HIDAYATULLAH NATIONAL LAW UNIVERSITY

Research project: Research Methodology

“IMPACT OF WTO ON STATE SOVEREIGNITY-A CRITICAL

ANALYSIS”

SUBMITTED TO:
Dr. Kaumudhi Challa
Assistant Professor

SUBMITTED BY:
DEVESH BAJPAI
LL.M. 1st Trimester
2019-20
ROLL NO.-17
 ACKNOWLEDGMENT

At the outset, I would like to express my heartfelt gratitude and thank my teacher,
Dr.Kaumudhi Challa for putting her trust in me and allowing me a project topic such as
this and for having the faith in me to deliver. Thank you for an opportunity to help me grow.
My gratitude also goes out to the staff and administration of HNLU for the infrastructure in
the form of our library and IT Lab that was a source of great help for the completion of this
project.

Devesh Bajpai

I
 DECLARATION

I, Devesh bajpai hereby declare that, the project work entitled, ‘Imapact of WTO on state
sovereignity-A critical analysis’ submitted to H.N.L.U., Raipur is record of an original work
done by me under the able guidance of Dr. Kaumudhi Challa, Assistant Professor,
H.N.L.U., Raipur.

Devesh bajpai
Roll No.17
Trimester I
25/10/2019

II
 Certificate

This is to certify that the research project “Imapact of WTO on state sovereignity-A
critical analysis” submitted by Devesh bajpai is a bonafide work which has been carried
under my supervision and has been submitted for award of any other degree.

Date: Dr. Kaumudhi Challa

Assistant Professor

III
 List of Abbreviations
WTO - World Trade Organization
UN/UNO - United Nation Organization
UNSC - United Nation Security Council
UNGS - United Nation General Assembly
MNC - Multinational Corporation
ITO - International Trade Organization
GATT - General Agreement on Trade and Tariff
USA - United States of America
UK - United Kingdom
OECD - Organization for Economic Cooperation and Development
EU/EC - European Union European Commission World War
NATO - North Atlantic Treaty Organization
ICJ - International Court Of Justice
IMF - International Monetary Fund
WB - World Bank
USSR - Union Of Soviet States Of Russia
IBRD - International Bank Of Reconstruction And Development
IPR - Intellectual Property Rights
NAFTA - North America Free Trade Agreement
AOA - Agreement on Agriculture
SPS - Agreement on Sanitary and Phytosanitary Measures
TBT - Agreement on Technical Barriers to Trade
TRIM - Agreement on Trade Related Investment Measures
GATS - General Agreement on Trade in Services
TRIPS - Agreement on Trade Related Aspects of Intellectual Property Rights
DSU - Dispute Settlement Unit
TPRM - Agreement on Trade Policy Review Mechanism
MEA - Ministry of External Affairs
OPEC - Organization of Petroleum Exporting Countries
VCLT - Vienna Convention on the Law of Treaties

IV
 TABLE of CASES

 Australian High court in Minister for Immigration and Ethnic Assets

versus TEOH, (1995) 183 CLR 273.
 J H Rayner Limited versus Department of Trade and Industry, (1990) 2 EC
418.
 Solomon versus Commissioner of Customs and Excise, (1967) 2 Q.B. 116.
 CCSU versus Minister of Civil Service, (1985) AC 374.
 Melon versus Metropolitan Police Commissioner, (1979) 1 C.H. 344.
 Contempt of Court Case- Attorney General versus BBC, 1981 EC 303.
 C.H.E.A.L.L versus Association of Professional Executive Clerical and
Computer Staff, (1983) 2 AC 180.
 Ram Jethmalani versus Union of India, (2011) 8 SCC 1.
 Jeeja Ghosh versus Union of India, (2016) 7 SCC 761.
 Jolly George workers versus Bank of Cochin, AIR 1980 SC 470.
 State of West Bengal versus Kesoram Industries, 2004 (10) SCC 2015.
 G Sundarrajan versus Union of India, (2013) 6 SCC 620.
 Vellore Citizens Welfare Forum versus Union of India, AIR 1996 SC 2715:
(1996) 5 SCC 647.
 Lloyds Chills Offshore versus Union of India, AIR 1930 Cal 22, 121 Ind Cas
625.

 National Legal Services Authority versus Union of India, (AIR 2014

SC 1863).
 TN Govardhanan versus Union of India, [1986] 160 ITR 318 ; AIR 1986 SC
1668.
 W. E. S. Ireland versus. Director General of Civil Aviation, WP(C) 871/2015
& 747/2015.
 Keshavnanda Bharti versus State of Kerala, (1973) 4 SCC 225.

V
TABLE OF CONTENT
ACKNOWLEDGEMENT I
DECLARATION II
CERTIFICATE III
LIST OF ABBREVIATION IV
V
TABLE OF CASES
CHAPTER-1
1.1. INTRODUCTION AND RESEARCH METHODOLOGY
TITLE
RESEARCH QUESTIONS
RATIONALE OF STUDY
RESEARCH OBJECTIVE 1-11
REVIEW OF LITERATURE
HYPOTHESIS
NATURE OF STUDY
CHAPTERIZATION
TIME LIMIT
LIMITATIONS
CHAPTER-2
EVOLUTION OF CONCEPTS OF STATE SOVEREIGNTY AND WTO
2.1.EMERGENCE OF INDEPENDENT STATE
2.2. CONCEPT OF SOVEREIGNTY 12-19
2.3. INTERNAL AND EXTERNAL SOVEREIGNTY
2.4. WTO IN 2019
2.5.GLOBALIZATION THROUGH WTO AND ITS ADVERSE
EFFECTS ON INDIAN RURAL POPULATION
CHAPTER-3
RELATION AND CONFLICT BETWEEN THE INDIAN CONSTITUTION
AND AGREEMENT ESTABLISHING THE WTO
3.1. INDIA AS A SOVEREIGN STATE THROUGH ITS
SOVEREIGNTY
3.2. BASIC STRUCTURE OF THE CONSTITUTION
20-23
3.3.THE MULTILATERAL MARRAKESH AGREEMENT
ESTABLISH THE WTO
3.4. OTHER AGREEMENTS OF WTO:
3.4.1.GATT
3.4.2 GATS
3.4.3 TRIPS
CHAPTER-4
EXERCISE OF EXECUTIVE POWER IN CONCLUSION AND
IMPLEMENTATION OF WTO AGREEMENTS 24-27

4.1. TREATY MAKING POWER UNDER CONSTITUTION

4.2. POLICY MAKING AND IMPLEMENTATION OF TREATY

CHAPTER-5
EXERCISE OF LEGISLATIVE POWER OF PARLIAMENT IN CONTEXT TO
VI
WTO AGREEMENT 28-31
5.1. CONCLUSION OF TREATY AND RATIFICATION
5.2. LAW MAKING ON THE SUBJECT-MATTER
CHAPTER-6
APPROACH OF INDIAN JUDICIARY TO HARMONIZE DOMESTIC LAWS
AND INTERNATIONAL LAWS ON TRADE AGREEMENTS OF WTO
6.1.POWERS OF SUPREME COURT OF INDIA 32-36
6.2. QUESTIONS TO BE CONCERNED BY THE SUPREME COURT
6.3. ENFORCEMENT OF INTERNATIONAL LAWS
6.4. VINEANNA CONVENTION AND PACTA SUN SURVENDA
CHAPTER-7
CONCLUSIONS AND RECOMMENDATION 37-41

BIBLIOGRAPHY 42

VII
 CHAPTER 1- INTRODUCTION AND RESEARCH METHODOLOGY
1.1.Introduction

The primary objective of this particular research paper is to provide a deep knowledge into
and on the subject matter of understanding the relationships and conflicts between the
“independent national governments”1and “transnational or multinational organizations”2
(corporations) in the context that how the later has impact and influence on the “sovereignty,
independence and control”3 of the former.

It has been argued through this paper that the present existing literatures and scenarios
have fallen short of predicting and estimating that “globalization especially through the
World Trade Organization has critically compromised”4 or in other words diluted the
independence of the states specially in the context of “Republic of India”, our country
which is on the path of “economic growth and development today becoming the fastest
growing economy”5,6 and “sixth largest economy on the globe”7.

The paper has utilized the notions and concepts of “independence, sovereignty and
autonomy”8 through our Constitution repeatedly in the literature as changing pattern can be
identified from “1947”9 to the present year of 2019. In the context of WTO, we are forced to
examine that India as an independent state is losing both “internal and external sovereignty”
in the age of global and international trade through WTO. “The Constitution of India” serves
as the grunt norm for the state and any law in violation to the Constitution is impliedly
invalid10. The Constitution through its preamble declares India as a sovereign state and
through its Articles provides for “express and implied limitations” on the conclusion and
enforcement of international trade arrangements.

