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Xiaowen Cha Law faculty, Dept of Social Science

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1 Xiaowen Cha Law faculty, Dept of Social Science 06-08-31
The Law of WTO 世界贸易组织法 Xiaowen Cha Law faculty, Dept of Social Science Chapter 1 An introduction:WTO

2 Structure of the Course
Regulation of trade in goods, services and trade-related intellectual property 货物贸易、服务贸易以及 与贸易有关的知识产权的规则 Its development and establishment 发展与建立 The law and institutions of the WTO Dispute-settlement System 争端解决机制 Trade policy review mechanism 贸易政策审查机制 Chapter 1 An introduction:WTO

3 Chapter 1 An introduction:WTO
Aims of the Course The knowledge you will acquire and understand by the end of the course: The fundamental principles of GATT 1994 The international legal and practical context in which international trade operates The institutional structure and powers of the WTO, including its dispute settlement procedure The interpretation of application of WTO rules Teaching and Studying methods Lecture Seminar Video-watching Chapter 1 An introduction:WTO

4 Chapter 1 An introduction:WTO
Readings List Note: Besides textbook, readings will normally include review of secondary reading books, treaties, cases, government and international organization websites, and academic articles. These may be in English. I will indicate which page and what you should read for each class. The reading list will send you by before each class. So please make sure you make a good preparation before the class. 1.Text Book 栾信节, WTO规则中英文教程, 北京:对外经济贸易大学出版社 2003; 2. Necessary Reading 李双元, 世贸组织规则研究的理论与案例, 北京:人民法院出版社 2004 (D ) 宣增益, 世界贸易组织法律教程, 北京:中信出版社2003 (F ) 李双元, 世界贸易组织法案例教程, 北京:知识产权出版社 (D ) 赵相林, 世界贸易组织法总论, 北京:中国法制出版社 (D ) All the agreements of WTO (available at: 3.Website: Chapter 1 An introduction:WTO

5 Chapter 1 Introduction: World Trade Organization
I. The debates on World Trading system II. The history of trade liberalization III. China and WTO IV. Function and Structure of WTO Chapter 1 An introduction:WTO

6 What is WTO? Location: Geneva, Switzerland Established: 1 January 1995
WTO Office, Geneva (日内瓦) Location: Geneva, Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations ( ) (乌拉圭回合谈判)  Membership: 149 countries (on 11 December 2005) Chapter 1 An introduction:WTO

7 Chapter 1 An introduction:WTO
There are a number of ways of looking at the WTO. an organization for liberalizing trade. a forum for governments to negotiate trade agreements. a place for them to settle trade disputes. operates a system of trade rules. Trade Negotiations Committee Chapter 1 An introduction:WTO

8 Chapter 1 Introduction: WTO
MISUNDERSTANDINGS? November 1999 — Third Ministerial Conference, Seattle — anti-WTO demonstration. November 2001 — China became the 143rd member of the WTO at the Fourth Ministerial Conference, Doha. BENEFITS? Chapter 1 An introduction:WTO

9 I. Debates on World Trading System
The benefits 1. Disputes are handled constructively 2. Rules make life easier for all 3. Freer trade cuts the costs of living 4. It provides more choice of products and qualities 5. Trade raises incomes 6. Trade stimulates economic growth 7. The basic principles make life more efficient The misunderstandings 1. The WTO dictates policy 2. Commercial interests take priority over the environment 3. … and over health and safety 4. The WTO destroys jobs, worsens poverty 5. Small countries are powerless in the WTO 6. The WTO is the tool of powerful lobbies 7. Weaker countries are forced to join the WTO Chapter 1 An introduction:WTO

10 II. The history of trade liberalization
II-1 The multilateral trading system — past, present and future II-2 GATT: a brief history II-3 Eight trade "rounds" (multilateral trade negotiations) II-4 WTO vs GATT: main differences Chapter 1 An introduction:WTO

11 II-1 The multilateral trading system (多边贸易体制)
Originally set up under GATT The system was developed through a series of trade negotiations held under the GATT, dealing with tariff reduction, anti-dumping and non-tariff measures(关税减让,反倾销和非关税措施). WTO, the successor to the GATT, came into being in 1995 The trade negotiations still continued after WTO establishment From GATT to WTO Chapter 1 An introduction:WTO

12 II-2 GATT: a brief history
The GATT- A provisional set of rules United Nation Conference on Trade and Employment(贸易和就业联合国会议), held in Havana, Cuba,1947 The Havana Charter for ITO was adopted(《国际贸易组织宪章》),but never entered into force. Substantial tariff reduction agreed among a group of countries The commercial policy of Havana Charter was taken and converted into GATT. Countries signed a Protocol of Provisional Application (《临时适用议定书》) to bring the GATT into force quickly. Originally 23 contracting parties Entered into force: 1 January 1948 Terminated on 31 December 1995 Chapter 1 An introduction:WTO

