WTO and Different Agreements

WTO as an Organization
The WTO is an organization which is:
 Rule-based
 Non-discriminatory
 Member-driven
 There are 164 Members of which 36 are the LDC
members.
 Developing countries including LDCs receive special and
differential (S&D) treatment (less commitment and longer
implementation period) in the WTO.
 WTO members cover about 98% of the global trade.
 From GATT to WTO
 Following World War II, nations have moved away from
thinking that trade was a zero-sum game to a philosophy of
trade for the benefit of all.
 This resulted in a decline of global trade from 2.99 million
in 1929 to 0.9 billion in 1933.
 Countries came to realize that a level of global peace was
needed for political, economic and social cooperation.
 They then started thinking for creating international
economic, political, and social cooperative agreements and
institutions to support them.
 The intent was to reduce trade barriers.
From GATT to WTO
 The General Agreement on Tariffs and Trade came into
force on 1 January 1948.
 GATT initiated different rounds of trade negotiations.
 WTO (World Trade Organization) was established as an
outcome of Uruguay Round (UR) of negotiations of GATT
(General Agreement on Tariffs and Trade) which prolonged
from 1986-1994.
 WTO Agreement came into force on 1.1.1995.
 The GATT Trade Rounds
Year Place/Name Subjects Covered Countries
1947 Geneva Tariffs 23
1949 Annecy Tariffs 13
1951 Torquay Tariffs 38
1956 Geneva Tariffs 26
1960-61 Geneva (Dillon Round) Tariffs 26

1964-67 Geneva (Kenedy Round) Tariff, Anti-dumping 62

measures
1973-79 Geneva (Tokyo Round) Tariffs, NTBs (non-tariff 102
barriers)
1986-94 Geneva (Uruguay Round) Tariffs, NTBs, rules, services, 123
Intellectual property, Dispute
settlement, textile, agri,
creation of WTO
2001- Doha Round of Negotiations Tariffs, NTBs, rules, services, 164
IP, DS, agri, 4 Singapore
Issues ( trade facilitation)
 GATT Vs. WTO
GATT
 GATT is an agreement.
 Contracting parties.
 Deals with trade in goods
only.
 Dispute settlement
procedures were weak
 Less discipline in agriculture
and textile.
 Based on GATT, 1947
WTO
 WTO is a multilateral legal
institution.
 Members
 Covers trade in goods, trade in
services and Intellectual Property
Rights (TRIPS)
 Strict dispute settlement
procedures.
 More discipline in agriculture and
textile.
 Based on GATT, 1994 which is GATT
1947 + other agreements
 WTO Agreements
Umbrella Marrasesh Agreement Establishing WTO

Basic Principles Goods Services Intellectual Property

 
Main Agreements General Agreement on General Agreement on Trade Related Aspects of
Tariffs and Trade Trade in Services Intellectual Property Rights
(GATT) (GATS) (TRIPS)
Additional Details 12 other Goods Services Annexes  
Agreements
Market Access Countries’ Schedule of Countries’ Schedule of
Commitments Commitments Commitments (and
MFN exemptions)

Dispute Settlement Understanding on Rules and Procedures Governing the Settlement of Disputes

Transparency Trade Policy Review Mechanism

 
Plurilateral Agreement on Trade in Civil Aircraft
Agreements
  Agreement on Government Procurement
 Objectives of WTO
 To raise standards of living;
 To ensure full employment;
 To expand the production of and trade in goods and services;
 To ensure optimal use of world’s resources for sustainable
development, protecting and preserving the environment;
 To ensure a secure share of developing countries and LDCs in
international trade
 substantial reduction of tariff and non-tariff barriers and
elimination of discriminatory treatment.
• Note: There remains questions how far these objectives been
materialized.
 Structure of the WTO
Ministerial Conference
(Every Two Year)

General Council meeting as

General Council meeting as
Dispute Settlement General Council
Trade Policy Review Body
Body
Appellate Body
Dispute Settlement panels

