International Business Law & Institutions Sol Picciotto Topic 1: From GATT to WTO

1. Law School International Business Law & Institutions Sol Picciotto Topic 1: From GATT to WTO Trade Organization or Government of Global Economy? Package of agreements, enforced by DS with (trade) sanctions Legal-Technocratic procedures Emphasis on liberalisation = market access `Non-tariff barriers’ = regulatory differences – need to harmonise? Linkages: disciplines on state rules, to conform to international standards SPS & TBT >>> technical & health standards (ISO, Codex) TRIMS & GATS >>> investment regulation TRIPS >>> WIPO & investment New `Singapore’ issues? competition; investment; environment; labour standards. IBLI Topic 1

2. The Legacy of Bretton Woods IMF - IBRD (WB) - [ITO] > GATT ITO: incl. provisions on Commodity Agreements, Cartels General Agreement on Tariffs & Trade - GATT 1947 Protocol of Provisional Application: not Organization Contracting Parties (= GATT Council) take decisions Negotiating Rounds GATT Uruguay Round (UR) negotiations 1987-1993 WTO, Marrakesh Agreement 1994 in force 1/1/95 4/04/03 146 members (incl. China, not Russia) 500 staff, 2003 budget SwFr154m IBLI Topic 1

3. The WTO Package Annex IA: Trade in Goods: GATT 1994 = GATT 1947 + Understandings + UR Protocol Schedules, + 12 Side Agreements (incl. Agric., Textiles) Annex IB: General Agreement on Trade in Services - GATS Annex IC: Agreement on Trade-Related Intellectual Property Rights - TRIPS Annex II: Dispute-Settlement Understanding - DSU Annex III: Trade Policy Review Mechanism - TPRM Annex IV:Plurilateral Agreements (optional) Civil Aircraft, Govt Procurement (25% of WTO members) [Bovine Meat, Dairy ended 1997] + Ministerial Decisions & Declarations IBLI Topic 1

4. Organizational Structure: chart Decisions: by Consensus if possible (`Green Room’) otherwise: 1 vote per state (incl. all EU MS) Interpretations: MinConf/GC: 75% majority new agreements/accessions: Consensus (package deals) Ministerial Conference Singapore 1996; Geneva 1998; Seattle 12/1999, Doha 11/ 2001, Cancun 09/2003 General Council (& DSB, TPRM) Committees: Environment, Development; WG Investment, etc Councils: Goods, Services, TRIPS Committees: Agriculture, SPS, TBT, etc Trade Negotiations Committee IBLI Topic 1

5. Basic Principles of the GATT Non-discrimination: (i) MFN- art.I: multilateral & unconditional `any advantage granted’ to ANY state must be extended to CP Non-discrimination: (ii) NT - art III taxes and other regulations affecting products `no less favourable’ than that for products of national origin Elimination of Quantitative Restrictions - art. XI no prohibitions or other restrictions on imports or exports by quotas, licences or other measures (total prohibition?) General Obligations subject to Exceptions, esp. art XX IBLI Topic 1

6. Tariffication & Trade Liberalisation No quotas, tariffs locked in, downward ratchet MFN = concession automatically generalised to all MS Equivalent concessions? reciprocity/free-riding Special & Differentiated Treatment for LDCs Art. II - Tariff Schedules `bindings’ `grandfathering’ margin of preference Negotiating Rounds (8) especially 1960-62 Dillon : item-by-item 1962-67 Kennedy: linear, aim 50% overall, exceptions 1973-79 Tokyo: algebraic (for disparities) + NTBs 1986-93 Uruguay: > comprehensive undertaking Tariffs on manufactures average 40% 1948 > 5% 1995 IBLI Topic 1

7. Exceptions art. VI Anti-Dumping goods sold at undervalue (=below home price) MAY impose duty, no greater than dumping margin art. VI Countervailing Duties no greater than export subsidy art. XII Balance-of-Payments art. XIX: Safeguards art. XXIV: regional FTA or Customs Union: bilateral? art. XX General Exceptions list, subject to general `chapeau’ art. XXI Security IBLI Topic 1

8. Dispute-Settlement - GATT - WTO Aim: (i) to resolve disputes consultations (XXII.1, DSU 4), mediation (DSU 5) arbitration (DSU 25) - for facts, expert group DSU 13.2 (ii) enforce compliance: right to retorsion (compensation) (iii) ensure Balance of Commitments maintained art. XXIII Nullification/Impairment OR Objective of Agreement impeded, BY (i) failure to carry out obligation (=violation) (ii) application of a measure (=non-violation) (iii) any other situation IBLI Topic 1

9. WTO: Legalisation of Dispute Settlement All `covered agreements’ + special rules DSU 1.2 cross-retaliation: DSU 22.3, Bananas Automatic Adoption of Reports: DSU 16.4, 14 Timetable (12 months max) Remedies: DSU 3.7 withdrawal of inconsistent measures (if violation) within reasonable time: DSU 21.3 disagreement on consistency > original Panel: DSU 21.5 Compensation/Suspension of Concessions: temporary, if withdrawal impractical Authorised discriminatory Suspension of concessions: DSU 22 (level subject to Arbitration, winner decides areas and timing) Cross-retaliation: DSU 22.3 IBLI Topic 1

10. Rule of Law in trade: DSU 3.2 World Court of Economic Justice? AB: members fixed term (part-time) Panelists ad hoc end of unilateralism? US Trade Act 301 Panel report mutually agreed solutions referred to DSB: DSU 3.6 standing & 3rd parties: DSU 3.3&7, US in Bananas amicus curiae briefs? Asbestos et al DS rulings don’t change MS rights/obligations: DSU 3.2&4 Only GC/MinConf can make Interpretations: WTO IX.2 AB formalist reasoning: international law & Vienna C. Reports not precedents but part of acquis: Japan Taxes IBLI Topic 1