GENERAL PRINCIPLES OF INTERNATIONAL TRADE

MODULE 3: FORMATION, STRUCTURE AND WORKING OF WTO ............................................................. 1

4. What is WTO? ............................................................................................................................................................ 4
5. Difference between GATT and WTO (GATT 1994 is a part of WTO law)? .................................................. 5
6. Types of trade agreements ........................................................................................................................................ 6
7. Problems with the WTO ........................................................................................................................................... 8
8. Trading rounds ........................................................................................................................................................... 8
9. ‘Birth Defects’ in the WTO ...................................................................................................................................... 9
10. The WTO Agreement.............................................................................................................................................. 10
1) WTO is a standalone agreement ....................................................................................................................... 10
2) Nature and Scope of WTO Agreement ........................................................................................................... 11
11. Observers under WTO: ........................................................................................................................................... 11
12. Export Controls........................................................................................................................................................ 11
13. Objectives and Functions for establishment of WTO ....................................................................................... 12
1) Recitals .................................................................................................................................................................. 12
1) Objectives ............................................................................................................................................................. 12
2) Functions of the WTO ....................................................................................................................................... 13
Coherence Function: Article III.5 and Article V .................................................................................................... 14
14. Philosophies and Basic Structure of the WTO .................................................................................................... 18
1) Philosophies ......................................................................................................................................................... 18
2) Basic Structure ..................................................................................................................................................... 19
15. Organisational structure .......................................................................................................................................... 19
1) Ministerial Conference ........................................................................................................................................ 21
2) General Council ................................................................................................................................................... 22
16. How does language play a role in interpretation ................................................................................................. 22
17. Secretary General...................................................................................................................................................... 23
3) Names ................................................................................................................................................................... 23
4) Procedure .............................................................................................................................................................. 23
5) Qualifications ....................................................................................................................................................... 23
6) Salary ..................................................................................................................................................................... 23
18. Is WTO a Democratic Organisation? ................................................................................................................... 24
19. The Great Sovereignty Debate ............................................................................................................................... 24
7) Membership of WTO ......................................................................................................................................... 24
8) Schedule of Concession ...................................................................................................................................... 24
9) Conformity of Laws, Regulations and Administrative Procedure ............................................................... 25
10) No Reservation is Allowed for any WTO Provision ................................................................................... 25
11) Compulsory and Exclusive Jurisdiction on all Trade Matters by the DSU .............................................. 25
12) TPRM .................................................................................................................................................................. 25
13) Decision Making Process ................................................................................................................................. 26
14) One country one vote ....................................................................................................................................... 26
15) Balancing b/w Developed and Developing & LDCs .................................................................................. 26
 16) The WTO is a rule-oriented system against power orientation.................................................................. 27
17) Power sharing arrangement (b/w DG etc).................................................................................................... 27
18) Budget Provisions ............................................................................................................................................. 27
19) Amendment Process ......................................................................................................................................... 27
20. Advantages of WTO Members .............................................................................................................................. 27
20) Trade is Conducted According to Rules Formulated and Agreed by Members Only ............................ 27
21) System for Resolving Disagreements b/w Members................................................................................... 27
22) There is an Opportunity to Help in Formulating Future Rules and Trade Policies ............................... 28
23) Equal Voting Power.......................................................................................................................................... 28
21. Role of Decisions in the WTO – Stare Decisis Rule .......................................................................................... 28
24) No precedential value ....................................................................................................................................... 28
25) They are merely guidelines ............................................................................................................................... 28
26) Only the MC and GC can interpret ................................................................................................................ 28
22. Are GATT Principles Still Applicable ................................................................................................................... 28
23. WTO and National Laws Conformity .................................................................................................................. 29
27) Conformity of National Laws ......................................................................................................................... 29
24. The Amendment Process ........................................................................................................................................ 30
28) Basic and Fundamental Amendments ............................................................................................................ 31
29) General Provisions ............................................................................................................................................ 31
25. Implementation of international treaties:.............................................................................................................. 31
26. WTO Accession Process ......................................................................................................................................... 33
 MODULE 3: FORMATION, STRUCTURE AND WORKING OF WTO

WTO- 164 members (last- Afghanistan)

 Universalist organization
 Multilateral trade organization.
 Regime theory
 Marrakesh Agreement establishing WTO- 1st January 1995 [h.q. Geneva]. However, it is treaty. For India,
there is no difference between treaty and agreement. However, there is a difference in US- URRA-
WTO is not law of the land; for trade purposes, US is a dualist country.
 It is a standalone agreement- influences other multilateral agreements but does not get influenced by
them.

 Note: Tariff wall- imposition of extraordinary tax; this was the

situation in 1929 (Protectionism): Great Depression
 Globalisation: 4 phases; no visa requirement before 1940- best
form of globalisation- every country was talking in terms of trade.

 GATT 1947 was replaced by GATT 1994- Basic principles of trade in goods were enumerated under
GATT 1994. For trade in services- GATS.

 Why was GATT 1947 removed?

1. Grandfather clause- even if your country is a contracting party in GATT, you are allowed to pass
GATT inconsistent laws.

2. Positive Consensus- this implies dispute settlement mechanism. Whenever a GATT inconsistent
law is passed, a party will have the right to challenge it but at the same time the other party will
have the right to give consent. How can a country whose action is challenged have the power to
give consent?

3. No IPR, services, agriculture, procurement, etc.

However, GATT wasn’t a failure. It was formed on the basis of experience and discussion. 8 discussions were
conducted for the formation of GATT

 WTO regulates trade in goods, services and IPR- Exchange of goods, services and IPR between
individuals located in different countries. WTO is a treaty-based organization which provides rules,
regulation and a framework regarding how a country should conduct itself in trade matters.
 If judicial pronouncement is not in accordance with WTO, it can be resolved before WTO Dispute
Settlement Mechanism- the mechanism ensures that the rules under WTO are enforceable. DSB 
Panel  Appellate Body (AB). John H. Jackson (he is an American professor, considered as the father
of WTO) calls DSM the “Crown Jewel” of WTO. Jackson gave the name WTO. Earlier the name
suggested was MTO- Multilateral Trade Organization.
 Patenting in India was not in compliance with WTO; US had challenged this; India lost. Recently, there
was another challenge by US regarding poultry where India lost again.
 IPR- Paris convention, Rome Convention, WIPO. Why WTO then?  Only those aspects covered
under TRIPS fall under the regulatory framework of WTO.
 Integration Mode and World Social Forum
 One of the basic principles of WTO- Transparency.
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  Based on neo-liberal ideas.
 Article 60 and 61 of the ICJ- third party rights. Article 10 of DSU- third party rights in WTO DSM.
Example- Brazil, being a third party, raised an issue against USA regarding cotton trade.

 Principal-Agent Relationship
- Representatives are sent by countries. If appellate body members/ICJ members are from teor country
then they should represent/defend their country only (mostly American thinking)

Three tiers of dispute resolution under the WTO

1. Consultation
 Negotiations
 If A asks, B has to give
 DSU Rules provides for consultation
 If consultation resolved disputes – MAS (Mutually Agreed Solution).
 If not then any of the parties will request for a Panel

2. Panel
 Ad hoc panel Reports

3. Appellate Body
 If any of the parties isnt satisfied by the Panel report they can appeal
 The decision here will be binding
 Decision by consensus: all have veto power
Panel report still can go to DSB for adoption

 Regional Comprehensive Economic Partnership RCEP: Mega Regional Trade Agreement (16
countries) [MRTA] – India’s policy of bilateral trade with 16 countries. Focussing on this rather than
multilateral trade - India backed out of this
There are 3 types of agreements in the WTO:
1. Customs Union (Art. XIV of GATT 1994)
2. FTA (RCEP is largely this only)
3. Interim Trade Agreements
 RCEP is the biggest RTA by far. India (when it was part of it) and China were the dominating authorities
here
(Now FTA is also there, through tariffs will be less. Hence, flooded with Chinese imports)
 India – backed out of RCEP mostly due to agricultural products, milk and meat. Import on manufacturing
- Automobile prices and meat prices were also sought to be reduced. These problems in trade in farm
products has resulted in India opposing the RCEP.
- Thus, India has entered into Bilateral Trade Agreements with these countries, rather than entering into a
regional trade agreement. 

 There has to be substantial trade agreements, and this means that majority goods cannot be excluded.
 Trade imbalances mean that there is a huge import and low export, or vice-versa. The Ministry of
Commerce was concerned about the RCEP causing a trade imbalance with China. 


 The four levels are: Multilateral trade, RTA, Bilateral Trade, Domestic. WTO focus is more on RTA
 Can it be said that RTA is eating WTO: Negoatiations at WTO level arent taking place properly

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 Eg: Doha Round. Multilateral trade isnt progressing
 Shift to BTA, then.

 SPS: Sanitary and Phyto-sanitary

 WTO regulated this as well
 Eg: Alphanso mangoes, banned import from India due to flies

 Does WTO regulate morality:

(Jhatka meat and halal meat)
- Can any country ban items on the basis of morality
- Art 20 of GATT and 14A of GATS and 7 of TRIPS gives two tests:
1. Non-discrimination test
2. Objectively proven

EC Seal Case

China Audio-visual Case

These were judgments in the WTO to facilitate trade

 Human rights, gender issues?

 Labour standards: No (ILO governs)

USA Gasoline Case

ILO regulates labour standards

Environment: Yes, explicitly and implicitly

 Art 20B and 9 of GATT 1994 – General Charter
 Eg: endangered goods, depletable goods
Art. 14 of GATTS

Art XVI, Marrakesh Agreement: cant sign anything against WTO obligations

 RTA formation is permitted by WTP – Art XXIC of GATT 1994 and it isn’t an exception of the WTO
but of MFN under Art. I of GATT, 1994

 Can any country sign FTA agreement having ILO obligations

 Whether IT is covered under WTO (software of hardware)

- IT Agreement, 1997 covers only software
- IT Agreement 2014 covers hardware as well
Controversy with this: India is not accepting.

