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India's Trade Overview

INDIA & THE WTO

GLOSSARY

• Agricultural product

Defined for the coverage of the WTO’s Agriculture Agreement, by the agreement’s Annex 1. This excludes, for example, fish and forestry products. It also includes various degrees of processing for different commodities.

• Amber Box

Domestic support for agriculture that is considered to distort trade and therefore subject to reduction commitments. Technically calculated as “Aggregate Measurement of Support” (AMS).

• Anti-dumping duties

GATT’s Article 6 allows anti-dumping duties to be imposed on goods that are deemed to be dumped and causing injury to producers of competing products in the importing country. These duties are equal to the difference between the goods’ export price and their normal value, if dumping causes injury.

• Blue Box

Amber Box types of support, but with constraints on production or other conditions designed to reduce the distortion. Currently not limited.

• Circumvention

Getting around commitments in the WTO such as commitments to limit agricultural export subsidies. Includes: avoiding quotas and other restrictions by altering the country of origin of a product; measures taken by exporters to evade anti-dumping or countervailing duties.

• Commercial presence

Having an office, branch, or subsidiary in a foreign country. In services, “mode 3” (see “modes of delivery”).

• Compulsory licensing

For patents: when the authorities license companies or individuals other than the patent owner to use the rights of the patent — to make, use, sell or import a product under patent (i.e. a patented product or a product made by a patented process) — without the permission of the patent owner. Allowed under the WTO’s TRIPS (intellectual property) Agreement provided certain procedures and conditions are fulfilled. See also government use.

• Counterfeit

Unauthorized representation of a registered trademark carried on goods identical or similar to goods for which the trademark is registered, with a view to deceiving the purchaser into believing that he/she is buying the original goods.

• Countervailing measures

Action taken by the importing country, usually in the form of increased duties to offset subsidies given to producers or exporters in the exporting country.

• Decoupled income support

Support for farmers that is not linked to (is decoupled from) prices or production.

• Distortion

When prices and production are higher or lower than levels that would usually exist in a competitive market.

• Domestic support

(Sometimes “internal support”.) In agriculture, any domestic subsidy or other measure which acts to maintain producer prices at levels above those prevailing in international trade; direct payments to producers, including deficiency payments, and input and marketing cost reduction measures available only for agricultural production.

• Dumping

Occurs when goods are exported at a price less than their normal value, generally meaning they are exported for less than they are sold in the domestic market or third-country markets, or at less than production cost.

• Export-performance measure

Requirement that a certain quantity of production must be exported.

• Food security

When the nutritional needs of a country or population are met consistently. This is commonly described as when people or populations “at all times have physical and economic access to sufficient, safe, and nutritious food to meet their dietary needs and food preferences for a healthy life”. “Food security” and “self-sufficiency” are not the same, and a key debate is whether policies aiming for self-sufficiency help or hinder food security.

• Free trade area

Trade within the group is duty free but members set their own tariffs on imports from non-members (e.g. NAFTA).

• GATS

The WTO’s General Agreement on Trade in Services.

• GATT

General Agreement on Tariffs and Trade, which has been superseded as an international organization by the WTO. An updated General Agreement is now the WTO agreement governing trade in goods. GATT 1947: The official legal term for the old (pre-1994) version of the GATT. GATT 1994: The official legal term for new version of the General Agreement, incorporated into the WTO, and including GATT 1947.

• General obligations

Obligations which should be applied to all services sectors at the entry into force of the GATS agreement.

• Geographical indications

Place names (or words associated with a place) used to identify products (for example, “Champagne”, “Tequila” or “Roquefort”) which have a particular quality, reputation or other characteristic because they come from that place.

• Green box

Domestic support for agriculture that is allowed without limits because it does not distort trade, or at most causes minimal distortion.

• GSP

Generalized System of Preferences — programmes by developed countries granting preferential tariffs to imports from developing countries.

• Import licensing

The need to obtain a permit for importing a product; administrative procedures for obtaining an import licence.

