Understanding the WTO

3rd edition Previously published as Trading into the Future September 2003 revised O!tober 200"

Fa!t #ile

The WTO
Location$ %eneva S&it'erland Established$ ( )anuary (**" Created by$ Uruguay +ound negotiations ,(*-./*01 Membership$ (0- !ountries ,sin!e (3 O!tober 20001 Budget$ (.* million S&iss #ran!s #or 200" Secretariat staff$ .30 Head$ Pas!al 2amy ,dire!tor3general1 Functions$ 4 5dministering WTO trade agreements 4 Forum #or trade negotiations 4 6andling trade disputes 4 7onitoring national trade poli!ies 4 Te!hni!al assistan!e and training #or developing !ountries 4 8ooperation &ith other international organi'ations

Third edition Previously published as Trading into the Future Written and published by the World Trade Organi'ation 9n#ormation and 7edia +elations :ivision ; WTO (**" 2000 200( 2003 200" 5n up3to3date version o# this te<t also appears on the WTO &ebsite ,http:// ! to!org !li!= on the WTO1 &here it is regularly updated to re#le!t developments in the WTO> Contact the "T# $nformation %i&ision rue de 2ausanne ("0 86/(2(( %en?ve 2( S&it'erland Tel$ ,0(/221 @3* "00@A"(*0 Fa<$ ,0(/221 @3* "0"e3mail$ enBuiriesC&to>org Contact "T# 'ublications rue de 2ausanne ("0 86/(2(( %en?ve 2( S&it'erland Tel$ ,0(/221 @3* "20-A"30Fa<$ ,0(/221 @3* "@*2 e3mail$ publi!ationsC&to>org Printed$ O!tober 200" D (0 000 !opies

The #irst step is to tal=> Essentially the WTO is a pla!e &here member governments go to try to sort out the trade problems they #a!e &ith ea!h other>

5t its heart are WTO agreements negotiated and signed by the bul= o# the &orldFs trading nations>

Gut the WTO is not Hust about liberali'ing trade and in some !ir!umstan!es its rules support maintaining trade barriers D #or e<ample to prote!t !onsumers or prevent the spread o# disease>

(bbre&iations
Some o# the abbreviations and a!ronyms used in the WTO$
58P 5: 53: 5FT5 57S 5PE8 5SE5J 5T8 8G: 888 8E+ 8O7ES5 8T: 8TE 8N: ::5 :SG :SU E8 EFT5 EU F5O %5TS %5TT %SP 6S 989TO 92O 97F 9T8 9TO 7E5 7E+8OSU+ 7F5 7FJ 7TJ J5FT5 PSE PS9 SO: S:T S55+8 S:+ SE25 SPS TGT T7G TJ8 TP+G TP+7 T+97s T+9PS UJ 5#ri!an 8aribbean and Pa!i#i! %roup ,2omI 8onvention1 5nti3dumping measures 5SE5J Free Trade 5rea 5ggregate measurement o# support ,agri!ulture1 5sia3Pa!i#i! E!onomi! 8ooperation 5sso!iation o# Southeast 5sian Jations 5greement on Te<tiles and 8lothing 8onvention on Giologi!al :iversity ,#ormer1 8ustoms 8o3operation 8oun!il ,no& W8O1 K5ustralia Je& LealandM 8loser E!onomi! +elations KTrade 5greementM ,also 5J8E+T51 8ommon 7ar=et #or Eastern and Southern 5#ri!a 8ommittee on Trade and :evelopment 8ommittee on Trade and Environment 8ountervailing duty ,subsidies1 :oha :evelopment 5genda :ispute Settlement Gody :ispute Settlement Understanding European 8ommunities European Free Trade 5sso!iation European Union ,o##i!ially European 8ommunities in WTO1 Food and 5gri!ulture Organi'ation %eneral 5greement on Trade in Servi!es %eneral 5greement on Tari##s and Trade %enerali'ed System o# Pre#eren!es 6armoni'ed 8ommodity :es!ription and 8oding System 9nterim 8ommission #or the 9nternational Trade Organi'ation 9nternational 2abour Organi'ation 9nternational 7onetary Fund 9nternational Trade 8entre 9nternational Trade Organi'ation 7ultilateral environmental agreement Southern 8ommon 7ar=et 7ulti#ibre 5rrangement ,repla!ed by 5T81 7ost3#avoured3nation 7ultilateral trade negotiations Jorth 5meri!an Free Trade 5greement Produ!er subsidy eBuivalent ,agri!ulture1 Pre3shipment inspe!tion Spe!ial and di##erential treatment ,#or developing !ountries1 South 5sian 5sso!iation #or +egional 8ooperation Spe!ial :ra&ing +ights ,97F1 2atin 5meri!an E!onomi! System Sanitary and phytosanitary measures Te!hni!al barriers to trade Te<tiles 7onitoring Gody Trade Jegotiations 8ommittee Trade Poli!y +evie& Gody Trade Poli!y +evie& 7e!hanism Trade3related investment measures Trade3related aspe!ts o# intelle!tual property rights United Jations

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UJ8T5: UJ:P UJEP UPON U+ NE+ N+5 W8O W9PO WTO

UJ 8on#eren!e on Trade and :evelopment UJ :evelopment Programme UJ Environment Programme 9nternational Union #or the Prote!tion o# Je& Narieties o# Plants Uruguay +ound Noluntary e<port restraint Noluntary restraint agreement World 8ustoms Organi'ation World 9ntelle!tual Property Organi'ation World Trade Organi'ation

For a !omprehensive list o# abbreviations and glossary o# terms used in international trade see #or e<ample$ Walter %oode Dictionary of Trade Policy Terms 0th Edition WTOA8ambridge University Press 2003> This and many other publi!ations on the WTO and trade are available #rom$ WTO Publi!ations World Trade Organi'ation 8entre William +appard +ue de 2ausanne ("0 86/(2(( %eneva S&it'erland> Tel ,P0(/221 @3* "20- A @3* "30-> Fa<$ ,P0(/221 @3* "@*2 e3mail$ publi!ationsC&to>org

#) THE "EBS$TE Qou !an #ind more in#ormation on WTO a!tivities and issues on the "T# ebsite> The site is !reated around gate ays leading to various subHe!ts D #or e<ample the trade topi!s gate&ay or the :oha :evelopment 5genda gate&ay> Ea!h gate&ay provides lin=s to all material on its subHe!t> +e#eren!es in this te<t sho& you &here to #ind the material> This is in the #orm o# a path through gate&ays starting &ith one o# the navigation lin=s in the top right o# the homepage or any other page on the site> For e<ample to #ind material on the agri!ulture negotiations you go through this series o# gate&ays and lin=s$ ! to!org * trade topics * goods * agriculture * agriculture negotiations Qou !an #ollo& this path either by !li!=ing dire!tly on the lin=s or via drop3do&n menus that &ill appear in most bro&sers &hen you pla!e your !ursor over the trade topi!s lin= at the top o# any &eb page on the site>

ord of caution: the fine print

While every e##ort has been made to ensure the a!!ura!y o# the te<t in this boo=let it !annot be ta=en as an o##i!ial legal interpretation o# the agreements> 9n addition some simpli#i!ations are used in order to =eep the te<t simple and !lear> 9n parti!ular the &ords !ountry and nation are #reBuently used to des!ribe WTO members &hereas a #e& members are o##i!ially !ustoms territories and not ne!essarily !ountries in the usual sense o# the &ord ,see list o# members1> The same applies &hen parti!ipants in trade negotiations are !alled !ountries or nations> Where there is little ris= o# misunderstanding the &ord member is dropped #rom member !ountries ,nations governments1 #or e<ample in the des!riptions o# the WTO agreements> Jaturally the agreements and !ommitments do not apply to non3members> 9n some parts o# the te<t %5TT is des!ribed as an international organi'ation> The phrase re#le!ts %5TTFs de facto role be#ore the WTO &as !reated and it is used simplisti!ally here to help readers understand that role> 5s the te<t points out this role &as al&ays ad ho! &ithout a proper legal #oundation> 9nternational la& did not re!ogni'e %5TT as an organi'ation> For simpli!ity the te<t uses the term %5TT members> O##i!ially sin!e %5TT &as a treaty and not a legally3established organi'ation %5TT signatories &ere !ontra!ting parties> 5nd #or easier reading arti!le numbers in %5TT and %5TS have been translated #rom +oman numbers into European digits>

8ontents
Chapter +!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!, Basics!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!, Chapter -!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!-. The agreements!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!-. Chapter .!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!/, Settling disputes!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!/, Chapter 0!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11 Cross2cutting and ne issues!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!11 Chapter /!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!3+ The %oha agenda!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!3+ Chapter 1!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!,3 %e&eloping countries!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!,3 Chapter 4!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!+5/ The #rgani6ation!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!+5/

8hapter (

Basics
The WTO &as born out o# negotiationsR everything the WTO does is the result o# negotiations

+! "hat is the "orld Trade #rgani6ation7

Simply put$ the World Trade Organi'ation ,WTO1 deals &ith the rules o# trade bet&een nations at a global or near3global level> Gut there is more to it than that>

!!! #< $S $T ( T(BLE7

'articipants in a recent radio discussion on the "T# ere full of ideas! The "T# should do this8 the "T# should do that8

$s it a bird8 is it a plane7
There are a number o# &ays o# loo=ing at the WTO> 9tFs an organi'ation #or liberali'ing trade> 9tFs a #orum #or governments to negotiate trade agreements> 9tFs a pla!e #or them to settle trade disputes> 9t operates a system o# trade rules> ,Gut itFs not Superman Hust in !ase anyone thought it !ould solve D or !ause D all the &orldFs problemsS1 (bo&e all8 it9s a negotiating forum : Essentially the WTO is a pla!e &here member governments go to try to sort out the trade problems they #a!e &ith ea!h other> The #irst step is to tal=> The WTO &as born out o# negotiations and everything the WTO does is the result o# negotiations> The bul= o# the WTOFs !urrent &or= !omes #rom the (*-./*0 negotiations !alled the Uruguay +ound and earlier negotiations under the %eneral 5greement on Tari##s and Trade ,%5TT1> The WTO is !urrently the host to ne& negotiations under the :oha :evelopment 5genda laun!hed in 200(> Where !ountries have #a!ed trade barriers and &anted them lo&ered the negotiations have helped to liberali'e trade> Gut the WTO is not Hust about liberali'ing trade and in some !ir!umstan!es its rules support maintaining trade barriers D #or e<ample to prote!t !onsumers or prevent the spread o# disease> $t9s a set of rules : 5t its heart are the WTO agreements negotiated and signed by the bul= o# the &orldFs trading nations> These do!uments provide the legal ground3rules #or international !ommer!e> They are essentially !ontra!ts binding governments to =eep their trade poli!ies &ithin agreed limits> 5lthough negotiated and signed by governments the goal is to help produ!ers o# goods and servi!es e<porters and importers !ondu!t their business &hile allo&ing governments to meet so!ial and environmental obHe!tives> The systemFs overriding purpose is to help trade #lo& as #reely as possible D so long as there are no undesirable side3e##e!ts> That partly means removing obsta!les> 9t also means ensuring that individuals !ompanies and governments =no& &hat the trade rules are around the &orld and giving them the !on#iden!e that there &ill be no sudden !hanges o# poli!y> 9n other &ords the rules have to be transparent and predi!table>

they said! #ne of them finally inter=ected: >"ait a minute! The "T# is a table! 'eople sit round the table and negotiate! "hat do you e?pect the table to do7@

;Multilateral9 trading system !!!

>>> i>e> the system operated by the WTO> 7ost nations D in!luding almost all the main trading nations D are members o# the system> Gut some are not so multilateral is used to des!ribe the system instead o# global or &orld> 9n WTO a##airs multilateral also !ontrasts &ith a!tions ta=en regionally or by other smaller groups o# !ountries> ,This is di##erent #rom the &ordFs use in other areas o# international relations &here #or e<ample a multilateral se!urity arrangement !an be regional>1

(nd it helps to settle disputes : This is a third important side to the WTOFs &or=> Trade relations o#ten involve !on#li!ting interests> 5greements in!luding those painsta=ingly negotiated in the WTO system o#ten need interpreting> The most harmonious &ay to settle these di##eren!es is through some neutral pro!edure based on an agreed legal #oundation> That is the purpose behind the dispute settlement pro!ess &ritten into the WTO agreements>

Born in +,,/8 but not so young

The WTO began li#e on ( )anuary (**" but its trading system is hal# a !entury older> Sin!e (*0- the %eneral 5greement on Tari##s and Trade ,%5TT1 had provided the rules #or the system> ,The se!ond WTO ministerial meeting held in %eneva in 7ay (**- in!luded a !elebration o# the "0th anniversary o# the system>1 9t did not ta=e long #or the %eneral 5greement to give birth to an uno##i!ial de facto international organi'ation also =no&n in#ormally as %5TT> Over the years %5TT evolved through several rounds o# negotiations> The last and largest %5TT round &as the Uruguay +ound &hi!h lasted #rom (*-. to (**0 and led to the WTOFs !reation> Whereas %5TT had mainly dealt &ith trade in goods the WTO and its agreements no& !over trade in servi!es and in traded inventions !reations and designs ,intelle!tual property1>

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-! 'rinciples of the trading system

The WTO agreements are lengthy and !omple< be!ause they are legal te<ts !overing a &ide range o# a!tivities> They deal &ith$ agri!ulture te<tiles and !lothing ban=ing tele!ommuni!ations government pur!hases industrial standards and produ!t sa#ety #ood sanitation regulations intelle!tual property and mu!h more> Gut a number o# simple #undamental prin!iples run throughout all o# these do!uments> These prin!iples are the #oundation o# the multilateral trading system> 5 !loser loo= at these prin!iples$

The principles
The trading system should be >>> 4 &ithout dis!rimination D a !ountry should not dis!riminate bet&een its trading partners ,giving them eBually most3#avoured3nation or 7FJ status1R and it should not dis!riminate bet&een its o&n and #oreign produ!ts servi!es or nationals ,giving them national treatment1R 4 #reer D barriers !oming do&n through negotiationR 4 predi!table D #oreign !ompanies investors and governments should be !on#ident that trade barriers ,in!luding tari##s and non3tari## barriers1 should not be raised arbitrarilyR tari## rates and mar=et3opening !ommitments are bound in the WTOR 4 more !ompetitive D dis!ouraging un#air pra!ti!es su!h as e<port subsidies and dumping produ!ts at belo& !ost to gain mar=et shareR 4 more bene#i!ial #or less developed !ountries D giving them more time to adHust greater #le<ibility and spe!ial privileges>

Trade

ithout discrimination

+! Most2fa&oured2nation AMF)B: treating other people eCually Under the WTO agreements !ountries !annot normally dis!riminate bet&een their trading partners> %rant someone a spe!ial #avour ,su!h as a lo&er !ustoms duty rate #or one o# their produ!ts1 and you have to do the same #or all other WTO members> This prin!iple is =no&n as most3#avoured3nation ,7FJ1 treatment ,see box1> 9t is so important that it is the #irst arti!le o# the %eneral 5greement on Tari##s and Trade ,%5TT1 &hi!h governs trade in goods> 7FJ is also a priority in the %eneral 5greement on Trade in Servi!es ,%5TS1 ,5rti!le 21 and the 5greement on Trade3+elated 5spe!ts o# 9ntelle!tual Property +ights ,T+9PS1 ,5rti!le 01 although in ea!h agreement the prin!iple is handled slightly di##erently> Together those three agreements !over all three main areas o# trade handled by the WTO> Some e<!eptions are allo&ed> For e<ample !ountries !an set up a #ree trade agreement that applies only to goods traded &ithin the group D dis!riminating against goods #rom outside> Or they !an give developing !ountries spe!ial a!!ess to their mar=ets> Or a !ountry !an raise barriers against produ!ts that are !onsidered to be traded un#airly #rom spe!i#i! !ountries> 5nd in servi!es !ountries are allo&ed in limited !ir!umstan!es to dis!riminate> Gut the agreements only permit these e<!eptions under stri!t !onditions> 9n general 7FJ means that every time a !ountry lo&ers a trade barrier or opens up a mar=et it has to do so #or the same goods or servi!es #rom all its trading partners D &hether ri!h or poor &ea= or strong>

"hy ;most2fa&oured97
This sounds li=e a !ontradi!tion> 9t suggests spe!ial treatment but in the WTO it a!tually means non3dis!rimination D treating virtually everyone eBually> This is &hat happens> Ea!h member treats all the other members eBually as most3 #avoured trading partners> 9# a !ountry improves the bene#its that it gives to one trading partner it has to give the same best treatment to all the other WTO members so that they all remain most3 #avoured> 7ost3#avoured nation ,7FJ1 status did not al&ays mean eBual treatment> The #irst bilateral 7FJ treaties set up e<!lusive !lubs among a !ountryFs most3#avoured trading partners> Under %5TT and no& the WTO the 7FJ !lub is no longer e<!lusive> The 7FJ prin!iple ensures that ea!h !ountry treats its over3(00 #ello&3members eBually> Gut there are some e<!eptions >>>

-! )ational treatment: Treating foreigners and locals eCually 9mported and lo!ally3produ!ed goods should be treated eBually D at least a#ter the #oreign goods have entered the mar=et> The same should apply to #oreign and domesti! servi!es and to #oreign and lo!al trademar=s !opyrights and patents> This prin!iple o# national treatment ,giving others the same treatment as oneFs o&n nationals1 is also #ound in all the three main WTO agreements ,5rti!le 3 o# %5TT 5rti!le (@ o# %5TS and 5rti!le 3 o# T+9PS1 although on!e again the prin!iple is handled slightly di##erently in ea!h o# these> Jational treatment only applies on!e a produ!t servi!e or item o# intelle!tual property has entered the mar=et> There#ore !harging !ustoms duty on an import is not a violation o# national treatment even i# lo!ally3produ!ed produ!ts are not !harged an eBuivalent ta<>

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Freer trade: gradually8 through negotiation

2o&ering trade barriers is one o# the most obvious means o# en!ouraging trade> The barriers !on!erned in!lude !ustoms duties ,or tari##s1 and measures su!h as import bans or Buotas that restri!t Buantities sele!tively> From time to time other issues su!h as red tape and e<!hange rate poli!ies have also been dis!ussed> Sin!e %5TTFs !reation in (*0@/0- there have been eight rounds o# trade negotiations> 5 ninth round under the :oha :evelopment 5genda is no& under&ay> 5t #irst these #o!used on lo&ering tari##s ,!ustoms duties1 on imported goods> 5s a result o# the negotiations by the mid3(**0s industrial !ountriesF tari## rates on industrial goods had #allen steadily to less than 0T> Gut by the (*-0s the negotiations had e<panded to !over non3tari## barriers on goods and to the ne& areas su!h as servi!es and intelle!tual property> Opening mar=ets !an be bene#i!ial but it also reBuires adHustment> The WTO agreements allo& !ountries to introdu!e !hanges gradually through progressive liberali'ation> :eveloping !ountries are usually given longer to #ul#il their obligations>

'redictability: through binding and transparency

Sometimes promising not to raise a trade barrier !an be as important as lo&ering one be!ause the promise gives businesses a !learer vie& o# their #uture opportunities> With stability and predi!tability investment is en!ouraged Hobs are !reated and !onsumers !an #ully enHoy the bene#its o# !ompetition D !hoi!e and lo&er pri!es> The multilateral trading system is an attempt by governments to ma=e the business environment stable and predi!table> 9n the WTO &hen !ountries agree to open their mar=ets #or goods or servi!es they bind their !ommitments> For goods these bindings amount to !eilings on !ustoms tari## rates> Sometimes !ountries ta< imports at rates that are lo&er than the bound rates> FreBuently this is the !ase in developing !ountries> 9n developed !ountries the rates a!tually !harged and the bound rates tend to be the same> 5 !ountry !an !hange its bindings but only a#ter negotiating &ith its trading partners &hi!h !ould mean !ompensating them #or loss o# trade> One o# the a!hievements o# the Uruguay +ound o# multilateral trade tal=s &as to in!rease the amount o# trade under binding !ommitments ,see table1> 9n agri!ulture (00T o# produ!ts no& have bound tari##s> The result o# all this$ a substantially higher degree o# mar=et se!urity #or traders and investors> The system tries to improve predi!tability and stability in other &ays as &ell> One &ay is to dis!ourage the use o# Buotas and other measures used to set limits on Buantities o# imports D administering Buotas !an lead to more red3tape and a!!usations o# un#air play> 5nother is to ma=e !ountriesF trade rules as !lear and publi! ,transparent1 as possible> 7any WTO agreements reBuire governments to dis!lose their poli!ies and pra!ti!es publi!ly &ithin the !ountry or by noti#ying the WTO> The regular surveillan!e o# national trade poli!ies through the Trade Poli!y +evie& 7e!hanism

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provides a #urther means o# en!ouraging domesti!ally and at the multilateral level>

transparen!y

both

'romoting fair competition

The WTO is sometimes des!ribed as a #ree trade institution but that is not entirely a!!urate> The system does allo& tari##s and in limited !ir!umstan!es other #orms o# prote!tion> 7ore a!!urately it is a system o# rules dedi!ated to open #air and undistorted !ompetition> The rules on non3dis!rimination D 7FJ and national treatment D are designed to se!ure #air !onditions o# trade> So too are those on dumping ,e<porting at belo& !ost to gain mar=et share1 and subsidies> The issues are !omple< and the rules try to establish &hat is #air or un#air and ho& governments !an respond in parti!ular by !harging additional import duties !al!ulated to !ompensate #or damage !aused by un#air trade> 7any o# the other WTO agreements aim to support #air !ompetition$ in agri!ulture intelle!tual property servi!es #or e<ample> The agreement on government pro!urement ,a plurilateral agreement be!ause it is signed by only a #e& WTO members1 e<tends !ompetition rules to pur!hases by thousands o# government entities in many !ountries> 5nd so on>

Encouraging de&elopment and economic reform

The WTO system !ontributes to development> On the other hand developing !ountries need #le<ibility in the time they ta=e to implement the systemFs agreements> 5nd the agreements themselves inherit the earlier provisions o# %5TT that allo& #or spe!ial assistan!e and trade !on!essions #or developing !ountries> Over three Buarters o# WTO members are developing !ountries and !ountries in transition to mar=et e!onomies> :uring the seven and a hal# years o# the Uruguay +ound over .0 o# these !ountries implemented trade liberali'ation programmes autonomously> 5t the same time developing !ountries and transition e!onomies &ere mu!h more a!tive and in#luential in the Uruguay +ound negotiations than in any previous round and they are even more so in the !urrent :oha :evelopment 5genda> 5t the end o# the Uruguay +ound developing !ountries &ere prepared to ta=e on most o# the obligations that are reBuired o# developed !ountries> Gut the agreements did give them transition periods to adHust to the more un#amiliar and perhaps di##i!ult WTO provisions D parti!ularly so #or the poorest least3developed !ountries> 5 ministerial de!ision adopted at the end o# the round says better3o## !ountries should a!!elerate implementing mar=et a!!ess !ommitments on goods e<ported by the least3developed !ountries and it see=s in!reased te!hni!al assistan!e #or them> 7ore re!ently developed !ountries have started to allo& duty3#ree and Buota3#ree imports #or almost all produ!ts #rom least3developed !ountries> On all o# this the WTO and its members are still going through a learning pro!ess> The !urrent :oha :evelopment 5genda in!ludes developing !ountriesF !on!erns about the di##i!ulties they #a!e in implementing the Uruguay +ound agreements> The Druguay <ound increased bindings
Per!entages o# tari##s bound be#ore and a#ter the (*-./*0 tal=s :eveloped !ountries :eveloping !ountries Transition e!onomies Before @2( @3 (fter ** @3 *-

,These are tari## lines so per!entages are not &eighted a!!ording to trade volume or value1

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.! The case for open trade

The e!onomi! !ase #or an open trading system based on multilaterally agreed rules is simple enough and rests largely on !ommer!ial !ommon sense> Gut it is also supported by eviden!e$ the e<perien!e o# &orld trade and e!onomi! gro&th sin!e the Se!ond World War> Tari##s on industrial produ!ts have #allen steeply and no& average less than "T in industrial !ountries> :uring the #irst 2" years a#ter the &ar &orld e!onomi! gro&th averaged about "T per year a high rate that &as partly the result o# lo&er trade barriers> World trade gre& even #aster averaging about -T during the period> The data sho& a de#inite statisti!al lin= bet&een #reer trade and e!onomi! gro&th> E!onomi! theory points to strong reasons #or the lin=> 5ll !ountries in!luding the poorest have assets D human industrial natural #inan!ial D &hi!h they !an employ to produ!e goods and servi!es #or their domesti! mar=ets or to !ompete overseas> E!onomi!s tells us that &e !an bene#it &hen these goods and servi!es are traded> Simply put the prin!iple o# !omparative advantage says that !ountries prosper #irst by ta=ing advantage o# their assets in order to !on!entrate on &hat they !an produ!e best and then by trading these produ!ts #or produ!ts that other !ountries produ!e best> 9n other &ords liberal trade poli!ies D poli!ies that allo& the unrestri!ted #lo& o# goods and servi!es D sharpen !ompetition motivate innovation and breed su!!ess> They multiply the re&ards that result #rom produ!ing the best produ!ts &ith the best design at the best pri!e> Gut su!!ess in trade is not stati!> The ability to !ompete &ell in parti!ular produ!ts !an shi#t #rom !ompany to !ompany &hen the mar=et !hanges or ne& te!hnologies ma=e !heaper and better produ!ts possible> Produ!ers are en!ouraged to adapt gradually and in a relatively painless &ay> They !an #o!us on ne& produ!ts #ind a ne& ni!he in their !urrent area or e<pand into ne& areas> E<perien!e sho&s that !ompetitiveness !an also shi#t bet&een &hole !ountries> 5 !ountry that may have enHoyed an advantage be!ause o# lo&er labour !osts or be!ause it had good supplies o# some natural resour!es !ould also be!ome un!ompetitive in some goods or servi!es as its e!onomy develops> 6o&ever &ith the stimulus o# an open e!onomy the !ountry !an move on to be!ome !ompetitive in some other goods or servi!es> This is normally a gradual pro!ess> Jevertheless the temptation to &ard o## the !hallenge o# !ompetitive imports is al&ays present> 5nd ri!her governments are more li=ely to yield to the siren !all o# prote!tionism #or short term politi!al gain D through subsidies !ompli!ated red tape and hiding behind legitimate poli!y obHe!tives su!h as environmental preservation or !onsumer prote!tion as an e<!use to prote!t produ!ers> Prote!tion ultimately leads to bloated ine##i!ient produ!ers supplying !onsumers &ith outdated unattra!tive produ!ts> 9n the end #a!tories !lose and Hobs are lost despite the prote!tion and subsidies> 9# other governments around the &orld pursue the same poli!ies mar=ets !ontra!t and &orld e!onomi! a!tivity is redu!ed> One o# the obHe!tives that governments bring to WTO negotiations is to prevent su!h a sel#3de#eating and destru!tive dri#t into prote!tionism> M#<E #) THE "EBS$TE: ! to!org * resources * "T# research and analysis

T<DE ()% )#)2T<$E$(L7

)obel laureate 'aul Samuelson challenged by the mathematician Stanisla Dlam to >name me one proposition in all of the social sciences hich is both true and non2tri&ial!@ Samuelson9s ans er7 Comparati&e ad&antage! >That it is logically true need not be argued before a mathematicianF that it is not tri&ial is attested by the thousands of important and intelligent men ho ha&e as ne&er been able to grasp the doctrine for themsel&es or to belie&e it after it e?plained to them!@ as once

"orld trade and production ha&e accelerated

Goth trade and %:P #ell in the late (*20s be#ore bottoming out in (*32> 5#ter World War 99 both have risen e<ponentially most o# the time &ith trade outpa!ing %:P> ,(*"0 U (00> Trade and %:P$ log s!ale1
2000

Merchandise trade
1000

GDP

200

100

50

GATT created 48 60 70 80

WTO created 90 1995

1929/ 32 38

(0

Comparati&e ad&antage
This is arguably the single most po&er#ul insight into e!onomi!s> Suppose !ountry 5 is better than !ountry G at ma=ing automobiles and !ountry G is better than !ountry 5 at ma=ing bread> 9t is obvious ,the a!ademi!s &ould say trivial1 that both &ould bene#it i# 5 spe!iali'ed in automobiles G spe!iali'ed in bread and they traded their produ!ts> That is a !ase o# absolute ad&antage> Gut &hat i# a !ountry is bad at ma=ing everythingV Will trade drive all produ!ers out o# businessV The ans&er a!!ording to +i!ardo is no> The reason is the prin!iple o# comparati&e ad&antage> 9t says !ountries 5 and G still stand to bene#it #rom trading &ith ea!h other even i# 5 is better than G at ma=ing everything> 9# 5 is mu!h more superior at ma=ing automobiles and only slightly superior at ma=ing bread then 5 should still invest resour!es in &hat it does best D produ!ing automobiles D and e<port the produ!t to G> G should still invest in &hat it does best D ma=ing bread D and e<port that produ!t to 5 even i# it is not as e##i!ient as 5> Goth &ould still bene#it #rom the trade> 5 !ountry does not have to be best at anything to gain #rom trade> That is !omparative advantage> The theory dates ba!= to !lassi!al e!onomist :avid +i!ardo> 9t is one o# the most &idely a!!epted among e!onomists> 9t is also one o# the most misunderstood among non3e!onomists be!ause it is !on#used &ith absolute advantage> 9t is o#ten !laimed #or e<ample that some !ountries have no !omparative advantage in anything> That is virtually impossible> Thin= about it >>>

("

0! The G(TT years: from Ha&ana to MarraHesh

The WTOFs !reation on ( )anuary (**" mar=ed the biggest re#orm o# international trade sin!e a#ter the Se!ond World War> 9t also brought to reality D in an updated #orm D the #ailed attempt in (*0- to !reate an 9nternational Trade Organi'ation> 7u!h o# the history o# those 0@ years &as &ritten in %eneva> Gut it also tra!es a Hourney that spanned the !ontinents #rom that hesitant start in (*0- in 6avana ,8uba1 via 5nne!y ,Fran!e1 TorBuay ,UW1 To=yo ,)apan1 Punta del Este ,Uruguay1 7ontreal ,8anada1 Grussels ,Gelgium1 and #inally to 7arra=esh ,7oro!!o1 in (**0> :uring that period the trading system !ame under %5TT salvaged #rom the aborted attempt to !reate the 9TO> %5TT helped establish a strong and prosperous multilateral trading system that be!ame more and more liberal through rounds o# trade negotiations> Gut by the (*-0s the system needed a thorough overhaul> This led to the Uruguay +ound and ultimately to the WTO> The trade chiefs
The dire!tors3general o# %5TT and WTO 4 Sir Eri! Wyndham White ,UW1 (*0-/.4 Olivier 2ong ,S&it'erland1 (*.-/-0 4 5rthur :un=el ,S&it'erland1 (*-0/*3 4 Peter Sutherland ,9reland1 %5TT (**3/*0R WTO (**" 4 +enato +uggiero ,9taly1 (**"/(*** 4 7i=e 7oore ,Je& Lealand1 (***/2002 4 Supa!hai Panit!hpa=di ,Thailand1 2002/ 200" 4 Pas!al 2amy ,Fran!e1 200"/

G(TT: ;pro&isional9 for almost half a century

From (*0- to (**0 the %eneral 5greement on Tari##s and Trade ,%5TT1 provided the rules #or mu!h o# &orld trade and presided over periods that sa& some o# the highest gro&th rates in international !ommer!e> 9t seemed &ell3established but throughout those 0@ years it &as a provisional agreement and organi'ation> The original intention &as to !reate a third institution to handle the trade side o# international e!onomi! !ooperation Hoining the t&o Gretton Woods institutions the World Gan= and the 9nternational 7onetary Fund> Over "0 !ountries parti!ipated in negotiations to !reate an 9nternational Trade Organi'ation ,9TO1 as a spe!iali'ed agen!y o# the United Jations> The dra#t 9TO 8harter &as ambitious> 9t e<tended beyond &orld trade dis!iplines to in!lude rules on employment !ommodity agreements restri!tive business pra!ti!es international investment and servi!es> The aim &as to !reate the 9TO at a UJ 8on#eren!e on Trade and Employment in 6avana 8uba in (*0@> 7ean&hile (" !ountries had begun tal=s in :e!ember (*0" to redu!e and bind !ustoms tari##s> With the Se!ond World War only re!ently ended they &anted to give an early boost to trade liberali'ation and to begin to !orre!t the lega!y o# prote!tionist measures &hi!h remained in pla!e #rom the early (*30s> This #irst round o# negotiations resulted in a pa!=age o# trade rules and 0" 000 tari## !on!essions a##e!ting X(0 billion o# trade about one #i#th o# the &orldFs total> The group had e<panded to 23 by the time the deal &as signed on 30 O!tober (*0@> The tari## !on!essions !ame into e##e!t by 30 )une (*0- through a Proto!ol o# Provisional 5ppli!ation> 5nd so the ne& %eneral 5greement on Tari##s and Trade &as born &ith 23 #ounding members ,o##i!ially !ontra!ting parties1> The 23 &ere also part o# the larger group negotiating the 9TO 8harter> One o# the provisions o# %5TT says that they should a!!ept some o# the trade rules o# the dra#t> This they believed should be done s&i#tly and provisionally in order to prote!t the value o# the tari## !on!essions they had negotiated> They spelt out ho& they envisaged the relationship bet&een %5TT and the 9TO 8harter but

(.

they also allo&ed #or the possibility that the 9TO might not be !reated> They &ere right> The 6avana !on#eren!e began on 2( Jovember (*0@ less than a month a#ter %5TT &as signed> The 9TO 8harter &as #inally agreed in 6avana in 7ar!h (*0- but rati#i!ation in some national legislatures proved impossible> The most serious opposition &as in the US 8ongress even though the US government had been one o# the driving #or!es> 9n (*"0 the United States government announ!ed that it &ould not see= 8ongressional rati#i!ation o# the 6avana 8harter and the 9TO &as e##e!tively dead> So the %5TT be!ame the only multilateral instrument governing international trade #rom (*0until the WTO &as established in (**"> For almost hal# a !entury the %5TTFs basi! legal prin!iples remained mu!h as they &ere in (*0-> There &ere additions in the #orm o# a se!tion on development added in the (*.0s and plurilateral agreements ,i>e> &ith voluntary membership1 in the (*@0s and e##orts to redu!e tari##s #urther !ontinued> 7u!h o# this &as a!hieved through a series o# multilateral negotiations =no&n as trade rounds D the biggest leaps #or&ard in international trade liberali'ation have !ome through these rounds &hi!h &ere held under %5TTFs auspi!es> 9n the early years the %5TT trade rounds !on!entrated on #urther redu!ing tari##s> Then the Wennedy +ound in the mid3si<ties brought about a %5TT 5nti3:umping 5greement and a se!tion on development> The To=yo +ound during the seventies &as the #irst maHor attempt to ta!=le trade barriers that do not ta=e the #orm o# tari##s and to improve the system> The eighth the Uruguay +ound o# (*-./*0 &as the last and most e<tensive o# all> 9t led to the WTO and a ne& set o# agreements> The G(TT trade rounds Iear (*0@ (*0* (*"( (*". (*.0/(*.( (*.0/(*.@ (*@3/(*@* (*-./(**0 'lace/ name %eneva 5nne!y TorBuay %eneva %eneva ,:illon +ound1 %eneva ,Wennedy +ound1 %eneva ,To=yo +ound1 %eneva ,Uruguay +ound1 Sub=ects co&ered Tari##s Tari##s Tari##s Tari##s Tari##s Tari##s and anti3dumping measures Tari##s non3tari## measures #rame&or= agreements Tari##s non3tari## measures rules servi!es intelle!tual property dispute settlement te<tiles agri!ulture !reation o# WTO et! Countries 23 (3 32. 2. .2 (02 (23

The ToHyo <ound: a first try to reform the system

The To=yo +ound lasted #rom (*@3 to (*@* &ith (02 !ountries parti!ipating> 9t !ontinued %5TTFs e##orts to progressively redu!e tari##s> The results in!luded an average one3third !ut in !ustoms duties in the &orldFs nine maHor industrial mar=ets bringing the average tari## on industrial produ!ts do&n to 0>@T> The tari## redu!tions phased in over a period o# eight years involved an element o# harmoni'ation D the higher the tari## the larger the !ut proportionally> 9n other issues the To=yo +ound had mi<ed results> 9t #ailed to !ome to grips &ith the #undamental problems a##e!ting #arm trade and also stopped short o# providing a modi#ied agreement on sa#eguards ,emergen!y import measures1> Jevertheless a series o# agreements

(@

on non3tari## barriers did emerge #rom the negotiations in some !ases interpreting e<isting %5TT rules in others brea=ing entirely ne& ground> 9n most !ases only a relatively small number o# ,mainly industriali'ed1 %5TT members subs!ribed to these agreements and arrangements> Ge!ause they &ere not a!!epted by the #ull %5TT membership they &ere o#ten in#ormally !alled !odes> They &ere not multilateral but they &ere a beginning> Several !odes &ere eventually amended in the Uruguay +ound and turned into multilateral !ommitments a!!epted by all WTO members> Only #our remained plurilateral D those on government pro!urement bovine meat !ivil air!ra#t and dairy produ!ts> 9n (**@ WTO members agreed to terminate the bovine meat and dairy agreements leaving only t&o>

The ToHyo <ound ;codes9

4 Subsidies and !ountervailing measures D interpreting 5rti!les . (. and 23 o# %5TT 4 Te!hni!al barriers to trade D sometimes !alled the Standards 8ode 4 9mport li!ensing pro!edures 4 %overnment pro!urement 4 8ustoms valuation D interpreting 5rti!le @ 4 5nti3dumping D interpreting 5rti!le . repla!ing the Wennedy +ound !ode 4 Govine 7eat 5rrangement 4 9nternational :airy 5rrangement 4 Trade in 8ivil 5ir!ra#t

