Has the WTO met its Objectives? Thomas Cottier Third Singapore-WTO Policy Dialogue on the World Trading System for Senior Government Officials from Asia and THE Pacific   "The WTO: 20 Years and Beyond" October 19/20, 2015 25.04.2018 World Trade Institute Berne The National Centres of Competence in Research (CCR) are a research instrument of the Swiss National Science Foundation (SNSF)

WTO Agreement, Preamble The Parties to this Agreement, Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development, … 25.04.2018 World Trade Institute Berne

Perceptions and Realities Doha Development Agenda stalling Forum Shifting to multilateral PTA in particular TTP, TTIP and RCEP Multipolar World WTO and multilateralism increasingly perceived irrelevant in public discourse and media No major protectionism during and after Financial and Debt Crisis New Members Central Role of WTO Dispute Settlement WTO Law is the Foundation of all modern RTAs 25.04.2018 World Trade Institute Berne

The WTO Legal Acquis Fundamental principles of non-discrimination (MFN and National Treatment) and transparency WTO law grew since 1947 and comprises some 20 full Agreements, 7 Understandings and numerous decisions, and tariff and services schedules of Members: A substantial codex The case law of Panels and the Appellate Body relates to almost 500 disputes filed since 1995 (October 2015) Towards universal Membership: from 128 to 161 in October 2015, with 22 acceding States 25.04.2018 World Trade Institute Berne World Trade Institute Berne 4

The Impact of WTO law WTO law provides the legal framework and legal security for millions of transactions every day around the World WTO law and the potential of retaliation played a major role in curbing economic protectionism following the financial crisis and the current European debt crisis WTO law allowed for increasing trade shares of developing countries (legitimacy), but not LLDCs 25.04.2018 World Trade Institute Berne World Trade Institute Berne 5

Agreements at Issue in Dispute Settlement 25.04.2018 World Trade Institute Berne

World Trade Institute Berne Main Assets Principles and Rules of WTO Law Administration of Agreements Partial revisions of Agreements (TRIPs, GPA) completed New Agreement on Trade Facilitation Dispute Settlement: two-tier system better balance of different policy goals in case law high levels of compliance TPRM: Transparency and Dialogue Technical Cooperation and Support: Training and Trade Facilitation Geneva Policy Dialogue with Trade Community and NGOs (WTO Forum and beyond) 25.04.2018 World Trade Institute Berne

Doha Development Agenda: State of Play Negotiations stalling mainly due to the NAMA and services talks, not due to complex regulatory fields Multiple Causes: DDA a political agenda post Sept 9/2001 Lack of pressure from private sector due to Uruguay Round results and relatively open markets Accession of PR China in 2001 Emerging economies and a multipolar World Shifting functions of MFN Failure to monitor legal compliance of RTAs Major shift to Preferential Trade Agreements in recent years 25.04.2018 World Trade Institute Berne World Trade Institute Berne 8

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Dialectical Relationship Multilateralism and Preferentialism mutually supportive over time: 1883 and 1886 IPR Conventions (Paris and Berne) based upon set of bilateral agreements GATT 1947 based upon US Reciprocal Trade Agreements Preferential Trade in Services based upon 1995 GATS Agreement (PTAs, TISA Negotiations) TTP/TTIP/RCEP: Future Multilateralization in WTO to be expected (2020-2030) 25.04.2018 World Trade Institute Berne

Tariff reductions in the industrial sector (developed countries) 25.04.2018 World Trade Institute Berne

De jure and facto MFN Effects of PTA Regulation Operation of differential tariff rates and quantitative limitations to goods and services markets in PTAs possible and effective in creating production networks Difficult to operate differential standards in regulation, e.g. TBT, SBS, IPRs, subsidies, investment, domestic regulation of services, competition rules, labour standards in PTAs WTO plus elements inherently deploy de facto or de jure MFN effects and free-riding for other WTO Members 25.04.2018 World Trade Institute Berne World Trade Institute Berne 12

WTO World Trade Report 2011 p. 72 “Trade between PTA members is growing as the number of agreements increase. About one half of world trade now takes place among PTA members. However, examining total trade flows between PTA partners overstates the amount of trade that takes place on a preferential basis. This is partly because tariff schedules of many PTA members increasingly contain duty-free MFN rates on which no further tariff reduction can be given. Hence, while the number of PTAs has been increasing, the importance of preferential trade has not kept pace. This development reflects a substantial reduction in MFN tariffs during the past two decades, either through multilateral trade negotiations or unilateral reductions.” WTO World Trade Report 2011 p. 72 25.04.2018 World Trade Institute Berne World Trade Institute Berne 13

The Common Law of International Trade RTAs all structured on the basis of WTO law disciplines Shared values and principles Core legal concepts of tariffs, QRs, non-discrimination (national treatment) and exceptions Structure of agreements follow WTO Law WTO-plus and sometimes WTO-minus 25.04.2018 World Trade Institute Berne

Conclusion: A Mixed Record WTO firmly established as anchor and (understated) foundation of a balanced international trading system Market access shift to PTA: trade diversion due to differential tariffs spill-over effects in NTBs largely excluding LLDCs in promoting growth and welfare 25.04.2018 World Trade Institute Berne

World Trade Institute Berne Thank you for your attention thomas.cottier@wti.org The Common Law of International Trade and the Future of the WTO, 18 Journal of International Economic Law 3-20 (2015) 25.04.2018 World Trade Institute Berne