3. Outline
What is WTO
Brief Overview
Agreements of WTO
Principles of Trading
Impacts of WTO
Criticism on WTO
Conclusion
Questions??
3
4. The International
Organization that
Governs the Rules of
Trade Between Nations
Functions:
-administer WTO trade agreements
-forum for trade negotiations
-handle trade disputes
-monitor national trade policies
-technical assistance and training
-cooperate with international organizations 4
5. Successor to GATT
International Organization
embodied in results of Uruguay Round
Established: 1 January 1995
Member driven (153 Members)
Decision making by CONSENSUS
Single Undertaking –several topics
negotiated together
Serviced by Secretariat - 600+ staff
Based in Geneva 5
6. Ministerial
WTO Conference
Organization
Trade
General Dispute
Policy
Review Council Settlement
Council Council
Committees for Trade Council for Trade
in Goods for TRIPS in Services
Committees Committees
Working Working Working
Parties Parties Parties 6
8. Main WTO Agreements
Agreement on Agriculture (AoA)
General Agreement on Trade in
Services (GATS)
Agreement on Trade-Related Aspects
of Intellectual Property Rights
(TRIPS)
8
9. PRINCIPLES OF TRADE
• Most Favorite Nation
• National Treatment
• Negotiations
• Barriers not raised
Arbitrarily
• Discourage unfair
practices
GATT Articles
9
10. MOST FAVORED NATION
Principle of Non-Discrimination
• Tariffs and regulations applied
without discrimination
• WTO Members receive most
preferential trade terms
GATT Article 1
10
11. Impact of WTO on Economy
• Helps promote peace between nations
• Disputes are handled constructively
• Rules make it easier for all – WTO based on rules not on
power
• Free trade cuts the cost of living, provides more choice of
products and quality
• Trade stimulates economic growth
• Trade raises income of country and it‘s people
• Basic principles make life more efficent
• Governments shielded from lobbying
• System encourages good governance
11
12. Helps promote peace between nations
• This sounds like an exaggerated claim, and it
would be wrong to make too much of it.
Nevertheless, the system does contribute to
international peace, and if we understand why,
we have a clearer picture of what the system
actually does.
12
13. Disputes are handled constructively
• As trade expands in volume, in the
number of products traded, and in the
numbers of countries and companies
trading, there is a greater chance that
disputes will arise. The WTO system
helps resolve these disputes peacefully
and constructively.
13
14. How WTO Resolves Disputes
• Member country complains about
violation of trade rule
• Panel of judges chosen
• Judicial-type hearing at WTO
• Finding
• Appeal and final ruling
• Implementation (in reasonable time) or
penalties/compensation
14
15. Rules make it easier for all –
WTO based on rules not on power
• The WTO cannot claim to make all
countries equal. But it does reduce
some inequalities, giving smaller
countries more voice, and at the same
time freeing the major powers from
the complexity of having to negotiate
trade agreements with each of their
numerous trading partners. 15
16. Trade stimulates economic growth
• Trade clearly has the potential to create
jobs. In practice there is often factual
evidence that lower trade barriers have
been good for employment. But the picture is
complicated by a number of factors.
Nevertheless, the alternative —
protectionism — is not the way to tackle
employment problems.
16
17. Free trade cuts the cost of living
• We are all consumers. The prices we
pay for our food and clothing, our
necessities and luxuries, and
everything else in between, are
affected by trade policies.
17
18. Trade raises incomes
• Lowering trade barriers allows trade
to increase, which adds to incomes —
national incomes and personal
incomes. But some adjustment is
necessary.
18
19. Governments shielded from lobbying
• The WTO helps governments take a
more balanced view of trade policy.
Governments are better-placed to
defend themselves against lobbying
from narrow interest groups by
focusing on trade-offs that are made in
the interests of everyone in the
economy.
19
20. System encourages good governance
• Under WTO rules, once a commitment
has been made to liberalize a sector of
trade, it is difficult to reverse. The
rules also discourage a range of unwise
policies. For businesses, that means
greater certainty and clarity about
trading conditions. For governments it
can often mean good discipline.
