1. INTERNATIONAL ECONOMIC LAW The history of the WTO

2. What are the origin of GATT? Why, when, for what reasons did states conclude the GATT? Post world war II architecture of reconstructing international economic relations War – peace- economic cooperation

3. Formation of international economic order after II World War Bretton Woods conference 1944 – new order for coordination on financial, economic, monetary relations International Monetary Fund (exchange rate stability, economic cooperation, resources for BOP stability) World bank (provides loans to DC) 1947 – GATT – Tariff negotiations Havana Charter - ITO See United Nations Charter - system of collective security - economic cooperation - functional to peace See also Schuman Declaration* (relations between political objectives (peace, federation of European States) and economic instruments

4. *Schuman Declaration Declaration of 9 May 1950 World peace cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it. The contribution which an organized and living Europe can bring to civilization is indispensable to the maintenance of peaceful relations. In taking upon herself for more than 20 years the role of champion of a united Europe, France has always had as her essential aim the service of peace. A united Europe was not achieved and we had war.

5. *Schuman Declaration Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity. The coming together of the nations of Europe requires the elimination of the age-old opposition of France and Germany. Any action taken must in the first place concern these two countries. With this aim in view, the French Government proposes that action be taken immediately on one limited but decisive point : "It proposes that Franco-German production of coal and steel as a whole be placed under a common High Authority, within the framework of an organization open to the participation of the other countries of Europe".

6. *Schuman Declaration The pooling of coal and steel production should immediately provide for the setting up of common foundations for economic development as a first step in the federation of Europe, and will change the destinies of those regions which have long been devoted to the manufacture of munitions of war, of which they have been the most constant victims.

7. *Schuman Declaration The solidarity in production thus established will make it plain that any war between France and Germany becomes not merely unthinkable, but materially impossible. The setting up of this powerful productive unit, open to all countries willing to take part and bound ultimately to provide all the member countries with the basic elements of industrial production on the same terms, will lay a true foundation for their economic unification.

8. *Schuman Declaration This production will be offered to the world as a whole without distinction or exception, with the aim of contributing to raising living standards and to promoting peaceful achievements. With increased resources Europe will be able to pursue the achievement of one of its essential tasks, viz. the development of the African continent. (omissis)

9. *Schuman Declaration In this way, there will be realized simply and speedily that fusion of interests which is indispensable to the establishment of a common economic system; it may be the leaven from which may grow a wider and deeper community between countries long opposed to one another by sanguinary divisions. By pooling basic production and by instituting a new High Authority, whose decisions will bind France, Germany and other member countries, this opposal will lead to the realization of the first concrete foundation of a European federation indispensable to the preservation of peace.

10. *Schuman Declaration To promote the realization of the objectives defined, the French Government is ready to open negotiations on the following bases: The task with which this common High Authority will be charged will be that of securing in the shortest possible time the modernization of production and the improvement of its quality; the supply of coal and steel on identical terms to the French and German markets, as well as to the markets of other member countries; the development in common of exports to other countries; the equalization and improvement of the living conditions of workers in these industries.

11. GATT origin Lake Success negotiations – January-February 1947 – Parallel negotiations on tariff reduction Negotiations results and GATT agreement: Geneva Final Act and Protocol of Provisional Application Different negotiating positions – UK and US US: tariff dismantling – no role of state –employment UK: strong role for government – (keynes) – Imperial preferences Trade and employment: expansion of trade (HOW?) positive for employment – multilateral cooperation – avoiding unilateral actions

12. Havana Charter Cooperation in world trade: United nations Conference on trade and employment 1947 adopted the Havana Charter establishing International trade Organization (ITO) Havana charter: Economic development Labour market Trade in natural resources Regulation of competition Development NO free trade concept alone

13. HAVANA CHARTER – Article 1 RECOGNIZING the determination of the United Nations to create conditions of stability and well-being which are necessary for peaceful and friendly relations among nations,

14. THE PARTIES to this Charter undertake in the fields of trade and employment to co-operate with one another and with the United Nations For the Purpose of REALIZING the aims set forth in the Charter of the United Nations, particularly the attainment of the higher standards of living, full employment and conditions of economic and social progress and development, envisaged in Article 55 of that CHARTER.

15. TO THIS END they pledge themselves, individually and collectively, to promote national and international action designed to attain the following objectives: 1. To assure a large and steadily growing volume of real income and effective demand, to increase the production, consumption and exchange of goods, and thus to contribute to a balanced and expanding world economy.

16. 2. To foster and assist industrial and general economic development, particularly of those countries which are still in the early stages of industrial development, and to encourage the international flow of capital for productive investment.

17. 3. To further the enjoyment by all countries, on equal terms, of access to the markets, products and productive facilities which are needed for their economic prosperity and development. 4. To promote on a reciprocal and mutually advantageous basis the reduction of tariffs and other barriers to trade and the elimination of discriminatory treatment in international commerce.

