Topic:

World Trade Organization

Members:
Dioso, Granil Khate
Abao, James Walter
Mapa, Princess Hannah
Moreno, Ma. Lixe Alezandra
Polinar, Xianne Kaye

Objectives:
1. To provide an overview of the World Trade Organization (WTO) and its role in regulating global
trade, including its objectives, structure, and enforcement mechanisms.
2. To critically analyze the effectiveness of the WTO in promoting and regulating international
trade, drawing on the findings of the Article Reviews chosen and Case Study.
3. To gain a comprehensive understanding of the complexities and challenges associated with
regulating global trade through the WTO.
a. Key Facts:
➢ The World Trade Organization (WTO) is an international organization that regulates global trade.
Established in 1995, it succeeded the General Agreement on Tariffs and Trade (GATT) and now
serves as the principal body for setting rules governing international trade. The primary purpose of
the WTO is to open trade for the benefit of all.
b. Headquarters:
➢ The headquarters of the World Trade Organization (WTO) is located in Geneva, Switzerland.
Specifically, it is situated at Centre William Rappard, Rue de Lausanne 154, 1211 Geneva 21. This
building serves as the principal office for the WTO's administrative and operational functions, as
well as hosting various meetings, negotiations, and conferences related to international trade.
c. Members:
➢ The members of the World Trade Organization (WTO) are countries and customs territories that
have agreed to abide by the organization's rules and regulations governing international trade. As of
2023, WTO members consist of 164 distinct nations.
d. Website: The WTO in brief
e. Mandate:
➢ The overall objective of the WTO is to help its members use trade as a means to raise living
standards, create jobs and improves people's lives. The WTO operates the global system of trade
rules and helps developing economies build their trade capacity. Global rules of trade provide
assurance and stability.
f. Key Structure:

➢ Ministerial Conference:
➢ highest decision-making body of the WTO. It meets at least once every two years,
bringing together trade ministers from member countries to discuss and make decisions
on various trade-related issues.

➢ General Council:
➢ main governing body of the WTO and is responsible for overseeing the functioning of
the organization. It meets regularly in Geneva to discuss matters related to trade
negotiations, dispute settlement, and the implementation of WTO agreements.

➢ Dispute Settlement Body (DSB):

➢ responsible for settling disputes between member countries regarding their trade
policies. It operates based on procedures outlined in the Dispute Settlement
Understanding (DSU), which is part of the WTO agreements.

➢ Councils and Committees:

➢ The WTO has several councils and committees that focus on specific areas of trade, such
as goods, services, intellectual property, and trade and development. These bodies
provide a forum for member countries to discuss issues related to their respective areas
of interest and work towards consensus on trade policies.

➢ Secretariat:
➢ The WTO Secretariat is the administrative arm of the organization, responsible for
providing support to member countries and facilitating the work of WTO bodies. It is
headed by the Director-General and is based in Geneva, Switzerland.

➢ Trade Negotiating Committees:

➢ These committees are responsible for negotiating trade agreements among member
countries. They focus on specific areas of trade, such as agriculture, services, or
 intellectual property, and work towards reaching consensus on trade rules and
commitments.

➢ Appellate Body:
➢ The Appellate Body is a part of the WTO's dispute settlement mechanism. It hears
appeals from panel rulings on trade disputes and ensures that WTO agreements are
interpreted and applied correctly.

GENERAL OBLIGATIONS

1. Most-Favoured-Nation Treatment

Each Member shall accord immediately and unconditionally to services and service
suppliers of any other Member treatment no less favorable than that it accords to like
services and service suppliers of any other country.

2. Transparency

Each Member shall publish promptly and, except in emergency situations, at the latest by
the time of their entry into force, all relevant measures of general application that pertain
to or affect the operation of this Agreement. International agreements pertaining to or
affecting trade in services to which a Member is a signatory shall also be published. Each
Member shall promptly and at least annually inform the Council for Trade in Services of
the introduction of any new, or any changes to existing laws, regulations, or
administrative guidelines which significantly affect trade in services covered by its
specific commitments under this Agreement. In addition, each Member shall respond
promptly to all requests by any other Member for specific information on any of its
measures of general application or international agreements.

3. Increasing Participation of Developing Countries

The increasing participation of developing country Members in world trade shall be

facilitated through negotiated specific commitments, by different Members pursuant to
Parts III and IV of this Agreement.

4. Economic Integration

This Agreement shall not prevent any of its Members from being a party to or entering
into an agreement liberalizing trade in services between or among the parties to such an
agreement. Consideration may be given to the relationship of the agreement to a wider
process of economic integration or trade liberalization among the countries concerned.

In Labor Markets Integration Agreements, members shall not be prevented from being a
party to an agreement establishing full integration of the labor markets between or among
the parties to such an agreement

5. Domestic Regulation

In sectors where specific commitments are undertaken, each Member shall ensure that all
measures of general application affecting trade in services are administered in a
reasonable, objective and impartial manner.
 Each Member shall maintain or institute as soon as practicable judicial, arbitral or
administrative tribunals or procedures which provide, at the request of an affected service
supplier, for the prompt review of, and where justified, appropriate remedies for,
administrative decisions affecting trade in services.

