Prepared For:Mr. Mohd Ab. Malek Bin Md. Shah

Prepared By:Ahmad Afidz Bin Mohlisin

2012272858Maswadi Bin Aziz

2012840482Muhamad Shahrulfitri Bin Mohd Sulaiman

2012618928BM2264D

Prepared For:Mr. Mohd Ab. Malek Bin Md. Shah

Prepared By:Ahmad Afidz Bin Mohlisin

2012272858Maswadi Bin Aziz

2012840482Muhamad Shahrulfitri Bin Mohd Sulaiman

2012618928BM2264D

Question 8Discuss the main principles of WTO and evaluate the effectiveness of the WTO in resolving international trade dispute.

Question 8Discuss the main principles of WTO and evaluate the effectiveness of the WTO in resolving international trade dispute.

INTRODUCTION

World Trade Organization (WTO) is the only international organization dealing with the global rules of trade.

Run by member governments. All major decisions made by the membership as a whole.

Place to settle trade disputes - try to sort out the trade problems they face.

OBJECTIVES OF WTO

To promote world trade in a manner that benefits every country.

Developing countries secure a better balance in the expansion of international trade.

To enhance competitiveness among all trading partners.

MAIN PRINCIPLES

OF WTO

NON-DISCRIMINATION

Should not discriminate its trading partners.

Two major components ;a) Most-favored-nation (MFN) rule. Been main features of international trade

policy for a long time. The term means equal trade advantages as the members. 

NON-DISCRIMINATION

b) National treatment Under national treatment, grants a particular right, benefit or privilege to its own citizens. Must provide equal treatment to those citizens of other states that are participating.

More beneficial for less developed countries

Giving them more time to adjust, greater flexibility and special privileges; over three-quarters of WTO members are developing countries and countries in transition to the market economies.

Transparency

The WTO members are required to publish their trade regulations, to maintain institutions allowing for the review of administrative decisions affecting trade, to respond to requests for information by other members, and to notify changes in trade policies to the WTO.

Safety Valves

Governments are able to restrict trade in order to protect the environment, public health, animal health and plant health.

There are three types of provision in this connection.

Articles Aimed at Ensuring Fair Competition

Include the right to impose countervailing duties on imports that have been subsidized and antidumping duties on imports that have been dumped

Provisions Permitting Intervention in Trade for Economic Reasons

there are provisions allowing actions to be taken in case of serious balance of payments difficulties or if a government desires to support an infant industry

The Stages of Dispute Settlement of WTO

Definition of disputes : as a specific disagreement concerning a matter of fact, law or policy in which a claim or assertion of one party is met with a refusal, counter claim or denial by another .

Consultation

Consultation is informal negotiation that gives opportunity to the parties of dispute to resolve the conflict.

The request for the consultation must be writing and address all the issues an reasons to the request.

Respondent should reply to the request within ten days.

If the respondent failed to respond or find the solution to satisfies all the parties within 60 days, they can request to the Dispute Settlement Body to establish panel.

This problem can refer to the expert for the recommendation.

In this stage will involve third party to solve th problem.

Panel Stage

The matter is refer to a panel of experts for their recommendation.

This stage requires up to 45 days for a panel to be appointed and plus 6 months for the panel to conclude.

A request for establishment of a panel must be made in writing and is addressed to the Chairman of the Dispute Settlement Body (DSB)

The responding member can block the panel’s establishment in the first DSB meeting which the request is made.

However, the panel will establish unless the DSB decides by consensus not to establish the panel.

Appeal

After the panel report submitted to the parties and if there are an objection with the panel conclusion they can appeal the report.

The report must be appeal before the Dispute Body Settlement adopts it and it will be refer to the Appellate Body.

Only the parties to disputes are allowed to appeal and third party may only participate in the appeal which known as “third participant”

Surveillance or Supervision of The Implementation

The member will be given 30 days to inform the Dispute Settlement Body on how the result will be implement.

This implementation will be based on the appellate report or final panel.

For the country, they will be give a reasonable time for the implementation as it cannot be achieved quickly.

Related cases

TUNA-DOLPHIN CASE-Us banned the importation of tuna from Mexico due to the incidental kill of dolphins caused by the “perse seine” nets

-GATT stated that United States could not ban tuna imports from Mexico because it had not explored other less-trade restrictive ways of achieving the same environmental objective

-panel found that one country could not impose its standards on another country to protect a renewable resource outside its own territory and labeling of “dolphin-safe” did not conform to GATT standards.

BANANA CASE

-European Union (EU) introduced a single import policy that imposed quotas, duties and import licensing on banana imports into EU countries (trade barriers)

-US and some other countries such as Mexico and Honduras complaint WTO because the system was unfair discriminated against them.

-panel found that it also favored some domestic countries

-in 1999 WTO approve 100 % tariff of EU imports into US.

Opinion of the effectiveness on dispute settlement of WTO

Current issues

US FAILS TO MEET ITS OBLIGATION IN THE WTO BOEING CASE

-United States (US) has not rely on obligations to follow with a World Trade Organization (WTO) by ruling on illegal subsidies which is “Boeing case”

-apply for consultation with US at 24 September 2012 to settle dispute.

- EU can apply for panel to review the issues.

WTO EFFECTIVENESS IN RESOLVING THE EUROPIAN UNION-UNITED STATES (EU-US) TRADE CONFLICT-example case between EU and US is Banana cases ( took many years to resolve)

-US and EU as the frequent user of the WTO dispute settlement system, especially against each other.