PROJECT REPORT

ON

WORLD TRADE ORGANIZATION

PREPARED BY

REGISTRATION NO.:

Preface:
In this present time where the competition becomes very high and trade becomes very tougher. Its become compulsory for every countriy to reduce the custom barriers. The trade which emerges from the Barter system when the people exchange goods for goods now becomes more complicated and the customer becomes more aware about the quality of product, market condition, and brand image. There is lots of technological advancement in the field of trade from that Barter system of trade to the current position of trade. In present time many countries open there hands for the international trade. The international trade which emerge from the Mercantilism System the first reasonably systematic body of thought devoted to international trade which main motto was to spread the freer trade in world. It also achieved its motto up to some extent. The countries decided to form a systematic body for dealing with the international trade, they decided to form the International Trade Organization (ITO) but the countries failed to achieve their goal as its charter was finally agreed at a UN Conference on Trade and Employment in Havana in March 1948, its ratification proved impossible in some cases. The General Agreement on Tariff and Trade (GATT) which comes in the time after the Second World War in the year 1946, for those 23 members countries agree for the tariff reduction between them. After the death of ITO, and despite of the provisional nature of the GATT, the GATT remained the only multilateral instrument governing international trade from 1948 until the establishment of WTO. Before the establishment of the WTO, GATT members countries negotiated with each other for the reduction of tariff and lots of other issues in the trade rounds, but the largest round of the GATT which started in 1986 and end on 1993 give birth to the WTO. My project report is for the same WTO. What kind of body it is and how it works. My approach is not to go in very detail about it but to present it as per my understanding. I have made my sincere efforts to familiarize my readers with the WTO. I would like to say thanks sincerely to all my friends and the seniors who helped me for the successfully completion of this project report. Although care has been taken in preparing this report but the possibility of errors cannot be denied.

WTO AND PROMOTION OF WORLD TRADE

SYNOPSIS:

1. Basic About WTO

i. What is WTO____________________________________________ 7 7 8 8

ii. When it comes___________________________________________ iii. WTO Secretarial and Budget________________________________ iv. Constitutional Body of WTO_________________________________

2. History
i. What is GATT____________________________________________ 11 Some important things to know A Mercantilism______________________________________ 11 B Argument for Free Trade____________________________ 12 C Comparative Advantage_____________________________ 12 D Institutionalization of International Trade________________ 13 ii. Trade Rounds of GATT in Nut Shell___________________________ 14 iii. What happen with GATT, did it succeed________________________ 15 iv. If GATT not succeed and WTO adopted the charter of GATT, Are they both same? No_______________ 16 v. If both GATT and WTO are not similar then what us the difference between the both._________________ 17

3. Uruguay Round
i. Uruguay Round___________________________________________ 18

ii. Snapshot for key dates for Uruguay Round_____________________ 20

iii. Some major subjects for Uruguay Round_______________________ 20 iv. The post- Uruguay round build-in agenda_______________________ 21

4. WTO Agreements in Nut Shell

i. Brief View about these agreements____________________________ 23 1. Goods_____________________________________________ 24 2. Services___________________________________________ 24 3. Intellectual Property__________________________________ 25 4. Dispute Settlement__________________________________ 25 5. Policy Review______________________________________ 25 ii. Plurilaterals 1. Trade in Civil Aircraft________________________________ 26 2. Government Procurement____________________________ 26 3. Dairy Products_____________________________________ 26 4. Bovine Meat_______________________________________ 26

5. Principles of Trading System

A closer look at these Principles
i.

Trade without discrimination______________________________________ 27

o o

Most Favored Nation National Treatment

ii.

Free Trade____________________________________________________ 28

iii. Predictability___________________________________________________ 28 iv. Promoting Fair Trade____________________________________________ 28 v.

Encouraging development and economic reform_______________________ 29 30 to 35

6. Ministerial Conferences WTO______________________________ a. Place and dates of the conferences b. Details view about it in brief

7. Two more common topics in WTO: Anti-Dumping and Countervailing Duty_________________________________________ 36 to 49 8. Settling Dispute a. Settling Dispute_________________________________________ b. A Unique Contribution____________________________________ c. Principles: Equitable, Fast, Effective, Mutually Acceptable________ d. Main feature of the DSU___________________________________ 50 50 50 51

e. How long it take to settle a dispute____________________________ 52 f. How are dispute settled_____________________________________ 52 i. ii. iii. iv. v. vi. Appeal____________________________________________ 53 The case has been decided: What next?__________________ 54 More case can be good news__________________________ 55 Panels____________________________________________ 55 The Panel Process__________________________________ 55 Case study: The Timetable practice_____________________ 56

9. The Environment: A Specific Concern_______________________________ 58 10. The Committee: broad- based responsibility___________________________ 58 11. WTO and environmental agreements: How are they related?_____________ 59 12. Disputes: Where should they be handled?____________________________ 60 13. International Commercial Arbitration_________________________________ 60 14. Case studies: a. A WTO Dispute: The Shrimp Turtle case____________________ b. A GATT dispute: The Tuna- Dolphin dispute___________________ 15. Developing Countries a. Development and trade_____________________________________ 71 b. Technical Assistance and training_____________________________ 71 66 68

16. List for Members, observers and least developed countries _______________ 72 17. Abbreviations___________________________________________________ 78 18. Conclusion of Appraisal Aspect_____________________________________ 80 19. Bibliography___________________________________________________ 81

1. BASIC ABOUT WTO

1.1 What is WTO?
World Trade Organization is organization which deals with the rules of trade between the nations at a global or near-global level. It is member driven, with decisions taken by consensus among all the member government. We can summarize the WTO in the following types:

It is an organization for trade opening between nations. It is a forum for governments to negotiate trade agreements and try to sort out the trade problems they face with each other. Everything which the WTO does is the result of negotiation. The WTO is currently the host to new negotiations, under the Doha Development Agenda launched in 2001. It is a set of rules which provide the legal ground-rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits. It is a place where trade dispute is settled. The WTO is a place where member governments try to sort out the trade problems they face with each other.

The WTO's founding and guiding principles remain the pursuit of open borders, the guarantee of most-favored-nation principle and non-discriminatory treatment by and among members, and a commitment to transparency in the conduct of its activities. The opening of national markets to international trade, with justifiable exceptions or with adequate flexibilities, will encourage and contribute to sustainable development, raise people's welfare, reduce poverty, and foster peace and stability. At the same time, such market opening must be accompanied by sound domestic and international policies that contribute to economic growth and development according to each member's needs and aspirations.

1.2 When it comes:

Born in 1 January, 1995, but it is not so young, its trading system is half century older. Since 1948, the General Agreement on Tariff and Trade (GATT) had provided the rules for the system. As it took the rules of GATT so on second WTO ministerial meeting, held in Geneva in May 1998, it celebrate 50th anniversary of the system. The last round of GATT was the Uruguay Round which started in 1986 and ended in 1994 and led to the WTOs creation. Whereas GATT had mainly dealt with trade in goods, the WTO and its agreements now cover trade in services, and in trade inventions, creations and designs (intellectual property). Over the past 60 years, the WTO helped to create a strong and prosperous international trading system, thereby contributing to the unprecedented global economic growth. The WTO currently has 153 members, of which 117 are developing countries or separate customs territories.

1.3 WTO Secretariat and Budget:

WTO activities are supported by a Secretariat of some 700 staff, led by the WTO Director- General. The Secretariat is located in Geneva, Switzerland, and has an annual budget of approximately CHF 200 million ($ 180 million, 160 million swiss francs) with individual contributions calculated on the basis of shares in the total trade conducted by WTO members. The three official language of the WTO are English, French and Spanish. Decisions in the WTO are generally taken by consensus of the entire membership. The highest institutional body is the Ministerial Conference, which meets roughly every two years. A General Council conducts the organization's business in the intervals between Ministerial Conferences. Both of these bodies comprise all members. Specialized subsidiary bodies (Councils, Committees, Sub-committees), also comprising all members, administer and monitor the implementation by members of the various WTO agreements. Its responsibilities include: Administrative and technical support for WTO delegate bodies (councils, committees, working parties, negotiating groups) for negotiations and the implementation of agreements. Technical support for developing countries, and especially the least-developed. Trade performance and trade policy analysis by WTO economists and statisticians. Assistance from legal staff in the resolution of trade disputes involving the interpretation of WTO rules and precedents. Dealing with accession negotiations for new members and providing advice to governments considering membership.

1.4 Constitutional Body of WTO:

Highest authority: the Ministerial Conference
So, the WTO belongs to its members. The countries make their decisions through various councils and committees, whose membership consists of all WTO members. Topmost is the ministerial conference which has to meet at least once every two years. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.

Second level: General Council in three guises

Day-to-day work in between the ministerial conferences is handled by three bodies: The General Council The Dispute Settlement Body The Trade Policy Review Body. All three are in fact the same the Agreement Establishing the WTO states they are all the General Council, although they meet under different terms of reference. Again, all three consist of all WTO members. They report to the Ministerial Conference. The General Council acts on behalf of the Ministerial Conference on all WTO affairs. It meets as the Dispute Settlement Body and the Trade Policy Review Body to oversee procedures for members and to analyze members trade policies.

Third level: councils for each broad area of trade, and more
Three more councils, each handling a different broad area of trade, report to the General Council: The Council for Trade in Goods (Goods Council) The Council for Trade in Services (Services Council) The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council) As their names indicate, the three are responsible for the workings of the WTO agreements dealing with their respective areas of trade. Again they consist of all WTO members. The three also have subsidiary bodies Six other bodies report to the General Council. The scope of their coverage is smaller, so they are committees. But they still consist of all WTO members. They cover issues such as trade and development, the environment, regional trading arrangements, and administrative issues. The Singapore Ministerial Conference in December 1996 decided to create new working groups to look at investment and competition policy, transparency in government procurement, and trade facilitation. Two more subsidiary bodies dealing with the plurilateral agreements (which are not signed by all WTO members) keep the General Council informed of their activities regularly.

Fourth level: down to the nitty-gritty

Each of the higher level councils has subsidiary bodies. The Goods Council has 11 committees dealing with specific subjects (such as agriculture, market access, subsidies, anti-dumping measures and so on). Again, these consist of all member countries. Also reporting to the Goods Council is the Textiles Monitoring Body, which consists of a chairman and 10 members acting in their personal capacities, and groups dealing with notifications (governments informing the WTO about current and new policies or measures) and state trading enterprises. The Services Councils subsidiary bodies deal with financial services, domestic regulations, GATS rules and specific commitments. At the General Council level, the Dispute Settlement Body also has two subsidiaries: the dispute settlement panels of experts appointed to adjudicate on unresolved disputes, and the Appellate Body that deals with appeals.

HODs and other bods: the need for informality

Important breakthroughs are rarely made in formal meetings of these bodies, least of all in the higher level councils. Since decisions are made by consensus, without voting, informal consultations within the WTO play a vital role in bringing a vastly diverse membership round to an agreement. One step away from the formal meetings are informal meetings that still include the full membership, such as those of the Heads of Delegations (HOD). More difficult issues have to be thrashed out in smaller groups. A common recent practice is for the chairperson of a negotiating group to attempt to forge a compromise by holding consultations with delegations individually, in twos or threes, or in groups of 20-30 of the most interested delegations. These smaller meetings have to be handled sensitively. The key is to ensure that everyone is kept informed about what is going on (the process must be transparent) even if they are not in a particular consultation or meeting, and that they have an opportunity to participate or provide input (it must be inclusive). One term has become controversial, but more among some outside observers than among delegations. The Green Room is a phrase taken from the informal name of the

director-generals conference room. It is used to refer to meetings of 2040 delegations, usually at the level of heads of delegations. These meetings can take place elsewhere, such as at Ministerial Conferences, and can be called by the minister chairing the conference as well as the director-general. Similar smaller group consultations can be organized by the chairs of committees negotiating individual subjects, although the term Green Room is not usually used for these. In the past delegations have sometimes felt that Green Room meetings could lead to compromises being struck behind their backs. So, extra efforts are made to ensure that the process is handled correctly, with regular reports back to the full membership. The way countries now negotiate has helped somewhat. In order to increase their bargaining power, countries have formed coalitions. In some subjects such as agriculture virtually all countries are members of at least one coalition and in many cases, several coalitions. This means that all countries can be represented in the process if the coordinators and other key players are present. The coordinators also take responsibility for both transparency and inclusiveness by keeping their coalitions informed and by taking the positions negotiated within their alliances. In the end, decisions have to be taken by all members and by consensus. The membership as a whole would resist attempts to impose the will of a small group. No one has been able to find an alternative way of achieving consensus on difficult issues, because it is virtually impossible for members to change their positions voluntarily in meetings of the full membership. Market access negotiations also involve small groups, but for a completely different reason. The final outcome is a multilateral package of individual countries commitments, but those commitments are the result of numerous bilateral, informal bargaining sessions, which depend on individual countries interests. (Examples include the traditional tariff negotiations, and market access talks in services.) So, informal consultations in various forms play a vital role in allowing consensus to be reached, but they do not appear in organization charts, precisely because they are informal. They are not separate from the formal meetings, however. They are necessary for making formal decisions in the councils and committees. Nor are the formal meetings unimportant. They are the forums for exchanging views, putting countries positions on the record, and ultimately for confirming decisions. The art of achieving agreement among all WTO members is to strike an appropriate balance, so that a breakthrough achieved among only a few countries can be acceptable to the rest of the membership.

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2 History of WTO:
Uruguay Round which was the biggest GATT round. It took seven and half years, almost double the original schedule. By the end, 123 countries were taking part. This round covered almost all trade, from toothbrushes to pleasure boats, from banking to telecommunications, from the genes to wild rice to AIDS treatments. It was quite simply the largest trade negotiation ever, and most probably the largest negotiation of any kind in history. The GATT was created at the end of the Second World War. At time it seemed doomed to fail. But at the end, the Uruguay Round brought about the biggest reform of the worlds trading system. And yet, despite its troubled progress, the Uruguay Round did see some early results. By the end of the Uruguay Round, 123 countries were taking part and after discussion and negotiation the GATT changed to WTO. That is how WTO comes. Its charter is adopted from GATT. So we can say that WTO is the updated form of GATT.

2.1 What is GATT?

Before knowing about GATT we just discuss about some more things which are link with it. Doing trade at international level is not a new thing it is as old as civilization, but it is the recent development to do trade internationally at independent level. From the ancient Greek to the present, government officials, intellectuals, and economists have pondered the determinants of trade between countries, have analyzed whether trade benefits or harms the nations, and, more importantly, have tried to determine what trade policy is best for any particular country.

2.1 (A) Mercantilism:

It is the first reasonable systematic body of thought devoted to international trade and it emerged in seventeenth and eighteenth century in Europe. For a predominant part of this period, mercantilist writers argued that a key objective of trade should be to promote a favorable balance of trade. A favorable balance of trade is one in which the value of domestic goods exported exceeded the value of imports, thereby resulting in a balance of trade surplus and adding precious metals and treasure to the countrys stock. Mercantilist advocated that government policy be directed to arranging the flow of commerce to conform to these beliefs. They sought a highly interventionist agenda, using taxes on trade to manipulate the balance of trade or commodity composition of trade in favor of the home country. But even if the logic of mercantilism was correct, this strategy could never work if all nations tried to follow it simultaneously. This is due to due to the fact that not every country can have a balance of trade surplus, and not every country can export manufactured goods and import raw materials.

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2.1 (B) Arguments for Free Trade:

In the earlier days of international trade it was very much difficult to adopt a particular policy because there was not some specific policy at that time and views of everyone are different from other. There were many anti-mercantilist economic writers during this period, few advocated complete free trade and set out systematic reasons for believing that free trade might be desirable. Adam Smith changed the economic thinking by his views. As per Smith, the division of labour was limited by the extent of the market; in other words, small markets would not be able to support a great deal of specialization, whereas larger market could. Therefore, it was opined that international trade effectively increased the size of the market for any given country, allowed for more refined specialization, created an international division of labour, and thereby benefited all countries by increasing the worlds productivity and output. Smith is remembered for his incisive analysis of trade policy, where he details not just the benefits of free trade but the cost of government intervention. Smith argued that the great object of mercantilism was to diminish as much as possible, the importation of foreign goods for home consumption, and to increase as much as possible the exportation of the produce of domestic industry. These goals were to be achieved through import restrictions, on one hand, and export subsidies on the other. Smith argued both the actions.

