Law of International Trade Continuous Assessment 3

Syllabus for the test on the 27th of March is RTA, TRIPS, NTD.

Regional Trade Agreements

Legal Framework of RTA in WTO

Article 12 of the Marrakech Agreement can be considered as the legal framework of RTA in
WTO as custom territory with their own external trade policy can be a member. The second
legal framework is in Article 1 of GATT, 1994 because the same are exceptions to non-
discrimination. Yet another is Article 9 of GATT, 1994 covering “marks of origin” ie location
where a product was produced, because RTAs concern rules of origin of goods.1 Still more
ground is found under Article 24 of GATT, 1994, Article 5 of GATT, 1994 and the Enabling
Clause, 1979. The last is a broad system of recognition by which developed countries can
give preference to developing countries, without reciprocity.
All RTAs are to be notified to the CRTA, under the General Council but those under the
Enabling Clause need to be notified to the Committee on Trade and Development, under
the Ministerial Council. Notification is important to maintain the system to prevent
Voluntary External Restrictions, first between Japan and America for hardware and
automobile respectively, in order to advance transparency as also under the Transparency
Mechanism, 2006 requiring immediate notification at the stages of beginning negotiations,
completion and implementation. Para 19 of the Doha Declaration and Para 28 of the Nairobi
Declaration have stressed its importance and need to be mad permanent, a change which is
still in pending.
There is no conflict of jurisdiction under Para 12 of the DSU as held in Turkey textiles,
Mexico Soft Drinks, Peru Agricultural Products cases. These cite Article 23 of the DSU as
also Articles 6 and 7, giving the WTO compulsory jurisdiction of RTAs. To that extent, Article
41 of the VCLT shall not apply. Due to these complex rules of origin issues, Jagdish Bhagwati
calls the RTA system a “Spaghetti Bowl”, eating away at multilateralism. The US Wool Case
and The US Origin Case pertain to the same.
India, in the 1990s was reluctant in signing RTAs, which meant the realisation of the policy
of other countries to sign RTAs only by 1998, after which India negotiated aggressively
under AB Vajpayee with all willing countries. This was followed by a phase of a strategic
planning after 2004 and then, phased manner2 (earlier commencing interim Framework

1 Two kinds of rules of origin are recognized under the WTO, preferential and non-
preferential. Under the WTO, there is non-preferential rules of origin. Article 2.5(f) of the
Rules of Origin Agreement calls for harmonization herein by the World Customs
Organisation.
2 Phases of Integration usually adopted by countries: There are usually the following three

phases of integration, with any other country, in trade and investments:

1) Shallow Integration: All countries first remove disputes before entering into trade and
investment framework agreements as also BIT.
2) Deeper Integration: Then countries, enter PTAs before signing FTAs.
3) Comprehensive Integration: Countries lastly begin comprehensive integration by
singing either SEPA or SECA.
Agreements and then, first entering a PTA before converting the same to an FTA). Now, a
search for new partners has commenced. The four reasons for India’s policy are:
A. Limitations of the WTO process
B. India’s political ambitions of global leadership beyond only South Asia
C. Cooperation at the multilateral level
D. To counter other major trading powers
8th March,2018
Comparative Regionalism
Comparative or competitive regionalism refers to such a phenomenon where two or more
countries have regional treaties with some particular country, as is the case for India and
China with South Korea and Nepal.

Old Regionalism and New Regionalism

Old Regionalism is an old concept based on government to government contact and
cooperation, cantered on foreign policy. The same was predominant in the 1950s. On the
other hand, new regionalism includes the participation of a wide variety of participants like
local industry and civil society, ensuring wider contact and cooperation under regional
treaties for trade.

Waves of Regionalism
There are the following five waves of regionalism, ie in the evolution of RTAs. The first
attempt to regionalise trade was made by Germany with France in the 19th Century but the
modern context begins in 1957.
1) Treaty of Maastricht in 1957 established the European Community, giving birth to the
GATT system
2) In the late 1970’s with the conclusion of the Tokyo Round of Negotiation, a new world
economic order arose
3) In 1991, countries began to proliferate the use of RTAs, like NAFTA and SAPTA (although
implemented by India only in 2006) as the Uruguay Rounds were about to conclude despite
failing to achieve regional aspirations.
4) After the failure of the Doha Rounds in 2001, the fourth wave commenced
5) The fifth wave of regional trade agreements led by mega regionals (Transatlantic Trade and
Investment Partnership, Trans-Pacific Partnership and the Regional Comprehensive
Economic Partnership) is currently ongoing.

