WTO short introduction
TURIN 16 July 2007
ITUC
WTO
The WTO: Founded in 1995 after 50 years of the
General Agreement on Tariffs and Trade – GATT
Headquarters in Geneva with about 400 staff Supervises a large number of global trade
treaties/agreements Has the power to enforce the rules of all of
its agreements with financial and regulatory clout
Can over-rule and/or undermine core labour standards and legislation in member states
WTO commitments
Commitments cannot be changed over time
Negotiations are not transparent, especially in services negotiations based on request-offer (and in bilaterals)
WTO agreements
Multiple agreements: The WTO supervises three main agreements:
1.Industrial goods (GATT), (which includes agriculture (AoA), plant and animal health and safety (SPS), Product standards (TBT), anti-dumping, subsidies and countervailing measures, investment rules (TRIMS), etc), 2. Services (GATS) and 3.Intellectual property (TRIPS)
No picking and choosing – when you join the WTO, you sign up to all of its agreements/treaties. With the exception of the plurilateral agreement on government procurement
WTO principles
Most Favoured Nation (MFN) In general, any agreement or deal that gives rights to
one WTO member state must be given to all other member states
A country cannot discriminate amongst WTO member states
National Treatment (NT) In general, if your country has committed itself to
some trade liberalisation, it must, in that area, treat foreign suppliers/investors ‘no less favourably than domestic supliers/investors are treated’
That does not mean ‘equal treatment for all’: you can treat foreign MNEs better than the way you treat your domestic firms
Disputes
Dispute Panels Country A (and B, C, ….) can complain that country X
is breaching its obligations under one or more WTO agreements
If Country X disagrees, the WTO can set up a mutually agreed (or imposed) panel – a ‘jury’
The panel hears evidence from all formal parties (and may allow external party evidence)
The verdict may tell Country X to change its behaviour (if ‘guilty’) or face punitive financial action from the complainants until it complies
An Appellate Body can rule on disputed verdicts
Decision making
Ministerial Conferences, Geneva negotiations and work in capitals
In theory, all new agreements and the conclusion of all trade Rounds are agreed at two-yearly Ministerial Conferences
In between ‘ministerials’, most real negotiations on details are done by resident Mission delegates in Geneva. They ‘prepare’ material for ministerials
When Geneva ‘problems’ arise, powerful Missions will pressure national capitals of less powerful members to ‘be more reasonable’ in Geneva
Some countries – about 30 – have no permanent Mission delegation in Geneva and so miss meetings. Silence, including absence, is ‘consent’.
Trade Policy Reviews
- Trade policies of all members are reviewed on a regular basis
- With aim to increase transparency, improve debate and enable assessment of the effects of policies on trade
- These reviews are used to highlight areas that need reform
- Many of these reviews recommend privatization.
ITUC country reports
Consensus and power
Members all officially have a veto power on any decison or agreement. No ‘consensus’ means no agreement
In practice, powerful members will threaten the loss of IMF/World Bank loans/projects or foreign aid if weaker countries block consensus
Many decisions are taken in secret/semi-secret, unofficial, exclusionary ‘Green Room’ meetings
Informal meeting ‘agreements’ are often presented as ‘general agreements based on wide consultation
Safeguards
There are safeguards in the WTO in case of market disruption
antidumping and countervailing measures.
Countries should make more strategic use of these.
Long and costly processes. The US does not take disputes seriously.
Bilateral versus multilateral agreements Same objectives of liberalization and
opening up of markets for multinationals Commitments in Bilaterals go further than in
multilateral agreements Commitments in Bilaterals go beyond goods
and services and include intellectual property, investment, competition policy and government procurement
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