🌍 WTO and Agriculture — From GATT to Global Trade Rules

How Global Trade Rules Affect Indian Farmers

When India exports basmati rice to Iran or imports palm oil from Indonesia, the rules governing these trades are set by the World Trade Organization (WTO). Whether it is the MSP a wheat farmer in Punjab receives, the pesticide residue limit on tea exported from Darjeeling, or the patent on a new Bt cotton seed variety — WTO agreements influence all of it. Understanding the journey from GATT to WTO is essential for competitive exams.

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From Bretton Woods to GATT

Event	Year	Key Detail
Bretton Woods Conference	1944	Held in New Hampshire, USA; 44 allied nations recognized the need for trade liberalization; also established IMF and World Bank
GATT Established	1947	At Geneva, Switzerland; a set of rules and forum for multilateral trade negotiations
India's Status	1947	Founding member of GATT — among the original 23 contracting parties
Negotiation Rounds	1947-1994	Progressively expanded from tariff reduction to non-tariff barriers, agriculture, services, and intellectual property

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Main Features of GATT

Feature	Detail	Agricultural Impact
Agricultural tariff reduction	30% reduction for all agricultural commodities from 1994	Lower import duties = easier entry for foreign farm products
Input subsidy reduction	Agricultural input subsidies reduced by 30%	Countries had to cut fertilizer, seed, and irrigation subsidies
Export subsidy reduction	Export subsidies reduced by 36%; volume of subsidized exports by 21%	Aimed at removing unfair advantages in global agricultural markets
Trade liberalization gains	Expected 2-10% rise in agri commodity prices; potential gain of US$ 200 billion globally	More efficient resource allocation benefits all participating countries
India's PDS protection	India can offer export subsidies without altering PDS and food security policies	Critical provision allowing India to maintain food security programmes
TRIPS	Seeds and plant varieties must be protected by patents or an effective sui generis system	Brought intellectual property into the agricultural domain
Removal of QRs	All quantitative restrictions, export duties, and minimum export prices to be removed	Opened markets but exposed domestic producers to global competition
TRIMS	No restrictions on quantum of foreign investment	Foreign companies could invest freely in agriculture and agribusiness

Key Criticism: GATT reforms were more beneficial to developed countries because they export high-value manufactured goods, while developing countries often export raw agricultural commodities — creating an uneven distribution of gains.