1
Adopted from the Constitution of India, 1949.
2
In context to World Trade Organization, established in 1994.
3
Sharma, B.M. and Bareth Roop Singh (Ed.), Good Governance Globalization and Civil Society, Rawat
Publications, Jaipur, 2004, p. 10.
4
Bhaduri, A., Nationalism and Economic Policy in the Era of Globalization in Nyyar Deepak, Governing
Globalization, Issues and Institutions, (ed) Oxford University Press, 2006, p. 22.
5
https://economictimes.indiatimes.com/news/economy/indicators/india-remains-fastest-growing- economy-
ahead-of-china-despite-up/downs/Articleshow/67334194.cms.
6
World Bank report 2015, 2016, 2017, 2018, Fitch Rating 2018, NITI Aayog Report 2018
7
The World Banl Global Watch report, 2018.
8
The Preamble to the Constitution of India.
9
Year when India gained independence from the British Crown into an independent State.
10
Article 12 and 13 of The Constitution of India, 1949
1
The ties of India‟s Constitution with international law date back to the pre-independence
days. Even during the British rule, India was the separate member of the League of Nations.
It is also the founding-member of the United Nations & WTO. In this paper, I have sketched
general scheme of the Constitution with reference to international law and further proceed to
analyze certain important provisions and aspects relating to the conflict between “the Indian
Constitution and the Marrakesh Agreement”. This paper will only focus on the various
WTO agreements and The Indian Constitution. The relation and conflicts between the two
laws will be restricted to the concept of state sovereignty through the Constitution and the
requirements of concluding and implementing the trade arrangements of WTO. The research
will not include any other international instrument or treaties other than that of WTO or any
domestic/special/general legislations of the Indian legal system.

The power blocks of the globe presently are the “state superpowers” 11 like the United
States of America, United Kingdom, China, etc., the transnational organizations like the
“World Trade Organization”12,“United Nation13,“Organization for Economic Cooperation
and Development”, etc. all to be noted established after the Second World War in
leadership of the United States of America, or the multinational corporations (MNC) like
“Apple”14, Google, Toyota, etc. all having its principle place of business in super
developed nations, “today corporate influential power and reach without any political,
geographical or territorial borders and limitations”15. Death threat are posed to a country
like India by the superpowers like U.S., is both externally and internally hampering the
“Constitutional objectives of our nation”16. The most recent example of “China” 17 in terror
combat against Pakistan in Pulwama terror attack or “oil sanctions”18 made by the U.S.A.
against India on Iran oil making it a necessity for India through “Indian Oil Corporation
to consider a deal of 100 billion $ (USD) to buy oil from U.S.A.”19.

11
As defined by International Institute of Strategic Studies.
12
Established by the Marrakesh Agreement in 1994 as successor of GATT 1947.
13
Established by the UN Charted on 26th June, 1945 as successor of League of Nations.
14 st
1 trillion dollar company by the Forbes, 2018.
15
Speech of Singapore‟s Deputy Prime Minister Lee Hsien Loong to policy makers in Washington DC in May
1998.
16
The Preamble to an act sets out the main objectives which the legislation is intended to achieve
17
Being a permanent and veto power member of United Nations Security Council.
18
https://www.worldoil.com/news/2018/12/19/india-circumventing-us-oil-sanctions-on-iran.
19
https://www.reuters.com/Article/us-india-ioc-usa/indian-oil-signs-first-annual-deal-to-buy-up-to-3- million-
tons-u-s-oil-idUSKCN1Q70BU
2
 The formation of World Trade Organization involve issues regarding violation of area
of influence on independent nations and in a formal sense on the “sovereignty” 20 of
the decision and policy making aspect of the Indian state. For example India cannot
back out from the Indus Water treaty entered in 1960 with Pakistan to make our
“neighboring state compensate for its dreadful deeds of sponsoring and assisting
terrorism as the treaty is backed by the World Bank” 21. On the other hand U.S.A. has
globally declared War against Afghanistan for its own revenge “killing nearly 2800
civilians in the armed conflict only in 2018.”22

This paper tends to argue that the power blocks have taken advantage of the process of the
establishment of the World Trade Organization “to increase their strength, income,
revenue, influence, authority and control over the independent sovereign nations across the
globe as such the arrangement was laid down by such “power blocks after the World War
II to “fulfill their thirst and greed of resources and wealth”23, for example the US and the
UK”24. It is also very important to mention that the reason of both the World Wars was
“over exploitation of resources”25,26 from nations whose struggle and fight for
independence led to creation of the independent states known as Third World Nations 27 and
India is no exception to this struggle of freedom.

TITLE:

“Impact of WTO on state sovereignty: A critical analysis”

20
The concept of external independence of the Indian State through the Preamble of the Constitution of India.
21
https://thewire.in/diplomacy/pulwama-unsc-statement-india-us-china.
22
https://edition.cnn.com/2018/10/10/asia/afghanistan-airstrikes-civilian-deaths-un-report- intl/index.html
23
Sikdar Soumyen, Contemporary Issues in Globalization, An Introduction to Theory and Policy in India,
Oxford University Press, 2002 pp 1-2..
24
Dr. Shashi Tharoor, Member of Parliament, LokSabha,
https://www.independent.co.uk/news/uk/home-news/dr-shashi-tharoor-tells-the-oxford-union-why-britain-owes-
reparations-for-colonising-india-in-viral-10407997.html
25
FCPS HS Social Studies, 2014.
26
Geography and History – Bilingual Studies – IES Parque de Lisboa, Alcorcón (Madrid).
27
The term Third World was originally coined in times of the Cold War to distinguish those nations that are
neither aligned with the West (NATO) nor with the East, the Communist bloc. Today the term
3
REASEARH QUESTIONS:

1. Whether the Marrakesh Agreement of 1994 overshadows the Indian Constitutional

limitations on international arrangements of WTO?
2. Whether the International Trade Treaties concluding (making) power subsists with
the Union Government of India (Union Executive) or with the Parliament of India
(Union Legislative)?
3. What is the jurisprudence & objective behind Article 253 of the Indian Constitution
and its impact on Article 73 of the Constitution?

RATIONALE OF STUDY:

The Constitution India serves as the grunt norm for the state and any law in violation to the
Constitution is impliedly invalid. The Constitution through its preamble declares India as a
sovereign state and through its Article provide for express and implied limitations on the
conclusion and enforcement of international trade arrangements. The ties of India’s
Constitution with international law date back to the pre-independence days. Even during the
British rule, India was the separate member of the League of Nations. It is also the founding-
member of the United Nations& WTO. In this paper, I have sketched general scheme of the
Constitution with reference to international law and further proceed to analyze certain
important provisions and aspects relating to the conflict between the Indian Constitution and
the Marrakesh Agreement.

RESEARCH OBJECTIVE:

1. To determine the diminishing status of Indian State external and internal sovereignty
in the globalized trade world.
2. To determine the Constitutional requirements for (a) conclusion of treaty & (b)
implementation of treaty.
3. To determine the role of domestic courts of India and their approach to harmonize
municipal laws with international laws.

4
REVIEW OF LITERATURE

Articles:

1. Effects of Globalization on Sovereignty of States, Elizabeth A. OJI (Ph.D.) and

M.V.C Ozioko , Lecturers, Faculty of Law, Nnamdi Azikiwe University, Awka,
Anambra State.

The interrelationships of markets, finance, goods and services, and the networks created by
transnational corporations are the most important manifestations of economic globalization.
Though the capitalist world-system has been international in essence for centuries, the extent
and degree of trade and investment globalization has increased greatly in recent decades.
Economic globalization has been accelerated by what information technology has done to
the movement of money. It is commonly claimed that the market’s ability to shift money
from one part of the globe to another by the push of a button has changed the rules of policy-
making, putting economic decisions much more at the mercy of market forces than before.

2. Globalization and Its Impact on State Sovereignty, Dr. Inakshi Chaturvedi.

The state’s role is changing as a result of globalization. According to them, there is the
possibility of states adapting themselves to the transformations in international society, in
the form of ‘pooled sovereignty’ – the idea that states that would be weak and ineffective
acting independently could acquire greater influence by working together with other states
through the vehicle of international or regional institutions. Others believe that globalization
is itself driven by the state. States are themselves the authors of globalization by promoting
and shaping the nature and pace of globalization. Trade agreements and regionalization are
instances of this. Political elites in different countries often use globalization as an
ideological device to make the move towards market reforms appear inevitable and
irresistible. States are now more concerned about their role as actors in global markets to
protect national economic well-being and are entrepreneurial.

3. Julian G. Ku and John Yoo,Globalization and Sovereignty, 31Berkeley J. Int'l

L.210 (2013) Available at:
https://scholarlycommons.law.hofstra.edu/faculty_scholarship/574.

5
Globalization represents the reality that we live in a time when the walls of sovereignty are
no protection against the movements of capital, labor, information and ideas-nor can they
provide effective protection against harm and damage.'The typical account points to at least
three ways that globalization has affected sovereignty. First, the rise of international trade
and capital markets has interfered with the ability of nation-states to control their domestic
economies. Second, nation-states have responded by delegating authority to international
organizations. Third, a "new" international law, generated in part by these organizations,
has placed limitations on the independent conduct of domestic policies.

4. ‘Globalization and Sovereignty: Why do States Abandon their Sovereign

published in Age of Globalization, Num. 1, 2008, pp. 22–32.

The process of globalization undoubtedly contributes to the change and reduction of the
scope of state sovereign powers. The list of threats to state sovereignty often includes global
financial flows, multinational corporations, global media empires, and the Internet etc. At
the same time (note that this point is debated surprisingly little and occasionally), since the
end of World War II, increasingly more states have been willingly and consciously limiting
their sovereign rights. And what is extremely important, many countries quite often give
away some of their sovereign powers voluntarily. In the article, it is argued that the factor of
voluntariness in reducing one's own authority is, no doubt, the most important in
understanding the future of the state.

5. International Morality Author(s): L. S. Woolf Source: International Journal of

Ethics, Vol. 26, No. 1 (Oct., 1915), pp. 11-22 Published by: The University of
Chicago Press Stable URL: https://www.jstor.org/stable/2376732 Accessed: 07-
11-2018 05:08 UTC.

