What is the WTO?

(World Trade Organization)

-only global international organization dealing with the rules of trade between nations. -help producers of goods and services, exporters, and importers conduct their business -ensure that trade flows as smoothly, predictably and freely as possible. -at the heart- agreements, negotiated and signed by trading nations ratified in their parliaments.
Established Location Membership Created By :January 1, 1995 : Geneva, Switzerland : 153 countries on 25 July 2008 : Uruguay Round Negotiations (1986-94)

Head

: Pascal Lamy France (Director-General)

How to join the WTO

First, tell us about yourself- describe all aspects of trade and economic policies that have a bearing on WTO agreements. Second, work out with us individually what you have to offer- cover tariff rates and specific market access commitments, and other policies in goods and services. Third, lets draft membership terms- -a draft membership treaty and lists of the member-to-bes commitments. Finally, the decision. - presented to the WTO General Council or the Ministerial Conference

THE AGREEMENTS
-negotiated and signed and ratified in their parliaments. -legal ground-rules for international commerce. -contracts, guaranteeing member countries important trade rights.

-bind governments to keep their trade policies within agreed limits. -help trade flow as freely as possible. , -trade transparent and predictable- no sudden change in trade policies.
1.

Tariffs: more bindings and closer to zero

-commitments to cut and bind customs duty rates.in some cases, tariffs are cut to zero.

There is no legally binding agreement that sets out the targets for tariff reductions (e.g. by what percentage they were to be cut.) -lists their commitments in schedules. This is the legally binding agreement for the reduced tariff rates.

2. Agriculture: fairer markets for farmers

-prohibits production subsidies and export subsidies. unless the subsidies are specified in a members lists of commitments. to cut both the amount of money they spend on export subsidies and the quantities of exports that receive subsidies -subsidized production encourage over-production.

3. Standards and safety

set their own standards in order to protect human, animal or plant life or health, provided they do not arbitrarily or unjustly discriminate or use this as disguised protectionism.
The basic question is : how to ensure that standards are genuinely useful, and not arbitrary or an excuse for protectionism.

4.Textiles
Textiles, like agriculture, was one of the hardest-fought issues in the WTO, as it was in the former GATT system. It has now completed fundamental change under a 10-year schedule. The system of import quotas that dominated the trade since the early 1960s have now been phased out.

5. Services
The agreement covers all internationally-traded services:
tourism, banking, telecommunications, professional services, services supplied from one country to another (e.g. international telephone calls) a foreign company setting up subsidiaries or branches to provide services in another country (e.g. foreign banks) individuals travelling from their own country to supply services in another (e.g. fashion models or consultants)

Intellectual property: protection and enforcement

6. Types of intellectual property
The areas covered by the TRIPS Agreement

Copyright and related rights-books,films,paintings,computer programs,recordings Trademarks, including service marks-brandnames and logos Geographical indications-place name to identify products ex. Champagne, scotch Industrial designs Patents-inventions Layout-designs (topographies) of integrated circuits Undisclosed information, including trade secret-need not be registered; protected automatically

7. Anti-dumping, subsidies, safeguards

- means charging extra import duty to bring price closer to the normal value or to remove the injury to domestic industry in the importing country. -act against dumping-show that dumping is taking place, calculate the extent of dumping (how much lower the export price is compared to the exporters home market price), and causing injury or threatening to do so.

8. Non-tariff barriers: red tape, etc

A number of agreements deal with various bureaucratic or legal issues that could involve hindrances to trade. import licensing-simple,transparent and predictable/burden of admin work restrict/distort imports rules for the valuation of goods at customs-fair,uniform & neutral preshipment inspection: further checks on imports-boc ins. Report/tax evasion/misdeclaration/fraud rules of origin: made in ... where?-where product made/cert origin investment measures-TRIMS

9. Plurilaterals: of minority interest

For the most part, all WTO members subscribe to all WTO agreements, however, there remained four agreements which had a narrower group of signatories and are known as plurilateral agreements: trade in civil aircraft-elimanates duties on all aircraft except military government procurement-transparent/not discrimnate fx suppliers dairy products bovine meat. The bovine meat and dairy agreements were terminated in 1997.

10. Trade policy reviews: ensuring transparency

-to inform the WTO and fellow-members of specific measures, policies or laws passed .

-regular reviews of individual countries trade policies the trade policy reviews.
In practice the reviews have two broad results: they enable outsiders to understand a countrys policies and circumstances, and they provide feedback to the reviewed country on its performance in the system.

Settling trade disputes

- trade policy measure or action that are breaking the WTO agreements, or failure to live up to obligations.

-Dispute Settlement Body.-establish panels of experts to consider the case. monitors the implementation of the rulings and recommendations, power to authorize retaliation when a country does not comply with a ruling.

-point is not to pass judgement-settle disputes, through consultations if possible. out of court settlement.

BENEFITS OF WTO

1.

The system helps to keep the peace

Peace- is partly an outcome of two of the most fundamental principles of the trading system: helping trade to flow smoothly and dealing with disputes over trade issues. -governments are confident that others will not raise their trade barriers, they will not be tempted to do the same. They will cooperate with each other.

2. The system allows disputes to be handled

constructivelyAs trade expands in volume, in the number of products
traded, and in the numbers of countries and companies trading, there is a greater chance that disputes will arise. The WTO system helps resolve these disputes peacefully and constructively.

