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WTO

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

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  1. WTO

  2. Objectives • WTO • Liberalise world trade • Promote economic stability • Lay down the rules for world trade • 148 Members, most non-members are seeking to join.

  3. 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’.

  4. 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.

  5. Sanctions • Penalty, or ban • Can involve tariffs • Tax levied on imported goods

  6. 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.

  7. 2005 • Brazil lodged a complaint against US cotton farmers • WTO ruled against the US • Congress pressure, but Bush complied with WTO ruling.

  8. 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.

  9. 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.

  10. 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.

  11. 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.

  12. 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.

  13. 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.

  14. Extended response • This is one way can draw in a key global institution into arguments. • Environment – WTO • Human Rights – WTO, etc

  15. 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.

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