WORLD TRADE ORGANISATION

AND RELATED AGREEMENTS

Group Members:Aveek Bose (08)D’Costa Rohan (12)Easakku Shiva (17)Menon Pramod (35)Pirwani Laxman (45)Shah Saurabh (54)Shetty Suraj (57)Chhawchharia Kamal (64)

Functions of WTO

Negotiating Forum

Set of Rules Dispute settlement

Principles of Trading

Trade without Discrimination

Freer Trade Predictability Promoting Fair

Competition

Encouraging development and economic

reform  Most Favoured

NationNational

Treatment

IntroductionIntroduction

History of WTOHistory of WTO• Established in 1995 • GATT is well over 50 years old

GATT trade roundsYear Place/name Subjects covered Countries1947 Geneva Tariffs 231949 Annecy Tariffs 131951 Torquay Tariffs 381956 Geneva Tariffs 261960-1961

GenevaTariffs 26

Dillon Round

1964-1967

Geneva Tariffs and anti-dumping measures 62

Kennedy Round

1973-1979

Geneva Tariffs, non-tariff measures, “framework” 102

Tokyo Round Agreements

1986-1994 Geneva

Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc

123

Organization Structure of WTOOrganization Structure of WTO• 150 members• 97% world trade• 30 other negotiating membership

Benefits of WTOBenefits of WTO

• The system helps promote peace• Disputes are handled constructively• Rules make life easier for all• Freer trade cuts the costs of living• It provides more choice of products and qualities • Trade raises incomes• Trade stimulates economic growth• The basic principles make life more efficient• Governments are shielded from lobbying• The system encourages good government

Overview of WTO AgreementsOverview of WTO Agreements

• Often called as WTO trade rules.• Commitments to lower customs tariffs and other trade barriers,

and to open and keep open services markets • Six main parts:

The basic structure of the WTO agreements: how the six main areas fit together — the umbrella WTO Agreement, goods, services, intellectual property, disputes and trade policy reviews.Umbrella AGREEMENT ESTABLISHING WTO

Goods Services Intellectual property

Basic principles GATT GATS TRIPSAdditional details Other goods

agreements and annexes

Services annexes

Market access commitments

Countries’ schedules of commitments

Countries’ schedules of commitments (and MFN exemptions)

Dispute settlement DISPUTE SETTLEMENTTransparency TRADE POLICY REVIEWS

Tariff AgreementsTariff Agreements

Tariff Cuts• Developed Countries Tariff cuts in first five years from 1st

January 2005• 40% cut in Industrial tariff from an average of 6.35 to 3.8%• Value of duty-free imported industrial products developed

countries will jump from 20% to 44%.• On 26 March 1997, 40 countries in information technology

products agreed to eliminate import duties

More Bindings• Imports restriction converted in tariff – tariffication• First step – to replace these restrictions with tariffs that represented

about the same level of protection • Six years from 1995-2000, these tariffs were gradually reduced.• Elimination of previous import bans.

Agriculture AgreementsAgriculture Agreements

• Original GATT contained Loopholes• The Uruguay Round produced the first multilateral agreement • Fair competition and a less distorted sector • New Rules and commitments • Market access• Domestic support• Export subsidies• The least-developed and those depending on food imports

Standards and Safety AgreementStandards and Safety Agreement

• Article 20 of GATT - Protect human, animal or plant life or health• The Sanitary and Phytosanitary Measures Agreement or SPS • Setting of own standards • Article 5.7 – temporary “precautionary” measures.• Technical regulations and standards: The Technical Barriers to

Trade Agreement (TBT)

• Discourages any methods that would give domestically produced

goods an unfair advantage

Textiles AgreementsTextiles Agreements

• One of the hardest-fought issues in the WTO

• From 1974 to the end of the Uruguay Round – The Multifibre

Arrangement (MFA)