2.1 (C) Comparative Advantage:

David Rechardo has received most of the credit for developing this comparative advantage theory, although James Mill and Robert Torrens had similar ideas around the same time. The theory suggests that a country should export goods in the country in which its relative cost advantage, and not the absolute cost advantage, is greatest in comparison to other countries.

For example:
Suppose that the United States can produce both Shirts and Automobiles more efficiently then Mexico. But if it can produce shirts twice efficiently as Mexico and can produce automobiles three time more efficiently than Mexico, the United States has an absolute productive advantage over Mexico in both the goods but a relative advantage in producing automobiles. In this case, the United States might export automobiles in exchange for imports of shirts even though it can produce shirts more efficiently than Mexico. The practical import of the doctrine is that a country may export a good even if a foreign country could produce it more efficiently if that is where its relative advantage lies; similarly, a country may import a good even if it could produce that good more efficiently than the country from which it is importing the good. From Mexicos standpoint, it lacks an absolute productive advantage in either commodity, but has a relative advantage in producing shirts (where its relative disadvantage is least). This trade is beneficial for both the United States and Mexico. The comparative advantage proposition is incredibly counterintuitive. It states that a less developed country that lacks an absolute advantage in any goods can still engage in mutually beneficial trade, and that an advanced country whose domestic industries are

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more efficient than those in any country can still benefit from trade even as some of its industries face intense import competition.

2.1 (D) Institutionalization of International Trade:

After the second world war, to give the early boost to trade liberalization and to begin to correct the large overhang of protectionist measures which remained place from the early 1930s- tariff negotiations were opened among the 23 founding GATT contracting parties in 1946. This first round of negotiations resulted in 45,000 tariff concessions affecting $10 billion or about one-fifth-of world trade. It was also agreed that the value of these concessions should be protected by early- and largely provisional acceptance of some of the trade rules in the draft ITO Charter. The tariff concessions and rules together became known as the General Agreement on Tariffs and Trade and entered into force in January 1948. The WTOs predecessor, the GATT, was established on a provisional basis after the Second World War in the wake of other new multilateral institutions dedicated to international economic corporation notably the Bretton Wood institutions now known as the World Bank and the International Monetary Fund. The original 23 GATT countries which argued on a draft Charter for an International Trade Organization (ITO) a new specialized agency of the United Nations. The charter was intended to provide not only world trade disciplines but also contained rules relating to employment, commodity agreements, restrictive business practices, international investment and services. Although the ITO Charter was finally agreed at a UN Conference on Trade and Employment in Havana in March 1948, its ratification proved impossible in some cases. When the United States government announced, in 1950, that it would not seek Congressional ratification of the Havana Charter, the ITO was effectively dead. Despite its provisional nature, the GATT remained the only multilateral instrument governing international trade from 1948 until the establishment of the WTO. Although, during the 47 years of implementation, the basic legal text of the GATT remained much as it was in 1948, there were additions in the form of plurilateral voluntary membership agreements and continual efforts to reduce tariffs. Much of this was achieved through a series of trade rounds. For the reduction of Tariff there was lots of trade rounds happens in between the members countries. The WTO which is an updated form of GATT, which was created on 1948 on a failed, attempted to create the International Trade Organization. Much of the history of those 47 years was written in Geneva. But it also traces a journey that spanned the continents, from that hesitant start in 1948 in Havana (Cuba), via Annecy (France), Torquay (U.K.), Tokyo (Japan), Punta del Este (Uruguay), Montreal (Canada), Brussels (Belgium) and finally to Marrakesh (Morocco) in 1994. During that period, the trading system came under GATT, salvaged from the aborted attempt to create the ITO. GATT helped establish a strong and prosperous multilateral trading system that became more and more liberal through rounds of trade negotiations. But by the 1980s the system needed a thorough overhaul. This lead to the Uruguay Round, and ultimately to the WTO.

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GATT provisional for almost the half a century from 1948 to 1994, the General Agreement on Tariff and Trade (GATT) provided the rules for much of world trade and presided over periods that saw some of the highest growth rates in international commerce. It seemed well-established, but throughout those 47 years, it was a provisional agreement and organization. The original intention was to create a third institution to handle the trade side of international economic cooperation, joining the two Bretton Woods institutions, the World Bank and the International Monetary Fund. Over 50 countries participated in negotiations to create an International Trade Organization (ITO) as a specialized agency of the United Nations. The draft ITO Charter was ambitious. It extended beyond world trade disciplines, to include rules on employment, commodity agreements, restrictive business practices, international investment, and services. The aim was to create the ITO at a UN Conference on Trade and Employment in Havana, Cuba in 1947.

2.2 Trade Rounds of GATT in nut shell:

Year 1947 1949 1951 1956 1960-1961 1964-1967 1973-1979

Place/name Geneva Annecy Torquay Geneva Geneva Dillon Round Geneva Kennedy Round Geneva Tokyo Round Geneva Uruguay Round

Subjects covered Tariffs Tariffs Tariffs Tariffs Tariffs Tariffs and anti-dumping measures

Countries 23 13 38 26 26 62

1986-1994

Tariffs, non-tariff measures, 102 framework agreements Tariffs, non-tariff measures, rules, 123 services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc

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2.3 What happen with GATT, Did it succeed:

Now the question is what happened with GATT, after the end of the biggest round of the GATT at Uruguay which took seven and half years, almost twice the original schedule. It was quite simply the largest trade negotiation ever, and most probably the largest negotiation of any kind in history. At the time when it seemed to fail, despite of the trouble progress, the Uruguay Round did see some early results. At the end of the Uruguay round there was 123 member countries who are participating and at the end WTO replaced GATT as an international organization, But the General Agreement still exists as the WTOs umbrella treaty for trade in goods, updated as a result of the Uruguay Round negotiations. Trade lawyers distinguish between GATT 1994, the updated parts of GATT and GATT 1947, the original agreement which is still the heart of GATT 1994. Confusing? For most of us, its enough to refer simply to GATT. But the question is that what happen to GATT why all the members of the GATT agree for WTO is still stood here at the time after the failure of ITO the GATT were successfully doing work and member countries participating in the reduction of tariff then why WTO? Did GATT succeeded. The reply is here GATT was provisional with a limited field of action, but its success over 47 years in promoting and securing the liberalization of much of world trade is incontestable. Continual reductions in tariffs alone helped spur very high rates of world trade growth during the 1950s and 1960s around 8% a year on average. And the momentum of trade liberalization helped ensure that trade growth consistently out-paced production growth throughout the GATT era, a measure of countries increasing ability to trade with each other and to reap the benefits of trade. The rush of new members during the Uruguay Round demonstrated that the multilateral trading system was recognized as an anchor for development and an instrument of economic and trade reform. But all was not well. As time passed new problems arose. The Tokyo Round in the 1970s was an attempt to tackle some of these but its achievements were limited. This was a sign of difficult times to come. GATTs success in reducing tariffs to such a low level, combined with a series of economic recessions in the 1970s and early 1980s, drove governments to devise other forms of protection for sectors facing increased foreign competition. High rates of unemployment and constant factory closures led governments in Western Europe and North America to seek bilateral market-sharing arrangements with competitors and to embark on a subsidies race to maintain their holds on agricultural trade. Both these changes undermined GATTs credibility and effectiveness. The problem was not just a deteriorating trade policy environment. By the early 1980s the General Agreement was clearly no longer as relevant to the realities of world trade as it had been in the 1940s. For a start, world trade had become far more complex and important than 40 years before: the globalization of the world economy was underway, trade in services not covered by GATT rules was of major interest to more and more countries, and international investment had expanded. The expansion of services trade was also closely tied to further increases in world merchandise trade. In other

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respects, GATT had been found wanting. For instance, in agriculture, loopholes in the multilateral system were heavily exploited, and efforts at liberalizing agricultural trade met with little success. In the textiles and clothing sector, an exception to GATTs normal disciplines was negotiated in the 1960s and early 1970s, leading to the Multifiber Arrangement. Even GATTs institutional structure and its dispute settlement system were causing concern. These and other factors convinced GATT members that a new effort to reinforce and extend the multilateral system should be attempted. That effort resulted in the Uruguay Round, the Marrakesh Declaration, and the creation of the WTO.

2.4 If GATT did not succeed and WTO adopted the charter of GATT, Are they both the same? No.
They are different the WTO is GATT plus lot more. It is probably best to be clear from the start that the General Agreement on Tariffs and Trade (GATT) contained: (1) an international agreement, i.e. a document setting out the rules for conducting international trade, and (2) an international organization created later to support the agreement. The text of the agreement could be compared to law, the organization was like parliament and the courts combined in a single body. GATT, the international agency, no longer exists. The World Trade Organization has now replaced it. GATT, the agreement, does still exist, but it is no longer the main set of rules for international trade. And it has been updated. What happened? When GATT was created after the Second World War, trade in goods dominated international commerce. Since then, trade in services transport, travel, banking, insurance, telecommunications transport, and consultancy and so on has become much more important. So has trade in ideas inventions and designs, and goods and services incorporating this intellectual property. The General Agreement on Tariff and Trade always dealt with trade goods, and it still does. It has been amended and incorporated into the new WTO agreements. The updated GATT lives alongside the new General Agreement on Trade in Services (GATS) and Agreement on TradeRelated Aspect of Intellectual Property Right (TRIPS). The WTO brings system for resolving disputes. In short, the WTO is not a simple extension of GATT. It is much more in existence. While GATT no longer exists as an international organization, the GATT agreement lives on. The old text is now called GATT 1947. The updated version is called GATT; ONE COULD SAY THAT THE CHILD IS THE FATHER OF THE MAN.

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2.5 If both GATT and WTO are not similar then what is the difference between the both:
1. GATT was ad hoc, and provisional. The General Agreement was never ratified in members parliaments, and it contained no provisions for the creation of an organization. The WTO and its agreements are permanent. As an international organization, the WTO has a sound legal basis because members have ratified the WTO agreements, and the agreements themselves describe how the WTO is to function. 2. The WTO has members. GATT had contracting parties, underscoring the fact that officially GATT was a legal text. 3. GATT dealt with trade in goods. WTO covers services and intellectual property as well. 4. The WTO dispute settlement system is faster, more automatic than the old GATT system. Its ruling cannot be blocked.

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3. Uruguay Round
3.1 Uruguay Round in Brief
It took seven and a half years, almost twice the original schedule. By the end, 123 countries were taking part. It covered almost all trade, from toothbrushes to pleasure boats, from banking to telecommunications, from the genes of wild rice to AIDS treatments. It was quite simply the largest trade negotiation ever, and most probably the largest negotiation of any kind in history. At times it seemed doomed to fail. But in the end, the Uruguay Round brought about the biggest reform of the worlds trading system since GATT was created at the end of the Second World War. And yet, despite its troubled progress, the Uruguay Round did see some early results. Within only two years, participants had agreed on a package of cuts in import duties on tropical products which are mainly exported by developing countries. They had also revised the rules for settling disputes, with some measures implemented on the spot. And they called for regular reports on GATT members trade policies, a move considered important for making trade regimes transparent around the world. A round to end all rounds? The seeds of the Uruguay Round were sown in November 1982 at a ministerial meeting of GATT members in Geneva. Although the ministers intended to launch a major new negotiation, the conference stalled on agriculture and was widely regarded as a failure. In fact, the work programme that the ministers agreed formed the basis for what was to become the Uruguay Round negotiating agenda. Nevertheless, it took four more years of exploring, clarifying issues and painstaking consensus-building, before ministers agreed to launch the new round. They did so in September 1986, in Punta del Este, Uruguay. They eventually accepted a negotiating agenda that covered virtually every outstanding trade policy issue. The talks were going to extend the trading system into several new areas, notably trade in services and intellectual property, and to reform trade in the sensitive sectors of agriculture and textiles. All the original GATT articles were up for review. It was the biggest negotiating mandate on trade ever agreed, and the ministers gave themselves four years to complete it. Two years later, in December 1988, ministers met again in Montreal, Canada, for what was supposed to be an assessment of progress at the rounds half-way point. The purpose was to clarify the agenda for the remaining two years, but the talks ended in a deadlock that was not resolved until officials met more quietly in Geneva the following April. Despite the difficulty, during the Montreal meeting, ministers did agree a package of early results. These included some concessions on market access for tropical products aimed at assisting developing countries as well as a streamlined dispute settlement system, and the Trade Policy Review Mechanism which provided for the first comprehensive, systematic and regular reviews of national trade policies and practices of GATT members. The round was supposed to end when ministers met once more in

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Brussels, in December 1990. But they disagreed on how to reform agricultural trade and decided to extend the talks. The Uruguay Round entered its bleakest period. Despite the poor political outlook, a considerable amount of technical work continued, leading to the first draft of a final legal agreement. This draft Final Act was compiled by the then GATT director-general, Arthur Dunkel, who chaired the negotiations at officials level. It was put on the table in Geneva in December 1991. The text fulfilled every part of the Punta del Este mandate, with one exception it did not contain the participating countries lists of commitments for cutting import duties and opening their services markets. The draft became the basis for the final agreement. Over the following two years, the negotiations lurched between impending failure, to predictions of imminent success. Several deadlines came and went. New points of major conflict emerged to join agriculture: services, market access, anti-dumping rules, and the proposed creation of a new institution. Differences between the United States and European Union became central to hopes for a final, successful conclusion. In November 1992, the US and EU settled most of their differences on agriculture in a deal known informally as the Blair House accord. By July 1993 the Quad (US, EU, Japan and Canada) announced significant progress in negotiations on tariffs and related subjects (market access). It took until 15 December 1993 for every issue to be finally resolved and for negotiations on market access for goods and services to be concluded (although some final touches was completed in talks on market access a few weeks later). On 15 April 1994, the deal was signed by ministers from most of the 123 participating governments at a meeting in Marrakesh, Morocco. The delay had some merits. It allowed some negotiations to progress further than would have been possible in 1990: for example some aspects of services and intellectual property, and the creation of the WTO itself. But the task had been immense, and negotiation-fatigue was felt in trade bureaucracies around the world. The difficulty of reaching agreement on a complete package containing almost the entire range of current trade issues led some to conclude that a negotiation on this scale would never again be possible. Yet, the Uruguay Round agreements contain timetables for new negotiations on a number of topics. And by 1996, some countries were openly calling for a new round early in the next century. The response was mixed; but the Marrakesh agreement did already include commitments to reopen negotiations on agriculture and services at the turn of the century. These began in early 2000 and were incorporated into the Doha Development Agenda in late 2001.