Committees on Council for Council for Council for

Trade and Environment Trade in Goods Trade-Related Aspects Trade in Services
Trade and Development
Sub-committee on Least- of Intellectual
Developed Countries Property Rights
Regional Trade Agreements
Balance of Payments Committees on Committees on
Restrictions Market Access Trade in Financial Services
Budget, Finance and Agriculture Specific Commitments
Administration Sanitary and Phytosanitary Measures Working parties on
Working parties on Technical Barriers to Trade Domestic Regulation
Accession Subsidies and Countervailing Measures GATS Rules
Working groups on Anti-Dumping Practices
Relationship between Customs Valuation Special Sessions of
Trade and Investment Rules of Origin Plurilaterals Services Council
Interaction between Import Licensing Trade in Civil Aircraft TRIPS Council
Trade and Competition Trade-Related Investment Measures Committee Dispute Settlement Body
Policy Safeguards Government Procurement Agriculture Committee
Transparency in Textiles Monitoring Body Committee Trade and Development
Government Procurement Working party on Committee
Trade, Debt and Finance State-Trading Enterprises Trade and Environment Committee
Trade and Technology Negotiating groups on
Transfer Plurilateral Market Access
Information Technology Agreement Rules
Committee

Key
Reporting to General Council (or a subsidiary)
Reporting to Dispute Settlement Body
Plurilateral committees inform the General Council or Goods Council of their activities, although these agreements are not signed by all WTO
members
Trade Negotiations Committee reports to General Council
The General Council also meets as the Trade Policy Review Body and Dispute Settlement Body
 Basic Principles of WTO
 Most Favoured Nations (MFN): non-discrimination
between different Members of the WTO (Ban on
import from Israel by Bangladesh!!!)
 National Treatment (NT): non-discrimination between
an imported product and a like-domestic product
 Predictability through binding and transparency.
 Free trade through gradual negotiations
 Elimination of quantitative restrictions
 Promoting fair competition
 Encouraging development and economic reform.
 Derogation from GATT
Principles
 Exceed the binding level (Article VI) due to dumping
and unfair subsidies.
 Allow quantitative restrictions for ensuring food
security (GATT Article XI.2, Article 12 of AOA).
 Safeguard the Balance of Payment Situation (Article
XII and XVIII)
 Emergency Safeguard actions on imports of particular
products (Article XI)
 Derogation from GATT

Principles
General Exceptions (Article XX):
To protect public morale
 To protect human, animal or plant life and health
 To the importation or exportation of gold or silver
 To the product of prison labour
 For the protection of national treasures of artistic, history or archaeological
value
 Conservation of exhaustible natural resources subject to the condition that
same is applied on domestic production or consumption
 Security Exception (Article XXI): Allow restrictions related importation or
exportations of items related to
 Trade of fissionable materials
 Trafficking of arms and ammunition
 Formation of Customs Union (Article XXIV)
 WTO Ministerial
Conferences
1. Singapore (1996),
2. Geneva (1998),
3. Seattle (1999),
4. Doha (2001)
5. Cancun (2003),
6. Hong Kong in December (2005)
7. Geneva (2009)
8. Geneva (2011)
9. Bali (2013)
10. Nairobi, 15-19 December 2015
11. Buenos Aires, 10-13 December 2017
12. Nur-Sultan, Kazakhstan (June 2021 ???), 8-11 June
2020.
 Agreement on Agriculture
 GATT treated agriculture trade differently than non-
agricultural products;
 Article XI, GATT prohibited quantitative restrictions, but
allows quantitative restrictions on agricultural products;
 Article XVI permits export subsidies on agricultural
products
 GATT negotiations made little headway in dismantling
protectionist domestic policies over several decades;
 Until the Uruguay Round (UR) of negotiations, there was
very little progress in removing agricultural trade barriers.
Agreement on Agriculture (AOA)

