PRESENTED BY:• Olivia Joanne Rodrigues• Sayantani Kundu• Mathew Issac• Himanshu Mehta

MANIPAL UNIVERSITY DUBAI CAMPUSJANUARY, 2016

What is the World Trade Organization?

“The World Trade Organization is ‘member-driven’, with decisions taken by General agreement among all member of governments and it deals with the rules of trade between nations at a global or near-global level. But there is more to it than that.”

The WTO agreements are lengthy and complex because they are legal texts covering a wide range of activities.

They deal with: agriculture, textiles and clothing,

banking, telecommunications, government purchases, industrial standards and product safety, food sanitation regulations, intellectual property, and much more.

WTO: The Beginnings/ History

• The World Trade Organization (WTO) came into being on January 1st 1995. It was the outcome of the lengthy (1986-1994) Uruguay round of GATT negotiations. The WTO was essentially an extension of GATT.

• It extended GATT in two major ways. First GATT became only one of the three major trade agreements that went into the WTO (the other two being the General Agreement on Trade in Services (GATS) and the agreements on Trade Related Aspects of Intellectual Property Rights (TRIPS)).

• Second the WTO was put on a much sounder institutional footing than GATT. With GATT the support services that helped maintain the agreement had come into being in an ad hoc manner as the need arose. The WTO by contrast is a fully fledged institution (GATT also was, at least formally, only an agreement between contracting parties and had no independent existence of its own while the WTO is a corporate body recognized under international law).

FACT FILE OF WTO

Location Geneva, SwitzerlandEstablished 1 January 1995Created by Uruguay Round negotiations

(1986-94)  

Membership 164 countries on 29 July 2016

Budget 197 million Swiss francs for 2015

Secretariat staff 634

Head Roberto Azevêdo (Director-General)

To create more together relationship with all nations in respect of global economic policy-making, it would cooperate with the IMF and the world bank & its affiliated organizations.

To arrange the forum for deliberations for the member nations in regard to their multilateral trade relations in issues deal with under the agreements

To provide a framework for implementing of the results arising out of the deliberations which taken place at ministerial conference level

To arrange the implementation, administration and operations of multilateral and plurilateral trade agreements

To manage effectively and efficiency the trade policy review mechanism (TRIM)

To manage the created understanding on rules and procedure governing the settlement of disputes

WHY WTO?

Administering WTO trade agreements

 Forum for trade

negotiationsHandling

trade disputes

Technical assistance and

training for developing countries

Cooperation with other

international organizations

Monitoring national

trade policies

FUNCTIONS OF WTO

Under the WTO agreements, countries cannot normally discriminate between their trading partners.

Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.

Most-favoured-nation (MFN):treating other people equally 

Imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents.

National treatment: Treating foreigners and locals equally  

PRINCIPLES OF WTO

• Trade Without Discrimination

Lowering trade barriers is one of the most obvious means of encouraging trade. The barriers concerned include customs duties (or tariffs) and measures such as import bans or quotas that restrict quantities selectively

• Free trade: gradually, through negotiation

Sometimes, promising not to raise a trade barrier can be as important as lowering one, because the promise gives businesses a clearer view of their future opportunities.

With stability and predictability, investment is encouraged, jobs are created and consumers can fully enjoy the benefits of competition. The multilateral trading system is an attempt by governments to make the business environment stable and predictable.

• Predictability: through binding and transparency

The WTO is sometimes described as a “free trade” institution, but that is not entirely accurate. The system does allow tariffs and, in limited circumstances, other forms of protection. More accurately, it is a system of rules dedicated to open, fair and undistorted competition.

The WTO system contributes to development. On the other hand, developing countries need flexibility in the time they take to implement the system’s agreements. And the agreements themselves inherit the earlier provisions of GATT that allow for special assistance and trade concessions for developing countries.