Where authorization is required for the supply of a service on which a specific

commitment has been made, the competent authorities of a Member shall, within a
reasonable period of time after the submission of an application considered complete
under domestic laws and regulations, inform the applicant of the decision concerning the
application.

6. Recognition

Member may recognize the education or experience obtained, requirements met, or

licenses or certifications granted in a particular country. Such recognition, which may be
achieved through harmonization or otherwise, may be based upon an agreement or
arrangement with the country concerned or may be accorded autonomously. A Member
that is a party to an agreement or arrangement of the type referred to in paragraph 1,
whether existing or future, shall afford adequate opportunity for other interested
Members to negotiate their accession to such an agreement or arrangement or to negotiate
comparable ones with it.

A Member shall not accord recognition in a manner that would constitute a means of
discrimination between countries in the application of its standards or criteria for the
authorization, licensing, or certification of services suppliers or a disguised restriction on
trade in services.

7. Monopolies and Exclusive Service Suppliers

Each Member shall ensure that any monopoly supplier of a service in its territory does
not, in the supply of the monopoly service in the relevant market, act in a manner
inconsistent with that Member's obligations under Article II and specific commitments.
Where a Member's monopoly supplier competes, either directly or through an affiliated
company, in the supply of a service outside the scope of its monopoly rights and which is
subject to that Member's specific commitments, the Member shall ensure that such a
supplier does not abuse its monopoly position to act in its territory in a manner
inconsistent with such commitments.

If, after the date of entry into force of the WTO Agreement, a Member grants monopoly
rights regarding the supply of a service covered by its specific commitments, that
Member shall notify the Council for Trade in Services no later than three months before
the intended implementation of the grant of monopoly rights and the provisions

8. Business Practices

Members recognize that certain business practices of service suppliers, other than those
falling under Article VIII, may restrain competition and thereby restrict trade in services.

Each Member shall, at the request of any other Member, enter into consultations with a
view to eliminating practices referred to in paragraph 1. The Member addressed shall
accord full and sympathetic consideration to such a request and shall cooperate through
the supply of publicly available non-confidential information of relevance to the matter in
question. The Member addressed shall also provide other information available to the
 requesting Member, subject to its domestic law and to the conclusion of a satisfactory
agreement concerning the safeguarding of its confidentiality by the requesting Member.

9. Emergency Safeguard Measures

There shall be multilateral negotiations on the question of emergency safeguard measures

based on the principle of non-discrimination. The results of such negotiations shall enter
into effect on a date not later than three years from the date of entry into force of the
WTO Agreement.

In the period before the entry into effect of the results of the negotiations referred to in
paragraph 1, any Member may notify the Council on Trade in Services of its intention to
modify or withdraw a specific commitment after a period of one year from the date on
which the commitment enters into force; provided that the Member shows cause to the
Council that the modification or withdrawal cannot await the lapse of the three-year
period. The provisions shall cease to apply three years after the date of entry into force of
the WTO Agreement.

10. Payments and Transfers

A Member shall not apply restrictions on international transfers and payments for current
transactions relating to its specific commitments. Nothing in this Agreement shall affect
the rights and obligations of the members of the International Monetary Fund under the
Articles of Agreement of the Fund, including the use of exchange actions which are in
conformity with the Articles of Agreement, provided that a Member shall not impose
restrictions on any capital transactions inconsistently with its specific commitments
regarding such transactions, except under Article XII or at the request of the Fund.

11. Restrictions to Safeguard the Balance of Payments

In the event of serious balance-of-payments and external financial difficulties or threat

thereof, a Member may adopt or maintain restrictions on trade in services on which it has
undertaken specific commitments, including on payments or transfers for transactions
related to such commitments. It is recognized that particular pressures on the balance of
payments of a Member in the process of economic development or economic transition
may necessitate the use of restrictions to ensure, inter alia, the maintenance of a level of
financial reserves adequate for the implementation of its program of economic
development or economic transition.

In determining the incidence of such restrictions, Members may give priority to the
supply of services that are more essential to their economic or development programs.
However, such restrictions shall not be adopted or maintained for the purpose of
protecting a particular service sector.

12. Government Procurement

There shall be multilateral negotiations on government procurement in services under this

Agreement within two years from the date of entry into force of the WTO Agreement.

13. General Exceptions

Subject to the requirement that such measures are not applied in a manner that would
constitute a means of arbitrary or unjustifiable discrimination between countries where
 like conditions prevail, or a disguised restriction on trade in services, nothing in this
Agreement shall be construed to prevent the adoption or enforcement by any Member of
measures:

(a) necessary to protect public morals or to maintain public order;

(b) necessary to protect human, animal or plant life or health;

(c) necessary to secure compliance with laws or regulations which are not inconsistent
with the provisions of this Agreement;

(d) inconsistent with Article XVII, provided that the difference in treatment is aimed at
ensuring the equitable or effective imposition or collection of direct taxes in respect of
services or service suppliers of other Members;

(e) inconsistent with Article II, provided that the difference in treatment is the result of an
agreement on the avoidance of double taxation or provisions on the avoidance of double
taxation in any other international agreement or arrangement by which the Member is
bound.

