WTO Agreements – GATT, GATS, and TRIPS

By | April 24, 2018

WTO Agreements cover goods, services, and intellectual property. The three agreements establishing the WTO are GATT, GATS, and TRIPS. 

WTO Agreements – GATT, GATS, and TRIPS

General Agreement on Tariffs and Trade was established in 1947. In 1995, GATT was replaced by the World Trade Organisation (WTO). As far as the old system or GATT was concerned, there were two GATTS: GATT, the organisation, and GATT, the agreement. The second one refers to the agreement between different governments setting out the rules for trade. GATT, the organisation, has been replaced by the establishment of the WTO. GATT, the agreement, however, exists along with the additional WTO new agreements, viz.

  • General Agreement on Trade in Services (GATS), and
  • General Agreements on the Trade-Related Aspects of Intellectual Property Rights (TRIPS).

It is, thus, clear that the WTO Agreements cover goods, services and intellectual property.

The three agreements establishing the WTO are:

  1. GATT,
  2. GATS, and
  3. TRIPS
GATT

GATT is related to increasing market access by reducing various trade barriers operating in different countries. The dismantling of trade restrictions was to be achieved by the reduction in tariff rates, reductions in non-tariff support in agriculture, abolition of voluntary export restraints or phasing out the Multi-fibre Arrangement (MFA), cut in subsidies, etc.

To improve market access, industrialised countries will have to reduce tariffs by 36 percent over six years and 24 percent for developing nations over 10 years. World trade in textiles and clothing’s is governed by the MFA which requires being phased out within 10 years (1993-2002).

On 1 January 2003, textiles and clothing sector will stand integrated into GATT, with the elimination of MFA restrictions. GATT aims at the elimination of farm support and export support in developed countries. The agreement says that all countries will have to reduce aggregate support levies if it is in excess of 5 percent of the total value of agricultural produce, but for developing countries, it is more than 10 percent. The value and the volume of direct export subsidies will have to be cut by 36 percent and 21 percent., respectively, over six years for developed countries.

GATS

Multilaterally agreed and legally enforceable rules and disciplines relating to trade in services are covered by General Agreement on Trade in Services. It envisages free trade in services, like banking, insurance, hotels, construction, etc., so as to promote growth in the developed countries by providing larger markets and in the developing countries through the transfer of technologies from the developed countries. GATS is more comprehensive in coverage than GATT. Trade in services is defined as covering more than a cross-border exchange of a service and includes also consumer movements and factor flows (Investment and labor).

As a result of this agreement, access of service personnel into markets of member countries will henceforth be possible on a non-discriminatory basis under the transparent and rule-based system. Under the agreement, service sector would be placed under most favored nation (MFN) obligations that prevent countries from discriminating among different nations in respect of services.

TRIPS

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement between all the member nations of the World Trade Organization (WTO). It sets down minimum standards for the regulation by national governments of many forms of intellectual property (IP) as applied to nationals of other WTO member nations. TRIPS was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994 and is administered by the WTO.

The TRIPS agreement introduced intellectual property law into the international trading system for the first time and remains the most comprehensive international agreement on intellectual property to date. As per the TRIPs provisions, the member countries are required to prepare the necessary legal framework spelling out the scope and standards of protection for rights in regard to intellectual property. Or in other words, the member countries have to adopt TRIPs provisions in their domestic intellectual property legislations like Patent Act, Copyright Act etc.

 WTO advocates necessary amendments to national IPR laws to accommodate the TRIPs provisions. TRIPs agreement is an effort to bring national legislation under common international rules. An important feature of TRIPs is that it is more specific and hard on ‘patents’ -the most important form of intellectual property. Patents should be available for any invention, whether products or processes, in all fields of technology provided they are new, involve an inventive step and capable of industrial application. Patents should be available and patent rights enjoyable without discrimination. In the case of plant rights, geographical indications etc., members can adopt a sui-generis (own designed) IPR regime.

WTO gives following areas of intellectual property – copyright and related rights, trademarks, protection of undisclosed information (trade secrets), geographical indications, industrial designs, integrated circuits, patents, and control of anti-competitive practices in contractual licenses. Signing TRIPs means countries have to modify their Patent Act, Copy Right Act, Trade Mark Act etc., in accordance with the provisions of the TRIPs. In India, the government has made a major amendment to the 1970 Patent Act in 2005 to accommodate the TRIPs provisions. In 2010, the Copyright Act was amended and enforced from 2012. Other legislations with respect to Industrial designs also have been made.

Contributed By – Lakshay Anand

Sources:

  1. SCC Online
  2. Indira Carr and Peter Stone, International Trade Law Paperback – Sixth Edition, 2017


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