Q: What is the GSP controversy?

Q: Why do countries issue Export bans?
a. To conserve domestic commodities short in supply; 

b. To preserve natural resources:
China Raw Materials Case ; China Rare Earths Case 

c. To combat domestic price rises or domestic price control; 

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 d. To maintain world prices of a commodity by withholding supplies; 

e. To develop domestic processing industries; 

f. To enforce voluntary export restraints (VERs) at the behest of an importing country; (Read)

g. To limit the military or economic capability of another country; 

h. To sanction a country or induce it to change its policies; 



4. WHAT IS WTO?
 It was founded on the principles of Marrakech Agreement. It is a treaty having 16 articles.
 WTO is the legal and institutional foundation of the multilateral trading system. It provides the principal
contractual obligations determining how governments frame and implement domestic trade legislations
and regulations. It contains a set of disciplines that affect the ability of governments to impose trade
restrictions and had helped to support the steady expansion of international trade. It is the platform on
which trade relations among countries evolve through collective debate, negotiation and adjudication.
 WTO has a legal personality of its own
 It is an institution.
 It is multilateral in nature.
 Determining how governments frame and implement domestic trade legislations and regulations leads to
the ‘great sovereignty debate’.
 It contains a set of principles- Non-discrimination are of two types- (1) between the countries: MFN
(Most Favoured Nations). MFN is a misnomer. (2) National Treatment (NT)- non-discrimination
between your own goods, IPRs and services. Other principles- Transparency, fair trade, free trade,
general exceptions, regional trade agreements (RTA) and special and differential treatment (SDT)
GSP- Generalised System of Preferences- Part IV, Articles 36-38 of GATT 1994 provides for SDT which is
popularly known as GSP. 1979 Declaration: enabling clause.

 WTO talks not only about trade expansion but also trade restrictions. These are known as trade
exigencies, trade emergencies. These are of 3 types:
(1) Anti-dumping: Dumping is not done by countries; it is done by companies or enterprises located in
foreign countries.
- It refers to selling the product in the foreign market at a price below the cost of production to
eliminate competition.
- Dumping Margin = Normal Value – Export Price.
- These countries are allowed to impose anti-dumping duties. Implementation of Article VI of
GATT 1994 which is popularly known as anti-dumping agreement. Article 2 of Anti-Dumping
Agreement of the WTO- calculation of dumping margin. Customs Tariff Act, 1975- India’s anti-
dumping law in compliance with WTO’s anti-dumping law.
-
(2) Against subsidisation: Subsidy- (1) financial contribution by the government, public body or any
entity which has been entrusted to do the same by the government, (2) leading to certain benefit. (3)
It must be specific in nature. Regulation of subsidies- Agreement on Subsidies and Countervailing
Measures. If any country provides subsidy and exports to another country, the other country can
impose countervailing duty

(3) Safeguarding measures: if excessive importation has taken place then the country can impose
safeguard duty.
 WTO is a member-driven organization. All the decisions are taken by the members. Members ensure
effective functioning of the WTO. WTO laws are made on the basis of collective acceptance.

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  Adjudication- dispute resolution among countries. Article 23 of DSU does not use the term ‘compulsory
jurisdiction’ but conveys the same. Understanding on Article 4 of GATT 1994, paragraph 12.

5. DIFFERENCE BETWEEN GATT AND WTO (GATT 1994 IS A PART OF WTO LAW)?

GATT 1994 is the rectified, amended or modified version of GATT 1947 (Annex 1A- GATT 1994).

1. GATT was an ad hoc and provisional arrangement whereas WTO agreements are more permanent
in nature. GATT 47 came into existence along with the PPA (Protocol of Provisional Application)
Note: Bretton Woods Conference 1944 was called by ECOSOC (Atlantic Charter 1941 was the beginning of
UN). The main purpose was to establish the following 3 pillars of international trade:
a) To regulate monetary side of international trade (balance of payment)- IMF was established.
b) International Bank for Reconstruction and Development (IBRD) popularly known as World Bank.
c) International Trade Organization (ITO)- couldn’t be established.
 US had moved a proposal at Bretton Woods Conference, Proposals for Expansion of World Trade and
Employment, 1945.
 The conference was attended by finance ministers of 23 countries including India.
 Three meetings had taken place:
a) London
b) New York
c) Lake Success
 Then, GATT 1947 (Geneva) came into being.
 The three meetings led to Havana Charter 1948. It had 2 aspects- Institutional aspect of ITO and Basic
principles of ITO. It had not been passed by the US President and therefore the accidental birth of
GATT 1947.

2. GATT had contracting parties. GATT was taking decisions independent of the contracting parties. It
also had reservations in terms of not accepting certain provisions. WTO is a member-driven
organization which requires ratification.

3. GATT 1947 was the first attempt towards multilateral agreements, but it dealt only with goods. WTO-
trade in services, IPRs, agriculture, investment, trade facilitations, etc. are also included.

4. GATT dispute settlement mechanism was ineffective cumbersome and power oriented.
- Articles 22 and 43 of GATT 1947 dealt with dispute settlement mechanism.
- It suffered the defect of ‘positive consensus’.
- Consent of all the parties, including both the victim and the aggressor was required.
- Aggressor country would never agree to the establishment of a panel. WTO settlement mechanism is
faster, precise and more automatic than the previous GATT.
- 18 months is the maximum time allotted for the redressal of disputes. Three stages of dispute
settlement- consultation, panel, AB. Time limits have been set for each stage.
- There was poor dispute resolution under GATT. DSU binds WTO. Agreements, laws, rules and
regulations are absolutely binding in nature. DSU is referred to as the Crown Jewel of WTO. It makes
WTO more effective

5. GATT has never worked as an institution. WTO is a full-fledged institution. Article I and II of the
Marrakech Agreement. Article II.1- “common institutional framework”. Article II.3- “binding on all
members”.
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 6. GATT had a ‘grandfather clause’. GATT inconsistent measures were allowed. It is filled with
exceptions. WTO does not have any such clause. It has to be accepted in totality.

7. Trade Policy Review Mechanism (TPRM), which is considered to be an innovation in WTO, means
continued surveillance mechanism. No such continued surveillance mechanism was there in GATT
1947.

8. Accession to GATT only declaration on the part of the country was required and and informal
acceptance by GATT contracting parties was required.
- Accession in WTO is cumbersome and time consuming.
- A country has to negotiate with each country and also with the WTO Secretariat and then only a country
can become a member after receiving acceptance by all.

9. Withdrawal process under GATT 1947 was equally easy. The same process under WTO is very
cumbersome.

10. WTO has a wider jurisdiction in terms of subject matter. GATT was primarily dealing with border
measures (customs borders- taxes and duties). WTO is not restricted to border measures. It has started
intruding into the internal matters of the countries. Also, GATT was restricted to goods but WTO deals
with everything pertaining to trade.

11. WTO deals with textiles. Earlier, Multi-Fibre Agreement (MFA) dealt with textiles. It involved a quota
system (quantity was fixed for every country). Under WTO ATC (Agreement on Textiles and
Clothing).

12. WTO is a single undertaking agreement. Accession of a country will be done only to the Marrakech
Agreement and by implication the country will accede to all other agreements.

13. WTO has wider impact on a country’s economy. GATT did not have much impact due to the
grandfather clause allowing for GATT inconsistent laws.

Note: Study by UNGA, 2001- Fragmentation of International Law

Joost Paulwyn- WTO is a sub-set of international law. It is thus required to follow the
principles of international law. Book- ‘Conflict of Norms’; Article- ‘Role of WTO in PIL
Trachman- opposite of Paulwyn
Pascal Lamy- Article: Role of WTO in PIL

Note: TFA (Trade Facilitation Agreement) came into being in 2017. All others came into
existence along with the Marrakech Agreement on 1 January 1995.
Blog: worldtradelaw.net – Simon Lester

Note: China withdrew from GATT in 1949. It had applied again after the Uruguay
Rounds in 198?

6. TYPES OF TRADE AGREEMENTS

1. Multilateral Trade Agreements (WTO)

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2. Bilateral Trade Agreements (BTA)- There are 8200 BTAs. E.g. India-Sri Lanka BTA

3. Regional Trade Agreements (RTA)- this primarily pertains to goods.

4. Free Trade Agreements (FTA)

5. North American Free Trade Agreement (NAFTA)

6. SAARC Preferential Trade Agreement (SAPTA)

7. Substantial All Trade- Turkey-Textiles Case, DS 34

8. Comprehensive Economic Partnership Agreement (CEPA)- comprehensive in terms of subject matter

(mini-WTO). India has a CEPA with Japan, Singapore and South Korea.

9. Comprehensive Economic Cooperation Agreement (CECA)

10. Framework Agreements Interim Trade Agreement- in 15 years it must lead to FTA.
 Article- ‘What Trade Agreements can do?’ by Doni Rodrik
 Crux of all trade agreements- Shallow integration to deeper integration.
 Removal of tariff and non-tariff barriers
 2011 World Trade Report- preferential trade agreements.
 Article XXIV of GATT 1994 allows for the abovementioned agreements.

Note:
 WTO is dying a slow death: Inability of WTO to include new concepts like
sustainable development- scholars from European countries and America. What
they say is sort of an exaggeration.
 Global Order- trade rules have been framed at a multilateral level- WTO. Genesis
of this was GATT 1947.
 New World Economic Order- Al carta system- Treaty shopping- developing
countries had challenged the developed world- Dollar will not be the dominating
country- basket will be created to find a common value. It started with
establishment of UNCTARD in 1964. Tokyo Round of Negotiations 1974 to1979-
introduced the al carta system; there were various codes regulating trade and treaty
shopping was allowed (opposite of single undertaking).
 ‘Global Disorder’- by Shashi Tharoor- if there is a rise of protectionism, then there
will be a hot war.