On Security Exceptions:

Nothing in this Agreement shall be construed:

(a) to require any Member to furnish any information, the disclosure of which it considers
contrary to its essential security interests; or

(b) to prevent any Member from taking any action which it considers necessary for the
protection of its essential security interests;

(c) to prevent any Member from taking any action in pursuance of its obligations under
the United Nations Charter for the maintenance of international peace and security.

The Council for Trade in Services shall be informed to the fullest extent possible of
measures taken.

14. Subsidies

Members recognize that, in certain circumstances, subsidies may have distortive effects
on trade in services. Members shall enter into negotiations with a view to developing the
necessary multilateral disciplines to avoid such trade-distortive effects. The negotiations
shall also address the appropriateness of countervailing procedures. Such negotiations
shall recognize the role of subsidies in relation to the development programs of
developing countries and take into account the needs of Members, particularly
developing country Members, for flexibility in this area. For the purpose of such
negotiations, Members shall exchange information concerning all subsidies related to
trade-in services that they provide to their domestic service suppliers.

Any Member who considers that it is adversely affected by a subsidy of another Member
may request consultations with that Member on such matters. Such requests shall be
accorded sympathetic consideration.
COMPLIANCE

Every World Trade Organization (WTO) member is assured that its exports will be treated fairly
in other members' markets. As the sole global organization overseeing trade rules, the WTO aims to
facilitate smooth, predictable, and free trade. To become a WTO member, a state or customs territory with
full autonomy in trade policies can accede by agreeing on terms with existing members. This involves
establishing a working party and engaging in negotiations, leading to adopting an accession package.

The negotiation of rules is fundamental to achieving fair and open trade. The WTO's rules,
resulting from member negotiations, provide a framework for resolving trade disputes through the
Dispute Settlement Mechanism. The Dispute Settlement Mechanism is a crucial component of the WTO's
enforcement mechanism, ensuring that member countries adhere to the agreed-upon rules. This
mechanism allows countries to bring forward complaints and seek resolution through a structured and
impartial process, ultimately promoting stability and fairness in international trade. This mechanism
ensures adherence to rules and fair, timely dispute resolution. Enforcement powers include consequences
for non-compliance, such as the suspension of concessions and the authority to authorize retaliatory
measures.

The outcome of the 1986-94 Uruguay Round negotiations significantly shaped the current set of
rules, introducing new provisions for trade in services, intellectual property, and dispute settlement. The
World Trade Organization (WTO) dispute settlement mechanism is crucial in maintaining a level playing
field for all member countries. It provides a platform for countries to address their grievances and resolve
trade disputes transparently and predictably. This mechanism helps to build trust among member
countries by ensuring that trade rules are followed and any violations are appropriately addressed. The
WTO agreements underscore a non-discriminatory trading system, guaranteeing fair treatment of exports
and imports. Developing economies also have flexibility in fulfilling their commitments. The WTO's
Trade Policy Review Mechanism enhances transparency by evaluating the impact of trade policies and
providing constructive feedback. Periodic scrutiny and global trade monitoring initiated after the 2008
financial crisis have become integral to assessing WTO members' implementation of trade measures.
These measures ensure that all member countries are held accountable for their trade policies and that
potential issues or violations can be addressed. WTO also provides technical assistance and
capacity-building programs to help developing economies fully participate in global trade and benefit
from its opportunities. If a WTO member does not comply with dispute settlement recommendations,
trade compensation or sanctions, such as increased customs duties, may follow.
ENFORCEMENT

The World Trade Organization (WTO) has enforcement powers primarily through its dispute
settlement mechanism. When a member country believes that another member is violating WTO
agreements or failing to live up to obligations, they can bring a dispute to the WTO. The dispute
settlement process includes consultations, the establishment of a panel of experts to consider the case, and
the possibility of an appeal. If a country loses a case, it is expected to bring its policy into line with the
ruling or recommendations, and may be given a reasonable period of time to do so. If it fails to act within
this period, it may face consequences such as the suspension of concessions or other obligations by the
complaining country. The priority is for the losing country to comply with the ruling, with the ultimate
goal being for the country to comply with WTO rules.

WTO dispute settlement is a rules-based, binding process that allows members to hold each other
accountable for their commitments under the WTO agreements. The enforcement mechanism is based on
the principle of "reverse consensus," which means that a panel or Appellate Body report is automatically
adopted unless there is consensus among WTO members to reject it. This ensures that decisions are made
in a fair and impartial manner, and that the rights and obligations of all members are protected

Additionally, the WTO agreements provide for the use of trade sanctions as a means of enforcing
rulings. If a country does not comply with a ruling, the complaining country may be authorized by the
Dispute Settlement Body to suspend concessions or other obligations to the losing country. This can take
the form of blocking imports by raising import duties on products from the other country above agreed
limits to levels so high that the imports are too expensive to sell. However, the use of trade sanctions is
considered a last resort and is intended to be temporary, to encourage the other country to comply.