It is not therefore surprising that in practice international morality so rarely determines

foreign policy. What does determine it is diplomatic morality. The result is that the motive
of a state's action is frequently not even its own interests but the interests of particular
persons. That is after all what is meant by the statement that the actions of European powers
in the undeveloped quarters of the globe are so often influenced "by financial and
commercial interests."

6
 6. NATIONAL COMMISSION TO REVIEW THE WORKING OF THE
CONSTITUTION A Consultation Paper on TREATY - MAKING
POWER UNDER OUR CONSTITUTION, Shri P.M. Bakshi, Former Member,
Law Commission of India.

Entering into treaties and agreements with foreign powers is one of the attributes of State
sovereignty. No State can insulate itself from the rest of the world whether it be in the
matter of foreign relations, trade, environment, communications, ecology or finance. This is
truer since the end of the World War II. The advent of globalization and the enormous
advances made in communication and information technology have rendered independent
States inter-dependent. Every State has entered into and is entering into treaties – be it
multi-lateral or bilateral – which have a serious impact upon the economy and the social and
political life of its society. In spite of the fundamental importance of the treaty-making
power, it has unfortunately received very little attention in our country, though in many
other countries, good amount of research and debate has gone into it. We in India cannot
afford to ignore this subject any longer, particularly because of the experience of W.T.O.
Treaties signed by our Government without consulting or without taking into confidence
either the Parliament or the public or, for that matter, groups and institutions likely to be
affected adversely thereby.

HYPOTHESIS

India as a third world nation loses its both internal and external sovereignty in the global
world of free trade and liberal economy. Today economic factor plays a more important and
effective role than military or politics. Thus the developing nations like India lose on
grounds of economic, politics and military influence and presence.

Nature of study

The nature of research adopted is doctrinal involving examination of impact of ratification

of international trade treaties on the external and internal sovereignty of India and incidental

7
cases having effects on the organs of the Indian Government (Executive, Legislative and
Judiciary) as well as opting analytical methodology in order to arrive at a complete
understanding of the concerned topic.
The research methodology adopted for this paper requires gathering significant resources
mostly from the secondary data which includes journals, articles, commentaries, textbooks,
reference books, internet sources, e-books. Citation method used is Bluebook 20th Edition.
Further, the research methodology is adopted because the aim of this dissertation is to
analyze the existing procedure on ratification of international trade treaty and to examine the
efficiency of such procedures and laws in implementation and execution of such treaties and
the related challenges incidental to it. In light of this, the Dissertation will use the deductive
method of research so as to reach a sum up result by concluding the general findings.
The researcher has gathered materials from various sources i.e. primary as well as secondary
sources available at the HNLU Library and HNLU online e-resources database. For this
mentioned reason, the Researcher will analyze the scholarly articles, international
instruments and conventions, Constitution of India, legislative provisions, decided case laws
and comments on different aspects associated with the issue.

Chapterization:

Introduction
Entering into treaties and agreements with foreign powers is one of the attributes of State
sovereignty. No State can insulate itself from the rest of the world whether it be in the matter
of foreign relations, trade, environment, communications, ecology or finance. This is more
true since the end of the World War II. The advent of globalization and the enormous
advances made in communication and information technology have rendered independent
States inter-dependent.This chapter contains introduction to the topic and historical
background on the development in the field of implementation and conclusion of
international trade treaties in India.

Evolution of the concepts of state sovereignty and world trade organization

Sovereignty means the independent authority of a State. It means that it has the power to
legislate on any subject; and that it is not subject to the control of any other State or external
8
power. According to the preamble, the constitution of India has been pursuance of the
solemn resolution of the people of India to constitute India into a ‘Sovereign Democratic
Republic’, and to secure well-defined objects set forth in the preamble. Sovereignty denotes
supreme and ultimate power. It may be real or normal, legal or political, individual or
pluralistic. In monarchies, sovereignty was vested in the person of monarchs. But in
republican form of governments, which mostly prevail in the contemporary world,
sovereignty is shifted to the elected representatives of the people.

Relation & conflict between the Indian Constitution and agreement establishing the
WTO
In this chapter, I attempt to give the basic introduction to international law, visit its branches
and concepts and examine them in relation to the municipal laws of India. It is well known
that India is a signatory to most international conventions and treaties but there are no direct
statutory provisions acknowledging the same. Therefore, for Indians to know all about
international laws, it’s highly recommended to depend on the Constitution of India and
various judicial pronouncements. It would be appropriate to examine, in the first instance,
the legal background to our constitutional scheme. It is well known that British India had
been following the British practice in the matter of treaty making. In India, constitutionally
speaking, treaty-making is an executive act. Entry 14, List I read with Article 246 of
the Constitution of India makes it crystal clear that the power to make laws with respect to
implementation of international treaties rests with the Union Government.” Article 53 vests
the executive power of the Union with the President of India. Article 73 says that the
executive power of the Union extends to exercising all powers accruing to the Government
of India from any International Treaty or Agreement.

Exercise of executive power in conclusion & implementation of wto agreements

By virtue of Article 73 of the Constitution, however, the Executive power of the Union
extends, in the absence of parliamentary legislation, to the matters with respect to which the
Parliament has power to make laws subject, of course, to constitutional limitations. It is well
known that the Parliament has not so far made any law regulating the procedure concerning
the entering into treaties and agreements nor with respect to their implementation. Equally
clearly, no law has been made regulating the manner in which the Government shall sign or
ratify the international conventions and covenants. The resulting situation, unfortunately, is
9
that it is left totally to the Executive to not only enter into treaties and agreements but also to
decide the manner in which they should be implemented, except where such implementation
requires making of a law by Parliament. According to the Transaction of Business Rules, all
international agreements or treaties require Cabinet Approval before they are signed and
ratified, except those which are specifically exempted. Before any agreement/treaty/MoU,
etc. is put up for approval of the Cabinet for signing and ratification, the text of the treaty
should be cleared by Ministry of External Affairs from legal and drafting angle by the Legal
and Treaties Division and by the concerned Territorial Division from the political angle. The
draft note for Cabinet circulated by the Administrative Ministry should also be sent for the
Ministry’s clearance and the note should indicate such clearance. The Legal and Treaties
Division must also be consulted during the negotiations for advice and guidance on the legal
aspects.

Exercise of legislative power of parliament in context to WTO agreements

Parliament, no doubt, has a constitutional control over the Executive; but it cannot be
disputed that the creation of the obligations undertaken in treaties and the assent to their
form and quality are the function of the Executive alone. Once they are created, while they
bind the State as against the other contracting parties, Parliament may refuse to perform
them and so leave the State in default. In a unitary State whose Legislature possesses
unlimited powers, the problem is simple. Parliament will either fulfill, or not, treaty
obligations imposed upon the State by its Executive. The nature of the obligations does not
affect the complete authority of the Legislature to make them law if it so chooses.

Approach of Indian judiciary to harmonize domestic law &international law on trade

arrangements of WTO

The courts are the guardian of the Constitution of India. In the absence of any “treaty
regulating legislation” in India, it mainly has to play the following roles:

1. It may have to interpret the legislation implementing a treaty; 2. In case of ambiguity it

may have to interpret the International treaty provisions along with the legislation
implementing a treaty in domestic law; 3. The role of the courts in case an international
treaty has been ratified but not incorporated within domestic law; 4. The role of the court in
case where an international treaty to which the executive has ratified but with some

10
reservations; 5. The role that it might have to play in cases of international treaties to which
such state is not a party yet treaties are nevertheless of vital importance ( e. g Human Rights
Treaties like ICCPR ).

However the list is by no means exhaustive and is merely indicative of the situations where
a domestic court may come across interpreting International treaty provisions. It is said of
the Vienna convention that it is the convention of conventions. The doctrine of “Pacta Sunt
Servanda” contained in article 26 and article 27 of the –Vienna convention, 1980 lays down
that every treaty in force is binding upon the parties to it and must be performed in good
faith and a party may not invoke the provisions of its internal law as a justification for its
failure to perform a treaty.

With such expectations flowing out of the doctrine of “Pacta Sunt Servanda” leads us to
another question that is do international treaties have to stand the constitutional test of being
conformity with part III of the Constitution of India as advocated by Basu; and in addition to
it do they also have to stand the test of the “vague” doctrine of Basic Structure; or can a
State have the defense of “Sovereignty” for non- compliance with the treaty provisions.

Time Limit:

The time limit for the proposed research work and bringing it towards success is
approximately one month.

Limitation:

This research project is limited to the function and importance of the WTO with respect to
the sovereignty of the state. The research is restricted to the study of books, statutes, articles
and judgments which are related to the impact of WTO on the sovereignty of the state.

11
 CHAPTER 2- EVOLUTION OF THE CONCEPTS OF STATE
SOVEREIGNTY AND WORLD TRADE ORGANIZATION

2.1 EMERGENCE OF INDEPENDENT STATE.

The end of Second World War and the rise of socialist power in U.S.S.R., India and China
opposing the imperial power of the Europe and the U.K. provided for the independence to
the third world nations. It is pronounced by many scholars that the fear among the Imperial
powers that the mass population of Asia and Africa would join the communist or the
socialist power and would become a more powerful state or a national park let to providing
independence for nations like China and India which today operate on communist and
socialist pattern of governance.

