International Trade Law
International Trade Law
International Trade Law
The origin of trade and commerce can be traced back to the earliest days of human history.
When people first began to settle down in permanent communities, they soon realized that
they could not produce everything they needed to survive. They began to trade with their
neighbors for goods and services that they could not produce themselves. This early trade
was often based on barter, where goods or services were exchanged directly for other goods
or services.
As societies became more complex, trade became more sophisticated. Money was invented as
a medium of exchange, and merchants began to specialize in the trade of certain goods. Trade
routes developed, linking different parts of the world. The Silk Road, which connected China
and Europe, is one of the most famous examples of an ancient trade route.
International trade law is a relatively recent development. It began to emerge in the 17th and
18th centuries, as countries began to develop their own trade policies. The first major
international trade agreement was the Treaty of Methuen, which was signed by England and
Portugal in 1703. This treaty established a system of preferential trade between the two
countries.
In the 19th century, international trade law began to develop more rapidly. The rise of free
trade ideology led to the negotiation of a number of trade agreements, including the Cobden-
Chevalier Treaty between England and France in 1860.
The 20th century saw the development of the modern system of international trade law. The
General Agreement on Tariffs and Trade (GATT) was signed in 1947, and it served as the
basis for international trade law for the next 70 years. The GATT was replaced by the World
Trade Organization (WTO) in 1995. The WTO is the primary international organization
responsible for overseeing international trade law.
International trade law is the body of law that governs the trade of goods and services
between countries. International trade law is a complex and ever-evolving field. It is based on
a variety of sources, including treaties, customary international law, and the decisions of
international tribunals. The goal of international trade law is to promote free trade and to
ensure that trade is conducted fairly and in accordance with international law.
The principle of national treatment: This principle requires countries to treat foreign
goods and services no less favorably than domestic goods and services.
International trade law plays an important role in the global economy. It helps to promote
economic growth, reduce poverty, and improve living standards. It also helps to ensure that
trade is conducted fairly and in accordance with international law.
Agreements between states, also known as treaties, are one of the primary sources of
international law. Treaties are binding agreements between two or more states that are
governed by international law. They can be used to regulate a wide range of issues, including
trade, war, human rights, and the environment.
The Vienna Convention on the Law of Treaties, which was adopted in 1969, sets out the
basic rules governing the formation, interpretation, and application of treaties. The
Convention also provides for a number of mechanisms for resolving disputes between states
over the interpretation or application of treaties.
Treaties are considered to be a primary source of international law because they are the
product of the consent of states. When states agree to be bound by a treaty, they are
essentially creating new law that is binding on them. This gives treaties a special status in the
international legal order, and they are often used to codify or develop existing customary
international law.
Some of the most important treaties in the history of international law include the following:
i. The Treaty of Westphalia (1648), which ended the Thirty Years' War and established
the modern system of sovereign states.
ii. The UN Charter (1945), which established the United Nations and set out its basic
principles.
iii. The Convention on the Law of the Sea (1982), which codified the law governing the
oceans.
iv. The Convention on the Rights of the Child (1989), which sets out the basic rights of
children.
Treaties continue to play an important role in the development of international law. They are
a valuable tool for states to cooperate on a wide range of issues, and they can help to promote
peace and stability in the international community.
General practices between states are one of the primary sources of international law.
Customary international law is the body of law that is derived from the consistent and
uniform practice of states over a period of time. Customary international law is considered to
be binding on states even if they have not explicitly consented to it.
For a practice to become customary international law, it must meet the following two criteria:
State practice: There must be a consistent and uniform practice of states. This means
that states must not only act in a certain way, but they must also believe that they are
legally obligated to do so.
Opinio juris: There must be a belief that the practice is obligatory. This means that
states must act in a certain way because they believe that it is the law, not because
they are simply following a tradition or doing what other states are doing.
The practice of states can be found in a variety of sources, including treaties, declarations,
resolutions, and state practice. The International Court of Justice (ICJ) has held that the
following factors are relevant in determining whether a practice is customary international
law:
If a practice meets the two criteria of state practice and opinio juris, it becomes customary
international law. Customary international law is binding on all states, regardless of whether
they have explicitly consented to it.
Customary international law is a dynamic body of law that evolves over time. As the practice
of states changes, so too does customary international law. This means that customary
international law can be a powerful tool for promoting change in the international legal order.
"Generally recognized principles of law" are one of the three primary sources of international
law, as listed in Article 38 of the Statute of the International Court of Justice (ICJ). These
principles are fundamental legal norms that are common to all legal systems. They can be
used to fill gaps in international law or to interpret treaties.
The ICJ has not provided a definitive list of generally recognized principles of law. However,
some examples of these principles include the following:
Here are some of the challenges in identifying and applying generally recognized principles
of law:
Despite these challenges, generally recognized principles of law remain an important source
of international law. They provide a framework for resolving legal disputes between states,
and they can also be used to promote the development of new legal norms.
Here are some examples of how generally recognized principles of law have been used in
international law:
The principle of good faith has been used to interpret treaties and to resolve disputes
between states.
The principle of estoppel has been used to prevent states from denying their own
actions.
The principle of res judicata has been used to prevent states from relitigating issues
that have already been decided by a court.
The principle of proportionality has been used to balance the competing interests of
states in the context of the use of force.
The principle of sovereign equality has been used to ensure that all states are treated
equally under international law.
Generally recognized principles of law are a valuable tool for the development and
application of international law. They provide a framework for resolving legal disputes
between states, and they can also be used to promote the development of new legal norms.
Judicial decisions and the teachings of the most highly qualified publicists are two of the
subsidiary sources of international law, as listed in Article 38 of the Statute of the
International Court of Justice (ICJ). These sources are not as authoritative as treaties,
customary international law, or general principles of law, but they can still be used to
interpret and apply international law.
Judicial decisions:
Judicial decisions are the rulings of international courts and tribunals. These decisions can be
used to interpret and apply international law, and they can also help to develop new legal
norms. However, it is important to note that judicial decisions are not binding on states.
States are free to disagree with the decisions of international courts and tribunals, and they
are not obligated to follow them.
The teachings of the most highly qualified publicists are the writings of respected scholars
and experts on international law. These writings can be used to interpret and apply
international law, and they can also help to develop new legal norms. However, it is
important to note that the teachings of publicists are not as authoritative as judicial decisions.
States are free to disagree with the teachings of publicists, and they are not obligated to
follow them.
The role of judicial decisions and the teachings of publicists in international law
Judicial decisions and the teachings of publicists play an important role in the development
and application of international law. They can be used to interpret and apply existing law, and
they can also help to develop new legal norms. However, it is important to note that these
sources are not as authoritative as treaties, customary international law, or general principles
of law. States are free to disagree with the decisions of international courts and tribunals, and
they are not obligated to follow the teachings of publicists.
Here are some of the benefits of using judicial decisions and the teachings of publicists in
international law:
They can provide guidance on how to interpret and apply international law.
Here are some of the challenges of using judicial decisions and the teachings of publicists in
international law:
States are free to disagree with the decisions of international courts and tribunals, and
they are not obligated to follow the teachings of publicists.
Overall, judicial decisions and the teachings of publicists are valuable sources of information
for those who are studying or practicing international law. However, it is important to be
aware of their limitations and to use them in conjunction with other sources of law.
Other sources:-
Agreements between traders, also known as lex mercatoria, are not considered to be a
primary source of international law. However, they can be used as a source of law in certain
circumstances.
Lex mercatoria is a body of customary law that developed among traders and
merchants in the Middle Ages. It is based on the principles of good faith, fair dealing,
and the need for certainty in commercial transactions.
Lex mercatoria has been used to resolve disputes between traders for centuries. In
recent years, it has also been used by international courts and tribunals to interpret and
apply international trade law.
There is no single authoritative source of lex mercatoria. It is based on a variety of
sources, including trade usages, arbitral awards, and the writings of scholars.
The status of lex mercatoria as a source of international law is uncertain. Some
scholars argue that it is a legitimate source of law, while others argue that it is not.
In some cases, agreements between traders can be used as a source of law in international
trade disputes. For example, if a dispute arises between two traders over the interpretation of
a contract, the court or tribunal may look to the lex mercatoria to help interpret the contract.
However, it is important to note that agreements between traders are not always binding on
states. States are free to agree to be bound by lex mercatoria, but they are not obligated to do
so.
Overall, agreements between traders can be a valuable source of law in international trade
disputes. However, it is important to be aware of their limitations and to use them in
conjunction with other sources of law.
6. Domestic law
Domestic law is not considered to be a primary source of international law. However, it can
be used as a source of law in certain circumstances.
Domestic law is the law of a particular state. It is created by the legislature, the
executive, and the judiciary of that state.
However, it is important to note that domestic law is not always binding on states in the
international legal order. States are free to change their domestic law at any time, and they are
not obligated to follow the domestic law of other states.
Overall, domestic law can be a valuable source of information for those who are studying or
practicing international law. However, it is important to be aware of its limitations and to use
it in conjunction with other sources of law.
Here are some additional thoughts on domestic law as a source of international law:
The relationship between domestic law and international law is complex and can vary
from state to state.
In some cases, domestic law may be inconsistent with international law. In these
cases, states may be obligated to change their domestic law to comply with
international law.
In other cases, domestic law may be interpreted in a way that is consistent with
international law.
The role of domestic law in international law is likely to continue to evolve in the
future.
THEORIES
1. Pure or Real Theory of International Trade Equilibrium
The pure theory of international trade equilibrium, also known as the Heckscher-Ohlin
model, is a neoclassical economic model that explains the pattern of international trade
between countries. The model is based on the following assumptions:
Perfect competition: There is perfect competition in both the goods market and the
factor market.
The pure theory of international trade equilibrium predicts that countries will export goods
that they produce using their abundant factors of production and import goods that they
produce using their scarce factors of production. For example, a country that is abundant in
land will export agricultural goods, while a country that is abundant in labor will export
manufactured goods.
The pure theory of international trade equilibrium has been criticized for its unrealistic
assumptions. For example, the assumption of perfect competition is not always realistic, and
the assumption of free trade is not always met in the real world. However, the model remains
an important tool for understanding the basic principles of international trade.
Here are some of the key insights of the pure theory of international trade equilibrium:
Trade can benefit both countries: Even if one country has an absolute advantage in the
production of all goods, both countries can still benefit from trade by specializing in
the production of the goods that they produce most efficiently.
The pattern of trade is determined by factor endowments: Countries will export goods
that they produce using their abundant factors of production and import goods that
they produce using their scarce factors of production.
Trade can lead to changes in the distribution of income: Trade can lead to winners and
losers, as the prices of goods change and the demand for factors of production shifts.
The pure theory of international trade equilibrium is a valuable tool for understanding the
basic principles of international trade. However, it is important to be aware of its limitations
and to use it in conjunction with other models of international trade.
The monetary theory of balance of payments adjustment is a theory that explains how balance
of payments imbalances are corrected through changes in the money supply. The theory is
based on the following assumptions:
Changes in the money supply lead to changes in prices: When the money supply
increases, prices rise. When the money supply decreases, prices fall.
Changes in prices lead to changes in imports and exports: When prices rise in a
country, its exports become less competitive and its imports become more attractive.
This leads to a decrease in exports and an increase in imports, which corrects the
balance of payments deficit.
The monetary theory of balance of payments adjustment has been criticized for its unrealistic
assumptions. For example, the assumption that the balance of payments is a monetary
phenomenon is not always realistic, and the assumption that changes in prices lead to changes
in imports and exports is not always true. However, the theory remains an important tool for
understanding the basic principles of balance of payments adjustment.
Here are some of the key insights of the monetary theory of balance of payments adjustment:
The balance of payments can be adjusted through changes in the money supply: A
balance of payments deficit can be corrected by decreasing the money supply, which
will lead to a decrease in prices and an increase in exports.
Changes in the money supply can have a significant impact on the economy: Changes
in the money supply can lead to changes in prices, output, and employment.
The monetary theory of balance of payments adjustment is a valuable tool for understanding
the basic principles of balance of payments adjustment. However, it is important to be aware
of its limitations and to use it in conjunction with other models of balance of payments
adjustment.
3. Mercantilism - Commercial Capitalism & its Criticism
Mercantilism is an economic theory that was dominant in Europe from the 16th to the 18th
centuries. It is based on the belief that a nation's wealth is determined by its stock of precious
metals, such as gold and silver. Mercantilists argued that countries could increase their wealth
by exporting more goods than they imported, which would result in a net inflow of precious
metals.
High tariffs on imported goods: This would make imported goods more expensive,
making it more attractive to buy domestically produced goods.
Subsidies for exports: This would make exported goods cheaper, making them more
competitive in foreign markets.
Colonization: This would give countries access to new markets and resources.
State control of the economy: Mercantilists believed that the state should play an
active role in the economy, by regulating trade, subsidizing industries, and supporting
colonies.
Commercial capitalism is the economic system that emerged in Europe during the 16th
century. It is based on the principles of free markets, private property, and profit
maximization. Commercial capitalism was a major factor in the rise of mercantilism, as it
provided the economic foundation for the policies of mercantilist states.
It was based on the false belief that a nation's wealth was determined by its stock of
precious metals.
It led to trade wars and other forms of economic conflict between countries.
In the 18th century, mercantilism began to decline as a result of the Industrial Revolution and
the rise of free trade. However, some of its principles, such as the importance of exports and
the role of the state in the economy, continue to be influential today.
It is based on a zero-sum game: The belief that a country's wealth can only increase at
the expense of another country's wealth is not always true.
It is not sustainable: Mercantilist policies can lead to trade wars and other forms of
economic conflict, which can damage the global economy.
Despite these criticisms, mercantilism played an important role in the development of the
global economy. It helped to lay the foundation for free trade and other modern economic
principles.
4. Theory of Absolute Advantage of Adam Smith
The theory of absolute advantage is an economic theory that was developed by Adam Smith
in his book The Wealth of Nations. The theory states that countries should specialize in the
production of goods and services that they can produce more efficiently than other countries.
This specialization will allow countries to produce more goods and services overall, which
will lead to economic growth.
The theory of absolute advantage predicts that Country A will export Good X and import
Good Y, while Country B will export Good Y and import Good X. This is because Country A
can produce Good X more efficiently than Country B, and Country B can produce Good Y
more efficiently than Country A.
The theory of absolute advantage has been criticized for a number of reasons, including:
It is based on the assumption that there are only two countries: In the real world, there
are many countries, and each country has different absolute advantages in the
production of different goods.
It is based on the assumption that there are no trade barriers: In the real world, there
are many trade barriers, such as tariffs and quotas. These trade barriers can make it
difficult for countries to specialize in the production of goods and services that they
have an absolute advantage in.
Despite these criticisms, the theory of absolute advantage is still an important concept in
economics. It helps to explain why countries trade with each other, and it provides a
foundation for other theories of international trade, such as the theory of comparative
advantage.
The theory of comparative advantage is an economic theory that was developed by David
Ricardo in his book On the Principles of Political Economy and Taxation. The theory states
that countries should specialize in the production of goods and services that they have a
comparative advantage in. This specialization will allow countries to produce more goods
and services overall, which will lead to economic growth.
The theory of comparative advantage predicts that Country A will export Good X and import
Good Y, while Country B will export Good Y and import Good X. This is because Country A
can produce Good X more efficiently than Country B, but Country B can produce Good Y
more efficiently than Country A.
The theory of comparative advantage has been developed and refined over time. In the
modern world, there are many factors that can affect a country's comparative advantage,
including the availability of resources, the level of technology, and the cost of labour.
Here are some of the key insights of the theory of comparative advantage:
Trade can benefit both countries: Even if one country has an absolute advantage in the
production of all goods, both countries can still benefit from trade by specializing in
the production of the goods that they produce most efficiently.
Trade can lead to changes in the distribution of income: Trade can lead to winners and
losers, as the prices of goods change and the demand for factors of production shifts.
The theory of comparative advantage is a valuable tool for understanding the basic principles
of international trade. However, it is important to be aware of its limitations and to use it in
conjunction with other models of international trade.
Here are some of the modern developments of the theory of comparative advantage:
The theory of revealed comparative advantage: This theory was developed by Bertil
Ohlin in the 1930s. It states that countries will tend to export the goods in which they
have a revealed comparative advantage, which is the good in which they have a larger
share of world exports.
The theory of factor endowments: This theory was developed by Eli Heckscher and
Bertil Ohlin in the 1930s. It states that countries will tend to export the goods that use
their abundant factors of production intensively. For example, a country that is
abundant in labour will tend to export labour-intensive goods.
The theory of comparative advantage is a powerful tool for understanding international trade.
It has helped to explain why countries trade with each other, and it has provided a foundation
for other theories of international trade. The theory is still being developed and refined today,
and it continues to be an important concept in economics.
6. H-O Model & Gravity Model
The Heckscher–Ohlin (H–O) model and the gravity model are two economic models that are
used to explain the pattern of international trade. The H–O model is based on the theory of
comparative advantage, and it predicts that countries will export goods that use their
abundant factors of production intensively. The gravity model, on the other hand, is based on
the idea that trade between two countries is proportional to the size of their economies and
inversely proportional to the distance between them.
Both models have been used in international law to argue for or against certain trade policies.
For example, the H–O model has been used to argue against tariffs and other trade barriers, as
these policies can distort the pattern of trade and lead to inefficient production. The gravity
model, on the other hand, has been used to argue for free trade agreements, as these
agreements can increase trade between countries and boost economic growth.
However, both models have also been criticized for their assumptions and limitations. For
example, the H–O model assumes that factors of production are perfectly mobile between
countries, which is not always the case. The gravity model, on the other hand, assumes that
trade is the only factor that determines the size of a country's trade, which is also not always
true.
Despite their limitations, both the H–O model and the gravity model are valuable tools for
understanding the pattern of international trade. They have been used to explain a wide range
of empirical observations, and they continue to be used in international law to argue for or
against certain trade policies.
Here are some of the key similarities and differences between the H–O model and the gravity
model:
Similarities:
Both models have been used in international law to argue for or against certain trade
policies.
Differences:
The H–O model is based on the theory of comparative advantage, while the gravity
model is based on the idea that trade between two countries is proportional to the size
of their economies and inversely proportional to the distance between them.
The H–O model assumes that factors of production are perfectly mobile between
countries, while the gravity model does not make this assumption.
Overall, both the H–O model and the gravity model are valuable tools for understanding the
pattern of international trade. However, they have different strengths and weaknesses, and
they should be used in conjunction with other models to get a complete picture of the factors
that influence international trade.
Free trade theory is a set of economic theories that argue that free trade between countries is
beneficial to all countries involved. These theories are based on the idea that countries can
produce goods and services more efficiently if they specialize in the production of goods and
services that they have a comparative advantage in.
