World Trade Organization
Content
By Mandi,Angelia,Carl and Corey
The WTO is Born
Based on the need to build and expand on the already established
foundation of the General Agreement on Tariffs and Trade (GATTwhich was established after World World II). The WTO was created on
January 1, 1995 from the 1986-1994 Uruguay Round Negotiations.
The focus of the negotiations was on the need to reduce tariffs and
lower trade barriers, and the need to establish common rules and
governance on the ever expanding global trade and international
commerce on a larger scale.
WTO -What We Stand For
The main purpose and goal of the
WTO is to help trade move freely for
all member nations so that each
member country can increase the
standard of living for the well-being
for their citizens.
WTO Today
As of November 30,2015, the WTO has
expanded its membership to162 countries
and has a budget of 197 million Swiss
Francs(2014). The WTO has become the
world's legislative and judicial body that
rules on trade and negotiations disputes
and is the only organization that can
enforce sanctions within it’s own
organization.
Coercion vs Rational Discourse Pt 1
The Doha Development Agenda and subsequent Bali Package are an
example of what happens when an organization does not use
coercion tactics, but instead a rational discourse.
The Doha Development Agenda was a proposal by rich countries to
address global poverty.
Problems with Doha
Negotiations in Cancun stalled over agriculture, industrial tariffs and
barriers to trade and services. Taking agriculture, for example, rich
countries can afford to pay their farmers a subsidy in order to help
them to continue farming. Poor countries are not able to pay this
subsidy, but can protect their farmers by placing higher tariffs on
agricultural goods.
Rich countries stand by their subsidies, and so the negotiations
ended in an impasse.
Doha to Bali Package
After 12 years of struggling with the Doha Development Agenda, the
WTO was able to salvage parts of Doha including: trade facilitation,
agriculture, and duty and quota-free market access for the least
developed countries.
In the Bali Package, agriculture is addressed with new disciplines on
export subsidies and tariff rate quotas.
Negotiations
The WTO has been primarily associated with resolving trade dispute
agreements between member countries, even if the trade
agreements were negotiated outside of the WTO. The Bali Package
has made the WTO more credible, as it was the first multilateral trade
agreement actually negotiated by the WTO.
Coercion vs Rational Discourse Pt 2
The WTO serves to replace coercion with rational discourse in two
notable ways.
First, the organization was created with the aim of ensuring that
internationally agreed upon trade laws and regulations are being
followed by all members. The WTO attempts to bring order and
structure to international trade. This order limits the anarchy often
associated with international relations and minimizes coercive
methods to end disputes; even those disputes involving trade.
(WTO) Principles: equitable, fast,
effective, mutually acceptable
Second, the organization puts a great deal of focus in settling trade
disputes between countries. The WTO has the mandate to create an
effective and efficient system for settling trade disputes between
countries in a way that would be mutually agreed upon by all
concerned members in the dispute. Serving as a neutral party to
settle disputes through rational discourse also allows the WTO to
reduce the perceived need for coercive action.
Bodies of Dispute Settlement
Dispute Settlement Body (DSB): Composed of governmental
representatives that oversee the entire process of dispute
settlement. Also has authority:
To establish panels for hearings
Adopt reports from Appellate and Panel bodies
Perform surveillance to ensure rulings and recommendations
are being implemented by member countries.
Decisions are often made through consensus. Panel or Appellate
Body reports are often approved by the Dispute Settlement Body
unless there is a consensus against the decisions made in the
Process of Dispute Settlement
Settlements of the disputes are expected to be completed after one
year without appeals and within one year and three months with
appeals.
First Stage: Countries in dispute try to settle the dispute themselves.
The WTO Chairperson can mediate this process.
Second Stage: A panel is appointed from the member countries. The
panel then aids the DSB in making rulings.
Process of Dispute Settlement (cont.)
A procedural series follows in which both sides present their case,
experts are called, and a decision is reached by the panel and the
DSB.
Either side can call for an appeal. The case is then heard by an
Appellate Body.
In the event that a country is found liable in a dispute it is given
recommendations and time to adjust its own trade policies in
accordance with the decisions of the WTO. Compensation can also be
given to the accusing member country.
Retaliation
Retaliation is the final and most serious consequence a nonimplementing Member faces in the WTO dispute settlement system.
Although retaliation requires prior approval by the DSB, the
countermeasures are applied selectively by one Member against
another.
The retaliation can take different forms, the most common is
additional tariffs imposed against the offending country.
Retaliation Examples
For example, in the 1990s, the EU imposed a ban on importing beef
containing artificial hormones. The US and Canada took the case to
the DSB on the grounds that there was no established scientific
reason for a health concern.
In 1997 the DSB ruled in favor of the US and Canada. Subsequently,
the US and Canada imposed $125 million in tariffs on goods imported
from the EU.