• Encouraging development and economic reform

• Promoting fair competition

STRUCTURES OF WTO

Ministerial Conference

General CouncilDispute

Settlement BodyTrade Policy Review Body

Goods Council Intellectual Property Council Services Council

The Committee on T&D and

T&E

ROLE OF WTO

The main goal of WTO is to help the trading industry to become smooth, fair, free and predictable. It was organized to become the administrator of multilateral trade and business agreements between its member nations. It supports all occurring negotiations for latest agreements for trade. WTO also tries to resolve trade disputes between member nations.

Multi-lateral agreements are always made between several countries in the past. Because of this, such agreements become very difficult to negotiate but are so powerful and influential once all the parties agree and sign the multi-lateral agreement. WTO acts as the administrator. If there are unfair trade practices or dumping and there is complain filed, the staff of WTO are expected to investigate and check if there are violations based on the multi-lateral agreements.

TRIMs, AND TRIPS OF WTO

1) Agreement on Trade-Related Investment Measures (TRIMs)

• TRIMs refers to certain conditions or restrictions imposed by a governments in respect of foreign investment in the country

• The agreement on TRIMs provides that no contracting party shall apply any TRIM which is inconsistent with the WTO Articles.

• It was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.

• Specifies enforcement procedures, remedies, and dispute resolution procedures.

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the World Trade Organization (WTO) that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Members

TRIPS contains requirements that nations' laws must meet for copyright rights, including the rights of performers, producers of sound recordings and broadcasting organizations; geographical indications, including appellations of origin; industrial designs; integrated circuit layout-designs; patents; monopolies for the developers of new plant varieties; trademarks; trade dress; and undisclosed or confidential information.

2)Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

THE RELEVANCE OF WTO

• The system helps promote peace.• The system allows disputes to be handled constructively.• A system based on rules rather than power makes life

easier for all.• Free trade cuts the cost of living.• It gives consumers more choice and a broader range of

qualities to choose from.• Trade raises incomes.• Trade stimulates economic growth and that can be good

news for employment• The basic principles make the system economically more

efficient, and they cut costs.

DEVELOPING COUNTRIES

• In the agreements: more time, better terms

• Legal assistance: Secretariat service

• Least-developed countries: special focus

• Committees- Trade and Development Committee

How the WTO deals with the special needs of an increasingly important group

RECENT ISSUES

• WTO issues panel reports regarding Indonesian import restrictions on agricultural products

• Trade prospects for 2017• Measures regarding Iron and Steel imports in Asia• WTO members take anti-dumping actions : panel report of Canada• Transparency mechanism for preferential trade arrangements set for

approval• Trade agreements between developing countries• Trade policy reviews and monitoring• Ratification of Trade Facilitation Agreement• WTO issues panel reports regarding Indonesian import restrictions on

agricultural products• Initiate membership for Somalia and Timor-Leste

UNITED STATES OFAMERICA

ASIAN COUNTRIESINDIA, PAKISTAN,

MALAYSIA, THAILAND

DS381: United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products

(Complainant: Mexico)

Tuna Dolphin case origin was by the US Marine Mammal Protection Act (MMPA), which banned the imports of tuna from countries that did not have conservation program to protect the dolphins in the tuna fishing process.

The tuna/dolphin controversy provides a useful and current case study in the conflict between global free trade and international environmental protection.

• As a result of this law,  exports of tuna from Mexico to the US were banned.

•  Mexico complained in 1991 under the GATT dispute settlement procedure.

• The embargo also applies to “intermediary” countries handling the tuna en route from Mexico to the United States.

1991If a country exporting tuna to the United States cannot prove to US authorities that it meets the dolphin protection standards set out in US law, the US government must embargo all imports of the fish from that country.

FEBRUARY

1991

SEPTEMBER

1991

Mexico asked for a panel in February 1991

The panel reported to GATT members and it concluded:

• That the US could not embargo imports of tuna products from Mexico simply because Mexican regulations on the way tuna was produced did not satisfy US regulations.