%id G(TT succeed7

%5TT &as provisional &ith a limited #ield o# a!tion but its su!!ess over 0@ years in promoting and se!uring the liberali'ation o# mu!h o# &orld trade is in!ontestable> 8ontinual redu!tions in tari##s alone helped spur very high rates o# &orld trade gro&th during the (*"0s and (*.0s D around -T a year on average> 5nd the momentum o# trade liberali'ation helped ensure that trade gro&th !onsistently out3 pa!ed produ!tion gro&th throughout the %5TT era a measure o# !ountriesF in!reasing ability to trade &ith ea!h other and to reap the bene#its o# trade> The rush o# ne& members during the Uruguay +ound demonstrated that the multilateral trading system &as re!ogni'ed as an an!hor #or development and an instrument o# e!onomi! and trade re#orm> Gut all &as not &ell> 5s time passed ne& problems arose> The To=yo +ound in the (*@0s &as an attempt to ta!=le some o# these but its a!hievements &ere limited> This &as a sign o# di##i!ult times to !ome> %5TTFs su!!ess in redu!ing tari##s to su!h a lo& level !ombined &ith a series o# e!onomi! re!essions in the (*@0s and early (*-0s drove governments to devise other #orms o# prote!tion #or se!tors #a!ing in!reased #oreign !ompetition> 6igh rates o# unemployment and !onstant #a!tory !losures led governments in Western Europe and Jorth 5meri!a to see= bilateral mar=et3sharing arrangements &ith !ompetitors and to embar= on a subsidies ra!e to maintain their holds on agri!ultural trade> Goth these !hanges undermined %5TTFs !redibility and e##e!tiveness> The problem &as not Hust a deteriorating trade poli!y environment> Gy the early (*-0s the %eneral 5greement &as !learly no longer as relevant to the realities o# &orld trade as it had been in the (*00s> For a start &orld trade had be!ome #ar more !omple< and important than 00 years be#ore$ the globali'ation o# the &orld e!onomy &as under&ay trade in servi!es D not !overed by %5TT rules D &as o# maHor interest to more and more !ountries and international investment had e<panded> The e<pansion o# servi!es trade &as also !losely tied to #urther in!reases in &orld mer!handise trade> 9n other respe!ts %5TT had been #ound &anting> For instan!e in agri!ulture loopholes in the multilateral system &ere heavily e<ploited and e##orts at liberali'ing agri!ultural trade met &ith little su!!ess> 9n the te<tiles and !lothing se!tor an e<!eption to %5TTFs normal dis!iplines &as negotiated in the (*.0s and early (*@0s leading to the 7ulti#ibre 5rrangement> Even %5TTFs institutional stru!ture and its dispute settlement system &ere !ausing !on!ern>

(-

These and other #a!tors !onvin!ed %5TT members that a ne& e##ort to rein#or!e and e<tend the multilateral system should be attempted> That e##ort resulted in the Uruguay +ound the 7arra=esh :e!laration and the !reation o# the WTO> Trade rounds: progress by pacHage
They are o#ten lengthy D the Uruguay +ound too= seven and a hal# years D but trade rounds !an have an advantage> They o##er a pa!=age approa!h to trade negotiations that !an sometimes be more #ruit#ul than negotiations on a single issue> The si'e o# the pa!=age !an mean more bene#its be!ause parti!ipants !an see= and se!ure advantages a!ross a &ide range o# issues> 5greement !an be easier to rea!h through trade3o##s D some&here in the pa!=age there should be something #or everyone> This has politi!al as &ell as e!onomi! impli!ations> 5 government may &ant to ma=e a !on!ession perhaps in one se!tor be!ause o# the e!onomi! bene#its> Gut politi!ally it !ould #ind the !on!ession di##i!ult to de#end> 5 pa!=age &ould !ontain politi!ally and e!onomi!ally attra!tive bene#its in other se!tors that !ould be used as !ompensation> So re#orm in politi!ally3sensitive se!tors o# &orld trade !an be more #easible as part o# a global pa!=age D a good e<ample is the agreement to re#orm agri!ultural trade in the Uruguay +ound> :eveloping !ountries and other less po&er#ul parti!ipants have a greater !han!e o# in#luen!ing the multilateral system in a trade round than in bilateral relationships &ith maHor trading nations>

Gut the si'e o# a trade round !an be both a strength and a &ea=ness> From time to time the Buestion is as=ed$ &ouldnFt it be simpler to !on!entrate negotiations on a single se!torV +e!ent history is in!on!lusive> 5t some stages the Uruguay +ound seemed so !umbersome that it seemed impossible that all parti!ipants !ould agree on every subHe!t> Then the round did end su!!ess#ully in (**3/*0> This &as #ollo&ed by t&o years o# #ailure to rea!h agreement in the single3se!tor tal=s on maritime transport> :id this mean that trade rounds &ere the only route to su!!essV Jo> 9n (**@ single3se!tor tal=s &ere !on!luded su!!ess#ully in basi! tele!ommuni!ations in#ormation te!hnology eBuipment and #inan!ial servi!es> The debate !ontinues> Whatever the ans&er the reasons are not straight#or&ard> Perhaps su!!ess depends on using the right type o# negotiation #or the parti!ular time and !onte<t>

(*

/! The Druguay <ound

9t too= seven and a hal# years almost t&i!e the original s!hedule> Gy the end (23 !ountries &ere ta=ing part> 9t !overed almost all trade #rom toothbrushes to pleasure boats #rom ban=ing to tele!ommuni!ations #rom the genes o# &ild ri!e to 59:S treatments> 9t &as Buite simply the largest trade negotiation ever and most probably the largest negotiation o# any =ind in history> 5t times it seemed doomed to #ail> Gut in the end the Uruguay +ound brought about the biggest re#orm o# the &orldFs trading system sin!e %5TT &as !reated at the end o# the Se!ond World War> 5nd yet despite its troubled progress the Uruguay +ound did see some early results> Within only t&o years parti!ipants had agreed on a pa!=age o# !uts in import duties on tropi!al produ!ts D &hi!h are mainly e<ported by developing !ountries> They had also revised the rules #or settling disputes &ith some measures implemented on the spot> 5nd they !alled #or regular reports on %5TT membersF trade poli!ies a move !onsidered important #or ma=ing trade regimes transparent around the &orld>

The +,31 agenda The (" original Uruguay +ound subHe!ts

Tari##s Jon3tari## barriers Jatural resour!e produ!ts Te<tiles and !lothing 5gri!ulture Tropi!al produ!ts %5TT arti!les To=yo +ound !odes 5nti3dumping Subsidies 9ntelle!tual property 9nvestment measures :ispute settlement The %5TT system Servi!es

( round to end all rounds7

The seeds o# the Uruguay +ound &ere so&n in Jovember (*-2 at a ministerial meeting o# %5TT members in %eneva> 5lthough the ministers intended to laun!h a maHor ne& negotiation the !on#eren!e stalled on agri!ulture and &as &idely regarded as a #ailure> 9n #a!t the &or= programme that the ministers agreed #ormed the basis #or &hat &as to be!ome the Uruguay +ound negotiating agenda> Jevertheless it too= #our more years o# e<ploring !lari#ying issues and painsta=ing !onsensus3building be#ore ministers agreed to laun!h the ne& round> They did so in September (*-. in Punta del Este Uruguay> They eventually a!!epted a negotiating agenda that !overed virtually every outstanding trade poli!y issue> The tal=s &ere going to e<tend the trading system into several ne& areas notably trade in servi!es and intelle!tual property and to re#orm trade in the sensitive se!tors o# agri!ulture and te<tiles> 5ll the original %5TT arti!les &ere up #or revie&> 9t &as the biggest negotiating mandate on trade ever agreed and the ministers gave themselves #our years to !omplete it> T&o years later in :e!ember (*-- ministers met again in 7ontreal 8anada #or &hat &as supposed to be an assessment o# progress at the roundFs hal#3&ay point> The purpose &as to !lari#y the agenda #or the remaining t&o years but the tal=s ended in a deadlo!= that &as not resolved until o##i!ials met more Buietly in %eneva the #ollo&ing 5pril> :espite the di##i!ulty during the 7ontreal meeting ministers did agree a pa!=age o# early results> These in!luded some !on!essions on mar=et a!!ess #or tropi!al produ!ts D aimed at assisting developing !ountries D as &ell as a streamlined dispute settlement system and the Trade Poli!y +evie& 7e!hanism &hi!h provided #or the #irst !omprehensive systemati! and regular revie&s o# national trade poli!ies and pra!ti!es o# %5TT members> The round &as supposed to end &hen ministers met on!e more in Grussels in :e!ember (**0> Gut they disagreed on ho& to re#orm agri!ultural trade and de!ided to e<tend the tal=s> The Uruguay +ound entered its blea=est period>

The Druguay <ound J Key dates

Sep 31 Punta del Este$ laun!h %ec 33 7ontreal$ ministerial mid3term revie& (pr 3, %eneva$ mid3term revie& !ompleted %ec ,5 Grussels$ !losing ministerial meeting ends in deadlo!= %ec ,+ %eneva$ #irst dra#t o# Final 5!t !ompleted )o& ,- Washington$ US and E8 a!hieve Glair 6ouse brea=through on agri!ulture Lul ,. To=yo$ Yuad a!hieve mar=et a!!ess brea=through at %@ summit %ec ,. %eneva$ most negotiations end ,some mar=et a!!ess tal=s remain1 (pr ,0 7arra=esh$ agreements signed Lan ,/ %eneva$ WTO !reated agreements ta=e e##e!t

20

:espite the poor politi!al outloo= a !onsiderable amount o# te!hni!al &or= !ontinued leading to the #irst dra#t o# a #inal legal agreement> This dra#t Final 5!t &as !ompiled by the then %5TT dire!tor3 general 5rthur :un=el &ho !haired the negotiations at o##i!ialsF level> 9t &as put on the table in %eneva in :e!ember (**(> The te<t #ul#illed every part o# the Punta del Este mandate &ith one e<!eption D it did not !ontain the parti!ipating !ountriesF lists o# !ommitments #or !utting import duties and opening their servi!es mar=ets> The dra#t be!ame the basis #or the #inal agreement> Over the #ollo&ing t&o years the negotiations lur!hed bet&een impending #ailure to predi!tions o# imminent su!!ess> Several deadlines !ame and &ent> Je& points o# maHor !on#li!t emerged to Hoin agri!ulture$ servi!es mar=et a!!ess anti3dumping rules and the proposed !reation o# a ne& institution> :i##eren!es bet&een the United States and European Union be!ame !entral to hopes #or a #inal su!!ess#ul !on!lusion> 9n Jovember (**2 the US and EU settled most o# their di##eren!es on agri!ulture in a deal =no&n in#ormally as the Glair 6ouse a!!ord> Gy )uly (**3 the Yuad ,US EU )apan and 8anada1 announ!ed signi#i!ant progress in negotiations on tari##s and related subHe!ts ,mar=et a!!ess1> 9t too= until (" :e!ember (**3 #or every issue to be #inally resolved and #or negotiations on mar=et a!!ess #or goods and servi!es to be !on!luded ,although some #inal tou!hes &ere !ompleted in tal=s on mar=et a!!ess a #e& &ee=s later1> On (" 5pril (**0 the deal &as signed by ministers #rom most o# the (23 parti!ipating governments at a meeting in 7arra=esh 7oro!!o> The delay had some merits> 9t allo&ed some negotiations to progress #urther than &ould have been possible in (**0$ #or e<ample some aspe!ts o# servi!es and intelle!tual property and the !reation o# the WTO itsel#> Gut the tas= had been immense and negotiation3#atigue &as #elt in trade bureau!ra!ies around the &orld> The di##i!ulty o# rea!hing agreement on a !omplete pa!=age !ontaining almost the entire range o# !urrent trade issues led some to !on!lude that a negotiation on this s!ale &ould never again be possible> Qet the Uruguay +ound agreements !ontain timetables #or ne& negotiations on a number o# topi!s> 5nd by (**. some !ountries &ere openly !alling #or a ne& round early in the ne<t !entury> The response &as mi<edR but the 7arra=esh agreement did already in!lude !ommitments to reopen negotiations on agri!ulture and servi!es at the turn o# the !entury> These began in early 2000 and &ere in!orporated into the :oha :evelopment 5genda in late 200(>

"hat happened to G(TT7

The WTO repla!ed %5TT as an international organi'ation but the %eneral 5greement still e<ists as the WTOFs umbrella treaty #or trade in goods updated as a result o# the Uruguay +ound negotiations> Trade la&yers distinguish bet&een %5TT (**0 the updated parts o# %5TT and %5TT (*0@ the original agreement &hi!h is still the heart o# %5TT (**0> 8on#usingV For most o# us itFs enough to re#er simply to %5TT>

The post2Druguay <ound built2in agenda

7any o# the Uruguay +ound agreements set timetables #or #uture

2(

&or=> Part o# this built3in agenda started almost immediately> 9n some areas it in!luded ne& or #urther negotiations> 9n other areas it in!luded assessments or revie&s o# the situation at spe!i#ied times> Some negotiations &ere Bui!=ly !ompleted notably in basi! tele!ommuni!ations #inan!ial servi!es> ,7ember governments also s&i#tly agreed a deal #or #reer trade in in#ormation te!hnology produ!ts an issue outside the built3in agenda>1 The agenda originally built into the Uruguay +ound agreements has seen additions and modi#i!ations> 5 number o# items are no& part o# the :oha 5genda some o# them updated> There &ere &ell over 30 items in the original built3in agenda> This is a sele!tion o# highlights$
+,,1 4 4 4 7aritime servi!es$ mar=et a!!ess negotiations to end ,30 )une (**. suspended to 2000 no& part o# :oha :evelopment 5genda1 Servi!es and environment$ deadline #or &or=ing party report ,ministerial !on#eren!e :e!ember (**.1 %overnment pro!urement o# servi!es$ negotiations start

+,,4 4 4 4 Gasi! tele!oms$ negotiations end ,(" February1 Finan!ial servi!es$ negotiations end ,30 :e!ember1 9ntelle!tual property !reating a multilateral system o# noti#i!ation and registration o# geographi!al indi!ations #or &ines$ negotiations start no& part o# :oha :evelopment 5genda

+,,3 4 4 Te<tiles and !lothing$ ne& phase begins ( )anuary Servi!es ,emergen!y sa#eguards1$ results o# negotiations on emergen!y sa#eguards to ta=e e##e!t ,by ( )anuary (**- deadline no& 7ar!h 20001 +ules o# origin$ Wor= programme on harmoni'ation o# rules o# origin to be !ompleted ,20 )uly (**-1 %overnment pro!urement$ #urther negotiations start #or improving rules and pro!edures ,by end o# (**-1 :ispute settlement$ #ull revie& o# rules and pro!edures ,to start by end o# (**-1

4 4 4

+,,, 4 9ntelle!tual property$ !ertain e<!eptions to patentability and prote!tion o# plant varieties$ revie& starts 5gri!ulture$ negotiations start no& part o# :oha :evelopment 5genda Servi!es$ ne& round o# negotiations start no& part o# :oha :evelopment 5genda Tari## bindings$ revie& o# de#inition o# prin!iple supplier having negotiating rights under %5TT 5rt 2- on modi#ying bindings 9ntelle!tual property$ #irst o# t&o3yearly revie&s o# the implementation o# the agreement Te<tiles and !lothing$ ne& phase begins ( )anuary Te<tiles and !lothing$ #ull integration into %5TT and agreement e<pires ( )anuary

-555 4 4 4 4

-554 4 -55/

22

8hapter 2

The agreements
The WTO is Zrules3basedFR its rules are negotiated agreements
+! #&er&ie : a na&igational guide
The WTO agreements !over goods servi!es and intelle!tual property> They spell out the prin!iples o# liberali'ation and the permitted e<!eptions> They in!lude individual !ountriesF !ommitments to lo&er !ustoms tari##s and other trade barriers and to open and =eep open servi!es mar=ets> They set pro!edures #or settling disputes> They pres!ribe spe!ial treatment #or developing !ountries> They reBuire governments to ma=e their trade poli!ies transparent by noti#ying the WTO about la&s in #or!e and measures adopted and through regular reports by the se!retariat on !ountriesF trade poli!ies> These agreements are o#ten !alled the WTOFs trade rules and the WTO is o#ten des!ribed as rules3based a system based on rules> Gut itFs important to remember that the rules are a!tually agreements that governments negotiated> This !hapter #o!uses on the Uruguay +ound agreements &hi!h are the basis o# the present WTO system> 5dditional &or= is also no& under&ay in the WTO> This is the result o# de!isions ta=en at 7inisterial 8on#eren!es in parti!ular the meeting in :oha Jovember 200( &hen ne& negotiations and other &or= &ere laun!hed> ,7ore on the :oha 5genda later>1

The ;additional details9

These agreements and anne<es deal &ith the #ollo&ing spe!i#i! se!tors or issues$ For goods ,under %5TT1 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 5gri!ulture 6ealth regulations #or #arm produ!ts ,SPS1 Te<tiles and !lothing Produ!t standards ,TGT1 9nvestment measures 5nti3dumping measures 8ustoms valuation methods Preshipment inspe!tion +ules o# origin 9mport li!ensing Subsidies and !ounter3measures Sa#eguards 7ovement o# natural persons 5ir transport Finan!ial servi!es Shipping Tele!ommuni!ations

For ser&ices ,the %5TS anne<es1

Si?2part broad outline

The table o# !ontents o# The +esults o# the Uruguay +ound o# 7ultilateral Trade Jegotiations$ The 2egal Te<ts is a daunting list o# about .0 agreements anne<es de!isions and understandings> 9n #a!t the agreements #all into a simple stru!ture &ith si< main parts$ an umbrella agreement ,the 5greement Establishing the WTO1R agreements #or ea!h o# the three broad areas o# trade that the WTO !overs ,goods servi!es and intelle!tual property1R dispute settlementR and revie&s o# governmentsF trade poli!ies> The agreements #or the t&o largest areas D goods and servi!es D share a !ommon three3part outline even though the detail is sometimes Buite di##erent> 4 They start &ith broad principles$ the %eneral 5greement on Tari##s and Trade ,%5TT1 ,#or goods1 and the %eneral 5greement on Trade in Servi!es ,%5TS1> ,The third area Trade3+elated 5spe!ts o# 9ntelle!tual Property +ights ,T+9PS1 also #alls into this !ategory although at present it has no additional parts>1 Then !ome e?tra agreements and anne?es dealing &ith the spe!ial reBuirements o# spe!i#i! se!tors or issues> Finally there are the detailed and lengthy schedules Aor listsB of commitments made by individual !ountries allo&ing spe!i#i! #oreign produ!ts or servi!e3providers a!!ess to their mar=ets> For %5TT these ta=e the #orm o# binding !ommitments on tari##s #or

4 4

23

goods in general and !ombinations o# tari##s and Buotas #or some agri!ultural goods> For %5TS the !ommitments state ho& mu!h a!!ess #oreign servi!e providers are allo&ed #or spe!i#i! se!tors and they in!lude lists o# types o# servi!es &here individual !ountries say they are not applying the most3#avoured3nation prin!iple o# non3dis!rimination> Underpinning these are dispute settlement &hi!h is based on the agreements and !ommitments and trade poli!y revie&s an e<er!ise in transparen!y> 7u!h o# the Uruguay +ound dealt &ith the #irst t&o parts$ general prin!iples and prin!iples #or spe!i#i! se!tors> 5t the same time mar=et a!!ess negotiations &ere possible #or industrial goods> On!e the prin!iples had been &or=ed out negotiations !ould pro!eed on the !ommitments #or se!tors su!h as agri!ulture and servi!es>

$n a nutshell
The basi! stru!ture o# the WTO agreements$ ho& the si< main areas #it together D the umbrella WTO 5greement goods servi!es intelle!tual property disputes and trade poli!y revie&s>
Umbrella %oods Basic principles Additional details G(TT Other goods agreements and anne<es (G<EEME)T EST(BL$SH$)G "T# Servi!es G(TS Servi!es anne<es 9ntelle!tual property T<$'S

Market access commitments

8ountriesF s!hedules 8ountriesF s!hedules o# !ommitments o# !ommitments ,and 7FJ e<emptions1 %$S'DTE SETTLEME)T T<(%E '#L$CI <EE$E"S

Dispute settlement Transparency

(dditional agreements
5nother group o# agreements not in!luded in the diagram is also important$ the t&o plurilateral agreements not signed by all members$ !ivil air!ra#t and government pro!urement>

Further changes on the hori6on8 the %oha (genda

These agreements are not stati!R they are renegotiated #rom time to time and ne& agreements !an be added to the pa!=age> 7any are no& being negotiated under the :oha :evelopment 5genda laun!hed by WTO trade ministers in :oha Yatar in Jovember 200(>

20

-! Tariffs: more bindings and closer to 6ero

The bul=iest results o# Uruguay +ound are the 22 "00 pages listing individual !ountriesF !ommitments on spe!i#i! !ategories o# goods and servi!es> These in!lude !ommitments to !ut and bind their !ustoms duty rates on imports o# goods> 9n some !ases tari##s are being !ut to 'ero> There is also a signi#i!ant in!rease in the number o# bound tari##s D duty rates that are !ommitted in the WTO and are di##i!ult to raise> #) THE "EBS$TE: ! to!org * trade topics * goods * goods schedules ! to!org * trade topics * ser&ices * ser&ices schedules

;Binding9 tariffs
The mar=et a!!ess s!hedules are not simply announ!ements o# tari## rates> They represent !ommitments not to in!rease tari##s above the listed rates D the rates are bound> For developed !ountries the bound rates are generally the rates a!tually !harged> 7ost developing !ountries have bound the rates some&hat higher than the a!tual rates !harged so the bound rates serve as !eilings> 8ountries !an brea= a !ommitment ,i>e> raise a tari## above the bound rate1 but only &ith di##i!ulty> To do so they have to negotiate &ith the !ountries most !on!erned and that !ould result in !ompensation #or trading partnersF loss o# trade>

Tariff cuts
:eveloped !ountriesF tari## !uts &ere #or the most part phased in over #ive years #rom ( )anuary (**"> The result is a 00T !ut in their tari##s on industrial produ!ts #rom an average o# .>3T to 3>-T> The value o# imported industrial produ!ts that re!eive duty3#ree treatment in developed !ountries &ill Hump #rom 20T to 00T> There &ill also be #e&er produ!ts !harged high duty rates> The proportion o# imports into developed !ountries #rom all sour!es #a!ing tari##s rates o# more than ("T &ill de!line #rom @T to "T> The proportion o# developing !ountry e<ports #a!ing tari##s above ("T in industrial !ountries &ill #all #rom *T to "T> The Uruguay +ound pa!=age has been improved> On 2. 7ar!h (**@ 00 !ountries a!!ounting #or more than *2T o# &orld trade in in#ormation te!hnology produ!ts agreed to eliminate import duties and other !harges on these produ!ts by 2000 ,by 200" in a hand#ul o# !ases1> 5s &ith other tari## !ommitments ea!h parti!ipating !ountry is applying its !ommitments eBually to e<ports #rom all WTO members ,i>e> on a most3#avoured3nation basis1 even #rom members that did not ma=e !ommitments>

"hat is this agreement called7 There is no legally binding agreement that sets out the targets #or tari## redu!tions ,e>g> by &hat per!entage they &ere to be !ut as a result o# the Uruguay +ound1> 9nstead individual !ountries listed their !ommitments in s!hedules anne<ed to 7arra=esh Proto!ol to the %eneral 5greement on Tari##s and Trade (**0> This is the legally binding agreement #or the redu!ed tari## rates> Sin!e then additional !ommitments &ere made under the (**@ 9n#ormation Te!hnology 5greement>

More bindings
:eveloped !ountries in!reased the number o# imports &hose tari## rates are bound ,!ommitted and di##i!ult to in!rease1 #rom @-T o# produ!t lines to **T> For developing !ountries the in!rease &as !onsiderable$ #rom 2(T to @3T> E!onomies in transition #rom !entral planning in!reased their bindings #rom @3T to *-T> This all means a substantially higher degree o# mar=et se!urity #or traders and investors> #) THE "EBS$TE: ! to!org * trade topics * marHet access [ See also %oha (genda negotiations

2"

(nd agriculture !!!

Tari##s on all agri!ultural produ!ts are no& bound> 5lmost all import restri!tions that did not ta=e the #orm o# tari##s su!h as Buotas have been !onverted to tari##s D a pro!ess =no&n as tari##i!ation> This has made mar=ets substantially more predi!table #or agri!ulture> Previously more than 30T o# agri!ultural produ!e had #a!ed Buotas or import restri!tions> The #irst step in tari##i!ation &as to repla!e these restri!tions &ith tari##s that represented about the same level o# prote!tion> Then over si< years #rom (**"/2000 these tari##s &ere gradually redu!ed ,the redu!tion period #or developing !ountries ends in 200"1> The mar=et a!!ess !ommitments on agri!ulture also eliminate previous import bans on !ertain produ!ts> 9n addition the lists in!lude !ountriesF !ommitments to redu!e domesti! support and e<port subsidies #or agri!ultural produ!ts> ,See section on agriculture.1

2.

.! (griculture: fairer marHets for farmers

The original %5TT did apply to agri!ultural trade but it !ontained loopholes> For e<ample it allo&ed !ountries to use some non3tari## measures su!h as import Buotas and to subsidi'e> 5gri!ultural trade be!ame highly distorted espe!ially &ith the use o# e<port subsidies &hi!h &ould not normally have been allo&ed #or industrial produ!ts> The Uruguay +ound produ!ed the #irst multilateral agreement dedi!ated to the se!tor> 9t &as a signi#i!ant #irst step to&ards order #air !ompetition and a less distorted se!tor> 9t &as implemented over a si< year period ,and is still being implemented by developing !ountries under their (03year period1 that began in (**"> The Uruguay +ound agreement in!luded a !ommitment to !ontinue the re#orm through ne& negotiations> These &ere laun!hed in 2000 as reBuired by the 5gri!ulture 5greement> [ See also %oha (genda negotiations

"hat is ;distortion97
This a =ey issue> Trade is distorted i# pri!es are higher or lo&er than normal and i# Buantities produ!ed bought and sold are also higher or lo&er than normal D i>e> than the levels that &ould usually e<ist in a !ompetitive mar=et> For e<ample import barriers and domesti! subsidies !an ma=e !rops more e<pensive on a !ountryFs internal mar=et> The higher pri!es !an en!ourage over3produ!tion> 9# the surplus is to be sold on &orld mar=ets &here pri!es are lo&er then e<port subsidies are needed> 5s a result the subsidi'ing !ountries !an be produ!ing and e<porting !onsiderably more than they normally &ould> %overnments usually give three reasons #or supporting and prote!ting their #armers even i# this distorts agri!ultural trade$ 4 to ma=e sure that enough #ood is produ!ed to meet the !ountryFs needs

The (griculture (greement: ne commitments

rules and

4 to shield #armers #rom the e##e!ts o# the &eather and s&ings in &orld pri!es 4 to preserve rural so!iety>

The obHe!tive o# the (griculture (greement is to re#orm trade in the se!tor and to ma=e poli!ies more mar=et3oriented> This &ould improve predi!tability and se!urity #or importing and e<porting !ountries ali=e> The ne& rules and !ommitments apply to$ 4 4 marHet access D various trade restri!tions !on#ronting imports domestic support D subsidies and other programmes in!luding those that raise or guarantee #armgate pri!es and #armersF in!omes e?port subsidies and other methods used to ma=e e<ports arti#i!ially !ompetitive>
"hat is this agreement called7 7ost provisions$ 5greement on 5gri!ulture> 8ommitments on tari##s tari## Buotas domesti! supports e<port subsidies$ in s!hedules anne<ed to the 7arra=esh Proto!ol to the %eneral 5greement on Tari##s and Trade (**0> 5lso$ K7inisterialM :e!ision on 7easures 8on!erning the Possible Jegative E##e!ts o# the +e#orm Programme on 2east3 :eveloped and Jet Food39mporting :eveloping 8ountries> ,See also$ 7odalities #or the establishment o# spe!i#i! binding !ommitments under the re#orm programme 7TJ>%J%A75AWA20>1

Gut the poli!ies have o#ten been e<pensive and they have !reated gluts leading to e<port subsidy &ars> 8ountries &ith less money #or subsidies have su##ered> The debate in the negotiations is &hether these obHe!tives !an be met &ithout distorting trade>

The agreement does allo& governments to support their rural e!onomies but pre#erably through poli!ies that !ause less distortion to trade> 9t also allo&s some #le<ibility in the &ay !ommitments are implemented> :eveloping !ountries do not have to !ut their subsidies or lo&er their tari##s as mu!h as developed !ountries and they are given e<tra time to !omplete their obligations> 2east3developed !ountries donFt have to do this at all> Spe!ial provisions deal &ith the interests o# !ountries that rely on imports #or their #ood supplies and the !on!erns o# least3developed e!onomies> Pea!e provisions &ithin the agreement aim to redu!e the li=elihood o# disputes or !hallenges on agri!ultural subsidies over a period o# nine years until the end o# 2003>

2@

7ar=et a!!ess$ Ztari##s onlyF please

The ne& rule #or mar=et a!!ess in agri!ultural produ!ts is tari##s only> Ge#ore the Uruguay +ound some agri!ultural imports &ere restri!ted by Buotas and other non3tari## measures> These have been repla!ed by tari##s that provide more3or3less eBuivalent levels o# prote!tion D i# the previous poli!y meant domesti! pri!es &ere @"T higher than &orld pri!es then the ne& tari## !ould be around @"T> ,8onverting the Buotas and other types o# measures to tari##s in this &ay &as !alled tari##i!ation>1 The tari##i!ation pa!=age !ontained more> 9t ensured that Buantities imported be#ore the agreement too= e##e!t !ould !ontinue to be imported and it guaranteed that some ne& Buantities &ere !harged duty rates that &ere not prohibitive> This &as a!hieved by a system o# tari##3Buotas D lo&er tari## rates #or spe!i#ied Buantities higher ,sometimes mu!h higher1 rates #or Buantities that e<!eed the Buota> The ne&ly !ommitted tari##s and tari## Buotas !overing all agri!ultural produ!ts too= e##e!t in (**"> Uruguay +ound parti!ipants agreed that developed !ountries &ould !ut the tari##s ,the higher out3o#3Buota rates in the !ase o# tari##3Buotas1 by an average o# 3.T in eBual steps over si< years> :eveloping !ountries &ould ma=e 20T !uts over (0 years> Several developing !ountries also used the option o# o##ering !eiling tari## rates in !ases &here duties &ere not bound ,i>e> !ommitted under %5TT or WTO regulations1 be#ore the Uruguay +ound> 2east3developed !ountries do not have to !ut their tari##s> ,These #igures do not a!tually appear in the 5gri!ulture 5greement> Parti!ipants used them to prepare their s!hedules D i>e> lists o# !ommitments> 9t is the !ommitments listed in the s!hedules that are legally binding>1 For produ!ts &hose non3tari## restri!tions have been !onverted to tari##s governments are allo&ed to ta=e spe!ial emergen!y a!tions ,spe!ial sa#eguards1 in order to prevent s&i#tly #alling pri!es or surges in imports #rom hurting their #armers> Gut the agreement spe!i#ies &hen and ho& those emergen!y a!tions !an be introdu!ed ,#or e<ample they !annot be used on imports &ithin a tari##3 Buota1> Four !ountries used spe!ial treatment provisions to restri!t imports o# parti!ularly sensitive produ!ts ,mainly ri!e1 during the implementation period ,to 2000 #or developed !ountries to 2000 #or developing nations1 but subHe!t to stri!tly de#ined !onditions in!luding minimum a!!ess #or overseas suppliers> The #our &ere$ )apan +ep> o# Worea and the Philippines #or ri!eR and 9srael #or sheepmeat &holemil= po&der and !ertain !heeses> )apan and 9srael have no& given up this right but +ep> o# Worea and the Philippines have e<tended their spe!ial treatment ne& member 8hinese Taipei gave spe!ial treatment to #irst year o# membership 2002>

)umerical targets for agriculture

The redu!tions in agri!ultural subsidies and prote!tion agreed in the Uruguay +ound> Only the #igures #or !utting e<port subsidies appear in the agreement> %e&eloped %e&eloping countries countries . years$ (0 years$ (**"/2000 (**"/2000 Tariffs average !ut #or all agri!ultural produ!ts minimum !ut per produ!t %omestic support total 57S !uts #or se!tor ,base period$ (*-./--1 E?ports value o# subsidies subsidi'ed Buantities ,base period$ (*-./*01 /3.T /2(T /20T /(0T /20T /(3T /3.T /("T /20T /(0T

2east developed !ountries do not have to ma=e !ommitments to redu!e tari##s or subsidies> The base level #or tari## !uts &as the bound rate be#ore ( )anuary (**"R or #or unbound tari##s the a!tual rate !harged in September (*-. &hen the Uruguay +ound began> The other #igures &ere targets used to !al!ulate !ountriesF legally3binding s!hedules o# !ommitments>

( tariff2Cuota
This is &hat a tari##3Buota might loo= li=e
Tari## rate -0T Yuota limit Out of !uota

"n !uota Charged 35M Charged +5M ( 000 tons 9mport Buantity

(0T

9mports entering under the tari##3Buota ,up to ( 000 tons1 are generally !harged (0T> 9mports entering outside the tari##3 Buota are !harged -0T> Under the Uruguay +ound agreement the ( 000 tons &ould be based on a!tual imports in the base period or an agreed minimum a!!ess #ormula> Tari## Buotas are also !alled tari##3rate Buotas>

#or ri!e> 5 ri!e in its

:omesti! support$ some you !an some you !anFt

The main !omplaint about poli!ies &hi!h support domesti! pri!es or

2-

subsidi'e produ!tion in some other &ay is that they en!ourage over3 produ!tion> This sBuee'es out imports or leads to e<port subsidies and lo&3pri!ed dumping on &orld mar=ets> The 5gri!ulture 5greement distinguishes bet&een support programmes that stimulate produ!tion dire!tly and those that are !onsidered to have no dire!t e##e!t> :omesti! poli!ies that do have a dire!t e##e!t on produ!tion and trade have to be !ut ba!=> WTO members !al!ulated ho& mu!h support o# this =ind they &ere providing per year #or the agri!ultural se!tor ,using !al!ulations =no&n as total aggregate measurement o# support or Total 57S1 in the base years o# (*-./--> :eveloped !ountries agreed to redu!e these #igures by 20T over si< years starting in (**"> :eveloping !ountries agreed to ma=e (3T !uts over (0 years> 2east3developed !ountries do not need to ma=e any !uts> ,This !ategory o# domesti! support is sometimes !alled the amber bo< a re#eren!e to the amber !olour o# tra##i! lights &hi!h means slo& do&n>1 7easures &ith minimal impa!t on trade !an be used #reely D they are in a green bo< ,green as in tra##i! lights1> They in!lude government servi!es su!h as resear!h disease !ontrol in#rastru!ture and #ood se!urity> They also in!lude payments made dire!tly to #armers that do not stimulate produ!tion su!h as !ertain #orms o# dire!t in!ome support assistan!e to help #armers restru!ture agri!ulture and dire!t payments under environmental and regional assistan!e programmes> 5lso permitted are !ertain dire!t payments to #armers &here the #armers are reBuired to limit produ!tion ,sometimes !alled blue bo< measures1 !ertain government assistan!e programmes to en!ourage agri!ultural and rural development in developing !ountries and other support on a small s!ale ,de minimis1 &hen !ompared &ith the total value o# the produ!t or produ!ts supported ,"T or less in the !ase o# developed !ountries and (0T or less #or developing !ountries1>

E<port subsidies$ limits on spending and Buantities

The 5gri!ulture 5greement prohibits e<port subsidies on agri!ultural produ!ts unless the subsidies are spe!i#ied in a memberFs lists o# !ommitments> Where they are listed the agreement reBuires WTO members to !ut both the amount o# money they spend on e<port subsidies and the Buantities o# e<ports that re!eive subsidies> Ta=ing averages #or (*-./*0 as the base level developed !ountries agreed to !ut the value o# e<port subsidies by 3.T over the si< years starting in (**" ,20T over (0 years #or developing !ountries1> :eveloped !ountries also agreed to redu!e the Buantities o# subsidi'ed e<ports by 2(T over the si< years ,(0T over (0 years #or developing !ountries1> 2east3developed !ountries do not need to ma=e any !uts> :uring the si<3year implementation period developing !ountries are allo&ed under !ertain !onditions to use subsidies to redu!e the !osts o# mar=eting and transporting e<ports>

The least2de&eloped and those depending on food imports

Under the 5gri!ulture 5greement WTO members have to redu!e

2*

their subsidi'ed e<ports> Gut some importing !ountries depend on supplies o# !heap subsidi'ed #ood #rom the maHor industriali'ed nations> They in!lude some o# the poorest !ountries and although their #arming se!tors might re!eive a boost #rom higher pri!es !aused by redu!ed e<port subsidies they might need temporary assistan!e to ma=e the ne!essary adHustments to deal &ith higher pri!ed imports and eventually to e<port> 5 spe!ial ministerial de!ision sets out obHe!tives and !ertain measures #or the provision o# #ood aid and aid #or agri!ultural development> 9t also re#ers to the possibility o# assistan!e #rom the 9nternational 7onetary Fund and the World Gan= to #inan!e !ommer!ial #ood imports> #) THE "EBS$TE: ! to!org * trade topics * goods * agriculture

30

0! Standards and safety

5rti!le 20 o# the %eneral 5greement on Tari##s and Trade ,%5TT1 allo&s governments to a!t on trade in order to prote!t human animal or plant li#e or health provided they do not dis!riminate or use this as disguised prote!tionism> 9n addition there are t&o spe!i#i! WTO agreements dealing &ith #ood sa#ety and animal and plant health and sa#ety and &ith produ!t standards>

Food8 animal and plant products: ho

safe is safe7
"hose international standards7
5n anne< to the Sanitary and Phytosanitary 7easures 5greement names$ 4 the F5OAW6O 8ode< 5limentarius 8ommission$ #or #ood 4 the 9nternational 5nimal 6ealth Organi'ation ,O##i!e 9nternational des Epi'ooties1$ #or animal health 4 the F5OFs Se!retariat o# the 9nternational Plant Prote!tion 8onvention$ #or plant health> %overnments !an add any other international organi'ations or agreements &hose membership is open to all WTO members>

Problem$ 6o& do you ensure that your !ountryFs !onsumers are being supplied &ith #ood that is sa#e to eat D sa#e by the standards you !onsider appropriateV 5nd at the same time ho& !an you ensure that stri!t health and sa#ety regulations are not being used as an e<!use #or prote!ting domesti! produ!ersV 5 separate agreement on #ood sa#ety and animal and plant health standards ,the Sanitary and 'hytosanitary Measures (greement or S'S1 sets out the basi! rules> 9t allo&s !ountries to set their o&n standards> Gut it also says regulations must be based on s!ien!e> They should be applied only to the e<tent ne!essary to prote!t human animal or plant li#e or health> 5nd they should not arbitrarily or unHusti#iably dis!riminate bet&een !ountries &here identi!al or similar !onditions prevail> 7ember !ountries are en!ouraged to use international standards guidelines and re!ommendations &here they e<ist> 6o&ever members may use measures &hi!h result in higher standards i# there is s!ienti#i! Husti#i!ation> They !an also set higher standards based on appropriate assessment o# ris=s so long as the approa!h is !onsistent not arbitrary> 5nd they !an to some e<tent apply the pre!autionary prin!iple a =ind o# sa#ety #irst approa!h to deal &ith s!ienti#i! un!ertainty> 5rti!le ">@ o# the SPS 5greement allo&s temporary pre!autionary measures> The agreement still allo&s !ountries to use di##erent standards and di##erent methods o# inspe!ting produ!ts> So ho& !an an e<porting !ountry be sure the pra!ti!es it applies to its produ!ts are a!!eptable in an importing !ountryV 9# an e<porting !ountry !an demonstrate that the measures it applies to its e<ports a!hieve the same level o# health prote!tion as in the importing !ountry then the importing !ountry is e<pe!ted to a!!ept the e<porting !ountryFs standards and methods> The agreement in!ludes provisions on !ontrol inspe!tion and approval pro!edures> %overnments must provide advan!e noti!e o# ne& or !hanged sanitary and phytosanitary regulations and establish a national enBuiry point to provide in#ormation> The agreement !omplements that on te!hni!al barriers to trade> #) THE "EBS$TE: ! to!org * trade topics * goods * sanitary and phytosanitary measures

