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The WTO
Nick Weaver, Melissa DeMaso, Jessica Ellenburg, Steve Jurca, Ben Jensen, Joshua Farnsworth
section: 2
HISTORY OF THE WTO– HOW IT WAS FORMED– PURPOSE OF THE WTO– THE STRUCTURE OF THE WTO
• MEMBER NATIONS– WHO THEY ARE– HOW TO BECOME A PART OF THE WTO– THE KEY LEADERS
• DISPUTE SETTLEMENTS• ARGUMENTS AGAINST THE WTO• ARGUMENTS SUPPORTING THE WTO
“The World Trade Organization (WTO) is the only global international organization
dealing with the rules of trade between nations. At its heart are the WTO
agreements, negotiated and signed by the bulk of the world’s trading nations
and ratified in their parliaments. The goal is to help producers of goods and
services, exporters, and importers conduct their business.”
- wto.org
The World Trade Organization
History of the WTO•How it was formed•Purpose of the WTO•The Structure of the WTO
Melissa DeMaso
Bretton Woods Conference• 1944
• 730 delegates from all 45 Allied Nations met in New Hampshire
• Purpose: to regulate the international, monetary, and financial order after World War II
• Proposed creation of an International Trade Organization (ITO) to establish rules for trade among countries.
So What Did Everyone Think?
Members of the UN Conference on Trade and Employment agreed to the ITO charter in March 1948 (4 years later)
Ratification was blocked by the U.S. Senate
–Fear that it would regulate rather than liberate big business
What Survived?
Only one element of the ITO survived…
The General Agreement on Tariffs and Trade (GATT)
(to reduce trade barriers)
Change Again…
• 7 rounds of negotiations occurred under GATT until the 8th round- known as the Uruguay Round.
• The 8th round lasted from 1986- 1995
Concluded with the establishment of the WTO!!
(main point of difference is the WTO’s substantial institutional structure)
Structure of the WTO
Ministerial Conference
General Council-General Council
-Dispute Settlement Body-Trade Policy review Body
Councils for Trade-Goods
-Property Rights-Services
Subsidiary Bodies
Other Committees
Members of the WTO•Who they are•How to become a part of the WTO•The Key Leaders
Jessica Ellenburg
Members of the WTO
How to become a part of the WTO• Original WTO Members
• Becoming a Member since WTO formation
– Process of Accession
1) Memorandum
2) Negotiation
3) Draft Membership Terms
4) The Decision
Process of Accession is not an easy process.
Vietnam: 150th MemberThe General Council approved Vietnam’s membership on 7 November 2006.
Vietnam will become the WTO’s 150th member 30 days after it has informed the WTO that it has ratified the accession package domestically.
Image: Director-General Pascal Lamy, Vietnamese Deputy Prime Minister Pham Gia Khiem, Vietnamese Trade Minister Truong Dinh Tuyen.
Leaders in the WTO
•Secretariat–Director-General
•Pascal Lamy
–Deputy Director-General•Alejandro Jara•Valentine Rugwabiza •Harsha Vardhana Singh•Rufus Yerxa
•Ministerial Conference Representatives
Dispute SettlementSpecifically Focusing on US Steel Dispute
Steve Jurca
Dispute the WTO has Resolved•US Steel Tariffs
–March 7, 2002
–Violated Agreement on Safeguards and Article XIX:1 of GATT 1994
–Initial Accusers: European Communities
–Korea, China, Switzerland, Canada, Mexico Venezuela, Norway, New Zealand, and Brazil soon joined the fight against high Steel tariffs.
Dispute the WTO has Resolved•WTO Panel Decision•United States’ safeguard measures at issue were inconsistent with at least one of the following WTO member pre-requisites:
–lack of demonstration of unforeseen developments; –lack of demonstration of increased imports–lack of demonstration of causation–lack of demonstration of parallelism.
•The Panel thus requested the United States to bring the relevant safeguard measures into conformity with prior agreements
Dispute the WTO has Resolved
Business Week Online Video
Dispute the WTO has Resolved•US Appealed ruling
•The Appellate Body upheld original decision
•The US ultimately conformed and reduced steel tariffs
“W" Wimps-Out and Consents to Lift U.S. Steel
Tariffs and WTO Demands.
Arguments against the WTO
Ben Jensen
Argument #1 The WTO hurts poor, small countries in favor of
rich, powerful nations
Thrusting small countries into a huge market, while illegalizing local protectionist policies, only serves to hamper their development. Due to the relative size of these countries, their negotiation power is severely limited, and subsequent treaties and trade agreements formed through the WTO benefit unfairly the rich and powerful corporations and nations.
