Presentation on theme: "CHAPTER XXV INTERNATIONAL ORGANIZATIONS"— Presentation transcript:
1 CHAPTER XXV INTERNATIONAL ORGANIZATIONS General Agreement on Tariffs and Trade (GATT)World Trade Organization (WTO)International Chamber of Commerce (ICC)Organization for Economic Cooperation and Development (OECD)Wassenaar Arrangement on Export ControlsG-7G-20
2 General Agreement on Tariffs & Trade (GATT) Signed by 23 nations after World War II on October 30, 1947 and took effect on June 30,1948An interim measure to form Int’l Trade Organization (ITO)Final leg of a triad after IMF & IBRD (World Bank)U.S. failed to ratify in 1950 & effectively killed ITOTo promote economic growth and development by liberalizing world trade through elimination or reduction of import tariffs and non-tariff barriers
3 General Agreement on Tariffs & Trade (GATT) In order to belong to GATT(1) Members were required to reduce tariffs and drop barriers(2) Had to adhere to Most Favored Nation (MFN) clause:If a country gives a tariff reduction to another country, it should grant the same concession to all other member nations on a non-discriminatory basisProvided basic set of rules by which trade negotiations took place and a mechanism for monitoring the implementation of these rules
4 General Agreement on Tariffs & Trade (GATT) GATT-sponsored trade rounds (or simply rounds): Multilateral Trade Negotiations1st , 1947, Tariffs, 23 countries2nd, 1949, Tariffs, 13 countries3rd, 1951, Tariffs, 38 countries4th, 1956, Tariffs, 26 countries5th, , Dillon Round, Tariffs, 26 countries. First time used ‘Round”6th, , Kennedy Round, Tariffs & Anti-dumping measures, 62 countries
5 General Agreement on Tariffs & Trade (GATT) 7th, , Tokyo Round, Tariffs & Non-tariffs measures, 102 countriesReduced the average tariff on industrial products by one-third to 4.7%8th, , Uruguay Round, 123 countriesLaunched in September 1986, in Punta del Este, Uruguay & concluded on Dec.15,1993. But a few more weeks for final touches on market access. Took 7 and a half years
6 General Agreement on Tariffs & Trade (GATT) Uruguay Round (continued):Signed by 123 nations on April 15, 1994 in Marrakesh, MoroccoCreated Word Trade Organization (WTO)Key new areas of agreementServicesGovernment procurement policiesIntellectual property rights-Patents, Trademarks, CopyrightsTextilesAgriculture
7 World Trade Organization WTO began its operation on January 1, 1995 as a result of the Uruguay Round and replaced the old GATT (GATT 1947).GATT became one of many WTO Agreements (GATT 1994)China joined WTO on 12/11/2001 and Taiwan (Chinese Taipei) on 1/1/2002.Russia joined on Aug. 22, 2012159 members as of Mar. 2, 2013 with TajikistanGoverning body of multilateral trading systemPlatform for trade dispute settlements
8 World Trade Organization ObjectivesTo help world trade flow as smoothly, freely, fairly, and predictably as possible byReduction of tariffsReduction of non-tariff barriersElimination of discriminatory treatment
9 Agreement on Goods: General Agreement on Tariffs and Trade (GATT) WTO AgreementsFinal Act of the Uruguay Round of trade negotiationsAgreement on Goods: General Agreement on Tariffs and Trade (GATT)Agreement on Services: General Agreement on Trade in Services (GATS)Agreement on Intellectual Property: Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
10 WTO AgreementsAgreement on Investment: Agreement on Trade-Related Investment Measures (TRIMS)Agreement on Textiles and ClothingAgreement on AgricultureAgreement on Government ProcurementAgreement on Trade Policy Review MechanismAgreement on Dispute Settlement
11 Agreement on Goods GATT (GA on Tariffs & Trade) WTO’s principal rule-book for trade in goodsCouncil for Trade in Goods (Goods Council):Consists of all member countriesCommittees onAgricultureMarket Access for GoodsSanitary and Phytosanitary MeasuresSubsidies & Countervailing MeasuresAnti-Dumping PracticesCustoms Valuation
12 Agreement on Goods GATT (GA on Tariffs & Trade) (cont.) Committees on (continued)Rules of OriginImport LicensingInvestmentSafeguardsInformation Technology AgreementWorking Group (Party) onState-Trading Enterprises
13 General Agreement on Services GATS (GA on Trade in Services)Banking, Insurance, Telecommunications, Tourism, Hotel, Car Rental, Transportation, Etc.Principles of freer and fairer trade in servicesMembers made individual commitments (schedules) for marketing opening for service sectors
14 General Agreement on Services GATS (GA on Trade in Services) (cont.)Council for Trade in Services (Services Council)Committees onTrade in Financial ServicesSpecific CommitmentsWorking Groups (Parties)Domestic RegulationsGATS Rules
15 Agreement on Intellectual Property TRIPs (Trade-Related Intellectual Property Rights)Rules for trade in ideas & creativityApplies to only trade-related intellectual propertiesProtection of Intellectual Properties:Copyrights, Trademarks, Geographical names used to identify products, Industrial designs, integrated circuit layout designs, trade secrets