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 7. PROBLEMS WITH THE WTO
1. Does not regulate competition matters;
2. Does not provide thorough standards for investment;
3. Does not provide international labour standards;
4. Public health issues are not discussed in the WTO;
5. Trade and gender related issues are not discussed in the WTO;
6. The WTO is struggling to regulate fisheries, cotton and taking SMEs into account;

1. Global Order:
 Multilateralism is the first experiment of Global Order.
 Global Order is a set of principles governing economic principles in a
uniform manner. 

 It originated in the 1940s, and expanded in the 1960s.


2. New World Economic Order:
• Starting with UNCTAD, there was a voice by the developing countries desirous
to have their voice heard on a global scale.
• In the 1960s, the developing and least developed countries made a demand for a
new economic order demanding reforms in the UN, GATT, World Bank
and the IMF. 

• Fromthe1970s, the demand was that new regulations be formed to take into
account 
these developing countries. 


3. World Disorder:
• Improper functioning of the WTO, curtailment of protectionism by the WTO
are problems that come within world disorder. 

• The unpredictability of world events, and disturbance in the world order also
constitutes world disorder. 


8. TRADING ROUNDS
Conducted at GATT platform. This ultimately led to the establishment of WTO on 1 st Jan 1995. Purpose- trade
liberalization. Following are the 8 rounds:
1. Geneva Round (1947-48)
- 23 countries participated, including India and Pakistan.
- Main aim: to reduce tariff barriers.

2. Annecy Round (1948-49, France)

- 33 countries had participated
- Main aim: Reduce tariff and give concessions (mutual reduction of tariffs)

3. Torquay Round (1950-51, U.K.)

- 34 countries had participated
- Main aim- tariff reduction.

4. Geneva Round (1955-56)

- 22 countries participated, including America, European countries and their allies.

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 5. Dillon Round (1960-62, Douglas Dillon-US Secretary of State)
- 45 countries had participated.
- European community was given membership as a GATT contracting party as a single entity. EC
would have only independent and single tariff schedule (law governing imposition of tariffs).
- Main aim- reduce tariff
- Multi Fibre Agreement, 1957 (MFA) got recognition in this round. It regulated textiles trade and was
based upon quota system. In 2005, MFA was abolished.

6. Kennedy Round (!964-67)

- 48 countries participated
- Named after John F. Kennedy
- Aims: reduce tariff barriers. Non-tariff barriers and anti-dumping agreement (for the first time).
Canada in 1904 became the first country to pass anti-dumping law.

7. Tokyo Round (1973-79)

- 102 countries participated.
- Launched at Tokyo and concluded at Geneva.
- It produces framework agreements in the form of codes based upon al carta system.

8. Uruguay Round (1986-94)

- 124 countries participated.
- It led to the establishment of Marrakech Agreement on 15th April 1994.
- Arthur Dunkel- last DG of GATT and first DG of WTO. He played a very significant role- main
architect.
First round under WTO- It was supposed to take place in Seattle in 1997. However, there were instances of
arsons and vehement protests. Therefore, the round took place in Doha. The round was known as the ‘Doha
Development Round’. It took place in 2001. Since 2001 WTO came to be dominated by DCs and LDCs.
Withdrawal from MFN status: Article XXI of GATT (security exception; how far this article read with Article
I affects the MFN status) Article XXI is an exception to Article I. MFN provision is not there in absolute
terms. It is subject to the exceptions contained in Article XX, Article XXI, Article XXIV (RTA), Article ??
(SDT).
 No country has permanent authority to examine the security exceptions (DS512, Russia).
 There are two countries- A and B
- Pre-Russia judgment- If A withdrew MFN status of B under Article XXI, country A will have the
absolute power to do so. There was no machinery to keep a check on this.
- Post-Russia judgment- If A withdrew MFN status of B under Article XXI, it can be challenged
before WTO by B. WTO shall be the final authority in such a scenario.

9. ‘BIRTH DEFECTS’ IN THE WTO

 GATT 47 came into being by accident and had birth defects, as per John H. Jackson. 

 In1944, the Bretton Woods Conference took place. This was the United Nations Monetary and
Financial Conference, and it popularly came to be known as the Bretton Woods Conference. 

 The Bretton Woods Conference was to bring into force the three pillars of international 
trade. Since
only Finance Ministers had attended this Conference, they sought to bring the 
ITO in force later,
when the Ministers of Commerce would be present. 

 Since there was a delay in establishing the ITO, a Conference in Geneva sought that there 
be measures
in force on an ad interim basis till the Havana Charter was adopted. 


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  The Havana Charter was however, never incorporated. The fU.S. ''Proposals for 
Expansion of World
Trade and Employment' sought the establishment of the 
International Trade Organization. 

 GATT was supposed to be a temporary measure on the basis of the 'Protocol for 
Provisional
Application'. 


GATT had certain inherent birth defects:

a. Lack of charter granting GATT legal personality; 

b. Lack of organizational structure; 

c. GATT had only provisional application; 

d. GATT Contracting Parties were allowed to have GATT-inconsistent measures; 

e. Ambiguity and confusion regarding GATT's authority, decision-making ability and legal status;



GATT was not a complete failure. GATT had certain important successes. These were:
a. Tariffs were substantially reduced; 

b. It was the first successful experiment to regulate international trade at a multilateral level; 

c. GATT has provided a platform for the liberalization of international trade; 

d. Through the Kennedy Round onwards, non-tariff barriers were also resolved; 

e. Special and differential treatment has been provided to developing and least developed countries
successfully, through the enabling clause of 1979; 

f. Adjudicatory mechanism for trade disputes started with GATT, and were successful. The genesis
of the DSU can be found in the GATT dispute resolution mechanism; 


10. THE WTO AGREEMENT

1) WTO is a standalone agreement

 It has independent existence
 It is not influenced by any outside agency such as WIP, International Telecommunication Union,
UNCTARD.
 Article 55 of Draft Articles on State Responsibility.
 Article III.5 of Marrakech Agreement: achieving coherence by cooperating with IMF, IBRD and its
affiliated agencies. WTO has entered into specific agreements/treaties with WIPO, UNCTARD, IBRD,
etc. to achieve greater coherence.
 WTO intends to provide framework for global administrative law for international trade. It makes
serious attempts in this direction.
1. WTO provides for rights and obligations of all.
2. They are binding.
3. WTO has entered into special agreements with WIPO, IMF, IBRD and UNCTARD.

Regulation of IP in the international realm: It was the Paris Convention of 1783 that dealt with IPR at an
international level for the first time. Paris, Berne, Rome and Washington conventions are part of TRIPS.

Para 6 of Doha Negotiations- public health related matters of the DC and LDCs.

Articles 7 and 8 of TRIPS- IPR is monopolistic right but when societal rights and monopolistic rights come in
conflict with each other, the societal right prevails (balancing of individual and societal rights).

Article 31 of TRIPS- due share to be given to the author.

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 2) Nature and Scope of WTO Agreement
It has been provided under Article II pf the Marrakech Agreement establishing WTO.
(1) It covers overall function of the WTO- Article II.1 Maintain trade relations between countries
(2) What does WTO law constitute?
- Marrakech Agreement establishing WTO- It provides institutional aspect of WTO. It does not
provide any rights or duties of States.
- Its Annexures- obligations are provided here.
(3) Article II.4 establishes relationship between WTO and GATT 1947.
(4) Article II.3 Plurilateral Agreements. There are 2 Plurilateral Agreements under WTO: GPA
(Government Procurement Agreement- latest text: 2014) and Agreement on Civil Aircraft. Initially there
were 4.

11. OBSERVERS UNDER WTO:

1. Countries are allowed to become observer.
2. Certain multilateral agencies were given the power to become observers. This is for the purpose of
coherency and so that informed decisions can be taken.
 Observer to WTO- At present, 29 countries have observer status under WTO.
 Observer to Plurilateral Agreement- Under GPA, there are 43 countries having observer status.
(Refer Pgs 27, 29 – Observer Status to countries who want to accede who are at an avanced stage of accession)

12. EXPORT CONTROLS

Why are export controls imposed on certain products- prohibition/ban on exportation? Economic policy
makers give the following reasons:
1. To conserve domestic commodities that are in short supply
2. Conserve natural resources.
3. Combat price rises or maintain domestic price controls.
4. Maintain world prices of a commodity by withholding supplies
5. To develop domestic processing industries
6. Enforce Voluntary Export Restraint (VERS) at the behest of an importing country.
7. Limit the military or economic capability of another country.
8. Enforcement of sanctions against a country and induce it to change its policy.
VERS are prohibited under Agreements on Safeguards. A voluntary export restraint (VER) or voluntary export
restriction is a government-imposed limit on the quantity of some category of goods that can be exported to a
specified country during a specified period of time. They are sometimes referred to as 'Export Visas'. They are
prohibited for the following reasons:
1. Transparency
2. Corruption
3. Distortive measure in world trade
4. Competitive selling is violated
US and Japan had entered into VERS with each other. It was discussed during the Uruguay Round that this kind
of arrangement is clandestine. These bilateral measures are not allowed as per WTO. They are prohibited
specifically under Agreements on Safeguards.

11
.
Whether the law passed to prohibit exportation of raw materials is valid?
 Due to the ground of climate change, our apex court has decided that raw
material exportation will not be permitted.
 Article 11 of GATT 1994: quantitative restrictions are not permitted.
 China- Raw Materials Case, 2013 (between US and China)- AB decided that a
country cannot impose a ban on raw material exportation.
 Article 20 VNG of GATT 1994
Trade politics has been replaced by trade law  journey from power-orientation
(rich countries influencing GATT- GATT earlier was considered to be “rich man’s
club”) to rule-orientation.
Article 10 of WTO- Third party participation- substantial future stake. To have a case
against any country you don’t have to prove injury. This principle was laid down in the
Brazil Upland Cotton case (DS267). There is a debate about enhancement of third-
party rights

13. OBJECTIVES AND FUNCTIONS FOR ESTABLISHMENT OF WTO

1) Recitals
 There are 5 recitals constituting the Preamble of WTO. Preamble is a part of Marrakech Agereement
 The preamble of the WTO records the intention of the states to develop an integrated, more viable and
durable multi-lateral trading system encompassing the GATT, the results of past trade liberalization
efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations.
 It also continued with whatever GATT 1947 was dealing with. It talks about continuity with change.
GATT provisions can be considered as acquas (guidelines)
 Preamble form the entire WTO legal regime and prevails over contrasting objectives provided under any
other agreements.
 The first 2 recitals declare the overreaching aims of the WTO.
 The third declares the WTO specific contributions to achieve the aims.
 The fourth recital sets out the attributes and components of the legal regime which are to be manifested
and realized
 The fifth recital formally translates the aims of recital one, two and three into treaty objectives.