 By the end of the UR, the Agreement on Agriculture

(AOA) was adopted by the GATT/WTO Members.
 The WTO Agreement on Agriculture (AOA) was
successful in making binding commitments in some
important areas:
 It eliminates country-specific exemptions for
agriculture;
 Some liberalizations were made in the domestic
support, market access, export competition, and
sanitary and phyto-sanitary measures and
 Almost all agricultural products are now subject to
multilateral disciplines including maximum tariff
bindings.
Agreement on Agriculture (AOA)
 Annex 1 of AOA describes the product coverage
under the AOA;
 All products under HS Chapter 1 to 24 excluding
fish and fish products and forestry products
 Basic agricultural products as well as the products
derived from them such as bread, butter and meat,
chocolate and sausages are included;
 Wines, spirits, tobacco products, fibers such as
cotton, wool and silk and raw animals skins for
leather production are included, jute is not an
agriculture product;
 Base period is 1986-88.
 Agreement on Agriculture: Three
Pillars

 Agriculture negotiations are carried out in three

pillars:
1. Market Access: various trade restrictions
confronting imports such as tariff, quota, ban.
2. Domestic Supports: subsidies and other
programmes, including those that raise or
guarantee farm gate prices and farmers’ incomes
3. Export Competition: methods used to make
exports artificially competitive.
 Numeric target for Cutting Agricultural Subsidies and Protection during the UR
Implementation Period
Developed Countries Developing Least Developed
(6 years reduction) Countries Countries
(1995-2000) 10-year reduction
1995-2004
Tariffs:
Average cut—all 36% 24% No reduction
agricultural goods commitment
Minimum cut per 15% 10% No reduction
product commitment
Domestic Support:
Cuts for sector 20% 13% No reduction
(Aggregate Measures commitment
of Support)
Export Subsidies:
Value of Subsidies 36% 24% No reduction
commitment
Subsidized quantities 21% 14% No reduction
commitment
 AOA: Doha Mandate
 Doha mandate for agriculture:
 Substantial improvement of market access;
 Reduction of, with a view to phasing out, all forms of export
subsidies;
 Substantial reductions in trade-distorting domestic support
 S&D treatment for developing countries are integral part of
negotiations;
 Non-trade concerns will be taken into consideration;
 Modalities for the further commitments, including provisions for S&D
treatment.
 However, there is any progress in agriculture negotiation. Special
Safeguard Mechanism and subsidies are the main stumbling block
 Non-Agriculture Market Access
(NAMA)

 The global trade for non-agricultural products

covers more than 92 percent of the total trade;
 The share of developing countries in non-
agricultural trade is increasing;
 Non-agricultural product constitute about 93%
of our export;
Original Mandate for NAMA
Negotiations
 Article XXVIII bis of the GATT says, contracting
parties recognize that custom duties often constitute
serious obstacles to trade, … directed to the substantial
reduction of the general level of tariff and other charges
on imports and exports;
 Negotiations shall be conducted on a basis which
affords adequate opportunity to take into account:
 The needs of individual contracting parties and
individual industries;
 The needs of LDC
 Doha Mandate: Para 16

 We agree to negotiations which shall aim, by

modalities to be agreed, to reduce or as appropriate
eliminate tariffs, including the reduction or
elimination of tariff peaks, high tariffs, and tariff
escalation, as well as non-tariff barriers, in particular
on products of export interest to developing countries.
 The negotiations shall take fully into account the
special needs and interests of developing and least
developed country participants, including less than
full reciprocity in reduction commitments.
Key Elements of NAMA Negotiations
 Formula for tariff cuts: Swiss formula will be used.
Coefficient for the formula not yet decided.
 Binding coverage
 Coefficients of the formula
 Flexibilities for developing countries
 Sectoral negotiations
 Market access for LDCs
 Non-reciprocal preference
 Non-agricultural environmental goods
 Non-tariff barriers
 LDCs’ Obligation

 LDCs shall be exempted from tariff reductions;