It's also important to note that the WTO dispute settlement mechanism is designed to be a
member-driven, consensus-based organization, where decisions are made by the members themselves
under agreed procedures that they negotiated, including the possibility of trade sanctions. This is quite
different from other agencies whose bureaucracies can, for example, influence a country’s policy by
threatening to withhold credit.
 Case 1:
Navigating Biotech Borders:
The WTO Dispute between the US and the EU on GMO Imports

Background:

The WTO (World Trade Organization) dispute between the United States and the European
Communities (EC) regarding measures affecting imports of agricultural and food products from the
United States that are or may be derived from biotech products (also known as GMOs, or genetically
modified organisms) has a complex background.

In May 2003, the United States requested consultations with the EC, asserting that the EC's
moratorium on the approval of biotech products and national marketing and import bans on biotech
products maintained by EC member States were inconsistent with the EC's obligations under the WTO
Agreement on Sanitary and Phytosanitary Measures (SPS Agreement) and the General Agreement on
Tariffs and Trade 1994 (GATT 1994).

The EC had applied a general de facto moratorium on the approval of biotech products, which
was challenged by the United States. The moratorium had been in place since 1998, and during this time,
the EC had not granted any authorizations for new biotech products.

The United States, joined by co-complainants Canada and Argentina, filed suit against the EU
before the WTO in 2003, challenging the EU's de facto moratorium and its various safeguard bans. In
November 2006, the WTO Dispute Settlement Body adopted the WTO panel's ruling in the case, which
was largely in favor of the complainants. The panel found that the EC had applied a general de facto
moratorium on the approval of biotech products, which was inconsistent with its obligations under the
SPS Agreement. The panel also found that the EC had acted inconsistently with its obligations with
regard to the approval procedures for 24 out of 27 biotech products identified by the complaining parties,
as well as with regard to EC member State safeguard measures, because these measures were not based
on risk assessments satisfying the definition of the SPS Agreement.

The DSB adopted the panel reports in November 2006, and the EC announced its intention to
implement the recommendations and rulings of the DSB in a manner consistent with its WTO obligations.
However, due to the complexity and sensitivity of the issues involved, the EC requested a reasonable
period of time for implementation. The United States and the EC agreed that the reasonable period of time
for the EC to implement the recommendations and rulings of the DSB shall be twelve months from the
date of the adoption of the panel reports, which expired on November 21, 2007. The parties subsequently
agreed to modify the reasonable period of time so as to expire on January 11, 2008.

In January 2008, the United States requested authorization from the DSB to suspend concessions
and other obligations, and the EC objected to the request and referred the matter to arbitration under
Article 22.6 of the DSU. The arbitration proceedings were suspended at the request of the parties.
Implications:

This case has several implications for international trade and the World Trade Organization (WTO) as an
institution.

● Firstly, the case highlights the importance of adhering to WTO regulations and obligations. The
European Communities (EC) was found to have applied a de facto moratorium on the approval of
biotech products, which was inconsistent with its obligations under the WTO's Agreement on
Sanitary and Phytosanitary Measures (SPS Agreement). This ruling reinforces the idea that WTO
members must follow the rules and regulations set out in the organization's agreements, even if
they disagree with them or find them difficult to implement.
● Secondly, the case demonstrates the complexity and sensitivity of issues related to biotechnology
and agricultural trade. The EC's moratorium on biotech products was motivated by concerns
about the potential risks associated with genetically modified organisms (GMOs). However, the
WTO panel found that the EC had not conducted sufficient risk assessments to justify the
moratorium. This highlights the need for careful and evidence-based decision-making when it
comes to biotechnology and agricultural trade, as well as the challenges of balancing scientific
and regulatory considerations.
● Thirdly, the case shows the importance of the dispute settlement mechanism in resolving trade
disputes. The EC and the complaining parties (Argentina, Canada, and the United States) engaged
in a lengthy and complex dispute resolution process, which included multiple panel reports,
extensions, and negotiations. While the process was time-consuming and contentious, it
ultimately resulted in a resolution that was acceptable to all parties. This underscores the value of
the WTO's dispute settlement mechanism as a means of resolving trade disputes and maintaining
the integrity of the global trading system.
● Finally, the case has broader implications for the WTO as an institution. The dispute highlights
the challenges of managing complex and sensitive issues within the WTO framework, as well as
the need for continued cooperation and dialogue among member states. The mutually agreed
solutions between Canada and the EC, as well as Argentina and the European Union, demonstrate
the potential for constructive engagement and cooperation, even in the face of disagreement and
controversy. However, the case also highlights the limitations of the WTO's dispute settlement
mechanism, as well as the need for ongoing reform and modernization to ensure that the
organization remains relevant and effective in the face of new challenges and opportunities.
 Case study 2:
“WTO Tensions: United States, Japan, and Chinese Taipei vs. European Communities on
Tariff Treatment of High-Tech Products”

The case was initiated by the United States, Japan, and Chinese Taipei against the European Communities
(EC) regarding certain EC measures that resulted iniable tariff treatment certain products, including
Flat-Panel Display Devices (FPDs), set-top boxes which have a communication function (STBCs), and
Multifunctional Digital Machines (MFMs). The complainants alleged that the EC measures were
inconsistent with Articles II:1(a), II:1(b), X:1, and X:2 of the General Agreement on Tariffs and Trade
1994 (GATT 1994).