Argument #2 The WTO is killing people
The WTO fiercely defends ‘Intellectual Property’ rights – and rightly so, to a degree. But when the concern is human life, temporary exceptions should be made. The WTO’s staunch enforcement of pharmaceutical’s IP rights prevents the creation of generic drugs that could be immediately employed in suffering Third world countries.
Argument #3The WTO is destroying the environment
• Exploited by corporations, the WTO abuses its power by declaring environmental standards as ‘barriers to trade’:
• “Recently, the WTO declared illegal a provision of the Endangered Species Act that requires shrimp sold in the US to be caught with an inexpensive device that allows endangered sea turtles to escape.”
Argument #4The WTO tramples labor and human rights
According to rulings by the WTO, it is illegal for a participating gov’t to ban any imported product based solely on the manner in which it was produced. This ruling makes it harder to fight child labor on an international level
Argument #5The WTO is fundamentally undemocratic
The WTO in theory is just fine, but the current setup favors multinational corporations in lieu of small country development. The numerous “advisory committees” behave very similarly to Washington politics – often useful, but too often detrimental to the real, stated aims of the WTO.
Argument #1 - The WTO hurts poor, small countries in favor of rich, powerful nations
Argument #2 - The WTO is killing
people
Argument #3 – The WTO is destroying the environment
Argument #4 – The WTO tramples labor and human rights
Argument #5 – The WTO is fundamentally undemocratic
Contesting the Arguments Against the WTO
Joshua Farnsworth
Incorrect arguments like this are used for several
different reasons:
1. Lack of Education
2. Industry Lobbyists
3. Media Bias
Argument #1:
The WTO hurts poor, small countries in favor of rich, powerful nations.
Figure 1Total GDP, in millions of 1990 US$
Figure 2GDP per Capita, in 1990 GK$
Argument #2:
The WTO is increasing hunger and killing people
“The 20th century saw unparalleled economic growth, with global per capita GDP increasing almost five-fold. But this growth was not steady—the strongest expansion came during the second half of the century, a period of rapid trade expansion accompanied by trade—and typically somewhat later, financial—liberalization.
“In the inter-war era, the world turned its back on internationalism—or globalization as we now call it—and countries retreated into closed economies, protectionism and pervasive capital controls. This was a major factor in the devastation of this period, when per capita income growth fell to less than 1 percent during 1913-1950.
-International Monetary Fund
Argument #3:The WTO is destroying the environment
The WTO tramples labor and human rights, and is
fundamentally undemocratic
Argument #1
The Media Problem
Media’s biasExample:WTO Ministerial Conference in Hong Kong
Argument #5The WTO is fundamentally undemocratic
The WTO in theory is just fine, but the current setup favors large nations & multinational corporations in lieu of small country development.
“US loses cotton fight with Brazil”
“A World Trade Organisation (WTO) appeals body on Thursday upheld an earlier ruling ordering the US to stop the payments to its farmers. “The organisation had found in its initial September ruling that the subsidies violated global trade rules. “Brazil said the US practice depressed world prices and hurt cotton producers both in Brazil and other countries. “Cotton growers in West Africa say that they have been especially hard hit by subsidies for US cotton farmers. “The US will now have to bring its cotton subsidies, which wrongly include export credits for producers, in line with global trade rules.”
BBC News: Thursday, 3 March, 2005
Benefits of International Trade & Globalization
• Helps impoverished nations• Increased variety of goods• Lower costs through economies of scale• Increased competition• Enhanced flow of ideas
Since the formation of WTO and increase in trade liberalization & globalization, quality of life has
improved around the world.
CONCLUSION
• BENEFITS OF THE WTO– Promotion of peace : This sounds like an exaggerated claim, and it
would be wrong to make too much of it. Nevertheless, the system does contribute to international peace, and if we understand why, we have a clearer picture of what the system actually does.
– Reduction in cost of living : We are all consumers. The prices we pay for our food and clothing, our necessities and luxuries, and everything else in between, are affected by trade policies.
– Increase in employment : Trade clearly has the potential to create jobs. In practice there is often factual evidence that lower trade barriers have been good for employment. But the picture is complicated by a number of factors. Nevertheless, the alternative — protectionism — is not the way to tackle employment problems.
– Trade becomes more efficient : Many of the benefits of the trading system are more difficult to summarize in numbers, but they are still important. They are the result of essential principles at the heart of the system, and they make life simpler for the enterprises directly involved in trade and for the producers of goods and services.
Conclusion
“It just so happens that globalization is great.”
-Prof. Bryson
ANY QUESTIONS?
