SOME BASIC INTERNATIONAL LAW CONCEPTS

1. SOME BASIC INTERNATIONAL LAW CONCEPTS • The world trading system is based on international law, i.e. law regulating relationships among States • State’s equality and sovereignty • Customary law • Treaty law • Acts of international organisations

2. SOME BASIC INTERNATIONAL LAW CONCEPTS • Custom: - non written - addressed to all States - made of practice and opinio juris - ex. prevention of environmental harm

3. SOME BASIC INTERNATIONAL LAW CONCEPTS • Treaty law - binding only upon contracting parties - difference between signature and ratification - it prevails upon customary law - GATT and WTO are examples of treaty law

4. SOME BASIC INTERNATIONAL LAW CONCEPTS • Acts of international organisations - IOs are created by a treaty among the parties wishing to join the IO - the IO can then emanate acts, binding upon members and subordinate to the establishing treaty - ex. the awards rendered by WTO judicial organs are acts of an IO

5. INTERNATIONAL TRADE TOOLS • Tariff obstacles (duties) • Non tariff obstacles (quota) • Tariff quota • Tariff can be ad valorem or on a specific basis - revenue for the State - protection of national industry

6. INTERNATIONAL TRADE TOOLS • Tariff binding • Tariff peak (industrial products) • Tariff escalation • Nuisance tariff

7. INTERNATIONAL TRADE TOOLS • Trade defence measures: - dumping - safeguard measure - anti-subsidy measure • Basic obligations: - most favourite nation clause - national treatment

8. HISTORICAL BACKGROUND • Classical liberalism - between industrial revolution (1750-1880) and WW1 - States do not intervene in economic relationships • “friendship, navigation and trade” treaties based on MFN and NT • trade regulation only based on duty collection

9. HISTORICAL BACKGROUND • Protectionism (between WW1 and WW2) • State intervention in the economy to reconstruct and to face the crisis • trade wars and economic autarchy • duties, anticompetitive practices and beggar-thy- neighbour policies • bilateral treaties (quota)

10. HISTORICAL BACKGROUND • managed free trade (neoliberalism) • after WW2 • economic freedom • set of rules guaranteed by States and IOs • delegation of power to IOs • erosion of domestic jurisdiction

11. THE BRETTON WOOD CONFERENCE • creation of the post-war economic order • complementing UN policy on peace and security • IMF = int’l monetary stability and BOP problems • IBRD (the WB group) = development projects • ITO = trade - UN Conference on trade and labor (1946-1948)

12. THE WORLD BANK GROUP Int'l financing Corporation: loans to private firms Int'l Development Agency: loands to LDCs (long term, low rates) Multilateral Investment Guarantee Agency : investment insurance Int'l Centre for the settlement of investment disputes : arbitration procedure

13. THE ITO • ITO (not born) = trade regulation but also labour, competition etc - UN specialised agency • failure: • protectionism vs push for liberalisation • US vs UK • cold war • 1 State =1 vote

14. THE GATT • signed in Geneva in 1947 while the UN conference is still going on • tariff concessions • provisional • no institutional structure • weaker than the Avana Charter

15. THE GATT • lack of formal strength • based on “rounds” • tariff reduction vs technical obstacles • “genuine” technical standards vs protectionist ones • examples: procurement policies, subsidies, custom valuation methods

16. THE TOKYO ROUND AND THE SEVENTIES • TR focused on technical obstacles • GATT “à la carte” • confusion and free riding • The 70s: general recession and oil price shock • rise of Japan and NICs • protectionism and managed trade (MFA)

17. DCs, LDCs, … • difficult to distinguish different categories of countries according to dev’t level • DCs & LDCs • transition economies • NICs and big DCs • role of UNCTAD in GATT/WTO • trade as a tool for dev’t

18. The Uruguay Round and the Marrakesh Agreement • 1986- 1994 • the transition from GATT to WTO • new subjects (services) • the single undertaking principle : end of free riding and unity of the system • plurilateral agreements

19. THE INSTITUTIONAL STRUCTURE • Traditional structure of IOs: • assembly or plenary • restricted organ • secretariat • WTO structure • Ministerial Conference • General Council • Secretariat

20. URUGUAY ROUND AGREEMENTS http://www.wto.org/english/docs_e/legal_e/legal_e.htm

21. THE INSTITUTIONAL STRUCTURE • Ministerial Conference • all members • Ministerial rank of representatives • general competence • political guidelines about the development of the organisation • meets every 2 years

22. THE INSTITUTIONAL STRUCTURE • General Council • all members • diplomatic rank • implementation of the MC decisions • interpretation of WTO legal texts • meets whenever necessary • DSB and TPR boby

23. THE INSTITUTIONAL STRUCTURE • Secretariat : - carries out the TPRM - provides technical assistance - cannot accept instructions by States - chosen by the DG

24. THE INSTITUTIONAL STRUCTURE The Director General - chosen by the General Council - acts in its individual capacity - responsible of the budget - he represents the organisation in front of other States - diplomatic role in negotiations

25. THE INSTITUTIONAL STRUCTURE • every agreement is managed by a Council • assessment of compliance • discussing future developments • GATT 1947 = GATT Council • SPS = SPS Council • but the GATT Council can intervene in other councils’ issues

26. THE INSTITUTIONAL STRUCTURE • lack of tranparency and civil society involvement • participation of DCs and LDCs • green room negotiations • consensus technique • non-trade issues • actually the real problem now is the lack of progressi in negotiations!

27. THE DOHA ROUND (2001 -???) • big momentum in 2001 vs economic crisis • industrial market access and agriculture big issues blocking other issues • proliferation of bilateral agreements and regional trading blocks • DSS prevailing over negotiations • protectionis moves (export bans, currency manipulation, import obstacles)