3(

Technical regulations and standards

Te!hni!al regulations and industrial standards are important but they vary #rom !ountry to !ountry> 6aving too many di##erent standards ma=es li#e di##i!ult #or produ!ers and e<porters> 9# the standards are set arbitrarily they !ould be used as an e<!use #or prote!tionism> Standards !an be!ome obsta!les to trade> The Technical Barriers to Trade (greement ATBTB tries to ensure that regulations standards testing and !erti#i!ation pro!edures do not !reate unne!essary obsta!les> The agreement re!ogni'es !ountriesF rights to adopt the standards they !onsider appropriate D #or e<ample #or human animal or plant li#e or health #or the prote!tion o# the environment or to meet other !onsumer interests> 7oreover members are not prevented #rom ta=ing measures ne!essary to ensure their standards are met> 9n order to prevent too mu!h diversity the agreement en!ourages !ountries to use international standards &here these are appropriate but it does not reBuire them to !hange their levels o# prote!tion as a result> The agreement sets out a !ode o# good pra!ti!e #or the preparation adoption and appli!ation o# standards by !entral government bodies> 9t also in!ludes provisions des!ribing ho& lo!al government and non3 governmental bodies should apply their o&n regulations D normally they should use the same prin!iples as apply to !entral governments> The agreement says the pro!edures used to de!ide &hether a produ!t !on#orms &ith national standards have to be #air and eBuitable> 9t dis!ourages any methods that &ould give domesti!ally produ!ed goods an un#air advantage> The agreement also en!ourages !ountries to re!ogni'e ea!h otherFs testing pro!edures> That &ay a produ!t !an be assessed to see i# it meets the importing !ountryFs standards through testing in the !ountry &here it is made> 7anu#a!turers and e<porters need to =no& &hat the latest standards are in their prospe!tive mar=ets> To help ensure that this in#ormation is made available !onveniently all WTO member governments are reBuired to establish national enBuiry points> #) THE "EBS$TE: ! to!org * trade topics * goods * technical barriers to trade

32

/! Te?tiles: bacH in the mainstream

Te<tiles li=e agri!ulture &as one o# the hardest3#ought issues in the WTO as it &as in the #ormer %5TT system> 9t has no& !ompleted #undamental !hange under a (03year s!hedule agreed in the Uruguay +ound> The system o# import Buotas that dominated the trade sin!e the early (*.0s have no& been phased out> From (*@0 until the end o# the Uruguay +ound the trade &as governed by the 7ulti#ibre 5rrangement ,7F51> This &as a #rame&or= #or bilateral agreements or unilateral a!tions that established Buotas limiting imports into !ountries &hose domesti! industries &ere #a!ing serious damage #rom rapidly in!reasing imports> The Buotas &ere the most visible #eature> They !on#li!ted &ith %5TTFs general pre#eren!e #or !ustoms tari##s instead o# measures that restri!t Buantities> They &ere also e<!eptions to the %5TT prin!iple o# treating all trading partners eBually be!ause they spe!i#ied ho& mu!h the importing !ountry &as going to a!!ept #rom individual e<porting !ountries> Sin!e (**" the WTOFs (greement on Te?tiles and Clothing A(TCB too= over #rom the 7ullti#ibre 5rrangement> Gy ( )anuary 200" the se!tor &as #ully integrated into normal %5TT rules> 9n parti!ular the Buotas !ame to an end and importing !ountries are no longer able to dis!riminate bet&een e<porters> The 5greement on Te<tiles and 8lothing no longer e<ists$ itFs the only WTO agreement that had sel#3destru!tion built in>

$ntegration: returning products gradually to G(TT rules

Te<tiles and !lothing produ!ts &ere returned to %5TT rules over the (03year period> This happened gradually in #our steps to allo& time #or both importers and e<porters to adHust to the ne& situation> Some o# these produ!ts &ere previously under Buotas> 5ny Buotas that &ere in pla!e on 3( :e!ember (**0 &ere !arried over into the ne& agreement> For produ!ts that had Buotas the result o# integration into %5TT &as the removal o# these Buotas> The agreement stated the per!entage o# produ!ts that had to be brought under %5TT rules at ea!h step> 9# any o# these produ!ts !ame under Buotas then the Buotas had to be removed at the same time> The per!entages &ere applied to the importing !ountryFs te<tiles and !lothing trade levels in (**0> The agreement also said the Buantities o# imports permitted under the Buotas had to gro& annually and that the rate o# e<pansion had to in!rease at ea!h stage> 6o& #ast that e<pansion &ould be &as set out in a #ormula based on the gro&th rate that e<isted under the old 7ulti#ibre 5rrangement ,see table1> Produ!ts brought under %5TT rules at ea!h o# the #irst three stages had to !over the #our main types o# te<tiles and !lothing$ tops and yarnsR #abri!sR made3up te<tile produ!tsR and !lothing> 5ny other restri!tions that did not !ome under the 7ulti#ibre 5rrangement and did not !on#orm &ith regular WTO agreements by (**. had to be made to !on#orm or be phased out by 200">

33

Four steps o&er +5 years

The s!hedule #or #reeing te<tiles and garments produ!ts #rom import Buotas ,and returning them to %5TT rules1 and ho& #ast remaining Buotas had to be e<panded> The e<ample is based on the !ommonly3used .T annual e<pansion rate o# the old 7ulti#ibre 5rrangement> 9n pra!ti!e the rates used under the 7F5 varied #rom produ!t to produ!t> Step 'ercentage of products to be brought under G(TT Aincluding remo&al of any CuotasB +1M ,minimum ta=ing (**0 imports as base1 +4M +3M 0,M ,ma<imum1 Ho fast remaining Cuotas should open up8 if +,,0 rate as 1M 1!,1M per year 3!4M per year ++!5/M per year )o Cuotas left

Step +: + Lan +,,/ ,to 3( :e! (**@1 Step -: + Lan +,,3 ,to 3( :e! 200(1 Step .: + Lan -55,to 3( :e! 20001 Step 0: + Lan -55/ Full integration into %5TT ,and #inal elimination o# Buotas1> 5greement on Te<tiles and 8lothing terminates>

The a!tual #ormula #or import gro&th under Buotas &as$ by 0>( < pre3(**" gro&th rate in the #irst stepR 0>2" < Step ( gro&th rate in the se!ond stepR and 0>2@ < Step 2 gro&th rate in the third step>

9# #urther !ases o# damage to the industry arose during the transition the agreement allo&ed additional restri!tions to be imposed temporarily under stri!t !onditions> These transitional sa#eguards &ere not the same as the sa#eguard measures normally allo&ed under %5TT be!ause they !an be applied on imports #rom spe!i#i! e<porting !ountries> Gut the importing !ountry had to sho& that its domesti! industry &as su##ering serious damage or &as threatened &ith serious damage> 5nd it had to sho& that the damage &as the result o# t&o things$ in!reased imports o# the produ!t in Buestion #rom all sour!es and a sharp and substantial in!rease #rom the spe!i#i! e<porting !ountry> The sa#eguard restri!tion !ould be implemented either by mutual agreement #ollo&ing !onsultations or unilaterally> 9t &as subHe!t to revie& by the Te<tiles 7onitoring Gody. 9n any system &here Buotas are set #or individual e<porting !ountries e<porters might try to get around the Buotas by shipping produ!ts through third !ountries or ma=ing #alse de!larations about the produ!tsF !ountry o# origin> The agreement in!luded provisions to !ope &ith these !ases> The agreement envisaged spe!ial treatment #or !ertain !ategories o# !ountries D #or e<ample ne& mar=et entrants small suppliers and least3developed !ountries> 5 Te?tiles Monitoring Body ATMBB supervised the agreementFs implementation> 9t !onsisted o# a !hairman and (0 members a!ting in their personal !apa!ity> 9t monitored a!tions ta=en under the agreement to ensure that they &ere !onsistent and it reported to the %oods 8oun!il &hi!h revie&ed the operation o# the agreement be#ore ea!h ne& step o# the integration pro!ess> The Te<tiles 7onitoring Gody also dealt &ith disputes under the 5greement on Te<tiles and 8lothing> 9# they remained unresolved the disputes !ould be brought to the WTOFs regular :ispute Settlement Gody> When the Te<tiles and 8lothing 5greement e<pired on ( )anuary 200" the Te<tiles 7onitoring Gody also !eased to e<ist>

30

#) THE "EBS$TE: ! to!org * trade topics * goods * te?tiles

3"

1! Ser&ices: rules for gro th and in&estment

The %eneral 5greement on Trade in Servi!es ,%5TS1 is the #irst and only set o# multilateral rules governing international trade in servi!es> Jegotiated in the Uruguay +ound it &as developed in response to the huge gro&th o# the servi!es e!onomy over the past 30 years and the greater potential #or trading servi!es brought about by the !ommuni!ations revolution> Servi!es represent the #astest gro&ing se!tor o# the global e!onomy and a!!ount #or t&o thirds o# global output one third o# global employment and nearly 20T o# global trade> When the idea o# bringing rules on servi!es into the multilateral trading system &as #loated in the early to mid (*-0s a number o# !ountries &ere s!epti!al and even opposed> They believed su!h an agreement !ould undermine governmentsF ability to pursue national poli!y obHe!tives and !onstrain their regulatory po&ers> The agreement that &as developed ho&ever allo&s a high degree o# #le<ibility both &ithin the #rame&or= o# rules and also in terms o# the mar=et a!!ess !ommitments>

Basic principles
4 5ll servi!es are !overed by %5TS 4 7ost3#avoured3nation treatment applies to all servi!es e<!ept the one3o## temporary e<emptions 4 Jational treatment applies in the areas &here !ommitments are made 4 Transparen!y in regulations inBuiry points 4 +egulations have to be obHe!tive and reasonable 4 9nternational payments$ normally unrestri!ted 4 9ndividual !ountriesF !ommitments$ negotiated and bound 4 Progressive liberali'ation$ through #urther negotiations

G(TS e?plained
The General (greement on Trade in Ser&ices has three elements$ the main te<t !ontaining general obligations and dis!iplinesR anne<es dealing &ith rules #or spe!i#i! se!torsR and individual !ountriesF spe!i#i! !ommitments to provide a!!ess to their mar=ets in!luding indi!ations o# &here !ountries are temporarily not applying the most3#avoured3nation prin!iple o# non3dis!rimination>

%eneral obligations and dis!iplines

Total co&erage The agreement !overs all internationally3traded servi!es D #or e<ample ban=ing tele!ommuni!ations tourism pro#essional servi!es et!> 9t also de#ines #our &ays ,or modes1 o# trading servi!es$ servi!es supplied #rom one !ountry to another ,e>g> international telephone !alls1 o##i!ially =no&n as cross2border supply ,in WTO Hargon mode (1 !onsumers or #irms ma=ing use o# a servi!e in another !ountry ,e>g> tourism1 o##i!ially consumption abroad ,mode 21 a #oreign !ompany setting up subsidiaries or bran!hes to provide servi!es in another !ountry ,e>g> #oreign ban=s setting up operations in a !ountry1 o##i!ially commercial presence ,mode 31 individuals travelling #rom their o&n !ountry to supply servi!es in another ,e>g> #ashion models or !onsultants1 o##i!ially presence of natural persons ,mode 01

Most2fa&oured2nation AMF)B treatment Favour one #avour all> 7FJ means treating oneFs trading partners eBually on the prin!iple o# non3dis!rimination> Under %5TS i# a !ountry allo&s #oreign !ompetition in a se!tor eBual opportunities in that se!tor should be given to servi!e providers #rom all other WTO members> ,This applies even i# the !ountry has made no spe!i#i! !ommitment to provide #oreign !ompanies a!!ess to its mar=ets under the WTO>1 7FJ applies to all servi!es but some spe!ial temporary e<emptions have been allo&ed> When %5TS !ame into #or!e a number o# !ountries already had pre#erential agreements in servi!es that they had signed &ith trading partners either bilaterally or in small groups>

3.

WTO members #elt it &as ne!essary to maintain these pre#eren!es temporarily> They gave themselves the right to !ontinue giving more #avourable treatment to parti!ular !ountries in parti!ular servi!es a!tivities by listing 7FJ e<emptions alongside their #irst sets o# !ommitments> 9n order to prote!t the general 7FJ prin!iple the e<emptions !ould only be made on!eR nothing !an be added to the lists> They are !urrently being revie&ed as mandated and &ill normally last no more than ten years> Commitments on marHet access and national treatment 9ndividual !ountriesF !ommitments to open mar=ets in spe!i#i! se!tors D and ho& open those mar=ets &ill be D are the out!ome o# negotiations> The !ommitments appear in s!hedules that list the se!tors being opened the e<tent o# mar=et a!!ess being given in those se!tors ,e>g> &hether there are any restri!tions on #oreign o&nership1 and any limitations on national treatment ,&hether some rights granted to lo!al !ompanies &ill not be granted to #oreign !ompanies1> So #or e<ample i# a government !ommits itsel# to allo& #oreign ban=s to operate in its domesti! mar=et that is a marHet2 access commitment> 5nd i# the government limits the number o# li!en!es it &ill issue then that is a marHet2access limitation> 9# it also says #oreign ban=s are only allo&ed one bran!h &hile domesti! ban=s are allo&ed numerous bran!hes that is an e?ception to the national treatment prin!iple> These !learly de#ined !ommitments are bound$ li=e bound tari##s #or trade in goods they !an only be modi#ied a#ter negotiations &ith a##e!ted !ountries> Ge!ause unbinding is di##i!ult the !ommitments are virtually guaranteed !onditions #or #oreign e<porters and importers o# servi!es and investors in the se!tor to do business> %overnmental servi!es are e<pli!itly !arved out o# the agreement and there is nothing in %5TS that #or!es a government to privati'e servi!e industries> 9n #a!t the &ord privati'e does not even appear in %5TS> Jor does it outla& government or even private monopolies> The !arve3out is an e<pli!it !ommitment by WTO governments to allo& publi!ly #unded servi!es in !ore areas o# their responsibility> %overnmental servi!es are de#ined in the agreement as those that are not supplied !ommer!ially and do not !ompete &ith other suppliers> These servi!es are not subHe!t to any %5TS dis!iplines they are not !overed by the negotiations and !ommitments on mar=et a!!ess and national treatment ,treating #oreign and domesti! !ompanies eBually1 do not apply to them> %5TSF approa!h to ma=ing !ommitments means that members are not obliged to do so on the &hole universe o# servi!es se!tors> 5 government may not &ant to ma=e a !ommitment on the level o# #oreign !ompetition in a given se!tor be!ause it !onsiders the se!tor to be a !ore governmental #un!tion or indeed #or any other reason> 9n this !ase the governmentFs only obligations are minimal #or e<ample to be transparent in regulating the se!tor and not to dis!riminate bet&een #oreign suppliers> Transparency %5TS says governments must publish all relevant la&s and regulations and set up enBuiry points &ithin their bureau!ra!ies> Foreign !ompanies and governments !an then use these inBuiry points to obtain in#ormation about regulations in any servi!e se!tor> 5nd they have to noti#y the WTO o# any !hanges in regulations that apply to the servi!es that !ome under spe!i#i! !ommitments>

3@

<egulations: ob=ecti&e and reasonable Sin!e domesti! regulations are the most signi#i!ant means o# e<er!ising in#luen!e or !ontrol over servi!es trade the agreement says governments should regulate servi!es reasonably obHe!tively and impartially> When a government ma=es an administrative de!ision that a##e!ts a servi!e it should also provide an impartial means #or revie&ing the de!ision ,#or e<ample a tribunal1> %5TS does not reBuire any servi!e to be deregulated> 8ommitments to liberali'e do not a##e!t governmentsF right to set levels o# Buality sa#ety or pri!e or to introdu!e regulations to pursue any other poli!y obHe!tive they see #it> 5 !ommitment to national treatment #or e<ample &ould only mean that the same regulations &ould apply to #oreign suppliers as to nationals> %overnments naturally retain their right to set Buali#i!ation reBuirements #or do!tors or la&yers and to set standards to ensure !onsumer health and sa#ety> <ecognition When t&o ,or more1 governments have agreements re!ogni'ing ea!h otherFs Buali#i!ations ,#or e<ample the li!ensing or !erti#i!ation o# servi!e suppliers1 %5TS says other members must also be given a !han!e to negotiate !omparable pa!ts> The re!ognition o# other !ountriesF Buali#i!ations must not be dis!riminatory and it must not amount to prote!tionism in disguise> These re!ognition agreements have to be noti#ied to the WTO> $nternational payments and transfers On!e a government has made a !ommitment to open a servi!e se!tor to #oreign !ompetition it must not normally restri!t money being trans#erred out o# the !ountry as payment #or servi!es supplied ,!urrent transa!tions1 in that se!tor> The only e<!eption is &hen there are balan!e3o#3payments di##i!ulties and even then the restri!tions must be temporary and subHe!t to other limits and !onditions> 'rogressi&e liberali6ation The Uruguay +ound &as only the beginning> %5TS reBuires more negotiations &hi!h began in early 2000 and are no& part o# the :oha :evelopment 5genda> The goal is to ta=e the liberali'ation pro!ess #urther by in!reasing the level o# !ommitments in s!hedules>

The anne<es$ servi!es are not all the same

9nternational trade in goods is a relatively simple idea to grasp$ a produ!t is transported #rom one !ountry to another> Trade in servi!es is mu!h more diverse> Telephone !ompanies ban=s airlines and a!!ountan!y #irms provide their servi!es in Buite di##erent &ays> The %5TS anne<es re#le!t some o# the diversity> Mo&ement of natural persons This anne< deals &ith negotiations on individualsF rights to stay temporarily in a !ountry #or the purpose o# providing a servi!e> 9t spe!i#ies that the agreement does not apply to people see=ing permanent employment or to !onditions #or obtaining !iti'enship permanent residen!e or permanent employment> Financial ser&ices 9nstability in the ban=ing system a##e!ts the &hole e!onomy> The #inan!ial servi!es anne< gives governments very &ide latitude to ta=e prudential measures su!h as those #or the prote!tion o# investors depositors and insuran!e poli!y holders and to ensure the integrity and stability o# the #inan!ial system> The anne< also e<!ludes #rom the agreement servi!es provided &hen a government is e<er!ising its authority over the #inan!ial system #or

3-

e<ample !entral ban=sF servi!es> Telecommunications The tele!ommuni!ations se!tor has a dual role$ it is a distin!t se!tor o# e!onomi! a!tivityR and it is an underlying means o# supplying other e!onomi! a!tivities ,#or e<ample ele!troni! money trans#ers1> The anne< says governments must ensure that #oreign servi!e suppliers are given a!!ess to the publi! tele!ommuni!ations net&or=s &ithout dis!rimination> (ir transport ser&ices Under this anne< tra##i! rights and dire!tly related a!tivities are e<!luded #rom %5TSFs !overage> They are handled by other bilateral agreements> 6o&ever the anne< establishes that the %5TS &ill apply to air!ra#t repair and maintenan!e servi!es mar=eting o# air transport servi!es and !omputer3reservation servi!es> 7embers are !urrently revie&ing the anne<>

Current

orH

%5TS sets a heavy &or= programme !overing a &ide range o# subHe!ts> Wor= on some o# the subHe!ts started in (**" as reBuired soon a#ter %5TS !ame into #or!e in )anuary (**"> Jegotiations to #urther liberali'e international trade in servi!es started in 2000 along &ith other &or= involving study and revie&> )egotiations A(rticle +,B Jegotiations to #urther liberali'e international trade in servi!es started in early 2000 as mandated by %5TS ,5rti!le (*1> The #irst phase o# the negotiations ended su!!ess#ully in 7ar!h 200( &hen members agreed on the guidelines and pro!edures #or the negotiations a =ey element in the negotiating mandate> Gy agreeing these guidelines members set the obHe!tives s!ope and method #or the negotiations in a !lear and balan!ed manner> They also uneBuivo!ally endorsed some o# %5TSF #undamental prin!iples D i>e> membersF right to regulate and to introdu!e ne& regulations on the supply o# servi!es in pursuit o# national poli!y obHe!tivesR their right to spe!i#y &hi!h servi!es they &ish to open to #oreign suppliers and under &hi!h !onditionsR and the overar!hing prin!iple o# #le<ibility #or developing and least3developed !ountries> The guidelines are there#ore sensitive to publi! poli!y !on!erns in important se!tors su!h as health3!are publi! edu!ation and !ultural industries &hile stressing the importan!e o# liberali'ation in general and ensuring #oreign servi!e providers have e##e!tive a!!ess to domesti! mar=ets> The 200( :oha 7inisterial :e!laration in!orporated these negotiations into the single underta=ing o# the :oha :evelopment 5genda Sin!e )uly 2002 a pro!ess o# bilateral negotiations on mar=et a!!ess has been under&ay> "orH on G(TS rules A(rticles +58 +.8 and +/B Jegotiations started in (**" and are !ontinuing on the development o# possible dis!iplines that are not yet in!luded in %5TS$ rules on emergen!y sa#eguard measures government pro!urement and subsidies> Wor= so #ar has !on!entrated on sa#eguards> These are temporary limitations on mar=et a!!ess to deal &ith mar=et disruption and the negotiations aim to set up pro!edures and dis!iplines #or governments using these> Several deadlines have been missed> The

3*

!urrent aim is #or the results to !ome into e##e!t at the same time as those o# the !urrent servi!es negotiations> "orH on domestic regulations A(rticle 0!0B Wor= started in (**" to establish dis!iplines on domesti! regulations D i>e> the reBuirements #oreign servi!e suppliers have to meet in order to operate in a mar=et> The #o!us is on Buali#i!ation reBuirements and pro!edures te!hni!al standards and li!ensing reBuirements> Gy :e!ember (**- members had agreed dis!iplines on domesti! regulations #or the a!!ountan!y se!tor> Sin!e then members have been engaged in developing general dis!iplines #or all pro#essional servi!es and &here ne!essary additional se!toral dis!iplines> 5ll the agreed dis!iplines &ill be integrated into %5TS and be!ome legally binding by the end o# the !urrent servi!es negotiations> MF) e?emptions A(nne? on (rticle -B Wor= on this subHe!t started in 2000> When %5TS !ame into #or!e in (**" members &ere allo&ed a on!e3only opportunity to ta=e an e<emption #rom the 7FJ prin!iple o# non3dis!rimination bet&een a memberFs trading partners> The measure #or &hi!h the e<emption &as ta=en is des!ribed in a memberFs 7FJ e<emption list indi!ating to &hi!h member the more #avourable treatment applies and spe!i#ying its duration> 9n prin!iple these e<emptions should not last #or more than ten years> 5s mandated by %5TS all these e<emptions are !urrently being revie&ed to e<amine &hether the !onditions &hi!h !reated the need #or these e<emptions in the #irst pla!e still e<ist> 5nd in any !ase they are part o# the !urrent servi!es negotiations> TaHing account of >autonomous@ liberali6ation A(rticle +,B 8ountries that have liberali'ed on their o&n initiative sin!e the last multilateral negotiations &ant that to be ta=en into a!!ount &hen they negotiate mar=et a!!ess in servi!es> The negotiating guidelines and pro!edures that members agreed in 7ar!h 200( #or the %5TS negotiations also !all #or !riteria #or ta=ing this autonomous or unilateral liberali'ation into a!!ount> These &ere agreed on . 7ar!h 2003> Special treatment for least2de&eloped countries A(rticle +,B %5TS mandates members to establish ho& to give spe!ial treatment to least3developed !ountries during the negotiations> ,These modalities !over both the s!ope o# the spe!ial treatment and the methods to be used>1 The least3developed !ountries began the dis!ussions in 7ar!h 2002> 5s a result o# subseBuent dis!ussions 7embers agreed the modalities on 3 September 2003> (ssessment of trade in ser&ices A(rticle +,B Preparatory &or= on this subHe!t started in early (***> %5TS mandates that members assess trade in servi!es in!luding the %5TS obHe!tive o# in!reasing the developing !ountriesF parti!ipation in servi!es trade> The negotiating guidelines reiterate this reBuiring the negotiations to be adHusted in response to the assessment> 7embers generally a!=no&ledge that the shortage o# statisti!al in#ormation and other methodologi!al problems ma=e it impossible to !ondu!t an assessment based on #ull data> 6o&ever they are !ontinuing their dis!ussions &ith the assistan!e o# several papers produ!ed by the Se!retariat> (ir transport ser&ices 5t present most o# the air transport se!tor D tra##i! rights and servi!es dire!tly related to tra##i! rights D is e<!luded #rom %5TSF !overage> 6o&ever %5TS mandates a revie& by members o# this situation> The purpose o# the revie& &hi!h

00

started in early 2000 is to de!ide &hether additional air transport servi!es should be !overed by %5TS> The revie& !ould develop into a negotiation in its o&n right resulting in an amendment o# %5TS itsel# by adding ne& servi!es to its !overage and by adding spe!i#i! !ommitments on these ne& servi!es to national s!hedules> #) THE "EBS$TE: ! to!org * trade topics * ser&ices [ See also %oha (genda negotiations

0(

4! $ntellectual property: protection and enforcement

The WTOFs (greement on Trade2<elated (spects of $ntellectual 'roperty <ights AT<$'SB negotiated in the (*-./*0 Uruguay +ound introdu!ed intelle!tual property rules into the multilateral trading system #or the #irst time>

Types of intellectual property The areas !overed by the T+9PS 5greement

8opyright and related rights Trademar=s in!luding servi!e mar=s %eographi!al indi!ations 9ndustrial designs Patents 2ayout3designs ,topographies1 o# integrated !ir!uits Undis!losed in#ormation in!luding trade se!rets

#rigins: into the rule2based trade system

9deas and =no&ledge are an in!reasingly important part o# trade> 7ost o# the value o# ne& medi!ines and other high te!hnology produ!ts lies in the amount o# invention innovation resear!h design and testing involved> Films musi! re!ordings boo=s !omputer so#t&are and on3line servi!es are bought and sold be!ause o# the in#ormation and !reativity they !ontain not usually be!ause o# the plasti! metal or paper used to ma=e them> 7any produ!ts that used to be traded as lo&3te!hnology goods or !ommodities no& !ontain a higher proportion o# invention and design in their value D #or e<ample brandnamed !lothing or ne& varieties o# plants> 8reators !an be given the right to prevent others #rom using their inventions designs or other !reations D and to use that right to negotiate payment in return #or others using them> These are intelle!tual property rights> They ta=e a number o# #orms> For e<ample boo=s paintings and #ilms !ome under !opyrightR inventions !an be patentedR brandnames and produ!t logos !an be registered as trademar=sR and so on> %overnments and parliaments have given !reators these rights as an in!entive to produ!e ideas that &ill bene#it so!iety as a &hole> The e<tent o# prote!tion and en#or!ement o# these rights varied &idely around the &orldR and as intelle!tual property be!ame more important in trade these di##eren!es be!ame a sour!e o# tension in international e!onomi! relations> Je& internationally3agreed trade rules #or intelle!tual property rights &ere seen as a &ay to introdu!e more order and predi!tability and #or disputes to be settled more systemati!ally> The Uruguay +ound a!hieved that> The WTOFs T+9PS 5greement is an attempt to narro& the gaps in the &ay these rights are prote!ted around the &orld and to bring them under !ommon international rules> 9t establishes minimum levels o# prote!tion that ea!h government has to give to the intelle!tual property o# #ello& WTO members> 9n doing so it stri=es a balan!e bet&een the long term bene#its and possible short term !osts to so!iety> So!iety bene#its in the long term &hen intelle!tual property prote!tion en!ourages !reation and invention espe!ially &hen the period o# prote!tion e<pires and the !reations and inventions enter the publi! domain> %overnments are allo&ed to redu!e any short term !osts through various e<!eptions #or e<ample to ta!=le publi! health problems> 5nd &hen there are trade disputes over intelle!tual property rights the WTOFs dispute settlement system is no& available> The agreement !overs #ive broad issues$ 4 4 ho& basi! principles o# the trading system and other international intelle!tual property agreements should be applied ho& to give adeBuate protection to intelle!tual property rights

"hat9s the difference7

8opyrights patents trademar=s et! apply to di##erent types o# !reations or inventions> They are also treated di##erently> Patents industrial designs integrated !ir!uit designs geographi!al indi!ations and trademar=s have to be registered in order to re!eive prote!tion> The registration in!ludes a des!ription o# &hat is being prote!ted D the invention design brandname logo et! D and this des!ription is publi! in#ormation> 8opyright and trade se!rets are prote!ted automati!ally a!!ording to spe!i#ied !onditions> They do not have to be registered and there#ore there is no need to dis!lose #or e<ample ho& !opyrighted !omputer so#t&are is !onstru!ted> Other !onditions may also di##er #or e<ample the length o# time that ea!h type o# prote!tion remains in #or!e>

02

4 4 4

ho& !ountries should enforce those rights adeBuately in their o&n territories ho& to settle disputes on intelle!tual property bet&een members o# the WTO special transitional arrangements during the period &hen the ne& system is being introdu!ed>

Basic principles: national treatment8 MF)8 and balanced protection

5s in %5TT and %5TS the starting point o# the intelle!tual property agreement is basi! prin!iples> 5nd as in the t&o other agreements non3dis!rimination #eatures prominently$ national treatment ,treating oneFs o&n nationals and #oreigners eBually1 and most3#avoured3 nation treatment ,eBual treatment #or nationals o# all trading partners in the WTO1> Jational treatment is also a =ey prin!iple in other intelle!tual property agreements outside the WTO> The T+9PS 5greement has an additional important prin!iple$ intelle!tual property prote!tion should !ontribute to te!hni!al innovation and the trans#er o# te!hnology> Goth produ!ers and users should bene#it and e!onomi! and so!ial &el#are should be enhan!ed the agreement says>

Ho to protect intellectual property: common ground2 rules

The se!ond part o# the T+9PS agreement loo=s at di##erent =inds o# intelle!tual property rights and ho& to prote!t them> The purpose is to ensure that adeBuate standards o# prote!tion e<ist in all member !ountries> 6ere the starting point is the obligations o# the main international agreements o# the World 9ntelle!tual Property Organi'ation ,W9PO1 that already e<isted be#ore the WTO &as !reated$ 4 4 the Paris 8onvention #or the Prote!tion o# 9ndustrial Property ,patents industrial designs et!1 the Gerne 8onvention #or the Prote!tion o# 2iterary and 5rtisti! Wor=s ,!opyright1>

Some areas are not !overed by these !onventions> 9n some !ases the standards o# prote!tion pres!ribed &ere thought inadeBuate> So the T+9PS agreement adds a signi#i!ant number o# ne& or higher standards>

8opyright
The T+9PS agreement ensures that !omputer programs &ill be prote!ted as literary &or=s under the Gerne 8onvention and outlines ho& databases should be prote!ted> 9t also e<pands international !opyright rules to !over rental rights> 5uthors o# !omputer programs and produ!ers o# sound re!ordings must have the right to prohibit the !ommer!ial rental o# their &or=s to the publi!> 5 similar e<!lusive right applies to #ilms &here !ommer!ial rental has led to &idespread !opying a##e!ting !opyright3 o&nersF potential earnings #rom their #ilms>

03

The agreement says per#ormers must also have the right to prevent unauthori'ed re!ording reprodu!tion and broad!ast o# live per#orman!es ,bootlegging1 #or no less than "0 years> Produ!ers o# sound re!ordings must have the right to prevent the unauthori'ed reprodu!tion o# re!ordings #or a period o# "0 years>

Trademar=s
The agreement de#ines &hat types o# signs must be eligible #or prote!tion as trademar=s and &hat the minimum rights !on#erred on their o&ners must be> 9t says that servi!e mar=s must be prote!ted in the same &ay as trademar=s used #or goods> 7ar=s that have be!ome &ell3=no&n in a parti!ular !ountry enHoy additional prote!tion>

%eographi!al indi!ations
5 pla!e name is sometimes used to identi#y a produ!t> This geographi!al indi!ation does not only say &here the produ!t &as made> 7ore importantly it identi#ies the produ!tFs spe!ial !hara!teristi!s &hi!h are the result o# the produ!tFs origins> Well3=no&n e<amples in!lude 8hampagne S!ot!h TeBuila and +oBue#ort !heese> Wine and spirits ma=ers are parti!ularly !on!erned about the use o# pla!e3names to identi#y produ!ts and the T+9PS 5greement !ontains spe!ial provisions #or these produ!ts> Gut the issue is also important #or other types o# goods> Using the pla!e name &hen the produ!t &as made else&here or &hen it does not have the usual !hara!teristi!s !an mislead !onsumers and it !an lead to un#air !ompetition> The T+9PS 5greement says !ountries have to prevent this misuse o# pla!e names> For &ines and spirits the agreement provides higher levels o# prote!tion i>e> even &here there is no danger o# the publi! being misled> Some e<!eptions are allo&ed #or e<ample i# the name is already prote!ted as a trademar= or i# it has be!ome a generi! term> For e<ample !heddar no& re#ers to a parti!ular type o# !heese not ne!essarily made in 8heddar in the UW> Gut any !ountry &anting to ma=e an e<!eption #or these reasons must be &illing to negotiate &ith the !ountry &hi!h &ants to prote!t the geographi!al indi!ation in Buestion> The agreement provides #or #urther negotiations in the WTO to establish a multilateral system o# noti#i!ation and registration o# geographi!al indi!ations #or &ines> These are no& part o# the :oha :evelopment 5genda and they in!lude spirits> 5lso debated in the WTO is &hether to negotiate e<tending this higher level o# prote!tion beyond &ines and spirits>

9ndustrial designs
Under the T+9PS 5greement industrial designs must be prote!ted #or at least (0 years> O&ners o# prote!ted designs must be able to prevent the manu#a!ture sale or importation o# arti!les bearing or embodying a design &hi!h is a !opy o# the prote!ted design>

00

Patents
The agreement says patent prote!tion must be available #or inventions #or at least 20 years> Patent prote!tion must be available #or both produ!ts and pro!esses in almost all #ields o# te!hnology> %overnments !an re#use to issue a patent #or an invention i# its !ommer!ial e<ploitation is prohibited #or reasons o# publi! order or morality> They !an also e<!lude diagnosti! therapeuti! and surgi!al methods plants and animals ,other than mi!roorganisms1 and biologi!al pro!esses #or the produ!tion o# plants or animals ,other than mi!robiologi!al pro!esses1> Plant varieties ho&ever must be prote!table by patents or by a spe!ial system ,su!h as the breederFs rights provided in the !onventions o# UPON D the 9nternational Union #or the Prote!tion o# Je& Narieties o# Plants1> The agreement des!ribes the minimum rights that a patent o&ner must enHoy> Gut it also allo&s !ertain e<!eptions> 5 patent o&ner !ould abuse his rights #or e<ample by #ailing to supply the produ!t on the mar=et> To deal &ith that possibility the agreement says governments !an issue !ompulsory li!en!es allo&ing a !ompetitor to produ!e the produ!t or use the pro!ess under li!en!e> Gut this !an only be done under !ertain !onditions aimed at sa#eguarding the legitimate interests o# the patent3holder> 9# a patent is issued #or a produ!tion pro!ess then the rights must e<tend to the produ!t dire!tly obtained #rom the pro!ess> Under !ertain !onditions alleged in#ringers may be ordered by a !ourt to prove that they have not used the patented pro!ess> 5n issue that has arisen re!ently is ho& to ensure patent prote!tion #or pharma!euti!al produ!ts does not prevent people in poor !ountries #rom having a!!ess to medi!ines D &hile at the same time maintaining the patent systemFs role in providing in!entives #or resear!h and development into ne& medi!ines> Fle<ibilities su!h as !ompulsory li!ensing are &ritten into the T+9PS 5greement but some governments &ere unsure o# ho& these &ould be interpreted and ho& #ar their right to use them &ould be respe!ted> 5 large part o# this &as settled &hen WTO ministers issued a spe!ial de!laration at the :oha 7inisterial 8on#eren!e in Jovember 200(> They agreed that the T+9PS 5greement does not and should not prevent members #rom ta=ing measures to prote!t publi! health> They unders!ored !ountriesF ability to use the #le<ibilities that are built into the T+9PS 5greement> 5nd they agreed to e<tend e<emptions on pharma!euti!al patent prote!tion #or least3developed !ountries until 20(.> On one remaining Buestion they assigned #urther &or= to the T+9PS 8oun!il D to sort out ho& to provide e<tra #le<ibility so that !ountries unable to produ!e pharma!euti!als domesti!ally !an import patented drugs made under !ompulsory li!ensing> 5 &aiver providing this #le<ibility &as agreed on 30 5ugust 2003>

9ntegrated !ir!uits layout designs

The basis #or prote!ting integrated !ir!uit designs ,topographies1 in the T+9PS agreement is the Washington Treaty on 9ntelle!tual Property in +espe!t o# 9ntegrated 8ir!uits &hi!h !omes under the World 9ntelle!tual Property Organi'ation> This &as adopted in (*-* but has not yet entered into #or!e> The T+9PS agreement adds a

0"

number o# provisions$ #or e<ample prote!tion must be available #or at least (0 years>

Undis!losed in#ormation and trade se!rets

Trade se!rets and other types o# undis!losed in#ormation &hi!h have !ommer!ial value must be prote!ted against brea!h o# !on#iden!e and other a!ts !ontrary to honest !ommer!ial pra!ti!es> Gut reasonable steps must have been ta=en to =eep the in#ormation se!ret> Test data submitted to governments in order to obtain mar=eting approval #or ne& pharma!euti!al or agri!ultural !hemi!als must also be prote!ted against un#air !ommer!ial use>

8urbing anti3!ompetitive li!ensing !ontra!ts

The o&ner o# a !opyright patent or other #orm o# intelle!tual property right !an issue a li!en!e #or someone else to produ!e or !opy the prote!ted trademar= &or= invention design et!> The agreement re!ogni'es that the terms o# a li!ensing !ontra!t !ould restri!t !ompetition or impede te!hnology trans#er> 9t says that under !ertain !onditions governments have the right to ta=e a!tion to prevent anti3!ompetitive li!ensing that abuses intelle!tual property rights> 9t also says governments must be prepared to !onsult ea!h other on !ontrolling anti3!ompetitive li!ensing>

Enforcement: tough but fair

6aving intelle!tual property la&s is not enough> They have to be en#or!ed> This is !overed in Part 3 o# T+9PS> The agreement says governments have to ensure that intelle!tual property rights !an be en#or!ed under their la&s and that the penalties #or in#ringement are tough enough to deter #urther violations> The pro!edures must be #air and eBuitable and not unne!essarily !ompli!ated or !ostly> They should not entail unreasonable time3limits or un&arranted delays> People involved should be able to as= a !ourt to revie& an administrative de!ision or to appeal a lo&er !ourtFs ruling> The agreement des!ribes in some detail ho& en#or!ement should be handled in!luding rules #or obtaining eviden!e provisional measures inHun!tions damages and other penalties> 9t says !ourts should have the right under !ertain !onditions to order the disposal or destru!tion o# pirated or !ounter#eit goods> Wil#ul trademar= !ounter#eiting or !opyright pira!y on a !ommer!ial s!ale should be !riminal o##en!es> %overnments should ma=e sure that intelle!tual property rights o&ners !an re!eive the assistan!e o# !ustoms authorities to prevent imports o# !ounter#eit and pirated goods>

Technology transfer
:eveloping !ountries in parti!ular see te!hnology trans#er as part o# the bargain in &hi!h they have agreed to prote!t intelle!tual property rights> The T+9PS 5greement in!ludes a number o# provisions on this> For e<ample it reBuires developed3!ountry governments to provide in!entives #or their !ompanies to trans#er te!hnology to least3 developed !ountries>

0.

