| INTRODUCTION: | | | | and Tariffs), the international organization that has |
| India is a democratic and political country with a well | | | | sought for four decades to promote freer world |
| streamlined administrative structure, and an already | | | | trade. If at all it sparks some emotion it tends to be |
| existing mixed economy, with a rich experience of | | | | in politically minded souls who see the Uruguay Round |
| private sector operations. Also available in India is a | | | | of GATT as a forum where rich countries try to |
| vast stock of skilled manpower and entrepreneurial | | | | force unpleasant things on the poor. |
| class, a reasonably good basic infrastructure and a | | | | Economic Growth |
| good track record of fulfilling past international | | | | But subsequently economic growth skyrocketed. Prof |
| obligations. | | | | Agnus Madison estimated that in 16 developed |
| The present bout of economic reforms in India | | | | countries, income per head went up 730 percent and |
| started in the eighties, mark both a continuity and a | | | | labour productivity by 1200 percent between 1970 to |
| break with India's post-independence development | | | | 1980. There were many reasons for this of which |
| strategy. India's strategy for development was | | | | one stands out - their exports increased by 96,500 |
| largely influenced by :o The cynicism of policy makers | | | | percent. That is a mind boggling figure, and puts in |
| regarding any possible help from the rest of the | | | | perspective the importance of trade in improving |
| world by way of investments, transfer of technology | | | | living standards. Countries have increasingly moved |
| and trade ando Reservation regarding ability of | | | | away from self-sufficiency to inter-dependence and |
| market forces to bring about of their own, an | | | | been rewarded with prosperity unthinkable in |
| optimum allocation of resources, thus balancing the | | | | preceding millennia. |
| country's two main objectives - 'growth' & | | | | Grave Disappointment in Some Areas: |
| 'equity'.o The External world is not necessarily an | | | | The establishment of the WTO and the entry into |
| unfriendly one, especially after the present day | | | | force of the agreements under its auspices have |
| technological changes and changes in the political - | | | | visited considerable iniquities upon the developing |
| economic relations between nations.o The domestic | | | | countries . Rife with imbalances and deficiencies, the |
| economy has now reached a threshold where for | | | | WTO agreements and the manner of their |
| better utilization of resources the benefits of the | | | | implementation have hardly benefited the Third World |
| market forces can be harnessed, by proper market | | | | Nations but have instead littered their development |
| friendly macro and micro economic policies helping | | | | path with imposing obstacles. |
| both in higher growth and more equity. | | | | Amid this panorama of inequity, the major developed |
| Since 1997, and especially after 1985-86 the | | | | countries are pushing for the launch of fresh |
| Government has embarked upon a series of | | | | negotiations that could result in new WTO rules |
| economic reforms leading towards liberalization and | | | | which add to the already onerous obligations of the |
| deregulation. The world trade in commercial services | | | | developing countries and further undermine their |
| amounts to US$ 1440 billion in the year 2001 which is | | | | developments prospects. This paper calls on |
| 23% of goods trade. In India it accounted to 49% of | | | | developing countries to resist these pressures |
| GDP in 2000-01 with Agriculture 27% and | | | | wholeheartedly and insist instead that the myriad |
| Manufacturing 23% of GDP. | | | | asymmetries in the existing agreements be remedied. |
| Since Feb 2000, negotiations are on the go in WTO | | | | This in turn, demands that they shed their previous |
| to expand & 'fine tune' the GATS. The | | | | passive stance and forge coordinated and |
| negotiations have aroused concerns worldwide. A | | | | consolidated positions within the WTO, for only with |
| growing number of local governments, trade unions, | | | | proactive cooperation the countries of the South can |
| NGO's are criticizing GATS and call for a halt on the | | | | advance their interests in the multi lateral trade. |
| negotiations. | | | | Ongoing Process of Constraining Market Access |
| GATS: | | | | There is sudden awareness about GATS especially |
| The General Agreement on Trade in Services came | | | | after the recent collapse of world talks in Cancun and |
| into existence as a result of the Uruguay Round of | | | | it has emerged into a very big public crisis. But behind |
| negotiations and entered into force on 1st January | | | | the headline- hitting turmoil trade negotiators are |
| 1995 with the establishment of WTO. The aim of | | | | quietly and determinedly getting on with negotiating |
| GATS is to gradually remove all barriers of trade in | | | | what rich countries and big business see as the |
| services. The agreement covers services as diverse | | | | biggest world trade prize of all - the GATS. |
| as banking, education, healthcare, tourism or | | | | The current negotiations aimed at massively |
| transport. The main idea is to open up these services | | | | expanding the General Agreement on Trade in |
| to international competition, allowing for profits. The | | | | Services have attracted growing concern. Around the |
| multi lateral legal instruments resulting from the | | | | world grassroots movements, local governments, |
| Uruguay Round were treated as single undertaking . | | | | trade unions and a growing number of developing |
| India also signed all the agreements under the single | | | | country governments have raised objections to |
| undertaking rule and GATS is a part of this whole | | | | these negotiations. The objections are based on: |
| package. | | | | GATS rules will have an universal access to basic |
| Prior to the Uruguay Round, services were | | | | services such as education, healthcare and water |
| considered to offer less potential for trade expansion | | | | which are non-profit institutions and this will affect |
| than goods, thanks to existence of technical, | | | | the poor |
| institutional and regulatory barriers. However, the | | | | Conflicts between GATS approach and the essential |
| development of new transmission technologies | | | | right of current and future governments to regulate |
| facilitating the supply of services (e.g. satellite | | | | companies in areas such as tourism, retail, |
| communication, electronic banking, tele - education), | | | | telecommunications and broadcasting. And once |
| the opening of monopolies in many countries and | | | | GATS rules are agreed for a particular service they |
| gradual liberalization of hitherto regulated sectors like | | | | are effectively irreversible. |
| transport, banking and insurance combined with | | | | Failure to undertake a comprehensive assessment of |
| changes in consumer preferences, enhanced the | | | | the impact of GATSexpansion before the talks |
| "tradeability" of services.These developments | | | | continue. |
| increased international services flows and created a | | | | Negotiations shrouded in secrecy |
| similar need for multilateral disciplines- as in the area | | | | It is a threat to democracy |
| of goods. | | | | It is a threat to public services |
| The GATS covers all internationally traded services | | | | It is being driven by Multinational corporations |
| with two exceptions : services provide to the public | | | | It is irreversible |
| in the exercise of governmental authority and in the | | | | It restricts the government regulations |
| Air transport sector, traffic rights and all services | | | | Aims at privatization of the companies |
| directly related to the exercise of traffic rights. It | | | | Recommendations: |
| recognizes the right of Members to regulate the | | | | Multinational norms need to be established. |
| supply of services in pursuit of their own national | | | | A mechanism to attend to specific problems being |
| policy objectives. | | | | faced by developing countries |
| EXPERIENCE OF DEVELOPING COUNTRIES | | | | To ensure complete equity and fairness in recognition |
| Most people's eyes glaze with boredom at the | | | | matters. |
| mention of GATT ( General Agreement on Trade | | | | |