1. D. Scott Wiley
&
Yan Jin

2. What is the WTO? Well…what is it???
A place?
“Today at the WTO…”
A law?
“Based on the WTO Regulation…”
A group of people?
“Members of the WTO agreed…”
A meeting?
“The WTO meeting was held in…”
The idea of the WTO can seem a bit abstract

3. What is the WTO?
The WTO is an organization that deals with rules of trade between nations
Functions include acting as:
An organization for liberalizing trade
A forum for trade negotiations
A set of rules
A system to settle disputes

4. An Organization for Liberalizing Trade
Liberalism in economics refers to an ideology that supports the individual rights of property and free contract
In the context of the WTO it means the removal of trade barriers
Goes with the idea that the hands-off approach to markets is the most efficient in the long-run
WTO’s Stated Aim:
Promote Free Trade
Stimulate Economic Growth

5. A Forum for Trade Negotiations
A place where member governments go to try to sort out trade problems
Members start by talking it out
WTO acts as a mediating body

6. The WTO as a Set of Rules WTO Agreements
Signed by most of the world’s trading nations
The legal framework for international commerce
Contracts for governments to maintain certain trading policies
Purpose is to help exporters and importers, while making sure governments meet social objectives
The WTO oversees the implementation, administration and operation of the covered agreements

7. A System to Settle Disputes
Conflict of interests exists in trade relations
Trade agreements need interpreting
WTO is meant to be a neutral party to help settle trade disputes

8. History
After World War II many nations had adopted a protectionist stance on trade
Many felt closed-protectionist positions was a cause of WWII
Victor nations set up economic institutions to prevent this from happening again

9. History Bretton Woods System of 1946
International Monetary Fund (IMF)
World Bank
International Trade Organization (ITO)
The General Agreement on Trade and Tariffs (GATT) was signed into place in 1947
The ITO did not fly
The US said it was unfair
GATT took the place of the ITO

10. History
GATT: main purpose was to reduce barriers to international trade
GATT was an agreement, not an organization
Became the de facto organization for international trade

11. History - GATT Trade Rounds – negotiation meetings
First 6 rounds reduced tariffs from ~50% to ~12%
7th, the Tokyo Round of the early 70’s was first major effort at trade reform
Mainly about non-tariff barriers to trade, such as:
Subsidies
Quotas
Foreign exchange controls
Import bans
Restrictive licensing

12. History – GATT
The 1986 Uruguay Rounds of trade negotiations covered new trade topics
Trade in services and intellectual property
Sensitive subjects, like textiles and agriculture
GATT was expanded by adding:
General Agreement on Trade in Services (GATS)
Agreement on Trade Related Aspects of Intellectual Property (TRIPS)
Complexities of globalization strained the effectiveness of GATT

13. History – WTO
Uruguay Round ended in 1994 with the formation of the World Trade Organization
Jan. 1, 1995 – WTO was born
GATT, GATS and TRIPS still exist as the framework for the WTO’s operations

14. History Current Round – Doha
Began November 2001
Ambitious agenda to make globalization more inclusive of the world’s poor
Talks have been contentious
No agreements have been reached
July 2006 talks were suspended by Director General, Pacel Lamy, but may go forward at anytime

15. Principles of the Trading System
Nondiscrimination
Reciprocity
Meant to prevent Free-riders
Binding and Enforceable Commitments
Ensures predictability
Transparency
Member nations are required to publish trade regulations and report changes
Safety Valves
Governments can prevent trade for, say, health reasons

16. Formal Structure – Highest Level -Ministerial Conference
Meets at least every two years
Brings together all members of WTO
Can make decisions on all matters under any multilateral trade agreement

17. Formal Structure – Second Level -General Council
Meets regularly
Made up of representatives from all member nations
Has the authority to act on behalf of the Ministerial Conference
Also acts as:
Dispute Settlement Body
Trade Policy Review Body

18. Formal Structure – Third Level -Councils for Trade
Works under the General Council
Made up of three councils
GATT Council
TRIPS Council
GATS Council
These councils are charged with overseeing the functioning of their various trade agreements

19. Formal Structure – Fourth Level -Subsidiary Bodies
These are sub-councils under the three councils for trade
Examples include:
Textiles Monitoring Body, under the GATT Council
Information Technology Agreement Committee, under the TRIPS Council
The Services Council, under the GATS Council