Free trade theory has been influential in international law. Many international agreements,
such as the General Agreement on Tariffs and Trade (GATT) and the World Trade
Organization (WTO), are based on the principles of free trade.
The following are some of the key principles of free trade theory:
Free trade: Countries should not impose tariffs or other trade barriers on goods and
services that are traded between them.
Competition: Free trade promotes competition between businesses, which can lead to
lower prices and better quality goods and services.
Efficiency: Free trade can lead to more efficient production, which can benefit
consumers by lowering prices and increasing the variety of goods and services
available.
Free trade theory has been criticized for a number of reasons. Some critics argue that free
trade can lead to job losses in certain industries, as businesses move production to countries
where labor is cheaper. Others argue that free trade can lead to environmental degradation, as
businesses move production to countries with weaker environmental regulations.
Despite these criticisms, free trade theory remains an influential force in international law.
Many countries continue to believe that free trade is beneficial to their economies, and they
continue to negotiate free trade agreements with other countries.
Free trade can lead to economic growth: Free trade can lead to increased
specialization and competition, which can lead to lower prices and better quality
goods and services. This can boost economic growth by increasing consumer demand
and investment.
Free trade can lead to job creation: Free trade can lead to the creation of new jobs in
export industries. It can also lead to the creation of jobs in industries that supply the
export industries.
Free trade can lead to lower prices: Free trade can lead to lower prices for consumers
because it increases competition between businesses. This can benefit consumers by
putting downward pressure on prices.
Free trade can lead to better quality goods and services: Free trade can lead to better
quality goods and services because it increases competition between businesses. This
can benefit consumers by giving them more choices and forcing businesses to
improve their products and services.
Free trade can lead to job losses: Free trade can lead to job losses in certain industries,
as businesses move production to countries where labor is cheaper. This can be a
problem for workers in those industries, who may have to find new jobs or accept
lower wages.
Free trade can lead to environmental degradation: Free trade can lead to
environmental degradation, as businesses move production to countries with weaker
environmental regulations. This can harm the environment and the health of people
living in those countries.
Free trade can lead to inequality: Free trade can lead to inequality, as the benefits of
trade are not always evenly distributed. This can be a problem for people who are
already poor or marginalized.
Overall, free trade theory is a complex and controversial issue. There are both pros and cons
to free trade, and it is important to weigh these factors carefully before making a decision
about whether or not to support free trade policies.
Distributive justice in international trade refers to the fair distribution of the benefits and
costs of trade between countries. This is a complex issue, as there are many different factors
to consider, such as the size of the economies involved, the level of development, and the
distribution of wealth within each country.
There are a number of different ways to think about distributive justice in international trade.
One approach is to focus on the overall gains from trade. If all countries benefit from trade,
then it can be argued that distributive justice has been achieved. However, this approach does
not take into account the fact that the benefits of trade may not be evenly distributed.
There are a number of different policies that can be used to promote distributive justice in
international trade. Some of these policies include:
Investment in education and training: This can help to ensure that workers have the
skills they need to find new jobs in the wake of trade.
Social safety nets: These can help to protect the most vulnerable members of society
from the negative effects of trade.
The issue of distributive justice in international trade is complex and there is no easy answer.
However, it is an important issue to consider, as the benefits of trade should be shared fairly
among all members of society.
Here are some of the key challenges to achieving distributive justice in international trade:
Measuring the benefits and costs of trade: It is difficult to measure the benefits and
costs of trade, as these can vary depending on the factors involved.
Identifying the winners and losers from trade: It is also difficult to identify the
winners and losers from trade, as these can vary depending on the factors involved.
Trade is the exchange of goods and services between countries. It is an important part of the
global economy, and it has many benefits for both individuals and countries.
Here are some of the key importance of trade and gains from trade:
Increased innovation: Trade can lead to increased innovation, as businesses are forced
to compete in a global market. This can lead to the development of new products and
services, which can benefit consumers and businesses alike.
Increased economic growth: Trade can lead to increased economic growth, as it can
lead to increased specialization, competition, and innovation. This can benefit both
individuals and countries, as it can lead to higher incomes and a better standard of
living.
The gains from trade can be measured in terms of the increase in consumer surplus and
producer surplus. Consumer surplus is the difference between the price that consumers are
willing to pay for a good and the price that they actually pay. Producer surplus is the
difference between the price that producers are willing to sell a good for and the price that
they actually sell it for.
The gains from trade can also be measured in terms of the increase in economic welfare.
Economic welfare is the sum of consumer surplus and producer surplus.
The gains from trade are not always evenly distributed. Some countries may benefit more
from trade than others. However, overall, trade is a positive force for the global economy. It
can lead to increased specialization, competition, innovation, and economic growth.
Trade barriers: Trade barriers can restrict trade and prevent countries from realizing
the full benefits of trade. Some common trade barriers include tariffs, quotas, and
subsidies.
Inequality: Trade can lead to inequality, as the benefits of trade are not always evenly
distributed. This can be a problem for people who are already poor or marginalized.
Economic globalization and international trade are two closely related concepts. Economic
globalization refers to the increasing interconnectedness of the world's economies, while
international trade refers to the exchange of goods and services between countries.
International trade is a key driver of economic globalization. When countries trade with each
other, they become more interconnected. This can lead to a number of benefits, including
increased specialization, competition, and innovation.
However, international trade can also have some negative consequences. For example, it can
lead to job losses in some industries, and it can also lead to environmental degradation.
Overall, economic globalization and international trade are complex phenomena with both
positive and negative consequences. It is important to carefully consider the potential benefits
and drawbacks of these trends before making policy decisions.
Here are some of the key benefits of economic globalization and international trade:
Here are some of the key challenges of economic globalization and international trade:
Trade barriers: Trade barriers can restrict trade and prevent countries from realizing
the full benefits of trade. Some common trade barriers include tariffs, quotas, and
subsidies.
Inequality: Economic globalization can lead to inequality, as the benefits of trade are
not always evenly distributed. This can be a problem for people who are already poor
or marginalized.
Despite these challenges, economic globalization and international trade are still important
forces in the global economy. It is important to work to address the challenges to these trends
in order to ensure that everyone can benefit from them.
Fair trade and free trade are two different approaches to international trade. Fair trade is
based on the idea that trade should be fair to all parties involved, including producers,
workers, and consumers. Free trade, on the other hand, is based on the idea that trade should
be free from government interference.
Here are some of the key differences between fair trade and free trade:
Prices: Fair trade prices are set above the market price, which helps to ensure that
producers receive a fair price for their goods. Free trade prices are determined by the
market, which means that they can be lower or higher than fair trade prices.
Working conditions: Fair trade standards require that producers provide good working
conditions for their workers, such as a living wage, safe working conditions, and
freedom of association. Free trade standards do not have any requirements for
working conditions.
Environment: Fair trade standards require that producers use sustainable production
methods that protect the environment. Free trade standards do not have any
requirements for environmental protection.
Fair trade and free trade are both complex issues with both pros and cons. It is important to
weigh the benefits and drawbacks of each approach before making a decision about which
one is best.
Fair trade benefits producers: Fair trade prices help to ensure that producers receive a
fair price for their goods, which can help to improve their standard of living.
Fair trade benefits workers: Fair trade standards require that producers provide good
working conditions for their workers, which can help to improve their working lives.
Fair trade benefits the environment: Fair trade standards require that producers use
sustainable production methods, which can help to protect the environment.
Free trade benefits consumers: Free trade can lead to lower prices for consumers, as it
can increase competition between businesses.
Free trade benefits businesses: Free trade can help businesses to grow and expand, as
it can give them access to new markets.
Free trade benefits the economy: Free trade can help to boost economic growth, as it
can increase trade and investment.
Ultimately, the decision of whether to support fair trade or free trade is a personal one. There
are both pros and cons to each approach, and it is important to weigh the benefits and
drawbacks before making a decision.
Governments intervene in the market for a variety of reasons, both economic and social. In
the international law context, governments may intervene in the market to:
Protect the environment: Governments may intervene in the market to protect the
environment, such as by regulating pollution or by promoting sustainable
development.
The extent to which governments intervene in the market varies from country to country.
Some countries have a more interventionist approach, while others have a more laissez-faire
approach. The decision of whether or not to intervene in the market is a complex one, and
there are a variety of factors that governments must consider, such as the economic and social
costs and benefits of intervention.
Here are some of the key arguments in favor of government intervention in the market:
Government intervention can correct market failures: Market failures occur when the
market does not allocate resources efficiently. This can happen for a variety of
reasons, such as when there are externalities or when there is imperfect information.
Government intervention can help to correct market failures by providing public
goods, regulating the market, or redistributing income.
Here are some of the key arguments against government intervention in the market:
Government intervention can distort the market: Government intervention can distort
the market by interfering with the price mechanism. This can lead to inefficient
allocation of resources and higher prices for consumers.
Instruments of trade policy are the tools that governments use to regulate international trade.
They can be used to promote trade, restrict trade, or protect domestic industries.
There are two main types of trade policy instruments: price-based instruments and non-price-
based instruments.
Price-based instruments are those that directly affect the price of goods and services traded
internationally. They include:
Tariffs: These are taxes imposed on imported goods. They raise the price of imported
goods, making them less competitive with domestically produced goods.
Quotas: These are limits on the quantity of goods that can be imported. They restrict
the supply of imported goods, which can also raise their price.
Export subsidies: These are payments made by the government to exporters. They
lower the price of exported goods, making them more competitive in foreign markets.
Non-price-based instruments are those that do not directly affect the price of goods and
services traded internationally. They include:
Technical barriers to trade: These are regulations that set standards for the quality,
safety, or labeling of goods. They can make it difficult or impossible for foreign
goods to meet the requirements, which can restrict trade.
Voluntary export restraints: These are agreements between governments in which one
government agrees to limit the quantity of goods that it exports to another country.
They are similar to quotas, but they are not imposed by the government.
Anti-dumping duties: These are duties imposed on imported goods that are sold at a
price below their fair market value. They are designed to protect domestic industries
from unfair competition.
The use of trade policy instruments is a complex issue. There are both economic and political
considerations that governments must take into account when making decisions about
whether or not to use these instruments.
Here are some of the key factors that governments consider when using trade policy
instruments:
The economic impact of the instrument: Governments must consider the impact of the
instrument on the economy as a whole, as well as on specific industries and sectors.
The political impact of the instrument: Governments must also consider the political
impact of the instrument, both domestically and internationally.
The legal implications of the instrument: Governments must ensure that the
instrument is consistent with international law and with their own domestic laws.
Protectionism
Protectionism is a trade policy that seeks to protect domestic industries from foreign
competition. Governments can use a variety of instruments to implement protectionism,
including:
Tariffs: Tariffs are taxes that are imposed on imported goods. Tariffs can raise the
price of imported goods, making them less competitive with domestically produced
goods.
Quotas: Quotas are limits on the quantity of goods that can be imported. Quotas can
restrict the availability of imported goods, making them more expensive and less
accessible to consumers.
Subsidies: Subsidies are payments that are made by the government to domestic
producers. Subsidies can help to lower the cost of production for domestic producers,
making them more competitive with foreign producers.
Technical barriers to trade: Technical barriers to trade are regulations that make it
more difficult or expensive for foreign goods to enter a country. Technical barriers to
trade can include requirements for testing, certification, or labeling.
Protectionism can have both positive and negative effects. On the one hand, protectionism
can help to protect domestic jobs and industries. On the other hand, protectionism can raise
prices for consumers and make it more difficult for businesses to access imported goods.
The use of protectionism is a controversial issue. Some people believe that protectionism is
necessary to protect domestic industries, while others believe that it is harmful to the
economy. The decision of whether or not to use protectionism is a complex one, and there are
a variety of factors that must be considered.
Protectionism can protect domestic jobs: Protectionism can help to protect domestic
jobs by making it more difficult for foreign goods to compete with domestically
produced goods. This can be especially important in countries that are heavily reliant
on manufacturing or agriculture.
Protectionism can protect national security: Protectionism can help to protect national
security by preventing the import of goods that could be used for military purposes.
This is especially important in countries that are considered to be a security threat.
Protectionism can raise prices for consumers: Protectionism can raise prices for
consumers by making imported goods more expensive. This can be a burden on
consumers, especially those who are on a tight budget.
Protectionism can harm the economy: Protectionism can harm the economy by
reducing competition and innovation. This can lead to higher prices, lower quality
goods and services, and a loss of jobs.
Protectionism can lead to trade wars: Protectionism can lead to trade wars, which are
conflicts between countries over trade policies. Trade wars can be harmful to the
global economy, as they can lead to higher prices, lower trade, and economic
instability.
The history of international trade is long and complex, dating back to the ancient world.
However, the modern trading system as we know it today really began to take shape in the
aftermath of World War II.
In 1947, 23 countries signed the General Agreement on Tariffs and Trade (GATT), which
established a set of rules governing international trade. The GATT was a provisional
agreement, and it was not until 1995 that the World Trade Organization (WTO) was created
to replace it.
The WTO is a more formal organization than the GATT, and it has a broader mandate. The
WTO not only deals with tariffs, but also with other trade-related issues such as subsidies,
intellectual property, and services.
The WTO has been credited with helping to promote global economic growth. Since its
creation, world trade has increased by more than fivefold. However, the WTO has also been
criticized for its perceived lack of transparency and accountability.
1970s: The Tokyo Round of GATT negotiations results in new agreements on non-
tariff barriers to trade.
2001: The Doha Development Agenda is launched, with the goal of further
liberalizing trade and helping developing countries.
The WTO is a complex organization, and its history is long and winding. However, it is clear
that the WTO has played a significant role in shaping the modern trading system.
The GATT held eight rounds of multilateral trade negotiations, each of which resulted in
significant reductions in tariffs. The most important of these rounds was the Uruguay Round,
which was concluded in 1994. The Uruguay Round not only reduced tariffs, but it also
created new rules on trade in services, intellectual property, and dispute settlement.
The Uruguay Round also led to the creation of the World Trade Organization (WTO), which
replaced the GATT. The WTO is a more formal organization than the GATT, and it has a
broader mandate. The WTO not only deals with tariffs, but it also with other trade-related
issues such as subsidies, intellectual property, and services.
The WTO has been credited with helping to promote global economic growth. Since its
creation, world trade has increased by more than fivefold. However, the WTO has also been
criticized for its perceived lack of transparency and accountability.
Here is a brief overview of the key differences between the GATT and the WTO:
The WTO is a more formal organization than the GATT. The WTO has a permanent
secretariat and a dispute settlement body. The GATT did not have these institutions.
The WTO has a broader mandate than the GATT. The WTO deals with tariffs, as well
as other trade-related issues such as subsidies, intellectual property, and services. The
GATT only dealt with tariffs.
The WTO has more members than the GATT. The WTO has 164 members, while the
GATT had 123 members at the time of its dissolution.
The GATT and the WTO have played a significant role in shaping the modern trading
system. They have helped to reduce tariffs and other trade barriers, and they have promoted
global economic growth. However, both organizations have also been criticized for their
perceived lack of transparency and accountability.
Geneva Round (1947): The first round of GATT negotiations, which resulted in the
signing of the General Agreement on Tariffs and Trade (GATT).
The Uruguay Round was a major achievement for the GATT. It resulted in significant
reductions in tariffs, the creation of new rules on trade in services, intellectual property, and
dispute settlement, and the establishment of the WTO. The Uruguay Round has had a major
impact on the global trading system, and it continues to shape the way trade is conducted
today.
Here are some of the key subjects and modalities of the Uruguay Round:
Tariffs: The Uruguay Round resulted in an average tariff reduction of 36%. This was
a significant achievement, as it reduced the average tariff on industrial products from
6.3% to 3.8%. The tariff reductions were phased in over a period of eight years, and
they were based on a formula that took into account the level of tariffs in each
country.
Non-tariff barriers: The Uruguay Round created new rules on non-tariff barriers,
such as quotas, subsidies, and technical barriers to trade. These rules were designed to
make it more difficult for countries to use non-tariff barriers to protect their domestic
industries. For example, the rules on quotas require countries to justify their use of
quotas, and they limit the amount of time that quotas can be in place.
Agriculture: The Uruguay Round reformed the agricultural trade regime, reducing
subsidies and providing greater market access for agricultural products. This was a
major achievement, as it had been difficult to reach agreement on agricultural trade in
previous rounds of negotiations. The Uruguay Round agreement on agriculture
required countries to reduce their agricultural subsidies, and it also provided for
greater market access for agricultural products.
Textiles and clothing: The Uruguay Round brought textiles and clothing under the
GATT rules, ending the Multifibre Arrangement (MFA). The MFA was a system of
quotas that had been used to restrict trade in textiles and clothing since the 1970s. The
Uruguay Round agreement on textiles and clothing phased out the MFA over a period
of ten years, and it also provided for greater market access for textiles and clothing
products.
Services: The Uruguay Round created the General Agreement on Trade in Services
(GATS), which sets out rules for trade in services. The GATS is a comprehensive
agreement that covers a wide range of services, including telecommunications,
financial services, and transportation services. The GATS rules are designed to make
it easier for countries to trade in services, and they also provide for greater
transparency in the regulation of services.
Intellectual property: The Uruguay Round created the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS), which sets out rules for intellectual
property protection. The TRIPS agreement covers a wide range of intellectual
property rights, including copyrights, trademarks, patents, and trade secrets. The
TRIPS rules are designed to protect intellectual property rights, and they also provide
for greater enforcement of these rights.
Dispute settlement: The Uruguay Round strengthened the GATT dispute settlement
system, making it more effective and expeditious. The dispute settlement system is a
mechanism that allows countries to resolve trade disputes through negotiations. The
Uruguay Round agreement on dispute settlement made it easier for countries to bring
cases to the dispute settlement system, and it also made it more difficult for countries
to block the adoption of dispute settlement rulings.
The General Agreement on Tariffs and Trade (GATT) was signed by 23 countries in 1947. It
was intended to be a provisional agreement until the International Trade Organization (ITO)
could be established. However, the ITO never came into force, and the GATT continued to
operate as a de facto international organization.
The GATT held eight rounds of multilateral trade negotiations, each of which resulted in
significant reductions in tariffs. The most important of these rounds was the Uruguay Round,
which was concluded in 1994. The Uruguay Round not only reduced tariffs, but it also
created new rules on trade in services, intellectual property, and dispute settlement.
The Uruguay Round also led to the creation of the World Trade Organization (WTO), which
replaced the GATT. The WTO is a more formal organization than the GATT, and it has a
broader mandate. The WTO not only deals with tariffs, but it also with other trade-related
issues such as subsidies, intellectual property, and services.
