A Project On
HISTORICAL B ACKGROUND AND O RGANIZATIONAL S TRUCTURE OF WTO
SUBMITTED TO MS. ANKIT AWASTHI
(FACULTY – Trade And Inve!"en!#
SUBMITTED BY $I$EK KUMAR SAI SEMESTER %& %& R OLL OLL NO. ') B.A. L.L.B. (HONS#
HIDAYATULLAH NATIONAL LAW UNIVERSITY
1
ACKNOWLEDGEMENT
I would like to express my gratitude to Mr. Ankit Awasthi for granting me such an interesting and unconventional topic and expect his leniency in judging the same. ords fail to express my deep sense of glee to my teacher Mr. Ankit Awasthi! who enlightened me with his "eautiful work on this topic. I would like to thank him for guiding me in doing all sorts of researches! suggestions and having discussions regarding my project topic "y devoting her precious time. I thank to the #.$.%.& for providing %i"rary! 'omputer and Internet facilities. And lastly I thank my friends and all those persons who have helped me in the completion of this project.
(I()* *&MA+ ,AI
-
RESEARCH METHODOLOGY
/his is a descriptive and analytical research paper. My research paper is largely "ased on secondary and electronic sources of information.
0
Table of Contents Introduction..................................................................................................................................................................... #istorical 2ackground....................................................................................................................................................3 4A//
+ounds...............................................................................................................................................................15
O"jectives......................................................................................................................................................................11 6unctions.......................................................................................................................................................................11 Organi7ational ,tructure...............................................................................................................................................1Ministerial 'onferences................................................................................................................................................1 'onclusion....................................................................................................................................................................1
Introduction /he orld /rade Organi7ation 8/O9 is the only glo"al international organi7ation dealing with the rules of trade "etween nations. At its heart are the /O agreements! negotiated and signed "y the "ulk of the world:s trading nations and ratified in their parliaments. 1 /he goal is to help producers of goods and services! exporters! and importers conduct their "usiness. /he /O was "orn out of negotiations! and everything the /O does is the result of negotiations. /he "ulk of the /O:s current work comes from the 1;<=>;0 negotiations called the &ruguay +ound and earlier negotiations under the 4eneral Agreement on /ariffs and /rade 84A//9. /he /O is currently the host to new negotiations! under the ?@oha @evelopment Agenda: launched in -551. here countries have faced trade "arriers and wanted them lowered! the negotiations have helped to open markets for trade. 2ut the /O is not just a"out opening markets! and in some circumstances its rules support maintaining trade "arriers for example! to protect consumers or prevent the spread of disease. /he system:s overriding purpose is to help trade flow as freely as possi"le so long as there are no undesira"le side effects "ecause this is important for economic development and wellB "eing. /hat partly means removing o"stacles. It also means ensuring that individuals! companies and governments know what the trade rules are around the world! and giving them the confidence that there will "e no sudden changes of policy. In other words! the rules have to "e ?transparent: and predicta"le. /rade relations often involve conflicting interests. Agreements! including those painstakingly negotiated in the /O system! often need interpreting. /he most harmonious way to settle these differences is through some neutral procedure "ased on an agreed legal foundation. /hat is the purpose "ehind the dispute settlement process written into the /O agreements. 1 httpsCDDwww.wto.orgDenglishDresEeD"ookspEeDanrepEeDwtr11B-"Ee.pdf
- httpsCDDwww.wto.orgDenglishDthewtoEeDcwrEeDcwrEhistoryEe.html
=
/he /O is run "y its mem"er governments. All major decisions are made "y the mem"ership as a whole! either "y ministers 8who usually meet at least once every two years9 or "y their am"assadors or delegates 8who meet regularly in 4eneva9. hile the /O is driven "y its mem"er states! it could not function without its ,ecretariat to coordinate the activities. /he ,ecretariat employs over =55 staff! and its experts lawyers! economists! statisticians and communications experts assist /O mem"ers on a daily "asis to ensure! among other things! that negotiations progress smoothly! and that the rules of international trade are correctly applied and enforced.0
https://www.wto.org/english/thewto _e/whatis_e/tif_e/org6_e.htm
0 httpsCDDwww.wto.orgDenglishDthewtoEeDcountriesEeDorg=EmapEe.htm
3
Historical Backround 6ollowing orld ar II! nations throughout the world! led "y the &nited ,tates and several other developed countries! sought to esta"lish an open and nondiscriminatory trading system with the goal of raising the economic wellB"eing of all countries.
