WORLD TRADE ORGANIZATIONOverview of the Multilateral Trading System and Introduction to the basic principles of the WTO

Said El Hachimi
External Relations Division WTO

1. What is the WTO? 2. WTO major contribution is Dispute Settlement 3. Principles 4. WTO as a Forum for negotiations 5. WTO Decision making 6. WTO and other Stakeholders:
Parliamentarians Non-Governmental Organizations.

What is the WTO?

500 pages of (Agreements) Rules/ 23,000 pages of Commitments

A set of International Trade Rules agreed by Members through Negotiations

Only Multilateral Set of Trade Rules

General Agreement on Tariffs and Trade 1994. General Agreement on Trade in Services. Trade-Related Aspects of Intellectual Property. Dispute Settlement Understanding. Trade Policy Review Mechanism. Plurilateral Agreements.

WTO major contribution is Dispute Settlement

WTO: Dispute Settlement

Enforcement of trade rules.

Cases brought up by Members Basis of any case is violation of commitments by a Member vis a vis other Member in the WTO

WTO: Dispute Settlement Clear rules and timetables.

How long to settle a dispute? 60 days Consultations, mediation, etc 45 days Panel set up and panellists appointed 6 months Final panel report to parties 3 weeks Final panel report to WTO members 60 days Dispute Settlement Body adopts report (if no appeal) Total = 1 year (without appeal) 6090 days Appeals report 30 days Dispute Settlement Body adopts appeals report Total = 1y 3m (with appeal)

 Priority: Settle disputes through consultations. Dispute Settlement Body. Panel process. Appellate Body. Rulings are binding and automatically adopted.

WTO: Dispute Settlement

WTO: Principles

WTO: Principles
Non-discrimination:
Members cannot discriminate between trade partners. Exceptions: Free trade agreements, tariff preferences for developingcountry products, GATT Article XX and trade remedies.

National treatment:
Imported and domestic goods should be treated equally. Applies only when the product or service has entered the market.

WTO: Principles
Freer trade: Through negotiations. Gradually lower trade barriers. Progressive liberalization. Stability and Predictability: Improves business and investment environment. Commitments at the WTO are binding. Transparency requirements.

WTO: Principles
Promoting fair competition: Rules on dumping and subsidies. Encourage development and reform: Flexibilities for developing countries and economies in transition. Transition periods. Technical assistance.

WTO is above all a Forum for Negotiations

 Negotiations on Specific Subjects:

Agriculture Trade in Services Intellectual Property

Round of Negotiations:
Several issues negotiated simultaneously.

Everything is derived from the results of the negotiations.

Without the WTO

The effect of protectionism on world trade, 192933
January December
1929 1930 1931

$3.0bn

February

November

1932 1933

March

October

$0.9bn

April

September

May

August July

June

Trade figures: per month Preliminaries

With the WTO

Value of world trade 19482003
US$ trillion, current prices
8 7

MORE trade? Of course, but look at the STABILITY >

If 67% had been wiped out

GATT 48
1

WTO 95
1997

0 1948

1957

1966

1975

1984

1993

2002

Preliminaries

What is the WTO?

Somewhere to negotiate and apply the results

The first step is to talk. This is where governments go to try to sort out their trade problems. WTO: not just for liberalizing trade. Sometimes the rules support trade barriers e.g. to protect consumers or prevent the spread of disease. Skip >>>

Somewhere to talk

Foremost: The WTO is a forum for negotiations

Current negotiations launched: 4th WTO Ministerial Conference, Doha, November 2001

Previous round: Uruguay Round 19861994

Eighth round under GATT, since 1948

Result: In 1995 ...

Rules expanded: goods (GATT) + services (GATS) + intellectual property (TRIPS) WTO formed, replacing GATT
Somewhere to talk

Foremost: The WTO is a forum for negotiations

Current negotiations launched: 4th WTO Ministerial Conference, Doha, November 2001

Doha Development Agenda:

Launched at Doha Ministerial Conference November 2001. Most to end 1 January 2005 negotiations: ~ 20 subjects problems with implementation of existing agreements
see Understanding the WTO page 77 Somewhere to talk

Foremost: The WTO is a forum for negotiations Agreement only by consensus

Everyone has to be persuaded No one forced by a majority

Everything else follows from negotiations ...

Somewhere to talk

CURRENT NEGOTIATIONS

Why so difficult?

