This document discusses various topics related to international business management and trade agreements: - It describes different types of bilateral and multilateral trade agreements such as GATT, WTO, TRIPS, TRIMS, and GATS. - It provides an overview of the General Agreement on Tariffs and Trade (GATT) and its replacement by the World Trade Organization (WTO). - It also briefly discusses India's bilateral trade agreements with different countries and regions, as well as the South Asian Association for Regional Cooperation (SAARC).

1. International Business Management

2.  Bilateral and multilateral trade laws
 General Agreement on Trade and Tariffs
(GATT)
 World Trade Organization – Different Rounds
 Intellectual Property Rights (IPR)
 TRIPS
 TRIMS
 GATS
 Ministerial Conferences
 SAARC
Mrs. Charu Rastogi, Asst. Prof.

3.  Trade agreements are either bilateral, involving two countries,
or multilateral. While some believe that bilateral free trade
agreements are a first step towards multilateral free trade,
others point out that bilateral trade agreements are
discriminatory and lead to fragmentation of the world trade
system and decline of the multilateral free trade.
 Bilateral Trade is the exchange of goods between two
countries.
 Bilateral trade agreements give preference to certain
countries in commercial relationships, facilitating trade and
investment between the home country and the foreign
country by reducing or eliminating tariffs, import quotas,
export restraints and other trade barriers.
Mrs. Charu Rastogi, Asst. Prof.

4.  Read this Business Standard article
 India has bilateral agreements with the following countries
and blocs:
◦ SAFTA (Bangladesh, Bhutan, the Maldives, Nepal, Pakistan, Sri
Lanka and Afghanistan)
◦ ASEAN (ASEAN–India Free Trade Area)
◦ European Union (final stage)
◦ Sri Lanka
◦ Singapore
◦ Thailand (separate from FTA agreement with ASEAN)
◦ Malaysia (separate from FTA agreement with ASEAN)
◦ Japan
◦ European Free Trade Association (EFTA) (negotiation ongoing)
◦ Canada (negotiation ongoing)
◦ South Korea
◦ Japan
Mrs. Charu Rastogi, Asst. Prof.

5.  A multilateral trade agreement involves three or
more countries who wish to regulate trade between
the nations without discrimination.
 They are usually intended to lower trade barriers
between participating countries and, as a
consequence, increase the degree of economic
integration between the participants.
 Multilateral trade agreements are considered the
most effective way of liberalizing trade in an
interdependent global economy.
Mrs. Charu Rastogi, Asst. Prof.

6.  Although multilateral trade existed earlier, it was
only after World War II that nations recognized the
need for a set of rules with the objective of
securing market access for post-war recovering
economies.
 The first such set of rules came in 1947 in the form
of the General Agreement on Tariffs and Trade
(GATT).
 GATT was replaced in 1995 by the World Trade
Organization, which has more than 150 members.
Mrs. Charu Rastogi, Asst. Prof.

7.  The General Agreement on Tariffs and Trade (GATT) is a
multilateral agreement regulating international trade.
 According to its preamble, its purpose is the "substantial
reduction of tariffs and other trade barriers and the
elimination of preferences, on a reciprocal and mutually
advantageous basis."
 It was negotiated during the UN Conference on Trade and
Employment and was the outcome of the failure of
negotiating governments to create the International Trade
Organization (ITO).
 GATT was signed in 1947 and lasted until 1993, when it
was replaced by the World Trade Organization in 1995.
The original GATT text (GATT 1947) is still in effect under
the WTO framework, subject to the modifications of GATT
1994.
Mrs. Charu Rastogi, Asst. Prof.

8.  The WTO began life on 1 January 1995, but its trading system
is half a century older. Since 1948, the General Agreement on
Tariffs and Trade (GATT) had provided the rules for the
system
 The World Trade Organization (WTO) deals with the rules of
trade between nations at a global or near-global level. But
there is more to it than that.
 There are a number of ways of looking at the WTO. It’s an
organization for liberalizing trade. It’s a forum for
governments to negotiate trade agreements. It’s a place for
them to settle trade disputes. It operates a system of trade
rules.
 There are a total of 157 member countries in the WTO, while
26 countries are currently negotiating their membership
 In 2012, the WTO welcomed 4 new members: Montenegro,
Samoa, Russian Federation and Vanuatu
Mrs. Charu Rastogi, Asst. Prof.

