General Summary for World Trade organisation PDF

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General summary for WTO and relevant areas from lecture...

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World Trade Organisation (WTO) born out of negotiations, everything the WTO does is the result of negotiation What is WTO? WTO deals with the rules of trade between nations at a global or near-global level, but there is more to it than that. It is a negotiating forum where member if governments go to try to sort out the trade problems, they faced with each other. The bulk of WTO current work comes from the 1986-94 negotiations called Uruguay round and earlier negotiations under GATT. WTO is currently the host to new negotiations under the Doha Development Agenda launched in 2001. Where countries face trade barriers and want them to be lowered, the negotiations have helped to liberalize the trade. But WTO is not all about liberalizing trades, in some circumstances its rules support the maintaining of trade barriers. It’s a set of rules, after rounds and rounds of negotiation. These documents provide the legal ground-rule for international commerce. Rules have to be transparent and predictable. Born in 1995 but, since 1948 GATT provided rules for system. Last and largest GATT round was the Uruguay round. Principles of trading system WTO agreements are lengthy and complex because they are legal text covering wide range of activities. These principles are the fundamentals of the multilateral trading system. Trade without discrimination 1. MFN: treating other people equally. Exceptions are allowed in limited circumstances. 2. National treatment: Treating foreigners and locals equally. (only when import products entered the country, charging custom taxes is not discrimination) 3. Predictability: through binding and transparency. 4. Promoting fair competition – WTO often describe as free trade institution, but this is not entirely true because, the system does allow

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tariffs and, in some circumstances, form of protection. Accurately saying it is a system of rules dedicated to open fair and undistorted competition. Encouraging development of economic reform The case for open trade. Temptation to ward off the challenge of competitive imports is always present. Richer governments are more likely to yield to the siren call of protectionism for short term political gain, through subsidies, complicated red tape and hiding behind legitimate policy such as environmental preservation or consumer protection as an excuse to protect producers. Protection ultimately leads to bloated, inefficient producers supplying consumers with outdated products. If other governments pursue the same policy, markets contract and world economic activity is reduced. One of the objectives that governments bring to WTO negotiations is to prevent such self-defeating and destructive drift into protectionism.

The GATT years: from Havana to Marrakesh Wto creation of 1 Jan 1995 marked the biggest reform of international trade since after 2nd WW. Gatt helped establish a strong and prosperous multilateral trading system that became more and more liberal through rounds of trade negotiations. But by 1980 the system needs a thorough overhaul. This led to Uruguay round and then wto. GATT: provisional for almost half a century From 1948 to 1994, gatt provided rules for much of world trade and presided over periods that saw some of the highest growth rates in international commerce. It seems well established, but for 47 years it was a provisional agreement and organization. Originally the intention was to create a 3rd institution to handle the trade side of international economic cooperation, joining the world bank and international monetary fund. Chapter 3 1. -

Over 50 countries had joined in negotiations to create ITO as a specialized agency in United nations. settling disputes Priority is to settle disputes, not to pass judgement. A unique contribution Dispute settlement is the central pillar of the multilateral system, and WTO’s unique contribution to the stability of the global economy.

Principles: equitable, fast, effective, mutually acceptable Disputes in WTO are mostly about broken promises. Dispute arises when one country adopts a trade policy measure or takes some action that one or more fellow members considers to be breaking the agreements, or to be a failure to live up to obligations. Third group countries can declare they have interest in the case and enjoy some rights. Procedure for dispute settlements exist in GATT but did not have a standard procedure and timeline schedule. Uruguay round agreement introduced a more structured process with more clearly defined stages in the procedure. How are disputes settled? Responsibility of the DS body, which consists all wto members. DSB have authority to establish panels of experts to consider the case and accept or reject the panel’s findings or the results of an appeal. Panel is helping the DSB make rulings or recommendations. But because panel’s report can only be rejected by consensus in the DSB, its conclusion is difficult to overturn. Appeals -

Either side can appeal a panel’s ruling. Appeals have to be based on points of law such as legal interpretation, they cannot reexamine existing evidence or examine new issues. DSB had to accept or reject appeals, rejection is only possible by consensus.

The case has been decided: what next? If country has done something wrong, it should swiftly correct its fault and if it continues to break agreements, it should offer compensation or suffer penalty. The panel processes At all stages countries in dispute are encouraged to consult each other in order to settle out of court.

Case study: the timetable in practice Cross-cutting and new issues Subjects that cut across the agreements, and some newer agenda item Wto work is not confined to specific agreements with specific obligations. Member governments also discuss a range of other issues, usually in special committees or working groups. One other topic has been discussed a lot in the wto is trade and labour rights. This is not on the wto work agenda but because it had received a lot of attention, it is included her to clarify the situation. Regionalism: friends or rivals? Regional trading arrangements seem to be contradictory, but often they can actually support wto’s multilateral trading system....