Within about 25 years of the end of Second World War, most countries of Asia, Africa and
Latin America which has been for centuries under the rule of imperialist power wanted the
freedom to agree with the struggle of decades or centuries. After the year 1995 we can
clearly see that the small pockets of population having their own territory in different part
of the world organizing a status structure called state. In the world today, is free from any
direct political control of any other country. The main reasons was British and Spanish and
other rulers oppression, industrial slavery and over exploitation of resources which before
the United Nations with the help of United States intervened on behalf of the office people
forming countries like Hawaii, Porto Rico, Cuba, Panama, etc..

The countries today are free, in fact formally can be seen as a Republic in the sense that the
nation is not ruled by another country. The mass population of the world was free from the
clutches of the white minority where by the ratio 20% of the white‟s (Europeans)
controlled and ruled over the 80% of the mass global population. The Second World War
can be reviewed on every part of the globe as a walk to defend freedom and democracy. It
has taken the forces of the freedom movements in the countries which were under colonial
rule.

India was one of the first countries to achieve independence after the Second World War.
Though the British rulers were successful in partitioning the country into Indian and
Pakistan whose adverse aftereffects can be witnessed today also. India's independence was
12
a great historical importance for the world. India's freedom movement and struggle has
been a source of inspiration to all freedom movements around the globe in all colonial
countries of Africa and mainly in Asia. Even before the independence of India the leaders
of freedom movement have brought together the leaders of many Asian countries on a
common platform known at that time as “Asian Relations Conference” which was
organized in the leadership of India. This symbolizes constantly the emergence of Asia as a
new factor of power in the world. Independent India became a source of strength to all
people fighting for the independence.

Independence in the formal sense at the level of international relations has been
invested in the UN Charter.

“Article 2.1 - The organization is based on the principles of social equality of all its
members”.
“Article 2.4 - All member states in the international relations are free from the threat
or cause of force again the territorial integrity or political independence of any
state”.

The major factors of an independent state can be said as: Firstly equality - all nations on
the globe are considered equal in terms of their sovereignty.. Independence also bring that
States are independent from interfacing from other states including the use of force, threat,
political, cultural, religious or economic disturbances. Territoriality showing equality is
confined to a physical space the area within which the Nations States independence may be
exercised and the population resides having an organization structure to govern and decide
for their population of the territory. Other factors can be said as continuity, uniformity, and
nation hood.

Today the factor that a state can be only recognized as an independent, sovereign state only
when it is recognized by the United States, as the largest and most inclusive multilateral
organization. its functioning of providing statehood makes sense as in the present world do
the factor of population, territory and controlling structure plays an important role but
international recognition is a more effective factor now.

13
2.2 CONCEPT OF SOVEREIGNITY.

Sovereignty is the term that is used for the concept to describe the independence and
autonomy of a modern nation state. Opposing the view of earlier leaders where countries
were ruled by kings in mediaeval and historic times and later on by colonial powers in the
18th and 19th century, sovereignty in the 20 th century and the present world refers to the
fact of absolute independence both internally and externally and autonomy that nation state
have to be there itself with respect to the decision making, policy implementation and all
matters concerning the citizens, population, territory, security, trade, environment, culture,
religion and tradition.

Sovereignty means that the nation States independent are free to decide for themselves
about the kind of democracy that the population want, the kind of rulers that the people
want, their policy internally and externally and regards of the citizen and territorial
integrity. More often the concept of sovereignty is invoked to mark the distinction between
taking decisions on their own by nation States and restricting the external influence or
pressure to see the decision making process in the independent nature. In such a respect
sovereign states are expected to be autonomous and independent when the performance of
policies and politics that is in their own interest of their own people interested and not
according to what the foreign power or other blocks dictate.

Globalization and sovereignty at today is a subject matter which within a century has
developed a complex relationship and conflicts over each other. In recent decades the
concept of Sovereign state has been debated all around the globe because globalization
means that independent States submit themselves to international treaties and agreements that
are not always in the best advantage or interest of the population . This relationship imposes some
amount of coercion or direct pressure on the nation States especially in the developing world
on the poor Nations and thus globalization has come to me as imperialism in another
structural and formal form. Though countries like India who has the taste of imperialism by
the British rule, they understand and thus are reluctant to submit to the policies of the World
Bank, the IMF the WTO or other international bodies. However it is also the case that the
options are limited as resisting these global bodies like the World Trade Organizations
means that the country is developing and much need of the infrastructure and economic
14
stability will be opted out from export opportunities, global market, support from
superpowers like the United States or the World Bank like in the case of North Korea.

The emergence of post-colonial powers after the Second World War however in the recent
economic crisis that was started in 2007 has proven that unity of the nation been
suppressed by international bodies cuts way as a global economy is tightly interconnected
and the Nations in today's world cannot regulate such subject matter in isolation. But on
the other hand the effectiveness and reluctant of the newly emerging economies like India
and China means that there is still place of national sovereignty and independence instead
of being completely dictated by the western powers.

For this it is stated that colonial powers and foreign powers or international bodies cannot
interfere in their internal or external assets or decision making of the country. The fact of
sovereignty is also important as an indicator that the struggle for freedom fought for
centuries and a victory is gained from the colonial States are bearing the fruits of the
struggle. This is also a sign of the emergence of new power blocks on the global seas
combining the factor of independent and the objective of the freedom struggle.

Finally on this, my submission is that sovereignty for many countries has been achieved at
huge expense of countless life and sacrifices and hence in the present world it cannot be
curbed by the successive generations and these holding principles of freedom, equality,
choice of political structure, democracy cannot be overrun by international bodies which
are controlled by once are rulers in the past.

2.3 INTERNAL AND EXTERNAL SOVEREIGNITY.

This particular topic distinguishes the external sovereignty from internal sovereignty. The
difference is based not on the subject matter of governance as both of them tends to affect
the population, territory and the structure of political rule of an independent state. By
external sovereignty it is meant that the state is not subjected or under control of any other
authority or foreign power and it is independent and autonomous in nature for any decision
making for its population. Today every independent nation reserves and controls the
authority to restrict any trade treaties or to enter into any military agreements. It is the
15
liberty of the state to determine its foreign policy and how to join any power blocks.

The term internal sovereignty can be defined as a relationship between the power of the
state structure and the political community for the population which is controlled by the
sovereign power. Like in India the sovereign power is based in the hands of the parliament
that is the legislature at the center to form policies for the welfare of its citizens and
territory integrity. “The parliament of India and its members are directly elected by the
citizens of India to govern and provide security of social, cultural, economic, religion,
political and civil rights”. With the parliament being the supreme authority whose power
are delegated by the citizens of India can be seen and refers to the internal affairs of the
state for governing the welfare of the population and territory. On the other hand external
sovereignty can be defined as a relationship between the foreign powers or states and the
sovereign power.

2.4 WTO IN 2019.

“The World Trade Organization today in the present world is the only true international
organization dealing with the global laws and rules for trade between independent
nations”. “Its main function is to ensure that the global trade flows as smoothly as possible,
predictably and free from all restrictions and tariffs as possible”.

The result of WTO is the assurance for consumers and producers all over the world can
know that they can enjoy “secure smooth and reasonably priced supplies and greet number
of choices of the finished products or raw materials and the services which are globally
available in any corner of this world”. On the other hand “producers and exporters are well
known on the fact of foreign markets, foreign exchange, international scenario and national
economic policy which are in coherence with the WTO rules and regulations”.

Many economists debate that the result of the establishment of WTO has provided for a
more peaceful and accountable world economics which lead to the prosperity of people all
around the globe. Decisions in the WTO today are taken on the principle of consensus
among all the member countries of the organization and the decisions taken there of
ratified by members parliaments or legislatures of members.

16
WTO dispute settlement unit has become more accountable and transparent to keep up the
pace of the developing nations with the developed one also providing a vast variety of
“exceptions to depart from the WTO general principles to safeguard the economy or
environment, indigenous and traditional industries”. The breaking down of trade barriers
by WTO in the international market has also resulted to “reduce the gap and increased
communication between the people and the nations all around the globe”.

Today WTO system is “based at the heart called the multilateral trading system agreement”
for arrangements negotiated and signed by a consensus of all the majority nations of the
world. Trading system ratified by the national legislature, the multilateral agreements can
be seen as a legal ground or rules of international trade and commerce. These agreements
are like contracts providing member nations important trade rights also binding the
governments to keep the trade policies within the agreed limits of the WTO for the benefit
of all.

The view today what is criticized is that the agreements of the WTO negotiated and signed
by the government but their purpose do not fulfill the requirements of the population but
on the other hand benefits the producers of the good and services, the players of the export
and import market and other business houses. Do the goal of the WTO is to improve the
welfare of the people of member countries but the mass population of many developing
nations of deprived of this benefits.

2.5 Globalization through wto and its adverse effects on indian rural population.

“More than 67% of Indian population (out of the 121 crores Indians, 83.3 crores live in
rural areas of India while 37.7 crores stay in urban areas)” in 2019 still lives in rural areas
without proper infrastructure and basic human needs such as education, health care,
sanitation, power, etc.. It is to be noted that “today in 2019 75% of the extremely poor
population of India exist in rural area of the country (out of 336 million populations below
poverty line)”28.