18. 5. To enable countries, by increasing the opportunities for their trade and economic development, to abstain from measures which would disrupt world commerce, reduce productive employment or retard economic progress

19. .6. To facilitate through the promotion of mutual understanding, consultation and co-operation the solution of problems relating to international trade in the fields of employment, economic development, commercial policy, business practices and commodity policy. ACCORDINGLY they hereby establish the INTERNATIONAL TRADE ORGANIZATION through which they shall co-operate an Members to achieve the purpose and the objectives set forth in this Article

20. The end of ITO and the GATT -No ratification of the Havana Charter by the US -GATT (Chapter IV of the Havana Charter) applied on a provisional basis (for 40 years) -GATT traditional Trade agreement: mfn – tariff concessions - national treatment – antidumping – subsidies – safeguards – balance of payment – prohibition of quantitative restrictions – general exceptions – dispute settlement / discipline on trade and domestic instruments

21. GATT preamble Recognizing that their relations in the field of trade and economic endeavor should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, developing the full use of the resources of the world and expanding the production and exchange of goods,

22. GATT Preamble Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce, Have through their Representatives agreed as follows….

23. GATT post 1947 GATT Rounds - More tariff negotiations – tariffs as the principal trade instruments of protection. Geneve (1947) – Annecy (1949) Torquay (1950) Geneva (1956) Dillon (1960/61) Kennedy (1962/67) – more attention on the role of non tariff barriers* (NTB) Tokyo Rounds (1973-1979): Codes.

24. Non tariff Barriers* Negative definition measures which take a form other than a tariff (fees other than tariffs and associated policies affecting imports are included) They make importation or exportation of products difficult and/or costly Quotas – national regulations laws standards, restrictive state-trading interventions, export subsidies, countervailing duties, technical barriers to trade, sanitary and phytosanitary (SPS) policies, rules of origin, and domestic content requirement schemes

25. Tokyo Round Codes (states were free to conclude them or to remain “outside”): not applie on a mfn basis Antidumping Code (Article VI GATT) Subsidies Code Agreement on import licensing Procedures A. on Trade in Civil Aircraft A. on Technical barriers to trade Customs Valuation Code On Government procurement

26. GATT crisis: increasing role of trade in services (not regulated), inefficient consensus/based settlement mechanism – Uruguay Round (the eighth Round) 1986 – 1994 1 january 1995 WTO

27. WTO WTO as an organization: institutional framework for conduct of trade relations – nearly universal organization Scope of the WTO WTO as a forum for negotiations for existing agreements and future negotiations An an umbrella institution for administering all agreements concluded during the round Fundamental principle: organization of world trade by legal means

28. Article II WTO Scope of the WTO1. The WTO shall provide the common institutional framework for the conduct of trade relations 2.The agreements and associated legal instruments included in Annexes 1, 2 and 3 (hereinafter referred to as "Multilateral Trade Agreements") are integral parts of this Agreement, binding on all Members. 3.The agreements and associated legal instruments included in Annex 4 (hereinafter referred to as "Plurilateral Trade Agreements") are also part of this Agreement for those Members that have accepted them, and are binding on those Members. The Plurilateral Trade Agreements do not create either obligations or rights for Members that have not accepted them.

29. WTO agreement – single undertaking GATT (goods) - GATS (services) – TRIPS Goods annexes - Services (annexes) Market access Commitments (schedules for goods and services) Dispute settlement understanding Trade policy review (Surveillance of national trade policies)

30. Article II.4 The General Agreement on Tariffs and Trade 1994 as specified in Annex 1A (hereinafter referred to as "GATT 1994") is legally distinct from the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act Adopted at the Conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, as subsequently rectified, amended or modified (hereinafter referred to as "GATT 1947")

31. GATT 1947 and GATT 1994 GATT is a trade agreement (one of its annexes) under the institutional umbrella of the WTO. GATT (1994) is a new agreement – negotiators added new elements during the UR GATT 1947 with amendments and modification entered into force before the date of entry into force of the WTO Agreement. (tariff concessions, protocols of accession new members), decisions on waivers still in force at the date of entry into force of the WTO A. Other decisions of the Contracting Parties

32. GATT 1947 must be read in conjunction with Understanding concerning Other duties and charges (GATT Art.II:l(b) State trading enterprises (GATT Art.XVII), Balance-of-payments, Regional trade agreements (GATT Art.XXIV) Waivers of Obligations, Concession withdrawal (GATT Art.XXVIII), Marrakesh Protocol to the GATT 1994

33. Gatt is a discipline of TRADE instruments (tariffs – quotas - export subsidies (Tariff reductions and binding no quotas – no export subsidie DOMESTIC instruments (trade instruments can be “transformed” in domestic instruments (tariff in consumption tax) - non discrimination use of domestic instruments – not use to advantage domestic producers WHY discipline on both? They can both affect trade – to avoid circumvention of obligations

34. Specific Sector Agreements For GATT: Agriculture Health regulations for farm products (SPS) Textiles and clothing Product standards (TBT) Investment measures Anti-dumping measures Customs valuation methods Preshipment inspection Rules of origin Import licensing Subsidies and counter- measures Safeguards For services: Movement of natural persons Air transport Financial services Shipping Telecommunications (Plulilateral: Civil Aircraft and Public Prcurement)

35. Market access: tariffs + non-tariff barriers Predictability: Rule-based system; Trade Policy Review Mechanism (since 1995); Dispute Settlement Procedure (since 1947, revised 1995)- Non-discrimination- Reciprocity

36. WTO as a legal order: legal rules Wto as an international organization A) negotiating forum B) management/administration of agreement C) dispute settlement

37. Main bodies: -Ministerial conference -General council -Special bodies -Secretariat -Director general