The GATT 1947 and the GATT 1994 are legally distinct agreements. The GATT 1947 was
incorporated into the GATT 1994, but it remains a separate legal instrument. The GATT
1994 also includes a number of new agreements and understandings that were not part of the
GATT 1947.
The GATT 1947 and the GATT 1994 are two legally distinct agreements. The GATT 1947
was incorporated into the GATT 1994, but it remains a separate legal instrument. The GATT
1994 also includes a number of new agreements and understandings that were not part of the
GATT 1947.
Legal status: The GATT 1947 was a provisional agreement, while the GATT 1994 is
a legally binding agreement.
Mandate: The GATT 1947 only covered trade in goods, while the GATT 1994
covers trade in goods, services, intellectual property, and dispute settlement.
Membership: The GATT 1947 had 23 members, while the GATT 1994 has 164
members.
Dispute settlement system: The dispute settlement system of the GATT 1947 was
less formal than the dispute settlement system of the GATT 1994.
New agreements: The GATT 1994 includes new agreements on services, intellectual
property, and dispute settlement.
The GATT 1994 is the current legal framework for the global trading system. It is a
comprehensive agreement that covers a wide range of trade-related issues. The GATT 1994
has had a major impact on the global economy, and it continues to shape the way trade is
conducted today.
The institutional structure of the World Trade Organization (WTO) is composed of the
following bodies:
General Council: The General Council is the main decision-making body of the WTO
between Ministerial Conferences. It is composed of ambassadors and other
representatives from all WTO members and meets several times a year. The General
Council has the power to act on behalf of the Ministerial Conference, and it also
serves as the Dispute Settlement Body, the Trade Policy Review Body, and the
Committee on Trade and Development.
Appellate Body: The Appellate Body is an independent body that hears appeals from
decisions made by panels in the WTO dispute settlement system. The Appellate Body
is composed of seven members who are appointed by the Ministerial Conference for
four-year terms.
Councils: There are several councils under the General Council that deal with specific
areas of trade, such as the Goods Council, the Services Council, and the TRIPS
Council. These councils are responsible for overseeing the implementation of the
agreements in their respective areas, and they also provide a forum for members to
discuss and negotiate trade-related issues.
Committees: There are also several committees under the General Council that deal
with more technical aspects of trade, such as the Committee on Technical Barriers to
Trade and the Committee on Customs Valuation. These committees are responsible
for providing advice to the General Council on technical issues, and they also play a
role in the implementation of the WTO agreements.
The WTO also has a number of other bodies, such as the Secretariat, the Dispute Settlement
Body, and the Trade Policy Review Body. These bodies play a variety of roles in the
functioning of the WTO, including providing technical support, resolving disputes, and
reviewing the trade policies of WTO members.
The institutional structure of the WTO is designed to be democratic and transparent. All
WTO decisions are made by consensus, and all WTO members have an equal say in the
decision-making process. The WTO also publishes all of its documents and decisions, and it
holds regular public meetings.
The WTO is a unique organization that has played a significant role in the global trading
system. The WTO's institutional structure has helped to ensure that the organization is
democratic and transparent, and it has also helped to make the WTO an effective forum for
resolving trade disputes.
Any state or customs territory having full autonomy in the conduct of its trade policies may
become a member of the World Trade Organization (WTO). This is known as accession.
The accession process is complex and can take several years to complete. It involves a
number of steps, including:
5. Protocol of Accession: Once the negotiations are complete, the Working Party adopts
a report that sets out the terms of accession. The applicant government then signs the
Protocol of Accession, which is a legal instrument that sets out the terms of the
applicant government's membership in the WTO.
6. Ratification: The applicant government must then ratify the Protocol of Accession by
its national parliament.
7. Adoption of the Protocol of Accession: Once the applicant government has ratified
the Protocol of Accession, the WTO General Council adopts the Protocol of
Accession, which brings the applicant government into the WTO.
The accession process can be a long and complex one, but it is ultimately a rewarding
experience for the applicant government. WTO membership provides a number of benefits,
including:
Access to the WTO's dispute settlement system: The WTO's dispute settlement
system is one of the most effective in the world. It provides a mechanism for WTO
members to resolve trade disputes through negotiations or through binding rulings by
panels and the Appellate Body.
Access to the WTO's market access commitments: WTO members have made
commitments to reduce tariffs and other barriers to trade. These commitments provide
WTO members with greater access to each other's markets.
The accession process is a valuable opportunity for countries to integrate their economies into
the global trading system and to reap the benefits of WTO membership.
There are a few exceptions to the consensus rule. For example, decisions on procedural
matters can be made by a majority vote. Additionally, the WTO can adopt decisions by a two
-thirds majority vote if there is a deadlock on a particular issue.
The WTO's decision-making process is based on a number of different bodies. The most
important of these bodies are the Ministerial Conference and the General Council. The
Ministerial Conference is the highest-level decision-making body in the WTO. It meets at
least once every two years and can adopt new rules, amend existing rules, and make decisions
on all matters related to the WTO. The General Council is the main decision-making body of
the WTO between Ministerial Conferences. It meets several times a year and has the power to
act on behalf of the Ministerial Conference.
The WTO also has a number of other bodies that play a role in the decision-making process.
These bodies include the Councils, the Committees, and the Appellate Body. The Councils
are responsible for overseeing the implementation of the WTO agreements in their respective
areas, and they also provide a forum for members to discuss and negotiate trade-related
issues. The Committees are responsible for providing advice to the General Council on
technical issues, and they also play a role in the implementation of the WTO agreements. The
Appellate Body is an independent body that hears appeals from decisions made by panels in
the WTO dispute settlement system.
The decision-making process in the WTO is a complex and sometimes slow process.
However, the consensus system ensures that all WTO members have a voice in the decision-
making process. This is important, as it helps to ensure that the WTO remains a legitimate
and effective organization.
Here are some of the key features of the WTO's decision-making process:
Consensus: All WTO members must agree on a decision before it can be adopted.
General Council: The main decision-making body of the WTO between Ministerial
Conferences. Meets several times a year.
Appellate Body: An independent body that hears appeals from decisions made by
panels in the WTO dispute settlement system.
The WTO's role in international trade is to ensure that trade flows as smoothly, freely, and
predictably as possible. It does this by:
Administering trade agreements: The WTO administers the agreements that have been
negotiated by its member countries. These agreements cover a wide range of trade-
related issues, including tariffs, non-tariff barriers, services, intellectual property, and
dispute settlement.
Providing a forum for trade negotiations: The WTO provides a forum for its member
countries to negotiate new trade agreements and to resolve trade disputes.
Settling trade disputes: The WTO has a dispute settlement system that is considered to
be one of the most effective in the world. This system allows WTO members to
resolve trade disputes through negotiations or through binding rulings by panels and
the Appellate Body.
Reviewing national trade policies: The WTO reviews the trade policies of its member
countries to ensure that they are in compliance with WTO rules.
The WTO has played a significant role in promoting international trade. Since its inception,
the WTO has helped to reduce tariffs and other barriers to trade, which has led to increased
trade flows and economic growth. The WTO has also helped to resolve trade disputes, which
has helped to create a more predictable and stable trading environment.
The WTO is not without its critics. Some critics argue that the WTO is too focused on trade
liberalization and that it does not do enough to protect workers' rights or the environment.
Others argue that the WTO's dispute settlement system is too powerful and that it can be used
by powerful countries to bully smaller countries.
Despite these criticisms, the WTO remains an important institution in the global trading
system. The WTO has helped to promote international trade and economic growth, and it has
provided a forum for its member countries to resolve trade disputes. The WTO is likely to
continue to play an important role in the global trading system in the years to come.
The World Trade Organization (WTO), the International Monetary Fund (IMF), and the
World Bank (WB) are all international organizations that were created in the aftermath of
World War II to help promote economic stability and growth. The WTO is responsible for
regulating international trade, the IMF is responsible for stabilizing the international
monetary system, and the WB is responsible for providing financial assistance to developing
countries.
The WTO, IMF, and WB have a close relationship. They all share the same goal of
promoting economic development and they often work together to achieve this goal. For
example, the WTO and the IMF often work together to ensure that trade agreements are
consistent with IMF's macroeconomic policies. The WB also works with the WTO and the
IMF to provide technical assistance to developing countries to help them implement trade
agreements and IMF policies.
In addition to the WTO, IMF, and WB, there are also other institutions that are part of the
Bretton Woods system. These institutions include:
The International Bank for Reconstruction and Development (IBRD): The IBRD is
the oldest institution of the World Bank Group. It provides loans to developing
countries for infrastructure projects, such as roads, bridges, and power plants.
The International Finance Corporation (IFC): The IFC is a private sector lending arm
of the World Bank Group. It provides loans and equity investments to private
companies in developing countries.
The International Centre for the Settlement of Investment Disputes (ICSID): ICSID is
an international arbitration court that settles investment disputes between investors
and host governments.
The Bretton Woods institutions play an important role in the global economy. They help to
promote economic growth and stability, and they provide financial assistance to developing
countries. The WTO, IMF, and WB are all important members of the Bretton Woods system,
and they work together to achieve the common goal of promoting economic development.
The WTO and the IMF often work together to ensure that trade agreements are
consistent with IMF's macroeconomic policies. For example, the WTO and the IMF
worked together to ensure that the 2001 Doha Round of trade negotiations was
consistent with the IMF's goal of promoting financial stability.
The WB also works with the WTO and the IMF to provide technical assistance to
developing countries to help them implement trade agreements and IMF policies. For
example, the WB has provided technical assistance to developing countries to help
them implement the WTO's Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS).
The WTO, IMF, and WB have also worked together to promote trade and investment
in developing countries. For example, the WTO, IMF, and WB have all supported the
Millennium Development Goals, which include the goal of halving the proportion of
people living in extreme poverty by 2015.
Here are some examples of how the WTO, IMF, and WB have worked together to promote
economic development:
In 2001, the WTO, IMF, and WB worked together to launch the Doha Development
Agenda, which is a set of trade negotiations aimed at promoting development in
developing countries.
In 2002, the WTO, IMF, and WB established the Global Trade and Finance Forum,
which is a forum for dialogue between the three organizations on trade and financial
issues.
In 2008, the WTO, IMF, and WB established the Joint Integrated Framework for
Trade-Related Technical Assistance to Least Developed Countries, which is a
program that provides technical assistance to least developed countries to help them
implement trade agreements and IMF policies.
The WTO, IMF, and WB are all important institutions in the global economy. They work
together to promote economic growth and stability, and they provide financial assistance to
developing countries. Their cooperation is essential for achieving the common goal of
promoting economic development.
The Declaration on the Contribution of the World Trade Organization to Achieving Greater
Coherence in Global Economic Policymaking was adopted by the WTO Ministerial
Conference in Doha, Qatar, in November 2001. The Declaration recognizes the need for
greater coherence between the WTO and other international organizations that are
responsible for different aspects of economic policy, such as the IMF and the World Bank.
The Declaration sets out a number of principles that should guide the WTO's efforts to
achieve greater coherence in global economic policymaking. These principles include:
The need for the WTO to take into account the work of other international
organizations when making decisions.
The need for the WTO to cooperate with other international organizations to ensure
that their policies are mutually supportive.
The need for the WTO to provide technical assistance to developing countries to help
them participate in global economic policymaking.
The Declaration also calls on the WTO to establish a mechanism for regular dialogue with
other international organizations. This mechanism would provide a forum for the WTO and
other organizations to discuss their work and to identify areas where they can cooperate.
The Coherence Declaration is an important step towards ensuring that the WTO is able to
play a more effective role in global economic policymaking. The Declaration sets out a
number of principles that should guide the WTO's efforts to achieve greater coherence, and it
calls for the establishment of a mechanism for regular dialogue with other international
organizations. The implementation of the Declaration will be essential for ensuring that the
WTO is able to contribute to the achievement of global economic objectives.
The WTO should take into account the work of other international organizations when
making decisions.
The WTO should cooperate with other international organizations to ensure that their
policies are mutually supportive.
The WTO should provide technical assistance to developing countries to help them
participate in global economic policymaking.
The WTO should establish a mechanism for regular dialogue with other international
organizations.
The Coherence Declaration is an important document that sets out the WTO's role in global
economic policymaking. The Declaration is a commitment to working with other
international organizations to ensure that the WTO is able to contribute to the achievement of
global economic objectives.
5th Para:-
The 5th point of the Coherence Declaration emphasizes the importance of the WTO
working with other international organizations to ensure that the international trading system
takes into account the development dimension of sustainable development. Sustainable
development is development that meets the needs of the present without compromising the
ability of future generations to meet their own needs. It is a broad concept that encompasses
economic, social, and environmental dimensions.
The WTO can play a role in promoting sustainable development by ensuring that the
international trading system is open and fair. This means that the WTO should work to reduce
barriers to trade, such as tariffs and quotas, and to ensure that the rules of the trading system
are fair and equitable. The WTO can also play a role in promoting sustainable development
by supporting the development of environmental goods and services, such as clean energy
technologies.
The WTO should work with other international organizations, such as the UNDP and the
UNEP, to ensure that the international trading system is aligned with the broader goals of
sustainable development. These organizations have expertise in the areas of development and
the environment, and they can help the WTO to understand the linkages between trade and
sustainable development.
Here are some specific examples of how the WTO can work with other international
organizations to promote sustainable development:
The WTO can work with the UNDP to provide technical assistance to developing
countries to help them implement trade agreements that are consistent with
sustainable development goals.
The WTO can work with the UNEP to develop guidelines for the environmental
impact assessment of trade agreements.
The WTO can work with the World Bank to provide financing for projects that
promote sustainable development through trade.
The WTO can also play a role in promoting sustainable development by raising awareness of
the issue among its members. The WTO can organize workshops and conferences on the
linkages between trade and sustainable development, and it can publish reports and other
materials on the topic.
The 5th point of the Coherence Declaration is an important reminder that the WTO is part of
a larger system of international organizations that are working to achieve global economic
objectives. The WTO should work with other organizations to ensure that the international
trading system is aligned with the broader goals of sustainable development.
The Dispute Settlement Mechanism (DSM) is one of the most important pillars of the World
Trade Organization (WTO). It is a system for resolving trade disputes between WTO
members. The DSM is based on the principle that countries should comply with their WTO
obligations, and that if they do not, they should be held accountable.
The two main components of the WTO's dispute settlement mechanism are:
Dispute settlement panels: These are groups of experts who are appointed to
investigate disputes and issue rulings. Dispute settlement panels are composed of
three members who are not affiliated with any government. The members of a dispute
settlement panel are appointed by the WTO's Dispute Settlement Body (DSB), which
is composed of all WTO members.
Appellate Body: This is a body of seven experts who hear appeals of rulings by
dispute settlement panels. The Appellate Body is composed of seven members who
are not affiliated with any government. The members of the Appellate Body are
appointed by the DSB for a four-year term.
The dispute settlement panels and the Appellate Body are responsible for resolving trade
disputes between WTO members. The dispute settlement process begins with a consultation
phase, during which the parties to the dispute try to resolve the dispute through informal
negotiations. If the consultation phase is unsuccessful, the complaining party can request that
the DSB establish a dispute settlement panel.
The dispute settlement panel will then investigate the dispute and issue a ruling. The ruling of
the dispute settlement panel is binding on the parties to the dispute. If the losing party does
not comply with the ruling, the winning party can request that the DSB authorize it to take
retaliatory measures against the losing party.
The Appellate Body can hear appeals of rulings by dispute settlement panels. The Appellate
Body can uphold, reverse, or modify the ruling of the dispute settlement panel. The ruling of
the Appellate Body is final and binding on the parties to the dispute.
The WTO's dispute settlement mechanism is a complex and sophisticated system. However,
it has been successful in resolving hundreds of trade disputes between WTO members. The
DSM is an important part of the global trading system, and it helps to ensure that WTO
members comply with their obligations.
Here are some of the key features of the dispute settlement panels and the Appellate Body:
Expertise: The members of the dispute settlement panels and the Appellate Body are
experts in international trade law. This ensures that the rulings are based on sound
legal principles.
Impartiality: The members of the dispute settlement panels and the Appellate Body
are not affiliated with any government. This ensures that the rulings are impartial and
objective.
Transparency: The dispute settlement process is open to the public, and all documents
and rulings are published on the WTO website. This ensures that the process is
transparent and accountable.
The dispute settlement panels and the Appellate Body are an important part of the WTO.
They help to ensure that WTO members comply with their obligations, and they help to
maintain the stability of the global trading system.
The DSM is considered to be one of the most effective dispute settlement systems in the
world. It has been used to resolve hundreds of disputes, and it has helped to ensure that WTO
members comply with their obligations.
The DSM is also an important mechanism for ensuring the stability of the global trading
system. By resolving disputes quickly and effectively, the DSM helps to prevent trade
tensions from escalating and disrupting the global economy.
The DSM is not without its critics. Some critics argue that the DSM is too complex and
bureaucratic, and that it can be slow and expensive to use. Others argue that the DSM is
biased in favor of developed countries, and that it does not do enough to protect the interests
of developing countries.
Despite these criticisms, the DSM remains an important part of the WTO. It is a vital
mechanism for ensuring that WTO members comply with their obligations, and it helps to
maintain the stability of the global trading system.
Here are some of the key features of the WTO's dispute settlement mechanism:
Binding: The rulings of the dispute settlement panels and the Appellate Body are
binding on the WTO members involved in the dispute. This means that the losing
party is required to comply with the ruling, or face the possibility of retaliation by the
winning party.
Independence: The dispute settlement panels and the Appellate Body are composed of
independent experts who are not affiliated with any government. This ensures that the
rulings are impartial and objective.
Transparency: The dispute settlement process is open to the public, and all documents
and rulings are published on the WTO website. This ensures that the process is
transparent and accountable.
The WTO's dispute settlement mechanism is an important part of the global trading system. It
helps to ensure that WTO members comply with their obligations, and it helps to maintain the
stability of the global trading system. The DSM is not without its critics, but it remains an
important mechanism for resolving trade disputes.
The dispute settlement mechanism under the General Agreement on Tariffs and Trade
(GATT) 1947 was a relatively informal system. It was based on the principle of consultation
and negotiation, and it did not have a formal appellate body.
The dispute settlement process under GATT 1947 began with a consultation phase, during
which the parties to the dispute tried to resolve the dispute through informal negotiations. If
the consultation phase was unsuccessful, the complaining party could request that a panel be
established to investigate the dispute.
The panel would then investigate the dispute and issue a report. The report of the panel was
not binding on the parties to the dispute, but it was generally accepted as a fair and impartial
assessment of the dispute. If the losing party did not comply with the report of the panel, the
winning party could request that the GATT Council authorize it to take retaliatory measures
against the losing party.