• The WTO’s Agreement on Textiles and Clothing (ATC) – 1995

• Fully integrated sector by 1st January 2005

• End of Quota system

• Textiles Monitoring Body (TMB) – Supervisory Body

Services AgreementsServices Agreements

• The General Agreement on Trade in Services (GATS) • Three elements:

General obligations and disciplines;

Annexes dealing with rules for specific sectors;

Movement of natural persons

Financial services

Telecommunications

Air transport services

Individual countries’ specific commitments• Most-favoured-nation (MFN) treatment  

Intellectual propertyIntellectual property AgreementsAgreements• Trade-Related Aspects of Intellectual Property Rights • Five broad issues:

Basic principles Protection to intellectual property rightsThe Paris Convention for the Protection of Industrial Property (patents, industrial designs, etc)The Berne Convention for the Protection of Literary and Artistic Works (copyright). Enforcement of RightsEnforced under member countries’ laws, and penalties for infringement Fair and equitable procedureReview of an administrative decision or to appeal a lower court’s ruling Settlement of Disputes Special transitional arrangements – 1, 5 or 11 years or more

• Willful trademark counterfeiting or copyright piracy – Criminal offence

Anti-dumping, subsidies, safeguardsAnti-dumping, subsidies, safeguards AgreementsAgreements

• Anti – Dumping actions: Anti-Dumping Agreement. • GATT (Article 6) allows countries to take action against dumping • Margin of dumping is less than 2% of the export price of the

product – investigations are to be end immediately. • Subsidies and special “countervailing” duties to offset the

subsidies

Prohibited subsidies

Actionable subsidies • Emergency measures to limit imports temporarily, designed to

“safeguard” domestic industries

Non-tariff barriersNon-tariff barriers Agreements Agreements

• Import licensingThe Agreement on Import Licensing Procedures

• Rules for the valuation of goods at customs

• Preshipment inspectionThe Preshipment Inspection Agreement 

• Rules of originThe Rules of Origin Agreement

• Investment measuresThe Trade-Related Investment Measures (TRIMs)

Agreement 

PlurilateralsPlurilaterals Agreements Agreements

• Trade in civil aircraft

• Government procurement

• Dairy products

• Bovine meat

The bovine meat and dairy agreements were terminated in 1997.

Trade policy reviewsTrade policy reviews

• Governments have to inform about specific measures, policies or laws through regular “notifications”

• WTO conducts regular reviews of individual countries’ trade policies — the trade policy reviews

• Objectives:Increase in transparencyImprovement in the quality of public and intergovernmental debateEnable the multilateral assessment of the effects of policies

• The frequency of the reviews depends on the country’s size:The four biggest traders – once every two years.The next 16 countries – every four years.The remaining countries – every six years

Dispute SettlementDispute Settlement

Dispute SettlementDispute Settlement• The main stages are:

• Before the first hearing • First hearing• Rebuttals: • Experts• First draft • Interim report• Review• Final report• The report becomes a ruling

• Appeals• Compliance of with WTO ruling and Penalties for Non compliance

Dispute SettlementDispute Settlement CasesCases

• 1st CASE: Hormone-Treated Beef Case

Complaints by: U.S. and CanadaComplaints against: European UnionWTO Cases WT/DS26 (U.S.) and WT/DS48 (Canada)

• 2nd CASE : Automobile Fuel-Efficiency Case

Complaint by: E.U.Complaint against: U.S.GATT Case DS31

Dispute SettlementDispute Settlement CasesCases

• 3RD Case: Baby-Food Trademark Controversy

Raised by: U.S.Directed against: GuatemalaDiscussed: 1993 - 1995. No formal WTO dispute-settlement procedure was initiated

• 4th case: Longhorn Beetle Controversy

Complaints by: Hong KongComplaints against: U.S. & CanadaComplaints to WTO Committee on Sanitary and Phytosanitary Measures. Formal WTO dispute-settlement procedure not initiated

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