2 The World Trade Organization
Exercise 2: To Join or not to Join?
The Parliament of the Republic of Newland has approved – by a narrow margin – the government's plans to start negotiations on accession to the WTO. However, the opposition continues its campaign against Newland's accession to the WTO in the hope of turning public opinion in Newland against WTO membership. In a series of interviews and speeches, the charismatic leader of the opposition claims that: (1) for many years Newland's best diplomats and negotiators will be caught up in never-ending, very complex
negotiations on accession; (2) Newland will be forced to make many amendments to its domestic legislation; (3) Newland will be forced to accept obligations to which current WTO Members are not subject; (4) if Newland were unable to meet some of its obligations under the WTO Agreement, it would have no other option than to withdraw from the WTO; (5) as a Member, Newland will have to grant market access to goods and services from Evilland, an original WTO Member, but a country with a notoriously bad human rights record; (6) the WTO is controlled by the European Union (which holds no less than twenty-seven votes) and the United States; (7) Newland, as a developing country, will not be able to participate effectively in WTO negotiations and decision- making; (8) the WTO is directed by a group of faceless international officials of French nationality, headed by a Director-General, who is also of French nationality and is handpicked by the ‘Quad’; (9) the confidentiality of government-to-government negotiations on trade matters is not guaranteed as special interest groups have access to meetings of WTO bodies and have immediate access to all official documents; and (10) NGOs, none of which is friendly to the economic and trade interests of Newland, have a voice in WTO decision-making. A recent poll showed that the opposition's campaign against WTO accession is succeeding and that public opinion in Newland is turning against accession. To reverse the tide, Newland's government decides to engage in a debate with the opposition in Parliament. The Minister of Foreign Affairs has taken it upon herself to reply to each of the 10 claims of the opposition leader. She wishes to do so, whenever possible, with legal, rather than political, arguments. You have been instructed to prepare speaking notes for the Minister.
1 M. Bronckers, ‘More Power to the WTO?’, Journal of International Economic Law, 2001, 41 (reproduced by permission of Oxford University Press). Emphasis added.
2 See below, footnote 4 on p. 75.
3 M. Khoh, ‘Un gouvernement mondial dans l'ombre’, Le Monde Diplomatique, May 1997. Translation: ‘A lurking world government’.
4 G. de Jonquières, ‘Prime Target for Protests: WTO Ministerial Conference’, Financial Times, 24 September 1999.
5 See Pascal Lamy, ‘Changing Landscape of International Trade’, www.wto.org/english/news_e/sppl-e/sppl271_e.htm.
6 1 UN ECOSOC Res. 13, UN Doc. E/22 (1946). For an overview of the negotiations of the GATT 1947 and the ITO with references to official documents, see Analytical Index: Guide to GATT Law and Practice (WTO, 1995), 3–6.
7 See J. Jackson, The World Trade Organization: Constitution and Jurisprudence (Royal Institute of International Affairs, 1998), 15–16.
8 Ibid., 16.
9 Ibid., 17–18.
10 Ibid., 18.
11 GATT BISD, Volume IV, 77. Part I of the GATT 1947 contained the MFN obligation and the obligation regarding tariff concessions, and Part III procedural provisions.
12 A second and more modest attempt in 1955 to establish an ‘Organization for Trade Cooperation’ also failed because the US Congress was again unwilling to give its approval.
13 See Article XXV of the GATT 1947, entitled ‘Joint Action by the Contracting Parties’.
14 The first of these rounds of negotiations, in 1947, led to the agreement of the GATT 1947 itself. See above, pp. 76–7.
15 See also below, pp. 78–82.
16 On the distinction between multilateral and plurilateral agreements, see above, pp. 40–50. Note that the agreements concluded at the end of the Tokyo Round are commonly also referred to as ‘codes’.
17 J. Jackson, The World Trade Organization: Constitution and Jurisprudence (Royal Institute of International Affairs, 1998), 24.
18 Ministerial Declaration on the Uruguay Round, GATT MIN.DEC, dated 20 September 1986, Part I, Section E, ‘Functioning of the GATT System’.
