Transcript Establishment of international trade rules reasons:

Establishment of international
trade rules  reasons:
1)elimination of trade-restrictive measures in
national legal orders;
2) need for security and predictability of trade
rules;
3) challenges presented by economic
globalisation
(environmental
issues,
consumer safety, labour standards,
cultural identity);
4) achievement of a greater measure of
equity in international economic relations.
ITO Charter
Havana Conference 1948
Complementarity with IMF and WB
No entry into force: USA didn’t support the
project anymore  Congress controlled by
Republicans).
GATT 1947
The GATT 1947 contains substantive trade
rules (most-favoured nation clause,
national treatment, barrier to market
access, subsidies and countervailing
duties, antidumping etc.).
No entry into force  provisional application
as from 1st January 1948  adoption of a
specific Protocol.
Birth defects of GATT 1947
(Jackson)
• The lack of a charter: no legal personality,
no procedural and institutional structure;
• Provisional character of its application;
• Grandfather rights;
• Ambiguity and confusion about GATT’s
authority.
Birth defects of GATT 1947 (II)
Very scant institutional structure (art. XXV
GATT 1947):
- meetings of Contracting Parties (one State,
one vote; majority rule  actual use of
consensus method);
- decisions of GATT Contracting Parties and
Panels reports.
The evolution from GATT to WTO
Lengthy Negotiating Rounds:
• failure of Tokyo Round: adoption of
Plurilateral agreements, binding only on
States which accepted them.
• Uruguay Round (1989-1994): success in
creating a new multilateral organization
Marrakesh Final Act (1994)
- institution of the World Trade Organization
and signature of the WTO Agreement
- creation of a Multilateral Trade
Organization and modification of FOGS
(functioning of GATT system)
- the single undertaking: Members of the
Organization should be bound by all the
agreements in the GATT system
Package of agreements annexed to
the WTO Agreement
• Annex 1A: Multilateral Agreements on Trade in
Goods  GATT 1994 (incorporating GATT 1947
and legal instruments adopted by GATT
Contracting Parties with reference to it) +
agreements on specific matters;
• Annex 1B: General Agreement on Trade in
Services;
• Annex 1C: Agreement on Trade-Related Aspects
of Intellectual Property Rights;
• Annex 2: Disputes Settlement Understanding;
• Annex 3: Trade Policy Review Mechanism;
• Annex 4: Plurilateral Trade Agreements.
Objectives of the WTO
• To raise standards of living;
• to ensure full employment, the growth of
real income and effective demand;
• to encourage the expansion of production
of, and trade in, goods and services.
The Wto Agreement must be interpreted in
the light of these objectives.
Objectives of the WTO (II)
Need to take into account:
1) sustainable economic development
principle;
2) preservation of the environment and
health;
3) integration of developing countries, esp.
the least-developed ones.
Objectives of the WTO (III)
Means for the achievement of those
objectives:
- reduction of tariff and non-tariff barriers to
trade;
- elimination of discriminatory treatment in
international trade.