There is a viewpoint through this paper that the economic reforms initiated in the early
1990‟s by then Finance Minister Dr. Manmohan Singh through LPG policy of
28
NSSO, National Sample Survey Organization Report, 2015
17
Liberalization, Privatization and Globalization are responsible for the collapse of rural and
indigenous economies and the after effect and agrarian crisis is Still underway 30 years
later. “Thus the question arises that how the sociaList and welfare state objective with
equal distribution of income, wealth and resources of the Indian Constitution is fulfilled
when the rural masses are driven out of economy as an important player without any
safeguard?”29

“I tend to describe that the level of inequality has risen to extraordinary levels. As per
report of World Bank India‟s richest 1% holds 58% of total country‟s wealth and only 57
billionaires in the country have same wealth ($216 billion) as that of bottom 70% of the
population.”30 When at the same time; hunger in India has reached its highest level in
independent India. It is also important to note that rural economy across India has
collapsed or are on the verge of collapse due to the neo-liberal policies of the government
of India since the 1990‟s. Human cost of the liberalization has been very high. The huge
wave of farmer suicide in Indian rural population from 1997 to 2017 is close to 2 lacks
according to official statics.

The Parliament of India has faulted the policies pursued by the government which
according to me resulted in a very high proportion of rural households getting into the
death cycle resulting in a very high number of farmer suicides. Government policies
encouraging farmers to switch to cash crop in place of traditional food crops has resulted in
an extraordinary increasing form input cost while market forces determine the price of the
cash crops. It is pointed that disproportionally the large number of affected farmers suicide
have occurred with cash crops because with food crops such as rise even if the price falls
day is food left to survive on. Inequality in India has reached one of the highest rates India
has ever seen during the time when public investment in agriculture shrank to 2% of the
GDP the nation suffered the worst agrarian crisis indicates the same time as India became
the nation of second highest number of dollar billionaires.

29
Article 46 of Vienna Convention on the Law of Treaties 1969: A party may not invoke the fact that its
consent to be bound by a treaty has been expressed in violation of a provision of its internal law regarding
competence to conclude treaties as invalidating its consent unless that violation was manifest and concerned a
rule of its internal law of fundamental importance
30
Rights Group Oxfam report, 2018
18
The major two adverse effects of the formation of WTO and India being its member
implementing the WTO agreements brought down the poverty reduction rate from over 3%
per annum before 1990 around 1 % per annum during 1990‟s. Also the employment growth
rate declined from 2.4 % in 1983 to 1990 to nearly 1% in 1992 to 1997.

Agriculture investment also declined due to diversion of resources in other sectors like
tourism, transport and communication. Market forces attract investment to region with
more developed infrastructure and thus states like Uttar Pradesh, Madhya Pradesh, Bihar,
Jharkhand and other having huge and rural population were at severe loss mainly in
agriculture society. As per the 2011 census of India more than 60% of the population still
base their livelihood on agriculture as India today also remains a major agriculture
dominant nation but the total contribution of agriculture through nearly 67% of the
population only contributes to nearly 17 % of the Indian GDP and economy.

19
CHAPTER 3- RELATION AND CONFLICT BETWEEN THE INDIAN
CONSTITUTION AND AGREEMENT ESTABLISHING THE WTO

3.1 India as a sovereign state trough its preamble.

The preamble to the Indian Constitution sets out the main objectives for which the
Constitution was enacted and intended to achieve. It can be said as a sort of introduction or
objective resolution to the statue and at several times is very helpful to understand the
policy and legislative intent of our founding fathers. The preamble clearly expresses what
she had thought or dreamt for so long during our freedom struggle. The Constitution
makers give to the preamble the place of pride or in legal sense a place of objective
resolution. It embodies in itself all the ideas ideals and aspirations for which the country
had struggled during the British rule. In the landmark judgement of in re berubari case the
Supreme Court has said that the preamble to the Constitution is a key to open the mind of
the makers and shows the general purpose for which they meet the several provisions in the
Constitution.

The first and opening line of the preamble declares that we the people of India having
solemnly resolved to constitute India into a sovereign socialist secular democratic republic
and to secure to all its citizens justice Liberty equality and fraternity. Two important
aspects from our point of view is the concept of sovereign and that the Constitution is
based or framed for “we the people of India” indirectly providing power to the parliament
of India through direct adult franchise election.

The preamble of the Constitution of India 1949 declares India to be a sovereign socialist
secular democratic and Republic state the word sovereign emphasizes that India is no more
dependent upon any outside authority. It means that internally and externally India is
sovereign to take decisions for its population. Its membership of the Commonwealth of
Nations and that of the United Nations or international organization do not restrict its
sovereign power.

20
3.2 Basic structure of the constitution.

The theory of basic structure of the Constitution of India was laid down by the Supreme
Court in the case of “Keshavnanda Bharti versus State of Kerala31” popularly known as the
fundamental rights case where the petitioner has challenged the validity of Constitution
24th amendment act 1971 of the Kerala land reform act 1963. In this Landmark is the
Constitution bench of 13 judges has enumerated certain essentials of basic structure mainly
the supremacy of the Constitution, the democratic form of the government, the sovereign
character of the Indian state and separation of power between the executive, judiciary and
legislative also safeguarding the federal structure.

The judgement of the supreme court does made it clear that the Constitution of India not
the parliament is supreme in India this is in accordance with the intention of the framers
who adopted a written Constitution for the country which clearly distinguished between the
ordinary legislative power and constituent power that is the amending power of the
parliament.

3.3 “The multilateral marrakesh agreement establishing the world trade

organization”32

“The agreement establishing the world trade organization is commonly known as the
Marrakesh agreement”. It was signed in “Marrakesh, Morocco, on April 15th 1994, which
was the concluding round of the Uruguay Round of multilateral trade negotiations of the
GATT 1994 agreement”.

This particular agreement specifically defines the “principles on which WTO is

established, the scope and function of the WTO, the structure which will be followed by
the WTO including the general assembly, trade dispute unit and all other related
structures”. Before the establishment of the WTO, the previous negotiated rounds were

31
(1973) 4 SCC 225.
32
With Final Act And Annexures And Protocol Concluded At Marrakesh, On 15 April 1994 (Number
31874).

21
under the „General Agreement on Tariffs and Trade‟ along with other
agreements concluded during the Uruguay round like the TRIPS, the GATS which are
included in the analysis of the Marrakesh agreement together and formerly are considered
to be the WTO agreements. All the present WTO members in 1994 had signed the
Marrakesh agreement making it binding and enforceable on the sovereign states. “The
agreement was enforced on 1st January 1995 and has no expiration date”.

Though the Marrakesh agreement has not provided a direct application to any
multinational or multilateral organization or corporations but was either established to
provide the economies welfare around the world. A set of rules and procedure to carry out
international trade without any restrictions or barriers to make the world a single economy
and a global marketplace. Also this agreement aimed at benefiting the population of the
world and the state government but in fact it rather provided more advantage to the
business houses, multinational corporations and power blocks from the globalization of
trade and commerce. Some economist also say that if you have a problem regarding the
WTO, call upon the U.S. government for your help and the
U.S. as the biggest donor and stake holder of all international corporations and institutes
have much of a influence and pressure on the WTO institution. It is also noted that
nominations made by the U.S. government for the executive post in the WTO and the
World Bank are never rejected by the institutions and agreed upon.

Some main Articles of the WTO agreements are Listed as:

“Article 1 - Scope and definition of WTO”.
“Article 2 - Most Favored Nation Treatment”.
“Article 3 - Transparency and Disclosure”.
“Article 4 - Increasing participation of developing countries”. “Article 5
- Economic integration”.
“Article 6 - Domestic regulations”.

The WTO establishing agreement has 29 Articles continued by several Annexures carrying
other agreements related to WTO as on goods, services, investment, IPR, agriculture, etc.

22
3.4 Other agreements of WTO.

3.4.1 “Multilateral Agreement on Trade in Goods: General Agreement on Tariffs

and Trade, 1994 (GATT)”33.

This general agreement concerns for providing reduction in trade barriers and tariffs by all
member nations of the WTO for the effective import, export and international exchange of
goods. This particular agreement only concerns the movement of tangible goods or
products being finished goods or raw materials to and from the international boundaries.
The agreement came into force in the year 1947 as a successor of ITO and in 1994 was
converted as a base into WTO agreement.

3.4.2 “General agreements on trade in services (gats)”34.

The agreement specifically deals with the trade in services not good. This agreement also
provide List of 155 global services and provides a set procedure and standard for all WTO
members to maintain or introduce laws in relation to the service sector. As today services
account for more than 50% of the global economy and many services like banking,
insurance and finance are so complexly interconnected that the destruction of the services
in one nation can lead to economic and instability all around the globe.

3.4.3“Agreement on Trade Related Aspects Of Intellectual Property Rights”.

(TRIPS)35.

The agreement came into play in 1995 and was the most disputed agreements in India
where the subject matter of covers copyright, trademark, geographical indications,
industrial designs, patents, layout designs, was taken into account to secure a global
standard procedure for around the globe. But this agreement hampered the indigenous
industries and the rural economy of most of the developing and least developed nations and
still provides for a great concern between the developing nations to safeguard themselves
against multinational corporations and power blocks for free availability of many
lifesaving goods and services such as public health.