Pyramid Structure of Trade

Foreign Trade Policy is three staged, with the WTO at the apex, regional agreements in
between and local policy at the base. In India, the Director General of Foreign Trade under
the Ministry of Commerce is empowered under the Foreign Trade Development Act, 1992 is
given the power to announce trade policy. Symmetry within these ensures the success of
trade policy.

Baldwin’s Analogy
Richard Baldwin compared the WTO system to be melting at the speed of a glacier while
RTAs were comparable to a wild fire. It is advisable to simultaneously develop the WTO as
also the RTA system.
9th March, 2018
Nature of India’s RTAs
India has the following Kind of RTAs:
1) Bilateral: India has bilateral RTAs with Sri Lanka, South Korea and Afghanistan, for
example.
2) Multilateral: India has multilateral RTAs with ASEAN and agreements like SAPTA and
SAFTA.
3) Framework Agreements: Examples of the same are India-Gulf Corporation Council RTA
and India-ASEAN Framework Agreement. For this reason, India is reluctant to bestow
MFN status on Pakistan.
4) Regional Trade Agreements: The classical definition of Regional Trade Agreements given
by Kruger pertains to agreements for trade liberalisation between the countries of the same
origin, as India has with Sri Lanka, Nepal and Myanmar, for example.
5) Preferential Trade Agreements: Afghanistan for example
6) Trade Treaty: India has such a treaty with Nepal, although being a mere hollow statement
providing for political resolution to any dispute.
7) Mega Regionals: India is a member of the Regional Comprehensive Economic Partnership
Agreement.
8) SEPA/SECA
9) Cross Regional Trade Agreement: Under such an agreement, countries of different
continents enter trade agreements, as has India with South Korea.
The Modi regime has entered into a single RTA since assuming power, and that too being a
Framework Agreement, way back in 2015. The India-EU Regional Trade Agreement, 2007 is
also stuck due to the bottlenecks in the automobile industry, pharmaceuticals industry and
government procurement. In contrast, India’s modal RTA is with Japan, providing wide
benefits and comprehensive coverage.

TRIPS
TRIPS Agreement
The WIPO in 1967, under the Stockholm Declaration is the chief agency for the protection of
intellectual property throughout the world. Intellectual property, according to the WIPO is
any “creation of human intellect” and hence, needs balancing between private rights and
social interest.
The TRIPS Preamble provides that IP rights are private rights. The WIPO has twenty-seven
treaties, of which TRIPS recognizes mere four under Article 2 (Paris, 1967-Industrial
Property; Bern, 1971-Lieterary and Artistic Works; Rome, 1961-Performers, Producer,
Phonograms and Broadcasters Rights and Washington, 1989-Intellectual Property in respect
of Integrated Circuits). Some scholars, on the contrary, cite Article 5 in order to claim that
TRIPS actually recognises all international conventions without the application of Articles 3
and 4 prescribing MFN and National Treatment.
Unlike the WIPO, the TRIPs imposes hard law to be applied within the borders of a territory
too. The Paris and Berne Convention together, often referred to as BIRPI, laid the seeds of
the WIPO.
TRIPS does not provide for any one form of exhaustion under Section 6.
India, like any other member automatically became a signatory to TRIPS upon signing the
Marrakech Agreement to join the World Trade Organisation.

 Current Status of WIPO: The WIPO became functional in 1971 and in 1974 became a
specialised agency of the UN.
 Comparison of TRIPS and WIPO:
A) WIPO obligations are soft law and hence difficult to enforce unlike violations of
TRIPS which is treated with sanction
B) Elaborate rules and procedures do not exist for WIPO
C) WIPO does not have a dispute settlement mechanism
D) Article 2(8) of the Stockholm Conference puts all IPR under the ambit of WIPO but
only eight subjects in IPR concern TRIPS

 The Case Super 301: An enactment in the United States threatening to impose sanctions
in case of infringement of US IPR, enacted in 1974. Such legislations are no longer allowed.
In an EU case, that enactment was struck down by the DSB, indicating the TRIPS’s
capacity for enforcement. Similarly, US Court exercising extra-territorial jurisdiction have
also withdrawn.
12th March, 2018
 Main Motive of IP Protection under TRIPS: As recognised by TRIPs,
encouragement of creativity and reward in terms of monetary benefits are considered
by scholars to be the essential cause of IPR. Article 21 of TRIPS excludes compulsory
licensing of all trademarks, otherwise all kinds of IPR could be compulsorily licensed.
IN this way TRIPS serves as a foreign subject in domestic law, there must be total
observance of the requirements under the TRIPS.