Panel Report: The panel report was circulated on 16 August 2010, and the panel concluded as follows:

● FPDs: The panel found that the EC measures were inconsistent with Article II:1(b) of the GATT
1994 as they directed national customs authorities to classify certain FPDs under dutiable
headings, contrary to the concessions that call for duty-free treatment. The panel also found that
the EC failed to accord treatment no less favourable than that set forth in its Schedule to the
commerce of other WTO Members, thus violating Article II:1(a) of the GATT 1994.
● STBCs: The panel found that the EC measures were inconsistent with Article II:1(b) of the GATT
1994 as they directed national customs authorities to classify certain STBCs under dutiable
headings, contrary to the concessions that call for duty-free treatment. The panel also found that
the EC measures accorded treatment less favourable to such STBCs than that provided for under
the STBCs narrative description in the EC Schedule, thus violating Article II:1(a) of the GATT
1994. However, the panel found that the United States failed to establish a prima facie case that
the products at issue fall within the scope of certain concessions.
● CNEN 2008/C 112/03: The panel found that the EC failed to publish promptly CNEN 2008/C
112/03, thus acting inconsistently with Article X:1 of the GATT 1994. The panel also found that
the EC acted inconsistently with Article X:2 of the GATT 1994 by enforcing the April 2007
CNEN amendment before its official publication.
● MFMs: The panel found that the EC measures were inconsistent with Article II:1(b) of the GATT
1994 as they required dutiable treatment of certain ADP MFMs and non-ADP MFMs that fall
within the scope of duty-free concessions, contrary to the concessions that call for duty-free
treatment. The panel also found that the measures accorded treatment less favourable to certain
ADP MFMs and non-ADP MFMs than that provided for under the EC Schedule, thus violating
Article II:1(a) of the GATT 1994.

DSB Adoption and Implementation:

The DSB adopted the panel reports on 21 September 2010. The European Union informed the DSB that it
intended to implement the recommendations and rulings and agreed with the United States on a
reasonable period of time of nine months and nine days from the date of the adoption of the
recommendations and rulings. The European Union notified the DSB of adopted measures in June 2011,
ensuring the full and timely implementation of the DSB's recommendations and rulings. However, the
United States, Japan, and Chinese Taipei expressed concerns about the European Union's compliance and
entered into sequencing agreements with the European Union to facilitate the resolution of the dispute.
Implications:

This case has several implications for international trade and the WTO as an institution.

● Firstly, it highlights the importance of WTO members adhering to their commitments under the
organization's agreements. The EC's failure to provide duty-free treatment for certain information
technology products was found to be inconsistent with its obligations under the ITA and the
GATT 1994. This ruling reinforces the idea that WTO members must fulfill their commitments to
maintain the integrity of the global trading system.
● Secondly, the case demonstrates the value of the WTO's dispute settlement mechanism in
resolving trade disputes. The panel process was lengthy and complex, but it ultimately resulted in
a resolution that was acceptable to all parties. This underscores the importance of the WTO's
dispute settlement mechanism as a means of resolving trade disputes and maintaining the rule of
law in international trade.
● Finally, the case highlights the challenges of implementing WTO recommendations and rulings.
While the EC indicated that it had adopted measures necessary to comply with the DSB's
recommendations and rulings, the United States, Japan, and Chinese Taipei expressed concerns
about the EC's compliance. This underscores the need for careful implementation of WTO
recommendations and rulings to ensure that they are effective in resolving trade disputes and
maintaining the integrity of the global trading system.
ARTICLE 1: The Case of the World Trade Organization

Author(s): John H. Jackson

Oxford University Press on behalf of the Royal Institute of International Affairs

1. Concept of Deference within the World Trade Organization (WTO) Dispute Settlement
System:

In his article, Jackson delves into the concept of deference in the WTO dispute settlement system,
emphasizing the importance of national governments being granted a degree of discretion in interpreting
and applying their laws. This is especially crucial when handling intricate regulatory issues necessitating
specialized knowledge and expertise at the domestic level. To illustrate this point, Jackson references the
US Chevron deference doctrine, the UK Wednesbury unreasonableness principle, and the continental
European margin of appreciation, which serve as examples of deference in administrative law. By
studying these principles, the WTO dispute settlement system can adopt a more balanced and effective
approach to resolving trade disputes, ensuring that the sovereignty of member states and their domestic
legal systems is respected (Jackson, 2008). .

According to Jackson (2008), the Chevron deference doctrine, the Wednesbury unreasonableness
principle, and the margin of appreciation concept all represent different approaches to administrative law
deference. The Chevron deference doctrine allows courts to defer to a federal agency's interpretation of a
statute when it is ambiguous and the agency's interpretation is reasonable. The Wednesbury
unreasonableness principle enables administrative courts to assess the lawfulness of decisions made by
public authorities, deeming a decision unreasonable if no reasonable person could have made it. The
margin of appreciation concept allows national authorities to have discretionary power in interpreting and
applying international human rights conventions, acknowledging their understanding of the country's
cultural, social, and political context. These principles highlight the significance of deference in
administrative law and the importance of balancing expert decision-making with judicial review.