9.  Above all, it’s a negotiating forum
◦ The bulk of the WTO's current work comes from the 1986-94 negotiations called the
Uruguay Round and earlier negotiations under GATT. The WTO is currently the host
to new negotiations, under the ―Doha Development Agenda‖ launched in 2001.
◦ Where countries have faced trade barriers and wanted them lowered, the negotiations
have helped to liberalize trade
 It’s a set of rules
◦ At its heart are the WTO agreements, negotiated and signed by the bulk of the
world’s trading nations. They are essentially contracts, binding governments to keep
their trade policies within agreed limits.
◦ Although negotiated and signed by governments, the goal is to help producers of
goods and services, exporters, and importers conduct their business, while allowing
governments to meet social and environmental objectives.
 And it helps to settle disputes
◦ Trade relations often involve conflicting interests and interpretation of agreements.
The most harmonious way to settle these differences is through some neutral
procedure based on an agreed legal foundation. That is the purpose behind the
dispute settlement process written into the WTO agreements
 Assisting developing countries in trade policy issues, through technical
assistance and training programmes
 Cooperating with other international organizations
 Reviewing national trade policies
Mrs. Charu Rastogi, Asst. Prof.

10.  Trade without discrimination
◦ Most-favoured-nation (MFN): treating other people equally
◦ National treatment: Treating foreigners and locals equally
 Freer trade: gradually, through negotiation
 Predictability: through binding and transparency
◦ In the WTO, when countries agree to open their markets for
goods or services, they ―bind‖ their commitments.
◦ A country can change its bindings, but only after
negotiating with its trading partners, which could mean
compensating them for loss of trade.
 Promoting fair competition
 Encouraging development and economic reform
Mrs. Charu Rastogi, Asst. Prof.

11.  The WTO agreements cover goods, services and intellectual
property.
 They spell out the principles of liberalization, and the permitted
exceptions. They include individual countries’ commitments to lower
customs tariffs and other trade barriers, and to open and keep open
services markets.
 They set procedures for settling disputes. They prescribe special
treatment for developing countries.
 They require governments to make their trade policies transparent
by notifying the WTO about laws in force and measures adopted,
and through regular reports by the secretariat on countries’ trade
policies.
 These agreements are often called the WTO’s trade rules, and the
WTO is often described as ―rules-based‖, a system based on rules.
But it’s important to remember that the rules are actually
agreements that governments negotiated.
Mrs. Charu Rastogi, Asst. Prof.

12. Umbrella Agreement establishing WTO
Goods Services Intellectual Property
Basic Principles GATT GATS TRIPS
Other goods
Additional Details agreements Services annexes
and annexes
Countries’
Countries’
Market access schedules of
schedules of
commitments commitments(and
commitments
MFN exemptions)
Dispute Settlement Dispute Settlement
Transparency Trade Policy Reviews
Mrs. Charu Rastogi, Asst. Prof.

13. Mrs. Charu Rastogi, Asst. Prof.

14. Subjects
Name Start Duration Countries Achievements
covered
Signing of GATT, 45,000
Geneva April 1946 7 months 23 Tariffs tariff concessions affecting
$10 billion of trade
Countries exchanged some
Annecy April 1949 5 months 13 Tariffs
5,000 tariff concessions
Countries exchanged some
September 8,700 tariff concessions,
Torquay 8 months 38 Tariffs
1950 cutting the 1948 tariff levels
by 25%
Tariffs,
January $2.5 billion in tariff
Geneva II 5 months 26 admission
1956 reductions
of Japan
September 11 Tariff concessions worth
Dillon 26 Tariffs
1960 months $4.9 billion of world trade
Tariffs,
37 Tariff concessions worth $40
Kennedy May 1964 62 Anti-
months billion of world trade
dumping
Mrs. Charu Rastogi, Asst. Prof.

