1. CHAPTER XXV INTERNATIONAL ORGANIZATIONS
General Agreement on Tariffs and Trade (GATT)
World Trade Organization (WTO)
International Chamber of Commerce (ICC)
Organization for Economic Cooperation and Development (OECD)
Wassenaar Arrangement on Export Controls
G-7
G-20

2. General Agreement on Tariffs & Trade (GATT)
Signed by 23 nations after World War II on October 30, 1947 and took effect on June 30,1948
An interim measure to form Int’l Trade Organization (ITO)
Final leg of a triad after IMF & IBRD (World Bank)
U.S. failed to ratify in 1950 & effectively killed ITO
To promote economic growth and development by liberalizing world trade through elimination or reduction of import tariffs and non-tariff barriers

3. General Agreement on Tariffs & Trade (GATT)
In order to belong to GATT
(1) Members were required to reduce tariffs and drop barriers
(2) Had to adhere to Most Favored Nation (MFN) clause:
If a country gives a tariff reduction to another country, it should grant the same concession to all other member nations on a non-discriminatory basis
Provided basic set of rules by which trade negotiations took place and a mechanism for monitoring the implementation of these rules

4. General Agreement on Tariffs & Trade (GATT)
GATT-sponsored trade rounds (or simply rounds): Multilateral Trade Negotiations
1st , 1947, Tariffs, 23 countries
2nd, 1949, Tariffs, 13 countries
3rd, 1951, Tariffs, 38 countries
4th, 1956, Tariffs, 26 countries
5th, , Dillon Round, Tariffs, 26 countries. First time used ‘Round”
6th, , Kennedy Round, Tariffs & Anti-dumping measures, 62 countries

5. General Agreement on Tariffs & Trade (GATT)
7th, , Tokyo Round, Tariffs & Non-tariffs measures, 102 countries
Reduced the average tariff on industrial products by one-third to 4.7%
8th, , Uruguay Round, 123 countries
Launched in September 1986, in Punta del Este, Uruguay & concluded on Dec.15,1993. But a few more weeks for final touches on market access. Took 7 and a half years

6. General Agreement on Tariffs & Trade (GATT)
Uruguay Round (continued):
Signed by 123 nations on April 15, 1994 in Marrakesh, Morocco
Created Word Trade Organization (WTO)
Key new areas of agreement
Services
Government procurement policies
Intellectual property rights-Patents, Trademarks, Copyrights
Textiles
Agriculture

7. World Trade Organization
WTO began its operation on January 1, 1995 as a result of the Uruguay Round and replaced the old GATT (GATT 1947).
GATT became one of many WTO Agreements (GATT 1994)
China joined WTO on 12/11/2001 and Taiwan (Chinese Taipei) on 1/1/2002.
Russia joined on Aug. 22, 2012
159 members as of Mar. 2, 2013 with Tajikistan
Governing body of multilateral trading system
Platform for trade dispute settlements

8. World Trade Organization
Objectives
To help world trade flow as smoothly, freely, fairly, and predictably as possible by
Reduction of tariffs
Reduction of non-tariff barriers
Elimination of discriminatory treatment

9. Agreement on Goods: General Agreement on Tariffs and Trade (GATT)
WTO Agreements
Final Act of the Uruguay Round of trade negotiations
Agreement on Goods: General Agreement on Tariffs and Trade (GATT)
Agreement on Services: General Agreement on Trade in Services (GATS)
Agreement on Intellectual Property: Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

10. WTO Agreements
Agreement on Investment: Agreement on Trade-Related Investment Measures (TRIMS)
Agreement on Textiles and Clothing
Agreement on Agriculture
Agreement on Government Procurement
Agreement on Trade Policy Review Mechanism
Agreement on Dispute Settlement

11. Agreement on Goods GATT (GA on Tariffs & Trade)
WTO’s principal rule-book for trade in goods
Council for Trade in Goods (Goods Council):
Consists of all member countries
Committees on
Agriculture
Market Access for Goods
Sanitary and Phytosanitary Measures
Subsidies & Countervailing Measures
Anti-Dumping Practices
Customs Valuation

12. Agreement on Goods GATT (GA on Tariffs & Trade) (cont.)
Committees on (continued)
Rules of Origin
Import Licensing
Investment
Safeguards
Information Technology Agreement
Working Group (Party) on
State-Trading Enterprises

13. General Agreement on Services
GATS (GA on Trade in Services)
Banking, Insurance, Telecommunications, Tourism, Hotel, Car Rental, Transportation, Etc.
Principles of freer and fairer trade in services
Members made individual commitments (schedules) for marketing opening for service sectors

14. General Agreement on Services
GATS (GA on Trade in Services) (cont.)
Council for Trade in Services (Services Council)
Committees on
Trade in Financial Services
Specific Commitments
Working Groups (Parties)
Domestic Regulations
GATS Rules