• GATT rules did not allow one country to take trade action for the purpose of attempting to enforce its own domestic laws in another country 

The report was never adopted

Mexico decided not to pursue the case and the panel report was never adopted even though some of the “intermediary” countries pressed for its adoption. (Under the present WTO system, if WTO members do not by consensus reject a panel report after 60 days, it is automatically accepted.)

Mexico and the United States held their own bilateral consultations aimed at reaching agreement outside GATT.

This led to a second panel report circulated to GATT members in mid 1994.

GATT found that the United States violated Article XI of GATT, by adopting quantitative restrictions on imports.

• The US argued that the restrictions were internal regulations enforced at the point of entry as permitted by Article III:4;

• nevertheless, GATT I's panel put aside this argument aside on grounds that Article III restrictions could only be applied to products and not processes by which the product was produced.

• The panel was also asked to judge the US policy of requiring tuna products to be labeled “dolphin-safe” 

• It concluded that this did not violate GATT rules because it was designed to prevent deceptiveadvertising practices on all tuna products

1992

The European Union lodged its own compliant.

1994

A compliance panel is established in the tuna case (DS381)

COMPLIANCE PANEL is a multi-member committee chartered to investigate conformance to laws, rules or regulations.

2009

A dispute settlement (DS381) is established on the case for the Tuna case between Mexico and the US.Dispute settlement is the central pillar of the multilateral trading system, and the WTO's unique contribution to the stability of the global economy. Without a means of settling disputes, the rules-based system would be less effective because the rules could not be enforced.

WTO rules against U.S. "dolphin safe" tunaA World Trade Organization appellate panel on Wednesday said U.S. "dolphin safe" tuna labeling rules unfairly discriminate against Mexico, raising the possibility of sanctions on U.S. goods if the rules are not modified or dropped.

2012

Recent events on the case

2015

Mexico wins ruling on tuna labelsThe World Trade Organization (WTO) ruled that the U.S. requirement that labels declare the tuna to be “dolphin-safe” is unfair to Mexican fishermen because “less favorable treatment” is given to Mexican tuna products because the rules set different requirements based on where a fish is caught.

MAY

2016

UNITED STATES OFAMERICA

ASIAN COUNTRIESINDIA, PAKISTAN,MALAYSIA, THAILAND

DS58: United States — Import Prohibition of Certain Shrimp and Shrimp Products

(Complainants: India; Malaysia; Pakistan; Thailand)

India, Malaysia, Pakistan and Thailand requested consultations with the United States concerning a ban on importation of shrimp and shrimp products from these complainants imposed by the US under Section 609 of US Public Law 101-162. Violations of Articles I, XI and XIII of the GATT 1994, as well nullification and impairment of benefits, were alleged.

Malaysia and Thailand requested the establishment of a panel. At its meeting on 22 January 1997, the DSB deferred the establishment of a panel. On 30 January 1997, Pakistan also requested the establishment of a panel.

9 JANUARY

1997

8 OCTOBER

1996

25 FEBRUARY

1997

Further to Malaysia’s and Thailand's request, the DSB established a Panel at its meeting ( also made in accordance with the request made Pakistan)

It also agreed that the two panels would be consolidated in a single panel, pursuant to Article 9.1 of the DSU with standard terms of reference. Australia, Colombia, Costa Rica, Ecuador, the European Communities, Guatemala, Hong Kong, India, Japan, Mexico, Nigeria, the Philippines, Senegal, Singapore and Sri Lanka reserved their third-party rights.

India also requested the establishment of a panel on the same matter.

10 APRIL

1997The DSB agreed that this panel would be consolidated with the panel already established at the request of Malaysia, Thailand and Pakistan. El Salvador and Venezuela reserved their third party rights, in addition to those delegations who had reserved their third-party rights to the panel established at the requests of Malaysia, Pakistan and Thailand.

15 APRIL

1997The panel was composed

15 MAY

1998

13 JULY

1998

6 NOVEMBER

1998

The panel report was circulated to Members. The panel found that the import ban in shrimp and shrimp products as applied by the United States is inconsistent with Article XI:1 of the GATT 1994, and cannot be justified under Article XX of the GATT 1994.