Aware of the role of trade "arriers in contri"uting to the economic depression in the 1;5s! and the military aggression that rose following the depression! the countries that met to discuss the new trading system saw open trade as essential for econo mic sta"ility and peace. /he intent of these negotiators was to esta"lish an International /rade Organi7ation 8I/O9! which would address not only trade "arriers "ut other issues indirectly related to trade! including employment! investment! restrictive "usiness practices! and commodity agreements. /he I/O was to "e a &nited $ations speciali7ed agency! "ut the I/O treaty was not approved "y the &nited ,tates and a few other signatories and never went into effect.
Instead! a provisional agreement on tariffs and trade rules! called the 4eneral Agreement on /ariffs and /rade 84A//9 was reached and went into effect in 1;0<. /his provisional 4A// "ecame the principal set of rules governing international trade for the next 03 years. /he /O is a relatively powerful international organisation. Its dispute settlement "ody can impose sanctions to enforce decisions on mem"er countries: disagreements over what /O rules mean in practice.
/he /O was preceded "y the Genera* A+ree"en! ,n Tar- and Trade (GATT# ! which was concluded in 1;03. 2ack then! the original idea was to start an International /rade Organisation! "ut that did not materialise. In the 4A// context! there were eight rounds of trade li"eralisation talks. Initially! their topics were the reduction of tariffs and the phasing out of Fuotas! "ut later other trade "arriers were tackled to.
<
/he &ruguay +ound was the final 4A// +ound. It was started at a summit in Punta del )ste in 1;<= and concluded in Marrakesh in 1;;0. It capped agriculture su"sidies and esta"lished the /O. Other important results includedC • • •
the end of textiles Fuotas at the "eginning of -55! the Agreement on /rade +elated Intellectual Property +ights 8/+IP,9 = and the 4eneral Agreement on /rades in ,ervices 84A/,9.
/he /O is meant to continue li"eralising trade through negotiation rounds. 6or many years! however! mem"ers did not agree on an agenda for a new round. At the Ministerial 'onference3 in ,ingapore in 1;;=! the rich nations insisted it should include investors: rights! competitionDantiBtrust policy! trade facilitation and government procurement. @eveloping countries disagreed! fearing that "inding rules on these G,ingapore issuesH would restrict their policy space and limit their scope for growth.
/he next summits in 4eneva in 1;;< and ,eattle in 1;;; similarly failed. Protests! which are now considered the "eginning of the movement of glo"alisation sceptics! overshadowed the meeting in ,eattle. 'ivil society organisations argued that the /O served the interests of rich nations in exploiting the /hird orld.
,uch criticism was misleading. /he /O only passes rules when all mem"ers agree. )very mem"er has the right of veto. ,ince many developing countries are /O mem"ers! their "argaining power is stronger in this context than when they negotiate on their own with the great economic powers.
en.wikipedia.org/wiki/Uruguay _ Round
= en.wikipedia.org/wiki/TRIPS _Agreement
3 https://www.wto.org/english/thewto_e/minist_e/minist_e.htm
;
$onetheless! there was reason to protest. Many developing countries felt cheated "y the &ruguay +ound "ecause it did not allow them to increase their exports as fast as they had "een made "elieve. One reason for such frustration was that trade policy is very complex! and the details may fast over"urden countries with weak governmental capacities. /he )& and &, delegations arrive at Ministerial 'onferences with armies of legal advisers! "ut small and poor countries are typically only represented "y a handful of diplomats.
At the turn of the Millennium! moreover! a glo"al dispute erupted over pharma patents! which! according to /+IP,! are protected all over the world. 2ra7il! /hailand! ,outh Africa and other nations! however! urgently needed low cost #I(DAI@, medication. /he Ministerial 'onference in @oha in -551 dealt with this matter "y allowing mem"ers to "reak patents if doing so is necessary to protect pu"lic health "ecause those who own intellectual property rights do not make essential medication availa"le at accepta"le prices.