15. Name Start Duration Countries Subjects covered Achievements
Tariffs, non-tariff
Tariff reductions worth
Sept’ 74 measures,
Tokyo 102 more than $300 billion
1973 months "framework"
dollars achieved
agreements
The round led to the
Tariffs, non-tariff creation of WTO, and
measures, rules, extended the range of trade
services, negotiations, leading to
intellectual major reductions in tariffs
Sept’ 87 property, dispute (about 40%) and agricultural
Uruguay 123
1986 months settlement, subsidies, an agreement to
textiles, allow full access for textiles
agriculture, and clothing from
creation of WTO, developing countries, and
etc an extension of intellectual
property rights.
Tariffs, non-tariff
measures,
agriculture, labor
standards,
Nov’ The round is not yet
Doha - 141 environment,
2001 concluded.
competition,
investment,
transparency,
patents etc
Mrs. Charu Rastogi, Asst. Prof.

16.  The WTO’s Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS), negotiated in the 1986-94 Uruguay Round,
introduced intellectual property rules into the multilateral trading
system for the first time.
 Ideas and knowledge are an increasingly important part of trade.
Most of the value of new medicines and other high technology
products lies in the amount of invention, innovation, research,
design and testing involved.
 Films, music recordings, books, computer software and on-line
services are bought and sold because of the information and
creativity they contain, not usually because of the plastic, metal or
paper used to make them.
 Creators can be given the right to prevent others from using their
inventions, designs or other creations — and to use that right to
negotiate payment in return for others using them. These are
―intellectual property rights‖. They take a number of forms. For
example books, paintings and films come under copyright;
inventions can be patented; brand names and product logos can be
registered as trademarks; and so on.
Mrs. Charu Rastogi, Asst. Prof.

17.  The WTO’s TRIPS Agreement is an attempt to narrow the gaps
in the way these rights are protected around the world, and to
bring them under common international rules. It establishes
minimum levels of protection that each government has to
give to the intellectual property of fellow WTO members.
 The agreement covers five broad issues:
◦ how basic principles of the trading system and other international
intellectual property agreements should be applied
◦ how to give adequate protection to intellectual property rights
◦ how countries should enforce those rights adequately in their own
territories
◦ how to settle disputes on intellectual property between members of the
WTO
◦ special transitional arrangements during the period when the new system
is being introduced.
Mrs. Charu Rastogi, Asst. Prof.

18.  The Agreement on Trade Related Investment Measures
(TRIMs) are rules that apply to the domestic regulations a
country applies to foreign investors, often as part of an
industrial policy. The agreement was agreed upon by all
members of the World Trade Organization.
 Policies such as local content requirements and trade
balancing rules that have traditionally been used to both
promote the interests of domestic industries and combat
restrictive business practices are now banned.
 TRIMs are rules that restrict preference of domestic firms and
thereby enable international firms to operate more easily
within foreign markets.
Mrs. Charu Rastogi, Asst. Prof.

19.  Local content requirement
◦ Measures requiring the purchase or use by an enterprise of
domestic products
 Trade balancing requirements
◦ Measures requiring that an enterprise's purchases or use of
imported products be limited to an amount related to the
volume or value of local products that it exports.
 Foreign exchange restrictions
 Export restrictions (Domestic sales requirements)
 Exceptions:
◦ Transitional period to eliminate these measures
◦ Exceptions for developing countries (for economic
development)
◦ Equitable provisions to new companies during transitional
period
Mrs. Charu Rastogi, Asst. Prof.

20.  The General Agreement on Trade in Services (GATS) is a treaty
of the World Trade Organization (WTO) that entered into force
in January 1995 as a result of the Uruguay Round
negotiations. The treaty was created to extend the
multilateral trading system to service sector, in the same way
the General Agreement on Tariffs and Trade (GATT) provides
such a system for merchandise trade.
 All members of the WTO are signatories to the GATS. The
basic WTO principle of most favoured nation (MFN) applies to
GATS as well.
 While the overall goal of GATS is to remove barriers to trade,
members are free to choose which sectors are to be
progressively "liberalised", i.e. marketised and privatised,
which mode of supply would apply to a particular sector, and
to what extent liberalisation will occur over a given period of
time.
Mrs. Charu Rastogi, Asst. Prof.

