Introduction to WTO

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Introduction to WTOObjectives, Scope and Functions

Faculty:

Dr. (Mrs.) Vijaya KattiProfessor & Chairperson (MDPs)Indian Institute of Foreign Trade

New Delhi - 110016

For CPEIM (Online) 2014

(Session on 27thJuly 2014)


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GATT Rounds

Name Dates Subject

Geneva 1947 Adoption of GATT

Annency, France 1949 Tariffs

Torquay, England 1951 Tariffs

Geneva 1956 Tariffs

Geneva (Dillon) 1960-61 Tariffs

Geneva (Kennedy) 1964-67 Tariffs

TariffsGATT negotiations rules

Across the board tariff

reduction

Antidumping measures


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GATT Rounds (Contd)

Name Dates Subject

Tokyo 1973-79 Overall reduction of tariffs

Non-tariffs barrier codes- Customs valuation

- Government procurement

- Subsidies and countervailing

measures

- Antidumping-Standards

-Import licensing

Enabling clause for differential

treatment


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The eighth round: theUruguay round

1986-93 The longest trade round further cuts in

industrial tariffs, export subsidies,

licensing, and customs valuation.

Divergent Subjects CoveredParticipating countries :123


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Founding Members of the GATT

1. Australia 13 Lebanon

2. Belgium 14 Luxembourg

3. Brazil 15 The Netherlands

4. Burma (now Myanmar) 16 New Zealand

5. Canada 17 Norway6. Ceylon (now Sri Lanka) 18 Pakistan

7. Chile 19 Southern Rhodesia

8. China (now Zimbabwe)

9. Cuba 20 Syria

10. Czechoslovakia 21 South Africa

11. France 22 United Kingdom

12. India 23 United States


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Achievements

Formation of a Permanent Body

World Trade Organisation - WTO

The Dispute Settlement Mechanism

Strengthening the Multilateral Trading System

Addressing tariff and non-tariff measures

Agreements to tackle different NTMS

Agriculture and textiles brought under themainstream of multilateral trade rules

Trade-related investment measures agreed upon

Agreement on trade-related intellectual propertyrights

Agreement on services


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WTO = GATT + More

GATT was ad hoc and provisional and the WTO and itsagreements are permanent.

GATT was not ratified by contracting parties inparliaments - WTO membershave ratified thus, giving

a sound legal basis GATT dealt with trade in goods only.

The WTO dispute settlement system is an improvedversion - faster and more automatic and rule based


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WTO vs. GATT: Main differences

Nature

Scope

Approach

Dispute settlement


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Basic principles ofGATT/WTO

Market access

Reduction and binding of tariffs

General elimination of quantitative restrictions

on imports and exports

Non-discrimination

MFNNational treatment


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WTO: Trade without discrimination

MFN-clause (Most-Favoured-Nation):art.I

Members are bound to grant to theproducts of other Members treatmentnot less favourable than that accordedto the products of any other country

Exceptions: Regional TradeAgreements, GSP


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Binding /Commitments

A country commits itself to ensure an

agreed level of access to its market, on an

MFN basis, for supplying countries


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Prohibition of QRs

The use of QRs (Quantitiative

Restrictions) is prohibited

Prohibition of QRs GATT Article XI

Non-discrimination of QRs and TRQs

GATT Article XIII

Prohibition of QRs GATS Article XVI


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The structure of WTO

Highest authority-ministerial conference

The general council delegates responsibility to three other

major bodies namely the councils for

Trade in goods,Trade in services and

Trade-related aspects of intellectual property rights.

Committee on trade and development

Committee on BOP restriction

Committee on budget, finance, and administration


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The structure of WTO(Contd)

Committee on Regional Trade Agreement 1996

Bodies set under limited membership Plurilateral Trade

Agreement

Committee on market accessWorking party on accession

Working groups on relationship between

Trade and investment

Trade and competition policy

Transparency in government procurement


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Scope

The WTO agreement (which some have described

as a mini charter) is strictly institutional and

procedural in character and has no substantive

rules or principles other than those which are

included in the annexed agreements.