Retaliation as Coercion
By allowing retaliation, even as a last resort, critics say the WTO still
accepts the role of coercion in trade disputes.
Coercion exists as the ‘sword’ that ensures compliance.
However, it is not often used and is not seen as a major factor in why
nations comply with the WTO.
Criticism
Common criticism of the WTO states that it favors corporate profits
over social, environmental, and labor concerns.
By enabling retaliation in cases of trade disputes that arise because
of health, environmental, and regulatory concerns within a sovereign
country, critics claim the WTO serves corporate interests only.
Bibliography
Heakal, Reem. "What Is the World Trade Organizatio." Investepedia.
Accessed January 10, 2016.
http://www.investopedia.com/articles/03/040203.a Accessed January
11, 2016. https://www.wto.org/index.htm. sp.
Mohammed Aly Sergie, and Eben Kaplan. “The World Trade
Organization.” Accessed January 10, 2016.
http://www.cfr.org/international-organizations-and-alliances/world-t
rade-organization-wto/p9386#p4
.
Bibliography
Joshua P. Metler, “The 2013 WTO Bali Ministerial: Prospects and New
Horizons.” Accessed January 10, 2016
http://www.brookings.edu/blogs/up-front/posts/2013/11/25-wto-bali-mi
nisterial-meltzer
World Trade Organization, “Understanding the WTO: Settling
Disputes.” Accessed January 11, 2016.
https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm.
Bibliography
World Trade Organization, “WTO Bodies Involved in Dispute
Settlement.” Accessed January 11, 2016.
https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/
c3s1p1_e.htm
;
https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e
/c6s10p1_e.htm
Public Citizen, “World Trade Organization (WTO)”, Accessed January
11 2016, http://www.citizen.org/Page.aspx?pid=758
Bibliography
Robert Z. Lawrence, “The United States and the WTO Dispute
Settlement” Accessed January 11, 2016
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=we
b&cd=11&cad=rja&uact=8&ved=0ahUKEwjE5par2qDKAhWLbT4KHe0iA
wY4ChAWCBswAA&url=http%3A%2F%2Fwww.cfr.org%2Fcontent%2Fpu
blications%2Fattachments%2FWTO_CSR25.pdf&usg=AFQjCNHLRK8z
J85sfz_xRTbWgT_6bY4EgQ&bvm=bv.111396085,d.cWw
The WTO is Born
Based on the need to build and expand on the already established
foundation of the General Agreement on Tariffs and Trade (GATTwhich was established after World World II). The WTO was created on
January 1, 1995 from the 1986-1994 Uruguay Round Negotiations.
The focus of the negotiations was on the need to reduce tariffs and
lower trade barriers, and the need to establish common rules and
governance on the ever expanding global trade and international
commerce on a larger scale.
WTO -What We Stand For
The main purpose and goal of the
WTO is to help trade move freely for
all member nations so that each
member country can increase the
standard of living for the well-being
for their citizens.
WTO Today
As of November 30,2015, the WTO has
expanded its membership to162 countries
and has a budget of 197 million Swiss
Francs(2014). The WTO has become the
world's legislative and judicial body that
rules on trade and negotiations disputes
and is the only organization that can
enforce sanctions within it’s own
organization.
Coercion vs Rational Discourse Pt 1
The Doha Development Agenda and subsequent Bali Package are an
example of what happens when an organization does not use
coercion tactics, but instead a rational discourse.
The Doha Development Agenda was a proposal by rich countries to
address global poverty.
Problems with Doha
Negotiations in Cancun stalled over agriculture, industrial tariffs and
barriers to trade and services. Taking agriculture, for example, rich
countries can afford to pay their farmers a subsidy in order to help
them to continue farming. Poor countries are not able to pay this
subsidy, but can protect their farmers by placing higher tariffs on
agricultural goods.
Rich countries stand by their subsidies, and so the negotiations
ended in an impasse.
Doha to Bali Package
After 12 years of struggling with the Doha Development Agenda, the
WTO was able to salvage parts of Doha including: trade facilitation,
agriculture, and duty and quota-free market access for the least
developed countries.
In the Bali Package, agriculture is addressed with new disciplines on
export subsidies and tariff rate quotas.
Negotiations
The WTO has been primarily associated with resolving trade dispute
agreements between member countries, even if the trade
agreements were negotiated outside of the WTO. The Bali Package
has made the WTO more credible, as it was the first multilateral trade
agreement actually negotiated by the WTO.
Coercion vs Rational Discourse Pt 2
The WTO serves to replace coercion with rational discourse in two
notable ways.