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3.2 Snapshot for key dates for Uruguay round:

Sep 86 Dec 88 Apr 89 Dec 90 Dec 91 Nov 92 Jul 93 Dec 93 Apr 94 Jan 95

Punta del Este: Montreal: Geneva: Brussels: Geneva: Washington: Tokyo: Geneva: Marrakesh: Geneva:

launch ministerial mid-term review mid-term review completed closing ministerial meeting ends in deadlock first draft of Final Act completed US and EU achieve Blair House breakthrough on agriculture Quad achieve market access breakthrough at G7 summit most negotiations end (some market access talks remain) agreements signed WTO created, agreements take effect

3.3 Some Major subjects for Uruguay Round (Uruguay Round Agenda 1986):
1. Tariffs 2. Non-tariff barriers 3. Natural resource products 4. Textiles and clothing 5. Agriculture 6. Tropical products 7. GATT articles 8. Tokyo Round codes 9. Anti-dumping 10. Subsidies 11. Intellectual property 12. Investment measures 13. Dispute settlement 14. The GATT system 15. Services

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3.4 The post-Uruguay Round built-in agenda

Many of the Uruguay Round agreements set timetables for future work. Part of this built-in agenda started almost immediately. In some areas, it included new or further negotiations. In other areas, it included assessments or reviews of the situation at specified times. Some negotiations were quickly completed, notably in basic telecommunications, financial services. (Member governments also swiftly agreed a deal for freer trade in information technology products, an issue outside the built-in agenda.) The agenda originally built into the Uruguay Round agreements has seen additions and modifications. A number of items are now part of the Doha Agenda, some of them updated. There were well over 30 items in the original built-in agenda. This is a selection of highlights: 1996

Maritime services: market access negotiations to end (30 June 1996, suspended to 2000, now part of Doha Development Agenda) Services and environment: deadline for working party report (ministerial conference, December 1996) Government procurement of services: negotiations start

1997

Basic telecoms: negotiations end (15 February) Financial services: negotiations end (30 December) Intellectual property, creating a multilateral system of notification and registration of geographical indications for wines: negotiations start, now part of Doha Development Agenda

1998

Textiles and clothing: new phase begins 1 January Services (emergency safeguards): results of negotiations on emergency safeguards to take effect (by 1 January 1998, deadline now March 2004) Rules of origin: Work programme on harmonization of rules of origin to be completed (20 July 1998) Government procurement: further negotiations start, for improving rules and procedures (by end of 1998) Dispute settlement: full review of rules and procedures (to start by end of 1998)

1999

Intellectual property: certain exceptions to patentability and protection of plant varieties: review starts

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2000

Agriculture: negotiations start, now part of Doha Development Agenda Services: new round of negotiations start, now part of Doha Development Agenda Tariff bindings: review of definition of principle supplier having negotiating rights under GATT Art 28 on modifying bindings Intellectual property: first of two-yearly reviews of the implementation of the agreement

2002

Textiles and clothing: new phase begins 1 January

2005

Textiles and clothing: full integration into GATT and agreement expires 1 January

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4. WTO Agreements in nutshell:

The basic structure of the WTO agreements: how the six main areas fit together the umbrella WTO Agreement, goods, services, intellectual property, disputes and trade policy reviews.

Umbrella Basic principles Additional details

AGREEMENT ESTABLISHING WTO Goods GATT Services GATS Intellectual property TRIPS

Other goods Services annexes agreements and annexes Countries of schedules of commitments(and MFN exemptions)

Market access Countries commitments schedules commitments Dispute settlement Transparency

DISPUTE SETTLEMENT TRADE POLICY REVIEWS

There are two more agreements which were not signed by all the member countries of the WTO and that are also important agreements: the two plurilateral agreements: civil aircraft and government procurement.

4.1 Brief view about these agreements: The WTO Agreements:

The WTOs rules the agreements are the result of negotiations between the members. The current set were the outcome of the 198694 Uruguay Round negotiations which included a major revision of the original General Agreement on Tariffs and Trade (GATT). GATT is now the WTOs principal rule-book for trade in goods. The Uruguay Round also created new rules for dealing with trade in services, relevant aspects of intellectual property, dispute settlement, and trade policy reviews. The complete set runs to some 30,000 pages consisting of about 30 agreements and separate commitments (called schedules) made by individual members in specific areas such as lower customs duty rates and services market-opening.

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Through these agreements, WTO members operate a non-discriminatory trading system that spells out their rights and their obligations. Each country receives guarantees that its exports will be treated fairly and consistently in other countries markets. Each promises to do the same for imports into its own market. The system also gives developing countries some flexibility in implementing their commitments. 4.1 (1) Goods It all began with trade in goods. From 1947 to 1994, GATT was the forum for negotiating lower customs duty rates and other trade barriers; the text of the General Agreement spelt out important rules, particularly non-discrimination. Since 1995, the updated GATT has become the WTOs umbrella agreement for trade in goods. It has annexes dealing with specific sectors such as agriculture and textiles, and with specific issues such as state trading, product standards, subsidies and actions taken against dumping. For goods (under 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 4.1 (2) Services Banks, insurance firms, telecommunications companies, tour operators, hotel chains and transport companies looking to do business abroad can now enjoy the same principles of freer and fairer trade that originally only applied to trade in goods. These principles appear in the new General Agreement on Trade in Services (GATS). WTO members have also made individual commitments under GATS stating which of their services sectors they are willing to open to foreign competition, and how open those markets are. For services (the GATS annexes) Movement of natural persons Air transport Financial services Shipping Telecommunications 4.1 (3) Intellectual property The WTOs intellectual property agreement amounts to rules for trade and investment in ideas and creativity. The rules state how copyrights, patents, trademarks, geographical

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names used to identify products, industrial designs, integrated circuit layout-designs and undisclosed information such as trade secrets intellectual property should be protected when trade is involved. 4.1 (4) Dispute settlement The WTOs procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly. Countries bring disputes to the WTO if they think their rights under the agreements are being infringed. Judgements by specially-appointed independent experts are based on interpretations of the agreements and individual countries commitments. The system encourages countries to settle their differences through consultation. Failing that, they can follow a carefully mapped out, stage-by-stage procedure that includes the possibility of a ruling by a panel of experts, and the chance to appeal the ruling on legal grounds. Confidence in the system is borne out by the number of cases brought to the WTO around 300 cases in eight years compared to the 300 disputes dealt with during the entire life of GATT (194794). 4.1 (5) Policy review The Trade Policy Review Mechanisms purpose is to improve transparency, to create a greater understanding of the policies that countries are adopting, and to assess their impact. Many members also see the reviews as constructive feedback on their policies. All WTO members must undergo periodic scrutiny, each review containing reports by the country concerned and the WTO Secretariat.

4.2 Plurilaterals For the most part, all WTO members subscribe to all WTO agreements. After the Uruguay Round, however, there remained four agreements, originally negotiated in the Tokyo Round, which have a narrower group of signatories and are known as obligations (i.e. obligations for all WTO members) when the World Trade Organization was established in 1995. The four were:

Trade in civil aircraft Government procurement Dairy products Bovine meat.

The Bovine meat and dairy agreements were terminated in 1997.

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4.2 (1) The Agreement on Trade in Civil Aircraft entered into force on 1 January 1980. It now has 24 signatories. The agreement eliminates import duties on all aircraft, other than military aircraft, as well as on all other products covered by the agreement civil aircraft engines and their parts and components, all components and sub- assemblies of civil aircraft, and flight simulators and their parts and components. It contains disciplines on government directed procurement of civil aircraft and inducements to purchase, as well as on government financial support for the civil aircraft sector.

4.2 (2) Government Procurement: opening up for competition. In most countries the government, and the agencies it controls are, together, the biggest purchaser of goods of all kinds, ranging from basic commodities to high-technology equipment. At the same time, the political pressure to favour domestic suppliers over their foreign competitors can be very strong. The Bovine meat and dairy agreements were terminated in 1997. An Agreement on Government Procurement was first negotiated during the Tokyo Round and entered into force on 1st January 1981. Its purpose is to open up as much of this business as possible to international competition. It is designed to make laws, regulations, procedures and practices regarding government procurement more transparent and to ensure they do not protect domestic products or suppliers, or discriminate against foreign products or suppliers. The agreement has 25 members. It has two elements general rules and obligations concern tendering procedures. The present agreement and commitments were negotiated in the Uruguay Round. These negotiations achieved a 10- fold expansion of coverage, extending international competition to include national and local government entities whose collective purchases are worth several hundred billion dollars each year. The new agreement also 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. The new agreement took effect on 1 January 1996. It also reinforces rules guaranteeing fair and non-discriminatory conditions of international competition. For example, governments will be required to put in place domestic procedures by which aggrieved private bidders can challenge procurement decisions and obtain redress in the event of the agreement.

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5. Principles of the Trading System:

The WTO agreements are lengthy and complex because they are legal texts covering a wide range of activities. They deal with: agriculture, textiles and clothing, banking, telecommunications, government purchases, industrial standards and product safety, food sanitation regulations, intellectual property, and much more. But a number of simple, fundamental principles run throughout all of these documents. These principles are the foundation of the multilateral trading system. A closer look at these principles:

5.1 Trade without discrimination

1. Most-favoured-nation (MFN): Treating other people equally: Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favour (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members. This principle is known as most-favoured-nation (MFN) treatment .It is so important that it is the first article of the General Agreement on Tariffs and Trade (GATT), which governs trade in goods. MFN is also a priority in the General Agreement on Trade in Services (GATS) (Article 2) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (Article 4), although in each agreement the principle is handled slightly differently. Together, those three agreements cover all three main areas of trade handled by the WTO. Some exceptions are allowed. For example, countries can set up a free trade agreement that applies only to goods traded within the group discriminating against goods from outside. Or they can give developing countries special access to their markets. Or a country can raise barriers against products that are considered to be traded unfairly from specific countries. And in services, countries are allowed, in limited circumstances, to discriminate. But the agreements only permit these exceptions under strict conditions. In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners whether rich or poor, weak or strong. 2. National treatment: Treating foreigners and locals equally Imported and locallyproduced goods should be treated equally at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents. This principle of national treatment (giving others the same treatment as ones own nationals) is also found in all the three main WTO agreements (Article 3 of GATT, Article 17 of GATS and Article 3

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of TRIPS), although once again the principle is handled slightly differently in each of these. National treatment only applies once a product, service or item of intellectual property has entered the market. Therefore, charging customs duty on an import is not a violation of national treatment even if locally-produced products are not charged an equivalent tax. 5.2 Freer trade: gradually, through negotiation: Lowering trade barriers is one of the most obvious means of encouraging trade. The barriers concerned include customs duties (or tariffs) and measures such as import bans or quotas that restrict quantities selectively. From time to time other issues such as red tape and exchange rate policies have also been discussed. Since GATTs creation in 1947-48 there have been eight rounds of trade negotiations. A ninth round, under the Doha Development Agenda, is now underway. At first these focused on lowering tariffs (customs duties) on imported goods. As a result of the negotiations, by the mid-1990s industrial countries tariff rates on industrial goods had fallen steadily to less than 4%. But by the 1980s, the negotiations had expanded to cover non-tariff barriers on goods, and to the new areas such as services and intellectual property. Opening markets can be beneficial, but it also requires adjustment. The WTO agreements allow countries to introduce changes gradually, through progressive liberalization. Developing countries are usually given longer to fulfil their obligations. 5.3 Predictability: through binding and transparency: Sometimes, promising not to raise a trade barrier can be as important as lowering one, because the promise gives businesses a clearer view of their future opportunities. With stability and predictability, investment is encouraged, jobs are created and consumers can fully enjoy the benefits of competition choice and lower prices. The multilateral trading system is an attempt by governments to make the business environment stable and predictable. 5.4 Promoting fair competition The WTO is sometimes described as a free trade institution, but that is not entirely accurate. The system does allow tariffs and, in limited circumstances, other forms of protection. More accurately, it is a system of rules dedicated to open, fair and undistorted competition. The rules on non-discrimination MFN and national treatment are designed to secure fair conditions of trade. So too are those on dumping (exporting at below cost to gain market share) and subsidies. The issues are complex, and the rules try to establish what is fair or unfair, and how governments can respond, in particular by charging additional import duties calculated to compensate for damage caused by unfair trade. Many of the other WTO agreements aim to support fair competition: in agriculture, intellectual property, services, for example. The agreement on government procurement

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(a plurilateral agreement because it is signed by only a few WTO members) extends competition rules to purchases by thousands of government entities in many countries. And so on.

5.5 Encouraging development and economic reform

The WTO system contributes to development. On the other hand, developing countries need flexibility in the time they take to implement the systems agreements. And the agreements themselves inherit the earlier provisions of GATT that allow for special assistance and trade concessions for developing countries. Over three quarters of WTO members are developing countries and countries in transition to market economies. During the seven and a half years of the Uruguay Round, over 60 of these countries implemented trade liberalization programmes autonomously. At the same time, developing countries and transition economies were much more active and influential in the Uruguay Round negotiations than in any previous round, and they are even more so in the current Doha Development Agenda. At the end of the Uruguay Round, developing countries were prepared to take on most of the obligations that are required of developed countries. But the agreements did give them transition periods to adjust to the more unfamiliar and, perhaps, difficult WTO provisions particularly so for the poorest, least-developed countries. A ministerial decision adopted at the end of the round says better-off countries should accelerate implementing market access commitments on goods exported by the least-developed countries, and it seeks increased technical assistance for them. More recently, developed countries have started to allow duty-free and quota-free imports for almost all products from least-developed countries. On all of this, the WTO and its members are still going through a learning process. The current Doha Development Agenda includes developing countries concerns about the difficulties they face in implementing the Uruguay Round agreements.

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6. MINISTERIAL CONFERENCES WTO

The WTO organization is driven by the member countries. The major decisions are taken by members as a whole, either by ministers or by their ambassadors or delegates. The Ministerial Conference the highest decision making body of WTO has to meet at least every two years. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements. Following Ministerial Conference have been held so farI. II. III. IV. V. VI. First Ministerial Conference at Singapore on December 9-13, 1996. Second Ministerial Conference at Geneva on May 18-20, 1998. Third Ministerial Conference at Seattle on November 30 December 3, 1999. Fourth Ministerial Conference at Doha on November 9 -13, 2001. Fifth Ministerial Conference at Cancun on September 10 -14, 2003. Sixth Ministerial Conference at Hong Kong on December 13 -18, 2005.

The major provisions of Declarations adopted at the Ministerial Conferences held so far are given below:

I.

Singapore Ministerial Conference, 1996

Ministerial Declaration adopted on December 13, 1996 In terms of Article IV of the Agreement establishing the World Trade Organization the Ministers met in Singapore from 9 to 13 December, 1996 for the first regular biennial meeting of the WTO, to further strengthen the WTO as a forum for negotiation, the continuing liberalization of trade within a rule- based system, and the multilateral review and assessment of trade policies, and in particular to:

Assess the implementation of commitments under the WTO Agreements and decisions; Review the ongoing negotiation and Work Programme; Examine developments in world trade; and Address the challenges of an evolving world economy.

In this meeting members participated in the following main areas:

Integration of Economies Opportunities and Challenges. Core Labour Standards. Marginalization Regional Agreement Dispute Settlement Implementation Developing Countries Least Developed Countries

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Textile and Clothing Trade and Environment Services Negotiations ITA and Pharmaceuticals Work Programme and Built- in Agenda Investment and Competition Transparency in Government Procurement

In this meeting the main things which were discussed is written above. The main aim of the WTO was to encourage the free trade and maintain sustainable growth. In pursuit if the goal of sustainable growth and development for the common goods, the Ministers envisaged a world where trade flows freely and renewed their commitment to:

A fair, equitable and more open rule based system; Progressive liberalization and elimination of tariff and non- tariff barriers to trade in goods; Progressive liberalization of trade in services; Elimination of discriminatory treatment in international trade relations; Integration of developing and least developed countries and economies in transition into the multilateral system; and The maximum possible level of transparency.

This ministerial meeting also declared on Trade in Information Technology Products and which account for well over 80 percent of world trade in these products(parties) declared that each partys trade regime should evolve in a manner that enhances market access opportunities for information technology products, each party shall bind and eliminate customs duties and other duties and charges of any kind, within the meaning of Article II : 1(b) of the GATT 1994, with respect to the following:

a. All products classified (or classifiable) with Harmonized System (1996) (HS) heading listed in Attachment A to the Annex to the declaration; and b. All products specified in Attachment B to the Annex to the Declaration, whether or not they are included in Attachment A;

Through equal rate reductions of customs duties beginning in 1997 and concluding in 2000, recognizing that extended staging of reductions and, before implementation, expansion of product coverage may be necessary in limited circumstances. Ministers expressed satisfaction about the large product coverage and instructed their respective official to make good faith efforts to finalize plurilateral technical discussions in Geneva on the basis of these modalities, and to complete this work by Janury 31, 1997, so as to ensure the implementation of this Declaration by the largest number of participants.

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Minister also invited the Ministers of other Members of the WTO, and States or separate customs territories in the process of acceding to the WTO, to provide similar instructions to their respective officials, so that they may participate in the technical discussions and participate fully in the expansion of world trade in information technology products.

II.

Geveva Ministerial Conference, 1998

Ministerial Declaration adopted on May 20, 1998

In this meeting the Ministers welcomed the successful conclusion of the negotiations on basic telecommunication and financial services; Took note of the implementation of the Information Technology Agreement and renewed their commitment to achieve progressive liberalization of trade in goods and services. Ministers underlined the crucial importance of the multilateral rule-based trading system, reaffirmed the commitments and assessments made at Singapore. Ministers renewing their commitment to ensuring that the benefits of the multilateral trading system are extended as widely as possible, Ministers recognized the need for the system to make its own contribution in response to the particular trade interests and development needs of developing- country Members.