Transition arrangements: +8 / or ++ years or more

When the WTO agreements too= e##e!t on ( )anuary (**" developed !ountries &ere given one year to ensure that their la&s and pra!ti!es !on#orm &ith the T+9PS agreement> :eveloping !ountries and ,under !ertain !onditions1 transition e!onomies &ere given #ive years until 2000> 2east3developed !ountries have (( years until 200. D no& e<tended to 20(. #or pharma!euti!al patents> 9# a developing !ountry did not provide produ!t patent prote!tion in a parti!ular area o# te!hnology &hen the T+9PS 5greement !ame into #or!e ,( )anuary (**"1 it had up to (0 years to introdu!e the prote!tion> Gut #or pharma!euti!al and agri!ultural !hemi!al produ!ts the !ountry had to a!!ept the #iling o# patent appli!ations #rom the beginning o# the transitional period though the patent did not need to be granted until the end o# this period> 9# the government allo&ed the relevant pharma!euti!al or agri!ultural !hemi!al to be mar=eted during the transition period it had to D subHe!t to !ertain !onditions D provide an e<!lusive mar=eting right #or the produ!t #or #ive years or until a produ!t patent &as granted &hi!hever &as shorter> SubHe!t to !ertain e<!eptions the general rule is that obligations in the agreement apply to intelle!tual property rights that e<isted at the end o# a !ountryFs transition period as &ell as to ne& ones> #) THE "EBS$TE: ! to!org * trade topics * intellectual property [ See also %oha %e&elopment (genda

0@

3! (nti2dumping8 subsidies8 safeguards: contingencies8 etc

Ginding tari##s and applying them eBually to all trading partners ,most3#avoured3nation treatment or 7FJ1 are =ey to the smooth #lo& o# trade in goods> The WTO agreements uphold the prin!iples but they also allo& e<!eptions D in some !ir!umstan!es> Three o# these issues are$ 4 a!tions ta=en against dumping ,selling at an un#airly lo& pri!e1 4 subsidies and spe!ial !ountervailing duties to o##set the subsidies 4 emergen!y measures to limit imports temporarily designed to sa#eguard domesti! industries>

;(%2CE%97
People sometimes re#er to the t&o together D 5:38N: D but there are #undamental di##eren!es :umping and subsidies D together &ith anti3 dumping ,5:1 measures and !ountervailing duties ,8N:1 D share a number o# similarities> 7any !ountries handle the t&o under a single la& apply a similar pro!ess to deal &ith them and give a single authority responsibility #or investigations> O!!asionally the t&o WTO !ommittees responsible #or these issues meet Hointly>

(nti2dumping actions

9# a !ompany e<ports a produ!t at a pri!e lo&er than the pri!e it normally !harges on its o&n home mar=et it is said to be dumping the produ!t> 9s this un#air !ompetitionV Opinions di##er but many governments ta=e a!tion against dumping in order to de#end their %eneral 5greement on Gut there are also #undamental di##eren!es domesti! industries> The WTO agreement does not Tari##s and Trade (**0 and these are re#le!ted in the agreements> pass Hudgement> 9ts #o!us is on ho& governments !an or !annot rea!t to dumping D it dis!iplines anti3dumping a!tions and :umping is an a!tion by a !ompany> With subsidies it is the government or a it is o#ten !alled the (nti2%umping (greement> ,This #o!us only government agen!y that a!ts either by on the rea!tion to dumping !ontrasts &ith the approa!h o# the paying out subsidies dire!tly or by reBuiring Subsidies and 8ountervailing 7easures 5greement>1
!ompanies to subsidi'e !ertain !ustomers>

The rea!tion to dumping and subsidies is o#ten a spe!ial o##setting import ta< ,!ountervailing duty in the !ase o# a subsidy1> This is !harged on produ!ts #rom spe!i#i! !ountries and there#ore it brea=s the %5TT prin!iples o# binding a tari## and treating trading partners eBually ,7FJ1> The "hat is this agreements provide an es!ape !lause but agreement called7 they both also say that be#ore imposing a 5greement on the duty the importing !ountry must !ondu!t a implementation o# detailed investigation that sho&s properly 5rti!le N9 Ki>e .Mo# the that domesti! industry is hurt>

The legal de#initions are more pre!ise but broadly spea=ing the WTO agreement allo&s governments to a!t against dumping &here there is genuine ,material1 inHury to the !ompeting domesti! industry> 9n order to do that the government has to be able to sho& that dumping is ta=ing pla!e !al!ulate the e<tent o# dumping ,ho& mu!h lo&er the e<port pri!e is !ompared to the e<porterFs home mar=et pri!e1 and sho& that the dumping is !ausing inHury or threatening to do so> %5TT ,5rti!le .1 allo&s !ountries to ta=e a!tion against dumping> The 5nti3:umping 5greement !lari#ies and e<pands 5rti!le . and the t&o operate together> They allo& !ountries to a!t in a &ay that &ould normally brea= the %5TT prin!iples o# binding a tari## and not dis!riminating bet&een trading partners D typi!ally anti3dumping a!tion means !harging e<tra import duty on the parti!ular produ!t #rom the parti!ular e<porting !ountry in order to bring its pri!e !loser to the normal value or to remove the inHury to domesti! industry in the importing !ountry> There are many di##erent &ays o# !al!ulating &hether a parti!ular produ!t is being dumped heavily or only lightly> The agreement narro&s do&n the range o# possible options> 9t provides three methods to !al!ulate a produ!tFs normal value> The main one is based on the pri!e in the e<porterFs domesti! mar=et> When this !annot be used t&o alternatives are available D the pri!e !harged by the e<porter in another !ountry or a !al!ulation based on the !ombination o# the e<porterFs produ!tion !osts other e<penses and normal pro#it margins> 5nd the agreement also spe!i#ies ho& a #air !omparison !an be made bet&een the e<port pri!e and &hat &ould be a normal pri!e> 8al!ulating the e<tent o# dumping on a produ!t is not enough> 5nti3

Gut the WTO is an organi'ation o# !ountries and their governments> The WTO does not deal &ith !ompanies and !annot regulate !ompaniesF a!tions su!h as dumping> There#ore the 5nti3:umping 5greement only !on!erns the a!tions governments may ta=e against dumping> With subsidies governments a!t on both sides$ they subsidi'e and they a!t against ea!h othersF subsidies> There#ore the subsidies agreement dis!iplines both the subsidies and the rea!tions>

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dumping measures !an only be applied i# the dumping is hurting the industry in the importing !ountry> There#ore a detailed investigation has to be !ondu!ted a!!ording to spe!i#ied rules #irst> The investigation must evaluate all relevant e!onomi! #a!tors that have a bearing on the state o# the industry in Buestion> 9# the investigation sho&s dumping is ta=ing pla!e and domesti! industry is being hurt the e<porting !ompany !an underta=e to raise its pri!e to an agreed level in order to avoid anti3dumping import duty> :etailed pro!edures are set out on ho& anti3dumping !ases are to be initiated ho& the investigations are to be !ondu!ted and the !onditions #or ensuring that all interested parties are given an opportunity to present eviden!e> 5nti3dumping measures must e<pire #ive years a#ter the date o# imposition unless an investigation sho&s that ending the measure &ould lead to inHury> 5nti3dumping investigations are to end immediately in !ases &here the authorities determine that the margin o# dumping is insigni#i!antly small ,de#ined as less than 2T o# the e<port pri!e o# the produ!t1> Other !onditions are also set> For e<ample the investigations also have to end i# the volume o# dumped imports is negligible ,i>e> i# the volume #rom one !ountry is less than 3T o# total imports o# that produ!t D although investigations !an pro!eed i# several !ountries ea!h supplying less than 3T o# the imports together a!!ount #or @T or more o# total imports1> The agreement says member !ountries must in#orm the 8ommittee on 5nti3:umping Pra!ti!es about all preliminary and #inal anti3 dumping a!tions promptly and in detail> They must also report on all investigations t&i!e a year> When di##eren!es arise members are en!ouraged to !onsult ea!h other> They !an also use the WTOFs dispute settlement pro!edure> #) THE "EBS$TE: ! to!org * trade topics * goods * antidumping [ See also %oha (genda negotiations

Subsidies and counter&ailing measures

This agreement does t&o things$ it dis!iplines the use o# subsidies and it regulates the a!tions !ountries !an ta=e to !ounter the e##e!ts o# subsidies> 9t says a !ountry !an use the WTOFs dispute settlement pro!edure to see= the &ithdra&al o# the subsidy or the removal o# its adverse e##e!ts> Or the !ountry !an laun!h its o&n investigation and ultimately !harge e<tra duty ,=no&n as !ountervailing duty1 on subsidi'ed imports that are #ound to be hurting domesti! produ!ers> The agreement !ontains a de#inition o# subsidy> 9t also introdu!es the !on!ept o# a spe!i#i! subsidy D i>e> a subsidy available only to an enterprise industry group o# enterprises or group o# "hat is this industries in the !ountry ,or state et!1 that gives the agreement called7 subsidy> The dis!iplines set out in the agreement only 5greement on apply to spe!i#i! subsidies> They !an be domesti! or Subsidies and 8ountervailing e<port subsidies>
7easures

The agreement de#ines t&o !ategories o# subsidies$ prohibited and a!tionable> 9t originally !ontained a third !ategory$ non3a!tionable subsidies> This !ategory e<isted #or #ive years ending on 3( :e!ember (*** and &as not e<tended> The agreement

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applies to agri!ultural goods as &ell as industrial produ!ts e<!ept &hen the subsidies are e<empt under the 5gri!ulture 5greementFs pea!e !lause due to e<pire at the end o# 2003> 4 'rohibited subsidies$ subsidies that reBuire re!ipients to meet !ertain e<port targets or to use domesti! goods instead o# imported goods> They are prohibited be!ause they are spe!i#i!ally designed to distort international trade and are there#ore li=ely to hurt other !ountriesF trade> They !an be !hallenged in the WTO dispute settlement pro!edure &here they are handled under an a!!elerated timetable> 9# the dispute settlement pro!edure !on#irms that the subsidy is prohibited it must be &ithdra&n immediately> Other&ise the !omplaining !ountry !an ta=e !ounter measures> 9# domesti! produ!ers are hurt by imports o# subsidi'ed produ!ts !ountervailing duty !an be imposed> (ctionable subsidies$ in this !ategory the !omplaining !ountry has to sho& that the subsidy has an adverse e##e!t on its interests> Other&ise the subsidy is permitted> The agreement de#ines three types o# damage they !an !ause> One !ountryFs subsidies !an hurt a domesti! industry in an importing !ountry> They !an hurt rival e<porters #rom another !ountry &hen the t&o !ompete in third mar=ets> 5nd domesti! subsidies in one !ountry !an hurt e<porters trying to !ompete in the subsidi'ing !ountryFs domesti! mar=et> 9# the :ispute Settlement Gody rules that the subsidy does have an adverse e##e!t the subsidy must be &ithdra&n or its adverse e##e!t must be removed> 5gain i# domesti! produ!ers are hurt by imports o# subsidi'ed produ!ts !ountervailing duty !an be imposed>

Some o# the dis!iplines are similar to those o# the 5nti3:umping 5greement> 8ountervailing duty ,the parallel o# anti3dumping duty1 !an only be !harged a#ter the importing !ountry has !ondu!ted a detailed investigation similar to that reBuired #or anti3dumping a!tion> There are detailed rules #or de!iding &hether a produ!t is being subsidi'ed ,not al&ays an easy !al!ulation1 !riteria #or determining &hether imports o# subsidi'ed produ!ts are hurting ,!ausing inHury to1 domesti! industry pro!edures #or initiating and !ondu!ting investigations and rules on the implementation and duration ,normally #ive years1 o# !ountervailing measures> The subsidi'ed e<porter !an also agree to raise its e<port pri!es as an alternative to its e<ports being !harged !ountervailing duty> Subsidies may play an important role in developing !ountries and in the trans#ormation o# !entrally3planned e!onomies to mar=et e!onomies> 2east3developed !ountries and developing !ountries &ith less than X( 000 per !apita %JP are e<empted #rom dis!iplines on prohibited e<port subsidies> Other developing !ountries are given until 2003 to get rid o# their e<port subsidies> 2east3developed !ountries must eliminate import3substitution subsidies ,i>e> subsidies designed to help domesti! produ!tion and avoid importing1 by 2003 D #or other developing !ountries the deadline &as 2000> :eveloping !ountries also re!eive pre#erential treatment i# their e<ports are subHe!t to !ountervailing duty investigations> For transition e!onomies prohibited subsidies had to be phased out by 2002> #) THE "EBS$TE: ! to!org * trade topics * goods * subsidies and counter&ailing measures [ See also %oha (genda negotiations

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Safeguards: emergency protection from imports

5 WTO member may restri!t imports o# a produ!t temporarily ,ta=e sa#eguard a!tions1 i# its domesti! industry is inHured or threatened &ith inHury !aused by a surge in imports> 6ere the inHury has to be serious> Sa#eguard measures &ere al&ays available under %5TT ,5rti!le (*1> 6o&ever they &ere in#reBuently used some governments pre#erring to prote!t their domesti! industries through grey area measures D using bilateral negotiations outside %5TTFs auspi!es they persuaded e<porting !ountries to restrain e<ports voluntarily or to agree to other means o# sharing mar=ets> 5greements o# this =ind &ere rea!hed #or a &ide range o# produ!ts$ automobiles steel and semi!ondu!tors #or e<ample> The WTO agreement bro=e ne& ground> 9t prohibits grey3area measures and it sets time limits ,a sunset !lause1 on all sa#eguard a!tions> The agreement says members must not see= ta=e or maintain any voluntary e<port restraints orderly mar=eting arrangements or any other similar measures on the e<port or the import side> The bilateral measures that &ere not modi#ied to !on#orm &ith the agreement &ere phased out at the end o# (**-> 8ountries &ere allo&ed to =eep one o# these measures an e<tra year ,until the end o# (***1 but only the European Union D #or restri!tions on imports o# !ars #rom )apan D made use o# this provision> 5n import surge Husti#ying sa#eguard a!tion !an be a real in!rease in imports ,an absolute increase1R or it !an be an in!rease in the importsF share o# a shrin=ing mar=et even i# the import Buantity has not in!reased ,relati#e increase1>
"hat is this agreement called7 5greement on Sa#eguards

9ndustries or !ompanies may reBuest sa#eguard a!tion by their government> The WTO agreement sets out reBuirements #or sa#eguard investigations by national authorities> The emphasis is on transparen!y and on #ollo&ing established rules and pra!ti!es D avoiding arbitrary methods> The authorities !ondu!ting investigations have to announ!e publi!ly &hen hearings are to ta=e pla!e and provide other appropriate means #or interested parties to present eviden!e> The eviden!e must in!lude arguments on &hether a measure is in the publi! interest> The agreement sets out !riteria #or assessing &hether serious inHury is being !aused or threatened and the #a!tors &hi!h must be !onsidered in determining the impa!t o# imports on the domesti! industry> When imposed a sa#eguard measure should be applied only to the e<tent ne!essary to prevent or remedy serious inHury and to help the industry !on!erned to adHust> Where Buantitative restri!tions ,Buotas1 are imposed they normally should not redu!e the Buantities o# imports belo& the annual average #or the last three representative years #or &hi!h statisti!s are available unless !lear Husti#i!ation is given that a di##erent level is ne!essary to prevent or remedy serious inHury> 9n prin!iple sa#eguard measures !annot be targeted at imports #rom a parti!ular !ountry> 6o&ever the agreement does des!ribe ho& Buotas !an be allo!ated among supplying !ountries in!luding in the e<!eptional !ir!umstan!e &here imports #rom !ertain !ountries have in!reased disproportionately Bui!=ly> 5 sa#eguard measure should not last more than #our years although this !an be e<tended up to eight years subHe!t to a determination by !ompetent national authorities that the measure is needed and that there is eviden!e the industry is

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adHusting> 7easures imposed #or more than a year must be progressively liberali'ed> When a !ountry restri!ts imports in order to sa#eguard its domesti! produ!ers in prin!iple it must give something in return> The agreement says the e<porting !ountry ,or e<porting !ountries1 !an see= !ompensation through !onsultations> 9# no agreement is rea!hed the e<porting !ountry !an retaliate by ta=ing eBuivalent a!tion D #or instan!e it !an raise tari##s on e<ports #rom the !ountry that is en#or!ing the sa#eguard measure> 9n some !ir!umstan!es the e<porting !ountry has to &ait #or three years a#ter the sa#eguard measure &as introdu!ed be#ore it !an retaliate in this &ay D i>e> i# the measure !on#orms &ith the provisions o# the agreement and i# it is ta=en as a result o# an in!rease in the Buantity o# imports #rom the e<porting !ountry> To some e<tent developing !ountriesF e<ports are shielded #rom sa#eguard a!tions> 5n importing !ountry !an only apply a sa#eguard measure to a produ!t #rom a developing !ountry i# the developing !ountry is supplying more than 3T o# the imports o# that produ!t or i# developing !ountry members &ith less than 3T import share !olle!tively a!!ount #or more than *T o# total imports o# the produ!t !on!erned> The WTOFs Sa#eguards 8ommittee oversees the operation o# the agreement and is responsible #or the surveillan!e o# membersF !ommitments> %overnments have to report ea!h phase o# a sa#eguard investigation and related de!ision3ma=ing and the !ommittee revie&s these reports> #) THE "EBS$TE: ! to!org * trade topics * goods * safeguards

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,! )on2tariff barriers: red tape8 etc

5 number o# agreements deal &ith various bureau!rati! or legal issues that !ould involve hindran!es to trade> 4 4 4 4 4 import li!ensing rules #or the valuation o# goods at !ustoms preshipment inspe!tion$ #urther !he!=s on imports rules o# origin$ made in >>> &hereV investment measures

$mport licensing: Heeping procedures clear

5lthough less &idely used no& than in the past import li!ensing systems are subHe!t to dis!iplines in the WTO> The (greement on $mport Licensing 'rocedures says import li!ensing should be simple transparent and predi!table> For e<ample the agreement reBuires governments to publish su##i!ient in#ormation #or traders to =no& ho& and &hy the li!en!es are granted> 9t also des!ribes ho& !ountries should noti#y the WTO &hen they introdu!e ne& import li!ensing pro!edures or !hange e<isting pro!edures> The agreement o##ers guidan!e on ho& governments should assess appli!ations #or li!en!es> Some li!en!es are issued automati!ally i# !ertain !onditions are met> The agreement sets !riteria #or automati! li!ensing so that the pro!edures used do not restri!t trade> Other li!en!es are not issued automati!ally> 6ere the agreement tries to minimi'e the importersF burden in applying #or li!en!es so that the administrative &or= does not in itsel# restri!t or distort imports> The agreement says the agen!ies handling li!ensing should not normally ta=e more than 30 days to deal &ith an appli!ation D .0 days &hen all appli!ations are !onsidered at the same time> #) THE "EBS$TE: ! to!org * trade topics * goods * import licensing

<ules for the &aluation of goods at customs

For importers the pro!ess o# estimating the value o# a produ!t at !ustoms presents problems that !an be Hust as serious as the a!tual duty rate !harged> The WTO agreement on !ustoms valuation aims #or a #air uni#orm and neutral system #or the valuation o# goods #or !ustoms purposes D a system that !on#orms to !ommer!ial realities and &hi!h outla&s the use o# arbitrary or #i!titious !ustoms values> The agreement provides a set o# valuation rules e<panding and giving greater pre!ision to the provisions on !ustoms valuation in the original %5TT> 5 related Uruguay +ound ministerial de!ision gives !ustoms administrations the right to reBuest #urther in#ormation in !ases &here they have reason to doubt the a!!ura!y o# the de!lared value o# imported goods> 9# the administration maintains a reasonable doubt

"hat is this agreement called7 5greement on 9mplementation o# 5rti!le N99 ,i>e> @1 o# the %eneral 5greement on Tari##s and Trade (**0R and related ministerial de!isions$ :e!ision +egarding 8ases Where 8ustoms 5dministrations 6ave +easons to :oubt the Truth or 5!!ura!y o# the :e!lared Nalue and :e!isions on Te<ts +elating to 7inimum Nalues and 9mports by Sole 5gents Sole :istributors and Sole 8on!essionaires>

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despite any additional in#ormation it may be deemed that the !ustoms value o# the imported goods !annot be determined on the basis o# the de!lared value> #) THE "EBS$TE: ! to!org * trade topics * goods * customs &aluation

'reshipment inspection: a further checH on imports

Preshipment inspe!tion is the pra!ti!e o# employing spe!iali'ed private !ompanies ,or independent entities1 to !he!= shipment details D essentially pri!e Buantity and Buality D o# goods ordered overseas> Used by governments o# developing !ountries the purpose is to sa#eguard national #inan!ial interests ,preventing !apital #light !ommer!ial #raud and !ustoms duty evasion #or instan!e1 and to !ompensate #or inadeBua!ies in administrative in#rastru!tures> The 'reshipment $nspection (greement re!ogni'es that %5TT prin!iples and obligations apply to the a!tivities o# preshipment inspe!tion agen!ies mandated by governments> The obligations pla!ed on governments &hi!h use preshipment inspe!tions in!lude non3dis!rimination transparen!y prote!tion o# !on#idential business in#ormation avoiding unreasonable delay the use o# spe!i#i! guidelines #or !ondu!ting pri!e veri#i!ation and avoiding !on#li!ts o# interest by the inspe!tion agen!ies> The obligations o# e<porting members to&ards !ountries using preshipment inspe!tion in!lude non3dis!rimination in the appli!ation o# domesti! la&s and regulations prompt publi!ation o# those la&s and regulations and the provision o# te!hni!al assistan!e &here reBuested> The agreement establishes an independent revie& pro!edure> This is administered Hointly by the 9nternational Federation o# 9nspe!tion 5gen!ies ,9F951 representing inspe!tion agen!ies and the 9nternational 8hamber o# 8ommer!e ,9881 representing e<porters> 9ts purpose is to resolve disputes bet&een an e<porter and an inspe!tion agen!y>

<ules of origin: made in !!!

here7

+ules o# origin are the !riteria used to de#ine &here a produ!t &as made> They are an essential part o# trade rules be!ause a number o# poli!ies dis!riminate bet&een e<porting !ountries$ Buotas pre#erential tari##s anti3dumping a!tions !ountervailing duty ,!harged to !ounter e<port subsidies1 and more> +ules o# origin are also used to !ompile trade statisti!s and #or made in >>> labels that are atta!hed to produ!ts> This is !ompli!ated by globali'ation and the &ay a produ!t !an be pro!essed in several !ountries be#ore it is ready #or the mar=et> The <ules of #rigin (greement reBuires WTO members to ensure that their rules o# origin are transparentR that they do not have restri!ting distorting or disruptive e##e!ts on international tradeR that they are administered in a !onsistent uni#orm impartial and reasonable mannerR and that they are based on a positive standard ,in other &ords they should state &hat does confer origin rat$er t$an %$at does not&. For the longer term the agreement aims #or !ommon ,harmoni'ed1

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rules o# origin among all WTO members e<!ept in some =inds o# pre#erential trade D #or e<ample !ountries setting up a #ree trade area are allo&ed to use di##erent rules o# origin #or produ!ts traded under their #ree trade agreement> The agreement establishes a harmoni'ation &or= programme based upon a set o# prin!iples in!luding ma=ing rules o# origin obHe!tive understandable and predi!table> The &or= &as due to end in )uly (**- but several deadlines have been missed> 9t is being !ondu!ted by a 8ommittee on +ules o# Origin in the WTO and a Te!hni!al 8ommittee under the auspi!es o# the World 8ustoms Organi'ation in Grussels> The out!ome &ill be a single set o# rules o# origin to be applied under non3 pre#erential trading !onditions by all WTO members in all !ir!umstan!es> 5n anne< to the agreement sets out a !ommon de!laration dealing &ith the operation o# rules o# origin on goods &hi!h Buali#y #or pre#erential treatment> #) THE "EBS$TE: ! to!org * trade topics * goods * rules of origin

$n&estment measures: reducing trade distortions

The Trade2<elated $n&estment Measures AT<$MsB (greement applies only to measures that a##e!t trade in goods> 9t re!ogni'es that !ertain measures !an restri!t and distort trade and states that no member shall apply any measure that dis!riminates against #oreigners or #oreign produ!ts ,i>e> violates national treatment prin!iples in %5TT1> 9t also outla&s investment measures that lead to restri!tions in Buantities ,violating another prin!iple in %5TT1> 5n illustrative list o# T+97s agreed to be in!onsistent &ith these %5TT arti!les is appended to the agreement> The list in!ludes measures &hi!h reBuire parti!ular levels o# lo!al pro!urement by an enterprise ,lo!al !ontent reBuirements1> 9t also dis!ourages measures &hi!h limit a !ompanyFs imports or set targets #or the !ompany to e<port ,trade balan!ing reBuirements1> Under the agreement !ountries must in#orm #ello&3members through the WTO o# all investment measures that do not !on#orm &ith the agreement> :eveloped !ountries had to eliminate these in t&o years ,by the end o# (**.1R developing !ountries had #ive years ,to the end o# (***1R and least3developed !ountries seven> 9n )uly 200( the %oods 8oun!il agreed to e<tend this transition period #or a number o# reBuesting developing !ountries> The agreement establishes a 8ommittee on T+97s to monitor the implementation o# these !ommitments> The agreement also says that WTO members should !onsider by ( )anuary 2000 &hether there should also be provisions on investment poli!y and !ompetition poli!y> This dis!ussion is no& part o# the :oha :evelopment 5genda> #) THE "EBS$TE: ! to!org * trade topics * in&estment

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+5! 'lurilaterals: of minority interest

For the most part all WTO members subs!ribe to all WTO agreements> 5#ter the Uruguay +ound ho&ever there remained #our agreements originally negotiated in the To=yo +ound &hi!h had a narro&er group o# signatories and are =no&n as plurilateral agreements> 5ll other To=yo +ound agreements be!ame multilateral obligations ,i>e> obligations #or all WTO members1 &hen the World Trade Organi'ation &as established in (**"> The #our &ere$ 4 4 4 4 trade in !ivil air!ra#t government pro!urement dairy produ!ts bovine meat>

The bovine meat and dairy agreements &ere terminated in (**@>

Fair trade in ci&il aircraft

The (greement on Trade in Ci&il (ircraft entered into #or!e on ( )anuary (*-0> 9t no& has 30 signatories> The agreement eliminates import duties on all air!ra#t other than military air!ra#t as &ell as on all other produ!ts !overed by the agreement D !ivil air!ra#t engines and their parts and !omponents all !omponents and sub3assemblies o# !ivil air!ra#t and #light simulators and their parts and !omponents> 9t !ontains dis!iplines on government3dire!ted pro!urement o# !ivil air!ra#t and indu!ements to pur!hase as &ell as on government #inan!ial support #or the !ivil air!ra#t se!tor> #) THE "EBS$TE: ! to!org * trade topics * goods * ci&il aircraft

Go&ernment procurement: opening up for competition

9n most !ountries the government and the agen!ies it !ontrols are together the biggest pur!hasers o# goods o# all =inds ranging #rom basi! !ommodities to high3te!hnology eBuipment> 5t the same time the politi!al pressure to #avour domesti! suppliers over their #oreign !ompetitors !an be very strong> 5n (greement on Go&ernment 'rocurement &as #irst negotiated during the To=yo +ound and entered into #or!e on ( )anuary (*-(> 9ts purpose is to open up as mu!h o# this business as possible to international !ompetition> 9t is designed to ma=e la&s regulations pro!edures and pra!ti!es regarding government pro!urement more transparent and to ensure they do not prote!t domesti! produ!ts or suppliers or dis!riminate against #oreign produ!ts or suppliers> The agreement has 2- members> 9t has t&o elements D general rules and obligations and s!hedules o# national entities in ea!h member !ountry &hose pro!urement is subHe!t to the agreement> 5 large part o# the general rules and obligations !on!ern tendering pro!edures> The present agreement and !ommitments &ere negotiated in the Uruguay +ound> These negotiations a!hieved a (03#old e<pansion o# !overage e<tending international !ompetition to in!lude national and lo!al government entities &hose !olle!tive pur!hases are &orth

".

several hundred billion dollars ea!h year> The ne& agreement also e<tends !overage to servi!es ,in!luding !onstru!tion servi!es1 pro!urement at the sub3!entral level ,#or e<ample states provin!es departments and pre#e!tures1 and pro!urement by publi! utilities> The ne& agreement too= e##e!t on ( )anuary (**.> 9t also rein#or!es rules guaranteeing #air and non3dis!riminatory !onditions o# international !ompetition> For e<ample governments &ill be reBuired to put in pla!e domesti! pro!edures by &hi!h aggrieved private bidders !an !hallenge pro!urement de!isions and obtain redress in the event su!h de!isions &ere made in!onsistently &ith the rules o# the agreement> The agreement applies to !ontra!ts &orth more than spe!i#ied threshold values> For !entral government pur!hases o# goods and servi!es the threshold is S:+ (30 000 ,some X(-" 000 in )une 20031> For pur!hases o# goods and servi!es by sub3!entral government entities the threshold varies but is generally in the region o# S:+ 200 000> For utilities thresholds #or goods and servi!es is generally in the area o# S:+ 000 000 and #or !onstru!tion !ontra!ts in general the threshold value is S:+ " 000 000> #) THE "EBS$TE: ! to!org * trade topics * goods * go&ernment procurement

%airy and bo&ine meat agreements: ended in +,,4

The $nternational %airy (greement and $nternational Bo&ine Meat (greement &ere s!rapped at the end o# (**@> 8ountries that had signed the agreements de!ided that the se!tors &ere better handled under the 5gri!ulture and Sanitary and Phytosanitary agreements> Some aspe!ts o# their &or= had been handi!apped by the small number o# signatories> For e<ample some maHor e<porters o# dairy produ!ts did not sign the :airy 5greement and the attempt to !ooperate on minimum pri!es there#ore #ailed D minimum pri!ing &as suspended in (**">

"@

++! Trade policy re&ie s: ensuring transparency

9ndividuals and !ompanies involved in trade have to =no& as mu!h as possible about the !onditions o# trade> 9t is there#ore #undamentally important that regulations and poli!ies "hat is this are transparent> 9n the WTO this is a!hieved in t&o agreement called7 &ays$ governments have to in#orm the WTO and Trade Poli!y +evie& #ello&3members o# spe!i#i! measures poli!ies or la&s 7e!hanism through regular noti#i!ationsR and the WTO !ondu!ts regular revie&s o# individual !ountriesF trade poli!ies D the trade poli!y revie&s> These revie&s are part o# the Uruguay +ound agreement but they began several years be#ore the round ended D they &ere an early result o# the negotiations> Parti!ipants agreed to set up the revie&s at the :e!ember (*-ministerial meeting that &as intended to be the mid&ay assessment o# the Uruguay +ound> The #irst revie& too= pla!e the #ollo&ing year> 9nitially they operated under %5TT and li=e %5TT they #o!used on goods trade> With the !reation o# the WTO in (**" their s!ope &as e<tended li=e the WTO to in!lude servi!es and intelle!tual property> The importan!e !ountries atta!h to the pro!ess is re#le!ted in the seniority o# the Trade Poli!y +evie& Gody D it is the WTO %eneral 8oun!il in another guise> The obHe!tives are$ 4 4 4 to in!rease the transparen!y and understanding o# !ountriesF trade poli!ies and pra!ti!es through regular monitoring to improve the Buality o# publi! and intergovernmental debate on the issues to enable a multilateral assessment o# the e##e!ts o# poli!ies on the &orld trading system>

The revie&s #o!us on membersF o&n trade poli!ies and pra!ti!es> Gut they also ta=e into a!!ount the !ountriesF &ider e!onomi! and developmental needs their poli!ies and obHe!tives and the e<ternal e!onomi! environment that they #a!e> These peer revie&s by other WTO members en!ourage governments to #ollo& more !losely the WTO rules and dis!iplines and to #ul#il their !ommitments> 9n pra!ti!e the revie&s have t&o broad results$ they enable outsiders to understand a !ountryFs poli!ies and !ir!umstan!es and they provide #eedba!= to the revie&ed !ountry on its per#orman!e in the system> Over a period o# time all WTO members are to !ome under s!rutiny> The #reBuen!y o# the revie&s depends on the !ountryFs si'e$ 4 The #our biggest traders D the European Union the United States )apan and 8anada ,the Yuad1 D are e<amined appro<imately on!e every t&o years> The ne<t (. !ountries ,in terms o# their share o# &orld trade1 are revie&ed every #our years> The remaining !ountries are revie&ed every si< years &ith the possibility o# a longer interim period #or the least3developed !ountries>

4 4

For ea!h revie& t&o do!uments are prepared$ a poli!y statement by the government under revie& and a detailed report &ritten independently by the WTO Se!retariat> These t&o reports together &ith the pro!eedings o# the Trade Poli!y +evie& GodyFs meetings are published shortly a#ter&ards> #) THE "EBS$TE: ! to!org * trade topics * trade policy re&ie s

"-

8hapter 3

'anels
Panels are li=e tribunals> Gut unli=e in a normal tribunal the panellists are usually !hosen in !onsultation &ith the !ountries in dispute> Only i# the t&o sides !annot agree does the WTO dire!tor3general appoint them> Panels !onsist o# three ,possibly #ive1 e<perts #rom di##erent !ountries &ho e<amine the eviden!e and de!ide &ho is right and &ho is &rong> The panelFs report is passed to the :ispute Settlement Gody &hi!h !an only reHe!t the report by !onsensus> Panellists #or ea!h !ase !an be !hosen #rom a permanent list o# &ell3Buali#ied !andidates or #rom else&here> They serve in their individual !apa!ities> They !annot re!eive instru!tions #rom any government>

Settling disputes
The priority is to settle disputes not to pass Hudgement>
+! ( uniCue contribution
:ispute settlement is the !entral pillar o# the multilateral trading system and the WTOFs uniBue !ontribution to the stability o# the global e!onomy> Without a means o# settling disputes the rules3 based system &ould be less e##e!tive be!ause the rules !ould not be en#or!ed> The WTOFs pro!edure unders!ores the rule o# la& and it ma=es the trading system more se!ure and predi!table> The system is based on !learly3de#ined rules &ith timetables #or !ompleting a !ase> First rulings are made by a panel and endorsed ,or reHe!ted1 by the WTOFs #ull membership> 5ppeals based on points o# la& are possible> 6o&ever the point is not to pass Hudgement> The priority is to settle disputes through !onsultations i# possible> Gy )uly 200" only about (30 o# the 332 !ases had rea!hed the #ull panel pro!ess> 7ost o# the rest have either been noti#ied as settled out o# !ourt or remain in a prolonged !onsultation phase D some sin!e (**">

"hat is this agreement called7 Understanding on +ules and Pro!edures %overning the Settlement o# :isputes

'rinciples: eCuitable8 fast8 effecti&e8 mutually acceptable

More cases can be good ne s :isputes in the WTO are essentially about bro=en promises> WTO members have agreed that i# they believe #ello&3members are violating trade rules they &ill use the multilateral system o# settling disputes instead o# ta=ing a!tion unilaterally> That means abiding by the agreed pro!edures and respe!ting Hudgements> 5 dispute arises &hen one !ountry adopts a trade poli!y measure or ta=es some a!tion that one or more #ello&3WTO members !onsiders to be brea=ing the WTO agreements or to be a #ailure to live up to obligations> 5 third group o# !ountries !an de!lare that they have an interest in the !ase and enHoy some rights> 5 pro!edure #or settling disputes e<isted under the old %5TT but it had no #i<ed timetables rulings &ere easier to blo!= and many !ases dragged on #or a long time in!on!lusively> The Uruguay +ound agreement introdu!ed a more stru!tured pro!ess &ith more !learly de#ined stages in the pro!edure> 9t introdu!ed greater dis!ipline #or the length o# time a !ase should ta=e to be settled &ith #le<ible deadlines set in various stages o# the pro!edure> The agreement emphasi'es that prompt settlement is essential i# the WTO is to #un!tion e##e!tively> 9t sets out in !onsiderable detail the pro!edures and the timetable to be #ollo&ed in resolving disputes> 9# a !ase runs its #ull !ourse to a #irst ruling it should not normally ta=e more than about one year D (" months i# the !ase is appealed> The agreed time limits are #le<ible and i# the !ase is !onsidered urgent ,e>g> i# perishable goods are involved1 it is a!!elerated as mu!h as possible>
9# the !ourts #ind themselves handling an in!reasing number o# !riminal !ases does that mean la& and order is brea=ing do&nV Jot ne!essarily> Sometimes it means that people have more #aith in the !ourts and the rule o# la&> They are turning to the !ourts instead o# ta=ing the la& into their o&n hands> For the most part that is &hat is happening in the WTO> Jo one li=es to see !ountries Buarrel> Gut i# there are going to be trade disputes any&ay it is healthier that the !ases are handled a!!ording to internationally agreed rules> There are strong grounds #or arguing that the in!reasing number o# disputes is simply the result o# e<panding &orld trade and the stri!ter rules negotiated in the Uruguay +oundR and that the #a!t that more are !oming to the WTO re#le!ts a gro&ing #aith in the system>