In conclusion, Jackson argues that these principles can offer valuable insights into the WTO
dispute settlement system, promoting a more balanced and effective approach to resolving trade disputes.
By incorporating elements of deference in administrative law, the WTO dispute settlement system can
respect the sovereignty of member states and their domestic legal systems while upholding the
rules-based trading system. This approach acknowledges the complexities of domestic regulatory
frameworks and encourages a more nuanced understanding of the challenges national governments face in
implementing and enforcing trade regulations.

2. Interplay between Deference and the Interpretation of Laws and Regulations within the
World Trade Organization (WTO) Dispute Settlement System

Another point that John H. Jackson (2008) argues is the relationship between deference and the
interpretation of laws and regulations within the context of WTO disputes. He argues that the standard of
review in such disputes should concentrate on the administrative action taken by member states instead of
interpreting laws or regulatory texts. This approach is based on respecting the sovereignty of member
states and their domestic legal systems.

Jackson's argument is rooted in the understanding that the WTO dispute settlement system should
acknowledge the complexities of domestic regulatory frameworks while upholding the rules-based trading
system. The WTO dispute settlement system can better balance these two objectives by focusing on
administrative action. This approach allows for a more nuanced understanding of the challenges national
governments face in implementing and enforcing trade regulations, thereby fostering a more balanced and
effective resolution of trade disputes.

According to Jackson (2008), the perspective is influenced by the principles of deference in

administrative law, which emphasize the importance of allowing administrative bodies to exercise their
expertise in interpreting laws, particularly in technical areas. By incorporating elements of deference in
administrative law, the WTO dispute settlement system can respect the sovereignty of member states and
their domestic legal systems while ensuring that the rules-based trading system is upheld. This approach
acknowledges the complexities of domestic regulatory frameworks and encourages a more nuanced
understanding of national governments' challenges in interpreting and applying trade regulations.

Jackson's second main point highlights the importance of emphasizing administrative action when
examining the relationship between deference and interpreting laws and regulations in WTO disputes. By
adopting this approach, the WTO dispute settlement system can better respect the sovereignty of member
states and their domestic legal systems while also acknowledging the complexities of domestic regulatory
frameworks and upholding the rules-based trading system.

The relation of Jackson's The Case of the World Trade Organization to Genetically Modified
Organisms:

In the context of genetically modified food and organisms (GMOs), the principles of deference in
administrative law discussed by Jackson can provide valuable insights for the WTO dispute settlement
system. According to National Geographic (n.d.), GMOs have been a contentious issue in international
trade, as different countries have varying regulations and standards regarding their approval, labeling, and
consumption. By incorporating elements of deference in administrative law, the WTO dispute settlement
system can strike a balance between upholding the rules-based trading system and respecting the
sovereignty of member states and their domestic legal systems. For instance, when assessing a national
government's decision to approve or ban GMOs, the WTO panel could apply the Wednesbury
unreasonableness principle to determine whether the decision is so unreasonable that no reasonable
authority could have made it. This approach acknowledges the complexities of domestic regulatory
frameworks and encourages a more nuanced understanding of the challenges national governments face in
implementing and enforcing regulations related to GMOs.

Moreover, according to LaHorgue (2019), focusing on the administrative action member states
took in GMO cases can lead to a more balanced and effective resolution of trade disputes. By
concentrating on the specific actions national governments take, the WTO dispute settlement system can
better appreciate the unique challenges and concerns underlying domestic regulatory frameworks. For
example, when evaluating a country's decision to impose labeling requirements on GMOs, the WTO
panel could consider the administrative action of implementing and enforcing such requirements rather
than solely focusing on interpreting the relevant laws and regulations. This approach would allow the
panel to assess whether the administrative action is reasonable and proportionate, considering the
country's cultural, social, and political context. By adopting this balanced and effective approach, the
WTO dispute settlement system can foster a more respectful and cooperative environment for resolving
trade disputes related to GMOs.
ARTICLE REVIEW 2: Do We Really Know that the WTO Increases Trade?

Author(s): Andrew Kenan Rose

National University of Singapore, Article in American Economic Review, Feb 2004

1. Questioning the Effectiveness of the GATT/WTO in Promoting Trade:

The author challenges the widely held belief that participation in the General Agreement on Tariffs and
Trade (GATT) and its successor, the World Trade Organization (WTO), significantly increases
international trade. Using a standard "gravity" model of bilateral merchandise trade and a comprehensive
panel data set covering over fifty years and 175 countries, the study finds little compelling evidence that
countries within the GATT/WTO exhibit substantially different trade patterns than non-members. This
challenges the narrative that these multilateral agreements are a key driver of increased global trade.
(Rose, 2004)

Rose (2004), explores the belief held by organizations like the World Trade Organization (WTO)
that the multilateral trading system is beneficial for boosting global trade. The organization has celebrated
the achievements of the multilateral trading system, claiming that since the inception of the General
Agreement on Tariffs and Trade (GATT) in 1948, world merchandise trade has increased 16-fold,
growing three times faster than merchandise output. The WTO highlights the exceptional growth in world
trade over the past 50 years, with merchandise exports growing by an average of 6% annually. Total trade
in 2000 was 22 times the level of 1950. The GATT and the WTO are credited with creating a strong and
prosperous trading system, contributing to unprecedented global economic growth.