33
Annexure 1A of WTO agreements, Multilateral agreement on Trade in Goods
34
Annexure 1B of WTO agreements
35
Annexure 1C of WTO agreements
23
 CHAPTER 4- EXERCISE OF EXECUTIVE POWER IN
CONCLUSION AND IMPLEMENTATION OF WTO
AGREEMENTS

4.1. TRAETY MAKING POWER UNDER CONSTITUTION.

“India as an independent and sovereign country has all powers to enter into any treaty or
agreement with foreign powers and international organizations” 36. After the end of Second
World War no nation can isolate its independent and sovereign from the rest of the world
in matters of trade, environment, communication, environment, finance, foreign relation
and security. We Indians cannot afford today in the globalized world to ignore the subject
of International trade any longer. This is particularly because of the negative and adverse
effects and experience of WTO trade arrangements entered by our government (executive
organ) without consulting, informing, debating or taking the Parliament into confidence or
the population of India into the confidence which are the representatives of the people
directly elected in the world largest democracy.

The arrangements entered by the Indian government under the WTO has far reaching
effects to the masses in reference to agriculture, intellectual property rights, environment,
culture, indigenous industries and so on.

The question addressed here is that to whom this power belongs to, weather to “the
executive or the parliament”. And if this “power exists with executive whether it is
subjected to parliamentary control or supervision”?

What will be the effects of the power provided by “entry 14 of List 1 of the seventh
Schedule and Article 253 of the Constitution of India” upon which the “federal structure
and concept of separation of power” is based?

36
Wali Ulla, “The Treaty- Making Power under the Constitution of India”, (1971) 2 SCC (Jour) 20. Sir
Robert Jennings and Sir Arthur Watts (ed), “Oppenheim‟s, International Law”, 9th ed., Vol.1,p.125.
McNair, “The Law of Treaties”, Clarendon Press‟, Oxford, 1986, p.35-38
24
4.2. Policy making and implementation of treaty.

On some issues like the investment and competition policy India as a sovereign nation
strongly feel that having a multilateral agreement would be a serious harm to the
autonomous and independent rights of the countries. The major difference is marked in our
Constitution between:
“Firstly, the Constitutional requirements for conclusion of any trade treaties”. “Secondly,
the requirements of the Indian Constitution for the implementation or execution of any
trade treaty obligation on the territory or population of the state”.

Thus it is very important to make it clear that the state or the “government with the power
of its executive branch may have the capacity to conclude a treaties but the lack of
necessary parliamentary or legislative intent cannot provide the power to give effect to the
treaty obligation”. The first point of conclusion of treaty refers to the validation of treaty in
terms of capacity to create an international obligation of becoming a signatory on an
international platform or with a foreign power. And the second point refers to the ability or
“the power to execute, perform or implement any treaty obligation within the territory of
India over its population”. The judiciary also reference to the treaty making power having
two different aspects. Firstly the state that is the Government of India can enter into a
treaty obligation but will be unable to implement or force treaty without the cooperation of
the legislature that is the parliament and the international obligation will be invalidated due
to lack of domestic lows.

The aspect of international trade to an extent in areas such as investment and agriculture
for India lead to the ceiling of sovereign right of the nation and the government
particularly in the developing countries like India with too little room in deciding the
matters of economic policy taking the national priority at first instance. Not only India but
other regional organizations like the “Organization of Petroleum Exporting Countries”, the
“European Union” or “Association of Southeast Asian Countries” has provided a difficulty
in agreement implementation of the WTO as this organization tends to safeguard their
national and regional interest first.

25
India is a member of WTO and from its founding days and today is seen as the leader of
developing and underdeveloped world. India also represents the developing world in the
blockage of the Doha round negotiations. As we all know the WTO decisions are taken by
consensus so there is a most possibility that anything severally unfavorable to India's
interest and national priority can be strongly and unilaterally opposed.

India can build constructively from the WTO while safeguarding its developmental
concerns but it has to have a strong relationship with other developing nations and interest
groups to have a strong point on the issue of every negotiation. In absence of any such
bodies as the WTO today India stands to lose a platform to have international trade. But
today India is self-sufficient to mobilize its capital, labour force, human resource and
natural resources without the selfish interests and support of the west. India today thanks to
the vast availability of resources both natural and human can easily have a prominent
influence on trade, economics military and politics on the smaller countries of Asia and its
surrounding neighbors. To have a smooth economy as in the Pacific and Indian Ocean
region with India and its neighbors having all the kind of natural resources required to have
a strong economy.

It is also prominent to note that major number of cases of complaints against India has
been brought down into the “WTO majorly by the United States, European commission or
the Chinese”.

“The advantage of India in the two fields namely agriculture and intellectual property has
always proved for India's dislike from the Western community especially the US and UK”.
Where the world knows that India is a leader in the market of agriculture and intellectual
property and hence the WTO agreements affecting such sovereign rights of India creates
issues.
India has also recently stayed out of the Information Technology agreement to which was
held in Nairobi. Because today most IT companies based in the U.S. gains a lot from the
huge population and market of India which increases the inequality in income and wealth.
India also stands difference when it comes to the sector of services because today India is
an emerging global power in it and business services through outsourcing and domestic
production. So it's demand WTO to negotiate a more liberal commitments on the part of
26
trading partners for cross border supply of services including the movement of natural
person that is the human resource to developed countries as the cost of bringing up the
natural resource is bared by the Indian economy.

India has been constant to raise the issue of disadvantage seen as the sector of
“health,sanitation, health insurance, essential drug facilities, IT sector, non-conventional
energy, need of outward foreign direct investment” and so on where India tends to negotiate
in the WTO on strong grounds.

India today has not provided open market access in higher education as foreign education
tends to distort the tradition, culture and indigenous education of the society on which
India is built upon. India continuously has put it support both internally and externally to
prevent issues harming its developing importance to safeguard its mass rural and
agricultural based economy and population and has also marked a red line in sector of
agriculture making it very clear that there is no scope of compromise on this position on
the world platform of WTO. Recently India has shown itself as a rigid and
uncompromising negotiator on the world platform. The Doha Development round where
India leads the developing and least developed nations tends to negotiate and shift the
world power and market in economy from west to east through its “look East international
policy”.

27
 CHAPTER 5- EXERCISE OF LEGISLATIVE POWER OF
PARLIAMENT IN CONTEXT TO WTO AGREEMENTS

5.1. Conclution of treaty & ratification.

The treaty making power or entering into a binding agreement with other foreign nations
has both international as well as internal aspects. Internal aspect on the treaty making
power in India resides in the limitations on that power provided by the Constitution of
India which automatically comes into the operation whenever such powers are exercised
by any organ of the state. The Constitution of India provides for a federal structure which
forms the basis of Constitutional organization. The division of power and function between
the center and the state being an essential characteristic of the Constitution provides
limitations on the power of the central legislature, that is the parliament and thus the
question arises that to whom this real power subsist. The various provision of the
Constitution which governs the India's foreign affairs or treaty making power are provided
in “Article 51, 73and 253 read with the entries in List 1 of the Schedule 7 also read along
with Article 245 and 246 with the same List”37.

The matter in India is that the power of inclusion of a treaty resides in the present with the
executive but the power for the implementation of the treaty. That is “ratification of any
international trade treaties resides with the legislature of the country”. Though the
Constitution it is not clear but has been made a practice in the Indian affairs that the power
is provided to the central legislature that is the parliament for the ratification of any treaty.
Therefore it is also important to note that in India there is a difference between “the
formation and the performance” or the enforcement of the obligations imposed by a treaty
towards the Indian state.

When we read “Article 253 and Entry 14 of the List 1 of the Schedule 7 of the
Constitution”, it clearly provides that the power persists with the parliament of the India
which can make “law for the whole or any part of territory of the India for implementing
any treaty agreement” or conventions with any other foreign power or any arrangement
made in by the executive at any international conference, seminar, association or body. It is
37
The Constitution of India, 1949
28
also debated that Article 253 already overrides differential distribution of power of the
implementation of treaty as the state legislatures are not taken into account for the approval
by the parliament.

It is to be also made clear that Article 253 cannot describe or restrict a citizen of India of
any of the fundamental rights conferred upon him by the Constitution. So for the
enforcement of any treaty obligation by the courts of India it is a mandate that the
parliament should ratify the international obligation through a domestic legislations which
would be applicable in the territory of India which provides the judiciary the power to
enforce and the executive the power to implement any treaty obligation.

Ratification can be defined as the final confirmation given by the central parliament to an
international treaties concluded by its so-called executive representative to have a power of
implementation and enforcement within the territory of India over its citizens and
population. Thus in absence of any law enacted by the parliament, the President of India
has the full executive power which his office enjoys to conclude any treaty with foreign
countries. On the other hand legislative action is required for the performance or execution
of the treaty obligation. The parliament alone has the exclusive power to make laws to
implement treaties and the power is exercised by the legislature also when the subject
matter is enumerated in the state list.

“However, the most important treaty that created a lot of hue and cry in India, the World
Trade Organization Agreements were signed by India without obtaining Parliamentary
approval”38.

5.2. Law making on the subject matter

38
At that time a Parliamentary Committee attached to Ministry of Commerce expressed great concern over
signing of the WTO Agreements especially the one on Trade Related Aspects of Intellectual Property rights
(TRIPS).
29
On 5th of March 1993, Shri. George Fernandes39 provided a notice of the intent to
introduce a “Constitution Amendment Bill” for amending the Article 253 so as to that trade
treaties be mandated to be “ratified by each House of Parliament by majority of the
memberships of each house and by a special majority of the state legislatures” before the
executive can enter into any treaty or arrangement. This amendment bill has been never
taken up for consideration in the Lok Sabha or till now.

The second attempt was made by Shri Satya Prakash Mishra, (Member of Rajya Sabha)
who questioned he government (number 6856) inquiring whether the present government
is willing to introduce any legislation or amending act to the Constitution to safeguard for
parliamentary approval, control and scrutiny of international treaties been entered by the
executive forming the part of government of India who are collectively responsible for or
in the lower house of the parliament.