1) Objectives
 Broad objective that can be deduced from the above are as follows:
1. To raise the standard of living.
2. To ensure full employment
3. To ensure large and steady growing volume of real income
4. To ensure expansion of production of trade in goods and services
5. To ensure optimal use of world’s resources in accordance with the objective of sustainable
development.
6. To protect and preserve the environment.
7. Reduction of tariff and non-tariff barriers to trade.
8. Elimination of discriminatory treatment in international trade relations
9. Positive steps to ensure that the developing and the least developing countries secure a share in the
growth of international trade.

12
  To serve as an interpretative tool and interpretation based on the preamble is to be considered as
contextual in nature (Article 32 of VCLT)
 According to AB the preamble helps to give “colour, texture and standing” to the rights and obligations
of the WTO members (US Shrimp Case- DS58).
 US Gasoline case
 Preamble has been used on many occasions by the AB in order to understand and interpret Article 20(b)
and (g) of the WTO Agreement.

E.C.-Tariff Preferences Case

The Appellate Board had used "positive steps" from the Preamble to uphold special and differential treatment of
certain developing countries. The Appellate Board used the term "commensurate" to highlight the differential
needs of developing and least developed countries. 


Brazil-Aircraft
Case
The Panel used the Preamble to find the meaning and concerns of developed countries in order to uphold the
subsidy obligation. In this case, by using the term "integrated, more viable and durable multilateral trading system" the
Appellate Body held that the fragmented policy that prevailed in GATT47 cannot be upheld in the era of the
WTO. 

2. The Preamble is used by applying the contextual interpretation rule under Art. 32 VCLT. Only Arts. 26,
31 and 32 are customary international law, and applicable to the WTO. 


2) Functions of the WTO

• Article III of the Marrakesh Agreement states the functions of the WTO.
The WTO has five specific functions:
1. Facilitation, implementation, administration and operation of WTO Agreement [Art. III(1)]; 

2. WTO will be the negotiation forum for negotiations for issues, old and new [Art.III(2)]; 

3. The WTO administers the dispute settlement undertaking in Annex 2 of the Marrakesh 
Agreement
[Art. III(3)]; 

4. The WTO administers the Trade Policy Review Mechanism, provided for in Annex 3 of 
the
Marrakesh Agreement [Art. III(4)];
(TPRM is an external audit mechanism. A comprehensive overview of trade policy is undertaken)(The best
four countries have to review their policy and provide such a report every two years, the sixteen most
developing countries after these have to review their policy every four years, and the rest of the members of
the WTO have to review their policy every six years) 

5. Coherence with global policy-making [Art. III(5)]; 

Sixth function:
6. Technical assistance to developing countries(came up in Doha Ministerial Conference)(as 
per Peter
van dan Bossche, this is an inherent function of the WTO); 


Topic continued on 21.1.20:

13
 (contd. from before)
2. TPRM: the first 4 countries submit report in 2 years, the next 16 in 4 years and the
rest on 6 years
- why: the countries having more share, their policies will have more
implication wrt intl trade and so they have to submit quicker
Have to implement within domestic legislations. If not implemented, then the laws
have no meaning. WTO not +ve morality, WTO facilitates the implementation

3. Art 3.2: WTO is a platform for negotiations – a) law covered under WTO and b)
new issues whether to implement or not
- if the countries agree the new issues will be discussed further and then it
will be included within a treaty

4. Adjudicatory procedure is compulsory.

- Art 23 of Dispute Settlement Understanding : “shall abide by” makes it compulsory
jurisdiction and so the WTO shall be resorted to and not the ICJ (WTO compulsory
jurisdiction on all trade matters within the agreement)

5. Article 3.5 and art 5, Marrakesh Agreement talks about WTO having relationships
and agreements to have greater coherence in intl trade law. If intl and monetary policy
not in consonance with each other then both will be a half hearted attempt

Coherence Function: Article III.5 and Article V

 WTO is although a paramount institution for regulating intl trade but it is not governing everything
pertaining to trade. Proliferation of intl agency has taken place after 1960s (UNCTAD etc, New Econ
Order, ILO got strengthened, etc.)
 The intensity to regulate intl trade increased after the 1960s
 Kennedy Round onwards, the issues to be governed by GATT increased
 Varied trade matters interests in various intl organisations and on the other hand WTO was est to
regulate intl trade. Chaos would ensue due to so many orgs. Thus, Uruguay Round negotiators thought
there was an urgent need to have coherency in intl organisations and so they adopted a Declaration on
the Contribution of the WTO to Achieve Greater Coherence in Global Policy Making
- Why is coherence reqd: 1. improvement in terms of global policy making
2. interlining the different aspects of economic policy
3. consistent and mutually supportive policies
4. pursue and develop cooperation
5. respecting each others’ mandate
6. respecting the autonomy in decision-making process of each institution
(aim with which the WTO from the very beginning tried to address these issues)
 The aim of coherence brought out by 1996 Declaration
 Under GATT 47, only 2 institutions were referred- IMF and UN
 Under WTO, the institutions reqd to have cooperation and coherence agreements:
1. Food and Agriculture Org
2. UN
3. International Labour Organisation
14
 4. International Plant Protection Convention
5. OECD
6. UNCTAD
7. UNEP
8. World Bank
9. World Customs Organisation
10. WHO
11. World Organisation for Animal Health
12. World Intellectual Property Organisation
 Details:
- How WTO is addressing those issues for which other dedicated intl orgs are already there
1. Agreement on Agriculture
- Other orgs dealing with agriculture are
a. Common Fund for Commodities
b. FAO
c. Intl Grains Council
d. Intl Coffee Organisation
- Three pillars of the Agreement:
a. Export Subsidy
b. Domestic Subsidy
c. .

2. WTO: Agreement on Implementation of Article 7 and Article 7 of GATT, 1994

- Under WTO the customs valuation is addressed by this Agreement
- Other orgs dealing exclusively with customs is: World Customs Organisation

3. WTO: Agreement on Rules of Origin

- Provide rules as to what is the source of the particular product, where the good was originated
- Similar org dealing with this exclusively : World Customs Organisation

4. WTO: Agreement on Sanitary and Phyto-sanitary Measures

- S: human and animal health
- PS: plant
- Similar org:
a) Codex Elementary Commission
b) FAO
c) International Union for Protection of New Variety of Plants
d) Society for Epigotis

5. WTO: Agreement on Textiles and Clothing

- Intl Textiles and Trading Bureau

6. WTO: TRIPS
- Others:
a. Intl Union for Protection of New Varieties of Plants
b. WHO
c. WIPO

15
 7. WTO: Trade Related Investment Measures (TRIMS)
Others:
a. IMF
b. ICSID
c. World Bank

8. WTO: Decisions or Measures in favour of LDC

Others:
a. UNCTAD
b. UNDP

9. WTO: GATTS
Others:
a. ILO
b. ITU
c. UNESCO
d. WHO
e. World Tourism Org
(etc)

10. WTO: Dispute Settlement Understanding

Others:
a) ICJ
b) ICSID [dispute forum b/w a country and an investor – a country and person in favour of each
other. Redressed doesn’t only apply to members, can still resolve dispute through ICSID]

11. Understanding and Provisions for regulating Balance of Payment provisions

Others:
1. IMF
2. World Bank

- Supporting role
- Interference

22.1.20
Project Topic: Working of Indian Federalism and WTO
- Whether States are having any say in the working of WTO
- Foreign universities being set up by Central Govt although
education is in concurrent list
- Kasturi Rangan Committee

 Art 2.5 of Rules of Origin, the rules will be harmonised with the help of WCO
 Trade in Services, WTO will try to get into agreements with ILO
 Doctrine of Incorporation by Reference of the WTO
- other multilateral orgs referred for two purposes:
16
 1) further liberalisation of intl trade by further harmonisation w the organisations
2) Those treaties of those orgs, name is mentioned and that is directly enforced in the WTO
platform w the help of DSU (enforcement of outside agreements in the WTO)
 Art V: GC empowered to est relations with other multi lateral orgs
 Art 16 of GATTS: GC and the other orgs will oversee the overall implementation of trade in service
regs in the domestic spheres
 Enforcement will only happen if the Treaties are mentioned in the Agreement (harmonisation and
enforcement are both there and are separate things)

How is harmonisation achieved (efforts taken to make WTO the global law). Mandate given under Art 5
1. Chief Executive Board for Coordinators
 WTO is one of the leading participating orgs
 1946 est, known then as Administrative Committee on Coordination
 Consists of 28 members organisations
 Meetings are chaired by the UN Sec-gen
 Immediate aim of the meetings is to deal with, discuss and analyse a specific topic of current
interest
 The overall aim is to bring coherence among the institutions and to ensure that they are having
regular contact with each other
 In 2008, the CEB had started the UN High Level Task Force on the Global Food Security Crisis
(after the meeting, the declaration was given where this Task Force was established)
- The main aim was to contain or solve the problem of rising prices of foodgrains
- It consists of 22 international organisations including WTO
- It is headed by the UN Sec-gen and FAO Director-general as Deputy Chairman

2. Aid for Trade Initiative

 Launched by the DG of WTO
 Aim: to foster coherence in trade capacity, building through collaboration with such partners as
the OECD, IMF, Intl Trade Centre, UNCTAD, UNDP, World Bank and Regional
Development Bank
 It is a collaborative arrangement for building capacity for doing trade
 To have regular contact meetings as t how Developed and LDCs should contribute more to get
their share in intl trade
 Two objectives:
i. Coherence with other multilateral orgs
ii. Fulfil objectives as mentioned in Recital No. 2

3. Creation of Standards and Trade Development Facility

 Joint initiative of FAO, WHO and World Bank
 Main aim: to help developing countries to implement intl sanitary and phyto-sanitary standards
in order to improve human, animal and plant standards to gain market access in other countries
as well.