 TRIPS+: RTAs are forums where TRIPS+ provisions are made by a few countries in
the treaty. These rights are protecting further than the eight intended by the TRIPS.
Article 1 recognises this flexibility of TRIPS.

 Inter-Action with Competition Law: Section 3(5) of the Competition Act holds it to
be antithesis to IPR, a balancing is ensured by licensing and agreements, with
reasonable restrictions is under way.

 Objectives of TRIPS: Under Article 7 of TRIPS references have been made to

innovation and patent, “the protection and enforcement of intellectual property rights
should contribute to the promotion of technological innovation and to the transfer and
dissemination of technology, to the mutual advantage of producers and users of
technological knowledge and in a manner conducive to social and economic welfare
and to balance rights and obligation. Such a balance is further ratified under Article 36,
“Subject to the provisions of paragraph of Article 36, Members shall consider unlawful
the following acts if performed without the authorization of the right holder: importing,
selling or otherwise distributing for commercial purposes a protected layout design, an
integrated circuit in which a protected layout design is incorporated or an article
incorporating such an integrated circuit only in so dark as continues to contain an
unlawfully reproduced layout design.”
Read with the preamble, these provisions clearly indicate the following objectives of
TRIPS:
1. To provide effective and adequate means of protection for IPR
2. To reduce distortion and impediments to international trade in terms of IPR;
3. To apply the basic principles of GATT3;
4. To provide adequate standard (as prescribed in Part II of TRIPS)

3 MFN, National Treatment, Transparency, Security Exceptions

5. To provide effective means of enforcement- civil, criminal, administrative and border
remedies
6. To address disputes between governments by the application of the DSU, under Article
64. Article 23 of GATT mentions violation, non-violation and situation as complaints
under GATT. The 11th Ministerial Declaration in Argentina, 2017 clarified however
that the only complaints under TRIPS may be violation and non-violation because
situational complaints are not known and hence add ambiguity to international trade.
7. Regulation of counterfeiting in copyrights and trademarks, under Article 4. The
Agreement on Counterfeiting was proposed by the United States and its allies.
Negotiations concerned counterfeiting generic drugs, software and hardware but
developing countries refused to reconcile with such a change without any reference to
the TRIPS Council.
8. To declare IPR as private rights
9. To harmonize IPR systems prevalent over the world by providing minimum standards.
10. To achieve public policy objectives, namely developmental and for the transfer of
technology
11. To recognise the interests of developing countries and least developed countries in IPR,
to integrate them further into global trade;
12. To provide increased level of protection in order to quell tensions between countries;
13. To establish coherence with WIPO.
Due compensation must be given to the inventor/ artist whenever the state
appropriates his IP Rights. In Socialist Countries, the contrary happened and only an
“Inventor Certificate” for recognition was granted.

 IP Protected under TRIPS: The following subjects are considered by TRIPS:

I. Copyright and Related/Neighbouring Rights (protected for up to fifty years
after the death of the Author by TRIPS; India is TRIPS+ because it gives
sixty years)
II. Trademarks (not less than seven years under TRIPS, India gives 10)
III. GI
IV. Industrial Design (at least ten years under TRIPS, a further five years
allowed in India)
V. Patents
VI. Integrated Circuits (Under TRIPS, not less than ten years)
VII. Undisclosed Information (As contract provides)
VIII. Anti-Competitive Practices (No time limit)
These rights are the minimum standards of Intellectual Property protection, such as
some countries grant patents to software while others don’t, India for example does not
patent plant varieties but treats it separately.
In addition to eight such IPR, there is TRIPS “flexibility”, a country may advance other
IPRs, without discrimination.