The GATT Council was composed of all GATT members, and it made decisions by
consensus. This meant that any GATT member could block the adoption of a report of a
panel or the authorization of retaliatory measures.
The dispute settlement mechanism under GATT 1947 was not without its critics. Some critics
argued that the system was too informal and that it did not provide for a binding ruling.
Others argued that the system was biased in favor of developed countries, and that it did not
do enough to protect the interests of developing countries.
Despite these criticisms, the dispute settlement mechanism under GATT 1947 was generally
considered to be successful. It helped to resolve a number of trade disputes, and it helped to
ensure that GATT members complied with their obligations.
The dispute settlement mechanism under GATT 1947 was the basis for the dispute settlement
mechanism under the World Trade Organization (WTO). The WTO dispute settlement
mechanism is more formal and more powerful than the GATT dispute settlement mechanism.
It has a formal appellate body, and its decisions are binding on the parties to the dispute.
The WTO dispute settlement mechanism has been criticized for being too complex and
bureaucratic, and for being biased in favor of developed countries. However, it remains an
important part of the WTO, and it helps to ensure that WTO members comply with their
obligations.
The World Trade Organization (WTO) has a dispute settlement system that is designed to
resolve disputes between its member states. The system is based on the principle of binding
arbitration, which means that the rulings of the WTO dispute settlement bodies are legally
binding on the parties to the dispute.
1. Consultations: The first step in the process is for the parties to the dispute to consult
with each other in an attempt to reach a mutually agreed solution. If consultations are
unsuccessful, the complaining party can request that the WTO establish a panel to
hear the case.
2. Panel: The panel is composed of three independent experts who are appointed by the
WTO Director-General. The panel hears the evidence presented by the parties to the
dispute and issues a report that sets out its findings and recommendations.
3. Appellate Body: The parties to the dispute can appeal the panel's report to the WTO
Appellate Body, which is composed of seven members. The Appellate Body can
uphold, modify, or reverse the panel's findings and recommendations.
Once the Appellate Body's report is issued, it is adopted by the WTO Dispute Settlement
Body (DSB). The DSB is the highest decision-making body of the WTO, and its decisions
are binding on all member states.
If the losing party to a WTO dispute fails to comply with the DSB's ruling, the winning party
can request that the DSB authorize it to take retaliatory measures against the losing party.
Retaliatory measures can include raising tariffs on imports from the losing party or
suspending concessions that were granted to the losing party.
The WTO dispute settlement system has been widely praised for its effectiveness in resolving
trade disputes between member states. The system has been used to resolve over 500 disputes
since its inception, and its rulings have been complied with by the vast majority of member
states.
Here are some of the key features of the WTO dispute settlement system:
Binding arbitration: The rulings of the WTO dispute settlement bodies are legally
binding on the parties to the dispute. This means that the losing party is obligated to
comply with the ruling, or face the possibility of retaliatory measures from the
winning party.
Independence: The panels and Appellate Body are composed of independent experts
who are not affiliated with any government. This ensures that the rulings of the
dispute settlement bodies are impartial and objective.
The WTO dispute settlement system has been a major factor in the success of the WTO. The
system has helped to ensure that the rules of the WTO are respected by all member states, and
it has helped to resolve trade disputes in a timely and efficient manner.
The Rules and Procedures Governing the Settlement of Disputes (DSU) is an integral part of
the World Trade Organization (WTO). It sets out the rules and procedures for resolving
disputes between WTO member countries. The DSU is based on the principle of binding
arbitration, which means that the rulings of the WTO dispute settlement bodies are legally
binding on the parties to the dispute.
Consultations: Article 3.3 of the DSU states that the dispute settlement system "shall
be based on the prompt settlement of disputes." This means that the WTO dispute
settlement bodies are expected to issue their rulings in a timely manner. The first step
in the process is for the parties to the dispute to consult with each other in an attempt
to reach a mutually agreed solution. If consultations are unsuccessful, the complaining
party can request that the WTO establish a panel to hear the case.
Panel: Article 6 of the DSU sets out the procedures for establishing a panel. A panel is
composed of three independent experts who are appointed by the WTO Director-
General. The panel hears the evidence presented by the parties to the dispute and
issues a report that sets out its findings and recommendations.
Appellate Body: Article 17 of the DSU sets out the procedures for appealing a panel
report to the WTO Appellate Body. The Appellate Body is composed of seven
members. The Appellate Body can uphold, modify, or reverse the panel's findings and
recommendations.
Once the Appellate Body's report is issued, it is adopted by the WTO Dispute Settlement
Body (DSB). The DSB is the highest decision-making body of the WTO, and its decisions
are binding on all member states.
If the losing party to a WTO dispute fails to comply with the DSB's ruling, the winning party
can request that the DSB authorize it to take retaliatory measures against the losing party.
Retaliatory measures can include raising tariffs on imports from the losing party or
suspending concessions that were granted to the losing party.
The DSU has been widely praised for its effectiveness in resolving trade disputes between
member states. The system has been used to resolve over 500 disputes since its inception, and
its rulings have been complied with by the vast majority of member states.
Article 3.3: This provision states that the dispute settlement system "shall be based on
the prompt settlement of disputes." This means that the WTO dispute settlement
bodies are expected to issue their rulings in a timely manner.
Article 3.7: This provision states that the dispute settlement system "shall be
conducted in accordance with the rules and procedures of this Understanding." This
means that the WTO dispute settlement bodies must follow the rules and procedures
set out in the DSU.
Article 16.4: This provision states that the losing party to a WTO dispute "shall
comply with the recommendations and rulings of the DSB." This means that the
losing party is obligated to comply with the ruling of the WTO dispute settlement
bodies.
The DSU has been amended several times since its inception. The most recent amendment
was made in 2017. The amendment made several changes to the DSU, including changes to
the procedures for appointing panelists and Appellate Body members.
The DSU is a vital part of the WTO. The system has helped to ensure that the rules of the
WTO are respected by all member states, and it has helped to resolve trade disputes in a
timely and efficient manner.
The dispute settlement process begins with consultations between the parties to the dispute. If
consultations are unsuccessful, the complaining party can request that the WTO establish a
panel to hear the case. The panel is composed of three independent experts who are appointed
by the WTO Director-General. The panel hears the evidence presented by the parties to the
dispute and issues a report that sets out its findings and recommendations.
The parties to the dispute can appeal the panel's report to the WTO Appellate Body, which is
composed of seven members. The Appellate Body can uphold, modify, or reverse the panel's
findings and recommendations.
Once the Appellate Body's report is issued, it is adopted by the WTO Dispute Settlement
Body (DSB). The DSB is the highest decision-making body of the WTO, and its decisions
are binding on all member states.
If the losing party to a WTO dispute fails to comply with the DSB's ruling, the winning party
can request that the DSB authorize it to take retaliatory measures against the losing party.
Retaliatory measures can include raising tariffs on imports from the losing party or
suspending concessions that were granted to the losing party.
The WTO dispute settlement system has been widely praised for its effectiveness in resolving
trade disputes between member states. The system has been used to resolve over 500 disputes
since its inception, and its rulings have been complied with by the vast majority of member
states.
Impartiality: The panels and Appellate Body are composed of independent experts
who are not affiliated with any government. This ensures that the rulings of the
dispute settlement bodies are impartial and objective.
Bindingness: The rulings of the WTO dispute settlement bodies are legally binding on
the parties to the dispute. This means that the losing party is obligated to comply with
the ruling, or face the possibility of retaliatory measures from the winning party.
The WTO dispute settlement system has been a major factor in the success of the WTO. The
system has helped to ensure that the rules of the WTO are respected by all member states, and
it has helped to resolve trade disputes in a timely and efficient manner.
There are many methods of dispute settlement that can be used by private traders. The most
common methods include:
Negotiation: This is the most informal method of dispute settlement. The parties
involved in the dispute sit down together and try to reach an agreement. This can be a
very effective method of resolving disputes, but it can also be difficult if the parties
are not willing to compromise.
Litigation: This is the most formal method of dispute settlement. The parties involved
in the dispute take their case to a court of law, and the court will make a decision that
is binding on both parties. Litigation can be a long and expensive process, but it can
be the only way to resolve a dispute if the parties cannot agree on a settlement.
The best method of dispute settlement for private traders will depend on the specific
circumstances of the dispute. If the parties are willing to compromise, negotiation may be the
best option. If the parties are not willing to compromise, mediation or arbitration may be a
better option. If the parties cannot agree on a settlement, litigation may be the only option.
Here are some of the advantages and disadvantages of each method of dispute settlement:
Negotiation:
o Advantages:
o Disadvantages:
Mediation:
o Advantages:
o Disadvantages:
Arbitration:
o Advantages:
o Disadvantages:
It can be expensive.
Litigation:
o Advantages:
The court's decision is binding on the parties, which means that they
are obligated to follow the court's decision.
o Disadvantages:
Ultimately, the best method of dispute settlement for private traders will depend on the
specific circumstances of the dispute. If the parties are willing to compromise, negotiation
may be the best option. If the parties are not willing to compromise, mediation or arbitration
may be a better option. If the parties cannot agree on a settlement, litigation may be the only
option.
The Multilateral Trading System (MTS) is the set of rules, institutions, and agreements that
govern international trade. It is based on the principles of non-discrimination, reciprocity,
enforceable commitments, transparency, and safety valves.
Reciprocity: The principle of reciprocity means that countries must make concessions
to each other in order to reach trade agreements. This ensures that all countries benefit
from trade agreements.
Transparency: The MTS is based on the principle of transparency. This means that all
WTO members must make their trade policies and practices public. This allows
businesses and governments to understand the rules of the system and to make
informed decisions about trade.
Safety valves: The MTS includes a number of safety valves that allow countries to
take temporary measures to protect their industries. These measures are designed to
prevent the MTS from being used to harm domestic industries.
The general principles of the MTS have helped to promote trade and economic growth
around the world. They have also helped to create a more stable and predictable trading
environment.
Increased trade: The MTS has led to a significant increase in trade between countries.
This has helped to boost economic growth and create jobs.
Lower prices: The MTS has helped to lower prices for consumers. This is because
businesses are able to compete more effectively in the global market.
More choices: The MTS has given consumers more choices when it comes to goods
and services. This is because businesses are able to import products from around the
world.
Increased investment: The MTS has helped to attract investment from around the
world. This is because businesses are more confident that their investments will be
protected by the rules of the system.
The MTS is not without its challenges. One challenge is that the system can be complex and
difficult to understand. Another challenge is that the system is constantly evolving, which can
make it difficult for businesses to keep up.
Despite these challenges, the MTS remains an important foundation for international trade.
The system has helped to promote trade and economic growth around the world, and it is
likely to continue to do so in the years to come.
PRINCIPLE OF NON-DISCRIMINATION
The principle of non-discrimination in multilateral trading is one of the core principles of the
World Trade Organization (WTO), which is the main international organization that regulates
trade among its member countries. The principle of non-discrimination means that countries
should treat each other equally and fairly in their trade policies, without giving preferential
treatment to some countries over others. There are two main aspects of non-discrimination in
multilateral trading: the most-favoured-nation (MFN) principle and the national treatment
principle.
The MFN principle requires that countries should not discriminate among their trading
partners. If a country grants a special favour (such as a lower tariff or a subsidy) to one of its
trading partners, it has to extend the same favour to all other WTO members. This ensures
that trade is based on comparative advantage and not on political or strategic considerations.
The MFN principle applies to all trade in goods and services, as well as to intellectual
property rights.
The national treatment principle requires that countries should not discriminate between their
own products and services and those of other countries. Once a foreign product or service
enters a country's market, it should be treated no less favourably than a domestic product or
service. This ensures that foreign and domestic producers and suppliers compete on equal
terms and that consumers have access to a wider choice of products and services.
The GATT provisions relating to the principles of non-discrimination are mainly Article I
and Article III. Article I deals with the most-favoured-nation (MFN) treatment obligation,
which requires that any advantage, favour, privilege or immunity granted by a contracting
party to any product originating in or destined for any other country shall be accorded
immediately and unconditionally to the like product originating in or destined for the
territories of all other contracting parties¹. Article III deals with the national treatment
obligation, which requires that the products of the territory of any contracting party imported
into the territory of any other contracting party shall not be subject, directly or indirectly, to
internal taxes or other internal charges of any kind in excess of those applied, directly or
indirectly, to like domestic products².
Some real cases/disputes in the WTO that involve these principles are:
1. EC — Bananas III:
This case concerned the European Community's (EC) import regime for bananas, which gave
preferential treatment to bananas from certain African, Caribbean and Pacific (ACP)
countries and discriminated against bananas from Latin American countries and their
distributors. The complainants were Ecuador, Guatemala, Honduras, Mexico and the United
States. The panel and the Appellate Body found that the EC's regime violated Article I and
Article III of the GATT, as well as other WTO rules. The EC was required to bring its regime
into conformity with its obligations under the WTO Agreement³.
2. US — Gasoline:
This case concerned a US measure aimed at regulating the composition and emission effects
of gasoline in order to reduce air pollution in the United States. The complainant was
Venezuela, later joined by Brazil. The panel and the Appellate Body found that the US
measure violated Article III of the GATT, as it treated imported gasoline less favourably than
domestic gasoline. The US was required to modify its measure to ensure equal treatment of
imported and domestic gasoline⁴.
- These cases concerned Canada's measures relating to the feed-in tariff program for
renewable energy generation in the province of Ontario. The complainants were Japan
and the European Union. The panel and the Appellate Body found that Canada's
measures violated Article III of the GATT, as they discriminated against imported
equipment for renewable energy generation in favour of domestic products. Canada
was required to withdraw its measures or make them consistent with its obligations
under the WTO Agreement.
Principle of Transparency
The principle of transparency in multilateral trading system is the degree to which trade
policies and practices, and the process by which they are established, are open and
predictable. Transparency is essential for ensuring that countries comply with their WTO
obligations, that trade disputes are resolved effectively, and that trade liberalization is
achieved through negotiations. Transparency also benefits businesses and consumers by
providing them with information on market conditions, regulations, and opportunities.
The WTO agreements contain various provisions that require or promote transparency among
its members. Some of these provisions are:
Members have to notify the WTO of any trade-related measures that they adopt or modify,
such as tariffs, subsidies, standards, or intellectual property rights. These notifications are
then circulated to other members and discussed in relevant WTO committees. The
notifications help members monitor each other's trade policies and identify any potential trade
barriers or violations of WTO rules.
Members have to publish their trade laws, regulations, and judicial decisions promptly and in
a manner that enables other members and traders to become acquainted with them. This helps
ensure that trade rules are transparent and accessible to all interested parties.
Members have to establish enquiry points where other members and traders can obtain
information on their trade regulations and procedures. This facilitates trade by providing a
channel for communication and clarification of trade-related issues.
The WTO conducts regular reviews of the trade policies and practices of its members, based
on reports prepared by the WTO Secretariat and the member under review. The reviews
provide an opportunity for members to examine and evaluate each other's trade policies and
to raise questions or concerns. The reviews also enhance the understanding of the global
trading system and its impact on development.
The WTO has a rules-based and transparent system for resolving trade disputes between its
members. The system involves consultations, panel proceedings, appellate review, and
implementation of rulings. The system aims to ensure that members comply with their WTO
obligations and that trade disputes are settled fairly and effectively.
(i) Non-compliance:
Some members fail to fulfill their transparency obligations, either by not notifying or
publishing their trade measures, or by providing incomplete or inaccurate information. This
undermines the credibility and effectiveness of the WTO system and creates uncertainty and
confusion for other members and traders.
(ii) Complexity: Some trade measures are complex and technical, making it difficult for other
members and traders to understand their implications and effects. This may create barriers to
trade or lead to disputes over their interpretation or application.
Some specific provisions in GATT providing for the principle of transparency are:
This article requires that members publish promptly and in a manner that enables other
members and traders to become acquainted with their trade laws, regulations, judicial
decisions, and administrative rulings. It also requires that members administer their trade
measures in a uniform, impartial, and reasonable manner, and provide for review and
correction of administrative actions relating to customs matters.
This article requires that members notify the WTO of any changes in their tariff schedules,
and consult with other members who have a substantial interest in the products concerned. It
also requires that members conduct tariff negotiations on the basis of reciprocity and mutual
advantage, taking into account the needs of less-developed countries.
This article requires that members cooperate with each other and with the WTO to achieve
the objectives of the GATT, and to exchange information on trade matters. It also requires
that members consult with each other on any matter affecting the operation of the GATT or
the attainment of its objectives.
Some real cases/disputes in the WTO that involve the principle of transparency are:
1. EC — Selected Customs Matters:
This case concerned the European Communities' (EC) customs system, which was challenged
by the United States as being inconsistent with Article X of the GATT and other WTO rules.
The United States claimed that the EC's system lacked uniformity, transparency,
predictability, and due process in its administration of customs laws and regulations. The
panel and the Appellate Body found that the EC violated Article X of the GATT by failing to
ensure uniform administration of its customs laws and regulations across its member states,
and by failing to provide effective review and correction mechanisms for customs matters.
2. China — Publications and Audiovisual Products: This case concerned China's measures
affecting the importation and distribution of publications, audiovisual products, and sound
recordings, which were challenged by the United States as being inconsistent with Article X
of the GATT and other WTO rules. The United States claimed that China's measures lacked
transparency, clarity, and predictability in their application and implementation. The panel
and the Appellate Body found that China violated Article X of the GATT by failing to
publish promptly or at all some of its trade-related measures, and by failing to administer its
measures in a uniform manner.
This case concerned the United States' measure prohibiting the importation of certain shrimp
and shrimp products from countries that do not use turtle-excluder devices (TEDs) in their
shrimp trawl fisheries, which was challenged by Malaysia as being inconsistent with Article
X of the GATT and other WTO rules. Malaysia claimed that the United States failed to
comply with an earlier ruling that found its measure to be unjustifiably discriminatory and
arbitrary. The panel and the Appellate Body found that the United States had taken steps to
improve the transparency, clarity, and consistency of its measure, but had not fully complied
with its obligations under Article X of the GATT by failing to notify Malaysia of some
changes in its certification procedures.
The principle of freer trade through gradual negotiations in multilateral trading system is one
of the core principles of the World Trade Organization (WTO), which is the main
international organization that regulates trade among its member countries. The principle of
freer trade means that countries should reduce or eliminate trade barriers, such as tariffs,
quotas, subsidies, or non-tariff measures, through multilateral negotiations, based on the
principles of reciprocity and mutual benefit. The principle of gradualism means that trade
liberalization should be achieved progressively and flexibly, taking into account the different
levels of development and interests of the countries involved.