"*

The Uruguay +ound agreement also made it impossible #or the !ountry losing a !ase to blo!= the adoption o# the ruling> Under the previous %5TT pro!edure rulings !ould only be adopted by !onsensus meaning that a single obHe!tion !ould blo!= the ruling> Jo& rulings are automati!ally adopted unless there is a !onsensus to reHe!t a ruling D any !ountry &anting to blo!= a ruling has to persuade all other WTO members ,in!luding its adversary in the !ase1 to share its vie&> 5lthough mu!h o# the pro!edure does resemble a !ourt or tribunal the pre#erred solution is #or the !ountries !on!erned to dis!uss their problems and settle the dispute by themselves> The #irst stage is there#ore !onsultations bet&een the governments !on!erned and even &hen the !ase has progressed to other stages !onsultation and mediation are still al&ays possible>

Ho

are disputes settled7

Settling disputes is the responsibility o# the :ispute Settlement Gody ,the %eneral 8oun!il in another guise1 &hi!h !onsists o# all WTO members> The :ispute Settlement Gody has the sole authority to establish panels o# e<perts to !onsider the !ase and to a!!ept or reHe!t the panelsF #indings or the results o# an appeal> 9t monitors the implementation o# the rulings and re!ommendations and has the po&er to authori'e retaliation &hen a !ountry does not !omply &ith a ruling> 4 First stage: consultation ,up to 15 days1> Ge#ore ta=ing any other a!tions the !ountries in dispute have to tal= to ea!h other to see i# they !an settle their di##eren!es by themselves> 9# that #ails they !an also as= the WTO dire!tor3general to mediate or try to help in any other &ay> Second stage: the panel ,up to 0/ days #or a panel to be appointed plus 1 months #or the panel to !on!lude1> 9# !onsultations #ail the !omplaining !ountry !an as= #or a panel to be appointed> The !ountry in the do!= !an blo!= the !reation o# a panel on!e but &hen the :ispute Settlement Gody meets #or a se!ond time the appointment !an no longer be blo!=ed ,unless there is a !onsensus against appointing the panel1> Ho long to settle a dispute7

O##i!ially the panel is helping the :ispute Settlement Gody ma=e rulings or re!ommendations> Gut be!ause the panelFs report !an only be reHe!ted by !onsensus in the :ispute Settlement Gody its !on!lusions are di##i!ult to overturn> The panelFs #indings have to be based on the agreements !ited> The panelFs #inal report should normally be given to the parties to the dispute &ithin si< months> 9n !ases o# urgen!y in!luding those !on!erning perishable goods the deadline is shortened to three months> The agreement des!ribes in some detail ho& the panels are to &or=> The main stages are$ 4 4

These appro<imate periods #or ea!h stage o# a dispute settlement pro!edure are target #igures D the agreement is #le<ible> 9n addition the !ountries !an settle their dispute themselves at any stage> Totals are also appro<imate> .0 days 0" days . months 3 &ee=s .0 days 8onsultations mediation et! Panel set up and panellists appointed Final panel report to parties Final panel report to WTO members :ispute Settlement Gody adopts report ,i# no appeal1

Total N + year A ithout appealB .0/*0 days 30 days Total N +y .m 5ppeals report :ispute Settlement Gody adopts appeals report A ith appealB

Before the first hearing$ ea!h side in the dispute presents its !ase in &riting to the panel> First hearing: the case for the complaining country and defence$ the !omplaining !ountry ,or !ountries1 the responding

.0

4 4

!ountry and those that have announ!ed they have an interest in the dispute ma=e their !ase at the panelFs #irst hearing> <ebuttals$ the !ountries involved submit &ritten rebuttals and present oral arguments at the panelFs se!ond meeting> E?perts$ i# one side raises s!ienti#i! or other te!hni!al matters the panel may !onsult e<perts or appoint an e<pert revie& group to prepare an advisory report> First draft$ the panel submits the des!riptive ,#a!tual and argument1 se!tions o# its report to the t&o sides giving them t&o &ee=s to !omment> This report does not in!lude #indings and !on!lusions> $nterim report$ The panel then submits an interim report in!luding its #indings and !on!lusions to the t&o sides giving them one &ee= to as= #or a revie&> <e&ie $ The period o# revie& must not e<!eed t&o &ee=s> :uring that time the panel may hold additional meetings &ith the t&o sides> Final report$ 5 #inal report is submitted to the t&o sides and three &ee=s later it is !ir!ulated to all WTO members> 9# the panel de!ides that the disputed trade measure does brea= a WTO agreement or an obligation it re!ommends that the measure be made to !on#orm &ith WTO rules> The panel may suggest ho& this !ould be done> The report becomes a ruling$ The report be!omes the :ispute Settlement GodyFs ruling or re!ommendation &ithin .0 days unless a !onsensus reHe!ts it> Goth sides !an appeal the report ,and in some !ases both sides do1>

(ppeals
Either side !an appeal a panelFs ruling> Sometimes both sides do so> 5ppeals have to be based on points o# la& su!h as legal interpretation D they !annot ree<amine e<isting eviden!e or e<amine ne& issues> Ea!h appeal is heard by three members o# a permanent seven3 member 5ppellate Gody set up by the :ispute Settlement Gody and broadly representing the range o# WTO membership> 7embers o# the 5ppellate Gody have #our3year terms> They have to be individuals &ith re!ogni'ed standing in the #ield o# la& and international trade not a##iliated &ith any government> The appeal !an uphold modi#y or reverse the panelFs legal #indings and !on!lusions> Jormally appeals should not last more than .0 days &ith an absolute ma<imum o# *0 days> The :ispute Settlement Gody has to a!!ept or reHe!t the appeals report &ithin 30 days D and reHe!tion is only possible by !onsensus>

The case has been decided:

hat ne?t7

%o dire!tly to Hail> :o not pass %o do not !olle!t \ > Well not e<a!tly> Gut the sentiments apply> 9# a !ountry has done something &rong it should s&i#tly !orre!t its #ault> 5nd i# it !ontinues to brea= an agreement it should o##er !ompensation or su##er a suitable penalty that has some bite> Even on!e the !ase has been de!ided there is more to do be#ore

.(

trade san!tions ,the !onventional #orm o# penalty1 are imposed> The priority at this stage is #or the losing de#endant to bring its poli!y into line &ith the ruling or re!ommendations> The dispute settlement agreement stresses that prompt !omplian!e &ith re!ommendations or rulings o# the :SG K:ispute Settlement GodyM is essential in order to ensure e##e!tive resolution o# disputes to the bene#it o# all 7embers> 9# the !ountry that is the target o# the !omplaint loses it must #ollo& the re!ommendations o# the panel report or the appeals report> 9t must state its intention to do so at a :ispute Settlement Gody meeting held &ithin 30 days o# the reportFs adoption> 9# !omplying &ith the re!ommendation immediately proves impra!ti!al the member &ill be given a reasonable period o# time to do so> 9# it #ails to a!t &ithin this period it has to enter into negotiations &ith the !omplaining !ountry ,or !ountries1 in order to determine mutually3a!!eptable !ompensation D #or instan!e tari## redu!tions in areas o# parti!ular interest to the !omplaining side> 9# a#ter 20 days no satis#a!tory !ompensation is agreed the !omplaining side may as= the :ispute Settlement Gody #or permission to impose limited trade san!tions ,suspend !on!essions or obligations1 against the other side> The :ispute Settlement Gody must grant this authori'ation &ithin 30 days o# the e<piry o# the reasonable period o# time unless there is a !onsensus against the reBuest> 9n prin!iple the san!tions should be imposed in the same se!tor as the dispute> 9# this is not pra!ti!al or i# it &ould not be e##e!tive the san!tions !an be imposed in a di##erent se!tor o# the same agreement> 9n turn i# this is not e##e!tive or pra!ti!able and i# the !ir!umstan!es are serious enough the a!tion !an be ta=en under another agreement> The obHe!tive is to minimi'e the !han!es o# a!tions spilling over into unrelated se!tors &hile at the same time allo&ing the a!tions to be e##e!tive> 9n any !ase the :ispute Settlement Gody monitors ho& adopted rulings are implemented> 5ny outstanding !ase remains on its agenda until the issue is resolved> [ See also %oha (genda negotiations

.2

-! The panel process

The various stages a dispute !an go through in the WTO> 5t all stages !ountries in dispute are en!ouraged to !onsult ea!h other in order to settle out o# !ourt> 5t all stages the WTO dire!tor3general is available to o##er his good o##i!es to mediate or to help a!hieve a !on!iliation> )ote' some spe!i#ied times are ma<imums some are minimums some binding some not
Consultations ,5rt> 01 .0 days by 2nd :SG meeting 'anel established by :ispute Settlement Gody ,:SG1 ,5rt> .1 Terms of reference ,5rt> @1 Composition ,5rt> -1 %uring all stages good o##i!es !on!iliation or mediation ,5rt> "1

0/20 days 20 days ,P(0 i# :ire!tor3%eneral as=ed to pi!= panel1

'anel e?amination Jormally 2 meetings &ith parties ,5rt> (21 ( meeting &ith third parties ,5rt> (01

E?pert re&ie group ,5rt> (3R 5ppendi< 01

$nterim re&ie stage %escripti&e part of report sent to parties #or !omment ,5rt> (">(1 $nterim report sent to parties #or !omment ,5rt (">21

<e&ie meeting ith panel upon reBuest ,5rt> (">21

)#TE$ a panel !an be Z!omposedF ,i>e> panellists !hosen1 up to about 30 days a#ter its ZestablishmentF ,i>e> a#ter :SGFs de!ision to have a panel

. months #rom panelFs !omposition 3 months i# urgent

'anel report issued to parties ,5rt> (2>-R 5ppendi< 3 par (2,H11

up to * months #rom panelFs establishment

'anel report issued to :SG ,5rt> (2>*R 5ppendi< 3 par (2,=11 (ppellate re&ie ,5rt> (.>0 and (@1

ma< *0 days

.0 days #or panel %SB adopts panel/appellate reportAsB report unless in!luding any !hanges to panel report made by appellate appealed \ report ,5rt> (.>( (.>0 and (@>(01 ;<E(S#)(BLE 'E<$#% #F T$ME9$ determined by$ member proposes :SG agreesR or parties in dispute agreeR or arbitrator ,appro< (" months i# by arbitrator1

$mplementation report by losing party o# proposed implementation &ithin Zreasonable period o# timeF ,5rt> 2(>31

$n cases of non2implementation parties negotiate !ompensation pending #ull implementation ,5rt> 22>21

T#T(L F#< <E'#<T (%#'T$#)$ \ 30 days #or Usually up to appellate report * months ,no appeal1 or %ispute o&er (2 months ,&ith implementation: appeal1 #rom Pro!eedings possible establishment o# in!luding re#erral to initial panel to adoption panel on implementation o# report ,5rt>201 ,5rt> 2(>"1 *0 days 'ossibility of arbitration on level o# suspension pro!edures and prin!iples o# retaliation ,5rt> 22>. and 22>@1

30 days a#ter Zreasonable periodF e<pires

<etaliation 9# no agreement on !ompensation :SG authori'es retaliation pending #ull implementation ,5rt> 221 Cross2retaliation$ same se!tor other se!tors other agreements ,5rt> 22>31

.3

.! Case study: the timetable in practice

On 23 )anuary (**" Nene'uela !omplained to the :ispute Settlement Gody that the United States &as applying rules that dis!riminated against gasoline imports and #ormally reBuested !onsultations &ith the United States> )ust over a year later ,on 2* )anuary (**.1 the dispute panel !ompleted its #inal report> ,Gy then Gra'il had Hoined the !ase lodging its o&n !omplaint in 5pril (**.> The same panel !onsidered both !omplaints>1 The United States appealed> The 5ppellate Gody !ompleted its report and the :ispute Settlement Gody adopted the report on 20 7ay (**. one year and #our months a#ter the !omplaint &as #irst lodged> The United States and Nene'uela then too= si< and a hal# months to agree on &hat the United States should do> The agreed period #or implementing the solution &as (" months #rom the date the appeal &as !on!luded ,20 7ay (**. to 20 5ugust (**@1> The !ase arose be!ause the United States applied stri!ter rules on the !hemi!al !hara!teristi!s o# imported gasoline than it did #or domesti!ally3re#ined gasoline> Nene'uela ,and later Gra'il1 said this &as un#air be!ause US gasoline did not have to meet the same standards D it violated the national treatment prin!iple and !ould not be Husti#ied under e<!eptions to normal WTO rules #or health and environmental !onservation measures> The dispute panel agreed &ith Nene'uela and Gra'il> The appeal report upheld the panelFs !on!lusions ,ma=ing some !hanges to the panelFs legal interpretation1> The United States agreed &ith Nene'uela that it &ould amend its regulations &ithin (" months and on 2. 5ugust (**@ it reported to the :ispute Settlement Gody that a ne& regulation had been signed on (* 5ugust>

.0

Time ,0 U start o# !ase1 /" years /0 months 0

Target/ actual period

%ate (**0 September (**0

(ction US 8lean 5ir 5!t amended US restri!ts gasoline imports under 8lean 5ir 5!t Nene'uela !omplains to :ispute Settlement Gody as=s #or !onsultation &ith US 8onsultations ta=e pla!e> Fail> Nene'uela as=s :ispute Settlement Gody #or a panel :ispute Settlement Gody agrees to appoint panel> US does not blo!=> ,Gra'il starts !omplaint reBuests !onsultation &ith US>1 Panel appointed> ,3( 7ay panel assigned to Gra'ilian !omplaint as &ell1 Panel meets Panel gives interim report to US Nene'uela and Gra'il #or !omment Panel !ir!ulates #inal report to :ispute Settlement Gody US appeals 5ppellate Gody submits report :ispute Settlement Gody adopts panel and appeal reports US and Nene'uela agree on &hat US should do ,implementation period is (" months #rom 20 7ay1 US ma=es #irst o# monthly reports to :ispute Settlement Gody on status o# implementation US signs ne& regulation ,(*th1> End o# agreed implementation period ,20th1

() days*

23 )anuary (**"

P( month P2 months P2] months

20 February (**" 2" 7ar!h (**" (0 5pril (**"

+) days*

P3 months

2- 5pril (**"

P. months P(( months P( year P( year ( month P( year 3 months P( year 0 months P( year (0] months P( year ((] months P2 years @ months

, mont$s -target is (.,&

(0/(2 )uly and (3/(" )uly (**" (( :e!ember (**" 2* )anuary (**. 2( February (**. 2* 5pril (**. 20 7ay (**. 3 :e!ember (**. * )anuary (**@ (*320 5ugust (**@

/() days* /+) days*

#) THE "EBS$TE: ! to!org * trade topics * dispute settlement

."

8hapter 0

Cross2cutting and ne issues

SubHe!ts that !ut a!ross the agreements and some ne&er agenda items
The WTOFs &or= is not !on#ined to spe!i#i! agreements &ith spe!i#i! obligations> 7ember governments also dis!uss a range o# other issues usually in spe!ial !ommittees or &or=ing groups> Some are old some are ne& to the %5TT3WTO system> Some are issues in their o&n right some !ut a!ross several WTO topi!s> Some !ould lead to negotiations> They in!lude$ 4 4 4 4 4 4 regional e!onomi! groupings trade and the environment trade and investment !ompetition poli!y transparen!y in government pro!urement trade #a!ilitation ,simpli#ying trade pro!edures ma=ing trade #lo& more smoothly through means that go beyond the removal o# tari## and non3tari## barriers1 ele!troni! !ommer!e

One other topi! has been dis!ussed a lot in the WTO #rom time to time> 9t is$ 4 trade and labour rights

This is not on the WTOFs &or= agenda but be!ause it has re!eived a lot o# attention it is in!luded here to !lari#y the situation>

..

+! <egionalism: friends or ri&als7

The European Union the Jorth 5meri!an Free Trade 5greement the 5sso!iation o# Southeast 5sian Jations the South 5sian 5sso!iation #or +egional 8ooperation the 8ommon 7ar=et o# the South ,7E+8OSU+1 the 5ustralia3Je& Lealand 8loser E!onomi! +elations 5greement and so on> Gy )uly 200" only one WTO member D 7ongolia D &as not party to a regional trade agreement> The surge in these agreements has !ontinued unabated sin!e the early (**0s> Gy )uly 200" a total o# 330 had been noti#ied to the WTO ,and its prede!essor %5TT1> O# these$ 20. &ere noti#ied a#ter the WTO &as !reated in )anuary (**"R (-0 are !urrently in #or!eR several others are believed to be operational although not yet noti#ied> One o# the most #reBuently as=ed Buestions is &hether these regional groups help or hinder the WTOFs multilateral trading system> 5 !ommittee is =eeping an eye on developments>

<egional trading arrangements

They seem to be !ontraditory but o#ten regional trade agreements !an a!tually support the WTOFs multilateral trading system> +egional agreements have allo&ed groups o# !ountries to negotiate rules and !ommitments that go beyond &hat &as possible at the time multilaterally> 9n turn some o# these rules have paved the &ay #or agreement in the WTO> Servi!es intelle!tual property environmental standards investment and !ompetition poli!ies are all issues that &ere raised in regional negotiations and later developed into agreements or topi!s o# dis!ussion in the WTO> The groupings that are important #or the WTO are those that abolish or redu!e barriers on trade &ithin the group> The WTO agreements re!ogni'e that regional arrangements and !loser e!onomi! integration !an bene#it !ountries> 9t also re!ogni'es that under some !ir!umstan!es regional trading arrangements !ould hurt the trade interests o# other !ountries> Jormally setting up a !ustoms union or #ree trade area &ould violate the WTOFs prin!iple o# eBual treatment #or all trading partners ,most3#avoured3nation1> Gut G(TT9s (rticle -0 allo&s regional trading arrangements to be set up as a spe!ial e<!eption provided !ertain stri!t !riteria are met> 9n parti!ular the arrangements should help trade #lo& more #reely among the !ountries in the group &ithout barriers being raised on trade &ith the outside &orld> 9n other &ords regional integration should !omplement the multilateral trading system and not threaten it> 5rti!le 20 says i# a #ree trade area or !ustoms union is !reated duties and other trade barriers should be redu!ed or removed on substantially all se!tors o# trade in the group> Jon3members should not #ind trade &ith the group any more restri!tive than be#ore the group &as set up> Similarly 5rti!le " o# the %eneral 5greement on Trade in Servi!es provides #or e!onomi! integration agreements in servi!es> Other provisions in the WTO agreements allo& developing !ountries to enter into regional or global agreements that in!lude the redu!tion or elimination o# tari##s and non3tari## barriers on trade among

.@

themselves> On . February (**. the WTO %eneral 8oun!il !reated the <egional Trade (greements Committee> 9ts purpose is to e<amine regional groups and to assess &hether they are !onsistent &ith WTO rules> The !ommittee is also e<amining ho& regional arrangements might a##e!t the multilateral trading system and &hat the relationship bet&een regional and multilateral arrangements might be> #) THE "EBS$TE: ! to!org * trade topics * goods * regional trade agreements [ See also %oha (genda negotiations

.-

-! The en&ironment: a specific concern

The WTO has no spe!i#i! agreement dealing &ith the environment> 6o&ever a number o# the WTO agreements in!lude provisions dealing &ith environmental !on!erns> The obHe!tives o# sustainable development and environmental prote!tion are stated in the preamble to the 5greement Establishing the WTO> The in!reased emphasis on environmental poli!ies is relatively re!ent> 5t the end o# the Uruguay +ound in (**0 trade ministers #rom parti!ipating !ountries de!ided to begin a !omprehensive &or= programme on trade and environment in the WTO> They !reated the Trade and En&ironment Committee> This has brought environmental and sustainable development issues into the mainstream o# WTO &or=>

;Green9 pro&isions
E<amples o# provisions in the WTO agreements dealing &ith environmental issues 4 G(TT 5rti!le 20$ poli!ies a##e!ting trade in goods #or prote!ting human animal or plant li#e or health are e<empt #rom normal %5TT dis!iplines under !ertain !onditions> 4 Technical Barriers to Trade ,i>e> produ!t and industrial standards1 and Sanitary and 'hytosanitary Measures ,animal and plant health and hygiene1$ e<pli!it re!ognition o# environmental obHe!tives> 4 (griculture$ environmental programmes e<empt #rom !uts in subsidies 4 Subsidies and Counter&ail$ allo&s subsidies up to 20T o# #irmsF !osts #or adapting to ne& environmental la&s> 4 $ntellectual property$ governments !an re#use to issue patents that threaten human animal or plant li#e or health or ris= serious damage to the environment ,T+9PS 5rti!le 2@1> 4 G(TS 5rti!le (0$ poli!ies a##e!ting trade in servi!es #or prote!ting human animal or plant li#e or health are e<empt #rom normal %5TS dis!iplines under !ertain !onditions>

The committee: broad2based responsibility

The !ommittee has a broad3based responsibility !overing all areas o# the multilateral trading system D goods servi!es and intelle!tual property> 9ts duties are to study the relationship bet&een trade and the environment and to ma=e re!ommendations about any !hanges that might be needed in the trade agreements> The !ommitteeFs &or= is based on t&o important prin!iples$ 4 The WTO is only !ompetent to deal &ith trade> 9n other &ords in environmental issues its only tas= is to study Buestions that arise &hen environmental poli!ies have a signi#i!ant impa!t on trade> The WTO is not an environmental agen!y> 9ts members do not &ant it to intervene in national or international environmental poli!ies or to set environmental standards> Other agen!ies that spe!iali'e in environmental issues are better Buali#ied to underta=e those tas=s> 9# the !ommittee does identi#y problems its solutions must !ontinue to uphold the prin!iples o# the WTO trading system>

7ore generally WTO members are !onvin!ed that an open eBuitable and non3dis!riminatory multilateral trading system has a =ey !ontribution to ma=e to national and international e##orts to better prote!t and !onserve environmental resour!es and promote sustainable development> This &as re!ogni'ed in the results o# the (**2 UJ 8on#eren!e on Environment and :evelopment in +io ,the Earth Summit1 and its 2002 su!!essor the World Summit on Sustainable :evelopment in )ohannesburg> The !ommitteeFs &or= programme #o!uses on (0 areas> 9ts agenda is driven by proposals #rom individual WTO members on issues o# importan!e to them> The #ollo&ing se!tions outline some o# the issues and &hat the !ommittee has !on!luded so #ar$

"T# and en&ironmental agreements: ho related7

are they

6o& do the WTO trading system and green trade measures relate to ea!h otherV What is the relationship bet&een the WTO agreements and various international environmental agreements and !onventionsV

.*

There are about 200 international agreements ,outside the WTO1 dealing &ith various environmental issues !urrently in #or!e> They are !alled multilateral environmental agreements ,7E5s1> 5bout 20 o# these in!lude provisions that !an a##e!t trade$ #or e<ample they ban trade in !ertain produ!ts or allo& !ountries to restri!t trade in !ertain !ir!umstan!es> 5mong them are the 7ontreal Proto!ol #or the prote!tion o# the o'one layer the Gasel 8onvention on the trade or transportation o# ha'ardous &aste a!ross international borders and the 8onvention on 9nternational Trade in Endangered Spe!ies ,89TES1> Grie#ly the WTOFs !ommittee says the basi! WTO prin!iples o# non3 dis!rimination and transparen!y do not !on#li!t &ith trade measures needed to prote!t the environment in!luding a!tions ta=en under the environmental agreements> 9t also notes that !lauses in the agreements on goods servi!es and intelle!tual property allo& governments to give priority to their domesti! environmental poli!ies> The WTOFs !ommittee says the most e##e!tive &ay to deal &ith international environmental problems is through the environmental agreements> 9t says this approa!h !omplements the WTOFs &or= in see=ing internationally agreed solutions #or trade problems> 9n other &ords using the provisions o# an international environmental agreement is better than one !ountry trying on its o&n to !hange other !ountriesF environmental poli!ies ,see s$rimp turtle and dolp$in tuna case studies1> The !ommittee notes that a!tions ta=en to prote!t the environment and having an impa!t on trade !an play an important role in some environmental agreements parti!ularly &hen trade is a dire!t !ause o# the environmental problems> Gut it also points out that trade restri!tions are not the only a!tions that !an be ta=en and they are not ne!essarily the most e##e!tive> 5lternatives in!lude$ helping !ountries a!Buire environmentally3#riendly te!hnology giving them #inan!ial assistan!e providing training et!> The problem should not be e<aggerated> So #ar no a!tion a##e!ting trade and ta=en under an international environmental agreement has been !hallenged in the %5TT3WTO system> There is also a &idely held vie& that a!tions ta=en under an environmental agreement are unli=ely to be!ome a problem in the WTO i# the !ountries !on!erned have signed the environmental agreement although the Buestion is not settled !ompletely> The Trade and Environment 8ommittee is more !on!erned about &hat happens &hen one !ountry invo=es an environmental agreement to ta=e a!tion against another !ountry that has not signed the environmental agreement> [ See also %oha (genda negotiations

( Hey Cuestion
9# one !ountry believes another !ountryFs trade damages the environment &hat !an it doV 8an it restri!t the other !ountryFs tradeV 9# it !an under &hat !ir!umstan!esV 5t the moment there are no de#initive legal interpretations largely be!ause the Buestions have not yet been tested in a legal dispute either inside or outside the WTO> Gut the !ombined result o# the WTOFs trade agreements and environmental agreements outside the WTO suggest$ (> First8 cooperate$ The !ountries !on!erned should try to !ooperate to prevent environmental damage> 2> The complaining country can act Ae!g! on importsB to protect its o n domestic en&ironment8 but it cannot discriminate> Under the WTO agreements standards ta<es or other measures applied to imports #rom the other !ountry must also apply eBually to the !omplaining !ountryFs o&n produ!ts ,national treatment1 and imports #rom all other !ountries ,most3#avoured3 nation1> 3> $f the other country has also signed an en&ironment agreement then &hat ever a!tion the !omplaining !ountry ta=es is probably not the WTOFs !on!ern> 0> "hat if the other country has not signed7 6ere the situation is un!lear and the subHe!t o# debate> Some environmental agreements say !ountries that have signed the agreement should apply the agreement even to goods and servi!es #rom !ountries that have not> Whether this &ould brea= the WTO agreements remains untested be!ause so #ar no dispute o# this =ind has been brought to the WTO> One proposed &ay to !lari#y the situation &ould be to re&rite the rules to ma=e !lear that !ountries !an in some !ir!umstan!es !ite an environmental agreement &hen they ta=e a!tion a##e!ting the trade o# a !ountry that has not signed> 8riti!s say this &ould allo& some !ountries to #or!e their environmental standards on others> "> "hen the issue is not co&ered by an en&ironmental agreement8 "T# rules apply> The WTO agreements are interpreted to say t&o important things> First trade restri!tions !annot be imposed on a produ!t purely be!ause o# the &ay it has been produ!ed> Se!ond one !ountry !annot rea!h out beyond its o&n territory to impose its standards on another !ountry>

%isputes:

here should they be handled7

Suppose a trade dispute arises be!ause a !ountry has ta=en a!tion on trade ,#or e<ample imposed a ta< or restri!ted imports1 under an environmental agreement outside the WTO and another !ountry obHe!ts> Should the dispute be handled under the WTO or under the other agreementV The Trade and Environment 8ommittee says that i# a dispute arises over a trade a!tion ta=en under an environmental agreement and i# both sides to the dispute have signed that agreement then they should try to use the environmental agreement to settle the dispute> Gut i# one side in the dispute has not signed

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the environment agreement then the WTO &ould provide the only possible #orum #or settling the dispute> The pre#eren!e #or handling disputes under the environmental agreements does not mean environmental issues &ould be ignored in WTO disputes> The WTO agreements allo& panels e<amining a dispute to see= e<pert advi!e on environmental issues>

"H(T THE (''ELL(TE B#%I S($%

;!!! "e ha&e not decided that the so&ereign nations that are members of the "T# cannot adopt effecti&e measures to protect endangered species8 such as sea turtles! Clearly8 they can and should! !!!9

( "T# dispute: The ;shrimp2turtle9 case

This &as a !ase brought by 9ndia 7alaysia Pa=istan and Thailand against the US> The appellate and panel reports &ere adopted on . Jovember (**-> The o##i!ial title is United States D 9mport Prohibition o# 8ertain Shrimp and Shrimp Produ!ts the o##i!ial WTO !ase numbers are "- and .(>

What &as it all aboutV

Seven spe!ies o# sea turtles have been identi#ied> They are distributed around the &orld in subtropi!al and tropi!al areas> They spend their lives at sea &here they migrate bet&een their #oraging and nesting grounds> Sea turtles have been adversely a##e!ted by human a!tivity either dire!tly ,their meat shells and eggs have been e<ploited1 or indire!tly ,in!idental !apture in #isheries destroyed habitats polluted o!eans1> 9n early (**@ 9ndia 7alaysia Pa=istan and Thailand brought a Hoint !omplaint against a ban imposed by the US on the importation o# !ertain shrimp and shrimp produ!ts> The prote!tion o# sea turtles &as at the heart o# the ban> The US Endangered Spe!ies 5!t o# (*@3 listed as endangered or threatened the #ive spe!ies o# sea turtles that o!!ur in US &aters and prohibited their ta=e &ithin the US in its territorial sea and the high seas> ,Ta=e means harassment hunting !apture =illing or attempting to do any o# these>1 Under the a!t the US reBuired US shrimp tra&lers to use turtle e<!luder devi!es ,TE:s1 in their nets &hen #ishing in areas &here there is a signi#i!ant li=elihood o# en!ountering sea turtles> Se!tion .0* o# US Publi! 2a& (0(/(02 ena!ted in (*-* dealt &ith imports> 9t said among other things that shrimp harvested &ith te!hnology that may adversely a##e!t !ertain sea turtles may not be imported into the US D unless the harvesting nation &as !erti#ied to have a regulatory programme and an in!idental ta=e3rate !omparable to that o# the US or that the parti!ular #ishing environment o# the harvesting nation did not pose a threat to sea turtles> 9n pra!ti!e !ountries that had any o# the #ive spe!ies o# sea turtles &ithin their Hurisdi!tion and harvested shrimp &ith me!hani!al means had to impose on their #ishermen reBuirements !omparable to those borne by US shrimpers i# they &anted to be !erti#ied to e<port shrimp produ!ts to the US> Essentially this meant the use o# TE:s at all times>

Legally speaHing !!!

The panel !onsidered that the ban imposed by the US &as in!onsistent &ith %5TT 5rti!le (( ,&hi!h limits the use o# import prohibitions or restri!tions1 and !ould not be Husti#ied under %5TT 5rti!le 20 ,&hi!h deals &ith general e<!eptions to the rules in!luding #or !ertain environmental reasons1> Follo&ing an appeal the 5ppellate Gody #ound that the measure at sta=e did Buali#y #or provisional Husti#i!ation under 5rti!le 20,g1 but #ailed to meet the reBuirements o# the !hapeau ,the introdu!tory paragraph1 o# 5rti!le 20 ,&hi!h de#ines &hen the general e<!eptions !an be !ited1> The 5ppellate Gody there#ore !on!luded that the US measure &as not Husti#ied under 5rti!le 20 o# %5TT ,stri!tly spea=ing %5TT (**0 i>e> the !urrent version o# the %eneral 5greement on Tari##s and Trade as modi#ied by the (**0 Uruguay +ound agreement1> 5t the reBuest o# 7alaysia the original panel in this !ase !onsidered the measures ta=en by the United States to !omply &ith the re!ommendations and rulings o# the :ispute Settlement Gody> The panel report #or this re!ourse &as appealed by 7alaysia> The 5ppellate Gody upheld the panel^s #indings that the US measure &as no& applied in a manner that met the reBuirements o# 5rti!le 20 o# the %5TT (**0

@(

The ruling
9n its report the 5ppellate Gody made !lear that under WTO rules !ountries have the right to ta=e trade a!tion to prote!t the environment ,in parti!ular human animal or plant li#e and health1 and endangered spe!ies and e<haustible resour!es1> The WTO does not have to allo& them this right> 9t also said measures to prote!t sea turtles &ould be legitimate under %5TT 5rti!le 20 &hi!h deals &ith various e<!eptions to the WTOFs trade rules provided !ertain !riteria su!h as non3dis!rimination &ere met> The US lost the !ase not be!ause it sought to prote!t the environment but be!ause it dis!riminated bet&een WTO members> 9t provided !ountries in the &estern hemisphere D mainly in the 8aribbean D te!hni!al and #inan!ial assistan!e and longer transition periods #or their #ishermen to start using turtle3e<!luder devi!es> 9t did not give the same advantages ho&ever to the #our 5sian !ountries ,9ndia 7alaysia Pa=istan and Thailand1 that #iled the !omplaint &ith the WTO> The ruling also said WTO panels may a!!ept ami!us brie#s ,#riends3 o#3the3!ourt submissions1 #rom J%Os or other interested parties>

ZWhat &e have not de!ided >>>F

This is part o# &hat the 5ppellate Gody said$ (-"> 9n rea!hing these !on!lusions &e &ish to unders!ore &hat &e have not de!ided in this appeal> We have not de!ided that the prote!tion and preservation o# the environment is o# no signi#i!an!e to the 7embers o# the WTO> 8learly it is> We have not de!ided that the sovereign nations that are 7embers o# the WTO !annot adopt e##e!tive measures to prote!t endangered spe!ies su!h as sea turtles> 8learly they !an and should> 5nd &e have not de!ided that sovereign states should not a!t together bilaterally plurilaterally or multilaterally either &ithin the WTO or in other international #ora to prote!t endangered spe!ies or to other&ise prote!t the environment> 8learly they should and do> (-.> What &e have de!ided in this appeal is simply this$ although the measure o# the United States in dispute in this appeal serves an environmental obHe!tive that is re!ogni'ed as legitimate under paragraph ,g1 o# 5rti!le __ Ki>e> 20M o# the %5TT (**0 this measure has been applied by the United States in a manner &hi!h !onstitutes arbitrary and unHusti#iable dis!rimination bet&een 7embers o# the WTO !ontrary to the reBuirements o# the !hapeau o# 5rti!le __> For all o# the spe!i#i! reasons outlined in this +eport this measure does not Buali#y #or the e<emption that 5rti!le __ o# the %5TT (**0 a##ords to measures &hi!h serve !ertain re!ogni'ed legitimate environmental purposes but &hi!h at the same time are not applied in a manner that !onstitutes a means o# arbitrary or unHusti#iable dis!rimination bet&een !ountries &here the same !onditions prevail or a disguised restri!tion on international trade> 5s &e emphasi'ed in United States D %asoline Kadopted 20 7ay (**. WTA:S2A5GA+ p> 30M WTO 7embers are #ree to adopt their o&n poli!ies aimed at prote!ting the environment as long as in so doing they #ul#ill their obligations and respe!t the rights o# other 7embers under the WTO 5greement>

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( G(TT dispute: The tuna2dolphin dispute

This !ase still attra!ts a lot o# attention be!ause o# its impli!ations #or environmental disputes> 9t &as handled under the old %5TT dispute settlement pro!edure> Wey Buestions are$

'S! The report

as ne&er adopted

Under the present WTO system i# WTO members ,meeting as the :ispute Settlement Gody1 do not by !onsensus reHe!t a panel report a#ter .0 days it is automati!ally a!!epted ,adopted1> That &as not the !ase under the old %5TT> 7e<i!o de!ided not to !an one !ountry tell another &hat its environmental regulations should beV pursue and the !ase and the panel report &as never adopted even though some o# the intermediary !ountries pressed #or its o# the do trade rules permit a!tion to be ta=en against the method used to produ!e goods ,rather than the Buality adoption> 7e<i!o and the United States held goods themselves1V their o&n bilateral !onsultations aimed at rea!hing agreement outside %5TT> 9n (**2 the European Union lodged its o&n !omplaint> This led to a se!ond panel report !ir!ulated to %5TT members in mid (**0> The report upheld some o# the #indings o# the #irst panel and modi#ied others> 5lthough the European Union and other !ountries pressed #or the report to be adopted the United States told a series o# meetings o# the %5TT 8oun!il and the #inal meeting o# %5TT 8ontra!ting Parties ,i>e> members1 that it had not had time to !omplete its studies o# the report> There &as there#ore no !onsensus to adopt the report a reBuirement under the old %5TT system> On ( )anuary (**" %5TT made &ay #or the WTO>

What &as it all aboutV

9n eastern tropi!al areas o# the Pa!i#i! O!ean s!hools o# yello&#in tuna o#ten s&im beneath s!hools o# dolphins> When tuna is harvested &ith purse seine nets dolphins are trapped in the nets> They o#ten die unless they are released> The US 7arine 7ammal Prote!tion 5!t sets dolphin prote!tion standards #or the domesti! 5meri!an #ishing #leet and #or !ountries &hose #ishing boats !at!h yello&#in tuna in that part o# the Pa!i#i! O!ean> 9# a !ountry e<porting tuna to the United States !annot prove to US authorities that it meets the dolphin prote!tion standards set out in US la& the US government must embargo all imports o# the #ish #rom that !ountry> 9n this dispute 7e<i!o &as the e<porting !ountry !on!erned> 9ts e<ports o# tuna to the US &ere banned> 7e<i!o !omplained in (**( under the %5TT dispute settlement pro!edure> The embargo also applies to intermediary !ountries handling the tuna en route #rom 7e<i!o to the United States> O#ten the tuna is pro!essed and !anned in an one o# these !ountries> 9n this dispute the intermediary !ountries #a!ing the embargo &ere 8osta +i!a 9taly )apan and Spain and earlier Fran!e the Jetherlands 5ntilles and the United Wingdom> Others in!luding 8anada 8olombia the +epubli! o# Worea and members o# the 5sso!iation o# Southeast 5sian Jations ,5SE5J1 &ere also named as intermediaries>

The panel
7e<i!o as=ed #or a panel in February (**(> 5 number o# intermediary !ountries also e<pressed an interest> The panel reported to %5TT members in September (**(> 9t !on!luded$ that the US !ould not embargo imports o# tuna produ!ts #rom 7e<i!o simply be!ause 7e<i!an regulations on the &ay tuna &as produ!ed did not satis#y US regulations> ,Gut the US !ould apply its regulations on the Buality or !ontent o# the tuna imported>1 This has be!ome =no&n as a produ!t versus pro!ess issue> that %5TT rules did not allo& one !ountry to ta=e trade a!tion #or the purpose o# attempting to en#or!e its o&n domesti! la&s in another !ountry D even to prote!t animal health or e<haustible natural resour!es> The term used here is e<tra3territoriality>

What &as the reasoning behind this rulingV 9# the US arguments &ere a!!epted then any !ountry !ould ban imports o# a produ!t #rom another !ountry merely be!ause the e<porting !ountry has di##erent environmental health and so!ial poli!ies #rom its o&n> This &ould !reate a virtually open3ended route #or any !ountry to apply trade restri!tions unilaterally D and to do so not Hust to en#or!e its o&n la&s domesti!ally but to impose its o&n standards on other