/he summit in @oha also started a new round of negotiations. Among other things! it is supposed to further reduce agricultural su"sidies and phase out export su"sidies for agricultural products. /hese issues matter very much to developing countries that depend on agriculture. ,u"sidies in richer nations thwart their farmers: competitiveness.
In @oha! moreover! the rich nations put the ,ingapore issues on the agenda! even though the developing countries! led "y India! made it clear they would not accept rules on these matters. ,o far! trade facilitation is the only ,ingapore issue on which talks have made reasona"le progress. All in all! however! the @oha +ound looks stuck. /he &,A and the )& are pursuing "ilateral strategies > and so are emerging giants like 'hina and India.
15
GATT !ounds" #ear
!ound
Action
1947
Geneva
45,000 re!"#$%n& $n '$(a#era( #ar$)& "%ver$n* +0 %- .%r( #rae/
1949
Annen", ran"e
5,000 re!"#$%n& $n '$(a#era( #ar$)&/
1951
T%r2!a, En*(an
3,700 re!"#$%n& $n '$(a#era( #ar$)& "%ver$n* a ne. ran*e %- *%%&/
1955 Geneva 5
Re!"#$%n& $n '$(a#era( #ar$)&/
190 D$((%n + R%!n
Re!"#$%n& $n '$(a#era( #ar$)&/ EEC #a(6& 'e*$n/
194 enne 7 R%!n
Re!"#$%n& $n '$(a#era( #ar$)&/ Ne*%#$a#$%n r!(e& e&#a'($&8e/
197 T%6% 79 R%!n
Re!"#$%n& $n '$(a#era( #ar$)&/ :r%"e!re& %n $&;!#e re&%(!#$%n, !<;$n* an ($"en&$n*/
193 Ur!*!a 9 R%!n
A$#$%na( #ar$) re!"#$%n&/ S#a(e
1995
WTO WTO re;(a"e& #8e GATT/ e&#a'($&8e
D%8a +001 R%!n
D$ver*en"e& 'e#.een eve(%;$n* an eve(%;e "%!n#r$e&/ I&&!e& %ver a*r$"!(#!ra( &!'&$$e&/
<,ourceC adapted from .. 2ernstein 8-55<9 A ,plendid )xchangeC #ow /rade ,haped the orld! $ew JorkC Atlantic Monthly Press! p. <.
11
Ob$ecti%es T/e -"0,r!an! ,12e3!-ve , WTO are4
1. /o improve the standard of living of people in the mem"er countries. -. /o ensure full employment and "road increase in effective demand. . /o enlarge production and trade of goods. 0. /o increase the trade of services. . /o ensure optimum utili7ation of world resources. =. /o protect the environment. 3. /o accept the concept of sustaina"le development.
&unctions T/e "a-n 5n3!-,n , WTO are d-35ed 1e*,64
1. /o implement rules and provisions related to trade policy review mechanism. -. /o provide a platform to mem"er countries to decide future strategies related to trade and tariff. . /o provide facilities for implementation! administration and operation of multilateral and "ilateral agreements of the world trade. 0. /o administer the rules and processes related to dispute settlement. . /o ensure the optimum use of world resources.
1-
=. /o assist international organi7ations such as! IM6 and I2+@ for esta"lishing coherence in &niversal )conomic Policy determination
.
