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WTO (GATT) negotiations often process multilaterally by

packages. That means, WTO members negotiate on several


trade-related issues simultaneously in a certain period of time.
The agreements, which constitute the WTO rules, are typically
reached by consensus among all members. Such a period of
negotiations forms a WTO trade round.
A new trade round is often launched when WTO members
realize limits of existing rules in protecting their rights and
facilitating trades. These limits may become apparent when new
problems stem from the existing trade or when international
trade develops into new areas. For example, the early GATT
trade rounds dealt mainly with tariff reductions. Consequently,
only few tariff barriers are left by the start of Tokyo Round.
People then saw the influence of non-tariff barriers against
trade and launched the Tokyo Round (1973-1979) to discuss
non-tariff measures. Then with the development of trade into
service and intellectual property rights, the Uruguay Round
from 1986 to 1994 further included issues in services and
intellectual property rights. Aware that GATT rules are limited
to trade in goods, the Uruguay Round also covered the topic of
WTOs creation..
Advantages and disadvantages of negotiation through
trade round?

1.

The First Round at Geneva, Switzerland, from April to


October 1947, where the participants completed 123
negotiations and established 20 schedules containing the
tariff reductions and bindings that became an integral part
of GATT.

2.

The Second Round at Annecy, France, from April to


August 1949, which led to 5,000 tariff concession and the
accession of ten more countries.

3.

The Third Round at Torquay, England from September


1950 to April 1951, which lead to 8,700 tariff concessions
and accession of four more countries.

4.

The Fourth Round at Geneva in May 1956, which led to


some $2.5 billion worth of tariff reductions;
The Dillon Round from September 1960 to July 1962,
which led to about 4,400 tariff concessions covering $4.9
billion of trade.

5.

6.

The Kennedy Round from May 1964 to June 1967, which


lead to concessions covering an estimated total value of
trade of about $40 billion.

7.

The Tokyo Round from September 1973 to November


1979 was a transitional period, covering both tariff and
non-tariff matters. In tariff issues, it talked about tariff
reduction and bindings that covered more than $300
billion of trade in almost 5 years. It also resulted in a
number of agreements in such non-tariff issues as subsidy,
dumping, government procurement, technical barriers to
trade, customs valuation, import licensing, civil aircraft,
dairy and bovine meat.

8.

The Uruguay Round from September 20, 1986 to April 15,


1994, further included tariffs and non-tariffs measures,
rules, services, intellectual property, dispute settlement,
textiles, and agriculture. At the conclusion of the Uruguay
Round on April 15, 1994, GATT members signed the
Marrakesh Agreement Establishing the WTO in
Marrakesh, Morocco. This Agreement defines the scope,
functions and structure of the World Trade Organization
(WTO)

Advantages:
The size of the package can mean more benefits because
participants can seek and secure advantages across a wide range
of issues.
In a package, the ability to trade-off different issues can make
agreement easier to reach because somewhere in the package
there is something for everyone.
Developing countries and other less powerful participants have
a greater chance of influencing the multilateral system in a trade
round than in bilateral relationships with major trading nations.
Disadvantages
The simultaneous negotiation in different areas necessarily
includes issues that certain negotiator countries are reluctant to
address. These issues serve actually as conditions for the process
of other issues beneficial to those countries. This situation can
put the developing countries at a disadvantage. The developing
ones are anxious to improve their economies through
international trade. However, the prerequisites in human rights
and environment protection often make it difficult for them to
address the most urgent issues in economic growth.
A brief history of past trade rounds

Because tariff was widely used as a tool to protect domestic


industries and generate revenue, the early trade rounds of
GATT mainly focused on tariff issues. Main trade rounds
include:

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Traditional points of divergence between developing and


developed WTO members?
All the WTO members participate in this multilateral trade
system with the intention to enhance their own economy. The
conflicts between developed and developing members result
from difference in their development stages. Although developing countries far outnumber developed countries in WTO,
developed countries still demonstrate superior bargaining
power.
Trade Related Intellectual Property Rights (TRIPs) and environment issues are two main points of divergence between the
developing and developed members of WTO.