4. Research and Analysis Collaborative Arrangement

 In 2002, WTO and WHO published a joint report on public health

17
  In 2013, WTO with WIPO published a joint study on promoting access to medical technologies
and innovation intersection between public health, IP and trade
 Most significant collaboration was with ILO (done in a more aggressive and systematic manner
with ILO):
i. Trade and Employment: Challenges for Policy Research
ii. Globalisation and Informal Jobs in Developing Countries and Making Globalisation
Socially Sustainable
 With OECD, WTO published Aid for Trade at a Glance

5. Manual on Statistics of International Trade in Services

 Joint initiative of WTO, EC, IMF, OECD, UNCTAD and UNO

6. WTO relations with UNCTAD

 WTO has the closest relationship with UNCTAD
 Developing countries did not have much say in the new organisations that were being set up, it was
dominated by the developed countries. The UNCTAD was established exclusively for discussing the
issues of the developing countries (GATT was being dominated by the developed countries only.
Thus GATT developments promoted the establishment of the UNCTAD)
 UNCTAD still has relevance even after establishment of WTO
 Close relationship with UNCTAD keeping in mind the complementarity in terms of membership
 Developing countries are now allowed to have a bigger share in terms of WTO as well (allowed to
have their say as well)
 In 2003, WTO and UNCTAD entered into an agreement known as the Strategic Partnership for the
Purposes of Implementation of Doha Round Initiatives
- The MoU talks about technical cooperation, capacity building, training and research & analysis
 Whenever a country decides to become a WTO member, the first accession process is helped by
UNCTAD. It prepares a country how to accede to the WTO

7. WTO provides Observer Status and is an Observer in other Organisations

 Art 5 allows the General Council to have a special arrangement with those organisations which are
dealing with matters dealing with the WTO as well
 In order to implement Art 5. General Council had adopted Rules of Procedure for Sessions of
Ministerial Conference and the meeting of the General Council
 The General Council following this

14. PHILOSOPHIES AND BASIC STRUCTURE OF THE WTO

1) Philosophies
1. Trade contributes to growth; 

2. Trade liberalization is to be achieved through reduction in tariff and non-tariff barriers; 

3. Predictability and security of trade through binding commitments increases trade; 

4. Well-defined rules relating to all matters impacting trade will have a positive impact on 
trade; 

5. Well-defined rules relating to developing and least developed countries will lead to overall

development of developing and least developed countries; 


18
 2) Basic Structure
Present in annexure of MA

ANNEX 1
ANNEX 1A: Multilateral Agreements on Trade in Goods
 General Agreement on Tariffs and Trade 1994
 Agreement on Agriculture
 Agreement on the Application of Sanitary and Phytosanitary Measures
 Agreement on Textiles and Clothing
 Agreement on Technical Barriers to Trade
 Agreement on Trade-Related Investment Measures
 Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
 Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994
 Agreement on Preshipment Inspection
 Agreement on Rules of Origin
 Agreement on Import Licensing Procedures
 Agreement on Subsidies and Countervailing Measures
 Agreement on Safeguards
ANNEX 1B: General Agreement on Trade in Services and Annexes
ANNEX 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights
ANNEX 2
Understanding on Rules and Procedures Governing the Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
ANNEX 4
Plurilateral Trade Agreements
 Agreement on Trade in Civil Aircraft
 Agreement on Government Procurement
 International Dairy Agreement
 International Bovine Meat Agreement

 Agreement on Textiles and Clothing was removed (ina phased manner). After removal, merged with the
agreement on agriculture
 TFA was added in 2017

17.1.20

15. ORGANISATIONAL STRUCTURE

Article 4
How does the WTO function (there is a hierarchical and pyramid-like structure in terms of governing)
I. At the apex (highest governing body) is Ministerial Conference: takes all necessary decisions
II. General Council
o Works as a Dispute Settlement Body (DSP). When it sits in this capacity, it will have its own
chairman, different from the chairman of the General Council
o And TPRB. When it sits in this capacity, it will have its own chairman, different from the
chairman of the General Council
III. Specialised Councils.

19
 o Council for trade in goods
o Council for trade in services
o Council for trade in IPR
(overall supervision of these is with the General Council)
IV. Horizontal Committee, Working Party and Working Groups
o Under these there ate some committees est by ministerial council:
1. Committee on trade and development (CTD)
2. Committee on BoP restrictions
3. Committee on budget, finance and administration
o Some are est by the general council:
1. Committee on trade and environment
2. Committee on regional trade groups
The working parties and working groups are est time to time on a ad hoc basis by the General Council. Eg:
Singapore MC had est two working parties fro the purposes 1) working party linkage with trade and competition
and 2) working party for trade and investment
Doha MC has implemented working groups on 1) trade, debt and finance and 2) trade and transfer of
technologyb
In 2004, Negotiating Group on Trade Facilitation had been established

 Committee: for the various treaties in the annexure, the day to day functioning of these, there are
committees established
 Working Party: eg- on accession of new members (when a new member makes an application for
acceding to the WTO
[[Taiwan is a WTO member (143rd); even states like UP or Rajasthan can be a WTO member. Who can be
member: 1) any country 2) any territory having an external trade policy]]
 Market Access Committee- access of a country’s goods in another territory. So a committee is there to
see this is taking place or not. Also looks into how can more market access be achieved
 Working Party on Subsidy Notifications
- Est under Art 24.2 of ASCM Agreement
- Why is it imp: there are three kinds of subsidies (traffic light approach).
1. Red: export subsidies are not permitted at all
2. Yellow: actionable subsidies. You are permitted to give subsidy but it mustn’t cause destruction
to anyone’s trade
3. Green: allowed subsidies. Eg: infrastructural
o Subsidy is given for incentive leads to benefits
o Whenever a country gives subsidy through the defined parameters of the Agreement, under 24(2)
have to notify to the working group that this subsidy has been given
o US related controversy: every country is required to notify but India hasn’t. USA has asked the
Committee to check whether India is complying and whether they are notifying or not
 Permanent Group of Exports (PGE) under Art 24.3 of ASCM
- if the panel refers the meter to this PGE in order to find export subsidy related matters, whatever
told by PGE would be binding on the panel. Function is to assist the panel on export subsidy related
matters is referred.
- Extraordinary because the DSU, if the panel is interested to have advice from any committee it is
discretionary for the panel to accept or not but this isn’t the case with the PGE

 secretariat or director-general? Art VI –Director General

- U Thant was the first secretary-general
20
 - MC and GC will determine the power of the DG and Dpy DG

18.1.20
 70 bodies are there in WTO. 34 are standing committees, 36 are ad hoc, 26 are working parties on
accession and 2 are plurilateral bodies
 Are the bodies restrictive in terms of membership: all the bodies are open for every WTO member to be
a party to, therefore there is no restriction in terms of membership

1) Ministerial Conference
 This is the highest body and is represented by the ministers of the WTO members
 Power - to carry out functions of WTO and take actions necessary to that effect (art 4)
 Meeting takes place every two years (not always respected sometimes it takes place every 3 or every 4
years)
 Highest decn making body and take actions necessary to make the WTO agreement effective

Specific functions:
1. Power to appoint DG and adopt regulations setting out the powers, duties, conditions of service and
terms of office of DG
o Why is DG and secretariat out of the purview of the organisation structure u/art IV: 1) They only have a
supportive role (addressee). All communications are addressed to him. 2) Also it is a member driven org
who has most power and so they DG and sec has only supportive role. Since WTO is a professional and
technical body, no single person given the full power to drive this.
- But practically, DG has influenced decn making process by circulating some papers etc and this led
to countries like India to pass a reso that the DG must be neutral and not try to influence the decn
making.
- The Sutherland Report (the Sutherland Committee wasn’t a WTO committee. Peter Sutherland used
to be pat of the WTO after retirement the 3 member committee was formed) says that the DG must
be given statutory power (otherwise the individual DGs could usurp power and influence decn
making) [[came after the Doha Round of negotiations]]

2. Power to adopt regulations concerning duty and conditions of service of the secretariat

3. Exclusive authority to adopt authoritative interpretation of the WTO Agreement (Art IX.2 – only
MC and GC has the power to have authoritative interpretation of anything brought by the three
Specialised Committees (interpretation on the recommendation of these committees)).
- This has never been done till date

4. Power to waive or set aside an obligation imposed upon a WTO member in certain exceptional
circumstances. This is prescribed under art IX and X. This is known as ‘waiver’.
- Some obligations are found difficult to be implemented by some countries and so they ask the MC
and GC to waive this obligation for a certain period of time. Only if all the countries agree to this
then can a waiver come into effect.
- Eg: Peace Clause – there under the Agreement on Agriculture; means that for a while some
countries can give export subsidies but that expired in 2001 and so it isn’t there anymore. In the Bali
Ministerial Conference, India was seeking waiver due to food security as 61% of the popn cannot eat
properly and so the Food Security Agreement should be implemented as a one-time waiver
- Eg: Rice Clause – Japan brought this clause. The countries agreed that for Japanese rice, there would
be no export to Japan of rice
21
 - Eg: India - Harmonised System of Preference of Goods. There was a requirement of universality of
the goods (in terms of quality, source of prodn, etc.) so that proper custom duty calculation may be
done. India was taking time to implement this and so wanted waiver in respect to this

[[Super 301 (1974), a legislative measure in terms of the USA to see whether any country is violating US IPR
laws then they would have the power to impose sanctions against that country. When WTO came into being,
this was challenged and so was repealed: whether unilateralism is permitted by the WTO – no]]

5. Power to adopt amendments to the WTO agreements (art X of Marrakesh Agreement)

- Trade Facilitation Agreement came into force through an amendment
- Any amendment is reqd to be accepted by the MC

6. Authority to approve accession of new members (art XII, Marrakesh Agreement)

Ministerial Conferences
Till date 11 MCs have taken place:
1. Singapore (Dec 9 -13, 1996)
2. Geneva (May 18 – 20, 1998) – IT 1 Agreement came into force (how trade will take place in IT), this
was merely a declaration, the full fledged IT Agreement wasn’t formed, only a half-hearted attempt)
3. Seattle (Nov 30 – Dec 3, 1999) – aborted and no decision or anything took place, no document
released. Farmers and NGO lobbies were protesting and didn’t allow the WTO to function
4. Doha (Nov 9 – 14, 2001) - Most significant MC esp for developing countries
- it is known as Doha Development Agenda (DDA). This exclusively covers dev and least developing
country issues
5. Cancun (Sept 10 – 14, 2003) - No declaration as rigid approach was adopted by dev and developing
6. Hong Kong (Dec 13 – 18, 2005)
7. Geneva (Nov 13 – Dec 2, 2009)
8. Geneva (Dec 15 – 17, 2011)
9. Bali (Dec 3 – 7, 2013)
10. Nairobi (Dec 15 – 19, 2015)
11. Buenos Aires (Dec 10 – 13, 2017)
12. Nur Sultan (Kazakhstan) (June 8 – 11, 2020) – first MC in Central Asia.

