The World Trade Organization The Talkboys

Kimberly – History Tim – Agreements Adam – Current Events Stephanie – Criticism/Commendation

History After World War II Bretton Woods Conference of 1944 Create institutions that would eliminate the causes of war. Through UN and eliminating the economic causes of war Bretton Woods Conference of 1944 Three institutions formed: The International Monetary Fund (IMF) The World Bank The International Trade Organization (ITO)

General Agreement on Tariffs and Trade (GATT) Congress refused to agree to the ITO Cede too much sovereignty to an international body. General Agreement on Tariffs and Trade—1947 Provisional agreement for the ITO Became the agreement and the organization for establishing and enforcing, through dispute settlement, the international trade rules.

The World Trade Organization The Uruguay Round (8th)—1984-1995 established the World Trade Organization amended GATT 1947 which became GATT 1994 Became the World Trade Organization (WTO) on January 1, 1995

Mission Increase international trade by promoting lower trade barriers providing a platform for the negotiation of trade “...In brief, the World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.”

Structure Highest level: Ministerial Conference Meets at least every two years Comprised of countries or customs unions Makes decisions on all matters under any of the multilateral trade agreements

Structure (cont.) Second level: General Council Handles the daily work of the ministerial conference along with the Dispute Settlement Body and the Trade Policy Review Body Consists of representatives of all WTO member states

Structure (cont.) Third level: Councils for Trade Work under the General Council Three parts Council for Trade in Goods Council for Trade-Related Aspects of Intellectual Property Rights Council for Trade in Services Six other bodies report to the General Council trade and development the environment regional trading arrangements administrative issues.

Structure (cont.) Fourth level: Subsidiary Bodies Three bodies The Goods Council—11 committees agriculture, market access, subsidies, anti-dumping measures, etc. The Services Council financial services, domestic regulations and other specific commitments Dispute Settlement panels and Appellate Body resolve disputes Appellate Body deals with appeals

Principles of Trading 1. Free of discrimination Cannot privilege a particular trading partner above others within the system Cannot discriminate against foreign products and services. 2. Tend toward more freedom fewer trade barriers (tariffs and non-tariff barriers) 3. Predictable trade barriers will not be raised arbitrarily markets will remain open. 4. Tend toward greater competition 5. More accommodating for less developed countries Give them more time to adjust, greater flexibility, and more privileges.

Agreements Approximately 30 agreements exist Agreements are (officially) made by consensus of all member countries Finds the most widely acceptable decision Time consuming In reality, agreements are often made in informal “Green Room” or “Mini-ministerial” meetings with some nations not being present

Agreement on Agriculture (AoA) Domestic support Green box- fixed payments for environmental programs Amber box- general subsidies Blue box- production-limiting subsidies Market access Developed countries- reduce tariffs by 36% Developing countries- reduce tariffs by 24% Export subsidies Reduce tariffs by 35%

General Agreement on Trade in Services (GATS) Prior to the GATS there was no agreement with regard to trade in services Historically many services (e.g. health, education) have been considered the responsibility of government With GATS many services have opened up to international trade that were previously monopolized by governments

Trade-related Aspects of Intellectual Property Rights (TRIPs) Sets forth minimum intellectual property standards for member countries Protected items include copyrights, geographical indications, industrial designs, chip designs, patents, trademarks, trade dress, and confidential information

Sanitary and Phyto-Sanitary Agreement (SPS) Sets food safety standards Bacterial contaminants Pesticides Inspection and labeling Animal and plant health Imported pets Diseases

Agreement on Technical Barriers to Trade (TBT) Ensures “that technical negotiations and standards, as well as testing and certification procedures, do not create unnecessary obstacles to trade”

Doha Round Began November 2001 Supposed to start in Seattle in 1999………..but

Challenges of Uruguay Protection remains high Troublesome domestic policies (subsidies, IPRs, labor conditions) Disadvantaged developing countries- particularly in agriculture (Development Agenda) 1- Only limited progress made in the agricultural, manufacturing sectors, tarrifs remain high, especially in developing countries, where they are three to four times as high as those in developed nations. (in industrial products) WTO is basically like the movies where the bad guy and the good guy both have guns, and one of them decideds they should fight like men, and you fifnd out one of them has a shotgun taped to his back, and as soon as they both decide to put down their guns, he whips it out.