3.

A system based on rules rather than power makes life easier for all

- giving smaller countries more voice, and at the same time freeing the major powers from the complexity of having to negotiate trade agreements with each of their numerous trading partners.

4. 5.

Freer trade cuts the cost of living

-result is reduced costs of production (because imports used in production are cheaper) and reduced prices of finished goods and services, and ultimately a lower cost of living.

It gives consumers more choice, and a broader range of qualities to choose from
rts allow us more choice both goods and services to choose from, and a wider range of qualities. -quality of locally-produced goods can improve because of the competition from imports.

6. 7. 8.

Trade raises incomes

Lowering trade barriers allows trade to increase, which adds to incomes national incomes and personal incomes.

Trade stimulates economic growth, and that can be good news for employment
-trade boosts economic growth, and that economic growth means more jobs.

The basic principles make the system economically more efficient, and they cut costs
Trade allows a division of labour between countries. -resources to be used more appropriately and effectively for production. -increase efficiency and to cut costs even more because of important principles enshrined in the system.

9.

The system shields governments from narrow interests

The GATT-WTO system which evolved in the second half of the 20th Century helps governments take a more balanced view of trade policy. Governments are better-placed to defend themselves against lobbying from narrow interest groups by focusing on trade-offs that are made in the interests of everyone in the economy.

10.

The system encourages good government

Under WTO rules, once a commitment has been made to liberalize a sector of trade, it is difficult to reverse. The rules also discourage a range of unwise policies. For businesses, that means greater certainty and clarity about trading conditions. For governments it can often mean good discipline. The rules reduce opportunities for corruption

MISUNDERSTANDINGS ABOUT WTO 1.

The WTO dictates policy 2. The WTO is for free trade at any cost 3. Commercial interests take priority over development 4. and over the environment 5. and over health and safety 6. The WTO destroys jobs, worsens poverty 7. Small countries are powerless in the WTO 8. The WTO is the tool of powerful lobbies 9. Weaker countries are forced to join the WTO 10. The WTO is undemocratic

1. The WTO does NOT tell governments what

to do
- its a member-driven organization.
That means: the rules of the WTO system are agreements resulting from negotiations among member governments, the rules are ratified by members parliaments, and decisions taken in the WTO are virtually all made by consensus among all members

2.

The WTO is NOT for free trade at any cost

-countries are willing to bargain with each other, of give and take, request and offer.
Their negotiating positions depend on how ready they feel they are to lower the barriers, and on what they want to obtain from other members in return.

3.

The WTO is NOT only concerned about commercial interests. This does NOT take priority over development
Sustainable development is a principal objective. -fact that freer trade boosts economic growth and supports development. -commerce and development are good for each other.

4.

In the WTO, commercial interests do NOT take priority over environmental protection
Many provisions take environmental concerns specifically into account.
-objectives, optimal use of the worlds resources, sustainable development and environmental protection. -Art. 20 GATTallow countries to take actions to protect human, animal or plant life or health, and to conserve exhaustible natural resources.

5.

The WTO does NOT dictate to governments on issues such as food safety, and human health and safety. Again commercial interests do NOT override
-provisions to take actions to protect human, animal or plant life or health. But these actions are disciplined, for example to prevent them being used as an excuse for protecting domestic producers protectionism in disguise. Some of the agreements deal in greater detail with product standards, and with health and safety for food and other products made from animals and plants. The purpose is to defend governments rights to ensure the safety of their citizens.

6.

The WTO does NOT destroy jobs or widen the gap between rich and poor
Trade can be a powerful force for creating jobs and reducing poverty.
Freer-flowing and more stable trade boosts economic growth. It has the potential to create jobs, it can help to reduce poverty, and frequently it does both.

7.
WTO

Small countries are NOT powerless in the

Small countries would be weaker without the WTO. The WTO increases their bargaining power.
Also, in the WTOs dispute settlement procedure, developing countries have successfully challenged some actions taken by developed countries. Without the WTO, these smaller countries would have been powerless to act against their more powerful trading partners.

8.

The WTO is NOT the tool of powerful lobbies

The WTO system offers governments a means to reduce the influence of narrow vested interests. Governments can use the WTO to resist lobbying
Governments can find it easier to reject pressure from particular lobbying groups by arguing that it had to accept the overall package in the interests of the country as a whole. The private sector, non-governmental organizations and other lobbying groups do not participate in WTO activities except in special events such as seminars and symposiums. They can only exert their influence on WTO decisions through their governments.

9.

Weaker countries do have a choice, they are NOT forced to join the WTO
Most countries do feel that its better to be in the WTO The reasons are : non-discrimination and transparency. By joining the WTO, even a small country automatically enjoys the benefits that all WTO members grant to each other. And small countries have won dispute cases against rich countries they would not have been able to do so outside the WTO.

By joining the WTO, small countries can also increase their bargaining power by forming alliances with other countries that have common interests.

10.

The WTO is NOT undemocratic

Decisions in the WTO are generally by consensus. In principle, thats even more democratic than majority rule because no decision is taken until everyone agrees. Decisions are by consensus. Agreements are ratified in parliaments.
It would be wrong to suggest that every country has the same bargaining power. Nevertheless, the consensus rule means every country has a voice, and every country has to be convinced before it joins a consensus.