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Institution

Institution. WTO Law. International Organization. The WTO is An international (intergovernmental) organization With Members (not only states ) (Art. XI, XII WTOA ) With its own legal personality (Art. VIII WTOA ) With organs (Art. IV, VI WTOA )

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Institution

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  1. Institution WTO Law

  2. International Organization • The WTO is • An international (intergovernmental) organization • With Members (not onlystates) (Art. XI, XII WTOA) • Withitsown legal personality (Art. VIII WTOA) • Withorgans (Art. IV, VI WTOA) • Withmainlyancillaryfunctions, thatmeans: • Nosupervisoryrole (TPRM?) • Almostnolawmakingpowers

  3. Trade Pillar WTO 1 state/ 1 vote EU, member dominant actor Financial Pillar Bretton Woods, IFIs + BIS 1 dollar/ 1 vote EU indirect role (MS on the board) Normative Pillar ILO, MEAs, WHO, FAO, Codex Alimentarius ITU, WIPO... 1 state/ 1 vote EU Member, participant or observer International Economic Regime

  4. Functions of the WTO (Art. III WTOA) • Facilitate the implementation, administration and operation, and further the objectives, of this Agreement and of the Multilateral Trade Agreements, • Framework for the implementation, administration and operation of the Plurilateral Trade Agreements. • Forum for negotiations among its Members concerning their multilateral trade relations in matters dealt with under the MTAs and the PTAs • Forum for further negotiations among its Members concerning their multilateral trade relations, and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference. • Administration of the DSU and the TPRM • Cooperation with the International Monetary Fund and with the International Bank for Reconstruction and Development and its affiliated agendies with a view to achieving greater coherence in global economic policy-making

  5. Institutional Structure (Art. IV WTOA) MINISTERIAL CONFERENCE AB Secretariat Appellate Body GENERAL COUNCIL DSB Panel TPRB TRIPS Council Committees Working Groups Council for Trade in Goods Council for Trade in Services Marrakesh Agreement establishing the WTO Committees Committees WTO Secretariat

  6. Organs of the WTO

  7. InstitutionalFeatures in the WTOA • The InstitutionalStructure: • Art. IV (Council), • VI (Secretariat) • 70 bodies, 34 standingbodies • The Relations withotherintl. Organizations (Art. V) • The WTO as an institution in public international law, (Art. VIII) • Voting (Art. IX.1) • Authenticinterpretation (Art. IX.2) • Waivers (Art. IX.3, 4 WTOA/XXV GATT, Understanding) • Amendments (Art. X) • Membership (Art. XI, XII, XV) • Continuitywith GATT (Art. XVI.1)

  8. The Bretton Woods Link • Bringingtogetherthetwosides of international economicexchangetogether • “With a view to achieving greater coherence in global economic policymaking, the WTO shall cooperate, as appropriate, with the International Monetary Fund and with the International Bank for Reconstruction and Development and its affiliated agencies.” (Art. III.5 WTOA) • II.2 Marrakech Declaration:: "2. Ministers confirm their resolution to strive for greater global coherence of policies in the fields of trade, money and finance, including cooperation between the WTO, the IMF and the World Bank for that purpose. " • Decision on achieving greater coherence in global economic policy-making • Declaration on the Relationship of the WTO with the IMF: same provisions as in the old GATT times • Agreements between WTO and IMF and IBRD (1996) • Mutual observer status

  9. Trade and Currency - 1 • The crisis in the 1920s showed the explosiveness of currency manipulations for protectionist reasons • Devaluation decreases the price of exports • Exchange rate may be manipulated • by buying foreign currencies with own money • by quotas for import and export of own or foreign currencies (reducing demand or supply) • By pegging or fixing exchange rates • Danger of manipulations in 2010 • Dispute about Chinas peg and later purchases of USD • October 2010: imminent currency war. G 20 in Korea lukewarm promises • What is the limit between normal intervention and protectionist manipulation?

