Download the world trade organizatoin

THE WORLD TRADE
ORGANIZATOIN
March 4, 2015--KUFS, Seoul, Korea
Professor Sung-Eun Stephan Kim
Prof. Sung-Eun S. Kim
Law & Policy of International Trade
Korea University of Foreign Studies
Spring, 2015
THE WORLD TRADE ORGANIZATOIN
Grades:
20% - attendance and class participation
40% - mid-term
40% - final
A+
A
B+
B
C+
C
D+
D
F
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Study Group
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This is critical in learning the course material and this helps students
prepare for the class as well as help digest the material after each class and
prepare for the exams.
6-10 persons—submit group members and leaders by next week
Meet 1-2 per week (once before class—e.g. Tuesday and also once after
class—e.g. Wednesday)
Are expected to answer questions on subject matters to be covered in class.
Must look up terminologies and understand their meanings. Google
search is a very useful tool. Use English to English dictionary when
looking up words.
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THE WORLD TRADE ORGANIZATOIN
Bretton Woods and the failure of the International Trade Organization
Conference on economic matters held in 1944 at Bretton Woods, New
Hampshire
After founding of UN in ‘45, 1946, resolution for forming the ITO
Lake Success, Geneva, Havana—ITO Charter, Schedule of Tariff
Reduction, GATT (General Agreement on Tariffs and Trades)
ITO never made it because US Congress, controlled by Republicans (1948
election) failed to ratify it. ITO was dead. GATT remained and became a
quasi organization.
The GATT becomes an international organization
The failure to adopt ITO—absence of the third pillar [IMF, World Bank, ITO]
following IMF, World Bank. GATT, an agreement, ≠Org. contracting parties
held annual meetings; new K parties could be added, But w/ birth defects:
Lack of charter—no legal person, no set procedures
GATT had only provisional application
--grandfathering rights for domestic legislations in force at the time of accession
to GATT that were inconsistent
Ambiguity and confusion re: authority, decision making ability, legal status.
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A summary of GATT obligations
The rules are designed to assure that the tariff concessions work as
intended and are not undermined.
1.National treatment of imports –taxes and regs. (Art III)
2. prohibition of quotas, import/export licenses and other measures—some
exceptions (Art IX); and a special provision relating to quotas on movies
(Art IV)
3. Guarantees of freedom of transit (Art V)
4. Rules relating to subsidies, anti dumping and countervailing duties (Art
VI & XVI)
5. Rules on Valuation for customs purposes (Art VII)
6. Rules on fees and formalities connected with importation and
exportation (Art VIII)
7. Rules on marks of origin (Art IX)
8. Rules on transparency and publication of national trade regs. (Art X)
9. Rules on currency exchange regs. (Art XV)
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10. Rules on state-trading enterprises (Art XVII)
11. Rules on gov’t assist. to economic development (Art XVIII)
EXCEPTIONS for:
1. Quotas for b-of-payment purposes (Art XII, XIII, XIV, XV, XVII,
Sec. B)
2. developing countries (Art XVIII and Part IV)
3. emergency action where serious injury is caused or threatened
to a domestic industry (Art XIX—”escape clause”)
4. health, safety, the protection of natural resources and other
matters (XX)
5. National security (XXI)
6. customs unions and free trade areas (≈FTA of today) (XXIV)
7. waivers by the K-parties (XXV)
8. to opt out of GATT when a new K-party joins GATT (XXXV)
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SETTLEMENT OF DISPUTE XXII (consultation) XXIII (provides
for filing of complaint and permits GATT K-Parties to investigate
and make recommendations—basis for GATT dispute resolution
system at the foundation of WTO dispute settlement procedures.
PROCEDURAL provisions:
1. modifying the Schedule for Concessions & conducting tariff
negotiations.
Withholding or withdrawing concessions if a state withdraws or fails
to become a K party
defining which countries can become a K party
Amending GATT
Withdrawal on 6 months notice
Acceptance, entry into force and registration of the GATT
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ANNEX—notes and supp. interpretations of various articles. GATT
was modified and superseded in part by GATT 1994—one of the
WTO Agreements—the original GATT is known as GATT 1947.
GATT tariff negotiating rounds—8 rounds ‘47 through ‘94
Geneva—Annecy—Torquay—Geneva—Dillon—Kennedy (62-67)--Tokyo (73-79)—Uruguay (86-94)
Early GATTs—reduction of tariffs; later, especially Uruguay
rounds—reduction of non-tariff barrier. Immense new body of laws:
basic texts of WTO agreements—400 pages. The one signed at
Marrakesh, Morocco on April 15, 1994—26,000 pages. The final
act of the U round transformed GATT into a full fledged org
called WTO.
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The creation of the WTO
Uruguay Round negotiations wanted to avoid the Tokyo situation—many
side agreements which were binding on only certain countries that signed
onto them. A new WTO was suggested (Jackson)—with status of a UN
special agency with an organizational structure and a dispute settlement
system. Jan 1, 1995. WTO Agreement all agreement annexed to WTO
Agmt became binding on all Members as a single body of law.