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LESSON 17:
VARIOUS ROUND OF WTO

WORLD ECONOMY AND GLOBALIZATION

TRIPs: As exports from developing countries come to yield


trade surpluses, developed countries take an effort to further
open the developing countries. They begin to seek stricter
protection of their TRIPs. At present, over 90% of the worlds
patents are in the control of developed countries. However,
most developing countries cannot afford patents and rely
mainly on unauthorized copying of the TRIPs in their production.
Environmental Issues: Developed countries always pursue the
sustainable development and implement bans and penalties
on goods produced through environmentally harmful processes. However, cheap labor and natural resources are the only
two resources for developing countries. As a result, developing
countries view environment degradation as inevitable in their
economic growth. They proposed that poverty is a greater
problem than pollution. Since processing activities (usually
undertaken by developed countries) do less harm to environment than extraction (usually undertaken by developing
countries) while generating more profits, developing countries
argue that the developed members should also pay the costs of
environment pollution and subsidize the expense of undertaking environmentally sound technologies on the part of
developing countries.
The WTO Ministerial Conference
The WTO Ministerial Conference is the organizations highestlevel decision-making body. As required by the Marrakesh
Agreement Establishing the WTO, it meets at least once every
two years and can make decisions on all matters under any of
the multilateral agreements. Since the establishment of WTO,
four ministerial conferences have been held. They are:
The 1st WTO Ministerial Conference in Singapore, 9-13
December 1996.
The 2nd WTO Ministerial Conference in Geneva, Switzerland
18-20 May 1998.
The 3rd WTO Ministerial Conference was held in Seattle,
Washington State, US, 30 November - 3 December 1999.
The 4th WTO Ministerial Conference in Doha, Qatar, 9 - 14
November 2001.
The Seattle Collapse?
What led to the collapse?
In early December 1999, WTO trade ministers convened in
Seattle for the third WTO Ministerial meeting. However, after a
week marred by rancorous debate and violent street protests,
they failed to fulfill the original intention of launching the ninth
round of multilateral trade negotiations. This was a unique case
in the GATT and WTO history that members failed to launch a
new round. In addition, this failure has brought questions
about the legitimacy of the trading system itself. (Scott, J.J.2000)
In peoples impression, the Seattle Collapse may be caused by
the street protects, which either claim for the priority of a certain
group in WTO negotiations (e.g. environmental protection,
human rights, and labor standards) or doubt completely the
functions of WTO. Whereas, the real cause of collapse, the
divisions between North and South, East and West, lay
inside the convention center.

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The North-South division means conflicts between developed


and developing countries. In Seattle ministerial, the developed
countries intended to take new negotiations at reducing the
protectionism in developing countries and demanded to
implement trade rules agreed in the Uruguay Round, such as
the TRIPs and Trade Related Investment Measures (TRIMs). In
contrast, the developing countries wanted to address the
barriers in developed countries (e.g., in agriculture, apparel, and
labor services) and revise the accords on TRIPs and TRIMs, in
order to allow them more time to implement the complex new
rules in these areas. In negotiations of services, each side put
priorities in sectors of its own favor. The developing countries
argued for reducing barriers in labor and maritime services,
while the developed ones argued for such reduction in sectors
like financial, air transport, information, and professional
services.
The East-West division means the disagreement among the
major developed countries. (Specifically, the United States,
European Union, Japan, and Canada.) In agriculture, the
United States claimed on deep cuts in farm subsides, while
European Union and Japan resisted agricultural reforms. As to
the antidumping rules, the European Union joined Canada to
insist reforms in antidumping rules with the United States. At
last, the contradiction of interests among these leading forces
of WTO resulted in their failure to lead the process of reaching
the declaration of launching a new trade round.
Major issues in the current trade round
The fourth WTO ministerial conference in Doha from 9-14
November, 2001 has approved the WTO entry of China and
Taipai and achieved the declaration of launching a 3-year long
negotiation round. Unlike the Seattle conference, this conference
paid attention to benefits of developing countries in the course
of market liberalization. Among existing WTO agreements
there are special and differential treatment provisions which
give developing countries privileged rights and treatments.
These special provisions include: longer time periods for
implementing agreements and commitments, measures to
increase trading opportunities for these countries, provisions
requiring all WTO members to safeguard the trade interests of
developing countries, financial and technical supports to help
developing countries in handling disputes, implementing
technical standards, and building the infrastructure for WTO
programs.
There is strong text in the Doha Ministerial Declaration that the
special and differential treatment provisions shall be an integral
part of all elements of the negotiations. The new trade round
will contain the following major issues:
Agriculture

The Doha Declaration agrees on negotiations aimed at reducing


all forms of export subsidies and trade-distorting domestic
support. Although the declaration does not commit the
European Union to phase out its agriculture export subsidies, it
opens the way of reducing export subsidy. This issue also
applies to the export credits and food aid in the United States,
thus can further reduce the level of dumping in agriculture
products.

