reporting to the goods council textile

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CHAPTER XXV CHAPTER XXV INTERNATIONAL INTERNATIONAL ORGANIZATIONSORGANIZATIONS

General Agreement on Tariffs and Trade (GATT)

World Trade Organization (WTO) International Chamber of Commerce (ICC) Organization for Economic Cooperation

and Development (OECD) Wassenaar Arrangement on Export

Controls G-7

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General Agreement on Tariffs & General Agreement on Tariffs & Trade (GATT)Trade (GATT)

Started with 23 nations after World War II on January 1, 1948

An interim measure to form Int’l Trade Organization (ITO)

Final leg of a triad after IMF & IBRD (World Bank) U.S. failed to ratify in 1950 & effectively killed ITO 128 member nations (contracting parties to the

GATT) as of December 1994 To promote economic growth and development

by liberalizing world trade through elimination or reduction of import tariffs and non-tariff barriers

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General Agreement on General Agreement on Tariffs & Trade (GATT)Tariffs & Trade (GATT)

In order to belong to GATT

(1) Members were required to reduce tariffs and drop barriers

(2) Had to adhere to Most favored nation (MFN) clause: • If a country gives a tariff reduction to

another country, it should grant the same concession to all other member nations on a non-discriminatory basis

Provided basic set of rules by which trade negotiations took place and a mechanism for monitoring the implementation of these rules

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GATT-sponsored rounds: Multilateral Negotiations

Tokyo Round (7th round: 1979)

• Reduction of Tariffs by 33 percent & Non-tariff barriers

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Uruguay Round:

• The 8th set of negotiations launched in 1986 & concluded on Dec.15,1993. Took 7 years

• Signed by 125 nations on April 15, 1994 in Morocco

• Key new areas of negotiation a.Services b.Government procurement policies c. Intellectual property rights-Patents,

Trademarks, Copyrights d.Textiles e.Agriculture

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World Trade Organization World Trade Organization (WTO)(WTO)

GATT became WTO January 1, 1995 with128 member nations

Grown to 144 members as of 1/1/2002: China on 12/11/2001 and Taiwan on 1/1/2002

Governing body of multilateral trading system Platform for trade dispute settlements

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World Trade Organization World Trade Organization

Objectives To help world trade flow as smoothly, freely,

fairly, and predictably as possible by • Reduction of tariffs • Reduction of non-tariff barriers • Elimination of discriminatory treatment

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World Trade Organization (WTO)

WTO Agreements Agreement on Goods: GATT (GA on

Tariffs & Trade) WTO’s principal rule-book for trade in goods Council for Trade in Goods (Goods Council): • 11 committees dealing with agriculture,

market access, subsidies, anti-dumping measures, and so on• All committees consist of all member

countries• Reporting to the Goods Council: Textile

Monitoring Body, State Trading Enterprises, Information Technology Agreement Committee

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Agreement on Services: GATS (GA on Trade in Services): • Banking, Insurance, Telecommunications,

Tourism, Hotel, Car Rental, Transportation, Etc.

• Principles of freer and fairer trade in services • Members made individual commitments

(schedules) for marketing opening for service sectors

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Agreement on Intellectual Property: TRIPs (Trade-Related Intellectual Property Rights) Rules for trade and investment in ideas &

creativity Applies to only trade-related intellectual

properties Protection of Intellectual Properties:• Copyrights, Trademarks, Geographical

names used to identify products, Industrial designs, integrated circuit layout designs, trade secrets

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Agreement on Dispute Settlement: Procedures for resolving trade quarrels Understanding on Rules and Procedures

Governing the Settlement of Disputes To enforce rules and ensure that trade flows

smoothly

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World Trade Organization (WTO)World Trade Organization (WTO) Agreement on Investment: TRIMs (Trade-

Related Investment Measures) Applies only to measures that affect trade in

goods. No discrimination against foreigners or foreign

products (violates “national treatment” principles of GATT).

No restrictions in quantities (violates prohibition of quantitative restrictions of the GATT)

No requirement for particular levels of local procurement by an enterprise (“local content requirements”).

No measures which limit a company’s imports or set targets for the company to export (“trade balancing requirements”)

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Agreement on Textiles & Clothing (ATC) From 1974 to 1994: Under Multifiber

Agreement (MFA). Textile quota From 1995, Fully integrated into normal GATT

rules of WTO in 10 years January 1, 2005, ATC no longer exists. No

quota. Only WTO agreement that has self-destruction

built-in

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World Trade Organization (WTO)World Trade Organization (WTO) Agreement on Textiles & Clothing (ATC)

Transitional safeguards measures• Different from those of WTO’s GATT• Can be applied on imports from specific

exporting countries: U.S. & E.U. against China’s textile• Can be applied thru consultations or

unilaterally• Subject to review by Textiles Monitoring

Body

Textiles Monitoring Body (TMB)• Supervises the agreement’s implementation• Deals with disputes under the Agreement

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Agreement on Agriculture New Rules and Commitments: To make more

market-oriented policies Market Access: Tariffs only or Tariffication

which is converting quota & other restrictions to tariff

Domestic Support: Domestic policies that have direct effect on production and trade must be cut back.

Export Subsidies: Prohibits export subsidies unless specified in a member’s lists of commitment. Must cut both the amount of subsidies and quantities that receive subsidies.