The WTO agreements contain various provisions that require or promote freer trade through
gradual negotiations among its members. Some of these provisions are:
1. Article XXVIII bis of the General Agreement on Tariffs and Trade (GATT) which requires
that members conduct tariff negotiations on a reciprocal and mutually advantageous basis,
taking into account the needs of less-developed countries.
2. Article XIX of the GATT, which allows members to modify or withdraw tariff concessions
under certain conditions, subject to compensation or retaliation by other members.
3. Article XXIV of the GATT, which permits members to form preferential trade agreements
(PTAs), such as free trade areas or customs unions, as long as they do not raise trade barriers
against non-parties and cover substantially all trade among parties.
4. Article XXVIII of the General Agreement on Trade in Services (GATS), which provides
for progressive liberalization of trade in services through successive rounds of negotiations,
taking into account the level of development and specific commitments of each member.
Some real cases/disputes in the WTO that involve this principle are:
1. EC — Bananas III:
- This case concerned the European Community's (EC) import regime for bananas,
which gave preferential treatment to bananas from certain African, Caribbean and
Pacific (ACP) countries and discriminated against bananas from Latin American
countries and their distributors. The complainants were Ecuador, Guatemala,
Honduras, Mexico and the United States. The panel and the Appellate Body found
that the EC's regime violated Article I (most-favoured-nation treatment) and Article
III (national treatment) of the GATT, as well as other WTO rules. The EC was
required to bring its regime into conformity with its obligations under the WTO
Agreement.
2. US — Gasoline:
- This case concerned a US measure aimed at regulating the composition and emission
effects of gasoline in order to reduce air pollution in the United States. The
complainant was Venezuela, later joined by Brazil. The panel and the Appellate Body
found that the US measure violated Article III (national treatment) of the GATT, as it
treated imported gasoline less favourably than domestic gasoline. The US was
required to modify its measure to ensure equal treatment of imported and domestic
gasoline.
- These cases concerned Canada's measures relating to the feed-in tariff program for
renewable energy generation in the province of Ontario. The complainants were Japan
and the European Union. The panel and the Appellate Body found that Canada's
measures violated Article III (national treatment) of the GATT, as they discriminated
against imported equipment for renewable energy generation in favour of domestic
products. Canada was required to withdraw its measures or make them consistent with
its obligations under the WTO Agreement.
The principle of freer trade through gradual negotiations in multilateral trading system is
intended to promote fair and efficient trade among countries, as well as to foster economic
development and cooperation. However, there are some challenges and limitations to this
principle, such as:
(i) Non-compliance:
Some members fail to implement or comply with their commitments under the WTO
agreements, either by not modifying or withdrawing their trade-restrictive measures, or by
imposing new ones. This undermines the credibility and effectiveness of the WTO system
and creates uncertainty and disputes for other members.
(ii) Complexity:
Some trade issues are complex and technical, making it difficult for members to negotiate
and reach agreements on them. This may result in deadlock or delay in trade liberalization or
reform⁸⁹.
(iii) Diversity:
Some members have different levels of development, interests, and preferences regarding
trade liberalization. This may create conflicts or imbalances among members over the pace
and scope of trade negotiations.
Therefore, it is important to balance the benefits and costs of freer trade through gradual
negotiations in multilateral trading system and to ensure that the WTO rules are respected and
enforced by all its members.
Principle of Predictability
The principle of predictability in multilateral trading system is one of the core principles of
the World Trade Organization (WTO), which is the main international organization that
regulates trade among its member countries. The principle of predictability means that
countries should provide stability and certainty in their trade policies and practices, and avoid
arbitrary or unjustified changes that could disrupt trade flows or create unfair advantages.
Predictability is essential for ensuring that countries comply with their WTO obligations, that
trade disputes are resolved effectively, and that trade liberalization is achieved through
negotiations. Predictability also benefits businesses and consumers by providing them with
information on market conditions, regulations, and opportunities.
The WTO agreements contain various provisions that require or promote predictability
among its members. Some of these provisions are:
- Notification obligations: Members have to notify the WTO of any trade-related measures
that they adopt or modify, such as tariffs, subsidies, standards, or intellectual property rights.
These notifications are then circulated to other members and discussed in relevant WTO
committees. The notifications help members monitor each other's trade policies and identify
any potential trade barriers or violations of WTO rules.
- Publication obligations: Members have to publish their trade laws, regulations, and judicial
decisions promptly and in a manner that enables other members and traders to become
acquainted with them. This helps ensure that trade rules are transparent and accessible to all
interested parties.
- Enquiry points: Members have to establish enquiry points where other members and traders
can obtain information on their trade regulations and procedures. This facilitates trade by
providing a channel for communication and clarification of trade-related issues.
- Trade policy reviews: The WTO conducts regular reviews of the trade policies and practices
of its members, based on reports prepared by the WTO Secretariat and the member under
review. The reviews provide an opportunity for members to examine and evaluate each
other's trade policies and to raise questions or concerns. The reviews also enhance the
understanding of the global trading system and its impact on development.
- Dispute settlement: The WTO has a rules-based and transparent system for resolving trade
disputes between its members. The system involves consultations, panel proceedings,
appellate review, and implementation of rulings. The system aims to ensure that members
comply with their WTO obligations and that trade disputes are settled fairly and effectively.
Some real cases/disputes in the WTO that involve this principle are:
- China — Publications and Audiovisual Products: This case concerned China's measures
affecting the importation and distribution of publications, audiovisual products, and sound
recordings, which were challenged by the United States as being inconsistent with Article X
(Publication and Administration of Trade Regulations) of the GATT and other WTO rules.
The United States claimed that China's measures lacked transparency, clarity, and
predictability in their application and implementation. The panel and the Appellate Body
found that China violated Article X of the GATT by failing to publish promptly or at all some
of its trade-related measures, and by failing to administer its measures in a uniform manner⁴.
This case concerned the United States' measure prohibiting the importation of certain shrimp
and shrimp products from countries that do not use turtle-excluder devices (TEDs) in their
shrimp trawl fisheries, which was challenged by Malaysia as being inconsistent with Article
X (Publication and Administration of Trade Regulations) of the GATT and other WTO rules.
Malaysia claimed that the United States failed to comply with an earlier ruling that found its
measure to be unjustifiably discriminatory and arbitrary. The panel and the Appellate Body
found that the United States had taken steps to improve the transparency, clarity, and
consistency of its measure, but had not fully complied with its obligations under Article X of
the GATT by failing to notify Malaysia of some changes in its certification procedures.
- Non-compliance: Some members fail to fulfill their transparency obligations, either by not
notifying or publishing their trade measures, or by providing incomplete or inaccurate
information. This undermines the credibility and effectiveness of the WTO system and
creates uncertainty and confusion for other members and traders² .
- Complexity: Some trade measures are complex and technical, making it difficult for other
members and traders to understand their implications and effects. This may create barriers to
trade or lead to disputes over their interpretation or application² .
Some of the specific provisions providing for the principle of predictability in GATT are:
This article requires that members publish promptly and in a manner that enables other
members and traders to become acquainted with their trade laws, regulations, judicial
decisions, and administrative rulings. It also requires that members administer their trade
measures in a uniform, impartial, and reasonable manner, and provide for review and
correction of administrative actions relating to customs matters.
This article allows members to take safeguard measures, such as increasing tariffs or
imposing quotas, to protect their domestic industries from serious injury caused by increased
imports. However, such measures have to be temporary, transparent, and non-discriminatory,
and subject to compensation or retaliation by other members.
This article allows members to modify or withdraw tariff concessions under certain
conditions, subject to compensation or retaliation by other members. It also provides for
periodic negotiations on tariff reductions among members.
Principle of Reciprocity
The principle of reciprocity in multilateral trading system is one of the core principles of the
World Trade Organization (WTO), which is the main international organization that regulates
trade among its member countries. The principle of reciprocity means that countries should
exchange trade concessions that are mutually beneficial and roughly equivalent in value.
Reciprocity is essential for ensuring that countries comply with their WTO obligations, that
trade disputes are resolved effectively, and that trade liberalization is achieved through
negotiations. Reciprocity also benefits businesses and consumers by providing them with
access to new markets, lower tariffs, and more competitive products and services.
The WTO agreements contain various provisions that require or promote reciprocity among
its members. Some of these provisions are:
- Article XXVIII bis of the General Agreement on Tariffs and Trade (GATT), which requires
that members conduct tariff negotiations on a reciprocal and mutually advantageous basis,
taking into account the needs of less-developed countries.
- Article XIX of the GATT, which allows members to modify or withdraw tariff concessions
under certain conditions, subject to compensation or retaliation by other members.
- Article XXIV of the GATT, which permits members to form preferential trade agreements
(PTAs), such as free trade areas or customs unions, as long as they do not raise trade barriers
against non-parties and cover substantially all trade among parties.
- Article II of the General Agreement on Trade in Services (GATS), which requires that
members grant most-favoured-nation (MFN) treatment to services and service suppliers of
other members, unless they have made specific exemptions in their schedules of
commitments.
Some real cases/disputes in the WTO that involve this principle are:
- EC — Bananas III: This case concerned the European Community's (EC) import regime for
bananas, which gave preferential treatment to bananas from certain African, Caribbean and
Pacific (ACP) countries and discriminated against bananas from Latin American countries
and their distributors. The complainants were Ecuador, Guatemala, Honduras, Mexico and
the United States. The panel and the Appellate Body found that the EC's regime violated
Article I (most-favoured-nation treatment) and Article III (national treatment) of the GATT,
as well as other WTO rules. The EC was required to bring its regime into conformity with its
obligations under the WTO Agreement.
- Canada — Renewable Energy / Canada — Feed-in Tariff Program: These cases concerned
Canada's measures relating to the feed-in tariff program for renewable energy generation in
the province of Ontario. The complainants were Japan and the European Union. The panel
and the Appellate Body found that Canada's measures violated Article III (national treatment)
of the GATT, as they discriminated against imported equipment for renewable energy
generation in favour of domestic products. Canada was required to withdraw its measures or
make them consistent with its obligations under the WTO Agreement.
The principle of reciprocity in multilateral trading system is intended to promote fair and
efficient trade among countries, as well as to foster economic development and cooperation.
However, there are some challenges and limitations to this principle, such as:
- Non-compliance: Some members fail to implement or comply with their commitments
under the WTO agreements, either by not modifying or withdrawing their trade-restrictive
measures, or by imposing new ones. This undermines the credibility and effectiveness of the
WTO system and creates uncertainty and disputes for other members .
- Complexity: Some trade issues are complex and technical, making it difficult for members
to negotiate and reach agreements on them. This may result in deadlock or delay in trade
liberalization or reform .
- Diversity: Some members have different levels of development, interests, and preferences
regarding trade liberalization. This may create conflicts or imbalances among members over
the pace and scope of trade negotiations .
The principle of promoting fair competition in multilateral trading system is one of the core
principles of the World Trade Organization (WTO), which is the main international
organization that regulates trade among its member countries. The principle of promoting fair
competition means that countries should not distort or restrict trade by applying unfair or
discriminatory measures, such as subsidies, dumping, state trading, or technical barriers.
Promoting fair competition is essential for ensuring that countries comply with their WTO
obligations, that trade disputes are resolved effectively, and that trade liberalization is
achieved through negotiations. Promoting fair competition also benefits businesses and
consumers by providing them with a level playing field, lower prices, and higher quality
products and services.
The WTO agreements contain various provisions that require or promote fair competition
among its members. Some of these provisions are:
- Article VI of the General Agreement on Tariffs and Trade (GATT), which allows members
to impose anti-dumping duties on imports that are sold at less than their normal value and
cause injury to domestic producers.
- Article XVI of the GATT, which requires members to notify the WTO of any subsidies that
they grant or maintain, and to eliminate or reduce any subsidies that are specific to certain
industries or products and cause adverse effects to other members.
- Article XVII of the GATT, which requires members to ensure that any state trading
enterprises that they establish or maintain act in accordance with commercial considerations
and do not discriminate or create trade distortions.
- Article 2 of the Agreement on Technical Barriers to Trade (TBT), which requires members
to ensure that any technical regulations or standards that they adopt or apply are not more
trade-restrictive than necessary to fulfill a legitimate objective, and do not create unnecessary
obstacles to trade.
Some real cases/disputes in the WTO that involve this principle are:
- US — Softwood Lumber: This case concerned the United States' measures affecting
imports of softwood lumber from Canada, which included anti-dumping and countervailing
duties, as well as a quota agreement. The complainant was Canada. The panel and the
Appellate Body found that the United States violated Article VI of the GATT and other WTO
rules by imposing duties on Canadian lumber without proper determination of dumping or
subsidization, and by applying a flawed methodology for calculating injury and duty rates.
The United States was required to revoke its duties or make them consistent with its
obligations under the WTO Agreement.
- EC — Aircraft: This case concerned the European Communities' (EC) subsidies to its civil
aircraft industry, which were challenged by the United States as being inconsistent with
Article XVI of the GATT and other WTO rules. The United States claimed that the EC's
subsidies conferred unfair advantages to Airbus, the main competitor of Boeing, and caused
serious prejudice to US interests. The panel and the Appellate Body found that the EC
violated Article XVI of the GATT and other WTO rules by granting specific subsidies to
Airbus that caused adverse effects to US interests. The EC was required to withdraw its
subsidies or take appropriate steps to remove their adverse effects.
- China — Raw Materials: This case concerned China's export restrictions on certain raw
materials, such as bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon
metal, yellow phosphorus, and zinc. The complainants were the European Union, Japan, and
the United States. The panel and the Appellate Body found that China violated Article XI
(General Elimination of Quantitative Restrictions) of the GATT and other WTO rules by
imposing export duties, quotas, licensing requirements, and minimum export prices on these
raw materials. China was required to bring its measures into conformity with its obligations
under the WTO Agreement.
- Diversity: Some members have different levels of development, interests, and preferences
regarding trade liberalization. This may create conflicts or imbalances among members over
the pace and scope of trade negotiations .
Therefore, it is important to balance the benefits and costs of promoting fair competition in
multilateral trading system and to ensure that the WTO rules are respected and enforced by
all its members.
The principle of creating safety values in multilateral trading system is one of the core
principles of the World Trade Organization (WTO), which is the main international
organization that regulates trade among its member countries. The principle of creating safety
values means that countries should be able to adopt measures to protect their essential
interests, such as public health, environment, security, or culture, even if they may affect
trade. Creating safety values is essential for ensuring that countries comply with their WTO
obligations, that trade disputes are resolved effectively, and that trade liberalization is
achieved through negotiations. Creating safety values also benefits businesses and consumers
by providing them with safeguards against potential risks or harms from trade.
The WTO agreements contain various provisions that allow or promote creating safety values
among its members. Some of these provisions are:
- Article XX of the General Agreement on Tariffs and Trade (GATT), which allows members
to adopt measures necessary to protect public morals, human, animal or plant life or health,
national treasures, exhaustible natural resources, or other legitimate objectives, subject to
certain conditions and exceptions.
- Article XIV of the General Agreement on Trade in Services (GATS), which allows
members to adopt measures necessary to protect public morals, human, animal or plant life or
health, privacy, public order, or other legitimate objectives, subject to certain conditions and
exceptions.
- Article 2 of the Agreement on Technical Barriers to Trade (TBT), which allows members to
adopt technical regulations or standards necessary to fulfill a legitimate objective, such as
protection of human health or safety, animal or plant life or health, environment, consumers'
interests, national security, or prevention of deceptive practices.
Some real cases/disputes in the WTO that involve this principle are:
- EC — Asbestos: This case concerned the European Communities' (EC) ban on imports and
sales of asbestos and asbestos-containing products, which was challenged by Canada as being
inconsistent with Article III (national treatment) and Article XI (general elimination of
quantitative restrictions) of the GATT and other WTO rules. Canada claimed that the EC's
ban was unjustified and discriminatory. The panel and the Appellate Body found that the
EC's ban was justified under Article XX(b) of the GATT as a measure necessary to protect
human health from the carcinogenic effects of asbestos. The EC was allowed to maintain its
ban as long as it did not apply it arbitrarily or unjustifiably.
- US — Tuna II (Mexico): This case concerned the United States' measure prohibiting the
importation of tuna and tuna products from Mexico that were not certified as "dolphin-safe",
which meant that they were caught without harming dolphins. The complainant was Mexico.
The panel and the Appellate Body found that the United States' measure violated Article 2.1
of the TBT Agreement as a technical regulation that discriminated against Mexican tuna
products. The United States was required to modify its measure to ensure equal treatment of
Mexican tuna products.
- Australia — Plain Packaging: This case concerned Australia's measure requiring plain
packaging for tobacco products, which was challenged by Cuba, Dominican Republic,
Honduras, Indonesia and Ukraine as being inconsistent with Article 2.2 of the TBT
Agreement and other WTO rules. The complainants claimed that Australia's measure was
unnecessary and ineffective in achieving its objective of reducing tobacco consumption and
protecting public health. The panel and the Appellate Body found that Australia's measure
was justified under Article 2.2 of the TBT Agreement as a technical regulation that fulfilled a
legitimate objective. Australia was allowed to maintain its measure as long as it did not apply
it arbitrarily or unjustifiably.
The principle of creating safety values in multilateral trading system is intended to promote
fair and efficient trade among countries, as well as to foster economic development and
cooperation. However, there are some challenges and limitations to this principle, such as:
- Complexity: Some trade issues are complex and technical, making it difficult for members
to negotiate and reach agreements on them. This may result in deadlock or delay in trade
liberalization or reform .
- Diversity: Some members have different levels of development, interests, and preferences
regarding trade liberalization. This may create conflicts or imbalances among members over
the pace and scope of trade negotiations .
Therefore, it is important to balance the benefits and costs of creating safety values in
multilateral trading system and to ensure that the WTO rules are respected and enforced by
all its members.
The principle of special and differential treatment in multilateral trading system is one of the
core principles of the World Trade Organization (WTO), which is the main international
organization that regulates trade among its member countries. The principle of special and
differential treatment means that developing countries and least-developed countries (LDCs)
should be given more favourable and flexible treatment than developed countries in their
trade policies and practices, in order to take into account their different levels of development
and needs. Special and differential treatment is essential for ensuring that developing
countries and LDCs comply with their WTO obligations, that trade disputes are resolved
effectively, and that trade liberalization is achieved through negotiations. Special and
differential treatment also benefits developing countries and LDCs by providing them with
preferential market access, technical assistance, capacity building, and policy space.
The WTO agreements contain various provisions that grant or promote special and
differential treatment to developing countries and LDCs. Some of these provisions are:
- Article XVIII of the General Agreement on Tariffs and Trade (GATT), which allows
developing countries to adopt measures for the promotion of their economic development,
such as industrialization, diversification, or infant industry protection, subject to certain
conditions and exceptions.
