WTO Flashcards
Origin and establishment of WTO
- 1944: Bretton Woods Conference ended with creation of IMF, IBRD (Worldbank) and international trade organisation
- 1947: constitution of trade organisation failed (no US ratification) -> GATT entered into force
- 1948-1994: several trade rounds, GATT meanwhile considered as defacto organisation
- 1994: Treaty of Marrakesh on establishment of WTO
- 1995: WTO Treaty enters into force
Objectives of WTO
Member-driven:
- negotiating forum for liberalising international trade
Rule-based:
- monitoring respect for international trade rules and procedures
- third party for solving international trade disputes
Membership
- states and customs territories can join
- from 129 to 164 members (representing 97% of world trade)
- new members must accept all prevailing rules (incl. annexes) and open its market for all members of WTO (principle of non-discrimination)
WTO: Institutional structure and decision-making
- Ministerial Conference
- General Council, Trade Policy Review Body, Dispute Settlement Body
- separate Councils for: trade in goods/ services/ IP rights
- Secretariate
-> mostly planning bodies
Decision-making: consensus
Structure of WTO
Umbrella: “Agreement Establishing WTO”
below: different areas of agreements: GATT, GATS, TRIPS
Important: WTO not a specialised agency of UN!
Basic rules and principles of WTO
Principle of non-discrimination:
- Most-favoured nation principle (GATT, GATS, TRIPS)
- > Exceptions:
- Regional Trade Agreements (if: they help trade flow more freely in this area; no rising of barriers of trade to other WTO members; notification to WTO is made)
- General System of Preferences: special access for developing countries for entering markets
- same ‘National Treatment’ of foreign goods as domestic, after they have entered market
- rules on market access (tariffication of trade barriers, ban on quantitative restrictions)
- rules on unfair trade (e.g. dumping)
- rules promoting harmonisation of national regulations
Trade Policy Review
- “Conformity Clause” -> members are obliged to regularly check conformity of national trading with WTO rules
- also: “WTO Trade Policy Review” (Annex 3) -> 4 largest members: every 3 years, the next 16 states: 5 years, remaining every 7 years
Purpose of WTO Trade Policy Review
- contribute to improved adherence by all members to rules of the WTO
- contribute to the better functioning of the multilateral trading system (transparency and understanding in trade policy and practices)
Trade Policy Review Body - how do they analyse and what is the outcome?
Based on two documents: statement by MS under review & report by WTO economists
-> Review meeting of TRPB and MS -> General/concluding remarks (not legally binding)
TRPB remarks on EU’s trade policies
- complementation on being a strong supporter and defender of rule-based trading system
- appreciation for recently concluded trade agreements, GSP, EBA
- questions and concerns about sanitary products
- concerns about CAP (high level of tariffs & high subsidies)
WTO Dispute Settlement: basic features & WTO organs involved
- only for WTO members
- system of compulsory jurisdiction
- system favours direct conversations between disputed parties
- > BUT: no creation of new trading rules (only interpretation of prevailing rules)
- WTO organs: DSB, Panel, Appellate Body
- over 500 disputes dealt with
Dispute Settlement Body
Administration of whole procedure -> appointing of a panel
[i.e. General Council, just under different name]
Panel
- set up by DSB
- three experts
- analysis of conflict, creation of report & decision-making
- > Report becomes ruling unless DSB rejects in consensus (“negative/reversed consensus”)
Appellate Body
- 7 permanent members
- appeal authority (uphold, modify or reverse Panel’s findings)
- > Report of Appellate Body becomes ruling unless DSB rejects in consensus
WTO Dispute Settlement: Procedure
1st stage: Consultation stage (between parties)
-> failing after two months -> establishing of Panel
2nd stage: Creation of Panel (-> analysis, report, decision)
3rd stage: Panel’s report can be taken to Appellate Body
4th stage: Implementation stage
-> immediately to be taken;
non-compliance -> negotiations between parties about compensation within 20 days
-> no agreement: complaining party may ask DSB for permission to impose duties against loosing party