Geneva Ministerial Declaration on Global Electronic Commerce May 20, 1998 Recognizing that global electronic commerce is growing and creating new opportunities for trade, the Ministers declared that the General Council shall, by its next meeting in special session, establish a comprehensive work programme to examine all trade-related issues relating to global electronic commerce, including those identified by Members. The work programme will involve the relevant World Trade Organization (WTO) bodies, take into account the economic, financial and work programme or the rights and obligations of Members under the WTO Agreements, Ministers also declared that Members will continue their current practice of not imposing customs duties on electronic transmissions.

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III.

Seattle Ministerial Conference, 1999

The Third WTO Ministerial Conferences was held in Seattle, Washington, USA between November 30 and December 3, 1999. The meeting was suspended without adopting any declaration. The suspension of talks, however, was not un-precedented in the history of multilaterial trading system. The previous illustrations of Ministerial talks which were suspended include the Uruguay Round Mid Term Review, Montreal, December 1988; and the Brussel Ministerial Meeting, December 1990. Mike Moore, the then Director General of WTO said that despite the temporary setback in Seattle, objectives remain unchanged

i. ii. iii. iv.

To continue to negotiate the progressive liberalization of international trade; To put trade to work more effectively for economic development and poverty alleviation; To confirm the Central role that the rule based trading system plays for member Governments in managing their economic affairs cooperatively; and To organize the WTO on lines that more truly represents the needs of all members.

IV.

Doha Ministerial Conference, 2001

Ministerial Declaration adopted on November 14, 2001

Before the commencement of this meeting there was the period of the global economic slowdown and in this phase it seemed that the international trade facing difficulties. So, Ministerial expressed determination to maintain the process of reform and liberalization of trade policies, thus ensuring that the system plays its full part in promoting recovery, growth and development and reaffirmed the principles and objectives set out in the Marrakesh Agreement Establishing the World Trade Organisation, and pledged to reject the use of protectionism. The Ministers also recognized that the majority of the member countries of the WTO are developing and least developed countries, Ministers urged to place their needs and interests at the heart of the Work Programme adopted in Declaration and continue to make positive efforts designed to ensure that developing countries, and especially the least-developed among them, secure a share in the growth of world trade commensurate with the needs of their economic development. Ministers also recognize the particular vulnerability of the least-developed countries and the special structural difficulties they face in the global economy, Ministers expressed their commitment to addressing the marginalization of least developed

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countries in international trade and to improving their effective participation in the multilateral trading system. Ministers stressed their commitment to the WTO as the unique forum for global trade rule- making and liberalization, while also recognizing that regional trade agreements can play an important role in promoting the liberalization and expansion of trade and in forcasting development. Ministers welcomed the WTOs continued cooperation with UNEP and other intergovernmental environmental organizations and encouraged efforts to promote cooperation between the WTO and relevant international environmental and developmental organization. Recognizing the challenges posed by an expanding WTO membership, Ministers confirmed their collective responsibility to ensure internal transparency and effective participation of all members. While emphasizing the intergovernmental character of the organization, Ministers committed themselves to making the WTOs operations and to improve dialogue with the public.

Main Work Programme of this meeting:

Implementation related issues and concerns Agriculture Market access for non-agricultural products Relationship between trade and investment Interaction between trade and competition policy Transparency in government procurement Trade facilitation WTO rules Trade and environment Small Economies Trade, debts and finance and Trade and transfer of technology Technical cooperation and capacity building Least-developed countries Special and differential treatment Supervision of Negotiations

V.

Cancun Ministerial Conference, 2003 (The following text was distributed at the Cancun Ministerial Conference on 13 September, 2003) Reaffirming declarations made and the decisions taken at Doha; the progress made towerds carrying out the Work Programme agreed at Doha and recommitting

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themselves to completing it fully, Ministers renewed their determination to conclude the negotiations launched at Doha successfully by the agreed date of 1 January, 2005. In pursuance of these objectives, Ministers welcomed the decisions on implementation of Doha Declaration on the TRIPS Agreement and Public Health.

Following are the main issues which were discussed in the meeting:

Agriculture Negotiations NAMA Negotiations Services Negotiations Rules Negotiations S & D Negotiations Investment Competition Small Economies TRIP non- violation Least Developed Countries Sectoral Initiation on Cotton Commodity Issues

VI.

Hong Kong Ministerial Conference, 2005

Ministerial Declaration adopted on December 18, 2005

The Ministers renewed their resolve to complete the Doha Work Programme fully and to conclude the negotiations launched at Doha successfully in 2006. The main areas for negotiation in this meeting are as follows:

Agricultural Negotiations Cotton NAMA Negotiations Services Negotiations TRIPS Negotiations Integrated Framework (IF)

In this meeting the Ministerial declaration also includes progress on negotiations and further actions in the areas of environment, trade facilitation, Dispute Settlement Understanding, Special & Differential Treatment, matters relating to implementation, TRIPs & Public Health, small economies, trade, debt and finance, trade & transfer of technology, E- Commerce and Least Developed Countries.

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7 Two more common topics in WTO is Anti Dumping and Countervailing Duty: Detailed study for the same

Dumping: The Theoretical Debate

Dumping is broadly defined as exporting at prices below those charged in the domestic market or at prices insufficient to cover the cost of the goods sold. The definition is only the prime facie description of phenomenon, which is in fact, far more complex. It does, however, identify the key element, which makes it a distorting instrument in international trade. The dumping firm is more likely to profit if demand does not slacken in the home market when the dumping firm raises its prices initially thereby enabling it to attain an increase in its overall revenue. The profit will also increase if the foreign market responds sharply to lower prices, more goods are sold, and the firms revenue is increased. The dumping firm will find it easier to engage in price discrimination between the home market and the foreign markets, if there are barriers to re-importation in the form of tariffs, quotas and non-tariff barriers to trade.

The concept of dumping marginal costs helps to explain the three customary subdivisions of dumping sporadic, intermittent and continuous (or persistent).

The key benefit for the importing country is the lower prices that the dumped goods bring to its consumers. When dumping is sporadic, the benefit of the lower prices would outweight the marginal harm suffered by the domestic producer. When the dumping is intermittent or predatory the substantial injury suffered by domestic continuous dumping may or may not be economically desirable. This would depend on whether the importing country has a smoothly functioning system of adjustment from import- impacted industries.

Types of Dumping
Price Discrimination Predatory Pricing Intermittent Dumping

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Price Discrimination means charging of significantly different product prices to two or more customers when there are no significant difference between the costs to the sellers for supplying to those customers. Predatory Pricing is the second characterization of dumping that gives rise to an economic rationale for antidumping laws. It consists of systematically pricing below cost with a view to intimidating and eliminating rivals in an effort to bring about a market price higher than otherwise would prevail. Intermittent Dumping, it is a situation in which one country oversupplies to another country of perishable goods. Agriculture producers often make planning decisions long before selling their produce. Because of cyclical nature of supply in agriculture markets, producers often find they have excess produce and rather than allowing it to rot they sell it at low prices. For these agricultural producers the relevant cost at the time of selling is the cost of packaging and marketing.

Fair Trade Controversy

The antidumping laws are justified politically because they address the perceived unfairness of low priced foreign imports. Dumping is characterized as and unfair trade practice. The global increase in antidumping actions may, therefore, reflect growing domestic political objections to the unfairness of the low priced foreign imports. Fairness us a vague concept and is reflective of the psychological mood of a nation loosing competitiveness or hegemony in the world economy. Actually the perceived unfairness results from the disruptive impact of cheaper imports on domestic industry and workforce, and could force the domestic industry to loose market share and the shareholders may loose capital. This creates a political situation where it is not generally possible to withhold pressure for some sort of commercial defense, justified or unjustified, to eliminate the injury caused by low priced imports.

What is Fair Trade?

The term fair trade gained currency in the 1870s when the British imperial economy headed into a recession and there was clamouring for some protectionist device. By fair trade was meant placing home and foreign producers on an equal level with regard to artificial conditions of production caused by export bounties, dumping under protection of high tariffs in the domestic and indirect taxation, but not interfering with natural comparative advantage.

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Conventional wisdom holds that the antidumping and the countervailing duty laws are cornerstones of international trade regulatory system designed to combat unfair trade practices. They are said to provide a custom remedy in the form of additional duty to offset price discrimination and subsidies. The reality is quite different. These are overly legalistic trade law remedies that have lost their original purpose.

Anti-Dumping and Indian Laws

Indian laws were amended with effect from 01.01.95 to bring them in line with the antidumping provisions in WTO agreement. Anti-Dumping duty investigations are carried out under Sections 9A of the Customs Tariff Act, 1975 read with Section 9B ibid and the rules made there under.

Legal Framework
Sections 9A, 9B and 9C of the Custom Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Article and for Determination of Injury) Rules, 1995 framed there under from the legal basis for anti-dumping investigations and for the levy of anti-dumping duties. These laws are based on the Agreement in Anti-Dumping, which is in pursuance of Article VI of GATT 1994.

Dumping
Dumping occurs when the export price of goods imported into India is less than the Normal Value of like articles sold in the domestic market of the exporter. Imports at cheap or low prices do not per se indicate dumping. The price at which like articles are sold in the domestic market of the exporter is referred to as the Normal Value of those articles.

Normal Value
The Normal value is the comparable price at which the goods under complaint are sold, in the ordinary course of trade, in the domestic market of the exporting country or territory. If the normal value cannot be determined by means of domestic sales, the Act provides for the following two alternative methods: i. Comparable representative export price to an appropriate third country.

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ii.

Cost of production in the country of origin with reasonable addition for administrative, selling and general costs and for profits.

Export Price
The export price of goods imported into India is the price paid or payable for the goods by the first independent buyer.

Determination of Dumping
For determining that the given price of the product exported is dumped or not the following things have to be verified:

Constructed Export price Margin of Dumping Factors Affecting Comparison of Normal value and Export Price

Like articles
Anti-dumping action can be taken only when there is an Indian industry which produces like articles when compared to the allegedly dumped imported goods. The article produced in India must either be identical to the dumped goods in all respects or in the absence of such an article, another article that has characteristics closely resembling those goods

Injuries to the Domestic Industry

The Indian industry must be able to show that dumped imports are causing or are threatening to cause material injury to the Indian domestic industry. Material retardation to the establishment of an industry is also regarded as injury. The material injury or threat thereof cannot be based on mere allegation, statement or conjecture. Sufficient evidence must be provided to support the contention of material injury. Injury analysis can broadly be divided in two major areas:

The volume effect The Price effect

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Casual Link
A causal link must exist between the material injury being suffered by the Indian industry and the dumped imports. In addition, other injury causes have to be investigated so that they are not attributed to dumping. Some of these are volume and volume and prices of imports not sold at dumped prices, contraction in demand or charges in the pattern of consumption, export performance, productivity of the domestic industry etc.

Dumping Investigation
A dumping investigation can normally be initiated only upon receipt of a written application by or on behalf of the Domestic Industry. In order to constitute a valid application, the following two conditions have to be satisfied: The domestic procedures expressly supporting the application must account fir not less than 25% of the total production of the like article by the domestic industry in India; and The domestic producers expressly supporting the application must account for more than 50% of the total production of the like article by those expressly supporting and those opposing the application.

Domestic Industry
Domestic Industry means the Indian producers of like articles as a whole or those producers whose collective output constitutes a major proportion of total Indian production. Producers who are related to the exporters or importers or are themselves importers of the allegedly dumped goods shall be deemed not to form part of the domestic industry.

De Minimis Margins
Any exporter whose margin of dumping is less than 2% of the export price shall be excluded from the purview of anti-dumping duties even if the existence of dumping, injury as well as the causal link is established. Further, investigations against any country are required to be terminated if the volume of the dumped imports from that particular source is found to be below 3% of the total imports, provided the cumulative imports from all those countries who individually account for less than 3%, are not more than 7%.

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Price Undertakings
The Designated Authority may suspend or terminated investigation if the exporter concerned furnished an undertaking to revise his price to remove the dumping or the injurious effect of dumping as the case may be. No undertaking can however be accepted before preliminary determination is made. No anti-dumping duties are recommended on such exporters from whom price undertaking has been accepted. No price undertaking may, however, be accepted in case it is found that acceptance of such undertaking is impracticable for any reason.

Subsidies and Countervailing Duties

In common parlance, the term subsidy means money granted by the State or a Public Body to keep the prices of commodities under control. Subsidy may make the form of direct or indirect government grants on production or exportation of goods including any special subsidy on transportation of any product. Subsidy on exports in the exporting country may translate into what is known as Countervailing duty in importing country which is simply a duty on subsidized imports that are found to be hurting domestic producers.

Agreement on Subsidies and Countervailing Measures (SCM Agreement)

The Agreement on Subsidies and Countervailing Measures (SCM Agreement) addresses two separate but closely related topics: multilateral disciplines regulating the provision of subsidies, and the use of countervailing measures of offset injury caused by subsidized imports. This agreement does two things- it disciplines the use of subsidies, and it regulates the actions countries can take to counter the effects of subsidies. It says a country can use the WTOs dispute settlement procedure to seek the withdrawal of the subsidy or the removal of its adverse effect.

The agreement builds on the Tokyo Round Subsidy Code. Unlike its predecessor, the present agreement contains a definition of subsidy. It also introduces the concept of a specific subsidy i.e. a subsidy available only to an enterprises, or group of industries in the country (or state, etc.) that gives the subsidy. The disciplines set out in the agreement only apply to specific subsidies .They can be domestic or export subsidies.

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Structure of the Agreement

Part I provides that the SCM Agreement applies only to subsidies that are specifically provided to an enterprise or industry or group of enterprise or industries, and defines both the term subsidy and the concept of specifically. Part II, III and IV divide all specific subsidies into one of three categories- prohibited, actionable, and nonactionable, and establish certain rules and procedures with respect to each category. Part V establishes the substantive and procedural requirements that must be fulfilled before a Member may apply a countervailing measure against subsidize imports. Parts VI and VII establish the institutional structure and notification/ surveillance modalities for implementation of the SCM Agreement. Part VIII contains special and differential treatment rules for various categories of developing country Members. Part IX contains transition rules for developed country and former centrally planned economy Members. Parts X and XI contain dispute settlement and final provisions.

Coverage of the Agreement

Part I of the Agreement defines the coverage of the Agreement. Specifically, it establishes a definition of the term subsidy and an explanation of the concept of specificity. Only a measure, which is a specific subsidy within the meaning of Part, I is subject to multilateral disciplines and can be subject to countervailing measures.

Calculation of the Amount of Subsidy

For the purpose of Part V, any method used by the investigating authority to calculate the benefit to the recipient conferred pursuant to paragraph 1 of Article 1 shall be provided for in the national legislation or implementing regulations of the Member concerned and its application to each particular case shall be transparent and adequately explained. Furthermore, any such method shall be consistent with the following guidelines: a. Government provision of equity capital shall not be considered as conferring a benefit, unless the investment decision can be regarded as inconsistent with the usual investment practice (including for the provision of risk capital) of private investors in the territory of that Member; b. A loan by a government shall not be considered as conferring a benefit, unless there is a difference between the amount that the firm would pay on a comparable commercial loan which the firm could actually obtain on the market. In this case the benefit shall be the difference between these two amounts; c. A loan guarantee by a government shall not be considered as conferring a benefit, unless there is a difference between the amount that the firm receiving

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the guarantee pays on a loan guaranteed by the government and the amount that the firm would pay on a comparable commercial loan bans the government guarantee. In this case the benefit shall be the difference between these two amounts adjusted for any differences in fees. d. The provisions of goods or services or purchase of goods by a government shall not be considered as conferring a benefit unless the provision is made for less than adequate remuneration, or the purchase is made for more than adequate remuneration. The adequacy of remuneration shall be determined in relation to prevailing market conditions for the good or service in question in the country of provision or purchase (including price, quality, availability, marketability, transportation and other conditions of purchase or sale).