20. Benefits from the WTO The system promotes peace
Disputes are handled constructively
Rules make life easier for all
Freer trade cuts the costs of living
It provides more choices of products
Trade raises incomes
Trade stimulates economic growth
The basic principals make life more efficient
Governments are shielded from lobbying
The system encourages good government
Source:

21. - A Unique Contribution
Dispute Settlement
- A Unique Contribution
It is the central pillar of the multilateral trading system
It is a unique contribution to the stability of the global economy
It makes the trading system more secure and predictable

22. Principle of Dispute Settlement
Equitable
Fast
Effective
Mutually acceptable

23. Stages of Dispute Settlement
Consultation- talk to each other
Panel- If consultations fail, the complaining country can ask for a panel to be appointed.
Appeal-Each side can appeal.

24. Case Decided, then?
If a country has done something wrong, It has to swiftly correct its fault.
if it continues to break an agreement, It must offer compensation or suffer a suitable penalty.
It must follow the recommendations of the panel report or the appeals report.
It must state its intention to do so at a Dispute Settlement Body meeting held within 30 days of the report’s adoption.
If after 20 days, no satisfactory compensation is agreed, the complaining side may ask the Dispute Settlement Body for permission to impose limited trade sanctions against the other side.
In any case, the Dispute Settlement Body monitors how adopted rulings are implemented.

25. How Long to Settle a Dispute?
60 days-Consultations, mediation, etc
45 days-Panel set up and panelists appointed
6 months-Final panel report to parties
3 weeks-Final panel report to WTO members
60 days-Dispute Settlement Body adopts report (if no appeal)
Total = 1 year (without appeal)
60-90 days-Appeals report
30 days-Dispute Settlement Body adopts appeals report
Total = 1y 3m(with appeal)

26. Case of Venezuela
On 23 January 1995, Venezuela complained to the Dispute Settlement Body that the United States was applying rules that discriminated against gasoline imports, and formally requested consultations with the United States.
Just over a year later the dispute panel completed its final report.
The United States appealed. The Appellate Body completed its report, and the Dispute Settlement Body adopted the report on 20 May 1996, one year and four months after the complaint was first lodged.
The United States agreed with Venezuela that it would amend its regulations within 15 months and on 26 August 1997 it reported to the Dispute Settlement Body that a new regulation had been signed on 19 August.

27. Effectiveness of Dispute Settlement
By July 2005, only about 130  of the nearly 332 cases had reached the full panel process. Most of the rest have either been notified as settled “out of court” or remain in a prolonged consultation phase — some since 1995.

28. The Complaint of U.S.A. against China
On 10 April 2007, the United States
requested consultations with China
concerning certain measures pertaining to
the protection and enforcement of
intellectual property rights in China.

29. The Four Matters on which the United States Requests Consultations
The thresholds that must be met in order for certain acts of trademark counterfeiting and copyright piracy to be subject to criminal procedures and penalties;   
Goods that infringe intellectual property rights that are confiscated by Chinese customs authorities, in particular the disposal of such goods following removal of their infringing features;   
The scope of coverage of criminal procedures and penalties for unauthorized reproduction or unauthorized distribution of copyrighted works;   
The denial of copyright and related rights protection and enforcement to creative works of authorship, sound recordings and performances that have not been authorized for publication or distribution within China.

30. Summary of Chinese intellectual property violations
Nearly 90 percent of all American software is pirated at an annual cost of more than $2 billion to the US economy.
Total copyright losses reach nearly $3 billion per year.
The U.S. automobile industry loses $12 billion each year due to counterfeit automotive parts production, of which China is a leading violator. 

31. Source: www.reuters.com
Response from China
"The United States Trade Representative, the USTR, has totally ignored the massive strides China has made," Premier Wu told an intellectual property forum in Beijing.
"The Chinese government is extremely dissatisfied about this, but we will proactively respond according to the related WTO rules and see it through to the end,“ Wu added.
Source:

32. Reasons to Oppose the WTO
1. The WTO Is fundamentally undemocratic
2. The WTO will not make us safer
3. The WTO tramples labor and human rights
4. The WTO would privatize essential services
5. The WTO is destroying the environment
6. The WTO is killing people
Source:

33. Reasons to Oppose the WTO
7. The WTO is increasing inequality
8. The WTO is increasing hunger
9. The WTO hurts poor, small countries in favor of rich powerful nations
10. The WTO undermines local level decision-making and national sovereignty
11. There are alternatives to the WTO
12. The tide is turning against free trade and the WTO!
Source:

34. Q & A?
Thank You!