20
21. Criticism of the WTO
• ..is fundamentally undemocratic
• ..tramples labor and human rights
• ..would privatize essential services
• ..is destroying the environment
• ..is endangering human lives
• ..is increasing inequality
• ..hurts poor countries in favor of rich powerful nations
• ..undermines local level decision-making and national
sovereignty
21
22. The WTO Is Fundamentally Undemocratic
• rules are written by and for corporations with inside
access to the negotiations
• simple requests for information are denied
• proceedings are held in secret
22
23. The WTO Will Not Make Us Safer
• domination of international trade by rich countries for
the benefit of their individual interests fuels anger and
resentment that make us less safe
23
24. The WTO Tramples Labor and Human Rights
• The WTO encourages a 'race to the bottom' in wages
by pitting workers against each other
• The WTO has ruled that it is illegal for a government
to ban a product based on the way it is produced, such
as with child labor
• It has also ruled that governments cannot take into
account "non commercial values" such as human
rights
24
25. The WTO Is Destroying the Environment
• The WTO is attempting to deregulate industries
including logging, fishing, water utilities, and energy
distribution, which will lead to further exploitation of
these natural resources.
25
26. The WTO is Increasing Inequality
• the richest 20 percent of the world's population
consume 86 percent of the world's resources while the
poorest 80 percent consume just 14 percent. WTO
rules have hastened these trends by opening up
countries to foreign investment and thereby making it
easier for production to go where the labor is cheapest
and most easily exploited and environmental costs are
low.
26
27. The WTO Hurts Poor, Small Countries in
Favor of Rich Powerful Nations
• many important decisions get made in a process
whereby poor countries' negotiators are not even
invited to closed door meetings
• Many countries do not even have enough trade
personnel to participate in all the negotiations
• many countries are too poor to defend themselves
from WTO challenges
27
29. Recommendations
• The Organization should operate
democratically
• Every country must have equal representation
• Rich countries should promote poor countries
• Some laws must be prepared related with
Human Rights, Child Labour, Environment
• The Dispute settlement system must be
Powerful to implement decisions
• Public services must remains profit free.
29
During this presentation I will provide a brief background of Trade facil at the WTO. Provide an overview of the mandate for negotiation and the Hong Kong Ministerial Declaration. The GATT articles that provide the legal framework for the negotiation, an overview of the proposals, discuss the development issues and how the negotiations are expected to progress.
Quantitative quotas eliminated and use of tariffs only through negotiations with other WTO members- countries make concessions to bind their tariffs which means that they commit to maximum tariffs that they will assess on all products. Some countries like the US have a different rate for each product. Other countries will just set one duty rate for all products or groups of products. These commitments are recorded in a schedule for each country. The schedules change constantly as countries continue to negotiate. They can assess duties lower than the bound tariff rate but not higher. Most favored nation means that all WTO members receive the lowest negotiated rate
Consensus - a notion is agreed unless 1 Member is opposed .