 LDCs are expected to substantially increase their
level of tariff binding commitments
 All tariff binding shall be on ad-valorem basis
 General Agreement on Trade in
Services (GATS)
 The GATS is the first and only multilateral trade agreement to
cover trade in services.
 GATS entered into force in January 1995.
 The GATS was inspired by essentially the same objectives as its
counterpart in merchandise trade, the General Agreement on Tariffs
and Trade (GATT).
 There are 12 sectors and160 sub-sectors
 Business and Professional, Communications, all types construction,
Distribution, Education, Environnent, Financial, Heath and social
Tourism, Recréation & cultural, Transport & Other
• The sub-sectors concord to a considerable degree to categories
contained and described in the provisional UN Central Product
Classification (UNCPC).
Modes of Supply of Services

 Mode 1: Cross Border (From the territory of one

Member into the territory of any other Member).
 Mode 2: Consumption Abroad (In the territory of one
Member to the service consumer of any other Member)
 Mode 3: Commercial Presence (Supply of a service by a
service supplier of one Member, through commercial
presence in the territory of any other Member).
 Mode 4: Presence of Natural Persons (Supply of a service
by a service supplier of one Member, through presence
of natural persons of a Member in the territory of any
other Member)
 Mode 1: Cross-Border Supply
• From the territory of one Member into the territory of
any other Member
• Only the service crosses the border from one Member to
another.
• Neither supplier nor the consumer of the service moves
from their respective territories.
• Such a transaction is conceptually similar to the movement
of a good across a border.
• Examples include
• service supplied via internet/over telephone such as
distance leaning, e-banking, telemedicine, call-center
service as well as many other services conveyed across a
border.
Mode 1: Cross Border
Mode 2: Consumption Abroad

• In the territory of one Member to the service consumer of any

other Member
• Known as the "movement of the consumer".
• The service consumer crosses the border to where the supplier is
located to obtain services.
• Examples include holidays abroad, foreign education, and
overseas health care.
• The service is delivered outside the territory of the Member
making the commitment.
• However, activities such as ship repair abroad, where only the
property of the consumer "moves", are also covered without
actual movement.
Mode 2: Consumption Abroad
Mode 3: Commercial Presence
• Supply of a service by a service supplier of one Member,
through commercial presence in the territory of any other
Member
• The service supplier establishes a commercial presence
through a foreign owned affiliate, subsidiary, representative
office or branch in the country where the consumer is
located.
• Examples might be foreign banks or telecommunications
companies established in host countries.
• In many cases, investment flows are involved.
Mode 3: Commercial Presence
 Mode 4: Presence of Natural
Persons
• Supply of a service by a service supplier of one Member,
through presence of natural persons of a Member in the
territory of any other Member
• This mode covers natural persons who are themselves service
suppliers, as well as natural persons who are employees of foreign
service suppliers in the host country.
• In schedules, Members have taken commitments based on the
following categories of persons: independent professionals; intra-
corporate transferees; business visitors; and contractual service
suppliers.
• It is temporary movement. Although no time limit is specified for
the temporary movement.
Mode4: Temporary Movement
of Natural Persons
GATS Negotiations
 Trade Related Aspects of
Intellectual Property Rights
1. Intellectual Property Rights (IPRs) is one of the most
controversial issues in the WTO.
2. There were conflicting views about the inclusion of this issue
in the WTO.
3. The Agreement lays down the minimum levels of protection to
the intellectual property owners (Art. 1).
4. All member are obliged to provide protection of IPR for at
least up to these levels.
 Seven Types of IPRs

1. Copy Rights
2. Patents
3. Trade Marks
4. Geographical Indications
5. Industrial Designs
6. Layout Design of integrated circuits
7. Undisclosed information
 TRIPS Agreements: Doha
Mandate
1. Implementation and interpretation of TRIPS Agreement should be in a
manner supportive of public health, by promoting both access to existing
medicines and research and development into new medicines. A separate
declaration was adopted.
2. Agree to negotiate the establishment of a multilateral system of notification
and registration of geographical indications for wines and spirits.
3. Products other than wines and spirits will be addressed in the Council for
TRIPS.
4. Review of Article 27.3(b), to examine, inter alia, the relationship between
the TRIPS Agreement and the Convention on Biological Diversity, the
protection of traditional knowledge and folklore, and other relevant new
developments raised by members.
 TRIPS and Public Health

