(c) 2004 Charles G. Gray1 Global Telecommunications Regulation TCOM 5173 The World Trade Organization (WTO) 7 April 2004 Charles G. Gray

(c) 2004 Charles G. Gray2 WTO Charter The World Trade Organization (WTO) is the only international entity dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and as freely as possible.

(c) 2004 Charles G. Gray3 WTO Precursors 1934 – US Reciprocal Trade Agreements Act 1944 – Bretton Woods Agreement –IMF, World Bank, GATT, IBRD –Fixed-rate foreign currency exchange system 1947 – Geneva, GATT adopted by 23 nations –122 mutual tariff reductions on goods 1949 – Annecy Round –Ten new countries added –5,000 tariff reductions

(c) 2004 Charles G. Gray4 More WTO Precursors 1951 – Torquay Round –8,700 tariff reductions –Three new members 1956 – Geneva Round –Additional 8,700 tariff reductions –Tariffs reduced affecting US$2,500 million Dillon Round (Geneva) –4,400 tariff reductions –Affected US$4,900 million in trade

(c) 2004 Charles G. Gray5 More WTO Precursors – Kennedy Round (Geneva) –70 member countries –Anti-dumping agreement –Tariffs reduced 35-40% – Tokyo Round –Preferential treatment to LDCs –Addressed non-tariff barriers for the first time Subsidies and licensing –99 countries now members –Additional significant tariff reductions

(c) 2004 Charles G. Gray6 The Uruguay Round – Puenta del Este, Uruguay –125 countries –Expanded agenda Agriculture Services Restricting subsidies Protecting intellectual property Established the WTO and GATS Final Act signed in Marrakesh, Morocco

(c) 2004 Charles G. Gray7 The WTO Today 148 Member countries –China (PRC) and Taiwan (ROC) added 2001/2 –FYROM – April 2003 –Nepal – August 2003 –25+ countries awaiting membership –“Observers” can watch, but not vote Covers over 90% of world trade Completely absorbed the GATT –GATT was only a set of rules –WTO is a firmly established legal institution

(c) 2004 Charles G. Gray8 Broad WTO Policies Assist developing and transition economies Provide specialized help for export promotion Promote regional trading arrangements Encourage cooperation in global economic policy making Publish reviews of members’ trade policies Provide routine notification when members introduce new or change trade measures

(c) 2004 Charles G. Gray9 Fundamental Principles Trade without discrimination –Most favored nation (MFN) clause Predictable and growing access to markets –Quotas outlawed, tariffs allowed Promote fair competition –Dumping and subsidies better defined Encourage development and economic reform –Favors LDCs, provides extended transition time

(c) 2004 Charles G. Gray10 WTO Functions Administering trade agreements Acting as a forum for trade negotiations Settling trade disputes Reviewing national trade policies Assisting developing countries in trade policy issues, through technical assistance and training programmes Cooperating with other international organizations

(c) 2004 Charles G. Gray11 WTO Organization Ministerial Conference –Required to meet at least every two years –Cancun – September 2003 General Council –Goods Council –Services Council –Intellectual Property Council Specialized committees, working groups and working parties Secretariat

(c) 2004 Charles G. Gray12 The WTO Secretariat Supports WTO delegate bodies Technical support to LDCs Provides economists and statisticians Provides legal staff – trade disputes Assists new members with accession negotiations Provides advice to governments considering membership Staff of budget about SFr134M

(c) 2004 Charles G. Gray13 WTO Benefits Peace Dispute resolution Rules Cost of living Choice Higher incomes Economic growth and jobs Efficiency Lobbying Good government

(c) 2004 Charles G. Gray14 WTO Risks “Services” are not defined –Virtually endless list – some not even defined yet Lack of effective leadership –Seattle focused on negative aspects –DG divided into two sub-terms Mike Moore ( ) Dr. Supachai Panitchpadki ( ) Non-government Organizations (NGOs) Horse trading

(c) 2004 Charles G. Gray15 The Big Issues Unforeseen consequences Lack of public scrutiny Government services vulnerable Trade dominates all other issues Telecommunications changes everything “Cream skimming” Skills drain Labor standards

(c) 2004 Charles G. Gray16 The “Doha Round” (Nov 2001) TRIPS and public health Agriculture Market access Services commitments Subsidies and anti-dumping Environment Dispute settlement Investment Government procurement

(c) 2004 Charles G. Gray17 The “Doha Round”–Cancun (Oct 03) Suicide over farm policy (Korean farmer) Conflicting priorities –Richer countries – foreign investment –Poor countries – farm subsidies –Activist protesters Disease, famine, poverty, environmental damage Talks collapsed – no agreement on anything Feb 04 – USTR trying to restart talks –Agriculture is still the major hurdle

(c) 2004 Charles G. Gray18 The Future of Telecommunications and the WTO? Second in size only to the financial services market An industry in its own right Essential infrastructure for nearly all other economic and social activities Moving from local to global systems and services WTO rules will be the principal guide