21.  The topmost decision-making body of the WTO is the
Ministerial Conference, which usually meets every two years.
It brings together all members of the WTO, all of which are
countries or customs unions. The Ministerial Conference can
take decisions on all matters under any of the multilateral
trade agreements.
 It has to meet at least once every two years. The Ministerial
Conference can take decisions on all matters under any of the
multilateral trade agreements
 The General Council, during its meeting on 25-26 July 2012,
agreed that the 9th WTO Ministerial Conference would be
held in Bali, Indonesia in the first week of December 2013
Mrs. Charu Rastogi, Asst. Prof.

22.  The South Asian Association for Regional Cooperation
(SAARC) is an organisation of South Asian nations, which
was established on 8 December 1985 when the
government of Bangladesh, Bhutan, India, Maldives, Nepal,
Pakistan, and Sri Lanka formally adopted its charter
providing for the promotion of economic and social
progress, cultural development within the South Asia
region and also for friendship and cooperation with other
developing countries.
 Afghanistan was added to the regional grouping on 13
November 2005
 It is dedicated to economic, technological, social, and
cultural development emphasising collective self-reliance.
 Meetings of heads of state are usually scheduled annually;
meetings of foreign secretaries, twice annually. It is
headquartered in Kathmandu, Nepal.
Mrs. Charu Rastogi, Asst. Prof.

23.  to promote the welfare of the people of South Asia and to
improve their quality of life;
 to accelerate economic growth, social progress and cultural
development in the region and to provide all individuals the
opportunity to live in dignity and to realize their full potential;
 to promote and strengthen selective self-reliance among the
countries of South Asia;
 to contribute to mutual trust, understanding and appreciation of
one another's problems;
 to promote active collaboration and mutual assistance in the
economic, social, cultural, technical and scientific fields;
 to strengthen cooperation with other developing countries;
 to strengthen cooperation among themselves in international
forums on matters of common interest; and
 to cooperate with international and regional organisations with
similar aims and purposes.
Mrs. Charu Rastogi, Asst. Prof.

24. Case Study
Mrs. Charu Rastogi, Asst. Prof.

25.  In late 1997, an American company RiceTec Inc, was granted a patent by the
US patent office to call the aromatic rice grown outside India 'Basmati'.
RiceTec Inc, had been trying to enter the international Basmati market with
brands like 'Kasmati' and 'Texmati' described as Basmati-type rice with
minimal success. However, with the Basmati patent rights, RiceTec will now
be able to not only call its aromatic rice Basmati within the US, but also label
it Basmati for its exports.
 This has grave repercussions for India and Pakistan because not only will
India lose out on the 45,000 tonne US import market, which forms 10
percent of the total Basmati exports, but also its position in crucial markets
like the European Union, the United Kingdom, Middle East and West Asia. In
addition, the patent on Basmati is believed to be a violation of the
fundamental fact that the long grain aromatic rice grown only in Punjab,
Haryana, and Uttar Pradesh is called Basmati. According to sources from the
Indian Newspaper, Economic Times, "Patenting Basmati in the US is like
snatching away our history and culture."
Mrs. Charu Rastogi, Asst. Prof.

26.  Basmati rice means the "queen of fragrance or the
perfumed one." This type of rice has been grown in the
foothills of the Himalayas for thousands of years. Its
perfumy, nut-like flavor and aroma can be attributed to
the fact that the grain is aged to decrease its moisture
content. Basmati, a long-grained rice with a fine texture is
the costliest rice in the world and has been favored by
emperors and praised by poets for hundreds of years.
According to the Agricultural and Processed Food Products
Export Development Authority (APEDA), India is the second
largest producer of rice after China, and grows over a
tenth of the world's wheat. In 1993, Basmati rice attracted
the highest premium because it is a very-long grained
rice, with an aroma of its own which enhances the flavors
its mixed with.
Mrs. Charu Rastogi, Asst. Prof.