Specificity
Assuming that a measure is a subsidy within the meaning of the SCM Agreement, it nevertheless is not subject to the SCM Agreement unless it has been specifically provided to an enterprise or industry or group of enterprises or industries. The basic principles is that a subsidy that distorts the allocation of resources within an economy should be subject discipline. Where a subsidy is widely available within an economy, such a distortion in the allocation of resources if presumed not to occur. Thus, only specific subsidies are subject to the SCM Agreement disciplines. There are four types of specificity within the meaning of the SCM Agreement:

Enterprise-specificity. A government targets a particular company or companies for subsidization; Industry-specificity. A government targets a particular sector or sectors for subsidization. Regional specificity - A government targets producers in specified parts of its territory for subsidization. Prohibited subsidies A government targets export goods or goods using domestic inputs for subsidization.

Prohibited subsidies: subsidies that require recipients to meet certain export targets, or to use domestic goods instead of imported goods. They are prohibited because they are specifically designed to distort international trade, and are therefore likely to hurt other countries trade. They can be challenged in the WTO dispute settlement procedure where they are handled under an accelerated timetable. If the dispute settlement procedure confirms that the subsidy is prohibited, it must be withdrawn immediately. Otherwise, the complaining country can take counter measures. If domestic producers are hurt by imports of subsidized products, countervailing duty can be imposed.

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Actionable subsidies: in this category the complaining country has to show that the subsidy has an adverse effect on its interests. Otherwise the subsidy is permitted. The agreement defines three types of damage they can cause. One countrys subsidies can hurt a domestic industry in an importing country. They can hurt rival exporters from another country when the two compete in third markets. And domestic subsidies in one country can hurt exporters trying to compete in the subsidizing countrys domestic market. If the Dispute Settlement Body rules that the subsidy does have an adverse effect, the subsidy must be withdrawn or its adverse effect must be removed. Again, if domestic producers are hurt by imports of subsidized products, countervailing duty can be imposed. Non- Actionable subsidies: The SCM Agreement creates three narrowly defined categories of subsidies, which are non-actionable, i.e. which cannot be challenged multilaterally, or is subject to countervailing action. These subsidies presumable are protected either because they are considered extremely unlikely to cause adverse effects or because they are considered to be of particular value and not to be discouraged. The three categories are:

Basic research and pre-competitive development subsidies. These subsidies cannot exceed a designated proportion of project costs and can only be used for certain expenditures in order to be non-actionable. Research and development subsidies in the civil aircraft sector do not benefit from non-actionable status. Assistance to disadvantaged regions. Regional aids are non-actionable provided that they are not limited to specific enterprises or industries within the region, that they are given pursuant to a general scheme of regional development, and that the region is disadvantaged by comparison with the Member as a whole in terms of objective criteria such as GNP per capita and unemployment. Assistance to adapt existing facilities to new environment requirements. Such assistance must be on a one-time basis, be limited to 20 per cent of adaption costs, and be available to all firms, which can adopt the new equipment and processes.

Subsidy programmes, which are notified to the Committee before they are implemented, are protected unless and until the Committee or arbitration body determines that they do not qualify for non-actionable status. Procedures for arbitration in this area were approved in June 1998. Subsidy programmes which have not been notified before implementation may be investigated by a panel or an investigation authority (in a CVD case) but if found to meet the criteria for non-actionability, shall be treated as nonactionable. Agricultural Subsidies: The agreement on Agricultural contains special rules regarding subsidies for agricultural products. The SCM Agreement does not prohibit export subsidies, which are consistent with the reduction commitments in the Agriculture Agreement, although they remain countervailable. Domestic supports consistent with the reduction commitments in the Agriculture Agreement are not actionable multilaterally, although they also may be subject to countervailing duties. Finally, domestic support within the green box of the Agricultural Agreement are neither actionable mutually nor are they subject to countervailing measures.

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Some of the disciplines are similar to those of the Anti-Dumping Agreement. Countervailing duty (the parallel of anti-dumping duty) can only be charged after the importing country has conducted a detailed investigation similar to that required for antidumping action. There are detailed rules for deciding whether a product is being subsidized (not always an easy calculation), criteria for determining whether imports of subsidized products are hurting (causing injury to) domestic industry, procedures for initiating and conducting investigations, and rules on the implementation and duration (normally five years) of countervailing measures. The subsidized exporter can also agree to raise its export prices as an alternative to its exports being charged countervailing duty. Subsidies may play an important role in developing countries and in the transformation of centrally-planned economies to market economies. Least-developed countries and developing countries with less than $1,000 per capita GNP are exempted from disciplines on prohibited export subsidies. Other developing countries are given until 2003 to get rid of their export subsidies. Least-developed countries must eliminate import-substitution subsidies (i.e. subsidies designed to help domestic production and avoid importing) by 2003 for other developing countries the deadline was 2000. Developing countries also receive preferential treatment if their exports are subject to countervailing duty investigations. For transition economies, prohibited subsidies had to be phased out by 2002.

Procedural rules:
Part V of the SCM Agreement contains detailed rules regarding the initiation and conduct of countervailing investigations, the imposition of preliminary and final measures, the use of undertakings, and the duration of measures. A key objective of these rules is to ensure that investigations are conducted in a transparent manner, that all interested parties have a full opportunity to defend their interests, and that investigating authorities adequately explain the bases for their determinations. A few of the more important innovations in the WTO SCM Agreement are identified below:

Standing The agreement defines in numeric terms the circumstances under which there is sufficient support from a domestic industry to justify initiation of an investigation. Preliminary Investigation: The Agreement ensures the conduct of a preliminary investigation before a preliminary measure can be imposed. Undertakings: The Agreements places limitations on the use of undertakings to settle CVD investigations, in order to avoid Voluntary Restraint Agreements or similar measures masquerading as undertakings. Sunset: The Agreement requires that a countervailing measure be terminated after five years unless it is determines that continuation of the measure is necessary to avoid the continuation or recurrence of subsidization and injury. Judicial review: The Agreement requires that Members create an independent tribunal to review the consistency of determination of the investigating authority with domestic law.

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Anti-Dumping and Countervailing Duties a closer look

Dumping and subsidies together with anti-dumping (AD) measures and countervailing duties (CVD) are often linked. An expert speaks of AD-CVD in one breath. Many countries handle the two issues under a single law, apply similar process to deal with them and give a single authority responsibility for investigations. Occasionally, the two WTO committees responsible for these issues meet jointly.

There are a number of similarities. The reaction to dumping and subsidies is often a special offsetting import tax (countervailing duty in the case of a subsidy). Like antidumping duty, countervailing duty is charged on products from specific countries and therefore it breaks the GATT principles of binding a tariff and treating trading partners equally (MFN). The agreements provide an escape clause, but they both also say that before imposing a duty, the importing country must conduct a detailed investigation that shows properly that domestic industry is hurt.

But there are also fundamental differences, and these are reflected in the agreements.

Dumping is an action by a company. With subsidies, it is the government or a government agency that acts, either by paying out subsidies directly or by requiring companies to subsidize certain customers.

But the WTO is an organization of countries and their governments. The WTO does not deal with companies and cannot regulate companies actions such as dumping. Therefore the Anti-Dumping Agreement only concerns the actions governments may take against dumping. With subsidies, governments act on both sides: they subsidize and they act against each others subsidies. Therefore the subsidies agreement disciplines both the subsidies and reactions.

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Issue Common to the Agreement on Subsidies and Countervailing Measures and the Anti Dumping Activities:
Industry Support Requirements: Currently, the ADA and ASCM require that an application for an investigation must: a) be supported by domestic producers whose collective output constitutes more than 50 percent of the total production of like products produced by that portion of the domestic industry expressing either support for or opposition to the application; and b) represent at least 25 percent of the total production of the like product produced by the domestic industry. There has been controversy over the past several years regarding whether the current industry support requirements as reflected in both the ADA and ASCM, are adequate. Certain countries will likely propose changes to the level to industry support required for an application to initiate a countervail or anti-dumping investigation. Proposals will likely also be made for new rules to ensure that the level of industry support for an application is objectively determined, free of direct or indirect government discretion.

Insignificant Margin of Dumping or Amount of Subsidy: The ASCM and the ADA require that an investigation be terminated with respect to certain goods, if the amount of subsidy or the margin of dumping is de minimis (i.e., insignificant). De minimis is defined in the Agreements as a subsidy of less than 1% of the export price, or a margin of dumping of less than 2% of the export price. In countervail investigations, for imports from developing country Members; de minimis is defined to be less than 2%, expressed as a percentage of the export price. Members will likely consider whether existing thresholds are appropriate both from a development and generic perspective.

Negligible volume level: The ADA requires that investigations be terminated with respect to goods of a country when the dumped imports from that country represent less than 3% of the total imports of the like products in the importing country, unless countries, whose dumped imports that individually account for less than 3%, collectively account for more than 7% of the total imports of like products in the importing country. The ASCM requires that an investigation be terminated if the volume of subsidized imports or the injury if negligible; however the ASCM does not define the term negligible, except in relation to imports from developing country Members, for which the volume of subsidized imports is negligible if they individually account for less than 4%, or collectively account for less than 9% of the total imports of like products in the importing country. Members will likely consider whether existing thresholds are appropriate both from a development and generic perspective.

Injury Issues: The provisions of Article 3 of the ADA and Article 15 of the ASCM, which concern the determination of injury and whether dumping or subsidizing caused such injury, have been the subject of numerous disputes. A range of issues are likely to be proposed for clarification or improvement including: the factors to be considered in determining whether an industry has suffered material injury and whether there are factors that must always be considered; the circumstances justifying a cumulative

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assessment of the effects of dumped or subsidized imports from more than one exporting country; the conditions of competition that are relevant to a determination of whether a cumulative injury assessment would be appropriate; the factors to be considered in determining whether a threat of material injury exists; and more detailed factors to be considered when establishing a causal linkage requirement between the dumped/ subsidized imports and material injury.

Public Interest and Lesser Duty: Articles 9.1 of the ADA and 19.2 of the ASCM establish the general principle that imposition of anti-dumping or countervailing duties is optional, even if all the requirements for imposition have been met, and establishes the desirability of the application of a lesser duty, i.e., less than the full margin of dumping or amount of subsidy. Several WTO Members, including Canada, have experience with lesser duty provisions. In Canada this has been done in the context of public interest considerations and we will be looking for other WTO members to adopt similar practices.

Duty Enforcement Methodologies: The ADA and ASCM provide for two basic approaches to duty assessment. In general terms, prospective enforcement involves the assessment of final duties when the goods are accounted for upon importation. Retrospective Assessment, on the other hand, involves the posting of deposits to cover estimated duties on individual import entries, with final duties being assessed in a subsequent review of those entries. The Agreements do not, however, provide detailed rules respecting how these methods are to be applied. Most Members employ a prospective system, which provides a measure of predictability for exporters and importers be affording them with the opportunity to sell the exported goods at a price that will not create a margin of dumping. The United States uses a retrospective approach, which assesses an estimated amount of duties at the time of importation, with final duty liability only being established in a subsequent administrative review, which is usually conducted on a yearly basis. The review can result in additional, unforeseen duty liability. As such, it may be useful to examine greater convergence between duty enforcement methodologies or the adoption of a single prospective method of duty assessment.

With regard to the Agreement on Subsidies and Countervailing Measures in the WTO, Venezuela had put forth a proposal that the subsidy measures implemented by developing countries to achieve legitimate goals such as regional growth, technology research and development funding, production diversification and development and implementation of environmentally sound methods of production be treated as nonactionable. The Doha Decision takes note off this proposal and places it among outstanding implementation issues on which the subsidies and countervailing Measures Committee must report to the Trade Negotiating Committee by the end of 2002. It urges members to exercise due restraint with respect to challenging such a measures in the interim.

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History for Dumping and anti-dumping measure Antidumping legislation arose at the end of the nineteenth century as a policy alternative to permanent rising of the tariffs and to meet special and temporary cases of dumping. Canada was the first country to initiate antidumping measures in 1904 against American firms dumping steel. Several commonwealth countries followed the example in the next ten years. The Sherman Act was a popular measure intended to curb price-fixing and monopolization by the emergent capitalists in the United States.

Between the two world wars League of National struggled unsuccessfully with questions regarding dumping and differential pricing. Therefore, in the post war efforts for devising rules for international trade through International Trade Organization and GATT the antidumping provisions found a place. Thus, the first multinational rules on antidumping were laid out, including the conditions under which individual countries were justified in taking defensive measures. These were finally incorporated in Article VI of GATT.

Article VI specifically condemned dumping, which it defined as the practice whereby the products of one country are introduced into the commerce of another country at less than the normal value of the product, if such action materially injured a domestic industry. In the event of dumping, a contracting party was given specific authorization to assess an antidumping duty of an amount not greater than the difference between the price in the importing country and the normal value of the product, in the ordinary course of trade in the exporter home market.

The dumping question came into life in Kennedy Round. United States, having introduced the subject of non-tariff barriers into the negotiations, was chagrined to find that the non-tariff barrier most often singled out by other countries was the US antidumping action. The Kennedy Round Antidumping Code was negotiated without advance authority by the Congress and in fact of strict reprimand from the Senate not to change the antidumping legislation in any way. It is settled law in United States that when an international agreement has the effect of changing existing domestic law, either directly, or by indirection through giving the law a meaning and a result, which Congress never intended, the agreement cannot be given effect unless it has been submitted to Congress for implementing legislation.

Antidumping duties have been described a curious hybrid of tariff ideas and price discrimination theories of antitrust laws. The provisions of GATT are designed to allow governments to take defensive actions to unfair merchant or governments practices in an exporting country. But if the defensive measure is overly large, it becomes a protectionist device in its own right. The problem of ascertaining the dividing line between fair and unfair actions in exporting countries, and defensive and protectionist retaliation in importing countries is not an easy one.

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8. Settling Dispute
8.1 Settling Dispute
Settling dispute in the fastest and effective way is often seen as one of the most important achievement of the WTO Agreement. While the GATT also contained provisions for conflict resolution, the DSU contains a number of innovations. In particular, it is generally seen as being superior to its predecessors in terms of the clarity of its provisions concerning procedural matters, and its provisions establishing a monitoring scheme to overview implementation. Recently, however, criticism has been voiced concerning the possibilities for poorer countries to take full advantages of the system.

8.2 A unique contribution

Dispute settlement is the central pillar of the multilateral trading system, and the WTOs unique contribution to the stability of the global economy. Without a means of settling disputes, the rules-based system would be less effective because the rules could not be enforced. The WTOs procedure underscores the rule of law, and it makes the trading system more secure and predictable. The system is based on clearly-defined rules, with timetables for completing a case. First rulings are made by a panel and endorsed (or rejected) by the WTOs full membership. Appeals based on points of law are possible. However, the point is not to pass judgement. The priority is to settle disputes, through consultations if possible. By January 2008, only about 136 of the nearly 369 cases had reached the full panel process. Most of the rest have either been notified as settled out of court or remain in a prolonged consultation phase some since 1995.

8.3 Principles: equitable, fast, effective, mutually acceptable

Disputes in the WTO are essentially about broken promises. WTO members have agreed that if they believe fellow-members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally. That means abiding by the agreed procedures, and respecting judgements. A dispute arises when one country adopts a trade policy measure or takes some action that one or more fellow-WTO members considers to be breaking the WTO agreements, or to be a failure to live up to obligations. A third group of countries can declare that they have an interest in the case and enjoy some rights. A procedure for settling disputes existed under the old GATT, but it had no fixed timetables, rulings were easier to block, and many cases dragged on for a long time inconclusively. The Uruguay Round agreement introduced a more structured process with more clearly defined stages in the procedure. It introduced greater discipline for the length of time a case should take to be settled, with flexible deadlines set in various

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stages of the procedure. The agreement emphasizes that prompt settlement is essential if the WTO is to function effectively. It sets out in considerable detail the procedures and the timetable to be followed in resolving disputes. If a case runs its full course to a first ruling, it should not normally take more than about one year 15 months if the case is appealed. The agreed time limits are flexible, and if the case is considered urgent (e.g. if perishable goods are involved), it is accelerated as much as possible. The Uruguay Round agreement also made it impossible for the country losing a case to block the adoption of the ruling. Under the previous GATT procedure, rulings could only be adopted by consensus, meaning that a single objection could block the ruling. Now, rulings are automatically adopted unless there is a consensus to reject a ruling any country wanting to block a ruling has to persuade all other WTO members (including its adversary in the case) to share its view. Although much of the procedure does resemble a court or tribunal, the preferred solution is for the countries concerned to discuss their problems and settle the dispute by themselves. The first stage is therefore consultations between the governments concerned, and even when the case has progressed to other stages, consultation and mediation are still always possible.