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Agreement on Agriculture (CONTINUED) Regulations for Animal and Plant Products:• A separate agreement on food safety and

animal & plant health standards• Allows countries to set their own standards• Must be based on science (scientific

justification) • Should not arbitrarily or unjustifiably

discriminate between countries• Encouraged to use international standards,

guidelines and recommendations.

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World Trade Organization World Trade Organization (WTO)(WTO) Agreement on Government Procurement

To open up to international competition. Members make laws, regulations, procedures

and practices regarding government procurement more transparent

Members do not protect domestic products or suppliers, or discriminate against foreign products or suppliers.

Extends international competition to include national and local government entities.

Extends coverage to services (including construction services), procurement at the sub-central level (for example, states, provinces, departments and prefectures), and procurement by public utilities.

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Agreement on Government Procurement Members required to put in place domestic

procedures by which aggrieved private bidders can challenge procurement decisions and obtain redress

Applies to contracts worth more than specified threshold values. • For central government: SDR 130,000 (some

$178,000 in May 1997). • For sub-central government: generally in the region

of SDR 200,000. • For utilities, generally in the area of SDR 400,000 and • For construction contracts, in general the threshold

value is SDR 5,000,000.

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Agreement on Trade Policy Review Mechanism (TPRM) To improve transparency To create a greater understanding members’

trade policies To asses their impact Members must undergo periodic scrutiny &

review of their trade policy

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Key Principles

Trade without discrimination: MFN & National treatment

Predictable and growing access to markets Tariff reductions: Industrial countries’ tariffs

from 6.3% to 3.8% Members’ commitment for market opening

service sectors

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Key Principles (CONTINUED)

Promotion of fair competition Sets rules on compensating duties against

dumping and foreign government subsidies Encouraging development & economic

reform of developing countries Industrial countries assist trade of developing

countries by conferring tariff preference programs such as GSP

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Main Functions Administering and implementing multilateral

trade agreements Forum for multilateral trade negotiations Resolving trade disputes Monitoring national trade policies of members Providing technical assistance and training to

developing countries

Cooperating with other international institutes

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Structure Ministerial Conference: Highest authority.

Meet every two years General Council: Ambassadors or heads

of delegation in Geneva. Meets as Trade Policy Review Body Dispute Settlement Body

Goods Council, Service Council and Intellectual Property Council, and so on

Numerous specialized committees and working groups

Secretariat: Day-to-day operations by Director-General, Four Deputy D.G.s, and 500 staff

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Resolution of Trade Disputes Trade disputes are settled according to the

Understanding on Rules and Procedures Governing the Settlement of Disputes

Member should not take unilateral action against perceived violations of trade rules, but seek resolution thru Multilateral dispute settlement system, and abide by its rulings and findings • A petition is filed with WTO • Dispute Settlement Body (DSB) is convened

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Resolution of Trade Disputes (CONTINUED) 1st stage: Bilateral consultations within 30

days of request by another member. Can be brought to WTO Director-General. If failed after 60 days from request for consultation

2nd stage: Complainant requests DSB to establish a panel to examine the case

3rd stage: Panel's final reports are given to parties within 6 months or 3 months in urgency such as perishable goods. Panel reports are adopted by DSB within 60 days of issuance, unless one party notifies its decision to appeal or parties agree not to adopt report

4th stage: Either party appeals to a standing Appellate Body

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Resolution of Trade Disputes (CONTINUED) 5th stage: Appellate Body decision: Generally

within 60 days, but in no case longer than 90 days. Reports of Appellate Body are accepted by DSB in 30 days of issuance.

6th stage: At a DSB meeting, party concerned presents intentions on how to implement the adopted recommendations and rulings of DSB

7th stage: If party concerned fails to comply, obligated to enter into negotiation with complainant to determine mutually acceptable compensation

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Resolution of Trade Disputes (CONTINUED) 8th stage: If no satisfactory compensation is

agreed, complainant requests authorization from DSB to suspend concessions or obligations to the other party

9th stage: DSB should grant this authorization, unless DSB decides by consensus to reject the request.

10th stage: DSB continues to monitor implementation of adopted recommendations

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International Chamber of International Chamber of Commerce (ICC)Commerce (ICC)

Over 100 member nations International Trade Rules issued by ICC

Incoterms 2000 Uniform Customs and Practices (UCP) for

Documentary Credit (2007 Revision), ICC Publication No. 600

Uniform Rules for Collections (ICC Publication No. 522)

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Organization for Economic Organization for Economic Cooperation & Development Cooperation & Development

(OECD)(OECD)Most members are developed

countries: 30 NationsOECD’s member countries share a

commitment to the democratic government and the market economy

Best known for its publications and its statistics.

OECD’s work covers economic and social issues from macroeconomics, to trade, education, development and science and innovation

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Wassenaar Arrangement on Wassenaar Arrangement on Export Controls for Conventional Export Controls for Conventional

Arms and Dual-Use Goods and Arms and Dual-Use Goods and TechnologyTechnology

Adopted by 33 countries in 1996. Replaced the Coordinating Committee on Multilateral Export Control (COCOM) which was suspended March 31, 1994

To restrict the export of conventional weapons and sensitive dual-use goods and technology to hostile nations

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G-7G-7 Not an international organization, but a

gathering of 7 nations USA, Canada, Germany, France, Italy,

Britain & Japan Finance ministers meets two or three

times a year Summit meeting of heads of government:

Once a year Also called G-8 by adding Russia

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