The author aims to quantify the impact of multilateral trade agreements on international trade,
utilizing a common and effective tool known as the "gravity" model of bilateral trade. This model, widely
used in economics, links trade (in the form of natural logarithms) to factors such as the distance between
countries and their combined income. The basic model is enhanced by incorporating additional variables
like cultural similarities, geography (whether countries are landlocked), and historical relationships (such
as colonization)

Finally, for those unfamiliar with the gravity model, it's a widely accepted method for estimating
the impact of different factors on international trade. Notably, it has proven successful in providing
meaningful and statistically significant results. In this case, the author expects that if the GATT/WTO has
a substantial impact on trade, member countries should demonstrate significantly higher trade levels than
non-member countries. The gravity model, with its proven reliability, becomes a valuable tool for
exploring the relationship between multilateral agreements and international trade.

2. Highlighting the Effectiveness of the Generalized System of Preferences (GSP):

In context, Andrew Kenen Rose (2004), identifies a strong effect associated with the Generalized
System of Preferences (GSP) contrary to the limited impact of the GATT/WTO. The GSP, which involves
trade concessions extended from developed to developing countries, provides tariff reductions on various
products for developing nations and preferential treatment given that the third countries comply with the
environmental, social, and human rights standards. It is found to be linked with an approximate doubling
of trade. GSP is implemented to maintain balance after observing the import and export states of the
developing countries. Suggesting that not all multilateral institutions have been ineffectual, and the GSP,
in particular, stands out as a significant factor contributing to increased international trade. It covered
countries such as the Republic of Congo, Kenya, Uzbekistan, and India, which are part of this scheme.
 The study's quantitative analysis indicates little data to support the claim that the GATT/WTO has
significantly impacted trade. Despite considering standard gravity effects, the study finds that bilateral
trade is not strongly or consistently associated with membership in the WTO or its precursor, the General
Agreement of Tariffs and Trade (GATT). This finding challenges the commonly held belief that joining
the GATT/WTO automatically leads to increased trade and, thus, the importance of other factors such as
economic policies, geographical proximity, and cultural ties in determining bilateral trade patterns.
Contrary to the gravity effects such as the Generalized System of Preferences (GSP), which demonstrate
both economically and statistically significant impacts on trade. Significantly, this lack of tight connection
between GATT/WTO membership and increased trade is not attributed to the methodology or standard
dataset (Rose, 2004).

The conclusion is that it is surprising to demonstrate a significant positive impact of the GATT
and WTO on trade. While the study does not definitively state that the GATT/WTO has not contributed to
increased trade (acknowledging the complexity of the data), it frames the negative result as an intriguing
mystery, challenging common perceptions that these institutions have dramatically encouraged global
trade. The author acknowledges that while the study does not definitively state that GATT and WTO have
yet to contribute to increased trade, demonstrating their positive impact is not easy. This study highlights
the need for further research to understand the factors driving increased trade beyond GATT/WTO
membership. It suggests that other variables, such as domestic policies, regional agreements, or
technological advancements, may significantly promote international trade. Therefore, future studies
should explore these alternative explanations to gain a comprehensive understanding of the dynamics
influencing global trade.

As stated by Andrew Kenan Rose (2004), these two points collectively underscore the nuanced
nature of the impact of multilateral trade agreements on global trade. While the GATT/WTO's
effectiveness is called into question based on the empirical findings, the GSP emerges as a notable
contributor to promoting trade, providing a more complex picture of the role of multilateral institutions in
shaping international trade patterns.

The relation of Rose’s “Do We Really Know that the WTO Increases Trade?” to the case of
European Communities and its member States regarding the tariff treatment

The case of the United States, Japan, Chinese Taipie versus the European Communities and its
member States regarding the tariff treatment of certain information technology products highlights some
of the complexities and challenges in implementing and enforcing multilateral trade agreements, such as
the GATT and the WTO. In this case, the United States claimed that the EC's tariff treatment of certain
products did not respect their commitments to provide duty-free treatment under the ITA, and therefore,
the EC was accused of violating Articles II:1(a) and II:1(b) of the GATT 1994.

This case can be related to the study conducted by Andrew Kenan Rose (2004) that questions the
effectiveness of the GATT/WTO in promoting trade. The study finds little compelling evidence that
countries within the GATT/WTO exhibit substantially different trade patterns than non-members,
challenging the narrative that these multilateral agreements are a key driver of increased global trade.