8.4 Main features of the DSU:

It played the Central Role in the Security and Predictability of WTO Multilateral Trading System Rule- Based System Exclusive Application of WTO Rules on Dispute Settlements Uniform application to all WTO Agreements Preserving the Rights and Obligations of WTO Members The Central Concept of Nullification or impairment

For settlement of dispute only WTO members can take part in dispute settlement. WTO dispute settlement is not open to the WTO observers, other international organizations, non-governmental organizations, local governments or private persons. For the case related to the same matter two or more members may request the establishment of a panel relate to the same matter, in which case a single panel may be establishes to examine these complaints.

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8.5 How long it take to settle a dispute?

These approximate periods for each stage of a dispute settlement procedure are target figures the agreement is flexible. In addition, the countries can settle their dispute themselves at any stage. Totals are also approximate. 60 days 45 days 6 months 3 weeks 60 days Total = 1 year 60-90 days 30 days Total = 1y 3m Consultations, mediation, etc Panel set up and panelists appointed Final panel report to parties Final panel report to WTO members Dispute Settlement Body adopts report (if no appeal) (without appeal) Appeals report Dispute Settlement Body adopts appeals report (with appeal)

8.6 How are disputes settled?

Settling disputes is the responsibility of the Dispute Settlement Body (the General Council in another guise), which consists of all WTO members. The Dispute Settlement Body has the sole authority to establish panels of experts to consider the case, and to accept or reject the panels findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has the power to authorize retaliation when a country does not comply with a ruling. First stage: consultation (up to 60 days). Before taking any other actions the countries in dispute have to talk to each other to see if they can settle their differences by themselves. If that fails, they can also ask the WTO director-general to mediate or try to help in any other way. Second stage: the panel (up to 45 days for a panel to be appointed, plus 6 months for the panel to conclude). If consultations fail, the complaining country can ask for a panel to be appointed. The country in the dock can block the creation of a panel once, but when the Dispute Settlement Body meets for a second time, the appointment can no longer be blocked (unless there is a consensus against appointing the panel). Officially, the panel is helping the Dispute Settlement Body make rulings or recommendations. But because the panels report can only be rejected by consensus in the Dispute Settlement Body, its conclusions are difficult to overturn. The panels findings have to be based on the agreements cited. The panels final report should normally be given to the parties to the dispute within six months. In cases of urgency, including those concerning perishable goods, the deadline is shortened to three months.

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The agreement describes in some detail how the panels are to work. The main stages are: Before the first hearing: each side in the dispute presents its case in writing to the panel. First hearing: the case for the complaining country and defence: the complaining country (or countries), the responding country, and those that have announced they have an interest in the dispute, make their case at the panels first hearing. Rebuttals: the countries involved submit written rebuttals and present oral arguments at the panels second meeting. Experts: if one side raises scientific or other technical matters, the panel may consult experts or appoint an expert review group to prepare an advisory report. First draft: the panel submits the descriptive (factual and argument) sections of its report to the two sides, giving them two weeks to comment. This report does not include findings and conclusions. Interim report: The panel then submits an interim report, including its findings and conclusions, to the two sides, giving them one week to ask for a review. Review: The period of review must not exceed two weeks. During that time, the panel may hold additional meetings with the two sides. Final report: A final report is submitted to the two sides and three weeks later, it is circulated to all WTO members. If the panel decides that the disputed trade measure does break a WTO agreement or an obligation, it recommends that the measure be made to conform to WTO rules. The panel may suggest how this could be done. The report becomes a ruling: The report becomes the Dispute Settlement Bodys ruling or recommendation within 60 days unless a consensus rejects it. Both sides can appeal the report (and in some cases both sides do).

8.6 (i) Appeals

Either side can appeal a panels ruling. Sometimes both sides do so. Appeals have to be based on points of law such as legal interpretation they cannot reexamine existing evidence or examine new issues. Each appeal is heard by three members of a permanent seven-member Appellate Body set up by the Dispute Settlement Body and broadly representing the range of WTO membership. Members of the Appellate Body have four-year terms. They have to be individuals with recognized standing in the field of law and international trade, not affiliated with any government.

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The appeal can uphold, modify or reverse the panels legal findings and conclusions. Normally appeals should not last more than 60 days, with an absolute maximum of 90 days. The Dispute Settlement Body has to accept or reject the appeals report within 30 days and rejection is only possible by consensus.

8.6 (ii) The case has been decided: what next?

Go directly to jail. Do not pass Go, do not collect . Well, not exactly. But the sentiments apply. If a country has done something wrong, it should swiftly correct its fault. And if it continues to break an agreement, it should offer compensation or suffer a suitable penalty that has some bite. Even once the case has been decided, there is more to do before trade sanctions (the conventional form of penalty) are imposed. The priority at this stage is for the losing defendant to bring its policy into line with the ruling or recommendations. The dispute settlement agreement stresses that prompt compliance with recommendations or rulings of the DSB [Dispute Settlement Body] is essential in order to ensure effective resolution of disputes to the benefit of all Members. If the country that is the target of the complaint loses, it must follow the recommendations of the panel report or the appeals report. It must state its intention to do so at a Dispute Settlement Body meeting held within 30 days of the reports adoption. If complying with the recommendation immediately proves impractical, the member will be given a reasonable period of time to do so. If it fails to act within this period, it has to enter into negotiations with the complaining country (or countries) in order to determine mutually-acceptable compensation for instance, tariff reductions in areas of particular interest to the complaining side. If after 20 days, no satisfactory compensation is agreed, the complaining side may ask the Dispute Settlement Body for permission to impose limited trade sanctions (suspend concessions or obligations) against the other side. The Dispute Settlement Body must grant this authorization within 30 days of the expiry of the reasonable period of time unless there is a consensus against the request. In principle, the sanctions should be imposed in the same sector as the dispute. If this is not practical or if it would not be effective, the sanctions can be imposed in a different sector of the same agreement. In turn, if this is not effective or practicable and if the circumstances are serious enough, the action can be taken under another agreement. The objective is to minimize the chances of actions spilling over into unrelated sectors while at the same time allowing the actions to be effective. In any case, the Dispute Settlement Body monitors how adopted rulings are implemented. Any outstanding case remains on its agenda until the issue is resolved.

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8.6 (iii) More cases can be good news

If the courts find themselves handling an increasing number of criminal cases, does that mean law and order is breaking down? Not necessarily. Sometimes it means that people have more faith in the courts and the rule of law. They are turning to the courts instead of taking the law into their own hands. For the most part, that is what is happening in the WTO. No one likes to see countries quarrel. But if there are going to be trade disputes anyway, it is healthier that the cases are handled according to internationally agreed rules. There are strong grounds for arguing that the increasing number of disputes is simply the result of expanding world trade and the stricter rules negotiated in the Uruguay Round; and that the fact that more are coming to the WTO reflects a growing faith in the system.

8.6 (iv) Panels

Panels are like tribunals. But unlike in a normal tribunal, the panellists are usually chosen in consultation with the countries in dispute. Only if the two sides cannot agree does the WTO director-general appoint them. Panels consist of three (possibly five) experts from different countries who examine the evidence and decide who is right and who is wrong. The panels report is passed to the Dispute Settlement Body, which can only reject the report by consensus. Panelists for each case may be chosen from an indicative list of well-qualified candidates nominated by WTO Members, although others may be considered as well, including those who have formerly served as panelist. Panelists serve in their individual capacities. They cannot receive instructions from any government. The indicative list is maintained by the Secretariat and periodically revised according to any modifications or additions submitted by Members.

8.6 (v) the panel processes

The various stages a dispute can go through in the WTO. At all stages, countries in dispute are encouraged to consult each other in order to settle out of court. At all stages, the WTO director-general are available to offer his good offices, to mediate or to help achieve conciliation.

Note: some specified times are maximums, some are minimums, some binding, some not

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8.6 (vi) Case study: the timetable in practice

On 23 January 1995, Venezuela complained to the Dispute Settlement Body that the United States was applying rules that discriminated against gasoline imports, and formally requested consultations with the United States. Just over a year later (on 29 January 1996) the dispute panel completed its final report. (By then, Brazil had joined the case, lodging its own complaint in April 1996. The same panel considered both complaints.) The United States appealed. The Appellate Body completed its report, and the Dispute Settlement Body adopted the report on 20 May 1996, one year and four months after the complaint was first lodged. The United States and Venezuela then took six and a half months to agree on what the United States should do. The agreed period for implementing the solution was 15 months from the date the appeal was concluded (20 May 1996 to 20 August 1997). The case arose because the United States applied stricter rules on the chemical characteristics of imported gasoline than it did for domestically-refined gasoline. Venezuela (and later Brazil) said this was unfair because US gasoline did not have to meet the same standards it violated the national treatment principle and could not be justified under exceptions to normal WTO rules for health and environmental conservation measures. The dispute panel agreed with Venezuela and Brazil. The appeal report upheld the panels conclusions (making some changes to the panels legal interpretation). The United States agreed with Venezuela that it would amend its regulations within 15 months and on 26 August 1997 it reported to the Dispute Settlement Body that a new regulation had been signed on 19 August.

Time (0 = start of case) -5 years -4 months 0 +1 month +2 months +2 months +3 months +6 months +11 months

Target/ actual period

Date

Action

1990 September 1994 23 January 1995 60 days 24 February 1995 25 March 1995 10 April 1995 30 days 28 April 1995 9 months (target is 10-12 July and 13-15 6-9) July 1995 11 December 1995

US Clean Air Act amended US restricts gasoline imports under Clean Air Act Venezuela complains to Dispute Settlement Body, asks for consultation with US Consultations take place. Fail. Venezuela asks Dispute Settlement Body for a panel Dispute Settlement Body agrees to appoint panel. US does not block. (Brazil starts complaint, requests consultation with US.) Panel appointed. (31 May, panel assigned to Brazilian complaint as well) Panel meets Panel gives interim report to US, Venezuela and Brazil for comment

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+1 year +1 year, 1 month +1 year, 3 months +1 year, 4 months +1 year, 10 months +1 year, 11 months +2 years, 7 months 60 days 30 days

29 January 1996 21 February 1996 29 April 1996 20 May 1996 3 December 1996 9 January 1997 19-20 August 1997

Panel circulates final report to members US appeals Appellate Body submits report Dispute Settlement Body adopts panel and appeal reports US and Venezuela agree on what US should do (implementation period is 15 months from 20 May) US makes first of monthly reports to Dispute Settlement Body on status of implementation US signs new regulation (19th). End of agreed implementation period (20th)

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9. The environment: a specific concern

The WTO has no specific agreement dealing with the environment. However, the WTO agreements confirm governments right to protect the environment, provided certain conditions are met, and a number of them include provisions dealing with environmental concerns. The objectives of sustainable development and environmental protection are important enough to be stated in the preamble to the Agreement Establishing the WTO. The increased emphasis on environmental policies is relatively recent in the 60-year history of the multilateral trading system. At the end of the Uruguay Round in 1994, trade ministers from participating countries decided to begin a comprehensive work programme on trade and environment in the WTO. They created the Trade and Environment Committee. This has brought environmental and sustainable development issues into the mainstream of WTO work. The 2001 Doha Ministerial Conference kicked off negotiations in some aspects of the subject.

10. The committee: broad-based responsibility

The committee has a broad-based responsibility covering all areas of the multilateral trading system goods, services and intellectual property. Its duties are to study the relationship between trade and the environment, and to make recommendations about any changes that might be needed in the trade agreements. The committees work is based on two important principles: The WTO is only competent to deal with trade. In other words, in environmental issues its only task is to study questions that arise when environmental policies have a significant impact on trade. The WTO is not an environmental agency. Its members do not want it to intervene in national or international environmental policies or to set environmental standards. Other agencies that specialize in environmental issues are better qualified to undertake those tasks. If the committee does identify problems, its solutions must continue to uphold the principles of the WTO trading system. More generally WTO members are convinced that an open, equitable and nondiscriminatory multilateral trading system has a key contribution to make to national and international efforts to better protect and conserve environmental resources and promote sustainable development. This was recognized in the results of the 1992 UN Conference on Environment and Development in Rio (the Earth Summit) and its 2002 successor, the World Summit on Sustainable Development in Johannesburg. The committees work programme focuses on 10 areas. Its agenda is driven by proposals from individual WTO members on issues of importance to them. The following sections outline some of the issues, and what the committee has concluded so far:

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11. WTO and environmental agreements: how are they related?

How do the WTO trading system and green trade measures relate to each other? What is the relationship between the WTO agreements and various international environmental agreements and conventions? There are about 200 international agreements (outside the WTO) dealing with various environmental issues currently in force. They are called multilateral environmental agreements (MEAs). About 20 of these include provisions that can affect trade: for example they ban trade in certain products, or allow countries to restrict trade in certain circumstances. Among them are the Montreal Protocol for the protection of the ozone layer, the Basel Convention on the trade or transportation of hazardous waste across international borders, and the Convention on International Trade in Endangered Species (CITES). Briefly, the WTOs committee says the basic WTO principles of non-discrimination and transparency do not conflict with trade measures needed to protect the environment, including actions taken under the environmental agreements. It also notes that clauses in the agreements on goods, services and intellectual property allow governments to give priority to their domestic environmental policies. The WTOs committee says the most effective way to deal with international environmental problems is through the environmental agreements. It says this approach complements the WTOs work in seeking internationally agreed solutions for trade problems. In other words, using the provisions of an international environmental agreement is better than one country trying on its own to change other countries environmental policies (see shrimp-turtle and dolphin-tuna case studies). The committee notes that actions taken to protect the environment and having an impact on trade can play an important role in some environmental agreements, particularly when trade is a direct cause of the environmental problems. But it also points out that trade restrictions are not the only actions that can be taken, and they are not necessarily the most effective. Alternatives include: helping countries acquire environmentallyfriendly technology, giving them financial assistance, providing training, etc. The problem should not be exaggerated. So far, no action affecting trade and taken under an international environmental agreement has been challenged in the GATT-WTO system. There is also a widely held view that actions taken under an environmental agreement are unlikely to become a problem in the WTO if the countries concerned have signed the environmental agreement, although the question is not settled completely. The Trade and Environment Committee is more concerned about what happens when one country invokes an environmental agreement to take action against another country that has not signed the environmental agreement.

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12. Disputes: where should they be handled?

Suppose a trade dispute arises because a country has taken action on trade (for example imposed a tax or restricted imports) under an environmental agreement outside the WTO and another country objects. Should the dispute be handled under the WTO or under the other agreement? The Trade and Environment Committee says that if a dispute arises over a trade action taken under an environmental agreement, and if both sides to the dispute have signed that agreement, then they should try to use the environmental agreement to settle the dispute. But if one side in the dispute has not signed the environment agreement, then the WTO would provide the only possible forum for settling the dispute. The preference for handling disputes under the environmental agreements does not mean environmental issues would be ignored in WTO disputes. The WTO agreements allow panels examining a dispute to seek expert advice on environmental issues.

13. INTERNATIONAL COMMERCIAL ARBITRATION

Commercial arbitration has been going through an incredible growth over the last decades and become a hot-topic. An entire industry has developed around alternative dispute resolution. Given the dramatic increase in the international trade and disputes arising there from, international arbitration institutions have flourished, many jurisdictions have passed new or updated international arbitration statutes, arbitration jurisprudence has increased manifold, and international arbitration textbooks and courses have appeared in law schools. U. S. courts have abandoned their traditional distrust of international arbitration, holding that the international nature of contracts constitute a reason to recognize and enforce arbitration clauses that might not be held valid in a purely domestic context.

Unlike mediation, which attempts to help parties voluntarily resolve their disputes; international commercial arbitration is a binding dispute resolution mechanism. The parties must agree it to, either at the time of drafting of a contract or something thereafter, usually after a dispute has arisen. With the exception of International Centre for the Settlement of Investment Disputes (ICSID) arbitration, which always involves a sovereign entity or constituent subdivision or agency thereof, international commercial arbitration takes place between parties(including, perhaps, state-owned companies acting in a non-sovereign capacity).

