Total Proposed Projects: 5
Trade And Technology Transfer: Some Issues For Consideration In The Context Of The Indian Automobile Industry
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Industry-specific Implications Of WTO Agreements |
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Setting The Context: Technology transfer has been one of the key issues that have prominently figured in the discussions centering on the shaping of the economic relations between the developing and the developed countries over the past few decades. This issue gained importance since it was widely acknowledged that access of developing countries to front-end technologies is a sine qua non of enhancing their trade flows, in particular and that of their development, in general.
It was in this context that a number of developing countries, including India, had raised the issue of the relationship between trade and technology transfer in several multilateral fora, including the United Nations Conference on Trade and Development (UNCTAD), in order that the multilaterally accepted framework facilitating flows of technology between developed and the developing countries can be evolved.
Since the establishment of the WTO, developing countries have been emphasising that the issue of technology transfer needs to be considered for improving the trade potential of the lesser players in the global economy. It was in the Fourth Ministerial Conference of the WTO held in Doha in 2001 that the issue on trade and technology transfer was finally taken on board, with the Ministerial Declaration stating thus:
“We agree to an examination, in a Working Group under the auspices of the General Council, of the relationship between trade and transfer of technology, and of any possible recommendations on steps that might be taken within the mandate of the WTO to increase flows of technology to developing countries. The General Council shall report to the Fifth Session of the Ministerial Conference on progress in the examination.”
The Working Group on Trade and Technology Transfer (WGTTT), which has been established following the mandate given by the Doha Ministerial Conference, is currently delineating the issues that need to be taken up in order that an agreed solution to the task laid before it can be found in an expeditious manner. In view of the above, it is important to undertake a thorough examination of the various aspects of trade and technology transfer using evidence thrown up by select industries with a view to providing inputs in the process that has been initiated by the WGTTT.
The Study: The study would take up the Indian automobile industry as a case study. The automobile industry in India has emerged as one of the more dynamic industries, particularly during the past decade. What is significant about the recent developments witnessed in this industry is that the major players have relied increasingly on infusion of technology. While this approach is in keeping with the imperatives of a technologically intensive industry like automobiles, it is important to recognise that continued access to frontier technologies can alone enhance the competitive strength of the Indian industry in the globalised economy.
The Issues To Be Examined:A number of issues have been raised in the on-going discussions in the WGTTT, which would merit attention in the context of the proposed study. These are as under:
1. Conceptualising Technology Transfer: This issue holds the key to the understanding of the phenomena of technology transfer. One of the approaches that have been suggested in the WGTTT is that a broad definition of technology transfer needs to be adopted, which reflects the flows of technology in both embodied and disembodied forms along with its diffusion. Thus, while analysing the channels of technology flows, the possibilities of getting access to the know-how as well as the know-why, needs to be examined.
2. Channels Of Technology Transfer: The channels of technology transfer have to be examined carefully from the point of view of assessing their effectiveness. This issue needs to be seen in light of the problems that may be encountered both by the recipient and by the transferring entities. An important dimension in this context is the role that foreign direct investment can play in transferring technologies from which developing countries like India can benefit from.
3. Licensing Of Technology: This issue has particular significance in case technology is sought in an unbundled form. Past evidence has shown that the technology licensing can give rise to anti-competitive practices. These have been in the nature of restrictive and unfair business practices. Another important issue arising in this context is the role of intellectual property rights in determining access to technologies on terms that are affordable. With the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) making it obligatory for the Member states of the organisation to adopt a strong regime of intellectual property rights, owners of proprietary technology can exercise enhanced control over the technology market. |
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Agreements On TBT And SPS: Implications For India Under WTO Regime
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Industry-specific Implications Of WTO Agreements |
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The trend towards greater integration of markets has been accompanied with a seemingly divergent tendency, one that has been set in motion by the adoption of increasing number of technical regulations and standards across countries.
As a result, there has been considerable differentiation of products, leading in turn to market segmentation. While the reason for this development has been ascribed, among others, to the rise in the numbers of discerning consumers who have demanded products that conform to the desired levels of safety, the misuse of these technical standards as non-tariff barriers is a major challenge.
