Location: Geneva, Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations (1986–94) Membership: 153 countries (since

23 July 2008) Budget: 185 million Swiss francs for 2008 Secretariat staff: 625 Head: Pascal Lamy (Director-General)

Functions of WTO : • Administering WTO trade agreements • Forum for trade negotiations • Handling trade disputes • Monitoring national trade policies • Technical assistance and training for developing countries • Cooperation with other international organizations

what is WTO?
the World Trade Organization (WTO) deals with the rules of trade between nations at a global or near-global level. But there is more to it than that. • • • • Is it a bird, is it a plane…… Above all, it’s a negotiating forum … It’s a set of rules … or it a table………

Born in 1995, but not so young
• The WTO began life on 1 January 1995, but its trading system is half a century older.

•Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. • •The last and largest GATT round, was the Uruguay Round which lasted from 1986 to 1994 and led to the WTO’s creation.

What happened to GATT?
• The WTO replaced GATT as an international organization, • The General Agreement still exists as the WTO’s umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations.

• Trade lawyers distinguish between GATT 1994, the updated parts of GATT, and GATT 1947. • the original agreement which is still the heart of GATT 1994. Confusing? For most of us, it’s enough to refer simply to “GATT”.

Principles of the trading system

1. 2.

Trade without discrimination
Most-favoured-nation (MFN): treating other people equally 2. National treatment: Treating foreigners and locals equally

• •

Freer trade: gradually, through negotiation Predictability: through binding and transparency Promoting fair competition

Encouraging development and economic reform

The case for open trade
World trade and production have accelerated Both trade and GDP fell in the late 1920s,before bottoming out in 1932. After World War II, both have risen exponentially, most of the time with trade outpacing GDP. (1950 = 100. Trade and GDP: log scale)

GATT trade rounds
Year 1947 1949 1951 1956 1960–1961 1964–1967
1973–1979 1986–1994

Place/ name Annecy

Subjects covered

Countries 23 13 38 26 26 62
102 123

Geneva Tariffs Tariffs Torquay Tariffs Geneva Tariffs Geneva Tariffs Geneva Tariffs and anti-dumping measures
Geneva Geneva Tariffs, non-tariff measures, “framework” agreements Tariffs non-tariff measures, rules, services.

The WTO is ‘rules-based’; its rules are negotiated agreements For • Goods (under GATT) • Agriculture • Textiles and clothing • Product standards (TBT) • Investment measures • Anti-dumping measures • Customs valuation methods • Preshipment inspection • Rules of origin • Import licensing

Agriculture: fairer markets for farmers
The new rules and commitments apply to: • market access — various trade restrictions confronting imports • domestic support — subsidies and other programmes, including those that raise or guarantee farmgate prices and farmers’ incomes • export subsidies and other methods used to make exports artificially competitive.

Standards and safety
• Food, animal and plant products: how safe is safe? • Technical regulations and standards •Sanitary Measures Agreement or SPS •Technical Barriers to Trade Agreement (TBT)

Services: rules for growth and investment
• All services are covered by GATS • Most-favoured-nation treatment applies to all services, except the one-off temporary exemptions • National treatment applies in the areas where commitments are made • Transparency in regulations, inquiry points • Regulations have to be objective and reasonable • International payments: normally unrestricted

Anti-dumping, subsidies, safeguards:
•actions taken against dumping (selling at an unfairly low price) • subsidies and special “countervailing” duties to offset the subsidies
Prohibited subsidies Actionable subsidies

• emergency measures to limit imports temporarily, designed to “safeguard” domestic industries.