- Part IV of the GATT, which requires developed countries to accord high priority to the
reduction or elimination of trade barriers affecting products of export interest to developing
countries, and to refrain from introducing new barriers or increasing existing ones.
- The Enabling Clause, which permits developed countries to grant preferential tariff
treatment to products originating in developing countries, either on a generalized, non-
reciprocal basis (the Generalized System of Preferences or GSP), or on a regional or global
basis (the Global System of Trade Preferences or GSTP).
Some real cases/disputes in the WTO that involve this principle are:
- EC — Sugar: This case concerned the European Communities' (EC) subsidies to its sugar
producers and exporters, which were challenged by Australia, Brazil, and Thailand as being
inconsistent with Article XVI of the GATT and other WTO rules. The complainants claimed
that the EC's subsidies caused serious prejudice to their interests and distorted world sugar
markets. The panel and the Appellate Body found that the EC violated Article XVI of the
GATT and other WTO rules by granting export subsidies that exceeded its commitment
levels, and by granting domestic support measures that exceeded its de minimis level. The EC
was required to bring its measures into conformity with its obligations under the WTO
Agreement.
- US — Upland Cotton: This case concerned the United States' subsidies to its upland cotton
producers and exporters, which were challenged by Brazil as being inconsistent with Article
XVI of the GATT and other WTO rules. Brazil claimed that the United States' subsidies
caused serious prejudice to its interests and distorted world cotton markets. The panel and the
Appellate Body found that the United States violated Article XVI of the GATT and other
WTO rules by granting export subsidies that exceeded its commitment levels, and by granting
domestic support measures that exceeded its de minimis level. The United States was
required to bring its measures into conformity with its obligations under the WTO
Agreement.
- India — Patents (US): This case concerned India's patent regime for pharmaceuticals and
agricultural chemicals, which was challenged by the United States as being inconsistent with
Article 27 of the TRIPS Agreement and other WTO rules. The United States claimed that
India failed to provide patent protection for inventions in these fields, as required by the
TRIPS Agreement. The panel found that India violated Article 27 of the TRIPS Agreement
by excluding these fields from patentability, but also recognized that India was entitled to a
transitional period until 2005 to implement this obligation, as a developing country.
The principle of special and differential treatment in multilateral trading system is intended to
promote fair and efficient trade among countries, as well as to foster economic development
and cooperation. However, there are some challenges and limitations to this principle, such
as:
- Non-compliance: Some members fail to implement or comply with their commitments
under the WTO agreements, either by not modifying or withdrawing their trade-restrictive
measures, or by imposing new ones. This undermines the credibility and effectiveness of the
WTO system and creates uncertainty and disputes for other members .
- Complexity: Some trade issues are complex and technical, making it difficult for members
to negotiate and reach agreements on them. This may result in deadlock or delay in trade
liberalization or reform .
- Diversity: Some members have different levels of development, interests, and preferences
regarding trade liberalization. This may create conflicts or imbalances among members over
the pace and scope of trade negotiations .
Therefore, it is important to balance the benefits and costs of special and differential
treatment in multilateral trading system and to ensure that the WTO rules are respected and
enforced by all its members
The sources of WTO law are the legal instruments that establish the rights and obligations of
the WTO members and the procedures for resolving trade disputes and conducting trade
policy reviews. The main sources of WTO law are:
NATIONAL TREATMENT
National treatment is one of the core principles of the multilateral trading system, which is
regulated by the World Trade Organization (WTO). National treatment means that countries
should not discriminate between their own products and services and those of other countries.
Once a foreign product or service enters a country’s market, it should be treated no less
favourably than a domestic product or service. This ensures that foreign and domestic
producers and suppliers compete on equal terms and that consumers have access to a wider
choice of products and services.
The meanings of "like products" and "directly competitive and substitutable products" are as
follows:
- Like products are products that are identical or similar in terms of their physical
characteristics, quality, end uses, consumer preferences, or tariff classification. The
determination of whether products are like or not depends on the facts and circumstances of
each case. For example, the Appellate Body in Japan — Alcoholic Beverages considered four
criteria to assess the likeness of alcoholic beverages: (i) the properties, nature and quality of
the products; (ii) the end-uses of the products; (iii) consumers' tastes and habits; and (iv) the
tariff classification of the products.
- Directly competitive and substitutable products are products that are not like each other, but
are capable of competing with each other in the same market and satisfying the same
consumer demand. The determination of whether products are directly competitive or
substitutable also depends on the facts and circumstances of each case. For example, the
panel in Canada — Periodicals considered three factors to assess the direct competitiveness
or substitutability of magazines: (i) the degree of physical resemblance between the products;
(ii) the extent to which the products serve the same or similar end-uses; and (iii) the extent to
which consumers perceive and treat the products as alternative means of performing
particular functions.
Differences:
Directly Competitive or
Criteria Like Products
Substitutable Products
a protective effect.
There are some exceptions to the rule of national treatment in the multilateral trading system,
which allow members to adopt measures that may discriminate between their own products
and services and those of other countries, under certain conditions and for certain purposes.
Some of these exceptions are:
Relevant Disputes:
Some real cases/disputes in the WTO that involve national treatment and like products are:
This case concerned Japan’s taxation system for alcoholic beverages, which was challenged
by the European Communities, Canada, and the United States as being inconsistent with
Article III:2 of the GATT and other WTO rules. The complainants claimed that Japan applied
higher taxes to imported vodka, whisky, gin, and genever than to domestic shochu, which
were like products. The panel and the Appellate Body found that Japan violated Article III:2
of the GATT by applying internal taxes to imported alcoholic beverages in excess of those
applied to like domestic beverages. Japan was required to bring its taxation system into
conformity with its obligations under the WTO Agreement.
ii. EC — Asbestos:
This case concerned the European Communities’ (EC) ban on imports and sales of asbestos
and asbestos-containing products, which was challenged by Canada as being inconsistent
with Article III:4 of the GATT and other WTO rules. Canada claimed that the EC’s ban
discriminated against imported asbestos products in favour of like domestic products made of
substitute fibres. The panel and the Appellate Body found that the EC’s ban did not violate
Article III:4 of the GATT, as asbestos products and substitute fibre products were not like
products, due to their different health risks. The EC was allowed to maintain its ban as a
measure necessary to protect human health under Article XX(b) of the GATT.
The most-favoured-nation (MFN) treatment rule is one of the core principles of the
multilateral trading system, which is regulated by the World Trade Organization (WTO). The
MFN treatment rule means that countries should treat each other equally and fairly in their
trade policies and practices, without giving preferential treatment to some countries over
others. If a country grants a special favour (such as a lower tariff or a subsidy) to one of its
trading partners, it has to extend the same favour to all other WTO members. This ensures
that trade is based on comparative advantage and not on political or strategic considerations.
The MFN treatment rule applies to all trade in goods and services, as well as to intellectual
property rights.
The MFN treatment rule is enshrined in various provisions of the WTO agreements. Some of
these provisions are:
Article I of the General Agreement on Tariffs and Trade (GATT), which requires
that any advantage, favour, privilege or immunity granted by a contracting party to
any product originating in or destined for any other country shall be accorded
immediately and unconditionally to the like product originating in or destined for the
territories of all other contracting parties.
Article II of the General Agreement on Trade in Services (GATS), which requires
that each member shall accord immediately and unconditionally to services and
service suppliers of any other member treatment no less favourable than that it
accords to like services and service suppliers of any other country.
Article 4 of the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS), which requires that with regard to the protection of intellectual property,
any advantage, favour, privilege or immunity granted by a member to the nationals of
any other country shall be accorded immediately and unconditionally to the nationals
of all other members.
Some real cases/disputes in the WTO that involve the MFN treatment rule are:
i. EC — Bananas III:
This case concerned the European Community's (EC) import regime for bananas, which gave
preferential treatment to bananas from certain African, Caribbean and Pacific (ACP)
countries and discriminated against bananas from Latin American countries and their
distributors. The complainants were Ecuador, Guatemala, Honduras, Mexico and the United
States. The panel and the Appellate Body found that the EC's regime violated Article I of the
GATT, as well as other WTO rules. The EC was required to bring its regime into conformity
with its obligations under the WTO Agreement.
This case concerned Canada's measures affecting imports of certain automotive products
from Japan, which included duty remission schemes, export performance requirements, and
local content requirements. The complainant was Japan. The panel and the Appellate Body
found that Canada's measures violated Article I of the GATT, as well as other WTO rules.
Canada was required to withdraw its measures or make them consistent with its obligations
under the WTO Agreement.
This case concerned China's measures affecting the importation and distribution of
publications, audiovisual products, and sound recordings, which included import restrictions,
trading rights limitations, and foreign equity limitations. The complainant was the United
States. The panel and the Appellate Body found that China's measures violated Article II of
the GATS, as well as other WTO rules. China was required to bring its measures into
conformity with its obligations under the WTO Agreement.
It promotes fair and efficient trade among countries, by preventing discrimination and
favouritism based on political or strategic considerations.
It reduces trade barriers and increases market access for all WTO members, by
ensuring that any trade concession granted by one member to another is extended to
all members.
It simplifies trade negotiations and administration, by avoiding complex bilateral or
plurilateral arrangements that may create confusion or conflict among members.
It fosters economic development and cooperation, by creating a level playing field for
all members and encouraging them to adopt sound trade policies.
There are some exceptions to the MFN treatment rule, which allow members to grant
preferential treatment to some countries over others, under certain conditions and for certain
purposes. Some of these exceptions are:
i. Article XXIV of the GATT, which permits members to form preferential trade
agreements (PTAs), such as free trade areas or customs unions, as long as they do not
raise trade barriers against non-parties and cover substantially all trade among parties.
ii. The Enabling Clause, which permits developed countries to grant preferential tariff
treatment to products originating in developing countries, either on a generalized, non
-reciprocal basis (the Generalized System of Preferences or GSP), or on a regional or
global basis (the Global System of Trade Preferences or GSTP).
iii. Article V of the GATS, which permits members to form economic integration
agreements (EIAs), such as free trade areas or common markets for services, as long
as they do not raise trade barriers against non-parties and have substantial sectoral
coverage.
iv. Article 27 of the TRIPS Agreement, which allows members to exclude certain
inventions from patentability for reasons of public order, morality, health, or
environment.
TRADING BLOCS
Trading blocs are groups of countries that agree to reduce or eliminate trade barriers among
themselves, while maintaining trade barriers against non-members. Trading blocs can take
different forms, such as free trade areas, customs unions, common markets, or economic
unions. Trading blocs can have various benefits and costs for their members and for the
multilateral trading system.
The European Union (EU) and the Association of Southeast Asian Nations (ASEAN) are two
examples of trading blocs that play an important role in the multilateral trading system.
The EU is a political and economic union of 27 member states that covers most of Europe.
The EU has a single market that allows the free movement of goods, services, capital, and
people within its borders. The EU also has a common currency (the euro), a common trade
policy, a common foreign and security policy, and a common legal system. The EU is one of
the largest economies and trading partners in the world, accounting for about 15% of global
GDP and 16% of global trade in 2019.
i. The Treaty on European Union (TEU) and the Treaty on the Functioning of the
European Union (TFEU), which are the founding treaties of the EU and set out its
objectives, functions, structure, and decision-making process.
ii. The Charter of Fundamental Rights of the European Union, which is a legally binding
document that proclaims the rights and freedoms of EU citizens and residents.
iii. The Regulations, Directives, Decisions, Recommendations, and Opinions adopted by
the EU institutions, such as the European Parliament, the European Council, the
Council of the European Union, the European Commission, or the Court of Justice of
the European Union. These are legal acts that have different effects and scopes
depending on their nature and purpose.
iv. The International Agreements concluded by the EU with other countries or
organizations, such as the WTO Agreement, the Paris Agreement on climate change,
or the Convention on Biological Diversity. These are legal instruments that bind the
EU and its member states to their provisions and obligations.
ASEAN is a regional organization of 10 member states that covers Southeast Asia. ASEAN
aims to promote economic growth, social progress, cultural development, regional stability,
and cooperation among its members. ASEAN has established an ASEAN Free Trade Area
(AFTA) that eliminates tariffs and non-tariff barriers among its members. ASEAN also has
an ASEAN Economic Community (AEC) that aims to create a single market and production
base, a competitive economic region, a region of equitable economic development, and a
region fully integrated into the global economy. ASEAN is one of the fastest growing
economies and trading partners in the world, accounting for about 3% of global GDP and 7%
of global trade in 2019.
Support the rules-based and open trading system under the WTO, by participating in
trade negotiations, dispute settlement, and policy review.
Promote regional and global integration, by forming preferential trade agreements
with other countries or regions, such as China, Japan, Korea, India, Australia, New
Zealand (ASEAN+1), or all together (ASEAN+6).
Advance its values and interests, by incorporating standards and principles on human
rights, democracy, rule of law, environment, or social protection in its trade policy.
Contribute to development and cooperation, by providing trade preferences, aid, or
assistance to developing countries or least-developed countries (LDCs), especially
those in Asia.
a) The ASEAN Charter, which is a legally binding document that establishes ASEAN as
a rules-based, people-oriented, and community-driven organization.
b) The ASEAN Charter sets out its objectives, functions, structure, and decision-making
process.
c) The ASEAN Economic Community Blueprint 2025, which is a strategic document
that outlines the vision, goals, and action plans for achieving an integrated, inclusive,
and resilient ASEAN Economic Community by 2025.
d) The ASEAN Economic Community Blueprint 2025 covers five interrelated and
mutually reinforcing characteristics: (i) a highly integrated and cohesive economy; (ii)
a competitive, innovative, and dynamic ASEAN; (iii) enhanced connectivity and
sectoral cooperation; (iv) a resilient, inclusive, people-oriented, and people-centred
ASEAN; and (v) a global ASEAN.
e) The Agreements, Protocols, Decisions, Declarations, and Statements adopted by the
ASEAN Summit, the ASEAN Coordinating Council, the ASEAN Economic
Ministers Meeting, or other relevant ASEAN bodies. These are legal or political acts
that have different effects and scopes depending on their nature and purpose.
f) The International Agreements concluded by ASEAN with other countries or
organizations, such as the WTO Agreement, the Regional Comprehensive Economic
Partnership (RCEP), or the Framework Agreement on Comprehensive Economic
Cooperation among the Governments of the Member Countries of ASEAN and the
People's Republic of China. These are legal instruments that bind ASEAN and its
member states to their provisions and obligations.
The rules governing the trading blocs are mainly derived from Article XXIV of the GATT
and Article V of the GATS, which permit members to form preferential trade agreements
(PTAs), such as free trade areas or customs unions, as long as they do not raise trade barriers
against non-parties and cover substantially all trade among parties. These rules aim to ensure
that PTAs are compatible with the principles of non-discrimination and reciprocity in the
multilateral trading system. However, there are some challenges and limitations to these
rules, such as:
- Ambiguity: Some terms and concepts in Article XXIV and Article V are vague or
undefined, such as "substantially all trade", "other regulations of commerce", or "economic
integration". This may create difficulties or disputes in interpreting and applying these rules .
- Flexibility: Some provisions in Article XXIV and Article V allow for exceptions or
deviations from the general rules, such as for developing countries, regional or global
arrangements, or interim agreements. This may create loopholes or inconsistencies in these
rules .
- Enforcement: Some aspects of Article XXIV and Article V are not subject to effective
monitoring or dispute settlement mechanisms, such as the notification or examination
procedures, or the transitional safeguards. This may create gaps or weaknesses in these rules .
Some real cases/disputes in the WTO that involve trading blocs are:
i. Turkey — Textiles:
This case concerned Turkey's import restrictions on textiles and clothing products from India,
which were challenged by India as being inconsistent with Article XI (general elimination of
quantitative restrictions) of the GATT and other WTO rules. India claimed that Turkey's
restrictions were not justified by its customs union with the EU, which had similar
restrictions on textiles and clothing products from third countries. The panel and the
Appellate Body found that Turkey violated Article XI of the GATT by imposing quantitative
restrictions on imports from India that were not necessary to secure compliance with its
obligations under the customs union with the EU.
This case concerned the European Community's (EC) import regime for bananas, which gave
preferential treatment to bananas from certain African, Caribbean and Pacific (ACP)
countries and discriminated against bananas from Latin American countries and their
distributors. The complainants were Ecuador, Guatemala, Honduras, Mexico and the United
States. The panel and the Appellate Body found that the EC's regime violated Article I (most-
favoured-nation treatment) and Article III (national treatment) of the GATT, as well as other
WTO rules. The EC was required to bring its regime into conformity with its obligations
under the WTO Agreement.
This case concerned Canada's measures affecting imports of certain automotive products
from Japan, which included duty remission schemes, export performance requirements, and
local content requirements. The complainant was Japan. The panel and the Appellate Body
found that Canada's measures violated Article I (most-favoured-nation treatment) and Article
III (national treatment) of the GATT, as well as other WTO rules. Canada was required to
withdraw its measures or make them consistent with its obligations under the WTO
Agreement.
Regional trade agreements (RTAs) and free trade agreements (FTAs) are types of preferential
trade agreements (PTAs) that allow countries to reduce or eliminate trade barriers among
themselves, while maintaining trade barriers against non-members. RTAs and FTAs can take
different forms, such as free trade areas, customs unions, common markets, or economic
unions.
- RTAs are agreements between two or more countries that are geographically close or share
a common border. RTAs aim to promote regional integration and cooperation among their
members. Examples of RTAs are the European Union (EU), the North American Free Trade
Agreement (NAFTA), the Association of Southeast Asian Nations (ASEAN), and the
Southern Common Market (MERCOSUR).
- FTAs are agreements between two or more countries that may or may not be geographically
close or share a common border. FTAs aim to increase market access and trade opportunities
among their members. Examples of FTAs are the Comprehensive and Progressive Agreement
for Trans-Pacific Partnership (CPTPP), the Comprehensive Economic and Trade Agreement
(CETA) between Canada and the EU, the United States-Mexico-Canada Agreement
(USMCA), and the Regional Comprehensive Economic Partnership (RCEP).
The relevant provisions in international trade law for RTAs and FTAs are mainly derived
from Article XXIV of the General Agreement on Tariffs and Trade (GATT) and Article V of
the General Agreement on Trade in Services (GATS), which permit members to form
preferential trade agreements, such as free trade areas or customs unions, as long as they do
not raise trade barriers against non-parties and cover substantially all trade among parties.
These provisions aim to ensure that RTAs and FTAs are compatible with the principles of
non-discrimination and reciprocity in the multilateral trading system. However, there are
some challenges and limitations to these provisions, such as ambiguity, flexibility, and
enforcement.