  10. Trade and Currency - 2 • See • art. II.6, duties and charges • VII.4, • XIV.1, 3, 5, • XV: exchange • and notes nr. 2 ad art. VI paras. 2 and 3, • nr. 1 ad art. VIII, • ad art. XV.4 GATT • Are currency manipulations prohibited subsidies or other protectionist non-tariff trade barriers (NTBs)? • Who decides about a violation? WTO or IMF? See art. XV GATT

  11. Coordination with the IMF • Coordination (XV.1) • Exchange rate policy of the Fund • Trade measures in the jurisdiction of the WTO • Consultation in full (XV.2) • WTO has to accept • Factual findings of the IMF • Determination of lawfulness by the IMF • According to its own primary law • According to a special exchange arrangement within the WTO • Determination of a reserve position of a MS • Under Art. XII.2 (a) • Under Art. XVIII.9 • Agreement on the procedures for consultation • Report of Members exchange activities not justified by GATT (XV.5)

  12. Monetary duties of Members of the WTO • XV.4: no frustration • Of the intent of GATT by exchange action • Of the intent of the IMFA by trade action • WTO members that are not IMF members (XV.6) • Have either to join the IMF or • To enter into a special exchange arrangement with the WTO • Also if a member is leaving the IMF • Special exchange arrangements are part of the WTO obligations (XV.6 and 7) • Securing that WTO obligations will not be frustrated by an exchange action • Generally not more restrictive than IMF obligations • Duty of information of the WTO according to the general scope of art. VIII.5 IMFA

  13. Exchange arrangements • IMF exception (XV.9 GATT): exchange controls that are always lawful • If in conformity with the IMF primary law or a special agreement with the members of the WTO • WTO exception (XV.9 GATT): restrictions or controls of exports or imports of goods are lawful • If they serve the exchange controls or restrictions permitted under arts. XI, XII, XIII and XIV and only shall make such controls or restrictions effective

  14. Relations with other International Organizations • Cooperation agreements with e.g. WIPO, UNCTAD • 2003: Memorandum of understanding with UNCTAD • Integrated Framework for Trade-related Technical Assistance (IF) • Joint Integrated Technical Assistance Programme (JITAP) • International Trade Centre WTO/UNCTAD • Memoranda of Understanding with other Ios • Active and passive observation statuses • Guidelines for the relations with NGOs

  15. Original Members of the WTO • Original Members (Art. XI WTOA) • New Members (Art. XII WTOA) • States and Customs territories (Art. XXIV GATT) • Application, Negotiations with all MS • Admission by 2/3 majority in the Ministerial Conference • At present: 153 Members (2008)

  16. New Members of the WTO • New Members (Accession, XII WTOA) • Any State • Or customs territory (XXIV 1,2 GATT) possessing full autonomy in the conduct of its external commercial relations and of the other matters regulated in WTOA and the MTAs • On Terms agreed between it and the WTO • May accede to the WTO and the MTAs together (single undertaking approach) • If admitted by the Ministerial Conference by 2/3rds majority

  17. Accession Procedure • Application • Establishment of a workingparty • Examinationoftheforeigntraderegimeoftheapplicant • Bilateral negotiationsabouttariffconcessions et al. • Agreement on thereportofthe Working Party • Admission by the Ministerial Conference by 2/3rds majority • Agreement on a Decisionand a Protocol setting out thetermsoftheacession • Entry intoforce

  18. Divergent obligations In accedingthe WTO Candidatesmayacceptmoreobligations (GATT plus) Orless (GATT minus)

  19. WTO Plus / WTO Minus • Art. XII WTOA: conditions of accessionaretobenegotiated • Obligationsmaygobeyondorbelowthestandard of incumbentmembers of the same statusofdevelopment • Becauseofthebalanceofobligationsandrights • Not subjecttothe unilateral concessions in theschedule • WTO Plus, e.g. • Obligationstoprivatizeenterprises • Obligationstojoin a PTA (Aircraftor GPA) • Obligation not toinvokespecialrulesfordeveloping countries • WTO Minus • Extended periods of transition

  20. Entry into Force of the Accession • Note by the Secretariat (WT/ACC/1 )of March 24, 1995 • “Following the General Council/Ministerial Conference's adoption of the Report of the working party and the approval of the draft Decision by a two-thirds majority of the WTO Members' positive vote, the Protocol of Accession enters into force thirty days after acceptance by the Applicant, either by signature or by deposit of the Instrument of Ratification, if Parliamentary approval is required.“ • But in fact: Consensus – singleexception: Ecuador • Different in theold GATT times (likeforwaivers)

  21. Withdrawal • XV WTOA: Withdrawal • WrittennoticetobereceivedbytheDGofthe WTO • Effective 6 monthsthereafter • ApplicablenecessarilytotheWTOAand all theMTAs • Expulsion not foreseen, exceptfor non-acceptance of an amendment (X.3 ?)