First, the organization was created with the aim of ensuring that
internationally agreed upon trade laws and regulations are being
followed by all members. The WTO attempts to bring order and
structure to international trade. This order limits the anarchy often
associated with international relations and minimizes coercive
methods to end disputes; even those disputes involving trade.
(WTO) Principles: equitable, fast,
effective, mutually acceptable
Second, the organization puts a great deal of focus in settling trade
disputes between countries. The WTO has the mandate to create an
effective and efficient system for settling trade disputes between
countries in a way that would be mutually agreed upon by all
concerned members in the dispute. Serving as a neutral party to
settle disputes through rational discourse also allows the WTO to
reduce the perceived need for coercive action.
Bodies of Dispute Settlement
Dispute Settlement Body (DSB): Composed of governmental
representatives that oversee the entire process of dispute
settlement. Also has authority:
To establish panels for hearings
Adopt reports from Appellate and Panel bodies
Perform surveillance to ensure rulings and recommendations
are being implemented by member countries.
Decisions are often made through consensus. Panel or Appellate
Body reports are often approved by the Dispute Settlement Body
unless there is a consensus against the decisions made in the
Process of Dispute Settlement
Settlements of the disputes are expected to be completed after one
year without appeals and within one year and three months with
appeals.
First Stage: Countries in dispute try to settle the dispute themselves.
The WTO Chairperson can mediate this process.
Second Stage: A panel is appointed from the member countries. The
panel then aids the DSB in making rulings.
Process of Dispute Settlement (cont.)
A procedural series follows in which both sides present their case,
experts are called, and a decision is reached by the panel and the
DSB.
Either side can call for an appeal. The case is then heard by an
Appellate Body.
In the event that a country is found liable in a dispute it is given
recommendations and time to adjust its own trade policies in
accordance with the decisions of the WTO. Compensation can also be
given to the accusing member country.
Retaliation
Retaliation is the final and most serious consequence a nonimplementing Member faces in the WTO dispute settlement system.
Although retaliation requires prior approval by the DSB, the
countermeasures are applied selectively by one Member against
another.
The retaliation can take different forms, the most common is
additional tariffs imposed against the offending country.
Retaliation Examples
For example, in the 1990s, the EU imposed a ban on importing beef
containing artificial hormones. The US and Canada took the case to
the DSB on the grounds that there was no established scientific
reason for a health concern.
In 1997 the DSB ruled in favor of the US and Canada. Subsequently,
the US and Canada imposed $125 million in tariffs on goods imported
from the EU.
Retaliation as Coercion
By allowing retaliation, even as a last resort, critics say the WTO still
accepts the role of coercion in trade disputes.
Coercion exists as the ‘sword’ that ensures compliance.
However, it is not often used and is not seen as a major factor in why
nations comply with the WTO.
Criticism
Common criticism of the WTO states that it favors corporate profits
over social, environmental, and labor concerns.
By enabling retaliation in cases of trade disputes that arise because
of health, environmental, and regulatory concerns within a sovereign
country, critics claim the WTO serves corporate interests only.
Bibliography
Heakal, Reem. "What Is the World Trade Organizatio." Investepedia.
Accessed January 10, 2016.
http://www.investopedia.com/articles/03/040203.a Accessed January
11, 2016. https://www.wto.org/index.htm. sp.
Mohammed Aly Sergie, and Eben Kaplan. “The World Trade
Organization.” Accessed January 10, 2016.
http://www.cfr.org/international-organizations-and-alliances/world-t
rade-organization-wto/p9386#p4
.
Bibliography
Joshua P. Metler, “The 2013 WTO Bali Ministerial: Prospects and New
Horizons.” Accessed January 10, 2016
http://www.brookings.edu/blogs/up-front/posts/2013/11/25-wto-bali-mi
nisterial-meltzer
World Trade Organization, “Understanding the WTO: Settling
Disputes.” Accessed January 11, 2016.
https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm.
Bibliography
World Trade Organization, “WTO Bodies Involved in Dispute
Settlement.” Accessed January 11, 2016.
https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/
c3s1p1_e.htm
;
https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e
/c6s10p1_e.htm
Public Citizen, “World Trade Organization (WTO)”, Accessed January
11 2016, http://www.citizen.org/Page.aspx?pid=758
Bibliography
Robert Z. Lawrence, “The United States and the WTO Dispute
Settlement” Accessed January 11, 2016
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=we
b&cd=11&cad=rja&uact=8&ved=0ahUKEwjE5par2qDKAhWLbT4KHe0iA
wY4ChAWCBswAA&url=http%3A%2F%2Fwww.cfr.org%2Fcontent%2Fpu
blications%2Fattachments%2FWTO_CSR25.pdf&usg=AFQjCNHLRK8z
J85sfz_xRTbWgT_6bY4EgQ&bvm=bv.111396085,d.cWw