 Basic Characteristics of TRIPS: These are:

I. Provides minimum standards
II. Lists IP rights required to be protected in domestic regimes
III. Enforcement Mechanism involving:
(1) Civil
(2) Criminal
(3) Administrative
 (4) Border
(5) Dispute Settlement Mechanism
IV. There are transitional provisions for developing countries
V. Dynamic Dimension of TRIPS: The “Dynamic Dimension of TRIPs” refers to the
four principles still left to debate:
A) Exhaustion
B) Public Health
C) Geographical Indicator
D) Counterfeiting of Goods
 13th March, 2018
Copyright
Under copyright, protection is accorded not to an idea but to its expression alone.
Copyright is the perceptible expression of an idea, fixed in a material or digital form.
Copyright is a bundle of exclusive rights, ie it comprises of the rights of paternity and
integrity. An author may assign some right while retaining some other. It is an
incorporeal right.
On the other hand, “Copyleft” is the practice of offering people the right to freely
distribute versions and copies with the stipulation that the same right be preserved after
some agreed time.
Page 3 is usually called the Copyright Page, bearing pertinent information about the
contents and price of the book.

 Protection of Copyrights under TRIPs: Under Articles 9 to 12 of the TRIPS read

with the preamble, the following may be copyrighted.
A) Original literary, musical, artistic or dramatic works
B) Sound Recordings
C) Films or Broadcasts
D) Typographical arrangements of published edition
E) Computer Programmes, Tables, Compilations and Data Base
F) Derivative works
G) Translations, Adaptations and Arrangement of Music
H) Optional (Legal and Administrative Works, Texts of Legislature, Works of
Applied Arts, Lectures, Addresses and other oral works, Works of folklore)
Exceptions to copyrights are idea, method of operation, procedures and mathematical
expressions as prescribed in Paragraph 2 of Article 9.

 Rights conferred by Copyrights

a) Reproduction
b) Communication to the Public
c) Transformation of the Protected Work

 Legal Framework for the Protection of Copyrights International: The following

treaties protect Copyrights, and are recognized in TRIPS:
a) Berne Convention on Literary Subjects, 1886
b) Universal Copyright Convention, 1952
c) Rome Convention on Performers and Broadcasts, 1961
d) Phonograms Convention, 1971
The WTO system replaced the WCT, 1996 and WPPR, 1996
 14th March, 2013
 Transfer of Copyrights: Transfer of Copyrights may take place either be assignment
or licensing. Under the former, there is severance of ownership of the copyright holder
while the latter only permits conditional use. Prospective work too may be transferred.
 Mode of Assignment: The mode of assignment shall always be in writing, singed
by the assignor, with a fixed duration (where not mentioned, five years), territorial
extent (if not specified, then only in the country of origin), royalty.
 Lapse of Assignment: An assignment lapses for a failure to be used for a year
 Relinquishing Copyright: All rights can be relinquished, but notice to the
Registrar of the Copyright Board is required. The same takes effect on the date such
notice is sent.

15th March, 2013

 Domain Name

 Tariff Wars: The need to revive the Trans Pacific Treaty has been stressed by Simon
Lester for resolving the tariff war in order to prevent tension. When tariff walls are
raised, domestic industry is protected by limited exports. Political turmoil and war
often follows, as witnessed in 1939 before the second World War. Article 21 of the
GATT Agreement mentions that members may consider taking trade actions in the
interest of their national security, as used by President Trump to justify raising tariffs
on steel and aluminium. However, this provision has never been employed.

 International Trade Inter-Dependency: John H Jackson refutes the notion that

Austenian sovereignty still exists, because with Ricardo’s theory that each country has
some competitive advantage, countries are now increasingly inter dependant. The WTO
furthered economic integration and poverty alleviation in major countries, like Brazil,
India and China.

 Trade and Sport: Harvard scholars have propounded that due to an increase in
prosperity from more trade results in better performance in world sport competitions
because better infrastructure is constructed with more wealth, as has been seen in India.

Notes for 19th March, on Page 4-5

20th March, 2018

Geographical Indication
 Rationale for Protection: GI helps serve the following:
i) Recognition of culture, traditional knowledge and long-lasting traditions held by
communities
ii) Incentivises communities with traditional knowledge
iii) Ensure overall prosperity to the community, via shared royalties for community
members
iv) Grants adequate protection to consumers against appropriation/ transfer to others
 Nature of Goods protected as GI: The following kinds of goods are protected under
GI:
i) Manufactured Goods
ii) Agricultural Goods
iii) Handicraft
 iv) Natural Goods
v) Food stuffs
There are two types of GI, general and special (for wines, beers and spirits), with the
latter having received special protection due to the lobbying efforts of European
communities.
 Have Communities benefited from GI? Some GI, such as Darjeeling Tea or Benarasi
Saris have been an outcome of efforts and labour of communities over long. However,
the GI has not helped the actual artisan, as intended and only benefited the owners of
the GI. A study has found that the only GI which have benefited communities are Bidar
utensils in Karnataka and Kochampali silk in Andhra Pradesh, mostly since artisans
here have direct market access. Similarly, GI has led to such inflation in prices, that
consumers also desist from making purchases.
 Spot GIs: The Ministry of Commerce aids communities register their GI. However,
mere registration is inadequate without advertising and marketing.