@3

!ountries> The door &ould be opened to a possible #lood o# prote!tionist abuses> This &ould !on#li!t &ith the main purpose o# the multilateral trading system D to a!hieve predi!tability through trade rules> The panelFs tas= &as restri!ted to e<amining ho& %5TT rules applied to the issue> 9t &as not as=ed &hether the poli!y &as environmentally !orre!t or not> 9t suggested that the US poli!y !ould be made !ompatible &ith %5TT rules i# members agreed on amendments or rea!hed a de!ision to &aive the rules spe!ially #or this issue> That &ay the members !ould negotiate the spe!i#i! issues and !ould set limits that &ould prevent prote!tionist abuse> The panel &as also as=ed to Hudge the US poli!y o# reBuiring tuna produ!ts to be labelled dolphin3sa#e ,leaving to !onsumers the !hoi!e o# &hether or not to buy the produ!t1> 9t !on!luded that this did not violate %5TT rules be!ause it &as designed to prevent de!eptive advertising pra!ti!es on all tuna produ!ts &hether imported or domesti!ally produ!ed>

Eco2labelling: good8 if it doesn9t discriminate

2abelling environmentally3#riendly produ!ts is an important environmental poli!y instrument> For the WTO the =ey point is that labelling reBuirements and pra!ti!es should not dis!riminate D either bet&een trading partners ,most3#avoured nation treatment should apply1 or bet&een domesti!ally3produ!ed goods or servi!es and imports ,national treatment1> One area &here the Trade and Environment 8ommittee needs #urther dis!ussion is ho& to handle D under the rules o# the WTO Te!hni!al Garriers to Trade 5greement D labelling used to des!ribe &hether #or t$e %ay a product is produ!ed ,as distin!t #rom the produ!t itsel#1 is environmentally3#riendly>

Transparency: information paper orH

ithout too much

2i=e non3dis!rimination this is an important WTO prin!iple> 6ere WTO members should provide as mu!h in#ormation as possible about the environmental poli!ies they have adopted or a!tions they may ta=e &hen these !an have a signi#i!ant impa!t on trade> They should do this by noti#ying the WTO but the tas= should not be more o# a burden than is normally reBuired #or other poli!ies a##e!ting trade> The Trade and Environment 8ommittee says WTO rules do not need !hanging #or this purpose> The WTO Se!retariat is to !ompile #rom its 8entral +egistry o# Joti#i!ations all in#ormation on trade3related environmental measures that members have submitted> These are to be put in a single database &hi!h all WTO members !an a!!ess

%omestically prohibited goods: dangerous chemicals8 etc

This is a !on!ern o# a number o# developing !ountries &hi!h are &orried that !ertain ha'ardous or to<i! produ!ts are being e<ported

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to their mar=ets &ithout them being #ully in#ormed about the environmental or publi! health dangers the produ!ts may pose> :eveloping !ountries &ant to be #ully in#ormed so as to be in a position to de!ide &hether or not to import them> 5 number o# international agreements no& e<ist ,e>g> the Gasel 8onvention on the 8ontrol o# Transboundary 7ovements o# 6a'ardous Wastes and their :isposal and the 2ondon %uidelines #or E<!hange o# 9n#ormation on 8hemi!als in 9nternational Trade1> The WTOFs Trade and Environment 8ommittee does not intend to dupli!ate their &or= but it also notes that the WTO !ould play a !omplementary role>

Liberali6ation and sustainable de&elopment: good for each other

:oes #reer trade help or hinder environmental prote!tionV The Trade and Environment 8ommittee is analysing the relationship bet&een trade liberali'ation ,in!luding the Uruguay +ound !ommitments1 and the prote!tion o# the environment> 7embers say the removal o# trade restri!tions and distortions !an yield bene#its both #or the multilateral trading system and the environment> Further &or= is s!heduled>

$ntellectual property8 ser&ices: some scope for study

:is!ussions in the Trade and Environment 8ommittee on these t&o issues have bro=en ne& ground sin!e there &as very little understanding o# ho& the rules o# the trading system might a##e!t or be a##e!ted by environmental poli!ies in these areas> On servi!es the !ommittee says #urther &or= is needed to e<amine the relationship bet&een the %eneral 5greement on Trade in Servi!es ,%5TS1 and environmental prote!tion poli!ies in the se!tor> The !ommittee says that the 5greement on Trade3+elated 5spe!ts o# 9ntelle!tual Property +ights ,T+9PS1 helps !ountries obtain environmentally3sound te!hnology and produ!ts> 7ore &or= is s!heduled on this in!luding on the relationship bet&een the T+9PS 5greement and the 8onvention o# Giologi!al :iversity> #) THE "EBS$TE: ! to!org * trade topics * en&ironment [ See also %oha (genda negotiations

@"

.! $n&estment8 competition8 procurement8 simpler procedures

7inisters #rom WTO member3!ountries de!ided at the (**. Singapore 7inisterial 8on#eren!e to set up three ne& &or=ing groups$ on trade and investment on !ompetition poli!y and on transparen!y in government pro!urement> They also instru!ted the WTO %oods 8oun!il to loo= at possible &ays o# simpli#ying trade pro!edures an issue sometimes =no&n as trade #a!ilitation> Ge!ause the Singapore !on#eren!e =i!=ed o## &or= in these #our subHe!ts they are sometimes !alled the >Singapore issues@> These #our subHe!ts &ere originally in!luded on the :oha :evelopment 5genda> The !are#ully3negotiated mandate &as #or negotiations to start a#ter the 2003 8an!`n 7inisterial 8on#eren!e on the basis o# a de!ision to be ta=en by e<pli!it !onsensus at that session on modalities o# negotiations> There &as no !onsensus and the members agreed on ( 5ugust 2000 to pro!eed &ith negotiations in only one subHe!t trade #a!ilitation> The other three &ere dropped #rom the :oha agenda> [ See also %oha %e&elopment (genda

$n&estment and competition:

hat role for the "T#7

Wor= in the WTO on investment and !ompetition poli!y issues originally too= the #orm o# spe!i#i! responses to spe!i#i! trade poli!y issues rather than a loo= at the broad pi!ture> :e!isions rea!hed at the (**. 7inisterial 8on#eren!e in Singapore !hanged the perspe!tive> The ministers de!ided to set up t o orHing groups to loo= more generally at ho& trade relates to investment and !ompetition poli!ies> The &or=ing groupsF tas=s &ere analyti!al and e<ploratory> They &ould not negotiate ne& rules or !ommitments &ithout a !lear !onsensus de!ision> The ministers also re!ogni'ed the &or= under&ay in the UJ 8on#eren!e on Trade and :evelopment ,UJ8T5:1 and other international organi'ations> The &or=ing groups &ere to !ooperate &ith these organi'ations so as to ma=e best use o# available resour!es and to ensure that development issues are #ully ta=en into a!!ount> 5n indi!ation o# ho& !losely trade is lin=ed &ith investment is the #a!t that about one third o# the X.>( trillion total #or &orld trade in goods and servi!es in (**" &as trade &ithin !ompanies D #or e<ample bet&een subsidiaries in di##erent !ountries or bet&een a subsidiary and its headBuarters> The !lose relationships bet&een trade and investment and !ompetition poli!y have long been re!ogni'ed> One o# the intentions &hen %5TT &as dra#ted in the late (*00s &as #or rules on investment and !ompetition poli!y to e<ist alongside those #or trade in goods> ,The other t&o agreements &ere not !ompleted be!ause the attempt to !reate an 9nternational Trade Organi'ation #ailed>1 Over the years %5TT and the WTO have in!reasingly dealt &ith

@.

spe!i#i! aspe!ts o# the relationships> For e<ample one type o# trade !overed by the %eneral 5greement on Trade in Servi!es ,%5TS1 is the supply o# servi!es by a #oreign !ompany setting up operations in a host !ountry D i>e> through #oreign investment> The Trade2 <elated $n&estment Measures (greement says investorsF right to use imported goods as inputs should not depend on their e<port per#orman!e> The same goes #or !ompetition poli!y> %5TT and %5TS !ontain rules on monopolies and e<!lusive servi!e suppliers> The prin!iples have been elaborated !onsiderably in the rules and !ommitments on tele!ommuni!ations> The agreements on intelle!tual property and servi!es both re!ogni'e governmentsF rights to a!t against anti3 !ompetitive pra!ti!es and their rights to &or= together to limit these pra!ti!es> #) THE "EBS$TE: ! to!org * trade topics * in&estment ! to!org * trade topics * competition policy

Transparency in go&ernment purchases: to ards multilateral rules

The WTO already has an (greement on Go&ernment 'rocurement> 9t is plurilateral D only some WTO members have signed it so #ar> The agreement !overs su!h issues as transparen!y and non3dis!rimination> The de!ision by WTO ministers at the (**. Singapore !on#eren!e did t&o things> 9t set up a orHing group that &as multilateral D it in!luded all WTO members> 5nd it #o!used the groupFs &or= on transparen!y in government pro!urement pra!ti!es> The group did not loo= at pre#erential treatment #or lo!al suppliers so long as the pre#eren!es &ere not hidden> The #irst phase o# the groupFs &or= &as to study transparen!y in government pro!urement pra!ti!es ta=ing into a!!ount national poli!ies> The se!ond phase &as to develop elements #or in!lusion in an agreement> #) THE "EBS$TE: ! to!org * trade topics * go&ernment procurement

Trade facilitation: a ne

high profile

On!e #ormal trade barriers !ome do&n other issues be!ome more important> For e<ample !ompanies need to be able to a!Buire in#ormation on other !ountriesF importing and e<porting regulations and ho& !ustoms pro!edures are handled> 8utting red3tape at the point &here goods enter a !ountry and providing easier a!!ess to this =ind o# in#ormation are t&o &ays o# #a!ilitating trade> The (**. Singapore ministerial !on#eren!e instru!ted the "T# Goods Council to start e<ploratory and analyti!al &or= on the simpli#i!ation o# trade pro!edures in order to assess the s!ope #or WTO rules in this area> Jegotiations began a#ter the %eneral 8oun!il de!ision o# ( 5ugust 2000> #) THE "EBS$TE:

@@

! to!org * trade topics * trade facilitation

@-

0! Electronic commerce
5 ne& area o# trade involves goods !rossing borders ele!troni!ally> Groadly spea=ing this is the produ!tion advertising sale and distribution o# produ!ts via tele!ommuni!ations net&or=s> The most obvious e<amples o# produ!ts distributed ele!troni!ally are boo=s musi! and videos transmitted do&n telephone lines or through the 9nternet> The de!laration on global ele!troni! !ommer!e adopted by the Se!ond ,%eneva1 7inisterial 8on#eren!e on 20 7ay (**- urged the WTO %eneral 8oun!il to establish a !omprehensive &or= programme to e<amine all trade3related issues arising #rom global ele!troni! !ommer!e> The %eneral 8oun!il adopted the plan #or this &or= programme on 2" September (**- initiating dis!ussions on issues o# ele!troni! !ommer!e and trade by the %oods Servi!es and T+9PS ,intelle!tual property1 8oun!ils and the Trade and :evelopment 8ommittee> 9n the meantime WTO members also agreed to !ontinue their !urrent pra!ti!e o# not imposing !ustoms duties on ele!troni! transmissions> #) THE "EBS$TE: ! to!org * trade topics * electronic commerce

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/! Labour standards: highly contro&ersial

Stri!tly spea=ing this should not be mentioned here at all be!ause there is no &or= on the subHe!t in the WTO and it &ould be &rong to assume that it is a subHe!t that lies ahead> Gut it has been dis!ussed so e<tensively that some !lari#i!ation is needed> The =ey phrase is !ore labour standards D essential standards applied to the &ay &or=ers are treated> The term !overs a &ide range o# things$ #rom use o# !hild labour and #or!ed labour to the right to organi'e trade unions and to stri=e>

The official ans er

What the (**. Singapore ministerial de!laration says on !ore labour standards We rene& our !ommitment to the observan!e o# internationally re!ogni'ed !ore labour standards> The 9nternational 2abour Organi'ation ,92O1 is the !ompetent body to set and deal &ith these standards and &e a##irm our support #or its &or= in promoting them> We believe that e!onomi! gro&th and development #ostered by in!reased trade and #urther trade liberali'ation !ontribute to the promotion o# these standards> We reHe!t the use o# labour standards #or prote!tionist purposes and agree that the !omparative advantage o# !ountries parti!ularly lo&3&age developing !ountries must in no &ay be put into Buestion> 9n this regard &e note that the WTO and 92O Se!retariats &ill !ontinue their e<isting !ollaboration>

Trade and labour rights: deferred to the $L#

Trade and labour standards is a highly !ontroversial issue> 5t the (**. Singapore 7inisterial 8on#eren!e WTO members de#ined the organi'ationFs role more !learly identi#ying the 9nternational 2abour Organi'ation ,92O1 as the !ompetent body to deal &ith labour standards> There is !urrently no &or= on the subHe!t in the WTO> The debate outside the WTO has raised three broad Buestions> 4 The legal Cuestion$ should trade a!tion be permitted as a means o# putting pressure on !ountries !onsidered to be severely violating !ore labour rightsV The analytical Cuestion$ i# a !ountry has lo&er standards #or labour rights do its e<ports gain an un#air advantageV The institutional Cuestion$ is the WTO the proper pla!e to dis!uss labourV

4 4

5ll three Buestions have a politi!al angle$ &hether trade a!tions should be used to impose labour standards or &hether this &ould simply be an e<!use #or prote!tionism> The WTO agreements do not deal &ith any !ore labour standards> Gut some industrial nations believe the issue should be studied by the WTO as a #irst step to&ard bringing the matter o# !ore labour standards into the organi'ation> WTO rules and dis!iplines they argue &ould provide a po&er#ul in!entive #or member nations to improve &or=pla!e !onditions> 7any developing and some developed nations believe the issue has no pla!e in the WTO #rame&or=> These nations argue that e##orts to bring labour standards into the arena o# multilateral trade negotiations are little more than a smo=es!reen #or prote!tionism> 7any o##i!ials in developing !ountries believe the !ampaign to bring labour issues into the WTO is a!tually a bid by industrial nations to undermine the !omparative advantage o# lo&er &age trading partners> 9n the &ee=s leading up to the (**. Singapore 7inisterial 8on#eren!e and during the meeting itsel# this &as a hard3#ought battle> 9n the end WTO members said they &ere !ommitted to re!ogni'ed !ore labour standards and that these standards should not be used #or prote!tionism> The e!onomi! advantage o# lo&3&age !ountries should not be Buestioned but the WTO and 92O se!retariats &ould !ontinue their e<isting !ollaboration the de!laration said> The !on!luding remar=s o# the !hairman SingaporeFs trade and industry minister 7r Qeo 8heo& Tong added that the de!laration does not put labour on the WTOFs agenda> The !ountries !on!erned might !ontinue their pressure #or more &or= to be done in the WTO but #or the time being there are no !ommittees or &or=ing parties dealing &ith the issue>

-0

8hapter "

The %oha agenda

The &or= programme lists 2( subHe!ts> The original deadline o# ( )anuary 200" &as missed> The uno##i!ial target is no& the end o# 200.>
5t the Fourth 7inisterial 8on#eren!e in :oha Yatar in Jovember 200( WTO member governments agreed to laun!h ne& negotiations> They also agreed to &or= on other issues in parti!ular the implementation o# the present agreements> The entire pa!=age is !alled the %oha %e&elopment (genda A%%(B> The negotiations ta=e pla!e in the Trade )egotiations Committee and its subsidiaries &hi!h are usually either regular !oun!ils and !ommittees meeting in special sessions or spe!ially3!reated negotiating groups> Other &or= under the &or= programme ta=es pla!e in other WTO !oun!ils and !ommittees> The Fifth Ministerial Conference in CancOn 7e<i!o in September 2003 &as intended as a sto!=3ta=ing meeting &here members &ould agree on ho& to !omplete the rest o# the negotiations> Gut the meeting &as soured by dis!ord on agri!ultural issues in!luding !otton and ended in deadlo!= on the Singapore issues ,see belo%1> +eal progress on the Singapore issues and agri!ulture &as not evident until the early hours o# ( 5ugust 2000 &ith a set o# de!isions in the %eneral 8oun!il ,sometimes !alled the )uly 2000 pa!=age1> The original + Lanuary -55/ deadline &as missed> 5#ter that members uno##i!ially aimed to #inish the negotiations by the end of -551> #) THE "EBS$TE: ! to!org * trade topics * %oha %e&elopment (genda ! to!org * the "T# * General Council ! to!org * trade topics * %oha %e&elopment (genda * Trade )egotiations Committee There are (*/2( subHe!ts listed in the :oha :e!laration depending on &hether to !ount the rules subHe!ts as one or three> 7ost o# them involve negotiationsR other &or= in!ludes a!tions under implementation analysis and monitoring> This is an uno##i!ial e<planation o# &hat the de!laration mandates ,listed &ith the de!larationFs paragraphs that re#er to them1$

$mplementation2related issues and concerns Apar +-B

9mplementation is short3hand #or developing !ountriesF problems in implementing the !urrent WTO 5greements i>e> the agreements arising #rom the Uruguay +ound negotiations> Jo area o# WTO &or= re!eived more attention or generated more !ontroversy during nearly three years o# hard bargaining be#ore the :oha 7inisterial 8on#eren!e> 5round (00 issues &ere raised during that period> The result &as a t&o3pronged approa!h$

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4 4

7ore than 00 items under (2 headings &ere settled at or be#ore the :oha !on#eren!e #or immediate delivery> The vast maHority o# the remaining items immediately be!ame the subHe!t o# negotiations>

This &as spelt out in a separate ministerial de!ision on implementation !ombined &ith paragraph (2 o# the main :oha :e!laration> The implementation decision in!ludes the #ollo&ing ,detailed e<planations !an be seen on the WTO &ebsite1$

%eneral 5greement on Tari##s and Trade ,%5TT1

Galan!e3o#3payments e<!eption$ !lari#ying less stringent !onditions in %5TT #or developing !ountries i# they restri!t imports in order to prote!t their balan!e3o#3payments> 7ar=et3a!!ess !ommitments$ !lari#ying eligibility to negotiate or be !onsulted on Buota allo!ation>

5gri!ulture
+ural development and #ood se!urity #or developing !ountries 2east3developed and net #ood3importing developing !ountries E<port !redits e<port !redit guarantees or insuran!e programmes Tari## rate Buotas

Sanitary and phytosanitary ,SPS1 measures

7ore time #or developing !ountries to !omply &ith other !ountriesF ne& SPS measures +easonable interval bet&een publi!ation o# a !ountryFs ne& SPS measure and its entry into #or!e EBuivalen!e$ putting into pra!ti!e the prin!iple that governments should a!!ept that di##erent measures used by other governments !an be eBuivalent to their o&n measures #or providing the same level o# health prote!tion #or #ood animals and plants> +evie& o# the SPS 5greement :eveloping !ountriesF parti!ipation in setting international SPS standards Finan!ial and te!hni!al assistan!e

Te<tiles and !lothing

E##e!tive use o# the agreementFs provisions on early integration o# produ!ts into normal %5TT rules and elimination o# Buotas> +estraint in anti3dumping a!tions> The possibility o# e<amining governmentsF ne& rules o# origin> 7embers to !onsider #avourable Buota treatment #or small suppliers and least3developed !ountries and larger Buotas in general>

Te!hni!al barriers to trade

Te!hni!al assistan!e #or least3developed !ountries and revie&s o# te!hni!al assistan!e in general> When possible a si<3month reasonable interval #or developing !ountries to adapt to ne& measures> The WTO dire!tor3general en!ouraged to !ontinue e##orts to help

-2

developing standards>

!ountries

parti!ipate

in

setting

international

Trade3related investment measures ,T+97s1

The %oods 8oun!il is to !onsider positively reBuests #rom least3 developed !ountries to e<tend the seven3year transition period #or eliminating measures that are in!onsistent &ith the agreement>

5nti3dumping ,%5TT 5rti!le .1

Jo se!ond anti3dumping investigation &ithin a year unless !ir!umstan!es have !hanged> 6o& to put into operation a spe!ial provision #or developing !ountries ,5rti!le (" o# the 5nti3:umping 5greement1 &hi!h re!ogni'es that developed !ountries must give spe!ial regard to the situation o# developing !ountries &hen !onsidering applying anti3dumping measures> 8lari#i!ation sought on the time period #or determining &hether the volume o# dumped imported produ!ts is negligible and there#ore no anti3dumping a!tion should be ta=en> 5nnual revie&s o# the agreementFs implementation to be improved>

8ustoms valuation ,%5TT 5rti!le @1

E<tending the deadline #or developing !ountries to implement the agreement :ealing &ith #raud$ ho& to !ooperate in e<!hanging in#ormation in!luding on e<port values

+ules o# origin
8ompleting the harmoni'ation o# rules o# origin among member governments :ealing &ith interim arrangements in the transition to the ne& harmoni'ed rules o# origin>

Subsidies and !ountervailing measures

Sorting out ho& to determine &hether some developing !ountries meet the test o# being belo& USX( 000 per !apita %JP allo&ing them to pay subsidies that reBuire the re!ipient to e<port> Joting proposed ne& rules allo&ing developing !ountries to subsidi'e under programmes that have legitimate development goals &ithout having to #a!e !ountervailing or other a!tion> +evie& o# provisions on !ountervailing duty investigations> +ea##irming that least3developed !ountries are e<empt #rom the ban on e<port subsidies> :ire!ting the Subsidies 8ommittee to e<tend the transition period #or !ertain developing !ountries>

Trade3related aspe!ts o# intelle!tual property rights ,T+9PS1

Jon3violation !omplaints$ the unresolved Buestion o# ho& to deal &ith possible T+9PS disputes involving loss o# an e<pe!ted bene#it even i# the T+9PS 5greement has not a!tually been violated> Te!hnology trans#er to least3developed !ountries

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8ross3!utting issues
Whi!h spe!ial and di##erential treatment provisions are mandatoryV What are the impli!ations o# ma=ing mandatory those that are !urrently non3bindingV 6o& !an spe!ial and di##erential treatment provisions be made more e##e!tiveV 6o& !an spe!ial and di##erential treatment be in!orporated in the ne& negotiationsV :eveloped !ountries are urged to grant pre#eren!es in a generali'ed and non3dis!riminatory manner i>e> to all developing !ountries rather than to a sele!ted group>

Outstanding implementation issues

To be handled under paragraph (2 o# the main :oha :e!laration>

Final provisions
The WTO :ire!tor3%eneral is to ensure that WTO te!hni!al assistan!e gives priority to helping developing !ountries implement e<isting WTO obligations and to in!rease their !apa!ity to parti!ipate more e##e!tively in #uture negotiations> The WTO Se!retariat is to !ooperate more !losely &ith other international organi'ations so that te!hni!al assistan!e is more e##i!ient and e##e!tive>

The implementation de!ision is tied into the main %oha %eclaration &here ministers agreed on a #uture &or= programme to deal &ith unsettled implementation Buestions> Jegotiations on outstanding implementation issues shall be an integral part o# the Wor= Programme in the !oming years they de!lared> 9n the de!laration the ministers established a t&o3tra!= approa!h> Those issues #or &hi!h there &as an agreed negotiating mandate in the de!laration &ould be dealt &ith under the terms o# that mandate> Those implementation issues &here there is no mandate to negotiate &ould be the ta=en up as a matter o# priority by relevant WTO !oun!ils and !ommittees> These bodies &ere to report on their progress to the Trade Jegotiations 8ommittee by the end o# 2002 #or appropriate a!tion> #) THE "EBS$TE: ! to!org * trade topics * %oha %e&elopment (genda * $mplementation %ecision E?plained

Key dates: agriculture Start$ early -555 Frame&or= agreed$ + (ugust -550> Formulas and other modalities #or !ountriesF !ommitments$ originally 3( 7ar!h 20038 no by 1th Ministerial Conference8 -55/ ,in 6ong Wong 8hina1 8ountriesF !omprehensive dra#t !ommitments and sto!= ta=ing$ originally by "th 7inisterial 8on#eren!e 2003 ,in 7e<i!o1 :eadline$ originally by ( )anuary 200" no& uno##i!ially by end of -551 part o# single underta=ing

(griculture Apar +.8 +0B

Jegotiations on agri!ulture began in early 2000 under 5rti!le 20 o# the WTO 5gri!ulture 5greement> Gy Jovember 200( and the :oha 7inisterial 8on#eren!e (2( governments had submitted a large number o# negotiating proposals>

These negotiations have !ontinued but no& &ith the mandate given by the :oha :e!laration &hi!h also in!ludes a series o# deadlines> The de!laration builds on the &or= already underta=en

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!on#irms and elaborates the obHe!tives and sets a timetable> 5gri!ulture is no& part o# the single underta=ing in &hi!h virtually all the lin=ed negotiations &ere to end by ( )anuary 200" no& &ith the uno##i!ial target o# the end o# 200.> The de!laration re!on#irms the long3term obHe!tive already agreed in the present WTO 5greement$ to establish a #air and mar=et3oriented trading system through a programme o# #undamental re#orm> The programme en!ompasses strengthened rules and spe!i#i! !ommitments on government support and prote!tion #or agri!ulture> The purpose is to !orre!t and prevent restri!tions and distortions in &orld agri!ultural mar=ets> Without preHudging the out!ome member governments !ommit themselves to !omprehensive negotiations aimed at$ mar=et a!!ess$ substantial redu!tions e<ports subsidies$ redu!tions o# &ith a vie& to phasing out all #orms o# these ,in the ( 5ugust 2000 #rame&or= members agreed to eliminate e<port subsidies by a date to be negotiated1 domesti! support$ substantial redu!tions #or supports that distort trade ,in the ( 5ugust 2000 #rame&or= developed !ountries pledged to slash trade3distorting domesti! subsidies by 20T #rom the #irst day any :oha 5genda agreement is implemented>

The de!laration ma=es spe!ial and di##erential treatment #or developing !ountries integral throughout the negotiations both in !ountriesF ne& !ommitments and in any relevant ne& or revised rules and dis!iplines> 9t says the out!ome should be e##e!tive in pra!ti!e and should enable developing !ountries to meet their needs in parti!ular in #ood se!urity and rural development> The ministers also ta=e note o# the non3trade !on!erns ,su!h as environmental prote!tion #ood se!urity rural development et!1 re#le!ted in the negotiating proposals already submitted> They !on#irm that the negotiations &ill ta=e these into a!!ount as provided #or in the 5gri!ulture 5greement> 5 #irst step along the road to #inal agreement &as rea!hed on ( 5ugust 2000 &hen members agreed on a #rame&or= ,5nne< 5 o# the %eneral 8oun!il de!ision1> The negotiations ta=e pla!e (griculture Committee> in >special sessions@ of the

#) THE "EBS$TE: ! to!org * trade topics * goods * agriculture * agriculture negotiations

Key dates: ser&ices Start$ early -555 Jegotiating guidelines and pro!edures$ March -55+

Ser&ices Apar +/B

Jegotiations on servi!es &ere already almost t&o years old &hen they &ere in!orporated into the ne& :oha agenda> The WTO %eneral 5greement on Trade in Servi!es ,%5TS1 !ommits member governments to underta=e negotiations on spe!i#i! issues and to enter into su!!essive rounds o# negotiations to progressively liberali'e trade in servi!es> The #irst round had to start no later than #ive years #rom (**">

9nitial reBuests #or mar=et a!!ess$ by .5 Lune -559nitial o##ers o# mar=et a!!ess$ by .+ March -55. Sto!= ta=ing$ originally "th 7inisterial 8on#eren!e 2003 ,in 7e<i!o1 +evised mar=et3a!!ess o##ers$ by .+ May -55/ :eadline$ originally by ( )anuary 200" no& unofficially end of -551 part o# single underta=ing

-"

5!!ordingly the servi!es negotiations started o##i!ially in early 2000 under the 8oun!il #or Trade in Servi!es> 9n 7ar!h 200( the Servi!es 8oun!il #ul#illed a =ey element in the negotiating mandate by establishing the negotiating guidelines and pro!edures> The :oha :e!laration endorses the &or= already done rea##irms the negotiating guidelines and pro!edures and establishes some =ey elements o# the timetable in!luding most importantly the deadline #or !on!luding the negotiations as part o# a single underta=ing> The negotiations ta=e pla!e in >special sessions@ of the Ser&ices Council and regular meetings o# its relevant subsidiary !ommittees or &or=ing parties> #) THE "EBS$TE: ! to!org * trade topics * ser&ices * ser&ices negotiations

MarHet access for non2agricultural products Apar +1B

The ministers agreed to laun!h tari##3!utting negotiations on all non3agri!ultural produ!ts> The aim is to redu!e or as appropriate eliminate tari##s in!luding the redu!tion or elimination o# tari## pea=s high tari##s and tari## es!alation as &ell as non3tari## barriers in parti!ular on produ!ts o# e<port interest to developing !ountries> These negotiations shall ta=e #ully into a!!ount the spe!ial needs and interests o# developing and least3developed !ountries and re!ogni'e that these !ountries do not need to mat!h or re!ipro!ate in #ull tari##3redu!tion !ommitments by other parti!ipants>

Key dates: marHet access Start$ Lanuary -55Sto!= ta=ing$ /th Ministerial Conference8 -55. ,in 7e<i!o1 :eadline$ originally by ( )anuary 200" no& uno##i!ially by end of -551 part o# single underta=ing

5t the start parti!ipants have to rea!h agreement on ho& ,modalities1 to !ondu!t the tari##3!utting e<er!ise ,in the To=yo +ound the parti!ipants used an agreed mathemati!al #ormula to !ut tari##s a!ross the boardR in the Uruguay +ound parti!ipants negotiated !uts produ!t by produ!t1> The agreed pro!edures &ould in!lude studies and !apa!ity3building measures that &ould help least3 developed !ountries parti!ipate e##e!tively in the negotiations> Ga!= in %eneva negotiators de!ided that the modalities should be agreed by 3( 7ay 2003> When that date &as missed members agreed on ( 5ugust 2000 on a ne& target$ the 6ong Wong 7inisterial 8on#eren!e in :e!ember 200"> While average !ustoms duties are no& at their lo&est levels a#ter eight %5TT +ounds !ertain tari##s !ontinue to restri!t trade espe!ially on e<ports o# developing !ountries D #or instan!e tari## pea=s &hi!h are relatively high tari##s usually on sensitive produ!ts amidst generally lo& tari## levels> For industriali'ed !ountries tari##s o# ("T and above are generally re!ogni'ed as tari## pea=s> 5nother e<ample is tari## es!alation in &hi!h higher import duties are applied on semi3pro!essed produ!ts than on ra& materials and higher still on #inished produ!ts> This pra!ti!e prote!ts domesti! pro!essing industries and dis!ourages the development o# pro!essing a!tivity in the !ountries &here ra& materials originate> The negotiations ta=e pla!e in a MarHet (ccess )egotiating

-.

Group> #) THE "EBS$TE: ! to!org * trade topics * marHet access * marHet access negotiations

Trade2related aspects of intellectual property rights AT<$'SB Apars +4P+,B

T<$'S and public health! 9n the de!laration ministers stress that it is important to implement and interpret the T+9PS 5greement in a &ay that supports publi! health D by promoting both a!!ess to e<isting medi!ines and the !reation o# ne& medi!ines> They re#er to their separate de!laration on this subHe!t> This separate de!laration on T+9PS and publi! health is designed to respond to !on!erns about the possible impli!ations o# the T+9PS 5greement #or a!!ess to medi!ines> 9t emphasi'es that the T+9PS 5greement does not and should not prevent member governments #rom a!ting to prote!t publi! health> 9t a##irms governmentsF right to use the agreementFs #le<ibilities in order to avoid any reti!en!e the governments may #eel> The separate de!laration !lari#ies some o# the #orms o# #le<ibility available in parti!ular !ompulsory li!ensing and parallel importing> ,For an e<planation o# these issues go to the main T+9PS pages on the WTO &ebsite1 For the :oha agenda this separate de!laration sets t&o spe!i#i! tas=> The T<$'S Council has to #ind a solution to the problems !ountries may #a!e in ma=ing use o# !ompulsory li!ensing i# they have too little or no pharma!euti!al manu#a!turing !apa!ity reporting to the %eneral 8oun!il on this by the end o# 2002> ,this &as a!hieved in 5ugust 2003 see intellectual property section of t$e /Agreements* c$apter>1 The de!laration also e<tends the deadline #or least3developed !ountries to apply provisions on pharma!euti!al patents until ( )anuary 20(.> Geographical indications J the registration system! %eographi!al indi!ations are pla!e names ,in some !ountries also &ords asso!iated &ith a pla!e1 used to identi#y produ!ts &ith parti!ular !hara!teristi!s be!ause they !ome #rom spe!i#i! pla!es> The WTO T+9PS 8oun!il has already started &or= on a multilateral registration system #or geographi!al indi!ations #or &ines and spirits> The :oha :e!laration sets a deadline #or !ompleting the negotiations$ the Fi#th 7inisterial 8on#eren!e in 2003> These negotiations ta=e pla!e sessions@ of the T<$'S Council> in >special
Key dates: intellectual property +eport to the %eneral 8oun!il D solution on !ompulsory li!ensing and la!= o# pharma!euti!al produ!tion !apa!ity$ originally by end o# 2002 de!ision agreed .5 (pril -55.> +eport to TJ8 D a!tion on outstanding implementation issues under par (2$ by end of -55- AmissedB :eadline D negotiations on geographi!al indi!ations registration system ,&ines and spirits1$ by /th Ministerial Conference8 -55. ,in 7e<i!o1 AmissedB :eadline D negotiations spe!i#i!ally mandated in :oha :e!laration$ originally by ( )anuary 200" no& uno##i!ially by end of -551 2east3developed !ountries to apply pharma!euti!al patent -@ provisions$ -5+1

Geographical indications J e?tending the >higher le&el of protection@ to other products! The T+9PS 5greement provides a

higher level o# prote!tion to geographi!al indi!ations #or &ines and spirits> This means they should be prote!ted even i# there is no ris= o# misleading !onsumers or un#air !ompetition> 5 number o# !ountries &ant to negotiate e<tending this higher level to other produ!ts> Others oppose the move and the debate in the T+9PS 8oun!il has in!luded the Buestion o# &hether the relevant provisions o# the T+9PS 5greement provide a mandate #or e<tending !overage beyond &ines and spirits> The :oha :e!laration notes that the T<$'S Council &ill handle this under the de!larationFs paragraph (2 ,&hi!h deals &ith implementation issues1> Paragraph (2 o##ers t&o tra!=s$ ,a1 &here &e provide a spe!i#i! negotiating mandate in this :e!laration the relevant implementation issues shall be addressed under that mandateR ,b1 the other outstanding implementation issues shall be addressed as a matter o# priority by the relevant WTO bodies &hi!h shall report to the Trade Jegotiations 8ommittee KTJ8M established under paragraph 0. belo& by the end o# 2002 #or appropriate a!tion> 9n papers !ir!ulated at the 7inisterial 8on#eren!e member governments e<pressed di##erent interpretations o# this mandate> 5rgentina said it understands there is no agreement to negotiate the Zother outstanding implementation issuesF re#erred to under ,b1 and that by the end o# 2002 !onsensus &ill be reBuired in order to laun!h any negotiations on these issues> Gulgaria the 8'e!h +epubli! EU 6ungary 9ndia 2ie!htenstein Wenya 7auritius Jigeria Pa=istan the Slova= +epubli! Slovenia Sri 2an=a S&it'erland Thailand and Tur=ey argued that there is a !lear mandate to negotiate immediately> <e&ie s of T<$'S pro&isions! T&o revie&s have been ta=ing pla!e in the T+9PS 8oun!il as reBuired by the T+9PS 5greement$ a revie& o# 5rti!le 2@>3,b1 &hi!h deals &ith patentability or non3 patentability o# plant and animal inventions and the prote!tion o# plant varietiesR and a revie& o# the entire T+9PS 5greement ,reBuired by 5rti!le @(>(1> The :oha :e!laration says that &or= in the T<$'S Council on these revie&s or any other implementation issue should also loo= at$ the relationship bet&een the T+9PS 5greement and the UJ 8onvention on GiodiversityR the prote!tion o# traditional =no&ledge and #ol=loreR and other relevant ne& developments that member governments raise in the revie& o# the T+9PS 5greement> 9t adds that the T+9PS 8oun!ilFs &or= on these topi!s is to be guided by the T+9PS 5greementFs obHe!tives ,5rti!le @1 and prin!iples ,5rti!le -1 and must ta=e development #ully into a!!ount> #) THE "EBS$TE: ! to!org * trade topics * intellectual property
Key dates: trade and in&estment 8ontinuing &or= in &or=ing group &ith de#ined agenda$ to /th Ministerial Conference8 -55. ,in 7e<i!o1 Jegotiations$ a#ter "th 7inisterial 8on#eren!e 2003 ,in 7e<i!o1 subHe!t to e<pli!it !onsensus on modalities &ith deadline$ by ( )anuary 200" part o# single underta=ing> Gut no -!onsensusR dropped from %oha agenda in + (ugust -550 decision

The four ;Singapore9 issues: no negotiations until :

For trade and in&estment trade and competition policy transparency in go&ernment procurement and trade facilitation the 200( :oha de!laration does not laun!h negotiations immediately> 9t says negotiations &ill ta=e pla!e a#ter the Fi#th Session o# the 7inisterial 8on#eren!e on the basis o# a de!ision to be ta=en by e<pli!it !onsensus at that session on modalities o# negotiations Ki>e> ho& the negotiations are to be !ondu!tedM> Gut !onsensus eluded members on negotiating the #our subHe!ts> Finally agreement &as rea!hed on ( 5ugust 2000 to negotiate trade facilitation alone> The three other subHe!ts &ere dropped #rom the :oha agenda>

<elationship bet een trade and in&estment Apars -5P--B

This is a Singapore issue i>e> a &or=ing group set up by the (**. Singapore 7inisterial 8on#eren!e has been studying it> 9n the period up to the 2003 7inisterial 8on#eren!e the de!laration instru!ts the

orHing group to #o!us on !lari#ying the s!ope and de#inition o# the issues transparen!y non3dis!rimination &ays o# preparing negotiated !ommitments development provisions e<!eptions and balan!e3o#3payments sa#eguards !onsultation and dispute settlement> The negotiated !ommitments &ould be modelled on those made in servi!es &hi!h spe!i#y &here !ommitments are being made D positive lists D rather than ma=ing broad !ommitments and listing e<!eptions> The de!laration also spells out a number o# prin!iples su!h as the need to balan!e the interests o# !ountries &here #oreign investment originates and &here it is invested !ountriesF right to regulate investment development publi! interest and individual !ountriesF spe!i#i! !ir!umstan!es> 9t also emphasi'es support and te!hni!al !ooperation #or developing and least3developed !ountries and !oordination &ith other international organi'ations su!h as the UJ 8on#eren!e on Trade and :evelopment ,UJ8T5:1> Sin!e the ( 5ugust 2000 de!ision this subHe!t has been dropped #rom the :oha agenda> #) THE "EBS$TE: ! to!org * trade topics * in&estment