  22. Membership Obligations • Objectiveobligations „Principles“ • Subjectiveconcessions (but extendedtrough MFN) • Pactasuntservanda • Article 26 VCLT • “Every treaty in force is binding upon the parties to it and must be performed by them in good faith.” • Art. XVI.4 WTOA: Domesticlawchangespromised • “4.Each member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.” • Financial Contributions (Art. VII.4 WTOA)

  23. Membership Rights • Mirroringtheobligationsoftheother MS • Counterpart forthe „lossoftheirownsovereignty“ • Ruleof Law brings relative security • Adjudicationandenforcement • Participation • Decisionmaking • Negotiations, but: • Capacity Problems

  24. Decisionmaking – Consensus, Majority • Art. IX WTOA • Rule: consensus (prosandcons ?): flexibility, democracy, protectionofminorities? • Not in the GATT forvoting on waiversandaccessions • On demand: majorityvoting, onestate - onevote (EU 27) • Special procedures • DSB (Art. 2.4 DSU, but „reverseconsensus“) • Authoritativeinterpretations (Art. IX.2 WTOA) • Waivers (Art. IX.3 WTOA, Art. XXV GATT) • Accessions (Art. XII.2 WTOA). Majority: Ecuador • Amendments (Art. X.1, 2 WTOA) • Budget (Art. VII.3 WTOA) • Except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by majority voting. (exceptions, by Rules of Procedure)

  25. The Consensus Principle • Art. IX WTOA • 1.The WTO shall continue the practice of decision-making by consensus followed under GATT 1947.[1] Except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting. At meetings of the Ministerial Conference and the General Council, each Member of the WTO shall have one vote. …. . Decisions of the Ministerial Conference and the General Council shall be taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the relevant Multilateral Trade Agreement. • [1] The body concerned shall be deemed to have decided by consensus on a matter submitted for its consideration, if no Member, present at the meeting when the decision is taken, formally objects to the proposed decision.

  26. Non-attendance ? • DECISION-MAKING PROCEDURES UNDER ARTICLES IX AND XII OF THE WTO AGREEMENT • Statement by the Chairman as agreed by the General Council on 15 November 1995 •   On occasions when the General Council deals with matters related to requests for waivers or accessions to the WTO under Articles IX or XII of the WTO Agreement respectively, the General Council will seek a decision in accordance with Article IX:1. Except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting under the relevant provisions of Articles IX or XII. •   The above procedure does not preclude a Member from requesting a vote at the time the decision is taken. •   Consequently, if any Member has a particular problem with a proposed decision regarding a request for a waiver or an accession to the WTO, it should ensure its presence at the meeting in which this matter will be considered. The absence of a Member will be assumed to imply that it has no comments on or objections to the proposed decision on the matter • WT/L/93 of 24 November 1995

  27. EU Membership • The "European Communities" aremember of the WTO (Art. IX WTOA) – succeededbythe EU? • See art. I TEU last sentence • But in practice: identityassumed • WTO-Agreements aremixedagreements, therefore parallel membership of EU anditsmembers

  28. Voting - Art. XI WTOA: • Where the European Communities exercise their right to vote, they shall have a number of votes equal to the number of their member States[2] which are Members of the WTO. • [2] The number of votes of the European Communities and their member States shall in no case exceed the number of the member States of the European Communities. • Compare that e.g. with China and the US

  29. - 29 - EU as a „Major Player“ in the WTO • The „Quad“: USA, EC, Japan, Canada • The G-7, G-8, G-10, G-20: EU-MS + EU • EU isalwaysamongthebiggestimportersandexporters in theworld • Bundlingtheeconomic power of 27 (andsoonevenmore) MS • Economicallythe EU istheonlyentitywithcapacity, influenceandstrengthcomparabletothe US andabletotakethelead

  30. - 30 - Special Nature of the EU • The EU is – under GATT law – a customsunionthatfulfilstherequirement of Art. XXIV.8 a GATT (cf. theunderstanding of the Uruguay Round) • But with a specialmembershipstatus • EachaccessiontotheEU bringsthenecessitytocompensatethirdstatesforthelosstheysuffer in terms of MFN status (Art. I GATT) andpossibly in thebindings of Art. II GATT (see art. XXIV.6 GATT) • Preferential Agreements withdeveloping countries andassociationagreementswiththird countries, especiallythecandidatesforaccessionmostoftenare not covering „substantially all trade“ andthusneed a waiverunderart. XXV GATT (and an understanding of the Uruguay Round) • Cf. the Cotonou Agreement

  31. PolicyConcepts • Preambleno. 5 • DESIRING to contribute, by means of a common commercial policy, to the progressive abolition of restrictions on international trade, • Art 206 TFEU • By establishing a customs union in accordance with Articles 28 to 32, the Union shall contribute, in the common interest, to the harmonious development of world trade, the progressive abolition of restrictions on international trade and on foreign direct investment, and the lowering of customs and other barriers.