The United States notified its intention to appeal certain issues of law and legal interpretations developed by the panel.

The Appellate Body reversed the panel’s finding that the US measure at issue is not within the scope of measures permitted under the chapeau of Article XX of the GATT 1994, but concluded that the US measure, while qualifying for provisional justification under Article XX(g), fails to meet the requirements of the chapeau of Article XX.

The DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report.

25 NOVEMBER

1998

22 DECEMBER

1999

12 OCTOBER

2000

The United States informed the DSB that it was committed to implementing the recommendations of the DSB and was looking forward to discussing with the complainants the question of implementation.

The parties to the dispute announced that they had agreed on an implementation period of 13 months from the date of adoption of the Appellate Body and Panel reports, i.e. it expired on 6 December 1999.

Malaysia and the United States informed the DSB that they had reached an understanding regarding possible proceedings under Articles 21 and 22 of the DSU.

On the grounds that the United States had not implemented appropriately the recommendations of the DSB, on 12 October 2000, Malaysia requested that the matter be referred to the original panel pursuant to Article 21.5 of the DSU

15 JUNE

2001The compliance panel circulated its report and concluded that:

The measure adopted by the United States in order to comply with the recommendations and rulings of the DSB violated Article XI:1 of the GATT 1994

In light of the recommendations and rulings of the DSB, Section 609 of Public Law 101-162, as implemented by the Revised Guidelines of 8 July 1999 and as applied so far by the US authorities, was justified under Article XX of the GATT 1994 as long as the conditions stated in the findings of this Report, in particular the ongoing serious good faith efforts to reach a multilateral agreement, remain satisfied.

Should any one of the conditions referred to above cease to be met in the future, the recommendations of the DSB may no longer be complied with. In such a case, any complaining party in the original case may be entitled to have further recourse to Article 21.5 of the DSU.

21 NOVEMBER

2001

Implementation of adopted reports

At the DSB meeting on the adoption of the Appellate Body report and the compliance panel report.

The United States stated that was pleased that both the Article 21.5 panel and the Appellate Body had found that the United States had implemented the DSB's recommendations and rulings insofar as it had found that the US compliance measure was justified as a conservation measure under Article XX(g) of the GATT 1994 and that the United States had rectified the prior measure's discriminatory aspects.

DS61 United States — Import Prohibition of Certain Shrimp and Shrimp Products (Complainant: Philippines)

25 October 1996

DS324 United States — Provisional Anti-Dumping Measures on Shrimp from Thailand (Complainant: Thailand)

9 December 2004

DS335 United States — Anti-Dumping Measure on Shrimp from Ecuador (Complainant: Ecuador)

17 November 2005

DS343 United States — Measures Relating to Shrimp from Thailand (Complainant: Thailand)

24 April 2006

DS345 United States — Customs Bond Directive for Merchandise Subject to Anti-Dumping/Countervailing Duties (Complainant: India)

6 June 2006

DS404 United States — Anti-dumping Measures on Certain Shrimp from Viet Nam (Complainant: Viet Nam)

1 February 2010

DS422 United States — Anti-Dumping Measures on Shrimp and Diamond Sawblades from China (Complainant: China)

28 February 2011

DS429 United States — Anti-Dumping Measures on Certain Shrimp from Viet Nam (Complainant: Viet Nam)

20 February 2012

Additional Cases

DS389: European Union — Certain Measures Affecting Poultry Meat and Poultry Meat Products from the United States

(Complainant: United States)

UNITED STATES OFAMERICA

EUROPEAN UNION(European Communities )

Under the WTO Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures all measures aimed at protecting human, animal and plant health must be based on scientific principles, and not discriminate arbitrarily or unjustifiably.

The ongoing poultry dispute, as well as the earlier beef and GMO disputes, highlight the significant divergence in understandings of scientific evidence, scientifically proven risk and the precautionary principlebetween the US and EU.