ANY DEAL has winners and losers (and lobbies) QUESTION: If there are losers, does that mean dont do it? RESULT: Status quo. But is that OK? ALTERNATIVE: Make use of the winners gains to help the losers adjust
Better trade

CURRENT NEGOTIATIONS

Seeking consensus

EASY OPTION: be defensive ... no deal is better than a bad deal (status quo) MORE DIFFICULT: identify own interests we want/dont want MOST DIFFICULT: to move forward What can others accept? give as well as take > CONSENSUS
Better trade

CURRENT NEGOTIATIONS

Key players, agriculture

Just a sample of groupings
COALITIONS AND MAJORS Africans, least-developed, ACP (together = G90, but with 64 WTO members) Cairns Group Australia, NZ, S.Africa, Brazil, Argentina, Thailand, Philippines, etc European Union G10 Switzerland, Norway, Japan, S.Korea, Ch.Taipei, etc G20+/ India, Brazil, China, S.Africa, etc G33 Indonesia, etc lobbying for special products Like minded India, Pakistan, Caribbean, etc RAMs new members (recently acceded members) Small island developing states United States CONSENSUS-BUILDERS US-EU (summer 2003) The Five Australia, Brazil, EU, India, US (summer 2004)
Better trade

CURRENT NEGOTIATIONS

Key players, agriculture

Africans, least-developed, ACP (together = G90, but with 64 WTO members)

G20+/ India, Brazil, China, S.Africa, etc G33 Indonesia, etc lobbying for special products
Press conference in Hong Kong 16 December 2005

New group: Small economies

Better trade

CURRENT NEGOTIATIONS

Key players, agriculture

Or, another way of looking at groups

Better trade

Bulgaria Austria Belgium Cyprus Czech R Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Slovakia Slovenia Spain Sweden UK Romania

Armenia FY Rep Macedonia

G90

US G1

LDCs
Bangladesh Cambodia Chad Maldives Burkina Faso Myanmar Burundi Togo Nepal Central African Rep Djibouti DR Congo Mali Gambia Guinea Guinea Bissau Lesotho Malawi Mauritania Niger Sierra Leone Rwanda Gabon Ghana Haiti Namibia Benin Madagascar Senegal Uganda Botswana Tanzania Zambia Cameroon Cuba Congo Cte dIvoire Kenya Mozambique Nigeria Zimbabwe Mauritius Angola Swaziland Egypt Tunisia Morocco

Albania Croatia Georgia Jordan Moldova Oman

ACP

Recent new

EU G-27 G-20
Mexico

Solomon Islands

India China Venezuela Indonesia Pakistan Philippines

Chile Brazil Bolivia Uruguay Australia Thailand Canada Paraguay Colombia Argentina Costa Rica Guatemala Malaysia N Zealand

Hong Kong, Ch Saudi Arabia El Salvador Macao, Ch Singapore Kyrgyz R Dominica Qatar Fiji UAE Papua New Guinea Brunei Kuwait Belize Bahrain Barbados Ecuador Antigua/Barbuda Dominican Rep Grenada Guyana G-33 St Vincent/Grenadines Trinidad/Tobago Honduras Jamaica Suriname Mongolia St Kitts/Nevis Nicaragua St Lucia Panama Peru Sri Lanka Turkey R Korea Iceland Israel Japan Liechtenstein Norway G-10 Switzerland Ch Taipei

Cairns Group

S Africa

African Group

Better trade

WTO: Decision Making

WTO Decision Making, what about the institutionals?

Member-driven and consensus-based.

Ministerial Conference:
Topmost decision-making body. Meets at least once every two years.

General Council:
On behalf of the Ministerial Conference. Meets in Geneva.

Councils:
Trade in Goods. Trade in Services. Trade-Related Aspects of Intellectual Property Rights.

Various Committees.

WTO and other Stakeholders

WTO and other stakeholders:

Parliamentarians

Elected representatives of the people. Constitutional role on trade issues. Crucial interface between people, civil society and governments. WTO outreach activities for Parliamentarians.

WTO and other stakeholders:

NGOs

Strong interest in WTO issues. NGO Attendance to Ministerial Conferences. Enhanced dialogue with civil society. Annual Symposium. Briefings for NGOs during WTO Meetings. Circulation of NGO Position Papers to WTO Members.

Registered NGOs in WTO Ministerial Conferences

Ministerial Singapore 1996 Geneva 1998 Seattle 1999 Doha 2001 Cancn 2003 Hong Kong NGOs who attended 108 128 686 370 795 812 Number of Individuals 235 362 1500 Approx. 370 1578 1596

What about the WTO Secretariat?

FACT FILE
Location: Geneva, Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations (1986-94) Membership: 150 countries Budget: 175m Swiss francs, 2006 Secretariat staff: ~630 Head: Pascal Lamy (director-general) Functions: Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training for developing countries Cooperation with other international organizations

The World Trade Organization

The World Trade Organization Centre William Rappard rue de Lausanne 154 CH1211 Geneva 21 Switzerland Tel: +41 (0)22 739 51 11 Fax: +41 (0)22 739 54 58 email: enquiries@wto.org website: www.wto.org