There is no legality for MSP	PMKISAN scheme gives 6000rs but this subsidy is not linked to current production.- These are Non-trade distorting

• In trade-distorting subsidies, there will be upper limits/ restrictions. MSP is part of the Amber box. 

AoA- DOMESTIC SUBSIDY (07:17 PM)

• It was signed by the end of the Uruguay round and it provides a framework w.r.t. long-term reforms related to agricultural trade and agriculture policy so that market orientation for agriculture can increase gradually.
• Agreement on agriculture has 3 components under it
• 1) Reduction in export subsidy.
• 2) Domestic subsidy.
• 3) Improved market access.
• Reduction in domestic subsidy
• The agreement mainly divides subsidies into trade-distorting and non-trade-distorting subsidies which were categorized under 3 different boxes
• Amber box
• All trade-distorting subsidies are made part of the amber box. The total reduction commitment in the amber box is expressed in terms of a total Aggregate Measure of Support (AMS) which includes all support given for a specific product (Direct and Indirect). 
• 
• This agreement stipulates the reduction of total AMS by 20% for developed countries over a period of 6 years while Developing countries were required to reduce the total AMS by 13% over 10 years.
• If a member nation wants to avoid commitments under AMS, the total subsidy given under AMS must be less than 5 % of the total value of production for developed countries and 10% for developing, such a level of subsidy is called the De-minimus level of subsidy.
• 
• Green Box
• The subsidy under the green box is considered a completely non-trade distorting subsidy and hence it is excluded from reduction commitments.
• This box mainly contains fixed payments to producers for environmental programs, rural infrastructure development, protection of plants and animals' health, etc. As long as these programs do not affect the current production levels.
• [* Criticism of Developed world- giving the subsidy in the Green box ]
• 
• Blue Box
• It is an exception to the general rule i.e. All subsidies linked to production should be kept at the de minimus level. It is related to production limiting agreements whose origin can be traced back to Uruguay round negotiations between the EU and the US.
• Question:- Do you think India needs to support its policies related to agriculture on international platforms like WTO? Discuss (10 marks/ 150 words).

The Topic for the next class:- Reduction in export subsidies, WTO structure, and Ministerial conferences.