Ministerial conference is responsible for decision making and meets every 2 years- The last meeting was Cancun in September 2003 next Hong Kong Dec 2005 during the 2 years between meetings the General Council performs the day to day functions of the Conference- the council is made up of all WTO Member Countries. It meets as a dispute settlement body and is responsible for carrying out reviews of the trade policies of individual countries on the basis of reports prepared by the WTO Secretariat. Under the General council there is a council for Each area- trade in goods, services and TRIPS- under the council there are committees and working parties (we will look at the council for goods in a second) Committees on left Trade and Environment- Trade and Development - Regional Trade Arrangements Work Party on Accession - oversee negotiations for accession and open to all interested member countries There is a new committee to observe developments of regional groups like the Arab Free trade group- some 100 groups worldwide. TNC special committee that is established during negotiations. TF will be a special committee under the TNC. Will report to them and possibly to the GC
List of Ministerial conferences since the WTO was established. The July Package resulted from a meeting of the General Council. During this meeting Members agreed that trade facilitation would become a topic of negotiation in the DDA. The results are called the July package- TF mandate is in Annex D. Document symbol is WT/L/579
Article 3- GATT Imports and locally produced goods must be treated the same in the domestic market “ Once goods have cleared customs, imported goods must be treated no less favorably than the equivalent domestically-produced goods also applies to services and intellectual property Art III4: (National Treatment principle) “ The products of the territory of any Member imported into the territory of any other Member shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. …”
Article 1 GATT “ Members are bound to grant to the products of other Members treatment not less favorable than that accorded to the products of any other country” Each member treats all other members equally as MFN partners. If a country improves the benefits that it gives to one trading partner it has to give the same best treatment to all other WTO members- they all remain most-favored. A country can not give lower rates to non-WTO countries than it does to WTO members. Exceptions countries in a legitimate free trade union may receive more preferential terms than MFN countries- must cover substantially all trade safeguards- can raise barriers against products from specific countries if they are trading unfairly. can apply higher duties to non-WTO members
(No need to explain each one- just show for example) These are main headings- many have subheadings. For example: A. Publication subheadings proposals for publication of legislation on the internet and establishment of an Enquiry point for trade-related information FYI: Time periods between publication and implementation- provides notice to all interested parties – including government officials and gives them time to adjust so they can be in compliance when the law takes affect Consultation and comments- this goes a step further. Allows interested parties to comment on proposed legislation. It is proposed that governments take these proposals into consideration. E. appeal procedures- right of administrative appeal, time limits for appeals, right to representation, release of goods pending appeal F. Other measures to enhance impartiality and non-discrimination
The main categories of proposals for Gatt Article VIII fees and formalities - Letters G-L in the Secretariat compilation (TN/TF/W/43/Rev.10) Consularization- – elimination of fees paid to consulates in country of export for approval to import. Some countries require documents to be stamped by their consulate in the country of export. Members want this practice eliminated as they claim the purpose is primarily to collect.
The main categories of proposals for Gatt Article VIII fees and formalities - Letters G-L in the Secretariat compilation (TN/TF/W/43/Rev.10) Consularization- – elimination of fees paid to consulates in country of export for approval to import. Some countries require documents to be stamped by their consulate in the country of export. Members want this practice eliminated as they claim the purpose is primarily to collect.
The main categories of proposals for Gatt Article VIII fees and formalities - Letters G-L in the Secretariat compilation (TN/TF/W/43/Rev.10) Consularization- – elimination of fees paid to consulates in country of export for approval to import. Some countries require documents to be stamped by their consulate in the country of export. Members want this practice eliminated as they claim the purpose is primarily to collect.
The main categories of proposals for Gatt Article VIII fees and formalities - Letters G-L in the Secretariat compilation (TN/TF/W/43/Rev.10) Consularization- – elimination of fees paid to consulates in country of export for approval to import. Some countries require documents to be stamped by their consulate in the country of export. Members want this practice eliminated as they claim the purpose is primarily to collect.
The main categories of proposals for Gatt Article VIII fees and formalities - Letters G-L in the Secretariat compilation (TN/TF/W/43/Rev.10) Consularization- – elimination of fees paid to consulates in country of export for approval to import. Some countries require documents to be stamped by their consulate in the country of export. Members want this practice eliminated as they claim the purpose is primarily to collect.
The main categories of proposals for Gatt Article VIII fees and formalities - Letters G-L in the Secretariat compilation (TN/TF/W/43/Rev.10) Consularization- – elimination of fees paid to consulates in country of export for approval to import. Some countries require documents to be stamped by their consulate in the country of export. Members want this practice eliminated as they claim the purpose is primarily to collect.
Technical Assistance & support The mandate calls for 2 phases of technical assistance: First: technical assistance to help Members to participate in the trade facilitation negotiations more effectively. The phase we are in now. Second: TA to assist with implementation of the final text or agreement Annex D also provides that to make TA and Capacity building more effective relevant international organizations shall be invited to cooperate. Specifically names IMF, OECD, UNCTAD, WCO AND World Bank to be included. They are the only Observers for the NGTF. They are the observers in CTG
For more information: There are 2 WTO webpages concerning trade facilitation. The first is the normal WTO webpage and contains links to all the negotiation documents. The second webpage concerns technical assistance and capacity building on TF- see next slide