19 In April 1989, the CONTRACTING PARTIES formally established the Trade Policy Review Mechanism.
20 See T. Stewart, The GATT Uruguay Round (Kluwer Law and Taxation, 1993), 1928.
21 See Communication from the European Community, GATT Doc. No. MTN.GNG/NG14/W/42, dated 9 July 1990, 2.
22 Many developing countries were hostile to the idea of an international trade organisation, unless this organisation was situated within the framework of the United Nations, such as the United Nations Conference on Trade and Development (UNCTAD).
23 J. Jackson, ‘Strengthening the International Legal Framework of the GATT–MTN System: Reform Proposals for the New GATT Round 1991’, in E. U. Petersmann and M. Hilf (eds.), The New GATT Round of Multilateral Trade Negotiations: Legal and Economic Problems (Kluwer, 1991), 17, 21 and 22. See also P. VerLoren van Themaat, in Ibid., 29: ‘It is highly unlikely that the world's government leaders would be willing, at this point in history, to even start serious discussions about such a new institution.’
24 See J. Jackson, ‘Strengthening the International Legal Framework of the GATT–MTN System: Reform Proposals for the New GATT Round 1991’, in Ibid., 21.
25 Draft Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, GATT Doc.
MTN.TNC/W/35/Rev.1, dated 3 December 1990.
26 The negotiations broke down because of the fundamental disagreement between the European Community and the United States on the issue of agricultural subsidies.
27 Draft Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, GATT Doc.
MTN.TNC/W/FA, dated 20 December 1991.
28 Withholding its consent to a new international trade organisation proved a useful bargaining chip in negotiations with the European Community. See Financial Times, 16 December 1993, 5.
29 See Ibid. Note that the World Trade Organization and the World Tourism Organization concluded an agreement on the use of the abbreviation ‘WTO’. To avoid confusion, the World Trade Organization agreed to use a distinct logo and avoid using the abbreviation in the context of tourism. See GATT Doc. MTN.TNC/W/146, 3.
30 Note that, after the entry into force of the WTO Agreement and the establishment of the WTO on 1 January 1995, the WTO and the GATT 1947 existed side by side for one year. The GATT 1947 was terminated only at the end of 1995.
31 G. Sampson, ‘Overview’, in G. Sampson (ed.), The Role of the World Trade Organization in Global Governance (United Nations University Press, 2001), 5.
32 Report by the Consultative Board to the Director-General Supachai Panitchpakdi, The Future of the WTO: Addressing Institutional Challenges in the New Millennium (the ‘Sutherland Report’) (WTO, 2004), para. 1.
33 Appellate Body Report, US – Shrimp (1998), para. 153. Emphasis added. For the interpretation of Article XX(g) of the GATT 1994, in light of the Preamble to the WTO Agreement, see below, pp. 565–8.
34 Ministerial Conference, Doha Ministerial Declaration, WT/MIN(01)/DEC/1, dated 20 November 2001, paras. 2 and 6.
Emphasis added.
35 Article II:1 of the WTO Agreement.
36 Emphasis added.
37 See Ministerial Conference, Doha Ministerial Declaration, WT/MIN(01)/DEC/1, dated 20 November 2001, para. 38. See also below, p. 85.
38 For an overview of these agreements, see above, pp. 40–50.
39 For a further discussion of these and other examples, see below, pp. 622 (Committee on Safeguards), 733 (Dumping Committee), 833 (Subsidies Committee), 887 (TBT Committee), 941 (SPS Committee).
40 For a discussion on these WTO bodies, see below, pp. 53–5.
41 See Second Protocol to the General Agreement on Trade in Services, S/L/11, dated 24 July 1995; and Fifth Protocol to the General Agreement on Trade in Services, S/L/45, dated 3 December 1997.
42 See Fourth Protocol to the General Agreement on Trade in Services, S/L/20, dated 30 April 1996.
43 See Third Protocol to the General Agreement on Trade in Services, S/L/12, dated 24 July 1995.
44 See Agreement on Trade in Information Technology Products (ITA), in Ministerial Declaration on Trade in Information Technology Products, adopted on 13 December 1996 and entered into force on 1 July 1997. The ITA was agreed at the close of the Singapore Ministerial Conference in December 1996. The ITA provides for the elimination of customs duties and other duties and charges on information technology products by the year 2000 on an MFN basis. The implementation of the ITA was contingent on approximately 90 per cent of world trade in information technology products being covered by the ITA. On 26 March 1997, that criterion was met. In 2012, seventy Members, representing 97 per cent of world trade in information technology products, were party to the ITA. In May 2012, it was announced that informal bilateral and plurilateral talks were about to start on the expansion of the ITA. See www.wto.org.