Orani'ational (tructure
1
10
M-n-!er-a* C,neren3e
/he topmost decisionBmaking "ody of the /O is the Ministerial 'onference! which usually meets every two years. It "rings together all mem"ers of the /O! all of which are countries or customs unions. /he Ministerial 'onference can take decisions on all matters under any of the multilateral trade agreements. T/e Trade 7,*-38 Rev-e6 B,d8 (T7RB#
/he /O 4eneral 'ouncil meets as the /rade Policy +eview 2ody to undertake trade policy reviews of Mem"ers under the /P+M and to consider the @irectorB4eneralKs regular reports on trade policy developement. /he /P+2 is thus open to all /O Mem"ers. /he current chair is Am"assador Atanas Atanassov PAPA+ILO( 82ulgaria9. T/e WTO Genera* C,5n3-* 9
/he 4eneral 'ouncil is the /O:s highestBlevel decisionBmaking "ody in 4eneva! meeting regularly to carry out the functions of the /O. It has representatives 8usually am"assadors or eFuivalent9 from all mem"er governments and has the authority to act on "ehalf of the ministerial conference which only meets a"out every two years. /he current chairperson is #.). Mr. onathan 6+I)@ 8'anada9. /he 4eneral 'ouncil also meets! under different rules! as the @ispute ,ettlement 2ody and as the /rade Policy +eview 2ody. GATT and !/e G,,d C,5n3-*
':
/he 4eneral Agreement on /ariffs and /rade 84A//9 covers international trade in goods. /he workings of the 4A// agreement are the responsi"ility of the 'ouncil for /rade in 4oods 84oods 'ouncil9 which is made up of representatives from all /O mem"er countries. /he current chairperson is Am". @acio 'A,/I%%O 8#onduras9. ; httpsCDDwww.wto.orgDenglishDthewtoEeDgcouncEeDgcouncEe.htm
15 httpsCDDwww.wto.orgDenglishDtratopEeDgattEeDgattEe.htm
1
/he 4oods 'ouncil has 15 committees dealing with specific su"jects 8such as agriculture! market access! su"sidies! antiBdumping measures and so on9. Again! these committees consist of all mem"er countries. Also reporting to the 4oods 'ouncil are a working party on state trading enterprises! and the Information /echnology Agreement 8I/A9 'ommittee.
T/e Serv-3e C,5n3-*; -! C,""-!!ee and ,!/er 51-d-ar8 1,d-e ''
/he 'ouncil for /rade in ,ervices operates under the guidance of the 4eneral 'ouncil and is responsi"le for overseeing the functioning of the 4eneral Agreement on /rade in ,ervices 84A/,9. It:s open to all /O mem"ers! and can create su"sidiary "odies as reFuired. 7*5r-*a!era* a+ree"en! ,n !rade -n 3-v-* a-r3ra!
/his agreement entered into force on 1 anuary 1;<5. It now has - signatories 8 Al"ania Austria 2elgium 2ulgaria 'anada 'hinese /aipei @enmark )gypt )stonia )uropean &nion 8formerly )'9 6rance 4eorgia 4ermany 4reece Ireland Italy apan %atvia %ithuania %uxem"ourg Macao! 'hina Malta Montenegro $etherlands $orway Portugal +omania ,pain ,weden ,wit7erland &nited *ingdom &nited ,tates9. Most /O agreements are multilateral since they are signed "y all /O mem"ers. /he agreement on trade in civil aircraft is one of two plurilateral agreements 8with the agreement on government procurement9 signed "y a smaller num"er of /O mem"ers. It eliminates import duties on all aircraft! other than military aircraft! as well as on all other products covered "y the agreement civil aircraft engines and their parts and components! all components and su"Bassem"lies of civil aircraft! and flight simulators and their parts and components.1-
11 httpsCDDwww.wto.orgDenglishDtratopEeDservEeDsEcounEe.htm
1- httpsCDDwww.wto.orgDenglishDtratopEeDcivairEeDcivairEe.htm
1=
Conclusion /he goal is to help producers of goods and services! exporters! and importers conduct their "usiness. /he /O was "orn out of negotiations! and everything the /O does is the result of negotiations. /he "ulk of the /O:s current work comes from the 1;<=>;0 negotiations called the &ruguay +ound and earlier negotiations under the 4eneral Agreement on /ariffs and /rade 84A//9. /he /O is currently the host to new negotiations! under the ?@oha @evelopment Agenda: launched in -551 /he /O descri"es itself as Na rulesB"ased! mem"erBdriven organi7ation all decisions are made "y the mem"er governments! and the rules are the outcome of negotiations among mem"ersN./he /O Agreement foresees votes where consensus cannot "e reached! "ut the practice of consensus dominates the process of decisionBmaking. +ichard #arold ,tein"erg 8-55-9 argues that although the /OKs consensus governance model provides lawB"ased initial "argaining! trading rounds close through powerB"ased "argaining favouring )urope and the &.,.! and may not lead to Pareto improvement.
13
