WTO

GATT: first multilateral agreement to regulate international trade

Members would negotiate to lower trade barriers and form package agreements irregular meetings grew in scope and gained control over specific areas

GATTWTORECIPROCAL TRADE:

i.e. Korea wishes to trade motorcycles to America so trade barriers are lowered in the US, reciprocal so Korea lowers barriers on flour …BILATERAL TRADE IS SHARED so lowered trade barriers are for all members of WTO, other members benefit too

FORMAL INSTITUTIONAL OFFICES:

GENERAL STAFF:

600 (mostly lawyers) facilitate and moderate trade rounds but have no decision making power. They offer their expertise only

DISPUTE SETTELMENT PANNEL:

state launches a complaint against another member who they believe to have violated the terms of agreement

international lawyers who are called when there is a dispute form a panel of circa 4- dispute settlement body

reduce bias by having a rotating panel issue consulted with Permanent Appeals body (Appellate body) standing body of seven

persons who can uphold, modify or reverse the legal findings and conclusions of a panel Appellate Body Reports, once adopted by the DSB, must be accepted by the parties of the

dispute, automatic settlement dispute system – which participants must attend to either remedy policy, offer cash, separate agreement and compensation barriers on something else, or WTO place trade sanctions against offender by persecutor who is allowed to equivalent amount of denied trade – balancing act

INVESTIGATE: terms violated, country in fault changes policy to original agreement OR WTO imposes a new policy OR negotiate new reciprocal trade leaks i.e. US refuses to lower trade barriers, China raises some to even out imposes reparations on powerful states

FLAWS:

To be a member you must treat all goods produced in other countries the same as domestic goods i.e. if a regulation is set it is to be applied evenly across the board

leads to underhand protection of domestic economy. Japanese car energy consumption lower, thus regulation is set and blocks out American cars. e.g. EU banned hormone beef – US saw this as an indirect attack on their market. WTO says it was fair as the regulation was applied evenly. BUT WTO investigated and found that the EU had no scientific backup for the health concerns. As their reason for this trade barrier didn’t have any grounding, not supported by the intention of the claim, it was annulled. the regulation must apply correctly to the product, not the method, cannot stipulate regulations for reason to stop.

COMPLAINTS: companies must complain to governments or unions first who choose whether to bring the complaint to the WTO

Japanese firms regularly complain that Chinese companies violate terms but Government more interested in maintaining friendly country to country agreements and relations so they don’t act on complaints i.e. FIREWALL. GOOGLE saw China’s internet black as an indirect restriction on trade but the US government refused to follow up their complaint. They hacked into the system and opened the firewall for several hours. No other company has been strong enough to take on china…security threat?

vvsmall interest groups after own benefit and not that of <country as whole. best organised at taking action. i.e. STEEL SETELMENT: Bush drew in votes from steel industries as he promised to raise tarrifs on Chinese steel. violation of agreement – benefited for several years. Revoked tariffs – because china is powerful?

Control over dumping and pattons (intellectual property agreements) – tension as to how to enforce this in developing countries, medicine etc. when non-compliance occurs in developing countries they are more likely to offer cash than change policy

COMPLIANCE:

100% difficult….20% unfair play = loss of 20% of WTO benefits balancing act SELECTIVE EXIT (DEFECTION) International law tries to create regulation in anarchy …WTO powerful enough to check

great powers like US, China, EU and not just small countries sway actions of state through reputation creation WTO is a system of reprisals and countermeasures to balance benefits and obligations of

membership…better outcomes for all… game theory