- They can promote trade creation and economic integration among their members, by
increasing market access, lowering trade costs, enhancing competitiveness, and fostering
cooperation.
- They can stimulate trade liberalization and reform among their members, by harmonizing or
converging their trade policies, standards, and regulations, and by addressing new or
emerging trade issues.
- They can support development and cooperation among their members, by providing
preferential treatment, technical assistance, capacity building, or policy space to developing
countries or least-developed countries (LDCs).
- They can complement or supplement the multilateral trading system under the World Trade
Organization (WTO), by advancing the principles of non-discrimination and reciprocity, by
contributing to the rules-based and open trading system, and by participating in trade
negotiations, dispute settlement, and policy review.
However, RTAs and FTAs can also pose some potential risks to multilateralism, such as:
- They can create trade diversion and discrimination against non-members, by diverting trade
from more efficient producers outside the PTA to less efficient producers inside the PTA, and
by creating different or preferential rules for different trading partners.
Therefore, it is important to balance the benefits and costs of RTAs and FTAs and to ensure
that they are compatible with the principles and objectives of multilateralism.
Market access is a key concept in international trade law that refers to the conditions, tariff
and non-tariff measures, agreed by members of the World Trade Organization (WTO) for the
entry of specific goods and services into their markets. Market access rules aim to ensure that
WTO members have secure and predictable access to the markets of other members, and that
Market access rules are mainly found in two WTO agreements: the General Agreement on
Tariffs and Trade (GATT) for trade in goods, and the General Agreement on Trade in
Services (GATS) for trade in services. Both agreements contain provisions on the reduction
and binding of tariffs, the elimination of quantitative restrictions, and the application of
specific WTO agreements that deal with certain aspects of market access, such as the
Market access rules are at the core of WTO law, as they reflect the objectives of the WTO to
promote trade liberalization, economic development, and international cooperation. However,
market access rules are not absolute, and they are subject to various exceptions and
flexibilities that allow WTO members to pursue other legitimate policy goals, such as the
protection of public health, the environment, or national security. Moreover, market access
rules are often subject to negotiations and disputes among WTO members, as they involve
complex and sensitive issues of economic interests, political preferences, and social values.
Therefore, market access rules are constantly evolving and adapting to the changing realities
of global trade.
They are the preferred trade policy instrument under the WTO, as they are more
transparent, predictable, and retain the relationship to consumer prices. Tariffs are
schedules of concessions. Tariffs can take different forms, such as ad valorem (based
on the value of the goods) or specific (based on the quantity or weight of the goods).
They are generally prohibited under Article XI of GATT, as they impose absolute
limits on trade, have a trade-distorting effect, and may not be transparent or fair in
Article XI applies to both de jure and de facto restrictions, as well as to measures that
There are some exceptions and flexibilities to the general prohibition of quantitative
restrictions, such as for security reasons (Article XXI of GATT), for balance-of-
payments difficulties (Article XII and XVIII:B of GATT), for agricultural products
(Article XI:2 of GATT and the Agreement on Agriculture), for textiles and clothing
(the Agreement on Textiles and Clothing), and for other legitimate policy goals
(Article XX of GATT). However, these exceptions and flexibilities are subject to
certain conditions and disciplines, and may be challenged or reviewed by other WTO
members.
There have been many disputes and cases involving tariffs and quantitative
restrictions under the WTO dispute settlement system. Some examples are: India –
Additional Import Duties (DS360), where the Appellate Body found that India's
additional duties on imports of certain products from the United States were
inconsistent with Article II:1 of GATT and could not be justified under Article XX of
GATT; China – Raw Materials (DS394/395/398), where the Appellate Body upheld
the panel's finding that China's export restrictions on certain raw materials were
inconsistent with Article XI:1 of GATT and could not be justified under Article XX
of GATT; and Indonesia – Import Licensing Regimes (DS477/478), where the panel
found that Indonesia's import licensing regimes for certain animal and horticultural
products were inconsistent with Article XI:1 of GATT and could not be justified
under Article XX of GATT.
ii. TARIFF BINDINGS UNDER ARTICLE II OF GATT 1994
Tariff bindings are the legal commitments made by WTO members to limit the
maximum level of tariffs that they can impose on imported goods. Tariff bindings are
recorded in the Schedules of Concessions annexed to GATT 1994, which are part of
the WTO legal framework. Tariff bindings provide predictability and security for
traders, as they prevent WTO members from raising their tariffs arbitrarily or
discriminatorily.
Article II:1(b) of GATT 1994 states that WTO members shall not impose any duties
or charges on imported goods in excess of those set forth and provided for in their
Schedules of Concessions. This means that WTO members must respect their tariff
bindings and not apply tariffs higher than the bound rates. Article II:1(b) also states
that WTO members shall not impose any other duties or charges of any kind on
imported goods, except those imposed on the date of GATT 1947 or those directly
and mandatorily required by legislation in force on that date. This means that WTO
members must not introduce any new fees, taxes, or surcharges on imported goods
The Understanding on the Interpretation of Article II:1(b) of GATT 1994 clarifies the
meaning and scope of the term "other duties or charges" in Article II:1(b). It states
that any such duties or charges must be recorded in the Schedules of Concessions
against the tariff item to which they apply, and that they must not exceed the level in
effect on the date of the entry into force of the WTO Agreement for the member
concerned. It also states that any changes in the level of such duties or charges must
There are some exceptions and flexibilities to the obligation to respect tariff bindings
under Article II of GATT 1994, such as for the protection of national security (Article
XXI of GATT 1994), for the maintenance of the balance of payments (Article XII and
XVIII of GATT 1994), for the application of safeguard measures (Article XIX of
GATT 1994 and the Agreement on Safeguards), and for the modification or
withdrawal of concessions (Article XXVIII of GATT 1994). However, these
exceptions and flexibilities are subject to certain conditions and disciplines, and may
There have been many disputes and cases involving tariff bindings under Article II of
GATT 1994 under the WTO dispute settlement system. Some examples are: EC –
Bananas III (DS27), where the Appellate Body found that the EC's tariff quota regime
for bananas was inconsistent with Article II:1(b) of GATT 1994, as it imposed duties
and charges on imports of bananas from certain countries in excess of those set forth
and provided for in the EC's Schedule of Concessions; US – FSC (DS108), where the
Appellate Body found that the US's foreign sales corporation scheme was inconsistent
with Article II:1(b) of GATT 1994, as it granted an exemption from certain taxes to
exports of certain products that was not recorded in the US's Schedule of
Concessions; and China – Auto Parts (DS339/340/342), where the Appellate Body
found that China's measures imposing additional charges on imported auto parts were
inconsistent with Article II:1(b) of GATT 1994, as they were not recorded in China's
Schedule of Concessions and exceeded the bound rates.
a. Tariffs are more consistent with the principle of non-discrimination, as they apply
equally to all imports from all sources, whereas quantitative restrictions may favour
certain countries or suppliers over others. Tariffs also respect the principles of
to treat imported goods no less favourably than domestic goods or goods from any
b. Tariffs are more efficient and less distorting than quantitative restrictions, as they
allow the market to determine the optimal level of trade, whereas quantitative
signals and incentives for producers and consumers, whereas quantitative restrictions
c. Tariffs are more transparent and predictable than quantitative restrictions, as they are
clearly specified and notified in the schedules of concessions of WTO members,
whereas quantitative restrictions may be hidden, arbitrary, or discretionary. Tariffs
also provide certainty and stability for traders, whereas quantitative restrictions may
quantitative restrictions are subject to strict rules and exceptions. Tariffs also allow
- There are some exceptions and flexibilities to the general prohibition of quantitative
restrictions, such as for security reasons (Article XXI of GATT 1994), for balance-of-
payments difficulties (Article XII and XVIII:B of GATT 1994), for agricultural products
(Article XI:2 of GATT 1994 and the Agreement on Agriculture), for textiles and clothing (the
Agreement on Textiles and Clothing), and for other legitimate policy goals (Article XX of
GATT 1994). However, these exceptions and flexibilities are subject to certain conditions
and disciplines, and may be challenged or reviewed by other WTO members.
- There have been many disputes and cases involving tariffs and quantitative restrictions
under the WTO dispute settlement system. Some examples are: India – Additional Import
Duties (DS360), where the Appellate Body found that India's additional duties on imports of
certain products from the United States were inconsistent with Article II:1 of GATT 1994 and
could not be justified under Article XX of GATT 1994; China – Raw Materials
(DS394/395/398), where the Appellate Body upheld the panel's finding that China's export
restrictions on certain raw materials were inconsistent with Article XI:1 of GATT 1994 and
could not be justified under Article XX of GATT 1994; and Indonesia – Import Licensing
Regimes (DS477/478), where the panel found that Indonesia's import licensing regimes for
certain animal and horticultural products were inconsistent with Article XI:1 of GATT 1994
exportation of goods, other than duties, taxes, or other charges, whether made
effective through quotas, import or export licences, or other measures.
The rationale behind Article XI is to ensure that WTO members have secure and
predictable access to the markets of other contracting parties, and that they do not face
for tariffs over quantitative restrictions as the main instrument of trade policy, as
tariffs are more transparent, predictable, efficient, and negotiable than quantitative
restrictions.
Article XI applies to both de jure and de facto restrictions, as well as to measures that
affect the opportunities for importation or exportation itself. Article XI covers a wide
range of measures that may restrict trade, such as quotas, licensing requirements,
Article XI is subject to various exceptions and flexibilities that allow WTO members
to pursue other legitimate policy goals, such as the protection of public health, the
contained in Article XI itself, such as for the prevention or relief of critical shortages
of foodstuffs or other products essential to the exporting country (Article XI:2(a)), for
products (Article XI:2(c)). Other exceptions and flexibilities are found in other WTO
agreements, such as the Agreement on Agriculture, the Agreement on Textiles and
Trade. However, these exceptions and flexibilities are subject to certain conditions
There have been many disputes and cases involving Article XI under the WTO
dispute settlement system. Some examples are: China – Raw Materials
(DS394/395/398), where the Appellate Body upheld the panel's finding that China's
export restrictions on certain raw materials were inconsistent with Article XI:1 and
could not be justified under Article XX; Indonesia – Import Licensing Regimes
(DS477/478), where the panel found that Indonesia's import licensing regimes for
certain animal and horticultural products were inconsistent with Article XI:1 and
could not be justified under Article XX; and India – Additional Import Duties
(DS360), where the Appellate Body found that India's additional duties on imports of
certain products from the United States were inconsistent with Article II:1 and could
In Article XI:
1. Article XI:2 of GATT 1994, which provides three specific exceptions to the general
prohibition of quantitative restrictions. These are:
governmental measures that restrict the quantities of the like domestic product
Other exceptions:
1. Article XXI of GATT 1994, which allows WTO members to take any action that they
consider necessary for the protection of their essential security interests, or in
pursuance of their obligations under the United Nations Charter for the maintenance
of international peace and security. This exception is very broad and self-judging, and
has been invoked by several WTO members in various disputes, such as the US steel
2. Article XII and XVIII:B of GATT 1994, which allow WTO members to impose
import restrictions for the purpose of safeguarding their external financial position
restrictions. This exception has been used by several developing countries, such as
India, Pakistan, and Brazil, to cope with their balance of payments difficulties.
3. Article XX of GATT 1994, which allows WTO members to adopt or enforce
measures that are necessary to protect public morals, human, animal or plant life or
frequently invoked and litigated exceptions in the WTO, as it covers a wide range of
protection, animal welfare, cultural preservation, and public health. However, this
discrimination, as well as a chapeau clause that requires that the measures are not
Non-tariff barriers to trade are measures that restrict the import or export of goods and
services without involving the imposition of tariffs (taxes on imports). They can take various
subsidies. Non-tariff barriers to trade can have different objectives and effects, such as to
achieve political or economic goals. Non-tariff barriers to trade can also affect the quantity,
Non-tariff barriers to trade are often more subtle and complex than tariffs, and they can be
more difficult to identify and address. They may also vary from country to country, or from
product to product, creating uncertainty and inconsistency for traders. Non-tariff barriers to
trade are subject to the rules and disciplines of the World Trade Organization (WTO), which
aims to promote trade liberalization and prevent trade distortion. The WTO provides a
framework for negotiation, notification, consultation, and dispute settlement among its
members regarding non-tariff barriers to trade. However, some non-tariff barriers to trade
may still remain or emerge due to the diversity and dynamism of trade policies and practices.
trade and prevent trade distortion. The TBT Agreement covers the development, adoption,
and application of voluntary product standards, mandatory technical regulations, and the
The main objectives of the TBT Agreement are to ensure that technical regulations,
standards, and conformity assessment procedures are non-discriminatory and do not create
unnecessary obstacles to trade, while recognizing the right of WTO members to implement
measures to achieve legitimate policy goals, such as the protection of human health and
safety, or the environment. The TBT Agreement also encourages WTO members to base their
The TBT Agreement applies to all products, including industrial and agricultural products,
except for sanitary and phytosanitary measures, which are covered by a separate agreement.
The TBT Agreement also does not apply to purchasing specifications prepared by
governmental bodies for their own use, which are addressed in the Agreement on
Government Procurement.
The TBT Agreement establishes a Committee on Technical Barriers to Trade, which oversees
the implementation of the agreement, provides a forum for members to discuss specific trade
concerns, and reviews the operation and effectiveness of the agreement. The TBT Agreement
also provides a framework for the settlement of disputes arising from its application, in
CASES:
i. China – Measures Related to the Exportation of Various Raw Materials:- This case
was brought by the United States, the European Union, and Mexico against China's
magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus, and zinc.
The complainants argued that China's measures violated its obligations under Article
XI:1 of GATT 1994, which prohibits quantitative restrictions on exports, and its
specific commitments under its Accession Protocol to the WTO, which prohibits
export duties and other charges on certain products. The panel and the Appellate Body
agreed with the complainants and found that China's measures were inconsistent with
its WTO obligations. China was required to bring its measures into conformity with
This case was brought by the United States and New Zealand against Indonesia's
import licensing regimes for horticultural products and animal products, such as
fruits, vegetables, flowers, beef, and poultry. The complainants argued that
Indonesia's measures violated its obligations under Article XI:1 of GATT 1994,
domestic sale of agricultural products. The panel and the Appellate Body agreed with
the complainants and found that Indonesia's measures were inconsistent with its WTO
obligations. Indonesia was required to bring its measures into conformity with its
This case was brought by the United States against India's additional and extra-
additional duties on imports of certain products from the United States, such as wine,
spirits, almonds, and chemicals. The United States argued that India's measures
violated its obligations under Article II:1 of GATT 1994, which requires WTO
members to respect their tariff bindings and not to impose any other duties or charges
on imports, and under Article III:2 of GATT 1994, which requires WTO members to
apply internal taxes on imported products no less favourably than on like domestic
products. The panel and the Appellate Body agreed with the United States and found
that India's measures were inconsistent with its WTO obligations. India was required
to bring its measures into conformity with its WTO obligations by the end of 2011.
The WTO-TBT Agreement and the Tokyo-TBT Agreement are two international agreements
that deal with technical barriers to trade, such as product standards, regulations, and
conformity assessment procedures. However, there are some differences between them, such
as:
i. The WTO-TBT Agreement was negotiated during the Uruguay Round of trade talks
(1986-1994) and is an integral part of the WTO Agreement, whereas the Tokyo-TBT
Agreement was negotiated during the Tokyo Round of trade talks (1973-1979) and
ii. The WTO-TBT Agreement has strengthened and clarified the provisions of the Tokyo
-TBT Agreement, such as by expanding the scope of the agreement to cover all
products, including industrial and agricultural products, by introducing more detailed
iii. The WTO-TBT Agreement also recognizes the right of WTO members to implement
measures to achieve legitimate policy objectives, such as the protection of human
health and safety, or the environment, and encourages them to base their measures on
not explicitly address these issues, and focused more on the elimination of
- The Agreement on Technical Barriers to Trade (TBT) is one of the multilateral trade
agreements under the World Trade Organization (WTO) that aims to facilitate international
trade and prevent trade distortion. The TBT Agreement covers the development, adoption,
and application of voluntary product standards, mandatory technical regulations, and the
- The TBT Agreement consists of a preamble, 15 articles, and three annexes. The preamble
sets out the objectives and principles of the agreement, such as the promotion of trade
achieve legitimate policy goals, and the encouragement of the use of international standards.
The articles contain the substantive obligations and rules of the agreement, such as the non-
discrimination and transparency requirements, the criteria for the preparation, adoption, and
application of technical regulations and standards, the code of good practice for standardizing
bodies, and the mechanisms for consultation, cooperation, and dispute settlement. The
annexes provide further details and definitions on the scope and terms of the agreement, such
as the illustrative list of products, the terms and their definitions, and the code of good
- The TBT Agreement applies to all products, including industrial and agricultural products,
except for sanitary and phytosanitary measures, which are covered by a separate agreement.
The TBT Agreement also does not apply to purchasing specifications prepared by
governmental bodies for their own use, which are addressed in the Agreement on
that lay down product characteristics or their related processes and production methods, with
which compliance is mandatory. It also defines standards as documents that lay down product
characteristics or their related processes and production methods, with which compliance is
not mandatory. It also defines conformity assessment procedures as any procedure used,
- The TBT Agreement has been invoked and interpreted in several disputes and cases under
the WTO dispute settlement system. Some examples are: EC – Sardines (DS231), where the
Appellate Body found that the EC's regulation on the marketing of preserved sardines was
inconsistent with Article 2.4 of the TBT Agreement, as it did not base its regulation on the
relevant international standard; US – Tuna II (DS381), where the Appellate Body found that
the US's measure on the labelling of tuna products was inconsistent with Article 2.1 and 2.2
of the TBT Agreement, as it discriminated against Mexican tuna products and was more trade
-restrictive than necessary to achieve the objective of dolphin protection; and EC – Seal
Products (DS400/401), where the Appellate Body found that the EC's regulation on the trade
of seal products was inconsistent with Article 2.1 and 2.2 of the TBT Agreement, as it
discriminated against Canadian and Norwegian seal products and was not based on a
legitimate objective or a rational relationship between the measure and the objective.
products no less favourably than like domestic products (national treatment) or like
products from any other WTO member (most-favoured-nation treatment) with respect
principle aims to ensure fair and equal competitive conditions for traders and to
prevent protectionism.
ii. Transparency: The TBT Agreement requires WTO members to notify other
inquiries on these measures. This principle aims to create a predictable and consistent
trading environment and to allow for consultation and cooperation among members.
iii. Harmonization: The TBT Agreement encourages WTO members to base their
avoid unnecessary obstacles to trade. This principle aims to reduce the diversity and
iv. Necessity: The TBT Agreement recognizes the right of WTO members to implement
health and safety, or the environment, but requires that such measures are not more
balance the regulatory autonomy of members with the trade liberalization objective of
the WTO.
v. Proportionality: The TBT Agreement requires WTO members to ensure that their
prepared, adopted, or applied with a view to or with the effect of creating unnecessary
obstacles to international trade. This principle aims to ensure that the trade impact of
the measures is proportionate to the policy objective pursued and that the measures
The Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement)
is one of the multilateral trade agreements under the World Trade Organization (WTO) that
aims to facilitate international trade and prevent trade distortion. The SPS Agreement covers
the development, adoption, and application of food safety and animal and plant health
The main objectives of the SPS Agreement are to ensure that SPS measures are not applied in
members to adopt or enforce measures necessary to protect human, animal or plant life or
health, subject to the requirement that these measures are based on scientific principles and
evidence.