$nteraction bet een trade and competition policy Apars -.P-/B

This is another Singapore issue &ith a &or=ing group set up in (**. to study the subHe!t> 9n the period up to the 2003 7inisterial 8on#eren!e the de!laration instru!ts the orHing group to #o!us on !lari#ying$ !ore prin!iples in!luding transparen!y non3dis!rimination and pro!edural #airness and provisions on hard!ore !artels ,i>e> !artels that are #ormally set up1 &ays o# handling voluntary !ooperation on !ompetition poli!y among WTO member governments support #or progressive rein#or!ement o# !ompetition institutions in developing !ountries through !apa!ity building
Key dates: trade and competition policy 8ontinuing &or= in &or=ing group &ith de#ined agenda$ to /th Ministerial Conference8 -55. ,in 7e<i!o1 Jegotiations$ a#ter "th 7inisterial 8on#eren!e 2003 ,in 7e<i!o1 subHe!t to e<pli!it !onsensus on modalities &ith deadline$ by ( )anuary 200" part o# single underta=ing> Gut no !onsensusR dropped from %oha agenda in + (ugust -550 decision

The de!laration says the &or= must ta=e #ull a!!ount o# developmental needs> 9t in!ludes te!hni!al !ooperation and !apa!ity building on su!h topi!s as poli!y analysis and development so that developing !ountries are better pla!ed to evaluate the impli!ations o# !loser multilateral !ooperation #or various developmental obHe!tives> 8ooperation &ith other organi'ations su!h as the UJ 8on#eren!e on Trade and :evelopment ,UJ8T5:1 is also in!luded> Sin!e the ( 5ugust 2000 de!ision this subHe!t has been dropped #rom the :oha agenda> #) THE "EBS$TE: ! to!org * trade topics * competition policy

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Transparency in go&ernment procurement Apar -1B

5 third Singapore issue that &as handled by a orHing group set up by the Singapore 7inisterial 8on#eren!e in (**.> The :oha :e!laration says that the negotiations shall be limited to the transparen!y aspe!ts and there#ore &ill not restri!t the s!ope #or !ountries to give pre#eren!es to domesti! supplies and suppliers D it is separate #rom the plurilateral %overnment Pro!urement 5greement> The de!laration also stresses development !on!erns te!hni!al assistan!e and !apa!ity building> Sin!e the ( 5ugust 2000 de!ision this subHe!t has been dropped #rom the :oha agenda> #) THE "EBS$TE: ! to!org * trade topics * go&ernment procurement
Key dates: go&ernment procurement AtransparencyB 8ontinuing &or= in &or=ing group &ith de#ined agenda$ to /th Ministerial Conference8 -55. ,in 7e<i!o1 Jegotiations$ a#ter "th 7inisterial 8on#eren!e 2003 ,in 7e<i!o1 subHe!t to e<pli!it !onsensus on modalities &ith deadline$ by ( )anuary 200" part o# single underta=ing> Gut no !onsensusR dropped from %oha agenda in + (ugust -550 decision

Trade facilitation Apar -4B

5 #ourth Singapore issue =i!=ed o## by the (**. 7inisterial 8on#eren!e> The de!laration re!ogni'es the !ase #or #urther e<pediting the movement release and !learan!e o# goods in!luding goods in transit and the need #or enhan!ed te!hni!al assistan!e and !apa!ity building in this area> 9n the period until the Fi#th 7inisterial 8on#eren!e in 2003 the "T# Goods Council &hi!h had been &or=ing on this subHe!t sin!e (**@ shall revie& and as appropriate !lari#y and improve relevant aspe!ts o# 5rti!les " ,ZFreedom o# TransitF1 - ,ZFees and Formalities 8onne!ted &ith 9mportation and E<portationF1 and (0 ,ZPubli!ation and 5dministration o# Trade +egulationsF1 o# the %eneral 5greement on Tari##s and Trade ,%5TT (**01 and identi#y the trade #a!ilitation needs and priorities o# 7embers in parti!ular developing and least3developed !ountries>

Key dates: trade facilitation 8ontinuing &or= in %oods 8oun!il &ith de#ined agenda$ to /th Ministerial Conference8 -55. ,in 7e<i!o1 Jegotiations$ after /th Ministerial Conference8 -55. ,in 7e<i!o1 subHe!t to e<pli!it !onsensus on modalities agreed in ( 5ugust 2000 de!ision> :eadline$ originally by ( )anuary 200" no& unofficially end of -551 part o# single underta=ing

Those issues &ere !ited in the ( 5ugust 2000 de!ision that bro=e the 8an!`n deadlo!=> 7embers agreed to start negotiations on trade #a!ilitation but not the three other Singapore issues>

#) THE "EBS$TE: ! to!org * trade topics * trade facilitation

*0

"T# rules: anti2dumping and subsidies Apar -3B

The ministers agreed to negotiations on the 5nti3 :umping ,%5TT 5rti!le .1 and Subsidies agreements> The aim is to !lari#y and improve dis!iplines &hile preserving the basi! !on!epts prin!iples o# these agreements and ta=ing into a!!ount the needs o# developing and least3developed parti!ipants> 9n overlapping negotiating phases parti!ipants #irst indi!ated &hi!h provisions o# these t&o agreements they thin= should be the subHe!t o# !lari#i!ation and improvement in the ne<t phase o# negotiations> The ministers mention spe!i#i!ally #isheries subsidies as one se!tor important to developing !ountries and &here parti!ipants should aim to !lari#y and improve WTO dis!iplines> Jegotiations ta=e pla!e in the <ules )egotiating Group> #) THE "EBS$TE: ! to!org * trade topics * goods * antidumping ! to!org * trade topics * goods * subsidies and counter&ailing measures

Key dates: anti2 dumping8 subsidies Start$ Lanuary -55Sto!= ta=ing$ /th Ministerial Conference8 -55. ,in 7e<i!o1 :eadline$ originally by ( )anuary 200" no& unofficially end of -551 part o# single underta=ing

"T# rules: regional trade agreements Apar -,B

WTO rules say regional trade agreements have to meet !ertain !onditions> Gut interpreting the &ording o# these rules has proved !ontroversial and has been a !entral element in the &or= o# the +egional Trade 5greements 8ommittee> 5s a result sin!e (**" the !ommittee has #ailed to !omplete its assessments o# Key dates: regional &hether individual trade agreements !on#orm &ith trade WTO provisions>
Start$ Lanuary -55-

This is no& an important !hallenge parti!ularly &hen nearly all member governments are parties to regional agreements are negotiating them or are !onsidering negotiating them> 9n the :oha :e!laration members agreed to negotiate a solution giving due regard to the role that these agreements !an play in #ostering development>

Sto!= ta=ing$ /th Ministerial Conference8 -55. ,in 7e<i!o1 :eadline$ originally by ( )anuary 200" no& unofficially end of -551 part o# single underta=ing

The de!laration mandates negotiations aimed at !lari#ying and improving dis!iplines and pro!edures under the e<isting WTO provisions applying to regional trade agreements> The negotiations shall ta=e into a!!ount the developmental aspe!ts o# regional trade agreements>

These negotiations #ell into the general timetable established #or virtually all negotiations under the :oha :e!laration> The original deadline o# ( )anuary 200" &as missed and the !urrent uno##i!ial aim is to #inish the tal=s by the end o# 200.> The 2003 Fi#th 7inisterial 8on#eren!e in 7e<i!o &as intended to ta=e sto!= o# progress provide any ne!essary politi!al guidan!e and ta=e de!isions as ne!essary> Jegotiations ta=e pla!e in the <ules )egotiating Group>

*(

#) THE "EBS$TE: ! to!org * trade topics * goods * regional trade agreements

%ispute Settlement Dnderstanding Apar .5B

The (**0 7arra=esh 7inisterial 8on#eren!e mandated WTO member governments to !ondu!t a revie& o# the :ispute Settlement Understanding ,:SU the WTO agreement on dispute settlement1 &ithin #our years o# the entry into #or!e o# the WTO 5greement ,i>e> by ( )anuary (***1>
Key dates: disputes understanding Start$ Lanuary -55:eadline$ originally by 7ay 2003 !urrently no deadline separate #rom single underta=ing

The :ispute Settlement Gody ,:SG1 started the revie& in late (**@ and held a series o# in#ormal dis!ussions on the basis o# proposals and issues that members identi#ied> 7any i# not all members !learly #elt that improvements should be made to the understanding> 6o&ever the :SG !ould not rea!h a !onsensus on the results o# the revie&> The :oha :e!laration mandates negotiations and states ,in par 0@1 that these &ill not be part o# the single underta=ing D i>e> that they &ill not be tied to the overall su!!ess or #ailure o# the other negotiations mandated by the de!laration> Originally set to !on!lude by 7ay 2003 the negotiations are !ontinuing &ithout a deadline>

Jegotiations ta=e pla!e in >special sessions@ of the %ispute Settlement Body> #) THE "EBS$TE: ! to!org * trade topics * dispute settlement

Trade and en&ironment Apars .+P..B

Je& negotiations
Multilateral en&ironmental agreements! 7inisters agreed to laun!h negotiations on the relationship bet&een e<isting WTO rules and spe!i#i! trade obligations set Key dates: out in multilateral environmental agreements> The en&ironment negotiations &ill address ho& WTO rules are to apply 8ommittee reports to to WTO members that are parties to environmental ministers$ /th and agreements in parti!ular to !lari#y the relationship 1th Ministerial bet&een trade measures ta=en under the Conferences8 -55. and -55/8 ,in 7e<i!o environmental agreements and WTO rules> So #ar no measure a##e!ting trade ta=en under an environmental agreement has been !hallenged in the %5TT3WTO system> $nformation e?change! 7inisters agreed to negotiate pro!edures #or regular in#ormation e<!hange bet&een se!retariats o# multilateral environmental agreements and the WTO> 8urrently the Trade and Environment 8ommittee holds an in#ormation session
and 6ong Wong 8hina1

Jegotiations sto!= ta=ing$ /th Ministerial Conference8 -55. ,in 7e<i!o1 Jegotiations deadline$ originally by ( )anuary 200" no& unofficially end of -551 part o# single *2 underta=ing

&ith di##erent se!retariats o# the multilateral environmental agreements on!e or t&i!e a year to dis!uss the trade3related provisions in these environmental agreements and also their dispute settlement me!hanisms> The ne& in#ormation e<!hange pro!edures may e<pand the s!ope o# e<isting !ooperation> #bser&er status! Overall the situation !on!erning the granting o# observer status in the WTO to other international governmental organi'ations is !urrently blo!=ed #or politi!al reasons> The negotiations aim to develop !riteria #or observership in WTO> Trade barriers on en&ironmental goods and ser&ices! 7inisters also agreed to negotiations on the redu!tion or elimination o# tari## and non3tari## barriers to environmental goods and servi!es> E<amples o# environmental goods and servi!es are !atalyti! !onverters air #ilters or !onsultan!y servi!es on &aste&ater management> Fisheries subsidies! 7inisters agreed to !lari#y and improve WTO rules that apply to #isheries subsidies> The issue o# #isheries subsidies has been studied in the Trade and Environment 8ommittee #or several years> Some studies demonstrate these subsidies !an be environmentally damaging i# they lead to too many #ishermen !hasing too #e& #ish> Jegotiations on these issues in!luding !on!epts o# &hat are the relevant environmental goods and servi!es ta=e pla!e in >special sessions@ of the Trade and En&ironment Committee> Jegotiations on mar=et a!!ess #or environmental goods and servi!es ta=e pla!e in the MarHet (ccess )egotiating Group and Ser&ices Council >special sessions@>

Wor= in the !ommittee

7inisters instru!ted the Trade and En&ironment Committee in pursuing &or= on all items on its agenda to pay parti!ular attention to the #ollo&ing areas$ The e##e!t o# environmental measures on mar=et a!!ess espe!ially #or developing !ountries> Win3&in3&in situations$ &hen eliminating or redu!ing trade restri!tions and distortions &ould bene#it trade the environment and development> 9ntelle!tual property> Paragraph (* o# the 7inisterial :e!laration mandates the T+9Ps 8oun!il to !ontinue !lari#ying the relationship bet&een the T+9PS 5greement and the Giologi!al :iversity 8onvention> 7inisters also as= the Trade and Environment 8ommittee to !ontinue to loo= at the relevant provisions o# the T+9PS agreement> Environmental labelling reBuirements> The Trade and Environment 8ommittee is to loo= at the impa!t o# e!o3 labelling on trade and e<amine &hether e<isting WTO rules stand in the &ay o# e!o3labelling poli!ies> Parallel dis!ussions are to ta=e pla!e in the Te!hni!al Garriers to Trade ,TGT1 8ommittee> For all these issues$ &hen &or=ing on these ,mar=et a!!ess &in3&in3&in situations intelle!tual property and environmental labelling1 the Trade and Environment 8ommittee should identi#y WTO rules that &ould need to be !lari#ied> %eneral$ ministers re!ogni'e the importan!e o# te!hni!al assistan!e and !apa!ity building programmes #or developing !ountries in the trade and environment area> They also en!ourage members to share e<pertise and e<perien!e on

*3

national environmental revie&s> #) THE "EBS$TE: ! to!org * trade topics * en&ironment

Electronic commerce Apar .0B

The :oha :e!laration endorses the &or= already done on ele!troni! !ommer!e and instru!ts the General Council to !onsider the most appropriate institutional arrangements #or handling the &or= programme and to report on #urther progress to the Fi#th 7inisterial 8on#eren!e> The de!laration on ele!troni! !ommer!e #rom the Se!ond 7inisterial 8on#eren!e in %eneva (**- said that WTO members &ill !ontinue their pra!ti!e o# not imposing !ustoms duties on ele!troni! transmissions> The :oha :e!laration states that members &ill !ontinue this pra!ti!e until the Fi#th 7inisterial 8on#eren!e>
Key date: electronic commerce +eport on #urther progress$ /th Ministerial Conference8 -55. ,in 7e<i!o1

#) THE "EBS$TE: ! to!org * trade topics * electronic commerce

Small economies Apar ./B

Small e!onomies #a!e spe!i#i! !hallenges in their parti!ipation in &orld trade #or e<ample la!= o# e!onomy o# s!ale or limited natural resour!es> The :oha :e!laration mandates the General Council to e<amine these problems and to ma=e re!ommendations to the ne<t 7inisterial 8on#eren!e as to &hat trade3related measures !ould improve the integration o# small e!onomies>

Key date: small economies +e!ommendations$ /th and 1th Ministerial Conferences8 -55. and -55/ ,in 7e<i!o and 6ong Wong 8hina1

Trade8 debt and finance Apar .1B

7any developing !ountries #a!e serious e<ternal debt problems and have been through #inan!ial !rises> WTO ministers de!ided in :oha to establish a "orHing Group on Trade8 %ebt and Finance to loo= at ho& trade3related measures !an !ontribute to #ind a durable solution to these problems> This &or=ing group &ill report to the %eneral 8oun!il &hi!h report to the ne<t 7inisterial 8on#eren!e>

Key date: debt and finance %eneral 8oun!il report$ /th and 1th Ministerial Conferences8 -55. and -55/ ,in 7e<i!o and 6ong Wong 8hina1

&ill in turn

Trade and technology transfer Apar .4B

5 number o# provisions in the WTO agreements mention the need #or a trans#er o# te!hnology to ta=e

Key date: technology transfer %eneral 8oun!il report$ /th and 1th Ministerial Conferences8 -55. and -55/ ,in 7e<i!o and *0 6ong Wong 8hina1

pla!e bet&een developed and developing !ountries> 6o&ever it is not !lear ho& su!h a trans#er ta=es pla!e in pra!ti!e and i# spe!i#i! measures might be ta=en &ithin the WTO to en!ourage su!h #lo&s o# te!hnology> WTO ministers de!ided in :oha to establish a orHing group to e<amine the issue> The &or=ing group &ill report to the %eneral 8oun!il &hi!h itsel# &ill report to the ne<t 7inisterial 8on#eren!e>

Technical cooperation and capacity building Apars .3P0+B

Through various paragraphs o# the :oha :e!laration WTO member governments have made ne& !ommitments on te!hni!al !ooperation and !apa!ity building> For e<ample the se!tion on the relationship bet&een trade and investment in!ludes a !all ,par 2(1 #or enhan!ed support #or te!hni!al assistan!e and !apa!ity building in this area> Within the spe!i#i! heading te!hni!al !ooperation and !apa!ity building paragraph 0( lists all the re#eren!es to !ommitments on te!hni!al !ooperation &ithin the :oha :e!laration$ paragraphs (. ,mar=et a!!ess #or non3agri!ultural produ!ts1 2( ,trade and investment1 20 ,trade and !ompetition poli!y1 2. ,transparen!y in government pro!urement1 2@ ,trade #a!ilitation1 33 ,environment1 3-300 ,te!hni!al !ooperation and !apa!ity building1 02 and 03 ,least3developed !ountries1> ,Paragraph 2 in the preamble is also !ited>1 Under this heading ,i>e> pars 3-/0(1 WTO member governments rea##irm all te!hni!al !ooperation and !apa!ity building !ommitments made throughout the de!laration and add general !ommitments$ The Se!retariat in !oordination &ith other relevant agen!ies is to en!ourage WTO developing3!ountry members to !onsider trade as a main element #or redu!ing poverty and to in!lude trade measures in their development strategies> The agenda set out in the :oha :e!laration gives priority to small vulnerable and transition e!onomies as &ell as to members and observers that do not have permanent delegations in %eneva> Te!hni!al assistan!e must be delivered by the WTO and other relevant international organi'ations &ithin a !oherent poli!y #rame&or=>
Key dates: technical cooperation Te!hni!al assistan!e #unding raised -0TR :evelopment 5genda %lobal Trust Fund set up$ %ecember -55+ :ire!tor3%eneral reports to %eneral 8oun!il$ %ecember -55:ire!tor3%eneral reports to ministers$ /th and 1th Ministerial Conferences8 -55. and -55/ ,in 7e<i!o and 6ong Wong 8hina1

The %irector2General reported to the General Council in :e!ember 2002 and to the Fifth Ministerial Conference on the implementation and adeBua!y o# these ne& !ommitments>

Follo&ing the de!larationFs instru!tions to develop a plan ensuring long3term #unding #or WTO te!hni!al assistan!e the General Council adopted on 20 :e!ember 200( ,one month a#ter the :oha !on#eren!e1 a ne& budget that in!reased te!hni!al assistan!e #unding by -0T and established a :oha :evelopment 5genda %lobal Trust

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Fund> The #und no& has an annual budget o# 20 million S&iss #ran!s> #) THE "EBS$TE: ! to!org * trade topics * de&elopment * technical cooperation Q training

Least2de&eloped countries Apars 0-8 0.B

7any developed !ountries have no& signi#i!antly de!reased or a!tually s!rapped tari##s on imports #rom least3developed !ountries ,2:8s1> 9n the :oha de!laration WTO member go&ernments !ommit themselves to the obHe!tive o# duty3#ree Buota3#ree mar=et a!!ess #or 2:8sF produ!ts and to !onsider additional measures to improve mar=et a!!ess #or these e<ports>

Key date: least2 de&eloped countries +eports to$ General Council8 Luly -55/th and 1th Ministerial Conferences8 -55. and -55/ ,in 7e<i!o and 6ong Wong 8hina1

7embers also agree to try to ensure that least3 developed !ountries !an negotiate WTO membership #aster and more easily> Some te!hni!al assistan!e is targeted spe!i#i!ally #or least3developed !ountries> The :oha :e!laration urges "T# member donors to signi#i!antly in!rease their !ontributions> 9n addition the Sub2Committee for L%Cs ,a subsidiary body o# the WTO 8ommittee on Trade and :evelopment1 designed a &or= programme in February 2002 as instru!ted by the :oha :e!laration ta=ing into a!!ount the parts o# the de!laration related to trade that &as issued at the UJ 2:8 8on#eren!e> #) THE "EBS$TE: ! to!org * trade topics * de&elopment

Special and differential treatment Apar 00B

The WTO agreements !ontain spe!ial provisions &hi!h give developing !ountries spe!ial rights> These spe!ial provisions in!lude #or e<ample longer time periods #or implementing agreements and !ommitments or measures to in!rease trading opportunities #or developing !ountries>
Wey date$ special and differential treatment +e!ommendations to %eneral 8oun!il$ Luly -55- Luly -55/

9n the :oha :e!laration member governments agree that all spe!ial and di##erential treatment provisions should be revie&ed &ith a vie& to strengthening them and ma=ing them more pre!ise> 7ore spe!i#i!ally the de!laration ,together &ith the :e!ision on 9mplementation3+elated 9ssues and 8on!erns1 mandates the Trade and %e&elopment Committee to identi#y &hi!h o# those spe!ial and di##erential treatment provisions are mandatory and to !onsider the impli!ations o# ma=ing mandatory those &hi!h are !urrently non3 binding> The :e!ision on 9mplementation3+elated 9ssues and 8on!erns

*.

instru!ted the !ommittee to ma=e its re!ommendations #or the General Council be#ore )uly 2002> Gut be!ause members needed more time this &as postponed to the end o# )uly 200"> #) THE "EBS$TE: ! to!org * trade topics * de&elopment

CancOn -55.8 Hong Kong -55/

The :oha agenda set a number o# tas=s to be !ompleted be#ore or at the Fi#th 7inisterial 8on#eren!e in 8an!`n 7e<i!o (0/ (0 September 2003> On the eve o# the !on#eren!e on 30 5ugust agreement &as rea!hed on the T+9PS and publi! health issue> 6o&ever a number o# the deadlines &ere missed in!luding modalities #or agri!ulture and the non3agri!ultural mar=et a!!ess negotiations re#orm o# the :ispute Settlement Understanding and re!ommendations on spe!ial and di##erential treatment> Jor &ere members near to agreement on the multilateral geographi!al indi!ations register #or &ines and spirits due to be !ompleted in 8an!`n> 5lthough 8an!`n sa& delegations move !loser to !onsensus on a number o# =ey issues members remained deeply divided over a number o# issues in!luding the Singapore issues D laun!hing negotiations on investment !ompetition poli!y transparen!y in government pro!urement and trade #a!ilitation D and agri!ulture> The !on#eren!e ended &ithout !onsensus> Ten months later the deadlo!= &as bro=en in %eneva &hen the %eneral 8oun!il agreed on the )uly pa!=age in the early hours o# ( 5ugust 2000 &hi!h =i!=ed o## negotiations in trade #a!ilitation but not the three other Singapore issues> The delay meant the ( )anuary 200" deadline #or #inishing the tal=s !ould not be met> Uno##i!ially members aimed to !omplete the ne<t phase o# the negotiations at the 6ong Wong 7inisterial 8on#eren!e (3/(- :e!ember 200" in!luding #ull modalities in agri!ulture and mar=et a!!ess #or non3agri!ultural produ!ts and to #inish the tal=s by the end o# the #ollo&ing year> #) THE "EBS$TE: to * decision maHing * ministerial conferences

! to!org * the

*@

8hapter .

%e&eloping countries
6o& the WTO deals &ith the spe!ial needs o# an in!reasingly important group
+! #&er&ie
5bout t&o thirds o# the WTOFs around ("0 members are developing !ountries> They play an in!reasingly important and a!tive role in the WTO be!ause o# their numbers be!ause they are be!oming more important in the global e!onomy and be!ause they in!reasingly loo= to trade as a vital tool in their development e##orts> :eveloping !ountries are a highly diverse group o#ten &ith very di##erent vie&s and !on!erns> The WTO deals &ith the spe!ial needs o# developing !ountries in three &ays$ 4 4 the "T# agreements !ontain special pro&isions on developing !ountries the Committee on Trade and %e&elopment is the main body #o!using on &or= in this area in the WTO &ith some others dealing &ith spe!i#i! topi!s su!h as trade and debt and te!hnology trans#er the "T# Secretariat provides technical assistance ,mainly training o# various =inds1 #or developing !ountries!

$n the agreements: more time8 better terms

The WTO agreements in!lude numerous provisions giving developing and least3developed !ountries spe!ial rights or e<tra lenien!y D spe!ial and di##erential treatment> 5mong these are provisions that allo& developed !ountries to treat developing !ountries more #avourably than other WTO members> The %eneral 5greement on Tari##s and Trade ,%5TT &hi!h deals &ith trade in goods1 has a spe!ial se!tion ,Part 01 on Trade and :evelopment &hi!h in!ludes provisions on the !on!ept o# non3 re!ipro!ity in trade negotiations bet&een developed and developing !ountries D &hen developed !ountries grant trade !on!essions to developing !ountries they should not e<pe!t the developing !ountries to ma=e mat!hing o##ers in return> Goth %5TT and the %eneral 5greement on Trade in Servi!es ,%5TS1 allo& developing !ountries some pre#erential treatment> Other measures !on!erning developing !ountries in the WTO agreements in!lude$ 4 4 e?tra time #or developing !ountries to #ul#il their !ommitments ,in many o# the WTO agreements1 provisions designed to in!rease developing !ountriesF trading opportunities through greater mar=et a!!ess ,e>g> in te<tiles servi!es te!hni!al barriers to trade1 provisions reBuiring WTO members to safeguard the interests o# developing !ountries &hen adopting some domesti! or international measures ,e>g> in anti3dumping sa#eguards te!hni!al barriers to trade1

*-

provisions #or various means of helping developing !ountries ,e>g> to deal &ith !ommitments on animal and plant health standards te!hni!al standards and in strengthening their domesti! tele!ommuni!ations se!tors1>

Legal assistance: a Secretariat ser&ice

The WTO Se!retariat has spe!ial legal advisers #or assisting developing !ountries in any WTO dispute and #or giving them legal !ounsel> The servi!e is o##ered by the WTOFs Training and Te!hni!al 8ooperation 9nstitute> :eveloping !ountries regularly ma=e use o# it> Furthermore in 200( 32 WTO governments set up an 5dvisory 8entre on WTO la&> 9ts members !onsist o# !ountries !ontributing to the #unding and those re!eiving legal advi!e> 5ll least3developed !ountries are automati!ally eligible #or advi!e> Other developing !ountries and transition e!onomies have to be #ee3paying members in order to re!eive advi!e>

Least2de&eloped countries: special focus

The least3developed !ountries re!eive e<tra attention in the WTO> 5ll the WTO agreements re!ogni'e that they must bene#it #rom the greatest possible #le<ibility and better3o## members must ma=e e<tra e##orts to lo&er import barriers on least3developed !ountriesF e<ports> Sin!e the Uruguay +ound agreements &ere signed in (**0 several de!isions in #avour o# least3developed !ountries have been ta=en> 7eeting in Singapore in (**. WTO ministers agreed on a Plan o# 5!tion #or 2east3:eveloped 8ountries> This in!luded te!hni!al assistan!e to enable them to parti!ipate better in the multilateral system and a pledge #rom developed !ountries to improved mar=et a!!ess #or least3developed !ountriesF produ!ts> 5 year later in O!tober (**@ si< international organi'ations D the 9nternational 7onetary Fund the 9nternational Trade 8entre the United Jations 8on#eren!e #or Trade and :evelopment the United Jations :evelopment Programme the World Gan= and the WTO D laun!hed the 9ntegrated Frame&or= a Hoint te!hni!al assistan!e programme e<!lusively #or least3developed !ountries> 9n 2002 the WTO adopted a &or= programme #or least3developed !ountries> 9t !ontains several broad elements$ improved mar=et a!!essR more te!hni!al assistan!eR support #or agen!ies &or=ing on the diversi#i!ation o# least3developed !ountriesF e!onomiesR help in #ollo&ing the &or= o# the WTOR and a speedier membership pro!ess #or least3developed !ountries negotiating to Hoin the WTO> 5t the same time more and more member governments have unilaterally s!rapped import duties and import Buotas on all e<ports #rom least3developed !ountries>

**

( ;maison9 in Gene&a: being present is important8 but not easy for all
The WTOFs o##i!ial business ta=es pla!e mainly in %eneva> So do the uno##i!ial !onta!ts that !an be eBually important> Gut having a permanent o##i!e o# representatives in %eneva !an be e<pensive> Only about one third o# the 30 or so least3developed !ountries in the WTO have permanent o##i!es in %eneva and they !over all United Jations a!tivities as &ell as the WTO> 5s a result o# the negotiations to lo!ate the WTO headBuarters in %eneva the S&iss government has agreed to provide subsidi'ed o##i!e spa!e #or delegations #rom least3developed !ountries> 5 number o# WTO members also provide #inan!ial support #or ministers and a!!ompanying o##i!ials #rom least3developed !ountries to help them attend WTO ministerial !on#eren!es> #) THE "EBS$TE: ! to!org * trade topics * de&elopment

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-! Committees
Wor= spe!i#i!ally on developing !ountries &ithin the WTO itsel# !an be divided into t&o broad areas$ ,i1 &or= o# the WTO !ommittees ,this heading1 and ,ii1 training #or government o##i!ials ,and others1 by the WTO Se!retariat as mandated by the !ommittee ,ne<t heading1>

Trade and %e&elopment Committee

The WTO 8ommittee on Trade and :evelopment has a &ide3ranging mandate> 5mong the broad areas o# topi!s it has ta!=led as priorities are$ ho& provisions #avouring developing !ountries are being implemented guidelines #or te!hni!al !ooperation in!reased parti!ipation o# developing !ountries in the trading system and the position o# least3developed !ountries> 7ember3!ountries also have to in#orm the WTO about spe!ial programmes involving trade !on!essions #or produ!ts #rom developing !ountries and about regional arrangements among developing !ountries> The Trade and :evelopment 8ommittee handles noti#i!ations o#$ 4 %enerali'ed System o# Pre#eren!es programmes ,in &hi!h developed !ountries lo&er their trade barriers pre#erentially #or produ!ts #rom developing !ountries1 pre#erential arrangements among developing !ountries su!h as 7E+8OSU+ ,the Southern 8ommon 7ar=et in 2atin 5meri!a1 the 8ommon 7ar=et #or Eastern and Southern 5#ri!a ,8O7ES51 and the 5SE5J Free Trade 5rea ,5FT51

Subcommittee on Least2%e&eloped Countries

The Sub!ommittee on 2east3:eveloped 8ountries reports to the Trade and :evelopment 8ommittee but it is an important body in its o&n right> 9ts &or= #o!uses on t&o related issues$ 4 4 &ays o# integrating least3developed !ountries into the multilateral trading system te!hni!al !ooperation>

The sub!ommittee also e<amines periodi!ally ho& spe!ial provisions #avouring least3developed !ountries in the WTO agreements are being implemented>

The %oha agenda committees

The :oha 7inisterial 8on#eren!e in Jovember 200( added ne& tas=s and some ne& &or=ing groups> The Trade and :evelopment 8ommittee meets in spe!ial sessions to handle &or= under the :oha :evelopment 5genda> The ministers also set up &or=ing groups on Trade :ebt and Finan!e and on Trade and Te!hnology Trans#er> ,For details see the !hapter on the :oha 5genda>1

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.! "T# technical cooperation

Te!hni!al !ooperation is an area o# WTO &or= that is devoted almost entirely to helping developing !ountries ,and !ountries in transition #rom !entrally3planned e!onomies1 operate su!!ess#ully in the multilateral trading system> The obHe!tive is to help build the ne!essary institutions and to train o##i!ials> The subHe!ts !overed deal both &ith trade poli!ies and &ith e##e!tive negotiation>

Training8 seminars and

orHshops

The WTO holds regular training sessions on trade poli!y in %eneva> 9n addition it organi'es about "00 te!hni!al !ooperation a!tivities annually in!luding seminars and &or=shops in various !ountries and !ourses in %eneva> Targeted are developing !ountries and !ountries in transition #rom #ormer so!ialist or !ommunist systems &ith a spe!ial emphasis on 5#ri!an !ountries> Seminars have also been organi'ed in 5sia 2atin 5meri!a the 8aribbean 7iddle East and Pa!i#i!> Funding #or te!hni!al !ooperation and training !omes #rom three sour!es$ the WTOFs regular budget voluntary !ontributions #rom WTO members and !ost3sharing either by !ountries involved in an event or by international organi'ations> The present regular WTO budget #or te!hni!al !ooperation and training is @ million S&iss #ran!s> E<tra !ontributions by member !ountries go into trust #unds administered by the WTO Se!retariat or the donor !ountry> 9n 2000 !ontributions to trust #unds totalled 20 million S&iss #ran!s> 5 WTO +e#eren!e 8entre programme &as initiated in (**@ &ith the obHe!tive o# !reating a net&or= o# !omputeri'ed in#ormation !entres in least3developed and developing !ountries> The !entres provide a!!ess to WTO in#ormation and do!uments through a print library a 8:3+O7 !olle!tion and through the 9nternet to WTO &ebsites and databases> The !entres are lo!ated mainly in trade ministries and in the headBuarters o# regional !oordination organi'ations> There are !urrently (00 re#eren!e !entres>

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0! Some issues raised

The Uruguay +ound ,(*-./*01 sa& a shi#t in Jorth3South politi!s in the %5TT3WTO system> Previously developed and developing !ountries had tended to be in opposite groups although even then there &ere e<!eptions> 9n the run up to the Uruguay +ound the line bet&een the t&o be!ame less rigid and during the round di##erent allian!es developed depending on the issues> The trend has !ontinued sin!e then> 9n some issues the divide still appears !lear D in te<tiles and !lothing and some o# the ne&er issues debated in the WTO #or e<ample D and developing !ountries have organi'ed themselves into allian!es su!h as the 5#ri!an %roup and the 2east3:eveloped 8ountries %roup> 9n many others the developing !ountries do not share !ommon interests and may #ind themselves on opposite sides o# a negotiation> 5 number o# di##erent !oalitions among di##erent groups o# developing !ountries have emerged #or this reason> The di##eren!es !an be #ound in subHe!ts o# immense importan!e to developing !ountries su!h as agri!ulture> This is a summary o# some o# the points dis!ussed in the WTO> ;'eaHs9 and ;escalation9: they7 hat are

Tariff peaHs$ 7ost import tari##s are no& Buite lo& parti!ularly in developed !ountries> Gut #or a #e& produ!ts that governments !onsider to be sensitive D they &ant to prote!t their domesti! produ!ers D tari##s remain high> These are tari## pea=s> Some a##e!t e<ports #rom developing !ountries> Tariff escalation$ 9# a !ountry &ants to prote!t its pro!essing or manu#a!turing industry it !an set lo& tari##s on imported materials used by the industry ,!utting the industryFs !osts1 and set higher tari##s on #inished produ!ts to prote!t the goods produ!ed by the industry> This is tari## es!alation> When importing !ountries es!alate their tari##s in this &ay they ma=e it more di##i!ult #or !ountries produ!ing ra& materials to pro!ess and manu#a!ture value3 added produ!ts #or e<port> Tari## es!alation e<ists in both developed and developing !ountries> Slo&ly it is being redu!ed>

'articipation in the system: opportunities and concerns

The WTO agreements &hi!h &ere the out!ome o# the (*-./*0 Uruguay +ound o# trade negotiations provide numerous opportunities #or developing !ountries to ma=e gains> Further liberali'ation through the :oha 5genda negotiations aims to improve the opportunities> 5mong the gains are e<port opportunities> They in!lude$ 4 4 4 4 4 #undamental re#orms in agri!ultural trade phasing out Buotas on developing !ountriesF e<ports o# te<tiles and !lothing redu!tions in !ustoms duties on industrial produ!ts e<panding the number o# produ!ts &hose !ustoms duty rates are bound under the WTO ma=ing the rates di##i!ult to raise phasing out bilateral agreements to restri!t traded Buantities o# !ertain goods D these grey area measures ,the so3!alled voluntary e<port restraints1 are not really re!ogni'ed under %5TT3WTO>

9n addition liberali'ation under the WTO boosts global %:P and stimulates &orld demand #or developing !ountriesF e<ports> Gut a number o# problems remain> :eveloping !ountries have pla!ed on the :oha 5genda a number o# problems they #a!e in implementing the present agreements> 5nd they !omplain that they still #a!e e<!eptionally high tari##s on sele!ted produ!ts ,tari## pea=s1 in important mar=ets that !ontinue to obstru!t their important e<ports> E<amples in!lude tari## pea=s on te<tiles !lothing and #ish and #ish produ!ts> 9n the Uruguay +ound on average industrial !ountries made slightly smaller redu!tions in their tari##s on produ!ts &hi!h are mainly e<ported by developing

(03

!ountries ,3@T1 than on imports #rom all !ountries ,00T1> 5t the same time the potential #or developing !ountries to trade &ith ea!h other is also hampered by the #a!t that the highest tari##s are sometimes in developing !ountries themselves> Gut the in!reased proportion o# trade !overed by bindings ,!ommitted !eilings that are di##i!ult to remove1 has added se!urity to developing !ountry e<ports> 5 related issue is tari## es!alation &here an importing !ountry prote!ts its pro!essing or manu#a!turing industry by setting lo&er duties on imports o# ra& materials and !omponents and higher duties on #inished produ!ts> The situation is improving> Tari## es!alation remains a#ter the Uruguay +ound but it is less severe &ith a number o# developed !ountries eliminating es!alation on sele!ted produ!ts> Jo& the :oha agenda in!ludes spe!ial attention to be paid to tari## pea=s and es!alation so that they !an be substantially redu!ed>

Erosion of preferences
5n issue that &orries developing !ountries is the erosion o# pre#eren!es D spe!ial tari## !on!essions granted by developed !ountries on imports #rom !ertain developing !ountries be!ome less meaning#ul i# the normal tari## rates are !ut be!ause the di##eren!e bet&een the normal and pre#erential rates is redu!ed> )ust ho& valuable these pre#eren!es are is a matter o# debate> Unli=e regular WTO tari## !ommitments they are not bound under WTO agreements and there#ore they !an be !hanged easily> They are o#ten given unilaterally at the initiative o# the importing !ountry> This ma=es trade under pre#erential rates less predi!table than under regular bound rates &hi!h !annot be in!reased easily> Ultimately !ountries stand to gain more #rom regular bound tari## rates> Gut some !ountries and some !ompanies have bene#ited #rom pre#eren!es> The gains vary #rom produ!t to produ!t and they also depend on &hether produ!ers !an use the opportunity to adHust so that they remain !ompetitive a#ter the pre#eren!es have been &ithdra&n>

The ability to adapt: the supply2side

8an developing !ountries bene#it #rom the !hangesV Qes but only i# their e!onomies are !apable o# responding> This depends on a !ombination o# a!tions$ #rom improving poli!y3ma=ing and ma!roe!onomi! management to boosting training and investment> The least3developed !ountries are &orst pla!ed to ma=e the adHustments be!ause o# la!= o# human and physi!al !apital poorly developed in#rastru!tures institutions that donFt #un!tion very &ell and in some !ases politi!al instability>

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8hapter @

The #rgani6ation
The WTO is Zmember3drivenF &ith de!isions ta=en by !onsensus among all member governments
+! "hose "T# is it any ay7
The WTO is run by its member governments> 5ll maHor de!isions are made by the membership as a &hole either by ministers ,&ho meet at least on!e every t&o years1 or by their ambassadors or delegates ,&ho meet regularly in %eneva1> :e!isions are normally ta=en by !onsensus> 9n this respe!t the WTO is di##erent #rom some other international organi'ations su!h as the World Gan= and 9nternational 7onetary Fund> 9n the WTO po&er is not delegated to a board o# dire!tors or the organi'ationFs head> When WTO rules impose dis!iplines on !ountriesF poli!ies that is the out!ome o# negotiations among WTO members> The rules are en#or!ed by the members themselves under agreed pro!edures that they negotiated in!luding the possibility o# trade san!tions> Gut those san!tions are imposed by member !ountries and authori'ed by the membership as a &hole> This is Buite di##erent #rom other agen!ies &hose bureau!ra!ies !an #or e<ample in#luen!e a !ountryFs poli!y by threatening to &ithhold !redit> +ea!hing de!isions by !onsensus among some ("0 members !an be di##i!ult> 9ts main advantage is that de!isions made this &ay are more a!!eptable to all members> 5nd despite the di##i!ulty some remar=able agreements have been rea!hed> Jevertheless proposals #or the !reation o# a smaller e<e!utive body D perhaps li=e a board o# dire!tors ea!h representing di##erent groups o# !ountries D are heard periodi!ally> Gut #or no& the WTO is a member3driven !onsensus3 based organi'ation>

(LTE<)(T$EE E$E"
;The "T# ill liHely suffer from slo ith hole@! and

cumbersome policy2maHing and management J an organi6ation be run by a >committee of the more than +-5 member countries cannot Mass management simply does not lend itself to operational efficiency or serious policy discussion! Both the $MF and the "orld BanH ha&e an e?ecuti&e board to direct the e?ecuti&e officers of the organi6ation8 ith permanent participation by the ma=or industrial countries and &oting! The "T# ill reCuire a comparable structure to operate efficiently! !!! RButS the political orientation of smaller !!! members remains strongly opposed!9 Leffrey L Schott 9nstitute #or 9nternational E!onomi!s Washington eighted

Highest authority: the Ministerial Conference

So the WTO belongs to its members> The !ountries ma=e their de!isions through various !oun!ils and !ommittees &hose membership !onsists o# all WTO members> Topmost is the ministerial !on#eren!e &hi!h has to meet at least on!e every t&o years> The 7inisterial 8on#eren!e !an ta=e de!isions on all matters under any o# the multilateral trade agreements> #) THE "EBS$TE: ! to!org * the "T# * decision maHing * ministerial conferences

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Second le&el: General Council in three guises

:ay3to3day &or= in bet&een the ministerial !on#eren!es is handled by three bodies$ 4 4 4 The %eneral 8oun!il The :ispute Settlement Gody The Trade Poli!y +evie& Gody

5ll three are in #a!t the same D the 5greement Establishing the WTO states they are all the %eneral 8oun!il although they meet under di##erent terms o# re#eren!e> 5gain all three !onsist o# all WTO members> They report to the 7inisterial 8on#eren!e> The %eneral 8oun!il a!ts on behal# o# the 7inisterial 8on#eren!e on all WTO a##airs> 9t meets as the :ispute Settlement Gody and the Trade Poli!y +evie& Gody to oversee pro!edures #or settling disputes bet&een members and to analy'e membersF trade poli!ies> #) THE "EBS$TE: ! to!org * the "T# * General Council

(0.