It was in response to the latter that the GATT took on board the issue of technical barriers to trade during the Tokyo Round of multilateral trade negotiations. A GATT working group, set up to evaluate the impact of non-tariff barriers in international trade, concluded that technical barriers were the largest category of non-tariff measures faced by exporters.
After years of negotiations at the end of the Tokyo Round in 1979, 32 GATT Contracting Parties signed the plurilateral Agreement on Technical Barriers to Trade (TBT). The Standards Code, as the Agreement was called, laid down the rules for preparation, adoption and application of technical regulations, standards and conformity assessment procedures.
The WTO Agreement on Technical Barriers to Trade (TBT) has strengthened and clarified the provisions of the Tokyo Round Standards Code.
Technical regulations and standards as defined in the Agreement on TBT can emerge from two levels. They can be related to the processes and production methods (PPMs) or can set out the way a product is labelled or packaged.
The implementation of the Agreement since the WTO came into existence has shown that countries have introduced the regulations to meet a diverse set of objectives. The most number of technical regulations and standards has been adopted with a view to protecting human safety or health.
The Agreement on the Application of Sanitary and Phytosanitary Measures which was agreed to at the end of Uruguay Round negotiations are aimed at setting standards for the protection of human, animal or plant life or health. The Agreement allows the WTO Member countries to set their own standards in this regard. However, the standards set by the countries must be based on science. Further, more they should not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail.
Member countries are encouraged to use international standards, guidelines and recommendations where they exist. However, members may use measures which result in higher standards if there is scientific justification. They can also set higher standards based on appropriate assessment of risks so long as the approach is consistent, not arbitrary.
In the case of both SPS and TBT Agreements, widespread participation in international standardising bodies, particularly by developing countries, can ensure that international standards reflect country-specific production and trade interests. The TBT and SPS Agreements may encourage Members to participate, within the limits of their resources, in the work of international bodies for the preparation of standards and guides or recommendations for conformity assessment procedures.
Developing countries, however, face formidable challenges posed by the two Agreements. On the one hand, they face the daunting task of getting effective market access in the major markets given the plethora of the regulations that have been imposed by their developed country counterparts. On the other hand, they have found that implementing and enforcing international standards may require technical and financial resources beyond their capabilities.
The TBT and the SPS Agreements have both tried to obviate these problems to some extent by easing the impact of certain provisions whose full application would not be compatible with developing country Members' development, financial and trade needs. The TBT Agreement states, for instance, that in view of their particular technological and socio-economic conditions, developing country Members may adopt technical regulations, standards or test methods aimed at preserving indigenous technologies and production methods and processes compatible with their development needs. It also allows developing country Members to request international standardising bodies to examine the possibility of, and if practicable, prepare international standards for products of special trade interest to them.
The SPS agreement on the other hand provides for S&D treatment for developing countries in two substantive ways:
1. Where the appropriate level of sanitary or phytosanitary protection allows scope for the phased introduction of new sanitary or phytosanitary measures, longer time-frames for compliance have to be accorded on products of interest to developing country Members so as to maintain opportunities for their exports
2. Secondly, the Committee on SPS can grant developing countries, specified, time-limited exceptions in whole or in part from obligations under this Agreement, taking into account their financial, trade and development needs, if so requested by the countries concerned
Notwithstanding these measures, the Agreements on TBT and SPS appear in the list of implementation concerns that the developing countries had raised in the run up to the Doha Ministerial Conference.
The issues that these countries had flagged most prominently were the following:
1. Article 11 of the Agreement on TBT relating to technical assistance, should be made obligatory so that the developing countries can effectively benefit from these provisions
2. Developed country importers should accept the self-declaration regarding adherence to technical standards by developing country exporters
3. The Committee on SPS was instructed to develop expeditiously the specific programme to further the implementation of Article 4 of the Agreement on the Application of Sanitary and Phytosanitary Measures
It is quite evident that there are certain critical issues for developing countries to meet the challenges posed by the Agreement on TBT and SPS.
The proposed study would analyse the implications of the Agreement on SPS and TBT for India.