Also Shri M. A. Baby40, (M.P., Rajya Sabha) provided a notice to the house for introducing
a “Constitution Amendment Bill, 1992) to amend “the Article 73, 77 and 253 of the
Constitution of India providing that every agreement, treaty, memorandum of
understanding, contract or deal entered into by the Government of India through its
executive branch including borrowings under Article 292 of the Constitution with any
foreign country or international organization of social, economic, political, financial or
cultural nature and settlements relating to trade, tariff and patents shall be laid before each
house of the parliament prior to the implementation of such agreement, treaty
memorandum of understanding, contract or will and shall operate only after it has been
approved by resolution of both houses of parliament” 41. It is also pertinent to mention here
what Pandit Jawaharlal Nehru as a Prime Minister said in the Lok Sabha;

“The treaty making power under the Constitution rests with the executive government, of
course to give effect to the treaty, one has to come to Parliament and the Government of
India, that is the union executive, if it does a wrong thing may be punished for it”42
39
Member of Parliament, Lok Sabha
40
In February, 1992
41
Shri Chitta Basu (M.P., Lok Sabha) supported the bill of Shri M.A. Baby
42
Lok Sabha Debates, Col. 6265 (19th Dec.) 1960. Cited in Rajeev Dhavan, Supra note 14, p.17. It is not
clear what Nehru meant by „punishment‟. Rajeev Dhavan opines on the “punishment” aspects of the Nehru
30
It was also pointed that in the year 1946 when after the World War II the International
Trade Organization was established, the US Congress rejected the bill as the ITO was not
favoring the US economy and thus the ITO was abolished and that GATT was established
in 1947 which was in favor to the rising economy of the United States so such powers
should also be vested in the Parliament of India.

statement that it may be no-confidence vote or retaliation permissible to other nation states under
international law.

31
 CHAPTER 6- APPROACH OF THE INDIAN JUDICIARY TO
HARMONIZE DOMESTIC LAWS AND INTERNATIONAL LAWS ON
TRADE ARRANGEMENTS OF WTO

6.1. Powers of supreme court of india.

International treaties are based on providing advantage to big power blocks which are on
the level playing field and are never transparent for the developing or least developed
Nations. Thus the concept of public debate and parliamentary ratification is a must
requirement in India especially over the TRIPS agreement which is the trade related
intellectual property rights set as a trap by the US and EU to capture the traditional and
indigenous industry and self-reliance of India on its products and innovations.

In the current world no human ethics code or law binds the transnational and multinational
corporations. The marketing wisdom of the Western Nations and recent technological
blessings has made Indians a country of over billion populations unhappy. The background
of the present patent amendment Bill in India before the parliament persuade and tends me
to think and communicate some of the serious consequences that India is facing. The grave
risk for an instance is the global financial flow operations to satisfy the market greed of the
power blocks to rob growth and available natural resources of Indian population who are in
desperate and great need of resources like essential life drugs, medical facilities,
communication, information and industrial technology which is the key to rapid
development.
Every Indian national living in this great Gandhi country must not hesitate or fear but
should resist in every measure possible with power and strength to curb down the
monopoListic idea of the west which weakens the internal economic system based on rural
economy and agriculture. The Doha negotiation round of the WTO started in 2001 is in a
situation of blockade from eighteen years between the developed Nations represented by
the US, UK, Japan and Canada and the developing nations of the world having most of the
mass population headed by Brazil, India and China. Besides the WTO agreement and the
final act of the Indian government at the final round of negotiations especially in Uruguay
had let us Indian down.
32
6.2. Questions to be concerned by the supreme court.

The Supreme Court has never stood ideal from its establishment to witness a treaty on
international platform to overshadow order and spoil the very basic structure of our
Constitution including democracy, sovereignty, federalism, welfare and social justice.
Firstly in respect to the basic structure of the Constitution the first question which the
government of India should always consider before becoming a signatory to any treaty is
about the federal structure of a Constitution. Today India is the biggest democracy in the
world and also democracy is a pillar of the basic feature of our Constitution, thus treaty
enactment without any public opinion for legislative debate or intent not only set back the
Indian population but also in future can result into unprecedented outcomes like unstable
economy or overturning political situation.

The sources of all power exercised by the organs of the government be it the executive, the
legislative or the judiciary is provided from the Constitution. It is therefore if a conflict
arises between the WTO agreement and the Constitutional requirement and mandates the
latter will always invalidate the former so as the Indian jurisdiction and jurisprudence is
taken into account. Article 141 of the Constitution vest the final authority in the Supreme
Court of India to declare the law which is binding on all the authorities and organ of the
government also the Constitution itself provide for the Supreme Court to be the interpreter
and guardian of the Constitution. Any decision by the council of ministers or the executive
heads or the legislature if invalidating the part 3 of the Constitution through Article 13 will
be null and void automatically.

Some may argue that the law of the Constitution is what the judges see or believe to be but
the same goes for the executive also. A person or a group of person cannot decide for 140
crores of Indian population. It is also a question in my mind from the beginning of my
research work that why always the Indian media is silent about this subject matter.

The question here is will our rulers restrict or lend our freedom in disguise of free trade on
international platform? No. “This is the time for us to protest and to safeguard our
population, knowledge and innovation as India from centuries has led the world” 43 in the
43
Roy, Ramashray, Inaugural Speech delivered in the Seminar on State and Globalization in the Department of
33
field of indigenous knowledge, culture, tradition, respect for environment and so on.

6.3. ENFORCEMENT OF INTERNATIONAL LAW

Is in the present date the supreme court of India is confused about the application of
international law. The recent judgement‟s of “the apex court as in Ram Jethmalani versus
Union of India”44 my view shows a misunderstanding of relationship between international
law and domestic Indian law greater conceptual clarity on this subject matter is very
critical in today's age of globalization.

The Supreme Court judgement in “Jeeja Ghosh versus Union of India 45” is celebrated for a
farming the Constitutional right under Article 21 for a person to live with dignity. “The
Vienna Convention on the Law of Treaties” 1963 requires India's internal legislation to
comply with international commitments. Article 27 of the treaty states that a state party
may not invoke the provision of its internal loss and justification for its failure to perform a
treaty. The Vienna convention was imposed in 1980 and the Supreme Court discuss the
same in 1963. The principle of factor Pacta Sunt Servanda, Article 26 and 27 of VCLT
states that every treaty signed by a contract in country is binding on it and the obligation
imposed by the treaties must be added and performed by the state in good faith.
The best possible way to on a treaty obligations is to ensure that the country's domestic law
are consistent with its treaty obligations as laid in the case of “Jolly George workers versus
Bank of Cochin”46. In this respect Article 26 and 27 of the convention on which “the
Supreme Court based its judgement on State of West Bengal versus Kesoram Industries” 47
and “G Sundarrajan versus Union of India 2013”48 provides the impression that the court is
trying to justify the expression of Pacta Sunt Servanda principal by invoking the VCLT
Articles whereas the court has already pointed out that VCLT altogether has a different
purpose not binding on the agreement between the states and international organizations.

In several cases like the „Vishakha‟ or „National Legal Service Authority‟ case the court had
specifically said that is the parliament of India has made any registration which is in conflict with the

Political Science, University of Rajasthan, Jaipur, 12 Feb., 2008

44
(2011) 8 SCC 1.
45
(2016) 7 SCC 761
46
AIR 1980 SC 470
47
2004 (10) S.C.C 2015
48
(2013) 6 SCC 620
34
international law that Indian courts are bound to give effect to the Indian law disregarding the
international law of treaties signed by the executive of a government. However in the absence of a
contrary registration municipal courts in India wood respect the rule of international law if it does
not dilute or conflict not only the Constitution but any domestic or municipal law act applicable in
the territory of India.

Also in such cases the court has often relied on “Article 51 clause C of the Constitution
read with Article 253 to support the said reasoning where Article 51 clause C as Directive
Principles of State policy” directs the state to endeavor to and thereby respect for
international law and obligations / arrangements of treaties which are not enforceable in the
court of law.

It was also questioned by “the judiciary of India in Vellore Citizens Welfare Forum versus
Union of India, 1996”49 from the executive that although one is to ensure if any distinction
between the power of the three branches of the government as laid down by the
Constitution has any merit and practical consequences for instance if the government of
India that is the executive branch we write in adopting measures to implement international
treaties which are inconsistent with domestic loss or even when the parliament has not
enacted a legislation giving effect to such an international treaty is the supreme court
jurisprudence is to be understood in support of the direct effect theory then the executive in
any sense will not stand right in doing so.

6.4. “VINEANNA CONVENTION AND PACTA SUN SURVENDA”.50

“The Vienna Convention on the Law of Treaties” (referred to as VCLT) is a treaty

concerning the international law on the formation and foundation of treaties between the
contracting states. The convention was adopted on 23rd may 1969 and came into force on
27th January 1980. Till the year 2018 the VCLT has been ratified by 116 sovereign States.

The scope of the convention is limited to the only aspects that is applies to the treaties

49
AIR 1996 SC 2715: (1996) 5 SCC 647
50
“ Vienna Convention on the law of treaties (with annex). Concluded at Vienna on 23 May 1969
Authentic texts: English, French, Chinese, Russian and Spanish. Registered ex officio on 27 January
1980”.