45 See Protocol Amending the TRIPS Agreement, WT/L/641, dated 8 December 2005. See below, pp. 141 and 1000.
46 See Protocol Amending the Agreement on Government Procurement, GPA/113, dated 2 April 2012. See below, pp. 509–11 and 535–7.
47 On accession protocols, such as the Protocol on the Accession of the People's Republic of China, see below, pp. 109–13.
48 See Ministerial Conference, Decision of 14 November on Implementation-Related Issues and Concerns, WT/MIN(01)/17, dated 20 November 2001. See also below, p. 139.
49 See Committee on Sanitary and Phytosanitary Measures, Decision of the Committee on Actions regarding SPS-Related Private Standards, G/SPS/55, dated 6 April 2011. See also below, footnote 21 of page 901.
50 See above, pp. 78–82, and below, pp. 87–94.
51 Note that the WTO Members already tried, but dismally failed, to start such round of multilateral trade negotiations at the ill- fated Seattle Ministerial Conference in November–December 1999. See above, p. 14, and below, p. 99. Also note that the willingness of WTO Members to agree to the launch of the Doha Round in November 2001 was related to the need for the international community to express its faith in international cooperation and negotiations after the terrorist attacks on the United States of 11 September 2001.
52 In the Doha Ministerial Declaration, the WTO Members stressed their ‘commitment to the WTO as the unique forum for global trade rule-making and liberalization’. See Ministerial Conference, Doha Ministerial Declaration, WT/MIN(01)/DEC/1, dated 20 November 2001, para. 4.
53 See Article 20 of the Agreement on Agriculture.
54 See Article XIX of the GATS.
55 For a complete list of the matters on the agenda of the Doha Round, see Ministerial Conference, Doha Ministerial Declaration, WT/MIN(01)/DEC/1, dated 20 November 2001.
56 See Ibid., para. 2.
57 Ibid., para. 47. The only subject-matter exempted from the ‘single undertaking’ approach are the negotiations on the improvements to and clarifications of the Dispute Settlement Understanding. See Ibid. See also below, pp. 91–2.
58 Note, however, that para. 47 of the Doha Ministerial Declaration provides room for deviation from the ‘single undertaking’
approach when it states: ‘However, agreements reached at an early stage may be implemented on a provisional or a definitive basis.’
See Ibid.
59 WTO Members took ‘note of work under way in the International Labour Organization (ILO) on the social dimension of globalization’. See Ministerial Conference, Doha Ministerial Declaration, WT/MIN(01)/DEC/1, dated 20 November 2001, para. 8.
60 At the Singapore Ministerial Conference in December 1996, these issues were first identified as possible issues for further negotiations within the WTO.
61 On ‘trade facilitation’, see below, pp. 508–9.
62 Note that the concept of ‘explicit consensus’ was a novum in WTO law. See below, p. 137, footnote 326.
63 See below, p. 81, footnote 26 and 90.
64 Note that, in the run-up to the Cancún Ministerial Conference, the General Council of the WTO did reach an agreement on the waiver to the TRIPS Agreement enabling the import by developing countries of generic medicines produced under compulsory licences. See General Council, Decision on the Implementation of Paragraph 6 of the Doha Declaration on TRIPS and Public Health, WT/L/540, dated 1 September 2003. See further below, p. 122, footnote 243.
65 Ministerial Conference, Ministerial Statement, WT/MIN(03)/20, dated 23 September 2003, para. 3.
66 See General Council, Doha Work Programme Decision adopted by the General Council on 1 August 2004, WT/L/579, dated 2 August 2004.
67 Ibid., para. 3.
68 See below, pp. 88–9.
69 See Ministerial Conference, Hong Kong Ministerial Declaration, WT/MIN(05)/DEC, dated 22 December 2005, para. 6 The elimination of export subsidies by 2013 was an important concession on the part of the European Communities.
70 Shree B. C. Servansing, ‘Non-Agricultural Market Access (NAMA) – Balancing Development and Ambition’, in P. Mehta, A.
Kaushik and R. Kaukab (eds.), Reflections from the Frontline: Developing Country Negotiators in the WTO (CUTS International, 2012), 88–9.