The following issues would be dealt with in the study:
1. Implications of country-specific vis-à-vis multilaterally evolved/evolving standards
2. Possible approaches for harmonisation of standards on India’s trade prospects
3. Analysis of the relationship between technology transfer and harmonisation of standards through TBT and SPS Agreements
It is expected that the proposed study would be providing guideposts in respect of:
1. The possible stand that the Government can take in the WTO and other multilateral fora with respect to the Agreements on SPS and TBT for protecting and promoting national interests
2. The technical/financial/legal interventions that would be necessary for improving the production systems so that they can meet the challenges arising from the two Agreements |
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Implementation Of The Agreement On Agriculture: A Review
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Agriculture |
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Introduction: In recent years, agriculture has emerged as one of the key areas under the World Trade Organization (WTO) discipline. There have been two major reasons for the emergence of this sector, in the list of key areas on the WTO agenda at present. First, the nature of benefits that developing countries expected from the introduction of the WTO discipline through the Agreement on Agriculture (AoA) have largely remained unmet. Second, the AoA is being reviewed in a comprehensive manner as a part of the built-in agenda of the WTO, which was subsequently re-inforced by the Doha Ministerial Declaration.
The AoA was made an integral part of the WTO to get introduced the much needed discipline in the markets for agricultural commodities, which were highly distorted because of the large volumes of subsidies that countries were using to support their producers. In such a situation, the inefficient producers, particularly from the major industrialised countries, were allowed to control the global markets while the relatively efficient producers in the developing countries were discriminated against.
The discipline that the AoA introduced covered three areas, viz. domestic support, export subsidies and market access. In respect of domestic support and export subsidies, the AoA sought to reduce the subsidies in countries that were providing large volumes of both these forms of subsidies. At the same time, the Agreement imposed a threshold for domestic support on countries that were not providing large enough volumes of this form if subsidies. The countries not granting export subsidies during the second half of the 1990s were not allowed to give any export subsidies under the new dispensation. The market access commitments were enforced through the establishment of tariff bindings and conversion of all forms of non-tariff barriers into tariffs. However, some countries were allowed to reserve the right to impose tariff rate quotas on select products. The AoA had thus taken the initiative to undertake partial liberalisation of agricultural markets.
Several studies conducted in the past indicated that the results of the Uruguay Round in the agricultural sector would bring significant welfare gains for a number of developing countries. In various scenarios worked out by the analysts, developing countries as a whole were expected to witness major welfare gains. Thus, India had anticipated increase in exports of at least a few of its agricultural products.
Traditional methods of cultivation being not too expensive in nominal terms and cheap farm labour being abundant, the prices of agricultural commodities in India were reasonable. These factors were expected to prove advantageous for India in the international market. India had expected that cost of production of agricultural commodities of the existing exporters would rise once they reduce domestic support and export subsidies in agricultural products. This along with the removal of quotas and other NTBs and subsequent reduction of tariffs would enable it to increase exports.
The Problem: The expected benefits of the developing countries from the introduction of the AoA, however, have not materialised. The lack of movement on the disciplining of the subsidies’ discipline has been indicated as a major factor in this regard. This issue needs to be examined more carefully in light of the farm policies that the United States and the European Union have adopted since the AoA was introduced.
The proposed study would examine the implementation issues relating to the disciplining of the subsidies discipline under the AoA.
The study would have three broad parts:
1. Analysis of the implementation of commitments relating to subsidies for a select set of countries (the countries selected would include the OECD countries and some of the Cairns Group members)
2. Likely implications of the Common Agricultural Policy of the EU, in particular the Fischler proposals, on the future of subsidies granted by the EU
3. Likely implications of the Farm Security and Rural Investment Act Farm Act enacted by the United States in 2002
4. Likely implications of the proposals presented in the WTO |
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Implementation Of The Doha Ministerial Declaration On Agreement On TRIPS And Public Health
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Intellectual Property Rights |
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Access to medicines has been a major concern in developing countries as these countries have been engaged in implementing their commitments taken under the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The two main issues that have been raised while articulating this concern are adequate availability and affordability of these medicines in the poorer regions of the world. These issues have come into sharp focus since the adoption of the Doha Declaration on the TRIPS Agreement and Public Health. The singular contribution made by the Doha Declaration on Public Health is that it opens up a range of options that the developing countries can explore for fulfilling their need for access to medicines taking into consideration their commitments under the Agreement on TRIPS.