15. Agreement on Intellectual Property
TRIPs (Trade-Related Intellectual Property Rights)
Rules for trade in ideas & creativity
Applies to only trade-related intellectual properties
Protection of Intellectual Properties:
Copyrights, Trademarks, Geographical names used to identify products, Industrial designs, integrated circuit layout designs, trade secrets

16. Agreement on Investment
TRIMs (Trade-Related Investment Measures)
Applies only to investment measures that affect trade in goods.
No discrimination against foreigners or foreign products (violates “national treatment” principles of GATT).
No restrictions in quantities (violates “prohibition of quantitative restrictions” of the GATT)
No requirement for particular levels of local procurement by an enterprise (“local content requirements”).
No measures which limit a company’s imports or set targets for the company to export (“trade balancing requirements”)

17. Agreement on Textiles & Clothing (ATC)
From 1974 to 1994: Under Multifiber Agreement (MFA). Textile quota
From 1995, Fully integrated into normal GATT rules of WTO in 10 years
January 1, 2005, ATC no longer exists. No quota.
Only WTO agreement that has self-destruction built-in

18. Agreement on Agriculture
New Rules and Commitments: Requires members to make more market-oriented policies
Market Access: Tariffs only or Tariffication which is converting quota & other restrictions to tariff
Domestic Support: Domestic support that has a direct effect on production and trade must be cut back.
Export Subsidies: Prohibits export subsidies unless specified in a member’s lists of commitment. Must cut both the amount of subsidies and quantities that receive subsidies.

19. Agreement on Agriculture
Regulations for Animal and Plant Products:
A separate agreement on food safety and animal & plant health standards
Allows countries to set their own standards
Must be based on science (scientific justification)
Should not arbitrarily or unjustifiably discriminate between countries
Encouraged to use international standards, guidelines and recommendations.

20. Agreement on Government Procurement
To open up government procurements to international competition.
A "plurilateral" agreement, which applies only WTO Members who have acceded to the Agreement, but not all Members.
Currently 40 WTO Members
Members make laws, regulations, procedures and practices regarding government procurement more transparent
Members do not protect domestic products or suppliers, or discriminate against foreign products or suppliers.

21. Agreement on Government Procurement
Extends international competition to procurement of national and local government entities.
Extends coverage to services (including construction services), procurement at the sub-central level (for example, states, provinces, departments and prefectures), and procurement by public utilities.
Members required to put in place domestic procedures by which aggrieved private bidders can challenge procurement decisions and obtain redress

22. Agreement on Government Procurement
Applies to contracts worth more than specified threshold values. In the USA,
Central (Federal) government: 130,000 SDRs for supplies & services
Sub-central government (State): 355,000 SDRs for supplies & services
All other entities: 400,000 SDRs for supplies & services
For construction contracts: 5 million SDRs
Some services excluded: Transportation, dredging, R & D, military support, etc.
1 SDR=US$1.58 as of May 23, 2011

23. Agreement on Trade Policy Review Mechanism (TPRM)
To improve transparency
To create a greater understanding members’ trade policies
To asses their impact
Members must undergo periodic scrutiny & review of their trade policy

24. Agreement on Dispute Settlement
Procedures for resolving trade disputes
To enforce rules and ensure that trade flows smoothly
Dispute settlement is the central pillar of the multilateral trading system.
Based on clearly-defined rules with timetables for completing a case
Priority is to settle disputes through consultations, if possible. About one-third of cases have been settled at consultation stage or still in consultations

25. Agreement on Dispute Settlement
Understanding on Rules and Procedures Governing on the Settlement of Disputes
Called Dispute Settlement Understanding (DSU)
Member should not take unilateral action against perceived violations of trade rules, but seek resolution thru Multilateral dispute settlement system, and abide by its rulings and findings

26. Agreement on Dispute Settlement
Timetable: Target figures. Flexible
60 days Consultations, mediations
45 days Panel setup and panelists appointed
6 mos. Final panel report to dispute parties
3 weeks Final panel report to WTO members
60 days Dispute Settlement Body adopts report (if not appealed)
Total 1 year without appeal
60-90 days Appeals report
30 days Dispute Settlement Body adopts appeals report
Total 1 year 3 months with appeals
In case of urgency like perishable goods, the panel report deadline is shortened to 3 months from 6 months.

27. Agreement on Dispute Settlement
Dispute Settlement Body (DSB)
General Council consisting of all WTO members
Settling disputes is the responsibility of the DSB.
If consultations among parties in dispute by WTO Director-General fails, complaining country can ask for a panel to be appointed.
Panel is composed of 3 panelists unless parties specially agree to have 5 panelists.
Director-General suggests potential panelists to disputing parties

28. Agreement on Dispute Settlement
Dispute Settlement Body
If parties do not agree on panelists, Director-General appoints panelists.
Panel’s final report can only be rejected by consensus in the Dispute Settlement Body (DSB). Almost always adopted unless appealed.
Therefore, panel’s final report becomes the DSB’s ruling and recommendation unless consensus rejects it.
Both sides can appeal the panel’s final report.