71 See, for example, General Council, Minutes of Meeting of 31 July 2008, WT/GC/M/115, dated 10 October 2008.
72 See below, pp. 136–8.
73 See below, p. 100.
74 As discussed above, the launch of the Doha Round has been seen as a ‘political response’ by the international community to the terrorist attacks on the United States of 11 September 2001. See above, pp. 21–2.
75 See above, p. 88.
76 See below, p. 676.
77 See below, p. 94, footnote 95.
78 The ‘Easter Package’ consisted of documents of the chairs of the negotiating committees on the work done by their committee, as well as an accompanying report by Pascal Lamy. See www.wto.org/english/tratop_e/dda_e/chair_texts11_e/chair_texts11_e.htm.
79 See WTO Annual Report 2012, 22.
80 See Opening Remarks of Director-General Pascal Lamy at the informal TNC meeting of 29 April 2011, www.wto.org/english/news_e/news11_e/tnc_dg_infstat_29apr11_e.htm.
81 See below, pp. 436–8.
82 See WTO Annual Report 2012, 22.
83 Chairman's Concluding Statement, WT/MIN(11)/11, dated 11 December 2011, p. 3.
84 Ibid.
85 While the emphasis since the start of the Doha Round had always been on the ‘single undertaking’ approach, note that the 2001 Doha Ministerial Declaration itself provided room for deviation from this approach. As discussed above, para. 47 of the Declaration states: ‘However, agreements reached at an early stage may be implemented on a provisional or a definitive basis.’ See above, p. 88, footnote 57.
86 See Ibid.
87 Ibid.
88 Report by the Chairman of the Trade Negotiations Committee to the General Council on 25 July 2012, www.wto.org/english/news_e/news12_e/gc_rpt_25jul12_e.htm.
89 See also Pascal Lamy, Strengthening the Multilateral Trading System, speech delivered at the Singapore Schuman Lecture Series of the European Chamber of Commerce in Singapore on 21 September 2012.
90 It has been argued that this proliferation of regional trade agreements was, and is, to a large degree triggered by the failure to bring the Doha Round negotiations to a successful conclusion. On the proliferation of regional trade agreements, see below, pp. 650–
5.
91 On the rapidly changing reality of international trade, see Chapter 1 of this book, at pp. 12–13.
92 See Bridges Weekly Trade News Digest, 12 December 2012.
93 See Bridges Weekly Trade News Digest, 4 April 2012, 11 July 2012, 26 September 2012 and 12 December 2012. Other Members involved include Australia, Canada, Colombia, Costa Rica, Hong Kong China, Iceland, Israel, Japan, Mexico, New Zealand, Norway, Pakistan, Panama, Peru, South Korea, Switzerland, Chinese Taipei, and Turkey.
94 See above, p. 75, and below, pp. 157–9. Moreover, while unsuccessful in the context of the Doha Round negotiations, it must be noted that the WTO has been successful in its function as a forum for negotiations and agreeing on new rules in several areas. See above, p. 91.
95 See Opening Remarks of Director-General Pascal Lamy at the informal TNC meeting of 29 April 2011, www.wto.org/english/news_e/news11_e/tnc_dg_infstat_29apr11_e.htm.
96 See Article 3.3 of the DSU.
97 See Article 3.2, second sentence, of the DSU.
98 See Article 3.2, last sentence, of the DSU.
99 I.e. the number of requests for consultations notified to the DSB until 31 December 2012. See www.worldtradelaw.net/dsc/database/searchcomplaints.asp.
100 Other disputes, such as those concerning the methodologies used by domestic trade remedy authorities (see e.g. below, pp.
692–6 and 159) are also, at least in some Members, politically very sensitive, albeit they do not attract much attention in the non- specialized media.
101 See below, pp. 156–310.
102 See Annex 3 to the WTO Agreement, entitled ‘Trade Policy Review Mechanism’.
103 See Trade Policy Review Mechanism, para. A(i).
104 See above pp. 8–12.
105 See Ibid., para. C(ii).
106 Exceptionally, in the event of changes in a Member's trade policies or practices that may have a significant impact on its trading partners, the Member concerned may be requested by the TPRB, after consultation, to bring forward its next review. See Ibid.
107 See below, pp. 122–4.
108 The two reports cover all aspects of the Member's trade policy broadly speaking, including its domestic laws and regulations;
the institutional framework; bilateral, regional and other preferential agreements; the wider economic needs; and the external environment.