Summary of the Dispute• The United States noticed that the EU had prohibited the

import of poultry treated with any substance unless that substance has been approved by the EU except water.

• This led to the prohibition of import of poultry that is treated with chemicals to reduce the production of microbes.

• The EU also maintained a market standard, which defines “poultry meat” as only “poultry meat suitable for human consumption, which has not undergone any treatment other than cold treatment.”

United States had requested the EU to approve four Pathogen Reduction Treatment (PRT), chlorine dioxide, acidified sodium chlorite, trisodium phosphate, and peroxyacids.2002

By the EU, after six years of delay, rejected the approval of the use of these four PRTs.

The United States objected that though numerous laboratories have tested the chemicals and cumulatively concluded that importation and consumption of poultry processed with these four PRTs does not pose a risk to human health, still the EU rejected the proposal.

The EU Agricultural and Fisheries Council rejected the same Commission proposal as SCoFCAH had.

According to the United States. the EC measures appear to be inconsistent with the EC's WTO obligations, including, but not limited to, the following:

• SPS Agreement Articles 2.2, 5, and 8, and Annex C(1)• GATT 1994 Articles X:1 and XI:1• Agriculture Agreement Article 4.2• TBT Agreement Article 2

2 JUNE

2008The EU Standing Committee on Food Chain and Animal Health (SCoFCAH) rejected the Commission's proposal.

18 DECEMBER

2008

The DSB established a panelAustralia, China, Korea and Norway reserved their third-party rights.  Subsequently, Guatemala, New Zealand and Chinese Taipei reserved their third-party rights.

30 JANUARY

2009Australia requested to join the consultations

8 OCTOBER

2009 The United States requested the establishment of a panel. 

19 NOVEMBER

2009DSB deferred the establishment of a panel

23 OCTOBER

2009

The U.S. poultry industry supported the WTO filing and encouraged the Obama Administration to continue to pursue the case.

In February 2009, the United States and the EU held consultations.

FEBRUARY

2009

The United States has asked the panel to review whether the EU’s ban on the import and marketing of poultry meat and poultry meat products processed with PRTs judged safe by the United States and also by European food safety authorities is consistent with the EU’s WTO obligations.

Even if the case advances to a dispute resolution panel, a solution appears to be elusive. The two sides maintain widely divergent views not only on the poultry issue but on some aspects of their basic approach to food safety regulation.

The case is still not resolved and is an ongoing case.

CONCLUSION

• It is the place where the member country comes and talks together and shares their grievance in order to resolve their problem related to International trade.

• The countries make their decisions through various councils and committees, whose membership consists of all WTO members.

• The system helps promote peace, by handling Dispute of member countries. It provides free trade which cuts the costs of living and provides more choice of products and qualities and stimulates economic growth.

• The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They include individual countries’ commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes. They prescribe special treatment for developing countries. They require governments to make their trade policies transparent

WTO deals with the special needs of developing countries as two thirds of the WTO members are developing countries and they play an increasingly important and active role in the WTO because of their numbers, because they are becoming more important in the global economy, and because they increasingly look to trade as a vital tool in their development efforts.

WORLD TRADE ORGANISATION• https://www.wto.org• https://www.wto.org/english/news_e/news_e.htm

US vs. Mexico (Tuna)• https://www.wto.org/english/tratop_e/envir_e/edis04_e.htm• https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm• http://www1.american.edu/ted/TUNA.HTM• http://www1.american.edu/ted/TUNA2.HTMNews referencehttp://www.reuters.com/article/us-usa-mexico-trade-idUSBRE84F1EY20120516http://mexiconewsdaily.com/news/mexico-wins-ruling-on-tuna-labels-again/

US vs. European Union (Poultry)• https://fas.org/sgp/crs/row/R40199.pdf• https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds389_e.htm

US vs. Asian Countries (Shrimp)• https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds58_e.htm• http://www1.american.edu/ted/shrimp3.htm

REFERENCES