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WTO - PowerPoint PPT Presentation

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WTO. Objectives. WTO Liberalise world trade Promote economic stability Lay down the rules for world trade 148 Members, most non-members are seeking to join. What do they do?. Trade talks Negotiate trade barriers Interpret trade agreements

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  • WTO

    • Liberalise world trade

    • Promote economic stability

    • Lay down the rules for world trade

  • 148 Members, most non-members are seeking to join.

What do they do
What do they do?

  • Trade talks

  • Negotiate trade barriers

  • Interpret trade agreements

    • These are complex. One example is four paragraphs of a 12,000 page document which discusses the exportation and importation of ‘soft round cheese’.

Trade disputes
Trade Disputes

  • WTO has a ‘disputes resolution panel’.

  • 3 judges that deal with accusations of one state of another of violations of trade.

  • Can impose sanctions.

  • What they want is that states see no advantage to violating WTO rules.


  • Penalty, or ban

  • Can involve tariffs

    • Tax levied on imported goods

Key wto trade rulings 2005
Key WTO trade rulings: 2005

  • Dispute between EU and US over subsidies of aircraft manufacturing.

  • Both filed disputes against each other.

  • Decided to settle dispute outside the WTO.


  • Brazil lodged a complaint against US cotton farmers

  • WTO ruled against the US

  • Congress pressure, but Bush complied with WTO ruling.

Why not withdraw
Why not withdraw?

  • Disastrous: no benefits when selling goods to other economies.

  • Estimated in US trade added to average income $9,000 per person in the US.

  • If they remain members but refuse to comply, then this is an incentive for states to ignore WTO rulings. If the US can do it, so can we.

  • Lead to collapse of international trading system. No one wants this.

2005 2007

  • Antigua, Barbuda

  • Banning US residence from gambling online was a move to protect US gambling institutions.

  • US citizens could place bets with agencies located outside the US on the internet.

  • WTO upheld this complaint.

  • US forced to remove restrictions placed on citizens.

Is this fair
Is this fair?

  • Impact on state sovereignty.

  • In order to comply with both the cotton and gambling cases, the US was compelled to change US domestic policy.

  • This is usually an exclusive right of the government.

  • Even more problematic with internet gambling. Laws had to be changed.

Impact on sovereignty
Impact on Sovereignty

  • When a new state becomes a member, they must change their existing policies and domestic laws in order to comply with WTO agreements.

  • Challenges the concept of sovereignty in a very real sense.

Criticisms of the wto
Criticisms of the WTO?

  • Uruguay round, started in 1986, no agreement until 1994.

  • Takes time for states to agree.

  • Doha round began in 2001, nowhere near concluding.

  • All states within negotiations are trying to look out for themselves.

Criticisms of the wto1
Criticisms of the WTO?

  • No positive discrimination allowed in trading rules. Cannot impose barriers against states whose goods may involve Human Rights violations or Environmental destruction

  • Mexico – Tuna – Dolphins case: US tried to reform Mexican tuna production, but WTO ruled against the US.

Extended response
Extended response

  • This is one way can draw in a key global institution into arguments.

  • Environment – WTO

  • Human Rights – WTO, etc

Eu and us
EU and US

  • Protect their own economies in the form of subsidies.

  • Developing states find it hard to compete.

  • Weakness of internationalism (not just WTO), states have to be willing to make sacrifices in their interests.

  • Danger that Doha will collapse because of this.

  • Return to protectionism.