109 In 2012, Members reviewed the trade policy and practices of Bangladesh, China, Colombia, Cote d’Ivoire, the East African Community (Burundi, Kenya, Rwanda, Tanzania and Uganda), Guinea-Bissau, Iceland, Israel, Korea, Kuwait, Nepal, Nicaragua, Norway, Philippines, Saudi Arabia, Singapore, Togo, Trinidad and Tobago, Turkey, the United Arab Emirates, the United States and Uruguay. See www.wto.org/english/tratop_e/tpr_e/tpr_e.htm.
110 See Trade Policy Review Mechanism, para. A(i).
111 Trade Policy Review Body – Review of Bangladesh – TPRB’s Evaluation, PRESS/TPRB/269, dated 13 and 15 September 2006.
112 Trade Policy Review Body – Review of Pakistan – TPRB’s Evaluation, PRESS/TPRB/187, dated 25 January 2002.
113 The first such report is dated 14 September 2009 and is, as are later reports, available on the WTO website.
114 See above, pp. 12–14.
115 See also Declaration on the Contribution of the World Trade Organization to Achieving Greater Coherence in Global Economic Policymaking, Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, para. 5.
116 See Agreement between the International Monetary Fund and the World Trade Organization, contained in Annex I to WT/GC/W/43, dated 4 November 1996; and the Agreement between the International Bank for Reconstruction and Development and the International Development Association and the World Trade Organization, contained in Annex II to WT/GC/W/43, dated 4 November 1996.
117 UNCTAD, the ITC and the UNDP.
118 See below, p. 104.
119 The ACP (African, Caribbean and Pacific) Group comprises seventy-nine members, forty of which are least-developed countries, most of them from Africa. The objective of the ACP Group is to contribute to the economic development and social progress of its Member States. See also below, pp. 102–4.
120 See www.wto.org/english/thewto_e/coher_e/coher_e.htm and www.wto.org/english/thewto_e/igo_obs_e.htm.
121 See www.wto.org/english/thewto_e/coher_e/coher_e.htm.
122 Guidelines for Arrangements on Relations with Non-Governmental Organizations, Decision adopted by the General Council on 18 July 1996, WT/L/162, dated 23 July 1996.
123 Ibid.
124 Moreover, an NGO centre with facilities for organising gatherings and workshops was set up alongside the official conference centre.
125 This issue is also referred to as the ‘external transparency’ issue. See also below, footnote 372, p. 145.
126 M. Moore, How Trade Liberalization Impacts on Employment, Speech to the International Labour Organization, 18 March 2002. Emphasis added.
127 With regard to developing-country NGOs focusing on environmental and labour issues, it has been alleged that the source of funding of these NGOs is not always transparent and may come from developed-country Members.
128 Note also that the mobilisation of civil society against economic globalisation has weakened in force (see above, p. 75); and that the WTO’s weakness as a global rule-maker, apparent from its failure to reach agreement in the context of the Doha Development Round negotiations, has made it a much less appealing target for protest. Some would say that civil society has lost interest in the WTO.
129 On the 2011 WTO Public Forum, see below, p. 101.
130 In 2011, the WTO Secretariat undertook 21 NGO briefings. From 2007 to 2011, the WTO Secretariat organised 118 NGO briefings. See WTO Annual Report 2012, 127.
131 Note, however, that in 2011 NGOs submitted only three contributions for posting on the WTO website.
132 Note, in this regard, for example, the collaboration with the International Centre for Trade and Sustainable Development (ICTSD) on technical assistance relating to WTO dispute settlement, and in particular the Specialized Training Course on WTO Litigation, organised in April–May 2012. This course also involved the Advisory Centre on WTO Law (ACWL) (see below, p. 301).
133 See WTO Annual Report 2012, 126.
134 For a complete overview of the programme of the 2012 WTO Public Forum, see www.wto.org/english/forums_e/public_forum12_e/public_forum12_e.htm.
135 Ministerial Conference, Doha Ministerial Declaration, WT/MIN(01)/DEC/1, dated 20 November 2001, para. 10.
136 See General Council, Procedures for the Circulation and De-restriction of WTO Documents, WT/L/452, dated 16 May 2002.
137 Ministerial Conference, Doha Ministerial Declaration, WT/MIN(01)/DEC/1, dated 20 November 2001, para. 38.