The World Trade Organization

The Talkboys

Kimberly – History

Tim – Agreements

Adam – Current Events

Stephanie – Criticism/Commendation

History

After World War II Create institutions that would eliminate the

causes of war. Through UN and eliminating the economic causes of

war

Bretton Woods Conference of 1944 Three institutions formed:

The International Monetary Fund (IMF) The World Bank The International Trade Organization (ITO)

General Agreement on Tariffs and Trade (GATT)

Congress refused to agree to the ITO Cede too much sovereignty to an international

body.General Agreement on Tariffs and Trade

—1947 Provisional agreement for the ITO Became the agreement and the organization for

establishing and enforcing, through dispute settlement, the international trade rules.

The World Trade Organization

The Uruguay Round (8th)—1984-1995 established the World Trade Organization amended GATT 1947 which became GATT

1994

Became the World Trade Organization (WTO) on January 1, 1995

Mission

Increase international trade by promoting lower trade barriers providing a platform for the negotiation of trade

“...In brief, the World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.”

Structure

Highest level: Ministerial Conference Meets at least every two years Comprised of countries or customs unions Makes decisions on all matters under any of the

multilateral trade agreements

Structure (cont.)

Second level: General Council Handles the daily work of the ministerial

conference along with the Dispute Settlement Body and the Trade Policy Review Body

Consists of representatives of all WTO member states

Structure (cont.)

Third level: Councils for Trade Work under the General Council

Three parts• Council for Trade in Goods• Council for Trade-Related Aspects of Intellectual

Property Rights• Council for Trade in Services

Six other bodies report to the General Council• trade and development• the environment• regional trading arrangements• administrative issues.

Structure (cont.)

Fourth level: Subsidiary Bodies Three bodies

The Goods Council—11 committees• agriculture, market access, subsidies, anti-dumping

measures, etc. The Services Council

• financial services, domestic regulations and other specific commitments

Dispute Settlement panels and Appellate Body• resolve disputes• Appellate Body deals with appeals

Principles of Trading

1. Free of discrimination Cannot privilege a particular trading partner above others within

the system Cannot discriminate against foreign products and services.

2. Tend toward more freedom fewer trade barriers (tariffs and non-tariff barriers)

3. Predictable trade barriers will not be raised arbitrarily markets will remain open.

4. Tend toward greater competition5. More accommodating for less developed countries

Give them more time to adjust, greater flexibility, and more privileges.

Agreements

Approximately 30 agreements exist

Agreements are (officially) made by consensus of all member countries Finds the most widely acceptable decision Time consuming

In reality, agreements are often made in informal “Green Room” or “Mini-ministerial” meetings with some nations not being present

Agreement on Agriculture (AoA) Domestic support

Green box- fixed payments for environmental programs Amber box- general subsidies Blue box- production-limiting subsidies

Market access Developed countries- reduce tariffs by 36% Developing countries- reduce tariffs by 24%

Export subsidies Reduce tariffs by 35%

General Agreement on Trade in Services (GATS)

Prior to the GATS there was no agreement with regard to trade in services

Historically many services (e.g. health, education) have been considered the responsibility of government

With GATS many services have opened up to international trade that were previously monopolized by governments

Trade-related Aspects of Intellectual Property Rights (TRIPs)

Sets forth minimum intellectual property standards for member countries

Protected items include copyrights, geographical indications, industrial designs, chip designs, patents, trademarks, trade dress, and confidential information

Sanitary and Phyto-Sanitary Agreement (SPS)

Sets food safety standards Bacterial contaminants Pesticides Inspection and labeling

Animal and plant health Imported pets Diseases

Agreement on Technical Barriers to Trade (TBT)

Ensures “that technical negotiations and standards, as well as testing and certification procedures, do not create unnecessary obstacles to trade”

Doha Round

Began November 2001

Supposed to start in Seattle in 1999………..but

Challenges of Uruguay

1. Protection remains high

2. Troublesome domestic policies (subsidies, IPRs, labor conditions)

3. Disadvantaged developing countries- particularly in agriculture (Development Agenda)

Doha Collapses

Europe blames US inflexibility regarding farm subsidies

Others blame EU for their own farm subsidies

EU wants to focus on manufacturing, not agriculture

Developing nations are appalled, combine to oppose rich nations

Cancun

The ministerial conference was held in Cancún, Mexico, aiming at forging agreement on the Doha round. An alliance of 22 southern states, the G20 (led by India, China and Brazil), resisted demands from the North for agreements on the so-called "Singapore issues" and called for an end to agricultural subsidies within the EU and the US. The talks broke down without progress.

WTO @ Cancun

Hong Kong

Billed as a “Development Round”Agreement to phase out all agricultural

export subsidies by 2014Terminate cotton subsidies by 2007Developing nations again see this round

as a loss.

Recent Sept. 28 Meeting

At its meeting on 28 September 2006, the Dispute Settlement Body established a compliance panel under DSU Article 21.5 at the second-time request by Brazil to review US' implementation of the DSB rulings in the “Cotton” case. At the same meeting, China blocked the first-time requests by the EC, US and Canada for panels to examine China's measures on imports of auto parts; and the US blocked Thailand's first-time request for a panel to examine US measures on shrimp from Thailand.

WTO Advantages

Helps trade to flow smoothly. Deals with disputes over trade. Decisions in the WTO are made by consensus

and the agreements apply to everyone. All countries can appeal against decisions which

they feel are unfair. This system has the potential to protect developing countries from harsh measures and unfair rules.

That’s dynamite

Jerry…Dy-no-mite

Well Philip, how do

you feel.

WTO Criticisms

1. The WTO only serves the interests of multinational corporations and wealthy nations.2. Fundamental principals and aims of the WTO are not beneficial for all parties involved. 3. The WTO tramples over labor and human rights4. The WTO is destroying the environment.5. Fundamental principals and aims of the WTO are not beneficial for all parties involved. 6. The US adoption of the WTO undemocratic.7. The WTO undermines local development and penalizes poor countries.8. The WTO is increasing inequality.

WTO Criticisms

The WTO only serves the interests of multinational corporations and wealthy nations

“Some examples of this bias are: (1) rich

countries are able to maintain high import duties and quotas in certain products, blocking imports from developing countries (2) the increase in non-tariff barriers such as anti-dumping measures allowed against developing countries; (3) many developing countries do not have the capacity to follow the negotiations and participate actively in the Uruguay Round; and (4) the TRIPS agreement which limits developing countries from utilizing some technology that originates from abroad in their local systems.”

- Martin Khor

WTO Criticisms

Fundamental principals and aims of the WTO are not beneficial for all parties involved. Free trade and deregulation may not be good

for developing countries Negative environmental, health, and safety

issues may be neglected

The End

Dispute Settlement

Dispute Settlement Body (WTO General Council Dispute Settlement Panel (3 trade officials) Appeals must be made on points of law Panel meets in secret, not required to alert

nations that their laws have been challenged WTO can authorize trade sanctions as

punishment (often ignored by powerful nations)

GATT founding members

Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, the Czechoslovak Republic, France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, the United Kingdom, and the United States.