Annex 1 A: Agmt on: Agriculture; Application of Sanitary and Phytosanitary
Measures; Textile and Clothing; Tech Barriers to Tr; Trade Related
Investment Measures; Art VI 1994 GATT Implementation (antidumping);
Customs Valuation; Pre-shipment Inspection; Rules of Origin; Import
Licensing Proc; Subsidies and Countervailing Measures; Safeguards.
Annex 1 B: GATS (services)
Annex 1 C: TRIPs (Intellectual Prop.)
Annex 2: DSU (Dispute Settlement Understanding)—procedures for
settling disputes
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Annex 3: Trade Policy Review Mechanism
Annex 4: Plurilateral Trade Agmts (Binding only on members who
accepted): Trade in Civil Aircraft; Int’l Dairy Agmt; Int’l Bovine
Meat Agmt But the last two were terminated in 1997.
WTO Agmt formally replaced GATT 1947
The WTO: functions and structure
1. provides a forum for nego among members; administers the system
of dispute settle; administers the Trade Policy Review Mechanism;
Cooperates with IMF and WB
2 .governing bodies: Ministerial Conf & Gen Council MC—supreme
authority reps of all Members meets at least every 2 years; GC—chief
decision making and policy body btwn MC meetings. GC—composed
of ALL members and discharges the responsibilities of DSB and Trade
Policy Review Body
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Special Councils and Committees report to GC (C for Tr in Goods, C
for TRIPs, Councils have the power to create committees; MC also has
the power to establish committees
Secretariat located in Geneva—Director General presides over it—
appointed by MC. Pascal Lamy Roberto Azevêdo Sep. 1, 2013 for 4
yrs.
Membership, accession and withdrawal
Countries join after negotiating terms of accession—must be approved
by 2/3 or more of Members. Difficult and time consuming process 
e.g. China a series of bilateral market access agmts were required to
be entered into with the U.S., the European Community 14 years. Nov
2001. (at Doha)
Withdrawal 6 months notice.
Decision-making
General decision-making: by consensus and voting. Consensus, if no
Member present at a meeting formally objects ≠ unanimity. If objection,
formal voting. Greater than ½ present. 1 vote per member. ≠ IMF, WB,
weighted vote.
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Interpretations. Strict: only MC or GC has the power to adopt
interpretation of WTO agmts by > 3/4
Waivers: of any obligations under WTO agmts; by > ¾, but
subject to staged implementation or a transitional period, only
by consensus.
Subject to annual review extended, modified or terminated
E.g., The Banana case: EC continue discrimination in favour of
imports from Africa, Pacific, Caribbean; tariff pref to developing
countries (including Latin Am) on a variety of other products.
Agreed to replace discrim tariff-quota by1/1/2006.
Amendments: very difficult: tabled 90 days + before submitted
for acceptance. Certain provisions only by unanimous vote. MC,
can decide whether all Members must accept it, and recalcitrant
member must withdraw or remain a member w/ consent of MC
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THE WORLD TRADE ORGANIZATOIN
The WTO as an international organization
WTO Agreement created WTO as a new int’l legal organization
Suggestions for improving the WTO
Decision making, too cumbersome: solution, creation of
an “Executive Body.” (GDP, share of world trade,
population; assure representation by developing
countries, a geographic balance; permanent v. rotating
members. A weighted voting system.
Needs to be more externally transparent.
Webcasting
Increased public access to WTO documentation
Extended use of the WTO website. (www.wto.org)
Improved dialogue through the allocation and use of budget
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Invitation to non-gov’t bodies to annual WTO meetings as observers,
written submissions; conduct a series of dialogues among Members,
academics, the media, and NGOs.
Creation of a mechanism for parliamentary input into int’l trade policy
debates, meetings among parliamentarians
Ad hoc non-binding advisory boards made up of experts ≈ APEC, WIPO,
OECD.
Current Work: The Doha Development Agenda
WTO 160 members and 23 observer states (+ Vatican) as of June
26, 2014. (New: Russia, Laos, Tajikistan, Vanuatu, etc.). (Consider:
UN has 193 member countries and there are 206 countries claiming
independent sovereign statehood.)
Korea — GATT K-party (April 14, 1967); signed Marrakesh WTO
Agreement and became a Member (April 15, 1994).
Doha Development Agenda, (started in 2001 in Doha, Qatar)
behind schedule; failed to reach agreements by 2007, 2008.
Trade in agricultural products
Non-agri trade issues
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Commitment for trade in services
Trade facilitation issues (cutting red tapes and customs formalities)
Developing countries and trades
Trade and environmental protection
EU. US, Japan v. G20 (India, Brazil, China, S. Afr)
Cancun, Mx, 2003 —Korean farmers & fisheries pres. Kyung Hae
Lee commits suicides
HK 2005, related meeting in Geneva, Paris, Geneva
Sugar, cotton, rice, dairy 4 biggest subsidized crop/agri in the US.
Next Class: March 13, 2015--Chapter 4 Dispute Settlement
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