13 Chapter 1 An introduction:WTO
II-3 Eight trade "rounds" Year Place/name Subjects covered Countries 1947 Geneva Tariffs 23 1949 Annecy 33 1951 Torquay 38 1956 26 Geneva/Dillon Round 45 Geneva/Kennedy Round Tariffs and antidumping measures 54 Geneva/Tokyo Round Tariffs, non-tariff measures, 99 Geneva/Uruguay Round Tariffs, non-tariff measures, rules, services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc 123 Chapter 1 An introduction:WTO

14 Evidence of the success of trade rounds
Chapter 1 An introduction:WTO

15 II-4 GATT vs.WTO: Main Difference
Legal basis (法律依据) Protocol Provisional Application of GATT Agreement Establishing the WTO Name of Membership Contracting Party (缔约方) Member (成员方/国) Nature (性质) 1. A set of rules 2. with no institutional foundation, 3. applied on a provisional basis A permanent institution with a permanent framework. It has legal personality with the privileges and immunities. Scope (范围) The rules just applied to trade in goods Agreement covers trades in goods, trade in service, and TRIPS Binding force ( 法律约束力) Contracting parties may reserve right to fulfill certain GATT obligations Members’s domestic regulation or measures must be consistent with WTO rules. Chapter 1 An introduction:WTO

16 II-4 GATT vs.WTO: Main Difference
Approach (方式) A series of new agreements were adopted during the Tokyo Round on a plurilateral,selective basis, causing a fragmentation of the multilateral trading system. The agreements are all multilateral, which have been adopted and accepted by its member as a single undertaking. Dispute Settlement (争端解决) Dispute settlements mechanism is not uniform. Function was not effective 1. Adopts a uniform dispute settlement system (DSU) 2.Has specific time limits and is therefore faster than the GATT system; 3. Has a permanent AB to review findings by DSP 4. A more detailed rules on implementation of findings Chapter 1 An introduction:WTO

17 Chapter 1 An introduction:WTO
III. China and WTO III-1 History of China’s accession to the WTO III- 2 The Legal Status of the Chinese Taipei in GATT/WTO III-3 Hong Kong and China and the WTO III-4 Macau and China and the WTO III-5 China in World Trade Chapter 1 An introduction:WTO

18 III-1 History of China’s accession to the WTO
China was one of the 23 original signatories of GATT in 1948 1950.3, Taiwan government announced China leave GATT 1986, China notified the GATT of its wish to resume its status as a GATT contracting party. Working Party established to examine China’s trade regime 1987, a GATT ~ concerned China’s trade regime for goods. 1995, a WTO ~ was converted and its scope was broadened to include trade in service, new rules on non-tariff measures and rules relating to IPR Bilateral negotiations between China and each WTO member. In the Fourth Ministerial Conference of WTO, China signed the Protocol on the Accession of the People‘s Republic of China (中华人民共和国加入议定书). China became a WTO member Chapter 1 An introduction:WTO

19 III- 2 The Legal Status of the Chinese Taipei in GATT/WTO
1965, Taiwan was granted observer status at GATT, but was removed in 1971 1992.9, a separate working party was established to examine the request for accession of the Seperated Customs Territory of Taiwan, Penghu, Kimen and Matsu (“Chinese Taipei”) ---“台湾、澎湖、金门、马祖单独关税区”(简称中国台北单独关税区) , Chines Taipei, as a separate customs territory of China(中国台北单独关税区 ), access WTO Chapter 1 An introduction:WTO

20 III-3 Hong Kong and China and the WTO
1986.4, Hongkong as a British Crown colony became contracting party of GATT. 1995, Hongkong became an original Member of the WTO 1997.7, PROC resumed the exercise of sovereignty over Hongkong. Therefore, Hongkong retain the status of a separate customs territory in WTO, to maintain and develop international relationship with States, regions and IO in the economic, trade and other fields. Chapter 1 An introduction:WTO

21 III-4 Macau and China and the WTO
1991.1, Macau became a contracting party of GATT 1995, Macau became a founding member of the WTO, using the name of “Macau, China” , Macau,as a separate customs territory of China, continued to be a WTO member. Chapter 1 An introduction:WTO

22 III-5 China in World Trade
Chapter 1 An introduction:WTO

23 IV. Function and Structure of WTO
IV-1 Functions and Legal status IV-2 Governing Structure IV-3 Membership, accession IV-4 Decision-making IV-5 Legal Framework of WTO Agreements “Agreement Establishing the WTO” Chapter 1 An introduction:WTO