In its basic structure, international commercial arbitration resembles the usual litigation process. Parties make claims and defenses, submit written pleadings, and call witnesses or submit their statements. Upon the completion of the arbitration, the arbitral tribunal issues its award. With the notable exception of ICSID arbitration awards, which may be annulled by a special ICSID ad hoc committee, most arbitral awards, which may be annulled by a special ICSID ad hoc committee, most arbitral awards are considered final and binding on the parties. Whether and on what extent the award is reasoned (i.e., contains a doctrinal justification of the result) and whether dissenting opinions are

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rendered very according to the arbitral rules used and the advantages or disadvantages of having a reasoned award in the jurisdiction(s) where the award may be enforced. The awards need not be made public, and, technically at least, are not binding precedent for future arbitral tribunals.

International arbitration differs from international litigation in that arbitrating parties determine to a large extent what procedural rules will govern the resolution of their dispute, and who will decide the dispute. In the context of international trade in commodities, disputes are often resolved within the context of trade organizations and their standards. In ad hoc arbitration, the parties negotiate procedural rules directly, either before or after a dispute have arisen, then conduct the arbitration pursuant to those rules. Alternatively, the parties may adopt the arbitration rules developed by the United Nations Commission on International Trade Law (UNCITRAL). The UNCITRAL rules address many of the same issues, as do the institutional rules discussed below, yet, by them, do not provide the administrative apparatus (and resulting expense) connected with institutional arbitration.

Probably more common than ad hoc arbitrations are those run under the auspices of an arbitral institution. The oldest and perhaps best known of these institutions is the International Chember of Commerce (ICC), located in Paris. The American Arbitration Association (AAA), based in New York but with affiliates throughout the United States, also has become increasingly active in administering international arbitration. It has concluded agreements with many foreign arbitral institutions, created supplementary rules for international arbitrations, and has allowed parties to conduct AAA arbitration under the UNCITRAL rules. Over well-established institutions include the London Court of International Arbitration and the Arbitration Institute of the Stockholm Chamber of Commerce; newer institutions include those in Singapore and Vancouver. The Permanent Court of International Arbitration has recently updated its rules and prepared to act more along the lines of the ICC and AAA.

These institutions do not themselves decide arbitration cases. The arbitrations often take place not in the home city of the institution, but at a location designated by the parties or arbitrators. Rather, for a fee, arbitral institutions administer arbitrations including receiving and distributing pleadings, and perhaps appointing arbitrators or reviewing an award for technical accuracy usually in connection with a decision by the parties to use the arbitration rules of the institution. These rules regulate such issues as the choice of arbitrators, the process of replacing an ill or deceased arbitrator, challenges to arbitrators for lack of independence, how and when parties file their pleadings, provisional remedies, the power of the arbitrators to hear witnesses, language(s) of the proceeding, evidentiary issues, and the drafting and signing of the arbitral award. Most institutional rules allow the parties to modify the rules to some extent, and to fill the gaps where the rules are silent. Parties thus look to the institution and its rules to resolve issues that are often not negotiated by the parties before they sign a contract.

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While the rules of the various arbitral institutions contain similar provisions on many issues, there are important differences among the various institutional rules. Take, for example, the situation in which two parties have agreed that arbitration is to be before a three- arbitrator tribunal. The ICC rules generally provide that each party nominates an arbitrator, with the third arbitrator being chosen by an ICC body unless the parties have provided that the party- appointed arbitrators agree on a third arbitrator within a fixed time- period. The UNCITRAL rules provide for a similar procedure, except that when the party- appointed arbitrators cannot agree either on the third, presiding arbitrator or on an institution to appoint that arbitrator, the Secretary- General of the Permanent Court of Arbitration at The Hague, upon application by a party, chooses the appointing authority for that arbitrators.

By contrast, the AAA International Arbitrations Rules provide that the parties may agree on any procedure for appointing arbitrators. However, if within sixty days after the commencement of the arbitration the parties have not agreed on the procedure for or the designation of the arbitrators, the AAA administrator may, upon written request by a party, appoint the arbitrator(s) or perform all functions provided for in a procedure agree to by the parties. Interestingly, the standard AAA Commercial Arbitration Rules, in cases in which the parties have not agreed on the tribunal or its method of selection, contain somewhat different default procedures for the choice of arbitrators. In such cases, the AAA provides the parties with a list of potential arbitrators. The parties may then strike names from the list and rank remaining names in order of preference, with the AAA choosing from the list any arbitrators on which the parties cannot agree.

The various institutional rules also differ in their regulation of the arbitral proceedings, ICC arbitrations must proceed within the framework of a document, drawn up by the arbitrator(s), knows as the Terms of Reference. The ICC rules also contain voluntary procedures for the appointment of a referee empowered to grant provisional or conservatory measures in advance of the constitution of a tribunal. No similar procedures exist case under the AAA International or the UNCITRAL rules.

Regardless of whether arbitration is governed by ad hoc or institutional arbitration rules, it is also subject to municipal law. Since international arbitration is a creature of contract, an arbitration agreement may specify which jurisdictions substantive law will govern the rights and duties of the parties in connection with the agreement, or it may allow the arbitrators to act as amiable compositors or to decide disputed matters ex aequo et bono (according to justice and fairness, rather than specific legal rules). Of course, as with any contractual clause, an arbitral choice-of-law clause may not be used to avoid otherwiseapplicable mandatory municipal law. In addition, virtually all jurisdictions consider disputes in some subject areas of the law inappropriate for resolution by arbitration. Those subject areas vary greatly from country to country, and often reflect the countrys

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sense of what is particularly vital to its national legal interests. For example, under French law, bankruptcy matters are inarbitrable.

Municipal procedural law governs international arbitrations also, most frequently by the law of the jurisdiction in which the arbitral tribunal sits. This law, knows as the lex loci arbitri, may be crucial in resolving procedural issues that arise. Thus, arbitral tribunals often meet in a jurisdiction with an arbitration law that is both developed and supportive of arbitration as a dispute resolution mechanism.

In the United States, both state and federal law govern international arbitration. Many states have their own state statutes on arbitration generally. Whereas a few states, such as New York, drafted original arbitration laws, many states have adopted arbitration laws based on the Uniform Arbitration Act, itself modeled on the Federal Arbitration Act. In addition, several states, including Florida, California, Georgia, Texas and Connecticut have adopted special statues for international arbitration. The passage of these statutes, which are based in whole or in part on the UNCITRAL arbitration rules, often was motivated by a desire to attract international arbitration, and the business and revenue connected with it, to the state. The Federal Arbitration Act (FAA) governs arbitrations involving transactions in interstate or foreign commerce. It is relatively narrow statute that focuses on the relationship of the courts to the arbitral process. Chapter 1 of the FAA defines the maritime and commerce transactions to which the FAA applies, addresses such issues as stays of litigation during arbitration and proceedings to compel arbitration, court appointment of arbitrators and enforcement of arbitrators subpoenas, and enforcement, modification, correction, or vacatur of arbitral awards.

In overcoming legislative and judicial hostility to arbitration agreements, the FAA and interpretative jurisprudence have established a broad principle of enforceability of arbitration clauses. The FAA is applicable in both state and federal courts; its reach is as expansive as that of the Commerce Clause. The recent United States Supreme Court decisions of Allied-Bruce Terminix Companies, Inc. v. Dobson and Doctors Associates, Inc. v. Casarotto have emphasized that in all cases involving interstate commerce, the FAA preempts conflicting state law. Thus, while the FAA allows applicable state-law contract defenses such as fraud, duress, or unconscionability to be used to invalidate arbitration agreements, courts are precluded from invalidating those agreements under state law that required that an arbitration provision be in large print on the first page of a contract would conflict with and thus be preempted by the FAA.

Upon the completion of an arbitration, the winning party often seeks judicial enforcement of the arbitral award. In the context of international arbitration, enforcement frequently occurs within the framework of a bilateral or multilateral treaty. The most important of

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these is the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, frequently known as the New York Convention. In force for some 109 countries, including the United States increased the ease of enforcing international arbitral awards, thus strengthening the international arbitral regime. Chapter 2 of the FAA provides U.S. implementing legislation for the Convention.

The basic feature of the Convention is that signatory states agree to recognize and enforce agreements in writing to submit issues to arbitration, and to enforce arbitral awards based upon those agreements. A party need not go to the court at the seat of the arbitral tribunal in order to have an arbitral awards recognized in a judgment. Rather, the moving party need supply only the award and the agreement upon which it was based, and fulfill certain authentication and translation requirements for those documents, in the jurisdiction in which recognition or enforcement is sought.

The Convention also severely limits the reasons for which recognition and enforcement of an arbitral award may be refused. These reasons include: a party lacked capacity under applicable law, the agreement to arbitrate was invalid under the law chosen by the parties or the law of the country where the award was made, parties were not given proper notification of the arbitral proceeding, the arbitration was not conducted in accordance with the arbitration agreement or with applicable law, the award addressed matters beyond the scope of the agreement to arbitrate, the subject matter of the dispute was not capable of settlement by arbitration in the enforcing country, or the recognition and enforcement of the award would violate the enforcing countrys public policy.

Three aspects of the scope of the Convention must be mentioned. First, the Convention, as implemented by the United States, applies both to (a) arbitral awards made outside of the United States, and (b) awards made in the United States, but which either do not arise out of a relationship involving property located abroad or performance abroad, or which has some other reasonable relation to one or more foreign countries.

Second, many countries, including the United States, have made both the commercial and reciprocity reservations to the Convention, meaning that the Convention applies only to awards defined as commercial by the enforcing state, and made in another state party.

Finally, the Convention applies to both recognition and enforcement of foreign arbitral awards, Enforcement of an award involves the taking of an award by a successful claimant into national courts, whereas a successful defendant in an arbitration proceeding may have the arbitral award recognized in other jurisdictions in order to prevent further court claims by the losing arbitration claimant.

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U.S. Courts generally have interpreted the Covention in keeping with the Conventions goals, thus making the enforcement of international arbitral awards quicker and easier than before. The very ratification of the Convention by the United States has played a role in the development of the ever-more-favorable stance of the U.S. courts vis--vis international arbitration.

The strengthening of the international arbitral system has created many reasons for parties to choose international arbitration over court litigation. Parties often prefer a neutral dispute resolution forum, such that no party need submit to the jurisdiction of the courts of another partys home nation. In many cases, the parties may choose their own judge(s), who may come from a neutral jurisdiction, who often have expertise in the field in question, and who, barring illness or death, virtually always decide a case from beginning to end (thus eliminating the possibility of having different judges hearing different motions or other aspects of a complex lawsuit). Independent of court backlogs, the parties, in conjunction with the arbitrators, set their own schedule, and follow their own procedural rules. The arbitration proceedings are, at least in principle, non-public, thus allowing parties, especially those with long-standing relationships, to resolve their disputes away from public scrutiny.

Whether international arbitration is cheaper than international litigation is a hotly debated issue, and depends upon a number of factors. Whereas judges are paid by the state, and a single arbitrator in a smaller matter may serve gratuitously, each arbitrator of the three-arbitrator panel typical of a large arbitration may demand relatively high fees for all time spent in connection with the arbitration, including reading pleadings and documents, traveling to the site of the arbitration, writing the awards, etc. The number of parties involved, the amount in controversy, and the willingness of the parties to accept the arbitral award immediately, rather than attempting to challenge it in the courts, may also determine the ultimate cost-effectiveness of international arbitration vis-avis international litigation.

Some observers find that the increase in popularity in international arbitration carries with it seeds of the systems own demise. The claim is that as international arbitration has moved beyond those parties that traditionally used it, viz., parties to trade in commodities, parties with long-standing relationships, etc. arbitration has become simply litigation before a different type of tribunal. As a result, the process has become more litigious and less a true alternative to national court litigation. The future of international arbitration may well depend, at least in part, on the ability of arbitrators, signatories to arbitration agreements, and courts to maintain the integrity of the international arbitral process.

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14. Case Study

14.1 A WTO dispute: The shrimp-turtle case
This was a case brought by India, Malaysia, Pakistan and Thailand against the US. The appellate and panel reports were adopted on 6 November 1998. The official title is United States Import Prohibition of Certain Shrimp and Shrimp Products, the official WTO case numbers are 58 and 61. What was it all about? Seven species of sea turtles have been identified. They are distributed around the world in subtropical and tropical areas. They spend their lives at sea, where they migrate between their foraging and nesting grounds. Sea turtles have been adversely affected by human activity, either directly (their meat, shells and eggs have been exploited), or indirectly (incidental capture in fisheries, destroyed habitats, polluted oceans). In early 1997, India, Malaysia, Pakistan and Thailand brought a joint complaint against a ban imposed by the US on the importation of certain shrimp and shrimp products. The protection of sea turtles was at the heart of the ban. The US Endangered Species Act of 1973 listed as endangered or threatened the five species of sea turtles that occur in US waters, and prohibited their take within the US, in its territorial sea and the high seas. (Take means harassment, hunting, capture, killing or attempting to do any of these.) Under the act, the US required US shrimp trawlers to use turtle excluder devices (TEDs) in their nets when fishing in areas where there is a significant likelihood of encountering sea turtles. Section 609 of US Public Law 101-102, enacted in 1989, dealt with imports. It said, among other things, that shrimp harvested with technology that may adversely affect certain sea turtles may not be imported into the US unless the harvesting nation was certified to have a regulatory programme and an incidental take-rate comparable to that of the US, or that the particular fishing environment of the harvesting nation did not pose a threat to sea turtles. In practice, countries that had any of the five species of sea turtles within their jurisdiction, and harvested shrimp with mechanical means, had to impose on their fishermen requirements comparable to those borne by US shrimpers if they wanted to be certified to export shrimp products to the US. Essentially this meant the use of TEDs at all times. The ruling In its report, the Appellate Body made clear that under WTO rules, countries have the right to take trade action to protect the environment (in particular, human, animal or plant

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life and health) and endangered species and exhaustible resources). The WTO does not have to allow them this right. It also said measures to protect sea turtles would be legitimate under GATT Article 20 which deals with various exceptions to the WTOs trade rules, provided certain criteria such as non-discrimination were met. The US lost the case, not because it sought to protect the environment but because it discriminated between WTO members. It provided countries in the western hemisphere mainly in the Caribbean technical and financial assistance and longer transition periods for their fishermen to start using turtle-excluder devices. It did not give the same advantages, however, to the four Asian countries (India, Malaysia, Pakistan and Thailand) that filed the complaint with the WTO. The ruling also said WTO panels may accept amicus briefs (friends-of-the-court submissions) from NGOs or other interested parties. What we have not decided ... This is part of what the Appellate Body said: 185. In reaching these conclusions, we wish to underscore what we have not decided in this appeal. We have not decided that the protection and preservation of the environment is of no significance to the Members of the WTO. Clearly, it is. We have not decided that the sovereign nations that are Members of the WTO cannot adopt effective measures to protect endangered species, such as sea turtles. Clearly, they can and should. And we have not decided that sovereign states should not act together bilaterally, plurilaterally or multilaterally, either within the WTO or in other international fora, to protect endangered species or to otherwise protect the environment. Clearly, they should and do. 186. What we have decided in this appeal is simply this: although the measure of the United States in dispute in this appeal serves an environmental objective that is recognized as legitimate under paragraph (g) of Article XX [i.e. 20] of the GATT 1994, this measure has been applied by the United States in a manner which constitutes arbitrary and unjustifiable discrimination between Members of the WTO, contrary to the requirements of the chapeau of Article XX. For all of the specific reasons outlined in this Report, this measure does not qualify for the exemption that Article XX of the GATT 1994 affords to measures which serve certain recognized, legitimate environmental purposes but which, at the same time, are not applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade. As we emphasized in United States Gasoline [adopted 20 May 1996, WT/DS2/AB/R, p. 30], WTO Members are free to adopt their own policies aimed at protecting the environment as long as, in so doing, they fulfill their obligations and respect the rights of other Members under the WTO Agreement.

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14.2 A GATT dispute: The tuna-dolphin dispute

This case still attracts a lot of attention because of its implications for environmental disputes. It was handled under the old GATT dispute settlement procedure. Key questions are: can one country tell another what its environmental regulations should be? and do trade rules permit action to be taken against the method used to produce goods (rather than the quality of the goods themselves)? What was it all about? In eastern tropical areas of the Pacific Ocean, schools of yellowfin tuna often swim beneath schools of dolphins. When tuna is harvested with purse seine nets, dolphins are trapped in the nets. They often die unless they are released. The US Marine Mammal Protection Act sets dolphin protection standards for the domestic American fishing fleet and for countries whose fishing boats catch yellowfin tuna in that part of the Pacific Ocean. If a country exporting tuna to the United States cannot prove to US authorities that it meets the dolphin protection standards set out in US law, the US government must embargo all imports of the fish from that country. In this dispute, Mexico was the exporting country concerned. Its exports of tuna to the US were banned. Mexico complained in 1991 under the GATT dispute settlement procedure. The embargo also applies to intermediary countries handling the tuna en route from Mexico to the United States. Often the tuna is processed and canned in an one of these countries. In this dispute, the intermediary countries facing the embargo were Costa Rica, Italy, Japan and Spain, and earlier France, the Netherlands Antilles, and the United Kingdom. Others, including Canada, Colombia, the Republic of Korea, and members of the Association of Southeast Asian Nations (ASEAN), were also named as intermediaries.

The panel
Mexico asked for a panel in February 1991. A number of intermediary countries also expressed an interest. The panel reported to GATT members in September 1991. It concluded: That the US could not embargo imports of tuna products from Mexico simply because Mexican regulations on the way tuna was produced did not satisfy US regulations. (But the US could apply its regulations on the quality or content of the tuna imported.) This has become known as a product versus process issue.

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that GATT rules did not allow one country to take trade action for the purpose of attempting to enforce its own domestic laws in another country even to protect animal health or exhaustible natural resources. The term used here is extra-territoriality. What was the reasoning behind this ruling? If the US arguments were accepted, then any country could ban imports of a product from another country merely because the exporting country has different environmental, health and social policies from its own. This would create a virtually open-ended route for any country to apply trade restrictions unilaterally and to do so not just to enforce its own laws domestically, but to impose its own standards on other countries. The door would be opened to a possible flood of protectionist abuses. This would conflict with the main purpose of the multilateral trading system to achieve predictability through trade rules. The panels task was restricted to examining how GATT rules applied to the issue. It was not asked whether the policy was environmentally correct or not. It suggested that the US policy could be made compatible with GATT rules if members agreed on amendments or reached a decision to waive the rules specially for this issue. That way, the members could negotiate the specific issues, and could set limits that would prevent protectionist abuse. The panel was also asked to labelled dolphin-safe (leaving product). It concluded that this prevent deceptive advertising domestically produced. judge the US policy of requiring tuna products to be to consumers the choice of whether or not to buy the did not violate GATT rules because it was designed to practices on all tuna products, whether imported or

Eco-labelling: good, if it doesnt discriminate

Labelling environmentally-friendly products is an important environmental policy instrument. For the WTO, the key point is that labelling requirements and practices should not discriminate either between trading partners (most-favoured nation treatment should apply), or between domestically-produced goods or services and imports (national treatment). One area where the Trade and Environment Committee needs further discussion is how to handle under the rules of the WTO Technical Barriers to Trade Agreement labelling used to describe whether for the way a product is produced (as distinct from the product itself) is environmentally-friendly.

Transparency: information without too much paperwork

Like non-discrimination, this is an important WTO principle. Here, WTO members should provide as much information as possible about the environmental policies they have adopted or actions they may take, when these can have a significant impact on trade.

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They should do this by notifying the WTO, but the task should not be more of a burden than is normally required for other policies affecting trade. The Trade and Environment Committee says WTO rules do not need changing for this purpose. The WTO Secretariat is to compile from its Central Registry of Notifications all information on trade-related environmental measures that members have submitted. These are to be put in a single database which all WTO members can access

Domestically prohibited goods: dangerous chemicals, etc

This is a concern of a number of developing countries, which are worried that certain hazardous or toxic products are being exported to their markets without them being fully informed about the environmental or public health dangers the products may pose. Developing countries want to be fully informed so as to be in a position to decide whether or not to import them. A number of international agreements now exist (e.g. the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, and the London Guidelines for Exchange of Information on Chemicals in International Trade). The WTOs Trade and Environment Committee does not intend to duplicate their work but it also notes that the WTO could play a complementary role.

Liberalization and sustainable development: good for each other

Does freer trade help or hinder environmental protection? The Trade and Environment Committee is analyzing the relationship between trade liberalization (including the Uruguay Round commitments) and the protection of the environment. Members say the removal of trade restrictions and distortions can yield benefits both for the multilateral trading system and the environment. Further work is scheduled.

Intellectual property, services: some scope for study

Discussions in the Trade and Environment Committee on these two issues have broken new ground since there was very little understanding of how the rules of the trading system might affect or be affected by environmental policies in these areas. On services, the committee says further work is needed to examine the relationship between the General Agreement on Trade in Services (GATS)and environmental protection policies in the sector. The committee says that the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) helps countries obtain environmentally-sound technology and products. More work is scheduled on this, including on the relationship between the TRIPS Agreement and the Convention of Biological Diversity.

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15. Developing countries

15.1 Development and trade Over three quarters of WTO members are developing or least-developed countries. All WTO agreements contain special provision for them, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities and support to help them build the infrastructure for WTO work, handle disputes, and implement technical standards. The 2001 Ministerial Conference in Doha set out tasks, including negotiations, for a wide range of issues concerning developing countries. Some people call the new negotiations the Doha Development Round. Before that, in 1997, a high-level meeting on trade initiatives and technical assistance for least-developed countries resulted in an integrated framework involving six intergovernmental agencies, to help least-developed countries increase their ability to trade, and some additional preferential market access agreements. A WTO committee on trade and development, assisted by a sub-committee on leastdeveloped countries, looks at developing countries special needs. Its responsibility includes implementation of the agreements, technical cooperation, and the increased participation of developing countries in the global trading system

15.2 Technical assistance and training

The WTO organizes around 100 technical cooperation missions to developing countries annually. It holds on average three trade policy courses each year in Geneva for government officials. Regional seminars are held regularly in all regions of the world with a special emphasis on African countries. Training courses are also organized in Geneva for officials from countries in transition from central planning to market economies. The WTO set up reference centres in over 100 trade ministries and regional organizations in capitals of developing and least-developed countries, providing computers and internet access to enable ministry officials to keep abreast of events in the WTO in Geneva through online access to the WTOs immense database of official documents and other material. Efforts are also being made to help countries that do not have permanent representatives in Geneva.

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16. Members and Observers

153 members on 10 February 2011 (with dates of membership). Click any member to see key information on trade statistics, WTO commitments, disputes, trade policy reviews, and notifications.

Albania Angola Antigua and Barbuda Argentina Armenia Australia Austria Bahrain, Kingdom of Bangladesh Barbados Belgium Belize Benin Bolivia, Plurinational State of Botswana Brazil Brunei Darussalam Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Cape Verde Central African Republic Chad Chile China Colombia Congo Costa Rica Cte d'Ivoire Croatia Cuba Cyprus Czech Republic Democratic Republic of the Congo Denmark Djibouti Dominica

8 September 2000 23 November 1996 1 January 1995 1 January 1995 5 February 2003 1 January 1995 1 January 1995 1 January 1995 1 January 1995 1 January 1995 1 January 1995 1 January 1995 22 February 1996 12 September 1995 31 May 1995 1 January 1995 1 January 1995 1 December 1996 3 June 1995 23 July 1995 13 October 2004 13 December 1995 1 January 1995 23 July 2008 31 May 1995 19 October 1996 1 January 1995 11 December 2001 30 April 1995 27 March 1997 1 January 1995 1 January 1995 30 November 2000 20 April 1995 30 July 1995 1 January 1995 1 January 1997 1 January 1995 31 May 1995 1 January 1995

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Dominican Republic Ecuador Egypt El Salvador Estonia European Union (formerly European Communities) Fiji Finland France Gabon The Gambia Georgia Germany Ghana Greece Grenada Guatemala Guinea Guinea-Bissau Guyana Haiti Honduras Hong Kong, China Hungary Iceland India Indonesia Ireland Israel Italy Jamaica Japan Jordan Kenya Korea, Republic of Kuwait, the State of Kyrgyz Republic Latvia Lesotho Liechtenstein Lithuania Luxembourg Macao, China Madagascar Malawi Malaysia

9 March 1995 21 January 1996 30 June 1995 7 May 1995 13 November 1999 1 January 1995 14 January 1996 1 January 1995 1 January 1995 1 January 1995 23 October 1996 14 June 2000 1 January 1995 1 January 1995 1 January 1995 22 February 1996 21 July 1995 25 October 1995 31 May 1995 1 January 1995 30 January 1996 1 January 1995 1 January 1995 1 January 1995 1 January 1995 1 January 1995 1 January 1995 1 January 1995 21 April 1995 1 January 1995 9 March 1995 1 January 1995 11 April 2000 1 January 1995 1 January 1995 1 January 1995 20 December 1998 10 February 1999 31 May 1995 1 September 1995 31 May 2001 1 January 1995 1 January 1995 17 November 1995 31 May 1995 1 January 1995

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Maldives Mali Malta Mauritania Mauritius Mexico Moldova, Republic of Mongolia Morocco Mozambique Myanmar Namibia Nepal Netherlands New Zealand Nicaragua Niger Nigeria Norway Oman Pakistan Panama Papua New Guinea Paraguay Peru Philippines Poland Portugal Qatar Romania Rwanda Saint Kitts and Nevis Saint Lucia Saint Vincent & the Grenadines Saudi Arabia, Kingdom of Senegal Sierra Leone Singapore Slovak Republic Slovenia Solomon Islands South Africa Spain Sri Lanka Suriname Swaziland

31 May 1995 31 May 1995 1 January 1995 31 May 1995 1 January 1995 1 January 1995 26 July 2001 29 January 1997 1 January 1995 26 August 1995 1 January 1995 1 January 1995 23 April 2004 1 January 1995 1 January 1995 3 September 1995 13 December 1996 1 January 1995 1 January 1995 9 November 2000 1 January 1995 6 September 1997 9 June 1996 1 January 1995 1 January 1995 1 January 1995 1 July 1995 1 January 1995 13 January 1996 1 January 1995 22 May 1996 21 February 1996 1 January 1995 1 January 1995 11 December 2005 1 January 1995 23 July 1995 1 January 1995 1 January 1995 30 July 1995 26 July 1996 1 January 1995 1 January 1995 1 January 1995 1 January 1995 1 January 1995

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Sweden Switzerland Chinese Taipei Tanzania Thailand The former Yugoslav Republic of Macedonia (FYROM) Togo Tonga Trinidad and Tobago Tunisia Turkey Uganda Ukraine United Arab Emirates United Kingdom United States of America Uruguay Venezuela, Bolivarian Republic of Viet Nam Zambia Zimbabwe
Observer governments

1 January 1995 1 July 1995 1 January 2002 1 January 1995 1 January 1995 4 April 2003 31 May 1995 27 July 2007 1 March 1995 29 March 1995 26 March 1995 1 January 1995 16 May 2008 10 April 1996 1 January 1995 1 January 1995 1 January 1995 1 January 1995 11 January 2007 1 January 1995 5 March 1995

Afghanistan Algeria Andorra Azerbaijan Bahamas Belarus Bhutan Bosnia and Herzegovina Comoros Equatorial Guinea Ethiopia Holy See (Vatican) Iran Iraq Kazakhstan Lao People's Democratic Republic Lebanese Republic Liberia, Republic of Libya Montenegro Russian Federation Samoa

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Sao Tom and Principe Serbia Seychelles Sudan Syrian Arab Republic Tajikistan Uzbekistan Vanuatu Yemen
Note: With the exception of the Holy See, observers must start accession negotiations within five years of becoming observers. Least-developed countries The WTO recognizes as least-developed countries (LDCs) those countries which have been designated as such by the United Nations. There are currently 48 least-developed countries on the UN list, 31 of which to date have become WTO members.

These are:

Angola Bangladesh Benin Burkina Faso Burundi Cambodia Central African Republic Chad Congo, Democratic Republic of the Djibouti Gambia Guinea Guinea Bissau Haiti Lesotho Madagascar Malawi Mali Mauritania Mozambique Myanmar Nepal Niger Rwanda

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Senegal Sierra Leone Solomon Islands Tanzania Togo Uganda Zambia

Twelve more least-developed countries are negotiating to join the WTO. They are: Afghanistan, Bhutan, Comoros, Equatorial Guinea, Ethiopia, Laos,Liberia, Sao Tom & Principe, Samoa, Sudan, Vanuatu, and Yemen. There are no WTO definitions of developed or developing countries. Developing countries in the WTO are designated on the basis of self-selection although this is not necessarily automatically accepted in all WTO bodies.

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17. Abbreviations
Some of the abbreviations and acronyms used in the WTO: ACP AD, A-D AFTA AMS APEC ASEAN ATC CBD CCC CER COMESA CTD CTE CVD DDA DSB DSU EC EFTA EU FAO GATS GATT GSP HS ICITO ILO IMF ITC African, Caribbean and Pacific Group (Lom Conventionand Cotonu Agreement) Anti-dumping measures ASEAN Free Trade Area Aggregate measurement of support (agriculture) Asia-Pacific Economic Cooperation Association of Southeast Asian Nations Agreement on Textiles and Clothing Convention on Biological Diversity (former) Customs Co-operation Council (now WCO) [Australia New Zealand] Closer Economic Relations [Trade Agreement] (also ANCERTA) Common Market for Eastern and Southern Africa Committee on Trade and Development Committee on Trade and Environment Countervailing duty (subsidies) Doha Development Agenda Dispute Settlement Body Dispute Settlement Understanding European Communities European Free Trade Association European Union Food and Agriculture Organization General Agreement on Trade in Services General Agreement on Tariffs and Trade Generalized System of Preferences Harmonized Commodity Description and Coding System Interim Commission for the International Trade Organization International Labour Organization International Monetary Fund International Trade Centre

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ITO MEA MERCOSUR MFA MFN MTN NAFTA PSE PSI S&D, SDT SAARC SDR SELA SPS TBT TMB TNC TPRB TPRM TRIMs TRIPS UN UNCTAD UNDP UNEP UPOV UR VER VRA WCO WIPO WTO

International Trade Organization Multilateral environmental agreement Southern Common Market Multifibre Arrangement (replaced by ATC) Most-favoured-nation Multilateral trade negotiations North American Free Trade Agreement Producer subsidy equivalent (agriculture) Pre-shipment inspection Special and differential treatment (for developing countries) South Asian Association for Regional Cooperation Special Drawing Rights (IMF) Latin American Economic System Sanitary and phytosanitary measures Technical barriers to trade Textiles Monitoring Body Trade Negotiations Committee Trade Policy Review Body Trade Policy Review Mechanism Trade-related investment measures Trade-related aspects of intellectual property rights United Nations UN Conference on Trade and Development UN Development Programme UN Environment Programme International Union for the Protection of New Varieties of Plants Uruguay Round Voluntary export restraint Voluntary restraint agreement World Customs Organization World Intellectual Property Organization World Trade Organization

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18. Conclusion of Appraisal Aspect:

As per the discussion above about the WTO, we can say that the WTO is an institutional body which comes after the dissolution of GATT and its charter was mainly adopted from GATT. WTO is working for the global trade and reduction of trade barrier on boarders. It achieved its target in some areas. WTO main activity is for tariff reduction. In its early years it facing difficulty but after the Tokyo Round members countries come to the conclusion that most the members countries in the WTO are developing countries so they make different rule and regulation for the developing countries so that they can survive in the global trade to facilitate the participating countries. WTO also working for GATS and TRIPs these are the two other main areas of trade, that is service and intellectual property on which its previous body was not working. WTO is working upon for many other things. Its main motto is to reduce the trade barriers among the nations. In simple terms we can say that the World Trade Organisation deals with the rule of trade between nations at a global or near-global level. Its a place where member governments try to sort out the trade problems they face with each others. Its cover many areas from the date of its formation and still working on many areas.

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19. BIBLIOGRAPHY
Study Material of Financial Management - ICSI World Trade Organization Web Site

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