2) General Council
 Represented by ambassadors of the countries

23.1.20

16. HOW DOES LANGUAGE PLAY A ROLE IN INTERPRETATION

 Authentic languages of WTO are English, French and Spanish (Art. XVI, Marrakesh Agreement)
 VCLT art. 33 – if an international treaty is there in more than one language, then all will be treated as
authentic languages

How to resolve conflict regarding interpretation:

22
 Chile Price Band and Safeguard Measures Case

EC-Anti Dumping Duties Case (EC Bad Lenin Case)

In the above cases, the panel had examined French and Spanish text to confirm a decision reached using the
English text

Generalised System of Preferences (GSP) Case

The appellate body had given the French and the Spanish text precedence over the English text

 Till this time only three cases are there relating to language issue pertaining to interpretation of the WTO
text
 Conclusion: English serves as the primary working language of this dispute settlement system

 Art. 1 of GATT 1994 and Art 3 GATT (national treatment) (global tenders etc to be issued in global
language – English)
 In India – Global Procurement Rules

17. SECRETARY GENERAL

 GATT 47 till 2020, only 7-8 persons have presided over GATT and WTO and this has led to stability
and efficiency. More stringent laws have come into force

3) Names
1. First executive secretary under GATT 47: Eric Wajndhan White (?) (1965 – 68). From’’67 the
nomenclature changed and he became DG of GATT
(No difference b/w executive secretary and director general, they are only nomenclatures)
2. Oliver Long (1968 – 80) from Switzerland
3. Arthur Dunkel (1980 – 93)
- important drafting work right from the inception of the WTO
4. Peter Sutherland (1993 – 95) from Ireland
- Last DG of GATT and first DG of WTO
5. Renato Ruggiro (1995 – 99) from Italy
6. Michael Moore (1999 – 02) from New Zealand
7. Supachai Panikchpakdi (2002 -05) from Thailand
8. Pascalami from France (2005 – 13)
9. Roberto Ajebido (Sept 1, 2013 – present) from Brazil

4) Procedure
 Procedure for appointment of DG was issued by the General Council in 2003
 As per this, the GC and Ministerial Conference has been given the power to appoint Director General
 The term is 4 years and can have two terms

5) Qualifications
1. Extensive experience in international relations encompassing economic trade and political matters
2. Must be having firm commitment to the work and objectives of the WTO
3. Proven leadership and managerial ability

6) Salary
 Fixed by the Committee on Budget, Finance and Administration
23
  Required to be approved by the General Council

18. IS WTO A DEMOCRATIC ORGANISATION?

 How is WTO treating its members would determine how democratic the organisation is
 Decision by vote is reached first by consensus and then my majority

1. WTO treats its members on an equal basis

2. Members treat each other on a most favoured nation basis
3. Free riders:
- A country not member of WTO, would they get more preference by a WTO country: not permitted
- Art 1 of GATT 1994: If an existing WTO member gives extra concession or preference to a non-
member then any other existing member would ask as a matter of right the same treatment
- Free riders issue has been substantially eliminated from the WTO
24.1.20

19. THE GREAT SOVEREIGNTY DEBATE

 Jackson’s contribution to sovereignty and the WTO is significant
 Sovereignty – command of an authority over a territory and interference from outside in terms of
making internal and external policy means sovereignty is getting violated.
 WTO is determining how one is conducting trade relations. The Marrakesh Agreement talks about how
to regulate domestic regulations in terms of food, environment, clothes, mechanical devices, patents, GI,
how soil is to be maintained, whether natural resources may be explored (sovereignty not there).
Externally it regulates with whom one would enter into trade relations (sovereignty restricted)
 Have we lost sovereignty upon joining the WTO:
Have to see from the following 2 aspects. The debate must be from these two aspects as to whether they have
gained or lost sovereignty
I. Perception of the scholars (Sir has already taught this)
II. External and internal policy determination

Arguments against sovereignty:

7) Membership of WTO
 Art XII – membership and accession
 The scholars write that WTO is a universal organisation but the practice of accepting members isn’t
supporting this view. Eg: Russia, China, Vietnam, Samoa
- Being asked to do certain things and only then become a part of WTO
 It is too cumbersome.
- Have to enter into negotiations with all existing members of the WTO and only if all agree can the
country become a member
- Russia’s entry was denied due to Georgia’s interference on the basis of some products’ specifications
of tariffs
 Therefore the understanding is it is not free to become a member and so not favouring sovereignty

8) Schedule of Concession
 Tariff is fixed (Art. 2 of GATT 1994 – fixation of tariff)
 Item-wise tariff on the goods if you are a member. Almost permanent fixation of custom tariffs.
 Specification of tariffs in terms of goods and services
 Too cumbersome, every member has to agree and if you don’t agree then have to pay compensation
24
 9) Conformity of Laws, Regulations and Administrative Procedure
 Art. XVI.4 - mandatory provision
 The laws etc., dealing with trade matters shall be in conformity to the WTO agreements and the annexed
agreements
 Judicial review on all regulations and administrative procedures

India Patents Case

India Automobile Case

India Solar Panel Case

India Poultry Case

India Qualitative Restriction Case

Domestic legislature successfully challenged and struck down in the above cases

10) No Reservation is Allowed for any WTO Provision

 Reservation happens at time of signing or consistently objecting
 Only form of reservation is waiver where all the countries consent
 WTO is a single undertaking, if you are accepting, it is acceptance of all the requirements of the WTO
 Art X.3: India refusing to join TFA and not giving any reason but then suddenly India joined the TFA.
But initially India had taken a risk. If the MC had decided to implement TFA then India would have to
leave the WTO as if they don’t agree to a provision they would have to leave

11) Compulsory and Exclusive Jurisdiction on all Trade Matters by the DSU
 Art. 23 of DSU: ‘compulsory jurisdiction’ not used but ‘shall have recourse to abide by’ in Art 23 shows
this compulsory jurisdiction of the DSU
 Compulsory exclusive jurisdiction binding in nature

Vietnam and USA Case (2006)

 Vietnam initiated dispute against US
 Only case where US refused to make submissions to the Panel. The Panel said that no submission is also
a submission
 One member is sufficient, initiation of dispute is only required
 Violation of WTO provision is sufficient for a claim

Paragraph 12 on the Understanding on Art 24

12) TPRM
 Trade Policy Review Mechanism
 The best 4 in terms of export and import will be reviewed by TPRB every 2 years, next 16 every 4 years
and the rest every 6 years
- Reviewed to see if they are still following the WTO mechanism

25
 Two bodies have re-exam right:
1. TPRB
2. CRTA
- Committee on Regional Trade Agreements
- To examine a country’s regional trade agreements to be in
compliance with GATT 1994
These are not adjudicatory bodies, their purpose is to ensure transparency

13) Decision Making Process

 One country one vote
 Theoretically, every country is having one membership and one vote
 The manner in which it is practice and the Green Room negotiations and the developed countries
twisting it in favour of themselves is becoming objectionable to the LDCs and developing countries.
27.1.20
Third Party Rights in DSU
 Participate in the proceedings so that they get training for when they are complainant
or respondent
 India is a prime example (150 cases out of (?))
 U/art 4, 10 and 17 of DSU and Art 61 of ICJ Charter

 Restrictive third party – whenever first meeting of DSU takes place you submit
 Enhanced third party rights – participation and submission in all DSU meetings, panel
meetings, interim meetings
 Australia example – the Panel accepted whatever Australia, the third party, said
 There is no provision in the WTO legal text that provides these enhanced rights. This
is by judicial interpretation: EC-Asbestos Case
 Third party rights are recognised but not enhanced third party rights by the WTO text
 The Doha negotiations currently: all WTO agreements are getting reviewed. Australia
only country to move resolution that enhanced third party rights must not be there
 Unanimity among scholars and cases regarding enhanced third party rights, except for
a couple of Australian scholars

 Judgment only binding on the main parties and not the third parties. Therefore imp
tool for the LDCs and the developing countries to learn

Arguments in favour of sovereignty:

14) One country one vote

 The critics state this is checking sovereignty but some scholars feel it ensures sovereign equality among
the countries

15) Balancing b/w Developed and Developing & LDCs

 If WTO divided in two parts, till 2001 WTO dominated by developed countries but after that bu
developing and LDCs. This implies that balancing has been done

26
  All the issues in the beginning pertained to developed countries but not issues pertaining only to
developing and LDCs

16) The WTO is a rule-oriented system against power orientation.