• Intellectual property rights

Ownership of ideas, including literary and artistic works (protected by copyright), inventions (protected by patents), signs for distinguishing goods of an enterprise (protected by trademarks) and other elements of industrial property.

• Local-content measure

Requirement that the investor purchase a certain amount of local materials for incorporation in the investor’s product.

• MFN

Most-favoured-nation treatment (GATT Article I, GATS Article II and TRIPS Article 4), the principle of not discriminating between one’s trading partners.

• Modes of delivery

How international trade in services is supplied and consumed. Mode 1: cross border supply; Mode 2: consumption abroad; Mode 3: foreign commercial presence; and Mode 4: movement of natural persons.

• National schedules

In services, the equivalent of tariff schedules in GATT, laying down the commitments accepted — voluntarily or through negotiation — by WTO members.

• National treatment

The principle of giving others the same treatment as one’s own nationals. GATT Article 3 requires that imports be treated no less favourably than the same or similar domestically-produced goods once they have passed customs. GATS Article 17 and TRIPS Article 3 also deal with national treatment for services and intellectual property protection.

• Natural persons

People, as distinct from juridical persons such as companies and organizations.

• NTBs

Non-tariff barriers, such as quotas, import licensing systems, sanitary regulations, prohibitions, etc. Same as “non-tariff measures”.

• Peace clause

Provision in Article 13 of the Agriculture Agreement saying agricultural subsidies committed under the agreement cannot be challenged under other WTO agreements, in particular the Subsidies Agreement and GATT. Expired at the end of 2003.

• Piracy

Unauthorized copying of materials protected by intellectual property rights (such as copyright, trademarks, patents, geographical indications, etc) for commercial purposes and unauthorized commercial dealing in copied materials.

• Preferential trade arrangements (PTAs)

This is the term used in the WTO for trade preferences, such as lower or zero tariffs, which a member may offer to a trade partner unilaterally. These include the Generalized System of Preferences schemes, under which developed countries grant preferential tariffs to imports from developing countries. They also include non-reciprocal preferential schemes granted through a waiver by the General Council, meaning the member has been exempted from applying the most favoured nation (MFN) principle.

• Rules of origin

Laws, regulations and administrative procedures which determine a product’s country of origin. A decision by a customs authority on origin can determine whether a shipment falls within a quota limitation, qualifies for a tariff preference or is affected by an anti-dumping duty. These rules can vary from country to country.

• Safeguard measures

Action taken to protect a specific industry from an unexpected build-up of imports — generally governed by Article 19 of GATT. The Agriculture Agreement and Textiles and Clothing Agreement have different specific types of safeguards: “special safeguards” in agriculture, and “transitional safeguards” in textiles and clothing.

• Sanitary and phytosanitary measures (SPS)

Measures dealing with food safety and animal and plant health.

Sanitary: for human and animal health.

Phytosanitary: for plants and plant products

• Special and differential treatment (S&DT):

Special treatment given to developing countries in WTO agreements. Can include longer periods to phase in obligations, more lenient obligations, etc.

• Special products (SP)

In Doha Round on agriculture: products for which developing countries are to be given extra flexibility in market access for food and livelihood security and rural development.

• Special safeguard mechanism (SSM)

In Doha Round on agriculture: a tool that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls.

• Subsidy

There are two general types of subsidies: export and domestic. An export subsidy is a benefit conferred on a firm by the government that is contingent on exports. A domestic subsidy is a benefit not directly linked to exports.

• Tariffs

Customs duties on merchandise imports. Levied either on an ad valorem basis (percentage of value) or on a specific basis (e.g. $7 per 100 kgs.). Tariffs give price advantage to similar locally-produced goods and raise revenues for the government.

• Technical barriers to trade (TBT)

Regulations, standards, testing and certification procedures, which could obstruct trade. The WTO’s TBT Agreement aims to ensure that these do not create unnecessary obstacles.

• Trade facilitation

Removing obstacles to the movement of goods across borders (e.g. simplification of customs procedures).

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