 After long debate, on 23 January 2017, WTO

members agreed to remove an important obstacle
to affordable drug imports to predominantly
supply the local market when generic medicines
are produced under compulsory license. 
 Prospect of Doha Round of
Negotiations
 Doha Round of negotiations initiated in 2001 and emphasized on
development dimension of trade called Doha Development Agenda
(DDA)
 DDA should supposed to be concluded in 2004.
 Members failed to conclude DDA.
 Negotiations stalled on disagreements over agricultural subsidies
and intellectual property rights
 Liberalizing global agricultural trade was the linchpin of the
agenda.
 Many of the world’s poorest nations depend on exporting basic
agricultural products but struggle to compete against richer nations
that support their farmers with subsidies.
 Prospect of Doha Round of
Negotiations
 OECD agriculture subsidies total nearly $300 billion annually.
 Developing countries argue that without a reduction in
developed countries’ subsidies, they must maintain tariffs and
maintain their own domestic subsidies.
 A major sticking point is “special safeguard mechanism,”
which would allow developing countries to temporarily raise
tariffs to protect their farmers from sudden price drops or
import surges.
 The Doha promised to give developing countries more time to
implement changes and the financial and technical support to
help them do so.
 By 2008, negotiations collapsed due to disagreement on
agriculture subsidies and the special safeguard mechanism. 
 Present State of Play in the
WTO
 Trump has denounced China’s trade practices
 Trump administration says that the WTO is incapable of dealing
with the problem.
 Instead, Trump has side stepped the WTO system.
 Trump has applied tariffs targeting over production of steel and
aluminum by China as well as announced further measures to
retaliate against China’s investment restrictions.
 CFR’s Edward Alden has warned that Trump’s willingness to
bypass the WTO will result in the death of the institution.
 On 15 September, WTO Panel declared that US measures on
China is inconsistent with MFN Principle, Binding Commitment
and Article XX of Moral exception.
 Threat of the WTO Dispute
Settlement System
 Dispute settlement is the main teeth of the WTO.
 The appeals system of DS is also under pressure.
 The Obama administration blocked the reappointment of a South
Korean judge to the WTO’s Appellate Body the first time any
country blocked the appointment of a judge from another country.
 Trump has continued to block new appointments, leaving three
judgeships out of seven vacant and hobbling much of the court’s
work.
 As WTO members failed to appoint the appellate body judges by
11 December 2019, appeals system are virtually dead.
 Bangladesh’s and the WTO
 LDCs including Bangladesh enjoy Duty free and quota free market
access under the WTO
 Duty free & quota-free (DFQF) market access in 38 countries has
enormous impact in increasing our export.
 EU and SAFTA allows only 30% value addition for enjoying (DFQF).
 However, after graduation Bangladesh will face enormous
challenges as it will loss the preferential market access (EU until
2027 and other 2024)
 TRIPS general waiver until 2021 helped to grow our manufacturing
industries and contributed to higher education.
 TRIPS waiver until 2033 for pharmaceutical have boosted our
pharmaceutical.
 TRIPS compliance will be critically important for Bangladesh.
Actions Needed by Bangladesh

 Signing FTA could accelerate market access.

 FTAs dimension has changed now. It includes various
issues such as tariffs, non-tariffs, investment,
environment, governance, government procurements,
intellectual property rights (IPRs)
 Bangladesh has to develop its own productivity and
ensure product and market diversifications.
 Trade related capacities has to be improved
significantly o sustain in the complex global trade
agreement.
 Improvement of negotiation skills should get utmost
priority.
Thank
you
all