EDITED BY Rasih Mert KOZAKÇI Cemal DARICI

1. EDITED BY Rasih Mert KOZAKÇI Cemal DARICI

2. ABOUT WTO • Location: Geneva, Switzerland • Established: 1 January 1995 • Created by: Uruguay Round negotiations (1986–94) • Membership: 159 countries • Budget: 196 million Swiss francs • Secretariat staff: 640 • Head: Pascal Lamy (Director-General)

3. FUNCTIONS • Administering WTO trade agreements • Forum for trade negotiations • Handling trade disputes • Monitoring national trade policies • Technical assistance and training for developing countries • Cooperation with other international organizations

4. The WTO’s work comes from the 1986–94 negotiations called the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade (GATT). The WTO holdsnew negotiations, under the “Doha Development Agenda” launched in 2001. The rules mustbe “transparent” and “ predictable ”.

5. THE GOALS to help exporters and importers, while allowing governments to meet social and environmental objectives.  to promotefreetrade whileminimizing undesirable side-effects. The rules mustbe “transparent” and “ predictable’’

6. THE AGREEMENTS explain the principles of liberalizationand exceptions. include commitments to lower trade barriers set procedures for settling disputes. prescribe special treatment for LDCs. requiretransparency in trade policies.

7. AGREEMENTS’ SUBJECTS Tariffs (morebindingsandclosertozero) Agriculture (fairermarketsforfarmers) StandardsandSafety General Agreement on Trade in Services (GATS) Agreements on TradeRelatedAspects of IntellectualPropertyRights (TRIPS) Anti-Dumping,Subsidies,Safeguards TradePolicyReviews

8. SETTLING DISPUTES • Disputes in the WTO are about broken promises. • The rules must be enforced. • Rulings are made by a panel and endorsed by the WTO’s full membership. • Appeals are possible. • The priority is to settle disputesthrough consultations.  • By January 2008, only about 136 of the 369 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

9. MISSUNDERSTANDING ABOUT WTO • The WTO does NOT tellgovernmentswhatto do • The WTO is NOT forfreetrade at anycost • The WTO is NOT onlyconcernedaboutcommercialinterests.Thisdoes NOT takepriorityoverdevelopment • Inthe WTO commercialinterests do NOT takepriorityoverenvironmentalprotection • The WTO does NOT dictatetogovernments on issuessuch as foodsafetyandhumanhealthandsafety

10. The WTO does NOT destroyjobsorwidenthegapbetweenrichandpoor • Smallcountriesare NOT powerless in the WTO • The WTO is NOT thetool of powerfullobbies • Weakercountries do have a choicetheyare NOT forcedtojointhe WTO • The WTO is NOT undemocratic

11. ORGANIZATION STRUCTURE

12. DEMOCRACY IN WTO • Most LDCs dependent on DCs in terms of imports, exports, aid, security, etc. • LDCs have fewer human and technical resources. • The dispute settlement system is costly and requires a level of legal expertise that LDCs may not have. • The dispute settlement process is lacking oftransparency. • The binding rules of the WTO may effectively remove democracy even when all the rules of the WTO are democratically and unanimously agreed by all the members

13. INDUSTRIAL POLICY Industrial policy is a contentious issue. Opponents have argued that it is unnecessary, due to • the inherent efficiency of markets • difficulttoimplementeffectively • unviable, due to LDCs‟ low capabilities • prohibited by the international institutions such as the WTO

14. HOW DOES THE WTO IMPACTS UPON INDUSTRIAL POLICY ? • Non – tariffsbarriers • Tariffsbarriers • Trade Related Investment Measures (TRIMs) • The Agreement on Subsidies and Countervailing Measures • General Agreement on Trade in Services (GATS) • Trade Related Aspects of Intellectual Property (TRIPs)

15. THE REMAINING POLICY SPACE • Non – tariffsbarriers • Tariffsbarriers • Trade Related Investment Measures (TRIMs) • The Agreement on Subsidies and Countervailing Measures • General Agreement on Trade in Services (GATS) • Trade Related Aspects of Intellectual Property (TRIPs) • Special and Differential Treatment • State-owned enterprises • Currency manipulation • Non-tradables

16. WHY DOES THE WTO UNDERMINE INDUSTRIAL POLICIES? • The real problem with the WTO policies is their irreversible nature. • LDCs still have some space to implement industrial policies but as WTO negotiations progress this space will narrow down. • The WTO agreements often favor rich countries and their MNCs. • While the TRIMs and GATS still allow room for LDCs to control over FDI and MNCs, Multilateral Agreement on Investment (MAI) which was proposed in 1997 and subsequently rejected due to worldwide mass protests around the globe made the intention of the rich WTO members clear.

17. While there is room for states to implement industrial policies, we need to consider if these rules allow for strategic sequencing of trade protection. • The Special and Differential Treatment hardly constitute ‘preferential’ treatment when one considers that DCs were already operating relatively liberal trade policies before the negotiations. • The non-notification of actionable subsidies may not be used as a permanent strategy, since theenforcement measures willbe strengthened. • The TRIPS agreement hardly benefits the LDCs and in fact may significantly harm their development

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