35
concluded between the states and does not cover agreements between states and
international organizations or between organizations themselves. Thus in the present
subject matter the VCLT is not binding on agreements between India and the WTO.

According to the Vienna Convention a treaty means an international agreement concluded

between states in written form and find in authority which are governed by international
law weather embodied in a single instrument or in two or more related instruments and
whatever its particular designation in the global context. Ratification, acceptance, approval
and accession means in each case of international act so named where by a state establishes
on the international plane its consent to be bound and obligatory by a treaty. Treaty
Agreements in full powers means a document verified or accepted from the competent
authority of a state designating a person or persons to represent the state for negotiating,
adopting or authenticating the text of a treaty for expressing the consent of the state to be
bound by a treaty or for accomplishing any other act with respect to a treaty.

CHAPTER 7- CONCLUSIONS AND RECOMMENDATIONS

36
7.1. This paper is to determine –

Firstly determine the diminishing status of Indian State external and internal sovereignty in
the globalized trade world.
Secondly to determine the Constitutional requirements for “(a) conclusion of treaty &(b)
implementation of treaty”.
Thirdly is to determine the role of domestic courts of India and their approach to harmonize
municipal laws with international laws.

After the end of Second world War (post 1945) the period witnessed the rise of
superpowers after England, France, Germany and Japan which were the United States of
America and the Union of Soviet Social Republic which rose up to the most powerful
blocks. The United States in collaboration with European Union nations formed the North
Atlantic Treaty organization and also developed the “Bretton Woods system of the World
Bank, International Monetary Fund and International Trade Organization”.

Though in the year 1946 the US Congress rejected the proposal of ITO and pushed
forWard for the establishment of General Agreement on Trade and Tariffs in 1947 which
was more favorable to the economy of United States and thus the negotiations from 1947
to 1994 in which 8 rounds of negotiation took place established the World Trade
Organization which provided advantage to the already rich superpowers, multinational
corporations and international trade organizations based in the United States as the world
was open for trade and the US took the most advantage of the same.

In the last 70 years the development of international and transnational organizations has
led to important changes in the obligation of decision making structure of the world
politics and state sovereignty. New forms of multinational organizations have been
established and with them arises the concept of collective decision making involving States
independent in nature, intergovernmental organization and a whole variety of transnational
pressure groups also moderated the idea of state sovereignty.

The fact that the US emerged as the world's only superpower its dominance over the world

37
primary due to the rise of the European Union and the US collaboration has made a pattern
of shift in the world mind set which sees today that economic domination in the world is
more important and powerful then cultural, traditional, indigenous and military strength or
capabilities.

In the present global scenario it is very hard to make a clear distinction between domestic
law and policy making and on the other hand foreign and global policy is becoming more
and more effective. The concept of sovereignty today also remains the most distinguishing
feature of an independent state like India. The process of globalization headed by the
United States through world trade organization and the operation of international law in
nearly 70 years has provided the international organizations and the non-governmental
organizations worldwide such power to “redefine the meaning of policy making more
legitimate and accountable to the world community” 51 like the WTO and the United
Nations .

Today we can also see that the current president of America, Mr. Donald Trump has the
slogan „make America great again” and continuously provides for oil, trade and other
economic sanctions rejecting international agreements and trade arrangements to save
guard his own economy and population. Mr. President Donald Trump keeps on saying to
cut short the HB1 Visa and not allow the foreign immigrants to take away the jobs of the
American population. This scenario also purchased in by many nations around the globe.
Currently the ongoing U.S. - China trade War is the biggest example of deviation of WTO
principles. Though the US has the biggest and positive amount of foreign exchange reserve
but having a deficit of 300 billion dollar of foreign reserves in comparison to export and
import of China making the President to provide sanctions and customs on more than 200
products traded from China starting the biggest trade War in the history of mankind.

Indian economy is based on rural economy, agriculture economy, indigenous and

traditional industries like handicraft and many others and these four economies has been
greatly adversely affected by the international trade. Still after 70 years of independence
India has not able to safeguard the sociaList and welfare concept of the Indian Constitution
the mass population deprived by the extent of globalization and international trade by
51
Camilleri J.A. and Falk, J., The End of Sovereignty: The Politics of a Shrinking and Fragmentary World,
EdWard Elgar, England, 1992, p. 148
38
WTO today lacks basic necessities like safe drinking water, electricity, infrastructure,
schools, education, medical care, health insurance, energy usage, etc..

Today the issue of the subject matter of international trade and WTO has not taken pace or
debated in India largely due to the illiteracy of people and the understanding level of the
Indian mass population as the subject matter is not a part of manifesto or a subject matter
of elections in any state assembly or central legislature due to the ignorance of the Indian
population on this subject matter. It can be said that in the coming future the people will be
more educated and known of the factors of international market and foreign relations. This
issue will be taken up in the election propagandas of the nation.

Today India is the biggest and strongest fastest growing economy on this earth with a rate
of 8% per annum while the U.S. or the European nations only have two to four percent of
growth economy. India is the biggest democracy in the world, 2nd populous state and the
sixth largest economy. It is very important to mention that on one side like the US having a
population of 30 crores and UK or France has more population less than 5 crores have
economy of more than 20 trillion dollar any stock market of more than 28 billion dollar
where the India having a population of 130 crores have an economy of less than 3
trillion and stock market also at 2.8 trillion U.S. $. Realizing this vast differences
between the economic situations of the countries of India and China as compared to the
U.S., U.K., France, Italy or Germany mainly the European Union or the US has caused us
and many scholars and economics to think on this aspect that how the globalization of
trade through WTO has benefited the developing or the least developed nations.

7.2. Suggestions made:

First - We should agree with my proposal that “the entry 14 of List 1 of the seventh
Schedule of the Constitution of India red along with Article 253” marks the opposition
from the law of the United Kingdom on the question of the power of executive organ to
conclude trade arrangements and agreements with outside power and its power to be the
signatory authority for concluding or ratifying any international trade conventions and
covenants. This position should be changed to tilt from U.S. legal system to that of U.K.

39
Second - The Union Executive that is the Government of India has all powers to enter into
a trade arrangement which will have effects on the subjects mentioned in “the List 2 to that
is the State List and the List 3 Concurrent List in the Seventh Schedule of the Constitution”
without being approved by the Parliament or the State Legislatures by a majority by
making a law as provided by “Clause 1 of the Article 73” and or without the approval or
consent of the concerned Legislature.

Third - The present position in India should be strictly and mandatory changed and
debated.

Fourth - We should support the proposal that the legislatures (both the parliament and the
state legislatures with special majority) should make a specific law (statue) clearly stating
the powers and authority of the executive organ on the subject of trade treaty formation
which includes forming agreement with foreign states and international organizations as
well as satisfying the parliament for international obligations and mandates.

Fifth - The Parliament of India in consultation with the majority of State Legislatures
be advised to enact any law providing power and authority to the executive for treaty
making considering all the possibility of implementing problems being created for one or
more of the States, the consent are concurrent to be made a mandate for the enactment of
the law.

Sixth - The power and authority or control of the parliament should not be restricted only
to the all arrangements and agreement related to trade and national economy.

Seventh – We should support my “proposal to amend Article 253” by the insertion of an

additional clause that is close to provide express mention that no treaty formed by the
government (executive) shall have any implementation or enforcement through law within
India and that no Constitutional rights or safeguards of the population of India can be
founded upon by such treaties by anyone without the consultation of parliament.

Lastly - It is also recommended that a mandatory approval and consultation process be

made an obligation with both the governmental agencies affected and non-
governmental bodies or experts in the areas concerned before the personalities in
40
executive authority could ratify for or conclude a treaty or agreement which could not be
able to hold the democratic pillar of our Constitution and the Indian state to promote
national interest under shelf of participation and belonging among the population.

BIBLIOGRAPHY

41
 BOOKS:

1. De Rohit, A People's Constitution: The Everyday Life of Law in the Indian

Republic, 2018.
2. Kashyap Subhash C., Constitutional History of India: Federalism, elections,
government and rule of law, 2015.
3. Basu Durga Das ,Introduction to the Constitution of India, 1960.
4. Basu Das Durga, Shorter Constitution of India, by 1981.
5. Bakshi P., The Constitution of India, 1990.
6. Austin Granville, The Indian Constitution, 1972.
7. Bhatia Gautam, The Transformative Constitution: A Radical Biography in Nine
Acts, 2019.
8. Austin Granville, Working a Democratic Constitution, 1999.

ARTICLES:

1. Globalization and Its Impact on State Sovereignty, Dr. Inakshi Chaturvedi. Available
at; http://paperroom.ipsa.org/papers/paper_249.pdf, Accessed on 11.10.2019

2. Globalization and Sovereignty: Why do States Abandon their Sovereign, Published in

Age of Globalization, Num. 1, 2008, pp. 22–32. Journal of Globalization Studies, Vol. 3,
Num. 1, May 2012, pp. 3–38 under the title „New Basics of State Order or Why do States
Lose Their Sovereignty in the Age of Globalization

3. IMPACT OF CHINESE GOODS ON INDIAN INDUSTRY, Parliament Of India,

Rajya Sabha, Department Related Parliamentary Standing Committee On Commerce, One
Hundred And Forty Fifth Report, (Presented to the Rajya Sabha on 26 th July, 2018), (Laid
on the Table of Lok Sabha on 26 th July, 2018), Rajya Sabha Secretariat, New Delhi July,
2018/ Shravana, 1940 (Saka).

42