16 Agreement on Investment TRIMs (Trade-Related Investment Measures)Applies only to investment measures that affect trade in goods.No discrimination against foreigners or foreign products (violates “national treatment” principles of GATT).No restrictions in quantities (violates “prohibition of quantitative restrictions” of the GATT)No requirement for particular levels of local procurement by an enterprise (“local content requirements”).No measures which limit a company’s imports or set targets for the company to export (“trade balancing requirements”)
17 Agreement on Textiles & Clothing (ATC) From 1974 to 1994: Under Multifiber Agreement (MFA). Textile quotaFrom 1995, Fully integrated into normal GATT rules of WTO in 10 yearsJanuary 1, 2005, ATC no longer exists. No quota.Only WTO agreement that has self-destruction built-in
18 Agreement on Agriculture New Rules and Commitments: Requires members to make more market-oriented policiesMarket Access: Tariffs only or Tariffication which is converting quota & other restrictions to tariffDomestic Support: Domestic support that has a direct effect on production and trade must be cut back.Export Subsidies: Prohibits export subsidies unless specified in a member’s lists of commitment. Must cut both the amount of subsidies and quantities that receive subsidies.
19 Agreement on Agriculture Regulations for Animal and Plant Products:A separate agreement on food safety and animal & plant health standardsAllows countries to set their own standardsMust be based on science (scientific justification)Should not arbitrarily or unjustifiably discriminate between countriesEncouraged to use international standards, guidelines and recommendations.
20 Agreement on Government Procurement To open up government procurements to international competition.A "plurilateral" agreement, which applies only WTO Members who have acceded to the Agreement, but not all Members.Currently 40 WTO MembersMembers make laws, regulations, procedures and practices regarding government procurement more transparentMembers do not protect domestic products or suppliers, or discriminate against foreign products or suppliers.
21 Agreement on Government Procurement Extends international competition to procurement of national and local government entities.Extends coverage to services (including construction services), procurement at the sub-central level (for example, states, provinces, departments and prefectures), and procurement by public utilities.Members required to put in place domestic procedures by which aggrieved private bidders can challenge procurement decisions and obtain redress
22 Agreement on Government Procurement Applies to contracts worth more than specified threshold values. In the USA,Central (Federal) government: 130,000 SDRs for supplies & servicesSub-central government (State): 355,000 SDRs for supplies & servicesAll other entities: 400,000 SDRs for supplies & servicesFor construction contracts: 5 million SDRsSome services excluded: Transportation, dredging, R & D, military support, etc.1 SDR=US$1.58 as of May 23, 2011
23 Agreement on Trade Policy Review Mechanism (TPRM) To improve transparencyTo create a greater understanding members’ trade policiesTo asses their impactMembers must undergo periodic scrutiny & review of their trade policy
24 Agreement on Dispute Settlement Procedures for resolving trade disputesTo enforce rules and ensure that trade flows smoothlyDispute settlement is the central pillar of the multilateral trading system.Based on clearly-defined rules with timetables for completing a casePriority is to settle disputes through consultations, if possible. About one-third of cases have been settled at consultation stage or still in consultations
25 Agreement on Dispute Settlement Understanding on Rules and Procedures Governing on the Settlement of DisputesCalled Dispute Settlement Understanding (DSU)Member should not take unilateral action against perceived violations of trade rules, but seek resolution thru Multilateral dispute settlement system, and abide by its rulings and findings
26 Agreement on Dispute Settlement Timetable: Target figures. Flexible60 days Consultations, mediations45 days Panel setup and panelists appointed6 mos. Final panel report to dispute parties3 weeks Final panel report to WTO members60 days Dispute Settlement Body adopts report (if not appealed)Total 1 year without appeal60-90 days Appeals report30 days Dispute Settlement Body adopts appeals reportTotal 1 year 3 months with appealsIn case of urgency like perishable goods, the panel report deadline is shortened to 3 months from 6 months.
27 Agreement on Dispute Settlement Dispute Settlement Body (DSB)General Council consisting of all WTO membersSettling disputes is the responsibility of the DSB.If consultations among parties in dispute by WTO Director-General fails, complaining country can ask for a panel to be appointed.Panel is composed of 3 panelists unless parties specially agree to have 5 panelists.Director-General suggests potential panelists to disputing parties
28 Agreement on Dispute Settlement Dispute Settlement BodyIf parties do not agree on panelists, Director-General appoints panelists.Panel’s final report can only be rejected by consensus in the Dispute Settlement Body (DSB). Almost always adopted unless appealed.Therefore, panel’s final report becomes the DSB’s ruling and recommendation unless consensus rejects it.Both sides can appeal the panel’s final report.