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a.

Textiles and Clothing


The Uruguay Round established a phasing out of textile
quotas by the year 2005. After that, the developing
countries have been complaining that developed countries
have delayed implementation of this phasing out until the
last minutes. With fierce resistance from U.S., the Doha
Declaration requests the Council for Trade in Goods to
examine a range of proposals suggested by developing
countries.

b.

Extension of some other timeframes.


There are other timeframes that developing countries are
reluctant to meet. For example, the Agreement on the
Application of Sanitary and Phytosanitary Measures, (ASA
agreement) which came into force with the establishment
of the WTO, sets out the basic rules for food safety and
animal and plant health standards in international trade.
WTO originally required application of the measures until
1997 for developing countries and until 2000 for the least
developed countries. The Doha Declaration also agreed to
extend the timeframe for developing countries to comply
with sanitary measures, and to consider requests for other
extensions in the areas of Trade Related Investment
Measures and Customs Valuation agreements. This
agreement temporarily exclude developing countries to
worry about extra costs added to their exporting products.

c. Transparency of government procurement


Favored government procurement may be an effective way to
protect domestic industries. To secure free trade, WTO also calls
for enhancing the transparency of government procurement.
d. Trade facilities
With the reduction of trade barriers, developed WTO members
also calls for the simplification of trade procedures, such as the
provision of more information about products and the
construction of relevant infrastructures.
These issues remain one point of disagreement between
developed and developing countries. Developed countries want
to address these issues as an effort to enlarge their market access
in the developing countries. However, developing countries
believed that such agreements could only add to their negotiation burden without providing them much benefit. The Doha
declaration further delayed such negotiations after the fifth
Ministerial.
Trade and Environment

There are about 200 international agreements outside the WTO


dealing with various environmental issues currently in force.
They are called multilateral environmental agreements (MEAs).
With a view to enhancing the mutual supportiveness of trade
and environment, the Doha Ministerial agreed to negotiate
upon:
a.
b.

the relationship between existing WTO rules and MEAs


procedures for regular information exchange between MEA
Secretariats and the relevant WTO committees, and the
criteria for the granting of observer status

c.

the reduction/elimination of tariff and non-tariff barriers


to environmental goods and services.

TRIPs and public health

Although the U.S. and European Union intended to reach


more restrictive patent laws, the Doha conference maintained
the original TRIP agreement. A separate declaration on TRIPs
and public health was reached in Doha. The statement agrees
that TRIPs can and should be interpreted and implemented in a
manner supportive of public health and favorable to access to
medicines. Thus Doha Ministerial singled out public health as a
special issue for intellectual property. In addition, the
agreements also grant member countries the right to
determine what constitutes a national emergency or other
circumstances of extreme urgency (e.g. public health crises,
including those relating to HIV/AIDS, tuberculosis, malaria
and other epidemics). In such circumstances, countries are
permitted to waive TRIPs requirements for prior negotiation
with patent owners, prior to overriding a patent. Furthermore,
WTO delayed the implementation of TRIPs for leastdeveloped countries (LDCs) until 2016.

Emphasizing the importance of technical assistance and capacity


building in the field of trade and environment to developing
countries, the Doha Ministerial also encouraged WTO members
to share expertise and experience for environmental reviews at
the national level.
Notes :

Singapore issues

The Singapore Ministerial in 1996 left four issues as follows:


a.

Investment

Issues about trade related investors rights. For example,


whether investors right to use imported goods as inputs
should depend on their export performance.
b.

Competition

Monopolies and exclusive service suppliers are against the rules


of WTO. WTO members should secure fair competition in
trade. And governments of different countries have the rights
to act against anti-competitive practices, and to work together to
limit these practices.
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Implementation - related issues, which include: