international trade regulation

International Trade International Trade RegulationRegulation

Victor H. Bouganim

WCL, American University

© 2001 Victor H. Bouganim, WCL, American University IBT - Intro - 2

The New International OrderThe New International Order

Multilateral Multilateral

RegionalRegional GlobalGlobal

Bi-lateralBi-lateralagreementsagreements


GGeneral AAgreement on TTariffs and TTrade GATT negotiations start after world war II GATT negotiations start after world war II

in order to facilitate international trade.in order to facilitate international trade. The Uruguay round introduces, among The Uruguay round introduces, among

other things, the issue of IP in 1986. other things, the issue of IP in 1986. The final agreements were concluded on The final agreements were concluded on

December 1993 and signed on April 1994 December 1993 and signed on April 1994 in Marrakech. in Marrakech.

The final agreements established the The final agreements established the WTO - The World Trade WTO - The World Trade Organization.Organization.

GATTGATT


GATT/WTO ObjectivesGATT/WTO Objectives Embodies the core

principles of liberal market theory:– Reduction of custom

duties and removal of non-tariffs trade barriers

– “Most favored nation” principle

Dispute settlement of trade issues

Ultimate goals Increasing the

world trade volume Raising the

standard of living - globally

Providing for full employment


WTO StructureWTO Structure

DirectorDirectorGeneralGeneral

SecretariatSecretariat

CommitteeCommitteeon Tradeon Trade

& Development& Development

CommitteeCommittee on Balance of Paymenton Balance of Payment

RestrictionsRestrictions

CommitteeCommitteeon Budget, Financeon Budget, Finance

& Administration& Administration

MinisterialMinisterialConferenceConference

Trade PolicyTrade PolicyReview BodyReview Body

Dispute SettlementDispute SettlementBodyBody

Council forCouncil forTrade in GoodsTrade in Goods

Council forCouncil forTrade in ServicesTrade in Services

Council forCouncil forTRIPsTRIPs

GeneralGeneralCouncilCouncil


Dispute Settlement under WTODispute Settlement under WTO

Dispute Settlement Body: special assembly of WTO General Council, includes all members

Five stages to dispute resolution: Consultation Panel establishment, investigation and report Appellate review of the panel report Adoption of the panel and appellate decision Implementation of the decision adopted

Could also have binding arbitration as alternative


WTO Dispute Settlement BodyWTO Dispute Settlement Body

WTO Principles: – equitable, fast, effective, mutually acceptable

The Dispute Settlement Body (the General Council in another guise) 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.


WTO Dispute Settlement Process - 1WTO Dispute Settlement Process - 1

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).



The panel’s 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.



WTO Appeals ProcessWTO Appeals Process

Either side can appeal a panel’s ruling. Appeals have to be based on points of law such as legal

interpretation — they cannot reexamine existing evidence or examine new evidence.

The appeal can uphold, modify or reverse the panel’s 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.


WTO Dispute Settlement WTO Dispute Settlement EnforcementEnforcement

The Dispute Settlement Body monitors how adopted rulings are implemented.

Any outstanding case remains on its agenda until the issue is resolved.


WTO - TRIPsWTO - TRIPs

Trade-Related Aspects of Intellectual Property– a World Trade Organization (WTO) agreement

– does not directly offer a private client any right to challenge the intellectual property laws of other nations

– provides a bases for the US to urge other nations to adopt adequate protection to comply with the TRIPs mandates

– creates standards and obligates WTO members to follow some of the concepts in several international conventions which safeguard intellectual property.


““Most Favored Nation”Most Favored Nation”

Any advantage, favor, privilege or immunity granted by a member to any other country (or its nationals) shall be accorded immediately and unconditionally to all members (or their nationals).

Exceptions Members entering:

– Customs unions– Free trade areas– Regional

arrangements Preferential treatment

– Under-developed countries


China’s WTO AccessionChina’s WTO Accession

China's Working Party was established on 4 March 1987.

China's Draft Protocol and Working Party Report are almost completed, and are expected to be finalized in mid-September 2001.

It is expected that WTO Ministers will take a decision on China's terms and conditions of entry into the WTO at the Doha Ministerial Conference in November 2001.


Regional Trade Unions Regional Trade Unions

EC - EU– EEuropean CCommunity– EEuropean UUnion

NAFTA– NNorth AAmerican FFree

TTrade AArea USA, Canada & Mexico

EFTA - EEA– EEuropean FFree

TTrade AArea

– EEuropean

EEconomic AArea EU plus Norway,

Switzerland ...


EU - European UnionEU - European Union

15 member sates

Goals– Economic integration

– Ultimately - political union

– Removal of customs

– Free competition

– Harmonized laws

The 4 freedoms

Free movement of – Goods

– Services

– Persons

– Capital

Free movement of information?


EU and NAFTAEU and NAFTA

Economic integration associations Focus on regional development of

nations with common interests EU and NAFTA suggest that economic

development will depend as much on regional trade agreements as on the worldwide WTO


International Economic InstitutionsInternational Economic Institutions

International Organizations play a significant role in international trade– created to assume a supportive role in international

business

– e.g. OECD, The South Centre

The United Nations created specialized agencies to administer certain areas of international trade– e.g. WTO, ITU, WIPO, UNCITRAL


OECDOECD

Organization for Economic Cooperation and Development

Created by nations with mutual trade and investment interests

Composed almost exclusively of developed nations

Free trade advocate, establishing guidelines for multinational corporations


Bretton Woods ConferenceBretton Woods Conference

Post WWII conference to correct world-wide depression. Creation of:–International Monetary Fund (IMF)–General Agreement on Tariffs and

Trade (GATT)–The World Bank


IMFIMF

Urge alterations in government policies where there were severe balance of payments dislocations

Restrictions on governments with respect to foreign exchange controls

Lines of credit available to correct imbalances final source of loans for developing nations before

they default on international obligations


The World BankThe World Bank

Formed as a lending agency Provides low interest loans to the poorest

nations Provides panels of experts for arbitration

and conciliation Offers forms of insurance for trade and

investment

international trade regulation

Documents