 In power orientation, only the powerful countries play a significant role but in rule orientation, the rules
are written and it is a rule-based system.
 The countries according to the rules have rights and obligations and these are protected through the
DSU (it is enforceable)

17) Power sharing arrangement (b/w DG etc)

(Check from someone)

18) Budget Provisions

 In the Marrakesh Agreement, specific Article regarding budget.
 Who contributes in the budget: members and decided in accordance with their shares in the overall
world trade. (the total budget is decided from the Budget Committee)

19) Amendment Process

 All the countries are having equal voting rights
 In terms of bringing any amendment to the WTO also equality is achieved
 Three amendment at the WTO platform:
- Two plurilateral agreements under Annex 4 have been removed (so now only 2 are there)
- TFA has been introduced in the WTO by Bali Ministerial Conference
- Implementation of paragraph 6 of Doha pertaining to public health related issues. Although Doha
Negotiation is still going on, para 6 has been taken out and already implemented

20. ADVANTAGES OF WTO MEMBERS

Why do countries prefer to have negotiations on trade related matters at the WTO?

20) Trade is Conducted According to Rules Formulated and Agreed by Members Only
 Rule oriented trading system against power oriented trading system
 Inbued (?), pending and present cases

21) System for Resolving Disagreements b/w Members

 Annex 2 of Marrakesh Agreement establishing WTO provides mechanism for compulsory and exclusive
jurisdiction in terms of all trade matters b/w the members
 This mechanism is popularly known as DSU. It provides that all the rights and obligations are positively
integrated with the WTO Agreement
- Any dispute at WTO platform on any matter will be resolved through DSU only
- Thus, effective dispute settlement mechanism
- Over the years it has proved successful and effective in resolving these disputes
 The sheer no of disputes getting resolved through the dispute settlement mechanism is indicative of the
fact that the countries are having faith in the dispute resolution mechanism
 At least 10 judgments decided by the Panel and 5-6 at the Appellate Level
 Who are the major disputing countries: 42% cases from is developing countries. Out of these, major are
India, Brazil and China (eg: Brazil dispute against India relating to sugar subsidies)
28.1.20

27
 22) There is an Opportunity to Help in Formulating Future Rules and Trade Policies

23) Equal Voting Power

 And it can be considered more democratic as compared to other multilateral platforms
 No scope of domination by any member or countries

21. ROLE OF DECISIONS IN THE WTO – STARE DECISIS RULE

24) No precedential value

They have value as several cases are being used to hear current disputes but not precedential value

25) They are merely guidelines

Japan Alcoholic Case

a. The decisions are guidelines (acquas), but not binding guidelines on third parties. Only binding on the
parties to the dispute
b. They create legitimate expectations

26) Only the MC and GC can interpret

 Power to provide authentic interpretation of WTO Agreements and provisions (Art. IX.2)
 The authentic interpretation done by 2 methods:
a) consensus
b) if above not achieved then by 3/4th majority voting
 On the recommendation of he three Councils of the WTO, recommendation given by MC and GC.
This has never been done till date
- Only once Brazil had asked what the meaning of currency manipulation in Article XV.4 of the WTO
Agreement. They had done it because they wanted to put pressure on the Americans and the
Chinese. Only India, China and USA indulge in currency manipulation. This is devaluation of
currency, prohibited by Art XV.5
 According to Art 3.4, DSU, the Panel and Appellate Body can only clarify the rights and obligations of
the members on two counts: a) facts as submitted by the members and b) the law that has been cited in
those disputes
- Q: can the Panel and Appellate Body perform de novo review (fresh investigation by the court not
on the facts and the laws submitted and cited by the parties) – No, can only adjudicate on the facts
and the laws presented and so don’t have power of de novo review, no authority to do investigation
to conduct de novo review
- Art. 9, DSU provides for Objective Assessment – in a limited manner in the first meeting (limited
discretion) to ask for more facts and more laws. Further proves that adjudication is only on the basis
of submitted facts and law
- Judicial Economy Rules refer to that if on one law similar laws are there (for eg Art 3 of GATT 1994
and this is referred in TRIMS as well || applies to one matter being governed by two provisions of
the WTO), it is the discretion of the Panel and the Appellate Body to decide which law they would
refer. Can appeal the application of any one of the similar laws by the Panel in the Appellate Body

22. ARE GATT PRINCIPLES STILL APPLICABLE

Art. XVI.1
- guided by
- decisions
- procedures
28
 - customary practices

 GATT Panels have decided 289 disputes – most celebrated author on GATT decisions Robert Hudee
(imp for dispute settlement for developing countries)
 U/art. XVI.1, MA ‘decisions’ doesn’t mean judgements – whatever decisions that the Contracting
Parties had taken relating to any issue
- Temporal aspect: Obligations from 1st Jan, 1995 and not previous to this [whether obligation taken
previous to this, can be challenged or not] (temporal aspect of obligations: timeline for interpretation
or application of any international treaty – cases: Airbus Case and Boeing Case and Brazil Cotton
Case || whether any previous Treaty to that of the WTO would be binding, whether any previous
action of the country would be binding)
- Example of ‘decision’: Decision of April 4, 1966 to provide Developing and LDCs specialised and
differential treatment
- Example 2: Decision on differential treatment to Developing and LDCs (enabling clause)
 Certain decisions taken during the Uruguay Round and has not been overruled. These are legal texts
attached to the WTO Agreement and part of the law
 Before 1999 the Panel and Appellate Body understood decisions in the sense of cases but in the USA
Gasoline Case, they said that previous case laws are merely guidelines giving some help to the Panel and
AB to go in favour or against
 Art. XVI.1 is considered to be the ‘Guidance Clause. Case:

Japan Alcoholic Beverage Case

23. WTO AND NATIONAL LAWS CONFORMITY

 Art. XVI.4, Marrakesh Agreement
The requirements to conform national and sub national laws to the WTO rules:

27) Conformity of National Laws

 Under GATT, there was a grandfather clause and due to this, it wasn’t required on the part of the parties
to conform their laws to the GATT principles
 But under WTO, the trade policies must be in conformity to the WTO Rules
 Art XVI.4 is the umbrella provision in terms of bringing all laws in conformity with WTO Rules (such
as: customs validation agreement, anti dumping agreement, pre shipment inspection, subsidies
agreement, TRIPS agreement - these provide examples of conformity to WTO Rules)
- VCLT Art. 27
 Federal Clause in a Treaty: Federal unit required to implement an international treaty in that manner as
central agency is implementing. In VCLT, federal clauses aren’t recognised
- If a country wants at the time of signing intl treaty, citing federalism, any special carve out, because
of the constitutional mechanism cannot implement certain provisions in our country
- This is not there in the WTO, reasons:
1) WTO is a single undertaking (piecemeal method of joining is not permitted, no scope of
manoeuvring)
2) WTO doesn’t provide for reservation
3) No question of conflict b/w WTO and other agreements – so although there may be clauses
that look like a conflict, the overreaching impact of Art XVI.4 do not allow the so called federal
clauses to work effectively. Theoretically these are there but for implementation, these clauses do
not work effectively.
- But arguably, there are 4 clauses in the WTO that look like federal clauses:
29
 1) Art 24(12), GATT 1994
2) Art. 13 of SPS Agreement
3) Art 3, 4 and 7 of TBT Agreement
4) Art 1(3) of GATTS
(These 4 provisions may be considered in conflict with Art XVI.4 of the MA)
- Art 24 of VCLT and Art 4 of ASR provides that any action of the sub federal units are attributable
to the central government. So if actions of the sub federal units are not in compliance with the WTO
obligations, it may be challenged
29.1.20
 Art XVI.4 covers three things
- it gives the legitimacy to the WTO to examine all rules, regulations and procedures
- Provides textual basis for review of national by the Dispute Settlement Panel and Appellate Body
- Legitimacy to the WTO adjudicative process so far as the review of national laws is concerned
Through Art XVI.4 can the national laws regs etc be determined only? – No, Art 23 of DSU also helps the
Panel and the Appellate Body to examine national laws to see the compliance and Art 23 is a case based analysis.
That case is EC-IT Products Case by the AB

Whether WTO Panel can examine national laws or not:

India Quantitative Restriction Case

India Automobile Case

India was raising the issue pertaining to sovereignty

- The Panel and AB bypassed this question by saying “we are not examining your laws, we are merely
seeing the compliance with WTO obligations”. They also said “Can you show any other mechanism
by which we will see the compliance of your country with the WTO obligations”. On this Q, the
Indian representative remained silent. We can say that the panel and AB restrained themselves from
using the term ‘examining’. They aren’t examining as such but are merely seeing the compliance

Q. Whether judicial pronouncements can be an example of compliance/can the Panel and AB examine judicial
pronouncements?
Q. Can a country successfully argue that because of the process of judicial mechanism (citing judicial
functioning) in my country, it makes it difficult for us to implement certain rules/taking time to implement
certain things?
[Basically u/Art. XVI.4, whether judicial pronouncements can be challenged?]
- Since it is a an organ of the State, its actions can be made subject to compliance:

US-Zeroing Case (against Japan)

 Para 182
 The AB said that
1) judicial pronouncements are example of overall compliance. How the judiciary is interpreting a
particular law given by the WTO to comply. How the law is to be interpreted also becomes part of the
law
2) judiciary is an organ of the State and any action taken by the organ would be subject to compliance

24. THE AMENDMENT PROCESS

Art. X, MA
 The source of art X is art 30 of GATT 47

30
  Comprehensive procedure for:
1) Amendment in the WTO Agreement
2) Annexed agreement
3) Terminating WTO agreements
4) Inserting new issues/agreements in the WTO
5) Amendment to plurilateral agreements

 Who can bring the process of amendment

1) Any member
2) Specific Councils

28) Basic and Fundamental Amendments

I. Certain provisions that may be amended with acceptance of all WTO members
- Unanimity Method
 Provisions:
1) To change the decision making process of WTO
2) Amendment to MFN provision of GATTs and TRIPS
3) Amendment process itself
 Why only these 3: these are basic and most fundamental to the WTO. If these are removed, it would no
longer be considered a multilateral agreement

30.1.20

II. By consensus

29) General Provisions

25. IMPLEMENTATION OF INTERNATIONAL TREATIES:

1. Monoism
- Kelsen
- This theory holds that both international and domestic law forms a part of the same legal system and
they conclude that the international law should be directly applicable in the domestic lawq
- In case of a conflict, international law would prevail

2. Dualist
- Angelotti
- The dualist theory holds that international law and domestic law are separate systems of law. They
stem from different sources and have different subject-matters.
- Neither has the power to alter the rules of the other – each is supreme within its own sphere.
- In case of a conflict, domestic law prevails.
- The subject matter of international law is states, and domestic law governs the relationships amongst
individuals, and between the individuals and the state.

