Lecture-2-WTO.pdf - Understanding the WTO CONTENTS CHAPTER...

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Understanding the WTO
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CONTENTS CHAPTER 1 BASICS CHAPTER 2 THE AGREEMENTS CHAPTER 3 SETTLING DISPUTES CHAPTER 4 DEVELOPING COUNTRIES CHAPTER 5 THE ORGANIZATION
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Chapter 1 BASICS 1. What is the World Trade Organiza4on? 2. Principles of the trading system 3. The case for open trade 4. The GATT years: from Havana to Marrakesh
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1. What is the World Trade Organization? Simply put: the World Trade Organiza4on (WTO) deals with the rules of trade between na4ons at a global or near-global level. It’s an organizaDon for liberalizing trade … Above all, it’s a negoDaDng forum ... It’s a set of rules ... And it helps to seRle disputes ... It’s an organiza4on for liberalizing trade. It’s a forum for governments to nego4ate trade agreements. It’s a place for them to seOle trade disputes. It operates a system of trade rules.
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1. What is the World Trade Organization? Born in 1995, but not so young The WTO began life on 1 January 1995, but its trading system is half a century older. Since 1948, the General Agreement on Tariffs and Trade (GATT) had provided the rules for the system. Over the years GATT evolved through several rounds of nego4a4ons. The last and largest GATT round, was the Uruguay Round which lasted from 1986 to 1994 and led to the WTO’s crea4on.
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2. Principles of the trading system The WTO agreements are lengthy and complex. Dealing with: agriculture, tex4les and clothing, banking, telecommunica4ons, government purchases, industrial standards and product safety, food sanita4on regula4ons, intellectual property, and more. But a number of simple, fundamental principles run throughout all of these documents à founda4on of the mul4lateral trading system.
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A closer look at these principles: 1. Trade without discriminaDon 1. Most-favoured-naDon (MFN): treaDng other people equally 2. NaDonal treatment: TreaDng foreigners and locals equally 2. Freer trade: gradually, through negoDaDon 3. Predictability: through binding and transparency 4. PromoDng fair compeDDon 5. Encouraging development and economic reform
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Most-favoured-nation (MFN) Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members. Some excep4ons are allowed, but only permit these excep4ons under strict condi4ons (i.e. trade within a set up group, developing countries, unfairly traded goods). In general, MFN means that every 4me a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners — whether rich or poor, weak or strong.
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National treatment Imported and locally- produced goods should be treated equally — at least a‘er the foreign goods have entered the market (giving others the same treatment as one’s own na4onals) The same should apply to foreign and domes4c services, and to foreign and local trademarks, copyrights and patents.
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