General Agreement on Tariffs And Trade (GATT)
It was in 1948 that General Agreement on Tariffs and Trade, an agency of the United Nations was formed. Over six rounds of multilateral trade negotiations, it succeeded in reducing tariff levels across the globe from an average of 40%, in the early 1950s, to less than ten percent by the early 1980s. But this supposed success only concealed the larger failure of GATT — that even while the industrialized nations chose to preach the virtues of free trade, a number of non tariff measures were defeating the underlying purposes.
In 1990 the GATT nations authorized Arthur Dunkel, the then Director General of GATT, to put together a comprehensive package, which might be acceptable to negotiating parties. This is known as Dunkel Draft. The Uruguay (South America) Round of GATT negotiations started’- in 1986 and concluded in December 1993. The negotiations were brought to a close by approving the agreement by 115 nations on 15 April, 1994. This took place in the city of .Marrakesh (Morocco). The agreement contains Dunkel’s proposals.
The new issues, trade-related intellectual property rights (TRIPS), trade-related investment measures (TRIMS), services and domestic agricultural policies have a direct bearing on the people’s welfare worldwide and, as such, have generated great concern. The people are concerned about new self-employment opportunities; employment due to expansion of industry, availability of goods, their prices and the sustenance of the economic growth achieved so far. Instead of further growth, there might be an era of ‘de-growth’ in certain sections of the economy. Business, both big and small, will be forced into collaborations with powerful foreign adversaries who are not capable of devising indigenous solutions. The reduction of tariff barriers will bring about acute competition between unequal’s giant multinationals (MNCs) on the one .side and the national sector and small and medium-scale industries on the other. There will be a tremendous inflow of foreign goods and it will cripple our industries.
The workers will be confronted with the new policies of structural adjustment, which will cut down their acquired benefits and collective bargaining strength.
Farmers will find seeds and plant varieties becoming the captive property of ‘food kings’. Subsidies and the credit facilities will be curtailed.
The philosophy of the patent system will be totally changed. Imports and locally produced goods will be allowed patent rights without any discrimination. Patents will be taken not only to establish manufacturing monopoly, but also to establish import monopoly The patent holder will not have any obligation to the national government that confers patent rights on him. Nor will there be any check on the imports of patented products. No price control order will be applicable to them.
The term of the patent will be twenty years from the date of filling the application, Since patent will be available for products or processes, it will be possible particularly in the chemical base products like drugs to take patents for new products for twenty years and process patent for another twenty years. Since there is no provision for compulsory licensing or sub-licensing, it will be impossible for domestic manufacturers to enter new areas of products or processes, which will be protected by the new patent regime. In India there is process patent at present for medicines, whereas in Pakistan, the USA and the UK there is products patent for them. It is because of this -patent system that the prices of medicines are very high in these countries. The availability of new medicines from indigenous sources will go up, as in the case of Latin American countries, and Canada and Italy.
The government claims that the GATT agreement signed by India will give a boost to our exports and, thus, strengthen the economy. They argue that it will be a panacea for the economic ills of-the country.
According to the Opposition parties, the agreement is detrimental to the interests of the country. The Government of India, they say, should not have surrendered its economic sovereignty before the developed countries, which try to establish their hegemony on the developing countries.