World Trade Organization: Rules, Agreements, and Measures
World Trade Organization (WTO)
The WTO is an organization with 164 members that deals with the rules of trade between nations. It covers various aspects of trade:
Trade of Goods
- GATT (General Agreement on Tariffs and Trade)
- Anti-Dumping measures
- Subsidies and countervailing measures
- Licensing procedures
Trade of Services
- GATS (General Agreement on Trade in Services) – 140 economies
- Excludes government authority and traffic rights
- Includes natural person’s presence, consumption abroad, cross-border supply, and commercial presence
Intellectual Property Rights
- TRIPS (Trade-Related Aspects of Intellectual Property Rights)
- Industrial Property (Paris Convention, need to register)
- Copyright (Berne Convention, first time made)
Functions of the WTO
- Forum for negotiation (Uruguay/Doha round)
- Handling trade disputes
- Monitoring trade policies
- Cooperation
- Non-discrimination in trade: MFN, NT
Customs Union
A level of economic integration where members have free trade and adopt common external tariffs.
Most Favored Nation (MFN)
If a WTO member grants a special favor (e.g., lower tariff) to another member, it must extend that benefit to all WTO members.
National Treatment (NT)
Imported and locally produced goods should be treated equally once the foreign goods have entered the market. The same applies to services.
Multilateralism
- Ruled by the WTO
- Consensus in decision-making
- Based on rules
- Benefits for developing and least developed countries
Regionalism
- Trend of making Regional Trade Agreements (RTAs)
- Agreements between countries close by (shared borders) or blocs (e.g., EU with EFTA)
- Individual countries from different continents
- Extend reciprocal benefits
Doha Round
Focuses on agriculture subsidies and freedom.
RTA: All product tariff reduction. PTA: Certain product tariff reduction.
Sanitary and Phytosanitary (SPS) Measures
Applied to protect:
- Animal or plant life or health from pests, diseases, or disease-carrying organisms.
- Human or animal life or health from risks arising from additives, contaminants, or toxins.
- Human life or health from diseases carried by animals.
- Prevent or limit damage from the entry, establishment, or spread of pests.
Examples: Additives in food or drink, residues of veterinary drugs.
SPS vs. TBT
The TBT (Technical Barriers to Trade) Agreement covers all technical regulations, voluntary standards, and procedures to ensure they are met, except when these are sanitary or phytosanitary measures as defined by the SPS Agreement.
Technical Barriers to Trade (TBT)
The TBT Agreement covers all technical regulations, voluntary standards, and conformity assessment procedures, except for SPS measures.
TBT measures can cover various subjects, such as car safety, energy-saving devices, and food carton shapes.
Technical Regulation
A document that lays down product characteristics or related processes and production methods, including mandatory administrative provisions.
Standard
A document approved by a recognized body that provides rules, guidelines, or characteristics for products or related processes and production methods, with which compliance is not mandatory.
Examples: Labeling of composition or quality of food, drink, and drugs; quality requirements for fresh food.