24 IV-1 Functions and Legal status
Functions (Art III of Agreement Establishing the WTO)(职能) Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training for developing countries Cooperation with other international organizations(IMF and World Bank) Legal status (法律地位) It is formally endowed with existence, legal personality and legal capacity as an international organization It must be acorded privileges and immunities that are in accordance with its functions. Chapter 1 An introduction:WTO

25 Chapter 1 An introduction:WTO
IV-2 Governing Structure Chapter 1 An introduction:WTO

26 IV-3 Membership and accession
The original WTO Membership consisted of all GATT contracting parties Countries may join the WTO after negotiating terms of accession. The Ministerial Conference must approve the terms of accession by a two-thirds majority of the WTO members. Accession (加入) – accomplished through obtaining a consensus of all WTO members First, “tell us about yourself Second, “work out with us individually what you have to offer” Third, “let’s draft membership terms” Finally, “the decision” Chapter 1 An introduction:WTO

27 Chapter 1 An introduction:WTO
IV-4 Decision-making Art IX of Agreement Establishing the WTO Decision-making by consensus (协商一致) “the body concerned shall be deemed to have decided by consensus if no Member, present at the meeting when the decision is taken, formally objects to the proposed decision” 协商一致是指在作出决定的会议上,如果出席会议的成员没有一个对作出的决议提出反对意见,决议机构被认为以协商一致的方式对提交审议的事项作出了决定 Voting Where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting Chapter 1 An introduction:WTO

28 Chapter 1 An introduction:WTO
IV-5 Legal framework of WTO Agreements (English Version is at page 12 of textbook) 第一部分:多边贸易协议包括《世界贸易组织协定》及其附件1、附件2、附件3。 附件1: 1A——货物贸易的多边协议(关于附件1A的总体解释说明,1994年GATT,农业协议,实施卫生与植物卫生措施协议,纺织品与服装协议,技术性贸易壁垒协议,与贸易有关的投资措施协议,反倾销协议,海关估价协议,装运前检验协议,原产地规则协议,进口许可程序协议,补贴与反补贴措施协议,保障措施协议) 1B——服务贸易总协定(GATS) 1C——与贸易相关的知识产权协定(TRIPS) 附件2:关于争端解决规则和程序的谅解(DSU) 附件3:贸易政策审查机制(TPRM) 第二部分:诸边贸易协议,主要由附件4组成。 包括航空器贸易协议,政府采购协议,国际奶制品协议,国际牛肉协议,信息技术产品协议。 Chapter 1 An introduction:WTO

29 Assignments of this class
1. Reading assignments: (1)栾信节 pp.1-8 (2)李双元, (D ) pp11-27 (as to question 1) (3)宣增益, (F ) pp4-11(as to question 5-6), pp (as to question 2-4) (4)Read Page 4-13 of this paper. (as to question 4) (5)Review the WTO Agreements, paying particular attention to preamble, Art I~VI, Art VIII (as to question 5-6) (6) Preamble of GATT 1947, available at: (in English). (7)The organization of WTO, available at: 2. Reflect on the following questions while/after reading the material: (1)To know the debate on free trade (advocates and challenges) (2)To know the Eight Multilateral Trade Negotiations (3)To understand the difference between GATT and WTO (4)To know the history of China’s accession to WTO (5)To master the function, accession, governing structure, decision-making of WTO (6)To know the legal structure and legal status of WTO Chapter 1 An introduction:WTO

Chapter 1 An introduction:WTO

31 Chapter 1 An introduction:WTO
Reading assignments 1. Reading assignments: (1)栾信节, WTO规则中英文教程, 北京:对外经济贸易大学出版社 2003; pp (as to question 1-5) (2)赵相林,世界贸易组织法总论, 北京:中国法制出版社 2004 (D ) pp (as to question 1-5) (3)宣增益, 世界贸易组织法律教程, 北京:中信出版社2003 (F ) pp11-27 (as to question 3-4) (4)See Page of this paper. (as to question 1-5) (5)Art 1 of General Agreement on Tariffs and Trade (GATT); Article 2 of General Agreement on Trade in Services (GATS); Article 4 of Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (as to question 1) (6)Art 3 of GATT; Article 17 of GATS; Article 3 of TRIPS(as to question 2) (7)Art 20,2124 of GATT(as to question 3) (8)Art 2 of GATT (as to question 4) 其中(2)和(3)任选一本即可 2. Reflect on the following questions while/after reading the material: (1)What is Principle of Non-discrimination? Which Article does it appear in GATT, GATS, TRIPS? (2)What’s the difference between Most-Favored-Nation principle and National Treatment? (3)The Exceptions of Most-Favored-Nation principle and National Treatment (4)To understand the Principle of Freer Trade. What is Tariff and non-tariff barrier? (5)To understand the Principle of Predictability, promoting fair competition, and encouraging development and economic reform. Chapter 1 An introduction:WTO

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