29. Agreement on Dispute Settlement
Appeals
Any appeal must be limited to issues of law covered in the panel report and the legal interpretation by the panel
Each appeal is heard by 3 members of a permanent 7-member Appellate Body set up by the DSB. Members have 4-year terms.
Appellate Body’s appeal reports are unconditionally accepted by DSB unless rejected with consensus including the complainant country

30. Agreement on Dispute Settlement
Implementation of Rulings & Recommendations of DSB
Losing country is required to
bring its policy into line with the rulings and recommendations.
enter into negotiations with complaining country to determine mutually acceptable compensation such as tariff reduction
If not agreed, DSB must grant winning country permission to apply limited trade sanctions such as suspending concessions or imposing punitive high tariffs

31. Agreement on Dispute Settlement
Filings of Dispute Settlements
From Jan 1995 to June 2011: 424 cases
1st filing by Singapore against Malaysia on Prohibition of Imports of Polyethylene and Polypropylene on January 10, 1995 (Case DS1).
25 cases in 1995
Highest 50 cases in 1997
Lowest 12 cases in 2005
Trend is the less dispute filings as years pass, thanks to better compliance by the WTO member countries.

32. Agreement on Dispute Settlement
Filings of Dispute Settlements (Cont.)
The United States was involved in 210 cases: 50% disputes; 97 cases as Complainant and 113 cases as Respondent (Defendant).
The 1st complaint filed by the United States was against South Korea’s Measures Concerning the Testing and Inspection of Agricultural Products on April 4, 1995 (Case No. DS3).
The 1st complaint filed against the United States was by Venezuela on Standards for Reformulated and Conventional Gasoline on January 24, 1995 (Case No. DS2).

33. WTO Key Principles Trade without discrimination:
Most Favored Nation (MFN)
National treatment
Predictable and growing access to markets
Tariff reductions on goods
Binding national schedule for opening services
Promotion of fair competition
Sets rules on compensating duties against dumping and foreign government subsidies

34. WTO Key Principles
Encouraging development & economic reform of developing countries
Industrial countries assist trade of developing countries by conferring tariff preference programs such as GSP

35. WTO Main Functions
Administering and implementing multilateral trade agreements
Forum for multilateral trade negotiations
Resolving trade disputes
Monitoring national trade policies of members
Providing technical assistance and training to developing countries
Cooperating with other international institutes

36. WTO Structure
Ministerial Conference: Highest authority. Meet every two years
General Council: Ambassadors or heads of delegation in Geneva. Meets as
Trade Policy Review Body
Dispute Settlement Body
Goods Council, Service Council and Intellectual Property Council, and so on
Numerous specialized committees and working groups
Secretariat: Day-to-day operations by Director-General, Four Deputy D.G.s, and 500 staff

37. International Chamber of Commerce (ICC)
Over 100 member nations
International Trade Rules issued by ICC
Incoterms 2010
Uniform Customs and Practices (UCP) for Documentary Credit (2007 Revision), ICC Publication No. 600
Uniform Rules for Collections (ICC Publication No. 522)

38. Organization for Economic Cooperation & Development (OECD)
Most members are developed countries: 34 Nations
OECD’s member countries share a commitment to the democratic government and the market economy
Best known for its publications and its statistics.
OECD’s work covers economic and social issues from macroeconomics to trade, education, development, science, and innovation.

39. Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technology
Adopted by 33 countries in Replaced the Coordinating Committee on Multilateral Export Control (COCOM) which was suspended March 31, 1994
To restrict the export of conventional weapons and sensitive dual-use goods and technology to hostile nations
Current membership: 40 countries

40. G-7/G-8
Not an international organization, but a gathering or a forum of the most developed countries
In 1975: G-6 consisting of France, Germany (West) , Italy, Japan, the U.K. and the U.S.A. after oil crisis in 1970s
In 1976, Canada joined & made it G-7
Finance ministers meet two or three times a year
Summit meeting of heads of government: Once a year
Also called G-8 by adding Russia

41. G-20 (Group of 20)
Group of 20 Finance Ministers & Central Bank Governors. Established in 1999 in the wake of 1997 Asian Financial crisis
Recently summit meetings of heads of states have been introduced.
90% of world GDP, 80% of world trade, and two-thirds of the world population
No secretariat or staff. Chair rotates annually, 2010 Korea, 2011 France
Agreed to replace the G-8 at the 2009 summits meeting in Pittsburg

42. G-20 (Group of 20) Argentina Australia Brazil Canada China France
Germany
India
Indonesia
Italy
Japan
Mexico
Russia
Saudi Arabia
South Africa
South Korea
Turkey
United Kingdom
United States
European Union