The proposed project would attempt to identify the options that the developing countries have for effectively implementing the Doha Declaration on Public Health and thus ensure access to medicines in the emerging regime of intellectual property protection. |
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Biotechnology Patenting: The Way Forward
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Intellectual Property Rights |
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Setting The Context: Extending patent protection to life forms has been one of the most contentious issues in the emerging regime of intellectual property protection. This emerges from the fact that while the developed countries have argued for the adoption of an international patent regime that covers all areas of technology, several developing countries have argued for a patent regime that allows countries to exclude life forms.
Two forums have been used by the contending sets of countries to express their views. The Council for the Trade Related Aspects of Intellectual Property Rights (TRIPS) in the WTO has been reviewing the exclusions that are currently available to patentable subject matter in so far as they relate to plants and animals. Negotiations on this issue have been going on since 1999 when the mandated review had commenced. However, the polarised positions taken by the countries on whether or not patent protection should be extended to all forms of life has effectively blocked any movement on this issue.
The Standing Committee on Patents in its on-going work on harmonisation of the patent laws had considered the “Subject Matter Eligible for Protection” as one of the issues to be considered when a decision was taken to initiate work on harmonisation of substantive patent law in 2000. The draft of the Substantive Patent Law Treaty (SPLT) proposed in this regard that the “subject matter eligible for protection shall include products and processes which can be made and used in any field of activity”. A limited set of exceptions have been provided, which include:
1. Mere discoveries
2. Abstract ideas as such
3. Scientific and mathematical theories and laws of nature as such
4. Purely aesthetic creations
This clearly indicates that the coverage of patentable subject matter proposed under the SPLT negotiations more extensive than that provided under the TRIPS Agreement. Although the discussions on this issue has been postponed following a decision taken in the Eighth Session of the Standing Committee on Patents in 2002, a view nonetheless has to be taken by countries like India as regards the position they would like to take in these crucial negotiations taking place in the WIPO.
In light of the above developments, India would have to carefully weigh its options while it is in the process of adopting a framework for patent protection which is consistent with the commitments taken under the Agreement on TRIPS. The position that India has taken in the discussions in the TRIPS Council has been that the country is “free to deny patents on life forms, except on micro-organisms and microbiological and non-biological processes, as per the provisions of the TRIPS Agreement”.
In keeping with this position, India has amended the Patents Act of 1970 with a view to provide for patenting of ‘micro-organisms’. At the same time, the Patents Act provides that products resulting from biochemical, biotechnological or micro-biological processes cannot be patentable.
The extending of patent protection to life forms raises several issues, which need to be analysed from India’s perspective. These issues can be divided into two sets. The first relates to the definitional aspects of micro-organisms. At the TRIPS Council, India, along with several other developing countries, has taken the position that the scope of the term ‘micro-organism’ should be left to the sovereign discretion of countries. The second issue that needs to be considered is whether or not there is a case for extending patentable subject matter to cover higher forms of life.
The above mentioned issues need to be analysed keeping in view the exercise for amending the Indian Patents Act that has been initiated. Although the Patents Act would have to be amended by January 1, 2005 for introducing product patents in the area of pharmaceuticals replacing the “process-patent alone” regime which is in place now, the exercise that is being carried out for this purpose needs to take a more comprehensive look at some of the more critical elements of the Indian Patents Act, which includes patentable subject matter. This becomes imperative in view of the fact that at least two sets of multilateral negotiations are currently taking place, the implications of which could be far reaching for India. As was indicated above, the TRIPS Council and the WIPO are engaged in the process of harmonising the patent laws globally and the extent to which this process of harmonisation progresses would be crucial for India and other developing countries.
The proposed study would deal with the following issues:
1. The global trends in patenting of living organisms: This discussion would cover the major industrialised countries and the relatively advanced developing countries
2. The experience of defining micro-organisms in a select set of countries
3. Perception of the Indian industry as regards extending of the domain of patent protection |
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