"T# structure
5ll WTO members may parti!ipate in all !oun!ils !ommittees et! e<!ept 5ppellate Gody :ispute Settlement panels Te<tiles 7onitoring Gody and plurilateral !ommittees>

Ministerial Conference

%eneral 8oun!il meeting as

%ispute Settlement
Body

%eneral 8oun!il meeting as

General Council

Trade 'olicy <e&ie Body

(ppellate Body %ispute Settlement panels

Committees on

Trade and Environment Trade and :evelopment Subcommittee on 0east De#eloped 1ountries +egional Trade 5greements Galan!e o# Payments +estri!tions Gudget Finan!e and 5dministration 5!!ession

Council for Trade in Goods

Council for Trade2<elated (spects of $ntellectual 'roperty <ights

Council for Trade in Ser&ices

Committees on

"orHing parties on "orHing groups on

Trade debt and #inan!e Trade and te!hnology trans#er ,$nacti&e$ ,+elationship bet&een Trade and 9nvestment ,9ntera!tion bet&een Trade and 8ompetition Poli!y ,Transparen!y in %overnment Pro!urement1

7ar=et 5!!ess 5gri!ulture Sanitary and Phytosanitary 7easures Te!hni!al Garriers to Trade Subsidies and 8ountervailing 7easures 5nti3:umping Pra!ti!es 8ustoms Naluation +ules o# Origin 9mport 2i!ensing Trade3+elated 9nvestment 7easures Sa#eguards State3Trading Enterprises

Committees on

Trade in Finan!ial Servi!es Spe!i#i! 8ommitments :omesti! +egulation %5TS +ules

"orHing parties on

'lurilaterals

Trade in 8ivil 5ir!ra#t 8ommittee %overnment Pro!urement 8ommittee

%oha %e&elopment (genda: T)C and its bodies

"orHing party on

Trade )egotiations Committee

Special Sessions of
Servi!es 8oun!il A T+9PS 8oun!il A :ispute Settlement Gody A 5gri!ulture 8ommittee A Trade and :evelopment 8ommittee A Trade and Environment 8ommittee

)egotiating groups on 'lurilateral

9n#ormation Te!hnology 5greement 8ommittee

7ar=et 5!!ess A +ules A Trade Fa!ilitation

Key
+eporting to %eneral 8oun!il ,or a subsidiary1 +eporting to :ispute Settlement Gody Plurilateral !ommittees in#orm the %eneral 8oun!il or %oods 8oun!il o# their a!tivities although these agreements are not signed by all WTO members Trade Jegotiations 8ommittee reports to %eneral 8oun!il The %eneral 8oun!il also meets as the Trade Poli!y +evie& Gody and :ispute Settlement Gody

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Third le&el: councils for each broad area of trade8 and more
Three more !oun!ils ea!h handling a di##erent broad area o# trade report to the %eneral 8oun!il$ 4 4 4 The 8oun!il #or Trade in %oods ,Goods Council1 The 8oun!il #or Trade in Servi!es ,Ser&ices Council1 The 8oun!il #or Trade3+elated 5spe!ts o# 9ntelle!tual Property +ights ,T<$'S Council1

Eoting is possible8 too hats7 Same people8 different

The WTO !ontinues %5TTFs tradition o# Jo not e<a!tly> ma=ing de!isions not by voting but by Formally all o# these !oun!ils and to ensure !onsensus> This allo&s all members !ommittees !onsist o# the #ull membership o# their interests are properly !onsidered even the WTO> Gut that does not mean theyto are though on o!!asion they may de!ide Hoin the same orin that distin!tions are a !onsensus thethe overall interests o# purely the bureau!rati!> multilateral trading system> 9n pra!ti!e the people parti!ipating inWTO the Where !onsensus is not possible the various !oun!ils and !ommittees are di##erent agreement allo&s #or voting D a vote being be!ause levels o# votes seniority and &on &ithdi##erent a maHority o# the !ast and on di##erent areas o# e<pertise are needed> the basis o# one !ountry one vote> 6eads o# missions in %eneva ,usually The WTO 5greement envisages #our spe!i#i! ambassadors1 normally represent their situations involving voting$ !ountries at the %eneral 8oun!il level> Some 4 interpretation o# any o# the multilateral o#5n the !ommittees !an be highly spe!iali'ed trade agreements !an be adopted a and sometimes governments send by e<pert maHority o# three Buarters o# WTO members> o##i!ials #rom their !apital !ities to parti!ipate in these meetings> 4 The 7inisterial 8on#eren!e !an &aive an obligation imposed a %oods parti!ular member Even at the level o#on the Servi!es and by a multilateral agreement also through T+9PS !oun!ils many delegations assign a three3Buarters maHority> di##erent o##i!ials to !over the di##erent meetings> 4 :e!isions to amend provisions o# the multilateral agreements !an be adopted through approval either by all members or by a t&o3thirds maHority depending on the nature o# the provision !on!erned> Gut the amendments only ta=e e##e!t #or those WTO members &hi!h a!!ept them> 4 5 de!ision to admit a ne& member is ta=en by a t&o3thirds maHority in the 7inisterial 8on#eren!e or the %eneral 8oun!il in bet&een !on#eren!es>

5s their names indi!ate the three are responsible #or the &or=ings o# the WTO agreements dealing &ith their respe!tive areas o# trade> 5gain they !onsist o# all WTO members> The three also have subsidiary bodies ,see belo%1> Si< other bodies report to the %eneral 8oun!il> The s!ope o# their !overage is smaller so they are !ommittees> Gut they still !onsist o# all WTO members> They !over issues su!h as trade and development the environment regional trading arrangements and administrative issues> The Singapore 7inisterial 8on#eren!e in :e!ember (**. de!ided to !reate ne& &or=ing groups to loo= at investment and !ompetition poli!y transparen!y in government pro!urement and trade #a!ilitation> T&o more subsidiary bodies dealing &ith the plurilateral agreements ,&hi!h are not signed by all WTO members1 =eep the %eneral 8oun!il in#ormed o# their a!tivities regularly>

Fourth le&el: do n to the nitty2gritty

Ea!h o# the higher level !oun!ils has subsidiary bodies> The Goods Council has (( !ommittees dealing &ith spe!i#i! subHe!ts ,su!h as agri!ulture mar=et a!!ess subsidies anti3dumping measures and so on1> 5gain these !onsist o# all member !ountries> 5lso reporting to the %oods 8oun!il is the Te<tiles 7onitoring Gody &hi!h !onsists o# a !hairman and (0 members a!ting in their personal !apa!ities and groups dealing &ith noti#i!ations ,governments in#orming the WTO about !urrent and ne& poli!ies or measures1 and state trading enterprises> The Ser&ices CouncilFs subsidiary bodies deal &ith #inan!ial servi!es domesti! regulations %5TS rules and spe!i#i! !ommitments> 5t the %eneral 8oun!il level the %ispute Settlement Body also has t&o subsidiaries$ the dispute settlement panels o# e<perts appointed to adHudi!ate on unresolved disputes and the 5ppellate Gody that deals &ith appeals>

Goods Council9s committees

7ar=et a!!ess 5gri!ulture Sanitary and phytosanitary measures Te<tiles 7onitoring Gody Te!hni!al barriers to trade Subsidies and !ountervail 5nti3dumping 8ustoms valuation +ules o# origin 9mport li!ensing 9nvestment measures Sa#eguards State trading ,&or=ing party1

;H#%s9 and other bods: the need for informality

9mportant brea=throughs are rarely made in #ormal meetings o# these bodies least o# all in the higher level !oun!ils> Sin!e de!isions are made by !onsensus &ithout voting in#ormal !onsultations &ithin the WTO play a vital role in bringing a vastly diverse membership round to an agreement> One step a&ay #rom the #ormal meetings are in#ormal meetings that

still in!lude the #ull membership su!h as those o# the 6eads o# :elegations ,6O:1> 7ore di##i!ult issues have to be thrashed out in smaller groups> 5 !ommon re!ent pra!ti!e is #or the !hairperson o# a negotiating group to attempt to #orge a !ompromise by holding !onsultations &ith delegations individually in t&os or threes or in groups o# 20/30 o# the most interested delegations> These smaller meetings have to be handled sensitively> The =ey is to ensure that everyone is =ept in#ormed about &hat is going on ,the pro!ess must be transparent1 even i# they are not in a parti!ular !onsultation or meeting and that they have an opportunity to parti!ipate or provide input ,it must be in!lusive1> One term has be!ome !ontroversial but more among some outside observers than among delegations> The %reen +oom is a phrase ta=en #rom the in#ormal name o# the dire!tor3generalFs !on#eren!e room> 9t is used to re#er to meetings o# 20/00 delegations> These meetings !an be !alled by a !ommittee !hairperson as &ell as the dire!tor3general and !an ta=e pla!e else&here su!h as at 7inisterial 8on#eren!es> 9n the past delegations have sometimes #elt that %reen +oom meetings !ould lead to !ompromises being stru!= behind their ba!=s> So e<tra e##orts are made to ensure that the pro!ess is handled !orre!tly &ith regular reports ba!= to the #ull membership> 9n the end de!isions have to be ta=en by all members and by !onsensus> Jo one has been able to #ind an alternative &ay o# a!hieving !onsensus on di##i!ult issues be!ause it is virtually impossible #or members to !hange their positions voluntarily in meetings o# the #ull membership> 7ar=et a!!ess negotiations also involve small groups but #or a !ompletely di##erent reason> The #inal out!ome is a multilateral pa!=age o# individual !ountriesF !ommitments but those !ommitments are the result o# numerous bilateral in#ormal bargaining sessions &hi!h depend on individual !ountriesF interests> ,E<amples in!lude the traditional tari## negotiations and mar=et a!!ess tal=s in servi!es>1 So in#ormal !onsultations in various #orms play a vital role in allo&ing !onsensus to be rea!hed but they do not appear in organi'ation !harts pre!isely be!ause they are in#ormal> They are not separate #rom the #ormal meetings ho&ever> They are ne!essary #or ma=ing #ormal de!isions in the !oun!ils and !ommittees> Jor are the #ormal meetings unimportant> They are the #orums #or e<!hanging vie&s putting !ountriesF positions on the re!ord and ultimately #or !on#irming de!isions> The art o# a!hieving agreement among all WTO members is to stri=e an appropriate balan!e so that a brea=through a!hieved among only a #e& !ountries !an be a!!eptable to the rest o# the membership>

-! Membership8 alliances and bureaucracy

5ll members have Hoined the system as a result o# negotiation and there#ore membership means a balan!e o# rights and obligations> They enHoy the privileges that other member3!ountries give to them and the se!urity that the trading rules provide> 9n return they had to ma=e !ommitments to open their mar=ets and to abide by the rules D those !ommitments &ere the result o# the membership ,or a!!ession1 negotiations> 8ountries negotiating membership are WTO observers>

Ho

to =oin the "T#: the accession process

5ny state or !ustoms territory having #ull autonomy in the !ondu!t o# its trade poli!ies may Hoin ,a!!ede to1 the WTO but WTO members must agree on the terms> Groadly spea=ing the appli!ation goes through #our stages$ 4 First8 >tell us about yourself@> The government applying #or membership has to des!ribe all aspe!ts o# its trade and e!onomi! poli!ies that have a bearing on WTO agreements> This is submitted to the WTO in a memorandum &hi!h is e<amined by the &or=ing party dealing &ith the !ountryFs appli!ation> These &or=ing parties are open to all WTO members> Second8 > orH out ith us indi&idually hat you ha&e to offer@> When the &or=ing party has made su##i!ient progress on prin!iples and poli!ies parallel bilateral tal=s begin bet&een the prospe!tive ne& member and individual !ountries> They are bilateral be!ause di##erent !ountries have di##erent trading interests> These tal=s !over tari## rates and spe!i#i! mar=et a!!ess !ommitments and other poli!ies in goods and servi!es> The ne& memberFs !ommitments are to apply eBually to all WTO members under normal non3dis!rimination rules even though they are negotiated bilaterally> 9n other &ords the tal=s determine the bene#its ,in the #orm o# e<port opportunities and guarantees1 other WTO members !an e<pe!t &hen the ne& member Hoins> ,The tal=s !an be highly !ompli!ated> 9t has been said that in some !ases the negotiations are almost as large as an entire round o# multilateral trade negotiations>1 Third8 >let9s draft membership terms@ > On!e the &or=ing party has !ompleted its e<amination o# the appli!antFs trade regime and the parallel bilateral mar=et a!!ess negotiations are !omplete the &or=ing party #inali'es the terms o# a!!ession> These appear in a report a dra#t membership treaty ,proto!ol o# a!!ession1 and lists ,s!hedules1 o# the member3to3beFs !ommitments> Finally8 >the decision@> The #inal pa!=age !onsisting o# the report proto!ol and lists o# !ommitments is presented to the WTO %eneral 8oun!il or the 7inisterial 8on#eren!e> 9# a t&o3thirds maHority o# WTO members vote in #avour the appli!ant is #ree to sign the proto!ol and to a!!ede to the organi'ation> 9n many !ases the !ountryFs o&n parliament or legislature has to rati#y the agreement be#ore membership is !omplete> #) THE "EBS$TE: ! to!org * the "T# * accessions

<epresenting us !!!
The &or= o# the WTO is underta=en by representatives o# member governments but its roots lie in the everyday a!tivity o# industry and !ommer!e> Trade poli!ies and negotiating positions are prepared in !apitals usually ta=ing into a!!ount advi!e #rom private #irms business organi'ations #armers !onsumers and other interest groups> 7ost !ountries have a diplomati! mission in %eneva sometimes headed by a spe!ial ambassador to the WTO> O##i!ials #rom the missions attend meetings o# the many !oun!ils !ommittees &or=ing parties and negotiating groups at WTO headBuarters> Sometimes e<pert representatives are sent dire!tly #rom !apitals to put #or&ard their governmentsF vie&s on spe!i#i! Buestions>

The Tuad
Some o# the most di##i!ult negotiations have needed an initial brea=through in tal=s among the #our largest members$ 8anada European Union )apan United States

These are the Yuadrilaterals or the Yuad>

European Dnion or Communities7

For legal reasons the European Union is =no&n o##i!ially as the European 8ommunities in WTO business> The EU is a WTO member in its o&n right as are ea!h o# its (" member states D ma=ing (. WTO members> While the member states !oordinate their position in Grussels and %eneva the European 8ommission alone spea=s #or the EU at almost all WTO meetings> For this reason in most issues WTO materials re#er to the EU or the more legally3!orre!t E8> 6o&ever sometimes re#eren!es are made to the spe!i#i! member states parti!ularly &here their la&s di##er> This is the !ase in some disputes &hen an EU memberFs la& or measure is !ited or in noti#i!ations o# EU member !ountriesF la&s su!h as in intelle!tual property ,T+9PS1> Sometimes individualsF nationalities are identi#ied su!h as #or WTO !ommittee !hairpersons>

<epresenting groups of countries !!!

9n!reasingly !ountries are getting together to #orm groups and allian!es in the WTO> 9n some !ases they even spea= &ith one voi!e using a single spo=esman or negotiating team> This is partly the natural result o# e!onomi! integration D more !ustoms unions #ree trade areas and !ommon mar=ets are being set up around the &orld> 9t is also seen as a means #or smaller !ountries to in!rease their bargaining po&er in negotiations &ith their larger trading partners> Sometimes &hen groups o# !ountries adopt !ommon positions !onsensus !an be rea!hed more easily> Sometimes the groups are spe!i#i!ally !reated to !ompromise and brea= a deadlo!= rather than to sti!= to a !ommon position> Gut there are no hard and #ast rules about the impa!t o# groupings in the WTO> The largest and most !omprehensive group is the European Dnion ,#or legal reasons =no&n o##i!ially as the >European Communities@ in WTO business1 and its (" member states> The EU is a !ustoms union &ith a single e<ternal trade poli!y and tari##> While the member states !oordinate their position in Grussels and %eneva the European 8ommission alone spea=s #or the EU at almost all WTO meetings> The EU is a WTO member in its o&n right as are ea!h o# its member states> 5 lesser degree o# e!onomi! integration has so #ar been a!hieved by WTO members in the (ssociation of South East (sian )ations A(SE()B D Grunei :arussalam 9ndonesia 7alaysia 7yanmar Philippines Thailand and Singapore> ,The three remaining members 8ambodia 2aos and Niet Jam are applying to Hoin the WTO>1 Jevertheless they have many !ommon trade interests and are #reBuently able to !oordinate positions and to spea= &ith a single voi!e> The role o# spo=esman rotates among 5SE5J members and !an be shared out a!!ording to topi!> ME<C#SD<8 the Southern Common MarHet ,5rgentina Gra'il Paraguay and Uruguay &ith Golivia and 8hile as asso!iate members1 has a similar set3up> 7ore re!ent e##orts at regional e!onomi! integration have not yet rea!hed the point &here their !onstituents #reBuently have a single spo=esman on WTO issues> 5n e<amples is the )orth (merican Free Trade (greement: )(FT( ,8anada US and 7e<i!o1> 5mong other groupings &hi!h o!!asionally present uni#ied statements are the (frican Group the least2de&eloped countries the (frican8

Caribbean and 'acific Group A(C'B and the Latin (merican Economic System ASEL(B> 5 &ell3=no&n allian!e o# a di##erent =ind is the Cairns Group> 9t &as set up Hust be#ore the Uruguay +ound began in (*-. to argue #or agri!ultural trade liberali'ation> The group be!ame an important third #or!e in the #arm tal=s and remains in operation> 9ts members are diverse but sharing a !ommon obHe!tive D that agri!ulture has to be liberali'ed D and the !ommon vie& that they la!= the resour!es to !ompete &ith larger !ountries in domesti! and e<port subsidies>

The Cairns Group

From #our !ontinents members ranging #rom OE8: !ountries to the least developed 5rgentina 5ustralia Golivia Gra'il 8anada 8hile 8olombia 8osta +i!a %uatemala 9ndonesia 7alaysia Je& Lealand Paraguay Philippines South 5#ri!a Thailand Uruguay

The "T# Secretariat and budget

The WTO Se!retariat is lo!ated in %eneva> 9t has around .30 sta## and is headed by a dire!tor3general> 9ts responsibilities in!lude$ 4 5dministrative and te!hni!al support #or WTO delegate bodies ,!oun!ils !ommittees &or=ing parties negotiating groups1 #or negotiations and the implementation o# agreements> Te!hni!al support #or developing !ountries and espe!ially the least3developed> Trade per#orman!e and trade poli!y analysis by WTO e!onomists and statisti!ians> 5ssistan!e #rom legal sta## in the resolution o# trade disputes involving the interpretation o# WTO rules and pre!edents> :ealing &ith a!!ession negotiations #or ne& members and providing advi!e to governments !onsidering membership>

4 4 4 4

Some o# the WTOFs divisions are responsible #or supporting parti!ular !ommittees$ the 5gri!ulture :ivision assists the !ommittees on agri!ulture and on sanitary and phytosanitary measures #or e<ample> Other divisions provide broader support #or WTO a!tivities$ te!hni!al !ooperation e!onomi! analysis and in#ormation #or e<ample> The WTO budget is over (.0 million S&iss #ran!s &ith individual !ontributions !al!ulated on the basis o# shares in the total trade !ondu!ted by WTO members> Part o# the WTO budget also goes to the 9nternational Trade 8entre>

.! The Secretariat
The WTO Se!retariat is headed by a dire!tor3general> :ivisions !ome dire!tly under the dire!tor3general or one o# his deputies> This is the stru!ture sin!e ( O!tober 200">
%irector2general Pas!al 2amy #ffice of the director2general$ administrative support #or ,disputes1 5ppellate Gody Council and Trade )egotiations Committee %i&ision$ %eneral 8oun!il :ispute Settlement Gody Trade Jegotiations 8ommittee ,::51 et! %%( Special %uties %i&ision$ Spe!ial #o!us on development assistan!e aspe!ts o# !otton and other sele!ted :oha :evelopment 5genda issues Human <esources %i&ision $nformation and Media <elations %i&ision %eputy director2general 5leHandro )ara (ccessions %i&ision$ negotiations to Hoin the WTO Economic <esearch and Statistics %i&ision Legal (ffairs %i&ision$ :ispute settlement et! <ules %i&ision$ anti3dumping subsidies sa#eguards state trading !ivil air!ra#t et! %eputy director2general Nalentine +ug&abi'a %e&elopment %i&ision$ trade and development least3developed !ountries E?ternal <elations %i&ision$ relations &ith intergovernmental and non3governmental organi'ations proto!ol Technical Cooperation (udit Trade and Finance %i&ision$ T+97sR trade debt and #inan!eR balan!e o# paymentsR lin=s &ith 97F and World Gan=R trade #a!ilitation ,simpli#i!ation o# trade pro!edures1R trade and investmentR et! Training and Technical Cooperation $nstitute %eputy director2general 6arsha Nardhana Singh (griculture and Commodities %i&ision$ agri!ulture sanitary and phytosanitary measures et! Trade and En&ironment %i&ision$ trade and environment te!hni!al barriers to trade et! Trade in Ser&ices %i&ision$ %5TS et!> %eputy director2general +u#us Qer<a (dministration and General Ser&ices %i&ision$ budget #inan!e and administration $nformatics %i&ision $ntellectual 'roperty %i&ision$ T+9PS !ompetition and government pro!urement Language Ser&ices and %ocumentation %i&ision MarHet (ccess %i&ision$ %oods 8oun!il mar=et a!!ess tari##s !ustoms valuation non3tari## measures import li!ensing rules o# origin preshipment inspe!tion Trade 'olicies <e&ie %i&ision$ trade poli!y revie&s regional trade agreements

0! Special policies
The WTOFs main #un!tions are to do &ith trade negotiations and the en#or!ement o# negotiated multilateral trade rules ,in!luding dispute settlement1> Spe!ial #o!us is given to #our parti!ular poli!ies supporting these #un!tions$ 4 4 4 4 5ssisting developing and transition e!onomies Spe!iali'ed help #or e<port promotion 8ooperation in global e!onomi! poli!y3ma=ing +outine noti#i!ation &hen members introdu!e ne& trade measures or alter old ones>

(ssisting de&eloping and transition economies

:eveloping !ountries ma=e up about three Buarters o# the total WTO membership> Together &ith !ountries !urrently in the pro!ess o# transition to mar=et3based e!onomies they play an in!reasingly important role in the WTO> There#ore mu!h attention is paid to the spe!ial needs and problems o# developing and transition e!onomies> The WTO Se!retariatFs Training and Te!hni!al 8ooperation 9nstitute organi'es a number o# programmes to e<plain ho& the system &or=s and to help train government o##i!ials and negotiators> Some o# the events are in %eneva others are held in the !ountries !on!erned> 5 number o# the programmes are organi'ed Hointly &ith other international organi'ations> Some ta=e the #orm o# training !ourses> 9n other !ases individual assistan!e might be o##ered> The subHe!ts !an be anything #rom help in dealing &ith negotiations to Hoin the WTO and implementing WTO !ommitments to guidan!e in parti!ipating e##e!tively in multilateral negotiations> :eveloping !ountries espe!ially the least3developed among them are helped &ith trade and tari## data relating to their o&n e<port interests and to their parti!ipation in WTO bodies> #) THE "EBS$TE: ! to!org * trade topics * de&elopment * "T# Training $nstitute

Speciali6ed help for e?porting: the $nternational Trade Centre

The 9nternational Trade 8entre &as established by %5TT in (*.0 at the reBuest o# the developing !ountries to help them promote their e<ports> 9t is Hointly operated by the WTO and the United Jations the latter a!ting through UJ8T5: ,the UJ 8on#eren!e on Trade and :evelopment1> The !entre responds to reBuests #rom developing !ountries #or assistan!e in #ormulating and implementing e<port promotion programmes as &ell as import operations and te!hniBues> 9t provides in#ormation and advi!e on e<port mar=ets and mar=eting te!hniBues> 9t assists in establishing e<port promotion and mar=eting servi!es and in training personnel reBuired #or these servi!es> The !entreFs help is #reely available to the least3developed !ountries>

The "T# in global economic policy2maHing

5n important aspe!t o# the WTOFs mandate is to !ooperate &ith the 9nternational 7onetary Fund the World Gan= and other multilateral institutions to a!hieve greater !oheren!e in global e!onomi! poli!y3 ma=ing> 5 separate 7inisterial :e!laration &as adopted at the 7arra=esh 7inisterial 7eeting in 5pril (**0 to unders!ore this obHe!tive> The de!laration envisages an in!reased !ontribution by the WTO to a!hieving greater !oheren!e in global e!onomi! poli!y3ma=ing> 9t re!ogni'es that di##erent aspe!ts o# e!onomi! poli!y are lin=ed and it !alls on the WTO to develop its !ooperation &ith the international organi'ations responsible #or monetary and #inan!ial matters D the World Gan= and the 9nternational 7onetary Fund> The de!laration also re!ogni'es the !ontribution that trade liberali'ation ma=es to the gro&th and development o# national e!onomies> 9t says this is an in!reasingly important !omponent in the su!!ess o# the e!onomi! adHustment programmes &hi!h many WTO members are underta=ing even though it may o#ten involve signi#i!ant so!ial !osts during the transition>

Transparency A+B: Heeping the "T# informed

O#ten the only &ay to monitor &hether !ommitments are being implemented #ully is by reBuiring !ountries to noti#y the WTO promptly &hen they ta=e relevant a!tions> 7any WTO agreements say member governments have to noti#y the WTO Se!retariat o# ne& or modi#ied trade measures> For e<ample details o# any ne& anti3 dumping or !ountervailing legislation ne& te!hni!al standards a##e!ting trade !hanges to regulations a##e!ting trade in servi!es and la&s or regulations !on!erning the intelle!tual property agreement D they all have to be noti#ied to the appropriate body o# the WTO> Spe!ial groups are also established to e<amine ne& #ree3 trade arrangements and the trade poli!ies o# !ountries Hoining as ne& members>

Transparency A-B: Heeping the public informed

The main publi! a!!ess to the WTO is the &ebsite &&&>&to>org> Je&s o# the latest developments are published daily> Ga!=ground in#ormation and e<planations o# a &ide range o# issues D in!luding Understanding the WTO D are also available> 5nd those &anting to #ollo& the nitty3gritty o# WTO &or= !an !onsult or do&nload an ever3 in!reasing number o# o##i!ial do!uments no& over ("0 000 in :o!uments Online> On (0 7ay 2002 the %eneral 8oun!il de!ided to ma=e more do!uments available to the publi! as soon as they are !ir!ulated> 9t also de!ided that the minority o# do!uments that are restri!ted should be made publi! more Bui!=ly D a#ter about t&o months instead o# the previous si<> This &as the se!ond maHor de!ision on transparen!y> On (- )uly (**. the %eneral 8oun!il had agreed to ma=e more in#ormation about WTO a!tivities available publi!ly and de!ided that publi! in#ormation in!luding derestri!ted WTO do!uments &ould be a!!essible on3line>

The obHe!tive is to ma=e more in#ormation available to the publi!> 5n important !hannel is through the media &ith regular brie#ings on all maHor meetings #or Hournalists in %eneva D and in!reasingly by email and other means #or Hournalists around the &orld> 7ean&hile over the years the WTO Se!retariat has enhan!ed its dialogue &ith !ivil so!iety D non3governmental organi'ations ,J%Os1 interested in the WTO parliamentarians students a!ademi!s and other groups> 9n the run3up to the :oha 7inisterial 8on#eren!e in 200( WTO members proposed and agreed on several ne& a!tivities involving J%Os> 9n 2002 the WTO Se!retariat in!reased the number o# brie#ings #or J%Os on all maHor WTO meetings and began listing the brie#ing s!hedules on its &ebsite> J%Os are also regularly invited to the WTO to present their re!ent poli!y resear!h and analysis dire!tly to member governments> 5 monthly list o# J%O position papers re!eived by the Se!retariat is !ompiled and !ir!ulated #or the in#ormation o# member governments> 5 monthly ele!troni! ne&s bulletin is also available to J%Os enabling a!!ess to publi!ly available WTO in#ormation> #) THE "EBS$TE: ! to!org * community/forums

Current "T# members

+03 governments on February 200" &ith date o# membership ,g U the "( original %5TT members &ho Hoined a#ter ( )anuary (**"R n U ne& members Hoining the WTO through a &or=ing party negotiation1$
(lbania - September 2000 ,n1 (ngola ( :e!ember (**. ,g1 (ntigua and Barbuda ( )anuary (**" (rgentina ( )anuary (**" (rmenia " February 2003 ,n1 (ustralia ( )anuary (**" (ustria ( )anuary (**" Bahrain ( )anuary (**" Bangladesh ( )anuary (**" Barbados ( )anuary (**" Belgium ( )anuary (**" Beli6e ( )anuary (**" Benin 22 February (**. ,g1 Boli&ia (3 September (**" ,g1 Bots ana 3( 7ay (**" ,g1 Bra6il ( )anuary (**" Brunei %arussalam ( )anuary (**" Bulgaria ( :e!ember (**. ,n1 BurHina Faso 3 )une (**" ,g1 Burundi 23 )uly (**" ,g1 Cambodia (3 O!tober 2000 ,n1 Cameroon (3 :e!ember (**" ,g1 Canada ( )anuary (**" Central (frican <epublic 3( 7ay (**" ,g1 Chad (* O!tober (**. ,g1 Chile ( )anuary (**" China (( :e!ember 200( ,n1 Colombia 30 5pril (**" ,g1 Congo 2@ 7ar!h (**@ ,g1 Costa <ica ( )anuary (**" CUte d9$&oire ( )anuary (**" Croatia 30 Jovember 2000 ,n1 Cuba 20 5pril (**" ,g1 Cyprus 30 )uly (**" ,g1 C6ech <epublic ( )anuary (**" %emocratic <epublic of the Congo ( )anuary (**@ ,g1 %enmarH ( )anuary (**" %=ibouti 3( 7ay (**" ,g1 %ominica ( )anuary (**" %ominican <epublic * 7ar!h (**" ,g1 Ecuador 2( )anuary (**. ,n1 Egypt 30 )une (**" ,g1 El Sal&ador @ 7ay (**" ,g1 Estonia (3 Jovember (*** ,n1 European Dnion ( )anuary (**" Fi=i (0 )anuary (**. ,g1 Finland ( )anuary (**" Former Iugosla& <epublic of Macedonia 0 5pril 2003 ,n1 France ( )anuary (**" Gabon ( )anuary (**" Gambia 23 O!tober (**. ,g1 Georgia (0 )une 2000 ,n1 Germany ( )anuary (**" Ghana ( )anuary (**" Greece ( )anuary (**" Grenada 22 February (**. ,g1 Guatemala 2( )uly (**" ,g1 Guinea Bissau 3( 7ay (**" ,g1 Guinea 2" O!tober (**" ,g1 Guyana ( )anuary (**" Haiti 30 )anuary (**. ,g1 Honduras ( )anuary (**" Hong Kong8 China ( )anuary (**" Hungary ( )anuary (**" $celand ( )anuary (**" $ndia ( )anuary (**" $ndonesia ()anuary (**" $reland ( )anuary (**" $srael 2( 5pril (**" ,g1 $taly ( )anuary (**" Lamaica * 7ar!h (**" ,g1 Lordan (( 5pril 2000 ,n1 Lapan ( )anuary (**" Kenya ( )anuary (**" Korea ( )anuary (**" Ku ait ( )anuary (**" Kyrgy6 <epublic 20 :e!ember (**- ,n1 Lat&ia (0 February (*** ,n1 Lesotho 3( 7ay (**" ,g1 Liechtenstein ( September (**" ,g1 Lithuania 3( 7ay 200( ,n1 Lu?embourg ( )anuary (**" Macao8 China ( )anuary (**" Madagascar (@ Jovember (**" ,g1 Mala i 3( 7ay (**" ,g1 Malaysia ( )anuary (**" Maldi&es 3( 7ay (**" ,g1 Mali 3( 7ay (**" ,g1 Malta ( )anuary (**" Mauritania 3( 7ay (**" ,g1 Mauritius ( )anuary (**" Me?ico ( )anuary (**" Moldo&a 2. )uly 200( ,n1 Mongolia 2* )anuary (**@ ,n1 Morocco ( )anuary (**" Mo6ambiCue 2. 5ugust (**" ,g1 Myanmar ( )anuary (**" )amibia ( )anuary (**" )epal 23 5pril 2000 ,n1 )etherlands J including )etherlands (ntilles ( )anuary (**" )e Vealand ( )anuary (**" )icaragua 3 September (**" ,g1 )iger (3 :e!ember (**. ,g1 )igeria ( )anuary (**" )or ay ( )anuary (**" #man * Jovember 2000 ,n1 'aHistan ( )anuary (**" 'anama . September (**@ ,n1 'apua )e Guinea * )une (**. ,g1 'araguay ( )anuary (**" 'eru ( )anuary (**" 'hilippines ( )anuary (**" 'oland ( )uly (**" ,g1 'ortugal ( )anuary (**" Tatar (3 )anuary (**. ,g1 <omania ( )anuary (**" < anda 22 7ay (**. ,g1 Saint Kitts and )e&is 2( February (**. ,n1 Saint Lucia ( )anuary (**" Saint Eincent Q the Grenadines ( )anuary (**" Senegal ( )anuary (**" Sierra Leone 23 )uly (**" ,g1 Singapore ( )anuary (**" Slo&aH <epublic ( )anuary (**" Slo&enia 30 )uly (**" ,g1 Solomon $slands 2. )uly (**. ,g1 South (frica ( )anuary (**" Spain ( )anuary (**" Sri LanHa ( )anuary (**" Suriname ( )anuary (**" S a6iland ( )anuary (**" S eden ( )anuary (**" S it6erland ( )uly (**" ,g1 Chinese Taipei ( )anuary 2002 ,n1 Tan6ania ( )anuary (**" Thailand ( )anuary (**" Togo 3( 7ay (**" ,g1 Trinidad and Tobago ( 7ar!h (**" ,g1 Tunisia 2* 7ar!h (**" ,g1 TurHey 2. 7ar!h (**" ,g1 Dganda ( )anuary (**" Dnited (rab Emirates (0 5pril (**. ,g1 Dnited Kingdom ( )anuary (**" Dnited States ( )anuary (**" Druguay ( )anuary (**" Eene6uela ( )anuary (**" Vambia ( )anuary (**" Vimbab e 3 7ar!h (**" ,g1

#bser&ers
5#ghanistan 5lgeria 5ndorra 5'erbaiHan Gahamas Gelarus Ghutan Gosnia and 6er'egovina 8ape Nerde EBuatorial %uinea Ethiopia 6oly See ,Nati!an1 9ran 9raB Wa'a=hstan 2ao People^s :emo!rati! +epubli! 2ebanese +epubli! 2ibya 7ontenegro +ussian Federation Samoa Sao Tome and Prin!ipe Saudi 5rabia Serbia Sey!helles Sudan TaHi=istan Tonga U=raine U'be=istan Nanuatu Niet Jam Qemen

)ote: With the e<!eption o# the 6oly See observers must start a!!ession negotiations &ithin #ive years o# be!oming observers