27.  RiceTec Inc, was issued the Patent number 5663484 on Basmati rice lines
and grains on September 2, 1997. In abstract, "the invention relates to novel
rice lines and to plants and grains of these lines. The invention also relates to
a novel means for determining the cooking and starch properties of rice
grains and its use in identifying desirable rice lines. Specifically, one aspect
of the invention relates to novel rice lines whose plants are semi-dwarf in
stature, substantially photoperiod insensitive and high yielding, and produce
rice grains having characteristics similar or superior to those of good quality
Basmati rice.
 Another aspect of the invention relates to novel rice lines produced from
novel rice lines. The invention provides a method for breeding these novel
lines. A third aspect...relates to the finding that the starch index (SI) of a rice
grain can predict the grain's cooking and starch properties, to a method
based thereon for identifying grains that can be cooked to the firmness of
traditional Basmati rice preparations, and to the use of this method in
selecting desirable segregants in rice breeding programs."
Mrs. Charu Rastogi, Asst. Prof.

28.  Rice is an important aspect of life in the Southeast and other parts of Asia. For centuries,
it has been the cornerstone of their food and culture. During this period, farming
communities throughout the region developed, nurtured, and conserved over a hundred
thousand distinct varieties of rice to suit different tastes and needs. It is for this reason
that patenting of Basmati by RiceTec Inc. is perceived as not only intellectual property
and cultural theft, but it also directly threatens farm communities in Southeast Asia.
 According to Dr Vandana Shiva, director of a Delhi-based research foundation which
monitors issues involving patents and biopiracy, the main aim for obtaining the patent
by RiceTec Inc. is to fool the consumers in believing there is no difference between
spurious Basmati and real Basmati. Moreover, she claims the "theft involved in the
Basmati patent is, therefore, threefold: a theft of collective intellectual and biodiversity
heritage on Indian farmers, a theft from Indian traders and exporters whose markets are
being stolen by RiceTec Inc., and finally a deception of consumers since RiceTec is using
a stolen name Basmati for rice which are derived from Indian rice but not grown in India,
and hence are not the same quality.―
 In fact, Basmati rice has been one of the fastest growing export items from India in
recent years. In the year to March 1997, India exported more than half a million tonnes
of Basmati to the Gulf, Saudi Arabia, Europe and the United States, a small part of its
total rice exports, but high in value. More substantively, Indian farmers export $250
million in Basmati every year and U.S. is a target market. (4) RiceTec Inc. had attempted
to sell its long-grain rice in Europe under such brand names as 'Texmati' and 'Kasmati'
but not as Basmati. However, if the patent is not revoked, RiceTec Inc., can now sell its
rice under the brand name Basmati which will definitely cut into India's and Pakistan's
global market share, especially as the rice grown in the US could be sold cheaper than
the Indian and Pakistani varieties.
Mrs. Charu Rastogi, Asst. Prof.

29.  In an official release, the government of India reacted immediately after learning of the
Basmati patent issued to RiceTec Inc., stating that it would approach the US patent office
and urge them to re-examine the patent to a United States firm to grow and sell rice
under the Basmati brand name in order to protect India's interests, particularly those of
growers and exporters. Furthermore, a high level inter-ministerial group comprising of
representatives of the ministries and departments of commerce, industry, external
affairs, Council for scientific and industrial research (CSIR), Agriculture, Bio-technology,
All India Rice Exporters Association (AIREA), APEDA, and Indian Council of Agricultural
Research (ICAR) were mobilized to begin an in-depth examination of the case.
 The contents and implications of the patent are currently being analyzed in consultation
with patent attorneys and agricultural scientists. The government of India is particularly
concerned about the patenting of Basmati because of an earlier case where the US
granted a patent to two Indian-born scientists on the use of Turmeric as a wound
healing agent. This case worked in favor of India because the patent was subsequently
revoked after scientists of (CSIR) successfully challenged the patenting on the ground
that the healing properties of Turmeric had been 'common knowledge' in India for
centuries. There is a clause in US patent laws that will accept any information already
available in published or written form anywhere in the world as 'common knowledge'.
 As a result, India was able to furnish published evidence to support their case that the
healing characteristics of Turmeric is not a new invention and as such cannot be
patented.
Mrs. Charu Rastogi, Asst. Prof.