In this particular case, the European Communities' tariff treatment of certain information
technology products was found to be inconsistent with its obligations under the GATT 1994. This
inconsistency, as Rose (2004) suggests, may challenge the common perception that the GATT/WTO has
dramatically encouraged global trade. The study emphasizes the need for further research to understand
the factors driving increased trade beyond GATT/WTO membership, such as domestic policies, regional
agreements, or technological advancements, which could significantly promote international trade.
 On the other hand, the study also highlights the effectiveness of the Generalized System of
Preferences (GSP) in promoting trade, which is an example of a regional agreement that has demonstrated
both economically and statistically significant impacts on trade. The GSP, which involves trade
concessions extended from developed to developing countries, provides tariff reductions on various
products for developing nations and preferential treatment given that the third countries comply with the
environmental, social, and human rights standards.

In conclusion, while the case of the United States versus the European Communities and its
member States highlights the challenges and complexities in implementing and enforcing multilateral
trade agreements, the study by Rose (2004) provides a nuanced perspective on the impact of such
agreements on global trade. The study emphasizes the need to consider other factors, such as domestic
policies, regional agreements, or technological advancements, that may significantly promote
international trade.
Conclusion

The World Trade Organization (WTO) occupies a pivotal position in shaping and regulating
global trade dynamics. Its primary objective is to facilitate the smooth flow of goods and services across
international borders by establishing a framework of rules and agreements that govern trade relations
between member countries. However, the effectiveness of the WTO in fulfilling its mandate, particularly
in terms of promoting trade and resolving disputes, has faced scrutiny and criticism.

In an era marked by increasing globalization and interdependence among nations, the role of the
WTO becomes even more crucial. As economies and markets become more interconnected, the need for a
robust and effective international trade organization is paramount. The WTO serves as a platform for
negotiations, trade agreements, and dispute settlement mechanisms, playing a vital role in maintaining
stability and predictability in the global trading system.

Despite its significance, the WTO has encountered challenges that have raised concerns about its
ability to address contemporary issues in the 21st century. Critics argue that the organization has struggled
to adapt to the evolving landscape of international trade, characterized by emerging technologies, shifting
economic dynamics, and new forms of trade barriers. Additionally, the WTO's capacity to resolve
disputes in a timely and efficient manner has been questioned, leading to instances where trade tensions
between nations escalate without a satisfactory resolution.

To ensure the WTO's continued relevance and effectiveness, further research and comprehensive
reforms are deemed necessary. This involves a critical examination of the organization's structure, rules,
and decision-making processes to better align them with the current global economic landscape. Reforms
should focus on addressing the challenges posed by technological advancements, promoting inclusivity
and fairness in trade agreements, and enhancing the efficiency of dispute settlement mechanisms.

Moreover, the WTO must adapt to the imperative of sustainable development in trade. This
includes addressing environmental concerns, promoting social responsibility, and ensuring that trade
policies contribute to long-term economic growth without compromising the well-being of communities
and the planet. By evolving in response to these challenges, the WTO can play a pivotal role in fostering
fair, sustainable, and inclusive global economic development through effective regulation and promotion
of international trade.
References:

Abbott, C. (2023, April 7). India is challenged at WTO over rice and wheat subsidies. Successful
Farming.
https://www.agriculture.com/news/business/india-is-challenged-at-wto-over-rice-and-wheat-subsidies

Farm talks chair calls for increased efforts to prepare for first draft negotiating text. (n.d.).
https://www.wto.org/english/news_e/news21_e/agri_03may21_e.htm

Genetically modified organisms. (n.d.).

https://education.nationalgeographic.org/resource/genetically-modified-organisms/

Jackson, J. H. (2008). The Case of the World Trade Organization. www.jstor.org, 437–454.
https://www.jstor.org/stable/25144810

LaHorgue, J. (n.d.). Economics Impacts of Genetically Modified Organisms: An analysis of Bt Cotton in

India. Scholarship @ Claremont. https://scholarship.claremont.edu/cmc_theses/2255/

Pollack, M. A., & Shaffer, G. (2009). . WTO Dispute settlement meets GMOs: Who decides? In Oxford
University Press eBooks (pp. 177–234).
https://doi.org/10.1093/acprof:oso/9780199237289.003.0005

Press corner. (n.d.). European Commission - European Commission.

https://ec.europa.eu/commission/presscorner/detail/en/IP_10_325

Rose, A. K. (2005). Do We Really Know That the WTO Increases Trade? on JSTOR. www.jstor.org.
http://www.jstor.org/stable/3592771

WTO | 2015 News items - Toy safety and genetically modified organisms top WTO standards committee
agenda. (n.d.). https://www.wto.org/english/news_e/news15_e/tbt_15jun15_e.htm

WTO | 2018 News items -Agriculture Committee reviews US counter-notification of India’s farm subsidy
spending. (n.d.). https://www.wto.org/english/news_e/news18_e/agcom_12jun18_e.htm

WTO | Agriculture - gateway. (n.d.). https://www.wto.org/english/tratop_e/agric_e/agric_e.htm

WTO | dispute settlement - the disputes - DS291. (n.d.-a).

https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds291_e.htm

WTO | dispute settlement - the disputes - DS291. (n.d.-b).

https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds291_e.htm

WTO | Services: Part II - General Obligations and Disciplines. (n.d.).

https://www.wto.org/english/tratop_e/serv_e/2-obdis_e.htm

WTO | Understanding the WTO - Agriculture: fairer markets for farmers. (n.d.).
https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm3_e.htm