  32. WTO Agreements asmixedagreements • Common commercialpolicy was always an exclusive power – now art. 3.1 e TFEU • Enlargedscope (art. 206/207) • Exclusive power toconclude international treaties • BeforeLisbon: ERTA – doctrine (22/70 [1971] ECJ 263) – mirroring power • Now 3.2 TFEU • BeforeLisbon, the MS hadsharedcompetences in mostpartsof GATS and TRIPS, thereforemixedagreements (opinion 1/94, [1994] ECR I-5267) • "close cooperation between the Member States and the Community institutions, both in the process of negotiation and conclusion and in the fulfilment of the commitments entered into.”

  33. Sharing of competences in practice • Art. 133 – Committee (now Art. 207 TFEU): decision in the EU Council ifnecessary – unitaryrepresentationneedsconsensus (in all matters, irrespective of whohastheinternal power) • Coordinatedposition of the EU andthememberstatesisrepresentedbytheCommissioncasting 27 votes • Joint andseveralliability – Commissionrepresents Member States in DS procedures

  34. - 34 - EC in the WTO Dispute Settlement • Sincethe WTO Agreement System hasbeenjoinedbythe ECs andits Member States • Andsincetheyassumejointandseveralliabilityforcompliancewiththerules of WTO law • therespondentparties of DS proceduresare • Sometimesthe ECs • Sometimesonememberstate (in areas of EC laworown national law), e.g. DS 131 and DS 173 US vs. France • Sometimesseveralmemberstates (in areas of EC laworown national law) e.g. DS 316 EC and certain member States — Large Civil Aircraft, US vs. European Communities; France; Germany; Spain; United Kingdom (Airbus), parallel DS 347 • WiththeCommissioncoordinatingthe Community (or: other Member States‘) interests in the MS cases • Retaliation covers • Sometimescommunitywidebranches • Sometimeseconomicsectors of particularimportanceforoneorseveralmemberstates

  35. Common Commercial Policy • Art. 207.1 TFEU • The common commercial policy shall be based on uniform principles, particularly with regard to • changes in tariff rates, • the conclusion of tariff and trade agreements relating to trade in goods and services, and • the trade related aspects of intellectual property, • foreign direct investment, • the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. ……

  36. Formalities • Art. 207.3 -> 218 TFEU • Exclusivecompetence • Conclusion: councildecision (218.6) partlytogetherwiththe EP • Also: adoption in the legal order of the EU • MS remainmembers of the WTO ifthisis not formallychanged • Next amendment? • EU representsthe Union andthememberslikeuntilnow • Cf. Also art. 220 asrepresentation of the EU

  37. Free Trade Agreements/Customs Unions • Bilateral Agreements with Switzerland • Customs Unions e.g. with Andorra, San Marino and Turkey • Free Trade Agreements with EEA, Euromed, Mercosur (in negotiation), Mexico, South Africa

  38. Regional Agreements • EEA Agreement (European Economic Area) • Norway • Iceland • Liechtenstein

  39. Third Country Trade Relations • Key EU bilateral agreements include: • Economic Partnership Agreements in negotiation with ACP countries (Cotonou) • Partnership and Cooperation Agreements with Russia and Ukraine • EUROMED Agreements • Particular relations to candidates for accession, e.g. Croatia

  40. Unilateral Preference Systems General System of Preferences (GSP) - the classical instrument for fostering development is by granting tariff preferences. The EU's GSP grants products imported from GSP beneficiary countries either duty-free access or a tariff reduction depending on the sensitivity of the product and the GSP arrangement enjoyed by the country concerned. “Everything But Arms” initiative (EBA) - EBA is a special GSP arrangement for the least developed countries. EBA grants duty-free access to imports of all products from LDCs without any quantitative restrictions, except to arms and munitions. Asymmetrical preferences e.g. for the Balkans and Moldova, with the aim of ensuring peace, stability, freedom and economic prosperity in the region (cf. “Wider Europe”).

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