3. Contemporary practice or hybrid form

- State obligations under international law cannot be excused because they conflict with domestic law
or if domestic law is somehow deficient

31
 - States have a duty to bring their domestic law in conformity with their obligations. Failure to do so is not
itself a breach of international law but may result in a breach if compliance with domestic law precludes
compliance with a specific international obligation
- The domestic law of the State concerned determines the effect of international law on domestic law.

Of the three theories, which one does WTO follow:

 Art. II.2, MA which provides that the WTO Agreements (MA + the 23 covered agreements. The
plurilateral agreements [GPA and Agreement on Civil Aircrafts] are optional in nature) are binding in
nature
 Art. XVI.4, MA which says that all laws regs and admin procedures shall be in conformity with WTO
obligations

Three jurisdictions to understand the provision of WTO Law:

USA:
 Art 6 of the Constitution says that international law is the law of the land – monoist
 Uruguay Round Agreement Act, 1994 section 102, US A had declared that WTO law is not the law of
the land. Therefore perfect example to understand that they follow convenience practice or hybrid form
of interpretation of the international treaties

Footwear Distributers and Retailers of America v USA

- Pre WTO case that says that WTO law cannot be law of the land due to s102 of URAA

Hyundai Electronics Co v. USA

- The same thing reiterated by the SC citing the URAA

European Union:
(internal trade policy is the same for all but external trade policy is different except for investment matters, so
therefore not completely a customs unions because in a customs union internal and external policies are the
same)
 Follows the dualist model in terms of WTO regulations

FedOIL v. Commission

Putgal v. Council (1998)

(?) v. Council

All these say that WTO law isn’t the law of the land
Duty of the Union to implement the law

India:

Karan Navedita v State of Mh (2010) 112 Bom L.R. 127

- WTO law isn’t the law of land

32
 Commissioner of Customs v. GM Exports (2016) 1 SCC 91
- Our laws are to be in conformity with the WTO laws (but it isn’t the law of the land – this implies
nobody can claim any right with respect to the violation of WTO law)

31.1.20
Under art 13 of the Constitution, can the central government direct the state government to implement WTO
regulations:
Kiran Navedita decided that they cannot do this, cannot direct the states to implement WTO law it since it is
not the law of the land

(Federalism of India is getting hampered due to the WTO as the Canter can pass laws relating to WTO
regulations even if it is a matter in the state list)

26. WTO ACCESSION PROCESS

 How does a new country become a WTO member?
 164th member was Afghanistan. Next member would be Ethiopia
 Universalist organisation
 WTO is thinking in terms of encompassing all countries of the world

1. Original/Founder Membership
- Art. XI
- 123 nations: parties in the Uruguay Round of Negotiations. In the Morocco Protocol, the time was given
of Jan 1, 1995 within which the countries in the Uruguay Round could join
- Contracting parties of the GATT’47 were given the option of joining the WTO and they did on Jan 1,
1995 itself

2. Acceding Membership
- Art. XII

(there is no difference in terms of rights and obligations b/w founder and acceding members)
 Whosoever is in the process of acceding to the WTO are observers in the WTO. This status is granted
by the General Council, which means that this country is in a very advanced stage of joining.
 The concept of ‘half membership’ was used in the case of China before they were granted full
membership. They had been classified as Non Market Economy and they were given time to implement
WTO laws till 11th December, 2016
- There is no provision for ‘non market economy’ in the WTO provisions
Features of non market economy:
(?)
3. Subsidy is presumed
4. Any exportation taking place to another, it is liable to countervailing duty
- In order to offset the domestic industries from the injury taking place, to cut this effect, the domestic
countries are allowed to impose these duties (Customs Tarrif Act)

Sasikant v UOI – challenged the NEP and it was held that the
SC doesn’t have the expertise to determine what kind of
economic policy is required.
BALCO Industries Case – disinvestment case – the
disinvestment that would take 33
place would be determined by
the Executive
Who can be a WTO member:
1. Any state
2. Any customs territory having its own external trade policy in reference to WTO and annexed
agreements (ability to implement WTO agreements of its own in any territory)
- This isn’t a full fledges sovereign state in the sense of that term. Autonomy must be there in terms of
trade matters without having any interference.
- It is different from customs union. CU is a trading bloc. It is a union between two or more countries
(Eg: EU, MERCOSUR, SACU – 1910)
- Eg: 1. Hong Kong (HK is a CT for the purposes of WTO)
2. Taiwan is a WTO member but it isn’t considered a full fledged country and so for WTO purposes
they may be considered to be a CT

How is membership granted:

1. There is no timeline for the accession process
- It is an unending process and till all countries become members the process will continue

2. Art. XII is modelled on art 32 of GATT”47

- Membership was allowed to acceding countries under this provision
- Accession only under this article (sole process to become WTO member)

3. Art XII gives the terms.

- To become a WTO member, the accession process that is required to be completed b/w that country
and the WTO
- The complete procedure has not been given in Art XII

4. Accession to the WTO Procedures for Negotiations Under Art. XII

- This procedure has been prepared by the WTO Secretariat
- This is an informal arrangement prepared by the Secretariat to help a new acceding member to become
one.
- Deliberate decision not to submit this procedure to the MC or GC. Since informal process, when the
Secretariat adopted it they didn’t formalise it by submission. The status is of ‘informal guidelines’.

5. Every country will be having their own accession protocol

- Each of these protocols will be different

 When a country has decided to become a member, they have to go to the TRTA (Trade Related
Technical Assistance)
 This provides two things:
1. Providing information to the newly acceding member or the country that has shown interest to join,
proving info on WTO Agreements
2. Providing information about the development of the organisation
(what is WTO and how it works)
 To provide TRTA, priority is given to LDCs, developing and those that have transitional economies
(Non Market Economies, the ones that had socialist or communist economy earlier)
34
  TRTA is funded by France, Germany, Netherlands, Norway, Sweden, UK, USA
 Status of TRTA: when it came into being, this was an informal arrangement and it turned into a formal
one by the Doha Development Round, because LDCs and developing countries require assistance from
the very beginning.
- The document was Implementation Related Issues and Concerns
- Proper funding could be there and proper assistance could be provided

Accession Process:
1. First Contact
 The interested govts’ trade representative first approaches the WTO Accession Division with the
intention to join WTO that process is called first contact
 for information before making a formal application to accede.
 This is after the TRTA
 The point of contact is the accession division of the WTO Secretariat

2. Application for Accession

 Submitted by the interested country to the DG, indicating the desire to join the WTO under Art XII
 There is a format to be followed for this, which isn’t fixed but has been developed over the years:
i. Addressed the DG
ii. Show the country’s intention to join WTO (expressed written desire)
iii. Must be under Art. XII of the MA

3. Examination of the applications and the establishment of the Working Party for Accession of Country x
 The written letter for accession is given to the GC (forwarded by the DG)
 The GC invites the country to address the GC present its views regarding its intention and desire to join
the WTO. What the country is going to do for acceding to the WTO.
 This invitation applies to a customs territory as well
 Once the GC is satisfied as to the intention of the country, then the Working Party is constituted. The
GC decides that the intention is true and is really there
 In the WP, the representative will submit a ‘trade memorandum’ – detailed information about its
intention to join WTO
 Membership of the WP is theoretically open to all WTO members but in practice it is seen that the
membership is given with respect to the potential of that country to conduct trade.
- The purpose of the WP is to conduct negotiations b/w the members and the country showing interest
to join WTO and so the membership is determined in terms of your capability and share in world trade

4. Observer Status to the acceding member

 Once the WP is established, the GC invites the country to attend the meetings of the WTO and become
an observer to the GC and the WTO (the MC) as well. So only in 2 bodies they have observer status

5. Factual Summary of the Points Raised (of the accession process)

 WP will prepare this document and this factual summary subsequently becomes the WP Report

6. Actual negotiations begin

 This is a three-fold process:
i. Multilateral Negotiations
- Takes place in the WP itself
35
 - Countries will discuss the accession protocol, g&s etc

ii. Plurilateral/Critical Matter Negotiations

- This doesn’t mean the country is joining the plurilateral agreements
- The critical areas are agriculture and second is subsidies

iii. Bilateral Negotiations

- For the purposes of:
a. Preparation for Schedule of Concession of customs tariff on each and every product
b. Specific Commitment on Services
- Some freedom is there on part of the countries
- Services schedule is the choice of the country whether or not to open certain services (eg: maritime
services, airline services).
- This depends on the specific commitments that India wants to have at the time of joining and even after
- This freedom isn’t there for goods
- It is not that all types of services will be open when they join WTO

China Raw Materials Case

China Rare Earth Case

Legal status of Accession Protocol: WTO document after it is submitted to the WTO Secretariat

1.2.20
 For accession process, every country of the WTO has veto power to not allow a country to become a
WTO member.
 Eg: China’s contracting party status was withheld by USA and European countries (Chinese accession
process was very cumbersome)
- China was a founder contracting party to GATT initially. They withdrew in 1949 when Mao came to
power
- They adopted an isolationist policy (didn’t withdraw because of ideological reasons)
 Process under GATT’47 was a two fold process: Declaration by the country and acceptance by the
GATT countries.

Accession Protocol consists of:

1. Rules
2. Customs and Tariffs
3. Agriculture Support and Export Subsidies
4. Services Protocol

36