Doha Collapses Europe blames US inflexibility regarding farm subsidies Others blame EU for their own farm subsidies EU wants to focus on manufacturing, not agriculture Developing nations are appalled, combine to oppose rich nations The effect of these subsidies is to flood global markets with below-cost commodities, depressing prices and undercutting producers in poor countries – a practice known as dumping. The EU and the US are allowed up to 380 bil in subsidies, and account for over 60% of rich country agricultural support spending. Europe spends more, but the US spends more per farmer

Cancun The ministerial conference was held in Cancún, Mexico, aiming at forging agreement on the Doha round. An alliance of 22 southern states, the G20 (led by India, China and Brazil), resisted demands from the North for agreements on the so-called "Singapore issues" and called for an end to agricultural subsidies within the EU and the US. The talks broke down without progress. G-22 – contingent of small, developing nations G-20 Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea,Turkey, the United Kingdom and the United States of America, and the European Union The "Singapore issues" refers to four working groups set up during the WTO Ministerial Conference of 1996 in Singapore, namely investment protection, competition policy, transparency in government procurement and trade facilitation. Disagreements between largely developed and developing economies prevented a resolution in these issues, despite repeated attempts to revisit them, notably during the 2003 Ministerial Conference in Cancún, Mexico, whereby no progress was made (demands from some rich nations for more transparent laws and better legal protection for trading companies ) Subsidies - The AoA's domestic support system currently allows Europe and the USA to spend $380 billion every year on agricultural subsidies alone.

WTO @ Cancun On the left is the G-20 and the right, G-22

Hong Kong Billed as a “Development Round” Agreement to phase out all agricultural export subsidies by 2014 Terminate cotton subsidies by 2007 Developing nations again see this round as a loss. The sixth WTO Conference Ministerial was held in Hong Kong from December 13 - December 18, 2005. It was considered vital if the four-year-old Doha Development Agenda negotiations were to move forward sufficiently to conclude the round in 2006. In this meeting, countries agreed to phase out all their agricultural export subsidies by the end of 2013, and terminate any cotton export subsidies by the end of 2006. Further concessions to developing countries included an agreement to introduce duty free, tariff free access for goods from the Least Developed Countries, following the Everything But Arms initiative of the European Union - but with up 3% of tariff lines exempted. Other major issues were left for further negotiation to be completed by the end of 2006. Cotton - Brazil had complained that US payments kept world cotton prices too low and gave its producers an edge over less developed and less well-funded rivals. According to Brazil's complaint, the US paid its farmers almost $4bn (£2.2bn) in cotton subsidies between 2001 and 2002 for a crop that was worth $3bn. The US more recently became embroiled in a spat with the European Union and Asia over steel tariffs, and it has also accused China of keeping its currency weak to boost exports. A representative from the Third World Network said “The developing countries gave in on the key market access issues of services and non-agricultural market access. In return they did not receive any significant gain in cotton, market access for LDCs, or “aid for trade”, the three main components of a so-called “development package.” As for the 2013 end-date for elimination of agricultural export subsidies, the most publicized claim of benefit from Hong Kong, it was no victory. This greatest-distorting subsidy of all should have been eliminated many years ago, and no price should have been asked for it.”

Recent Sept. 28 Meeting At its meeting on 28 September 2006, the Dispute Settlement Body established a compliance panel under DSU Article 21.5 at the second-time request by Brazil to review US' implementation of the DSB rulings in the “Cotton” case. At the same meeting, China blocked the first-time requests by the EC, US and Canada for panels to examine China's measures on imports of auto parts; and the US blocked Thailand's first-time request for a panel to examine US measures on shrimp from Thailand.

WTO Advantages Helps trade to flow smoothly. Well Philip, how do you feel. Helps trade to flow smoothly. Deals with disputes over trade. Decisions in the WTO are made by consensus and the agreements apply to everyone. All countries can appeal against decisions which they feel are unfair. This system has the potential to protect developing countries from harsh measures and unfair rules. That’s dynamite Jerry…Dy-no-mite

WTO Criticisms 1. The WTO only serves the interests of multinational corporations and wealthy nations. 2. Fundamental principals and aims of the WTO are not beneficial for all parties involved. 3. The WTO tramples over labor and human rights 4. The WTO is destroying the environment. 5. Fundamental principals and aims of the WTO are not beneficial for all parties involved. 6. The US adoption of the WTO undemocratic. 7. The WTO undermines local development and penalizes poor countries. 8. The WTO is increasing inequality.

WTO Criticisms The WTO only serves the interests of multinational corporations and wealthy nations

“Some examples of this bias are: (1) rich countries are able to maintain high import duties and quotas in certain products, blocking imports from developing countries (2) the increase in non-tariff barriers such as anti-dumping measures allowed against developing countries; (3) many developing countries do not have the capacity to follow the negotiations and participate actively in the Uruguay Round; and (4) the TRIPS agreement which limits developing countries from utilizing some technology that originates from abroad in their local systems.” - Martin Khor

WTO Criticisms Fundamental principals and aims of the WTO are not beneficial for all parties involved. Free trade and deregulation may not be good for developing countries Negative environmental, health, and safety issues may be neglected

The End

Dispute Settlement Dispute Settlement Body (WTO General Council Dispute Settlement Panel (3 trade officials) Appeals must be made on points of law Panel meets in secret, not required to alert nations that their laws have been challenged WTO can authorize trade sanctions as punishment (often ignored by powerful nations)

GATT founding members Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, the Czechoslovak Republic, France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, the United Kingdom, and the United States.