29 Agreement on Dispute Settlement AppealsAny appeal must be limited to issues of law covered in the panel report and the legal interpretation by the panelEach appeal is heard by 3 members of a permanent 7-member Appellate Body set up by the DSB. Members have 4-year terms.Appellate Body’s appeal reports are unconditionally accepted by DSB unless rejected with consensus including the complainant country
30 Agreement on Dispute Settlement Implementation of Rulings & Recommendations of DSBLosing country is required tobring its policy into line with the rulings and recommendations.enter into negotiations with complaining country to determine mutually acceptable compensation such as tariff reductionIf not agreed, DSB must grant winning country permission to apply limited trade sanctions such as suspending concessions or imposing punitive high tariffs
31 Agreement on Dispute Settlement Filings of Dispute SettlementsFrom Jan 1995 to June 2011: 424 cases1st filing by Singapore against Malaysia on Prohibition of Imports of Polyethylene and Polypropylene on January 10, 1995 (Case DS1).25 cases in 1995Highest 50 cases in 1997Lowest 12 cases in 2005Trend is the less dispute filings as years pass, thanks to better compliance by the WTO member countries.
32 Agreement on Dispute Settlement Filings of Dispute Settlements (Cont.)The United States was involved in 210 cases: 50% disputes; 97 cases as Complainant and 113 cases as Respondent (Defendant).The 1st complaint filed by the United States was against South Korea’s Measures Concerning the Testing and Inspection of Agricultural Products on April 4, 1995 (Case No. DS3).The 1st complaint filed against the United States was by Venezuela on Standards for Reformulated and Conventional Gasoline on January 24, 1995 (Case No. DS2).
33 WTO Key Principles Trade without discrimination: Most Favored Nation (MFN)National treatmentPredictable and growing access to marketsTariff reductions on goodsBinding national schedule for opening servicesPromotion of fair competitionSets rules on compensating duties against dumping and foreign government subsidies
34 WTO Key PrinciplesEncouraging development & economic reform of developing countriesIndustrial countries assist trade of developing countries by conferring tariff preference programs such as GSP
35 WTO Main FunctionsAdministering and implementing multilateral trade agreementsForum for multilateral trade negotiationsResolving trade disputesMonitoring national trade policies of membersProviding technical assistance and training to developing countriesCooperating with other international institutes
36 WTO StructureMinisterial Conference: Highest authority. Meet every two yearsGeneral Council: Ambassadors or heads of delegation in Geneva. Meets asTrade Policy Review BodyDispute Settlement BodyGoods Council, Service Council and Intellectual Property Council, and so onNumerous specialized committees and working groupsSecretariat: Day-to-day operations by Director-General, Four Deputy D.G.s, and 500 staff
37 International Chamber of Commerce (ICC) Over 100 member nationsInternational Trade Rules issued by ICCIncoterms 2010Uniform Customs and Practices (UCP) for Documentary Credit (2007 Revision), ICC Publication No. 600Uniform Rules for Collections (ICC Publication No. 522)
38 Organization for Economic Cooperation & Development (OECD) Most members are developed countries: 34 NationsOECD’s member countries share a commitment to the democratic government and the market economyBest known for its publications and its statistics.OECD’s work covers economic and social issues from macroeconomics to trade, education, development, science, and innovation.
39 Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technology Adopted by 33 countries in Replaced the Coordinating Committee on Multilateral Export Control (COCOM) which was suspended March 31, 1994To restrict the export of conventional weapons and sensitive dual-use goods and technology to hostile nationsCurrent membership: 40 countries
40 G-7/G-8Not an international organization, but a gathering or a forum of the most developed countriesIn 1975: G-6 consisting of France, Germany (West) , Italy, Japan, the U.K. and the U.S.A. after oil crisis in 1970sIn 1976, Canada joined & made it G-7Finance ministers meet two or three times a yearSummit meeting of heads of government: Once a yearAlso called G-8 by adding Russia
41 G-20 (Group of 20)Group of 20 Finance Ministers & Central Bank Governors. Established in 1999 in the wake of 1997 Asian Financial crisisRecently summit meetings of heads of states have been introduced.90% of world GDP, 80% of world trade, and two-thirds of the world populationNo secretariat or staff. Chair rotates annually, 2010 Korea, 2011 FranceAgreed to replace the G-8 at the 2009 summits meeting in Pittsburg
42 G-20 (Group of 20) Argentina Australia Brazil Canada China France GermanyIndiaIndonesiaItalyJapanMexicoRussiaSaudi ArabiaSouth AfricaSouth KoreaTurkeyUnited KingdomUnited StatesEuropean Union