PRESENTATIONWORLD TRADE ORGANIZATION

(WTO)

INTRODUCTIONLOGO OF WTO

WTO: FactsMembership - 160 member countriesDirector general – Roberto Azevedo ( From

Brazil)

The WTO is a rules-based, member-driven organization — all decisions are made by the member governments, and the rules are the outcome of negotiations among members.

Information about the institution.

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The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.

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WTO Objectives:Raising standards of livingEnsuring full employmentEnsuring growth of real income and

demandExpanding production and tradeSustainable developmentProtection of the environment

WTO: What is its purpose?

BACKGROUND

World Trade Organization: HistoryMid-1940s:

Meeting in Bretton Woods, New Hampshire, Created IMF and World Bank

US tried to create ITO = International Trade Organization

Interim agreement: GATT = General Agreement on Tariffs and Trade

When ITO failed to be approved (by US!), GATT governed trade policy by default

World Trade Organization: RoundsRounds of GATT

Multilateral Trade NegotiationsNo. Years Name Accomplishments1-5 1947-61 Reduced tariffs6 1964-67 Kennedy Tariffs + anti-dumping7 1973-79 Tokyo Tariffs + NTBs8 1986-94 Uruguay Tariffs, NTBs, Services, Intellectual Property,

Textiles, Ag., Dispute Settlement, Created WTO

9 2001-? Doha ? (Doha Development Agenda)

MISSION, FUNCTIONS AND PRINCIPLES

MISSIONThe WTO's stated goal is to improve the

welfare of the people of its member countries, specifically by lowering trade barriers and providing a platform for negotiation of trade

Its main mission is "to ensure that trade flows as smoothly, predictably and freely as possible".

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FUNCTIONS Among the various functions of the WTO,

these are regarded by analysts as the most important:

It oversees the implementation, administration and operation of the covered agreements

It provides a forum for negotiations and for settling disputes.

. PRINCIPLES OF THE TRADING SYSTEMThe WTO establishes a framework for trade policies; it does not define or specify outcomes. That is, it is concerned with setting the rules of the trade policy games. Five principles are of particular importance in understanding both the pre-1994 GATT and the WTO:

1.Non-Discrimination.2.Reciprocity.3.Binding and enforceable commitments.4.Transparency.5.Safety valves.

Non-Discrimination It has two major components: the most favoured

nation (MFN) rule, and the national treatment policy. Both are embedded in the main WTO rules on goods, services, and intellectual property, but their precise scope and nature differ across these areas. The MFN rule requires that a WTO member must apply the same conditions on all trade with other WTO members, i.e. a WTO member has to grant the most favorable conditions under which it allows trade in a certain product type to all other WTO members."Grant someone a special favour and you have to do the same for all other WTO members." National treatment means that imported goods should be treated no less favorably than domestically produced goods (at least after the foreign goods have entered the market) and was introduced to tackle non-tariff barriers to trade (e.g. technical standards, security standards et al. discriminating against imported goods).[

Reciprocity It reflects both a desire to limit the scope

of free-riding that may arise because of the MFN rule, and a desire to obtain better access to foreign markets. A related point is that for a nation to negotiate, it is necessary that the gain from doing so be greater than the gain available from unilateral liberalization; reciprocal concessions intend to ensure that such gains will materialise

Any country that benefits from another’s tariff reduction should reciprocate to an equivalent extent.

Binding and enforceable commitmentsThe tariff commitments made by WTO

members in a multilateral trade negotiation and on accession are enumerated in a schedule (list) of concessions. These schedules establish "ceiling bindings": a country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade. If satisfaction is not obtained, the complaining country may invoke the WTO dispute settlement procedures.

TransparencyThe WTO members are required to publish their trade

regulations, to maintain institutions allowing for the review of administrative decisions affecting trade, to respond to requests for information by other members, and to notify changes in trade policies to the WTO. These internal transparency requirements are supplemented and facilitated by periodic country-specific reports (trade policy reviews) through the Trade Policy Review Mechanism (TPRM).[38] The WTO system tries also to improve predictability and stability, discouraging the use of quotas and other measures used to set limits on quantities of imports

Safety valves In specific circumstances, governments are able to restrict

trade. The WTO’s agreements permit members to take measures to protect not only the environment but also public health, animal health and plant health.

There are three types of provision in this direction:1.articles allowing for the use of trade measures to attain non-

economic objectives;2.articles aimed at ensuring "fair competition"; members must not

use environmental protection measures as a means of disguising protectionist policies.

3.provisions permitting intervention in trade for economic reasons.

Exceptions to the MFN principle also allow for preferential treatment of developing countries, regional free trade areas and customs unions.

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Set of rulesThe negotiated legal rules included in the various WTO agreements cover the following topics:

Trade in GoodsTrade in ServicesTrade-related aspects of intellectual

property rightsDispute SettlementTrade Policy Reviews

WTO: How does it work?

FORMAL STRUCTUREAccording to WTO rules, all WTO members may participate in all councils, committees, etc., except the Appellate Body, Dispute Settlement panels, and plurilateral committees. Decisions within the WTO are made by members, not staff, and they are made by consensus, not by formal vote.

COUNCILS FOR TRADEThe Councils for Trade work under the General Council. There are three councils — Council for Trade in Goods, Council for Trade-Related Aspects of Intellectual Property Rights, and Council for Trade in Services — each council works in different fields. Apart from these three councils, six other bodies report to the General Council reporting on issues such as trade and development, environmentalism, regional trading arrangements and administrative issues.

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COUNCIL FOR TRADE IN GOODSCOUNCIL FOR TRADE-RELATED

ASPECTS OF INTELLECTUAL PROPERTY RIGHTS

COUNCIL FOR TRADE IN SERVICES

COMMITTEESThe General council has several different committees, working groups, and working parties. Committees on:

Trade and Environment Trade and Development (Subcommittee on

Least-Developed Countries) Regional Trade Agreements Balance of Payments Restrictions Budget, Finance and Administration

TRIPS (Trade Related Intellectual Property Rights Agreement)

The agreement requires member countries to provide patent protection to all products or processes in all fields. The protection is granted subject to the following three conditions:The product or process is a new one.It contains an inventive step.It is capable of industrial application for 20

years from the grant of the patent

TRIPS (Trade Related Intellectual Property Rights Agreement)

TRIPS agreement covers the following seven intellectual properties:PatentsCopyright and other related RightsGeographical IndicationsIndustrial DesignsTrade marksLayout design of integrated circuitsUndisclosed information including trade secrets

TRIMS (Trade Related Investment Measures)TRIMS refers to certain conditions or

restrictions imposed by a government in respect of foreign investment in the country.

In the late 1980's, there was a significant increase in foreign direct investment throughout the world.

TRIMS are widely employed by developing countries. The Agreement on TRIMs provides that no contracting party shall apply any TRIM which is inconsistent with the WTO articles