Non-tariff barriers: red tape, etc
A number of agreements deal with various bureaucratic or legal issues that could involve hindrances to trade. • import licensing • rules for the valuation of goods at customs • preshipment inspection: further checks on imports • rules of origin: made in ... where? • investment measures

•The WTO agreements contain special provisions on developing countries • the Committee on Trade and Development is the main body focusing on work in this area in the WTO, with some others dealing with specific topics such as trade and debt, and technology transfer • the WTO Secretariat provides technical assistance (mainly training of various kinds) for developing countries. •Least-developed countries: special focus

The WTO is ‘member-driven’, with decisions taken by consensus among all member governments

• Highest authority: the Ministerial Conference • Second level: General Council in three guises The General Council
The Dispute Settlement Body The Trade Policy Review body Third level: councils for each broad area of trade, and more

The WTO Secretariat and budget
• The WTO Secretariat is located in Geneva. It has around 630 staff and is headed by a director-general. Its responsibilities include: • Administrative and technical support for WTO delegate bodies (councils, committees, working parties, negotiating groups) for negotiations and the implementation of agreements. • Technical support for developing countries, and especially the leastdeveloped. • Assistance from legal staff in the resolution of trade disputes involving the interpretation of WTO rules and precedents. • Dealing with accession negotiations for new members and providing advice to governments considering membership.

How to join the WTO: the accession process
First, “tell us about yourself”. Second, “work out with us individually what you have to offer”. Third, “let’s draft membership terms Finally, “the decision”.

Place : Doha ( Quatar) Doha development agenda ( DDA), Nov 2001 Objective : Its objective is to lower trade barriers around the world, which allows countries to increase trade globally. Major issues :Agriculture, industrial tariffs and non-tariff barriers, services, and trade remedies. Differences between developed and developing nations ( EU, USA and Japan vs India, Brazil, China, and South Africa ) Also considerable contention against and between the EU and the U.S. over their maintenance of agricultural subsidies —seen to operate effectively as trade barriers The most recent round of negotiations, July 23-29 2008, broke down after failing to reach a compromise on agricultural import rules

Doha round contd…
Negotiations : TNC ( Trade Negotiation Committee) Director General : Pascal Lamy Topics covered : market access, development issues, WTO rules, trade facilitation and other issues. Doha,2001 : Agricultural and manufacturing markets, GATS( General agreement on Trades in Services), TRIPS (Trade-Related Aspects of Intellectual Property Rights). Intention : Make trade rules fairer for developing countries. Cancún,2003: Collapsed on issues ( Singapore issues) like government procurement, trade facilitation (customs issues), trade and investment, and trade and competition .

Doha round contd…
• Geneva 2004 : 1)Pushed by USA would focus on market access, including an elimination of agricultural export subsidies. 2)EU accepted the elimination of agricultural export subsidies “by date certain.3) Singapore issues were moved off the Doha agenda. 4)India and Brazil directly negotiated with developed countries on agriculture and trade facilitation.5)The idea of “framework agreement” – which provides guidelines for completing DOHA

2005 Paris and Hong Kong
• France protested to cut subisidies to farmers • U.S., Australia, the EU, Brazil and India failed to agree on issues relating to chicken, beef and rice . • Hong Kong, 2005 – Sixth round • Most of the world's governments reached a deal to set a deadline for eliminating subsidies of agricultural exports by 2013 . • The final declaration also requires industrialized countries to open their markets to goods from the worlds poorest nations.

Geneva 2006
• Failed to reach consensus on reducing farming subsidies and lowering import taxes. • Dim chances to succeed because Trade Act of 2002. • What is Trade Act 2002 ?

Potsdam 2007. Geneva 2008
• Potsdam 2007 broke because of a deadlock between USA, the EU, India and Brazil over opening up agricultural and industrial markets in various countries and also how to cut rich nation farm subsidies.

Geneva 2008 1)Talks were stalled on the issue of special safeguard mechanism compromise. 2)US said it was ready to cap farm subsidies at $15 billion a year from $18 billion on condition* 3)US & EU also offered an increase in the temp-work visas for professional workers. 4) Disagreements on issued related to Indian & Chinese farmers, African & Caribbean banana imports to EU. 5) Failure was blamed at India and China over over the special safeguard mechanism (SSM)

Doha 2009
• No negotiations • Ministers reaffirmed the need to conclude the Round in 2010 • Ministers want to finish Doha rounds so that they may concentrate on urgent issues like Climate change.