Utility Models
 Meaning: Utility Models, also known as “Petty Patents”, are such improvements
devised from little invention, made on mechanical devices. The term of protection
herein is three to five years. The main purpose is the promotion of SMEs. Countries
that recognize utility models are Spain, Argentina, Brazil and China.
 Whether recognized by TRIPS? Not recognised by the TRIPS Agreement. Article 27
concerning the subject matter of patentability mentions a sui generis method of
patenting, allowing countries to have their own means and mechanisms for the
protection of patents. The Paris convention, 1967 however recognized this concept,
leading overenthusiastic scholars to opine that so does TRIPS, when in fact the latter
has several exceptions from the former.
 The Machappan Committee found that the scheme of recognizing utility models would
be advantageous to SMEs.4
 While utility models are well serving in the short term, in the long term, they impede
the development of patents and high technology R&D.

Breeders Rights
Article 27 confers a similar flexibility on the patenting of seeds. The same is
recognized as under the International Union for the Protection of New Varieties of
Plants, an acronym for the French term of the same. It was established in 1961 and
there have been four versions, of which India accepts the third version, 1978 rather
than the 1972 version, in vogue in other parts of the country or the 2004 version,
which is the most recent.
 Why has the same been given to farmers rather than patent rights to companies
over seeds in India, unlike the United States?
1) The need for farmers production
2) Article 27 grants freedom for granting the protection of patents
3) Food Security

4Position of SMEs in the WTO System: In India, SMEs may have only uphill fifty members,
whereas in the EU, standard practice is for the number to be ten. The Argentina Ministerial
Conference has stressed hence that the WTO system include SMEs under the ambit of its
regulation, in addition to the trade in energy (EU Energy Charter, 1981 exists in the EU but
not under the WTO) and forest products.
 4) Incentivising agricultural labour for the development of indigenous seeds from the
transfer of traditional knowledge

21st March, 2018

Priority Rights
Priority rights apply when multiple applications for registration of patents, trademarks
and Industrial Designs5 are made in different jurisdictions and are of the following
kinds, each giving the first applicant priority over its registration in such territory:
a) Convention Priority Rights: Such priority rights as conferred under Article 4 of the
Paris Convention. This is the most widely used type of priority rights.
b) Priority rights under Multilateral Arrangements: Such priority rights recognized by
multilateral treaties, recognized under Article 8(1) of the Patent Cooperation Treaty
and Articles 87 and 89 of the European Patent Convention.
c) Internal Priority Rights: Internal Priority Rights refer to the right of the first
applicant for registration to receive priority for the registration of the same patent
as any other applicants. The same is not recognized by the Paris Convention, despite
its practice in some jurisdictions.
d) Bilateral Priority Rights: Such priority rights devised under RTAs and FTAs, as in
the US-Jordan Trade Agreement and the India-Singapore CEPA6, for example.
The Register for the same is the International Search Agency under the WIPO.

22nd March, 2018

WIPO-IPR Agreement, 1995
WIPO regulates IPR predominantly since 1972 and has been a UN Agency since 1974
whereas WTO only covers eight IPR, including new IPR. TRIPS regulates domestic IPR
provisions rather than rendering the trade in IPR free, hence “no country can grow on the
basis of stealing”.
Legislations after India became a signatory of TRIPS: India amended the Patents Act in
2000, the Copyrights Act in 2012 and introduced enactments of PVP, Trademarks Act, 1999,
GI Act, Biological Diversity Act

Non-Tariffs Barriers

5 For trademarks and ID, the priority period is a half a year and twice that for patents.
6 The other CEPAs are with South Korea, Japan. Unlike mega-regionals, the CEPA covers
further subject matters but does not include WTO+ measures.
Article 24/11 concerns the trade between India and Pakistan, given the peculiarities of the
independence of those countries. There is a positive list of subjects on which trade carries
on but a larger negative list that concerns prohibited subjects.