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Relationship

Enjoys equal status as other international

organizations

Cooperates with other international institutions to

achieve a greater coherence in global policy

making


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The Secretariat

Headed by the Director General

Carries out WTOs administrative

work

Responsible for serving the WTO

bodies with respect to negotiationsand implementation of the

agreements

Providing technical support to

developing countriesDirector-General Roberto Azevdo meets the Director-

General of the International Labour Organization (ILO),Guy Ryder, at the offices of the ILO in Geneva.


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Budget and contributions

Annual budget presented by the Director General

to the committee on budget, finance, and

administration

Contribution from individual members are

calculated on the basis of their shares in the total

trade conducted by WTO members


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The Structure of the Legal Text: Marrakesh

Agreement Establishing the World Trade

Organization

Article I Establishment of the organization

Article II Scope of WTO

Article III Functions of WTO

Article IV Structure of WTOArticle V Relations with other organizations

Article VI The Secretariat

Article VII

Budget and contributionsArticle VIII Status of WTO

Article IX Decision making


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Marrakesh agreement(Contd)

Article X Amendments

Article XI Original membership

Article XII Accession

Article XIII Non-application of multilateraltrade agreements between particular membersArticle XIV Acceptance, entry into force anddeposit

Article XV Withdrawal

Article XVI Miscellaneous provisions


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Annex 1

Annex 1A Multilateral agreementon trade in goods

Annex 1B General agreement ontrade in services andannexes

Annex 1C Agreement on trade- related aspects of

intellectual propertyrights


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Annex 1A: Multilateralagreement on trade in goods

GATT 1994

Agreement on agriculture

Agreement on application of SPS measures

Agreement on TBTAgreement on textiles & clothing

Agreement on TRIMS


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Annex 1A: Multilateral agreementon trade in goods (Contd)

Agreement on the implementation of article VI of

GATT 1994

Agreement on pre-shipment inspection

Agreement on rules of origin

Agreement on import licensing procedures

Agreement on subsidies and countervailing

measuresAgreement on safeguards


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Annexes1B andAnnexes 1C

Annex 1B General agreement on Trade inServices

Annex 1C Intellectual property and its rights -What they imply?


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Annexes

Annex 2 - Understanding the rules andprocedures governing the settlement of dispute

Annex 3 -Trade policy review mechanism

Annex 4 Plurilateral trade agreement

Agreement on trade in civil aircraft

Agreement on government procurement


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Withdrawal from the WTO

Any Member may withdraw from the WTO, such

withdrawal applying to both the WTO and the

WTO and the Multilateral Trade Agreements, by

sending a formal written notice of withdrawal tothe Director General of the WTO. The actual

withdrawal will take place six months after

receipt of the notice.


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WTO : A dynamic workprogramme

Ongoing business Tasks

defined by agreements

themselves

a) specialized meetings

b) Regular reviews of

national trade policies


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WTO: A dynamic workprogramme (Contd)

The built in Agenda

a) Agriculture, Services

b) Talks on new subjects Trade Competition Policy,

Investmentc) Trade Problems of LDCs Not to undertake

commitments/concessions inconsistent with their

development/financial and trade needs

d) Trade and Environment Committee on Trade andEnvironment

Two Continuing Tasks (1) Dispute Settlement (2)

Accession


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Ministerial conferences

First Ministerial Singapore (1996)

Second Ministerial Geneva (1998)

Third Ministerial Seattle (1999)

Fourth Ministerial Doha (2001)Fifth Ministerial Cancun (2003)

Geneva Framework Mexico (July 2004)

Sixth Ministerial Hong Kong (2005)

Seventh Ministerial Geneva (November 2009)

Eighth Ministerial Geneva (December 2011)

Ninth Ministerial - Bali, 3-6 December 2013


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Summary

WTO is different than GATT.

It is an institution with specific objectives, scope, and

functions.

Marrakesh Agreement is followed by four annexes and 31volumes of schedules of concessions.

160 members and no withdrawal as on 26 June 2014.

WTO has dynamic work programme.

Ninth ministerial held so far.


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Thank You

Documents

Introduction to WTO