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WTO short introduction

WTO short introduction. TURIN 16 July 2007 ITUC. WTO. The WTO: Founded in 1995 after 50 years of the General Agreement on Tariffs and Trade – GATT Headquarters in Geneva with about 400 staff Supervises a large number of global trade treaties/agreements

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WTO short introduction

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  1. WTO short introduction TURIN 16 July 2007 ITUC

  2. WTO The WTO: • Founded in 1995 after 50 years of the General Agreement on Tariffs and Trade – GATT • Headquarters in Geneva with about 400 staff • Supervises a large number of global trade treaties/agreements • Has the power to enforce the rules of all of its agreements with financial and regulatory clout • Can over-rule and/or undermine core labour standards and legislation in member states

  3. WTO commitments • Commitments cannot be changed over time • Negotiations are not transparent, especially in services negotiations based on request-offer (and in bilaterals)

  4. WTO agreements Multiple agreements: • The WTO supervises three main agreements: 1.Industrial goods (GATT), (which includes agriculture (AoA), plant and animal health and safety (SPS), Product standards (TBT), anti-dumping, subsidies and countervailing measures, investment rules (TRIMS), etc), 2. Services (GATS) and 3.Intellectual property (TRIPS) • No picking and choosing – when you join the WTO, you sign up to all of its agreements/treaties. With the exception of the plurilateral agreement on government procurement

  5. WTO principles Most Favoured Nation (MFN) • In general, any agreement or deal that gives rights to one WTO member state must be given to all other member states • A country cannot discriminate amongst WTO member states National Treatment (NT) • In general, if your country has committed itself to some trade liberalisation, it must, in that area, treat foreign suppliers/investors ‘no less favourably than domestic supliers/investors are treated’ • That does not mean ‘equal treatment for all’: you can treat foreign MNEs better than the way you treat your domestic firms

  6. Disputes Dispute Panels • Country A (and B, C, ….) can complain that country X is breaching its obligations under one or more WTO agreements • If Country X disagrees, the WTO can set up a mutually agreed (or imposed) panel – a ‘jury’ • The panel hears evidence from all formal parties (and may allow external party evidence) • The verdict may tell Country X to change its behaviour (if ‘guilty’) or face punitive financial action from the complainants until it complies • An Appellate Body can rule on disputed verdicts

  7. Decision making Ministerial Conferences, Geneva negotiations and work in capitals • In theory, all new agreements and the conclusion of all trade Rounds are agreed at two-yearly Ministerial Conferences • In between ‘ministerials’, most real negotiations on details are done by resident Mission delegates in Geneva. They ‘prepare’ material for ministerials • When Geneva ‘problems’ arise, powerful Missions will pressure national capitals of less powerful members to ‘be more reasonable’ in Geneva • Some countries – about 30 – have no permanent Mission delegation in Geneva and so miss meetings. Silence, including absence, is ‘consent’.

  8. Trade Policy Reviews • Trade policies of all members are reviewed on a regular basis • With aim to increase transparency, improve debate and enable assessment of the effects of policies on trade • These reviews are used to highlight areas that need reform • Many of these reviews recommend privatization. • ITUC country reports

  9. Consensus and power • Members all officially have a veto power on any decison or agreement. No ‘consensus’ means no agreement • In practice, powerful members will threaten the loss of IMF/World Bank loans/projects or foreign aid if weaker countries block consensus • Many decisions are taken in secret/semi-secret, unofficial, exclusionary ‘Green Room’ meetings • Informal meeting ‘agreements’ are often presented as ‘general agreements based on wide consultation

  10. Safeguards • There are safeguards in the WTO in case of market disruption • antidumping and countervailing measures. • Countries should make more strategic use of these. • Long and costly processes. The US does not take disputes seriously.

  11. Bilateral versus multilateral agreements • Same objectives of liberalization and opening up of markets for multinationals • Commitments in Bilaterals go further than in multilateral agreements • Commitments in Bilaterals go beyond goods and services and include intellectual property, investment, competition policy and government procurement

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