30.  In the presence of widespread uprising among farmers and exporters, the
nation of India as a whole feel confident of being able to successfully
challenge the Basmati patent by RiceTec Inc. According to the Economic
Times of India, the law firm of Sagar and Suri who won the Turmeric patent
case and presently representing the government against RiceTec Inc. in
existing cases, said; "RiceTec has got a patent for three things: growing rice
plants with certain characteristics identical to Basmati, the grain produced by
such plants, and the method of selecting the rice plant based on a starch
index (SI) test devised by RiceTec Inc."
 The lawyers plan to challenge this patent on the basis that the above
mentioned plant varieties and grains already exist and thus cannot be
patented. In addition, they encountered some information from the US
National Agricultural Statistics Service in its latest Rice Year book 1997,
released in January 1998, which states that almost 75 percent of US rice
imports are the Jasmine rice from Thailand and most of the remainder are
from India and Pakistan,"varieties that cannot be grown in the US" This piece
of information is rather interesting and can be used as a weapon against the
RiceTec Basmati patent
Mrs. Charu Rastogi, Asst. Prof.

31.  The law firm representing India in the dispute, Sagar and Suri,
criticized the procedures for granting patents in the US
claiming it is diametrically opposite to the one followed in
India and Europe. According to them, India first examines a
patent application, then widely publishes it for third parties to
challenge, and only then grants the patent.
 However, the US keeps the patent application a closely
guarded secret and grants it without allowing other parties to
challenge it. After the patent has been granted, third parties
are then allowed to petition against the patent as India is
currently doing in the Basmati case. This criticism clearly
illustrates the shortfalls in the patent process in the US that
ultimately needs to be revised to prevent future cases like
this from occurring.
Mrs. Charu Rastogi, Asst. Prof.

32.  Indians feel that the US government's decision to grant a patent for the
prized Basmati rice violates the International Treaty on Trade Related
Intellectual Property Rights (TRIPS). The president of the Associated
Chambers of Commerce (ASSOCHAM) said Basmati rice is traditionally
grown in India and Pakistan and granting patent to it violated the
Geographical Indications act under the TRIPS. The TRIPS clause defines
Geographical indication as "a good originating in the territory of a
member, or a region or locality in that territory, where a given quality,
reputation, or other characteristic of the good is essentially attributable
to its geographical origin."
 As a result, it is safe to say Basmati rice is as exclusively associated with
India and Pakistan as Champagne is to France and Scotch Whiskey is to
Scotland. Indians argue that just as the US cannot label their wine as
champagne, they should not be able to label their rice Basmati. If the
patent is not revoked in the US because unlike the Turmeric case, rice
growers lack documentation of their traditional skills and knowledge,
then India as have been urged by many activist in the field should take
the case to the WTO for an authoritative ruling based on the violation of
TRIPS.
Mrs. Charu Rastogi, Asst. Prof.

33.  In the wake of the problems with patents that India has experienced in recent
years, they have now realized the importance of enacting laws for conserving
biodiversity and controlling piracy as well as intellectual protection
legislation that conform to international laws. There is a widespread belief
that RiceTec Inc., took out a patent on Basmati only because of weak, non-
existent Indian laws and the government's philosophical attitude that natural
products should not be patented. According to some Indian Experts in the
field of genetic wealth, India needs to formulate a long-term strategy to
protect its bio-resources from future bio-piracy and or theft.
 India and Pakistan who are joining hands to tackle the crisis have a strong
case against RiceTec Inc. British traders are also supporting India and
Pakistan. According to Howard Jones, marketing controller of the UK's
privately owned distributor Tilda Ltd, "True Basmati can only be grown in
India or Pakisatn. We will support them in any way if its necessary."
 The Middle East is also showing support by only labeling Indian or Pakistani
rice as Basmati. The case is still unfolding and it will be interesting to find
out what happens in the end once the government and government agencies
have gathered the necessary data and information to support their case and
to prevent their cultural heritage from being taken away from them.
Mrs. Charu Rastogi, Asst. Prof.

34. Mrs. Charu Rastogi, Asst. Prof.