The SPS Agreement also encourages members to harmonize their SPS measures with
Epizootics, and the International Plant Protection Convention, without requiring members to
change their appropriate level of protection. The SPS Agreement also provides for
transparency, consultation, cooperation, and dispute settlement mechanisms to avoid or
The SPS Agreement applies to all SPS measures that may, directly or indirectly, affect
international trade, such as import bans, testing and certification requirements, quarantine and
inspection procedures, maximum residue limits, and labelling requirements. The SPS
Agreement does not apply to technical regulations, standards, and conformity assessment
procedures that are not related to food safety or animal and plant health, which are covered
The Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement)
is one of the multilateral trade agreements under the World Trade Organization (WTO) that
aims to facilitate international trade and prevent trade distortion. The SPS Agreement covers
the development, adoption, and application of food safety and animal and plant health
i. The SPS Agreement consists of a preamble, 14 articles, and three annexes. The
preamble sets out the objectives and principles of the agreement, such as the
implement measures necessary to protect human, animal or plant life or health, and
recommendations. The articles contain the substantive obligations and rules of the
for the assessment of risk and the determination of the appropriate level of protection,
the harmonization and equivalence of SPS measures, the control, inspection and
approval procedures, the technical assistance and special treatment for developing
countries, and the mechanisms for consultation, cooperation, and dispute settlement.
The annexes provide further details and definitions on the scope and terms of the
agreement, such as the illustrative list of SPS measures, the terms and their
definitions, and the guidelines for the recognition of the concept of regionalization.
ii. The SPS Agreement applies to all SPS measures that may, directly or indirectly,
affect international trade, such as import bans, testing and certification requirements,
requirements. The SPS Agreement defines SPS measures as any measure applied to
protect human or animal life from risks arising from additives, contaminants, toxins or
from plant- or animal-carried diseases; to protect animal or plant life from pests,
The SPS Agreement has been invoked and interpreted in several disputes and cases under the
WTO dispute settlement system. Some examples are: EC – Hormones (DS26/48), where the
Appellate Body found that the EC's ban on imports of hormone-treated beef from the US and
Canada was inconsistent with Article 5.1 of the SPS Agreement, as it was not based on a risk
assessment; Australia – Salmon (DS18), where the Appellate Body found that Australia's
import restrictions on fresh, chilled or frozen salmon from Canada were inconsistent with
Article 5.6 of the SPS Agreement, as they were more trade-restrictive than required to
achieve the appropriate level of protection; and Japan – Agricultural Products II (DS76),
where the Appellate Body found that Japan's varietal testing requirement for imports of
certain fruits and vegetables from the US was inconsistent with Article 2.2 of the SPS
Agreement, as it was not based on scientific principles and evidence.
The SPS Agreement incorporates several principles that guide its interpretation and
from any other WTO member (most-favoured-nation treatment) with respect to SPS
measures. This principle aims to ensure fair and equal competitive conditions for traders and
to prevent protectionism.
- Transparency: The SPS Agreement requires WTO members to notify other members of
their proposed or adopted SPS measures, and to provide information and respond to inquiries
on these measures. This principle aims to create a predictable and consistent trading
- Harmonization: The SPS Agreement encourages WTO members to base their SPS
measures on international standards, guidelines and recommendations developed by relevant
Office of Epizootics, and the International Plant Protection Convention, without requiring
members to change their appropriate level of protection. This principle aims to reduce the
diversity and complexity of SPS requirements and to promote mutual recognition and
- Necessity: The SPS Agreement recognizes the right of WTO members to implement
measures to achieve legitimate policy objectives, such as the protection of human, animal or
plant life or health, but requires that such measures are not more trade-restrictive than
necessary to fulfil those objectives. This principle aims to balance the regulatory autonomy of
members with the trade liberalization objective of the WTO.
- Proportionality: The SPS Agreement requires WTO members to ensure that their SPS
measures are not prepared, adopted, or applied with a view to or with the effect of creating
unnecessary obstacles to international trade. This principle aims to ensure that the trade
impact of the measures is proportionate to the policy objective pursued and that the measures
- Article 2.3 of the SPS Agreement, which states that WTO members shall ensure that their
identical or similar conditions prevail, including between their own territory and that of other
members.
- Article 7 of the SPS Agreement, which states that WTO members shall notify other
members of any new or changed SPS measures that may have a significant effect on trade,
and shall provide copies of the measures and relevant information upon request.
- Article 3 of the SPS Agreement, which states that WTO members shall base their SPS
measures on international standards, guidelines or recommendations, where they exist, or
shall provide a scientific justification or a risk assessment for any deviation from such
standards.
- Article 5.6 of the SPS Agreement, which states that WTO members shall ensure that their
SPS measures are not more trade-restrictive than required to achieve their appropriate level of
- Article 5.1 of the SPS Agreement, which states that WTO members shall ensure that their
SPS measures are based on a risk assessment, taking into account risk assessment techniques
- Australia – Salmon (DS18), where the Appellate Body found that Australia's import
restrictions on fresh, chilled or frozen salmon from Canada were inconsistent with Article 5.6
of the SPS Agreement, as they were more trade-restrictive than required to achieve the
- Japan – Apples (DS245), where the Appellate Body found that Japan's import prohibition
on apples from the US was inconsistent with Article 2.3 of the SPS Agreement, as it
arbitrarily discriminated between the US and other countries where fire blight was present.
The Agreement on Rules of Origin is one of the multilateral trade agreements under the
World Trade Organization (WTO) that aims to facilitate international trade and prevent trade
distortion. The Agreement on Rules of Origin covers the development, adoption, and
application of non-preferential rules of origin by WTO members. Non-preferential rules of
origin are those that are not related to contractual or autonomous trade regimes that grant
tariff preferences, such as free trade agreements or generalized system of preferences. Non-
preferential rules of origin are used to determine the country of origin of goods for various
discriminatory quantitative restrictions or tariff quotas. They are also used for government
The main objectives of the Agreement on Rules of Origin are to ensure that rules of origin are
clear and predictable, and that they do not create unnecessary obstacles to trade. The
Agreement on Rules of Origin also aims to ensure that rules of origin do not nullify or impair
the rights of WTO members under other WTO agreements, such as the General Agreement
on Tariffs and Trade (GATT) 1994. The Agreement on Rules of Origin also provides for
transparency, consultation, and dispute settlement mechanisms to avoid or resolve trade
of non-preferential rules of origin, which is carried out by the Committee on Rules of Origin
(CRO) and the Technical Committee on Rules of Origin (TCRO). The work programme aims
to harmonize and clarify the rules of origin for all products, based on a common set of
definitions, general rules, and product-specific rules. The work programme also aims to
ensure that the rules of origin are prepared and applied in an impartial, transparent,
Rules of origin are the criteria used to determine the country of origin of a product for various
purposes, such as applying tariffs, quotas, or other trade measures. Rules of origin are
important because they can affect the conditions and costs of trade, as well as the eligibility
There are two types of rules of origin: preferential and non-preferential. Preferential rules of
origin are those that are related to trade agreements that grant tariff preferences or other
benefits to certain products or countries, such as free trade agreements or generalized system
of preferences. Non-preferential rules of origin are those that are not related to any
preferential trade regime, and are used for other purposes, such as applying most-favoured-
nation treatment, anti-dumping and countervailing duties, safeguard measures, origin marking
The Agreement on Rules of Origin is a multilateral trade agreement under the World Trade
Organization (WTO) that covers the development, adoption, and application of non-
preferential rules of origin by WTO members. The main objectives of the agreement are to
ensure that rules of origin are clear and predictable, and that they do not create unnecessary
obstacles to trade. The agreement also establishes a work programme for the harmonization
of non-preferential rules of origin, which is carried out by the Committee on Rules of Origin
trade measures. It is based on the idea that a product acquires the origin of the country
The Substantial Transformation Test is applied when a product is not wholly obtained
or produced in a single country, but consists of materials or components from more
than one country. The test examines whether the processing or manufacturing in the
country claiming origin adds significant value or alters the essential characteristics of
the product. The test may consider various factors, such as the name, character, use,
tariff classification, or physical properties of the product before and after the
processing or manufacturing.
The Substantial Transformation Test is not a uniform or harmonized rule, but varies
from country to country, or from product to product, depending on the national
definition or criteria for substantial transformation, and different countries may apply
different tests or standards to determine the origin of the same product. This may
create uncertainty and inconsistency for traders, and may lead to trade disputes or
litigation.
The Substantial Transformation Test is subject to the rules and disciplines of the
World Trade Organization (WTO), which aims to promote trade liberalization and
prevent trade distortion. The WTO provides a framework for negotiation, notification,
consultation, and dispute settlement among its members regarding rules of origin. The
rules of origin, which is carried out by the Committee on Rules of Origin and the
CASES:
EC – Chicken Cuts (DS269/286): Brazil and Thailand challenged the EC’s customs
classification of chicken cuts, which resulted in higher duties and discriminatory
treatment. The WTO found that the EC violated its tariff schedule and its rules of
origin obligations.
US – Wool Shirts and Blouses (DS33): India challenged the US rules of origin for
wool shirts and blouses, which required the use of US fabrics. The WTO found that
EC – Tariff Preferences (DS246): India challenged the EC’s tariff preferences granted
to certain developing countries under its GSP scheme, which was based on labour and
environmental standards. The WTO found that the EC violated its rules of origin
obligations.
The Agreement on Pre-shipment Inspection is one of the multilateral trade agreements under
the World Trade Organization (WTO) that aims to facilitate international trade and prevent
trade distortion. The Agreement on Pre-shipment Inspection covers the practice of employing
private companies to check shipment details such as price, quantity and quality of goods
the General Agreement on Tariffs and Trade (GATT) apply to such activities.
The main objectives of the Agreement on Pre-shipment Inspection are to safeguard national
financial interests (prevention of capital flight and commercial fraud as well as customs duty
cooperation, and dispute settlement mechanisms to avoid or resolve trade disputes arising
that are mandated by governments, whether directly or indirectly, and whether they are
does not apply to pre-shipment inspection activities that are undertaken at the initiative of the
importer or the exporter, or that are related to contractual or autonomous trade regimes that
grant tariff preferences, such as free trade agreements or generalized system of preferences.
PSI companies are private companies that are hired by governments or importers to check the
shipment details of goods ordered from overseas, such as price, quantity, quality, and
i. To verify that the goods conform to the contract specifications and the applicable
ii. To issue a report of findings or a certificate of inspection that confirms the accuracy
iii. To assist the customs authorities of the importing country in determining the correct
v. To safeguard the financial interests and the health and safety of the consumers of the
importing country
The Agreement on Pre-shipment Inspection imposes certain obligations on both user and
exporting members. User members are those that require or use PSI services for imports,
while exporting members are those from which the goods are exported.
a. To ensure that PSI activities are carried out in a transparent, consistent, and non-
discriminatory manner, and that they do not create unnecessary delays or costs for
traders.
b. To publish and notify other members of their laws, regulations, and administrative
procedures relating to PSI, and to provide information and respond to inquiries on
these matters.
c. To avoid any conflict of interest between the PSI entities and the suppliers, importers,
or customs authorities, and to ensure that the PSI entities are independent and
accountable.
d. To ensure that the PSI entities use the appropriate methods and criteria for the
valuation, classification, and quality control of the goods, and that they issue the
e. To provide adequate and effective procedures for the review and correction of the PSI
results, and to ensure that the importers have the right to appeal against the PSI
decisions.
f. To cooperate with the exporting members and the PSI entities in the verification and
investigation of any complaints or disputes arising from the PSI activities.
a. To ensure that the PSI entities have access to the premises and records of the suppliers
and exporters, and to facilitate the inspection and testing of the goods.
b. To provide the PSI entities with the necessary information and documentation relating
to the exportation of the goods, such as invoices, contracts, transport documents, and
certificates of origin.
c. To cooperate with the user members and the PSI entities in the verification and
investigation of any complaints or disputes arising from the PSI activities.
inspection (PSI) entities. PSI entities are private companies hired by governments or
importers to check the shipment details of goods ordered from overseas, such as price,
The IRP is administered by an Independent Entity (IE), which is jointly appointed by the
Commerce (ICC). The IE is responsible for selecting and appointing independent experts to
conduct the reviews, and for ensuring the transparency and impartiality of the procedure.
The IRP can be initiated by an exporter who is dissatisfied with the findings or the certificate
of inspection issued by a PSI entity, or by a PSI entity who is challenged by an exporter. The
IRP is voluntary and does not affect the rights and obligations of WTO members under the
PSI Agreement or other WTO agreements. The IRP is also confidential and does not involve
the governments or the customs authorities of the importing or exporting countries.
- The exporter or the PSI entity submits a request for review to the IE, along with the relevant
documents and information, within 60 days of the date of the disputed findings or certificate
of inspection. The IE acknowledges the receipt of the request and informs the other party.
- The IE appoints an independent expert to conduct the review, taking into account the
qualifications, experience, and availability of the expert, as well as the nature and complexity
of the dispute. The IE notifies the parties of the name and contact details of the expert, and
- The expert reviews the documents and information submitted by the parties, and may
request additional information or clarification from either party or from the IE. The expert
may also consult with other experts or sources, as appropriate. The expert conducts the
review in an objective and impartial manner, and applies the relevant rules and criteria for the
- The expert issues a written report of the review, containing the findings and conclusions,
and the reasons for them, within 30 days of the appointment. The expert sends the report to
the IE, who forwards it to the parties. The report is final and binding on the parties, unless
- The IE monitors the implementation of the report by the parties, and reports any difficulties
CASES:-
EC – Chicken Cuts:
o Brazil and Thailand challenged the EC’s customs classification of frozen
boneless chicken cuts imported from these countries, which resulted in higher
o The panel and the Appellate Body found that the EC’s classification violated
its tariff schedule and its obligations under the PSI Agreement.
o The EC had to change its classification to comply with its WTO obligations by
the end of 2005.
US – Gambling:
o The panel and the Appellate Body found that the US measures violated its
o The US had to modify its measures to comply with its WTO obligations by the
end of 2006.
EC – Biotech Products:
o The US, Canada, and Argentina challenged the EC’s measures affecting the
approval and marketing of biotech products, such as GMOs, which created
undue delays, moratoria, and de facto bans on the importation of such products
o The panel found that the EC’s measures violated its obligations under the SPS
o The EC had to bring its measures into conformity with its WTO obligations by
and fair trade among countries. Some examples of unfair trade are dumping, subsidies,
Dumping is the practice of exporting a product at a price lower than its normal value
in the domestic market or in a third country market. Dumping can cause injury to the
domestic industry of the importing country by undercutting its prices and market
share.
to the recipients and distort trade by lowering their production costs or increasing
Cartels are agreements among competing firms to fix prices, limit output, allocate
markets, or engage in other anti-competitive practices. Cartels can reduce consumer
Price fixing is a form of collusion among sellers to set a common price for a product
or service, usually above the competitive level. Price fixing can harm buyers by
Abuse of market dominance is the conduct of a firm that has a substantial degree of
market power to exploit its position and exclude or limit competition. Abuse of
market dominance can take various forms, such as predatory pricing, exclusive
The World Trade Organization (WTO) is the main international body that regulates trade
among its member countries. The WTO agreements contain rules on unfair trade practices,
such as dumping and subsidies, and provide mechanisms for dispute settlement and trade
remedies.
The General Agreement on Tariffs and Trade (GATT) is the core WTO agreement that
covers trade in goods. It contains rules on non-discrimination, national treatment, tariff
bindings, and exceptions. It also contains rules on dumping and anti-dumping measures,
which allow countries to impose duties on dumped imports that cause injury to their domestic
industry.
- The Agreement on Subsidies and Countervailing Measures (SCM) is the WTO
agreement that covers trade in goods affected by subsidies. It defines and classifies subsidies,
and sets out rules on their legality and challenge. It also allows countries to impose
countervailing duties on subsidized imports that cause injury to their domestic industry.
- The General Agreement on Trade in Services (GATS) is the WTO agreement that covers
trade in services. It contains rules on non-discrimination, market access, national treatment,
and exceptions. It also contains rules on subsidies and emergency safeguards, which are still
under negotiation.
enforcement. It also contains rules on unfair competition, which prohibit acts that create
Anti-dumping measures are duties imposed by WTO members on imports that are found to
be dumped and causing injury to the domestic industry of the importing country. Dumping is
the practice of exporting a product at a price lower than its normal value in the domestic
Article VI of GATT 1994 is the core provision that allows WTO members to take anti-
dumping measures. It states that dumping is to be condemned if it causes or threatens
retards the establishment of a domestic industry¹. It also defines the concepts of normal value,
export price, and like product for the purpose of determining dumping margins.
The Anti-dumping Agreement is the WTO agreement that implements Article VI of GATT
1994 and provides detailed rules and procedures for conducting anti-dumping investigations
a. The principles and criteria for determining dumping, injury, and causation.
b. The initiation and subsequent investigation of dumping allegations by the authorities
of the importing country.
c. The evidence and information required for the investigation and the rights and
obligations of the interested parties.
d. The provisional measures that can be applied pending the final determination of
dumping and injury.
e. The price undertakings that can be offered by the exporters to suspend or terminate
the investigation or the imposition of duties.
f. The imposition and collection of anti-dumping duties and their retroactive application.
g. The duration and review of anti-dumping duties and price undertakings and their
termination in certain circumstances.
h. The public notice and explanation of determinations and the judicial review of
administrative actions.
i. The special treatment of developing country members and the possibility of anti-
dumping action on behalf of a third country.
j. The role and functions of the Committee on Anti-Dumping Practices and the
consultation and dispute settlement mechanisms.
The Antidumping Agreement also contains two annexes that provide guidance on the
procedures for on-the-spot investigations and the use of best information available in the
The interpretation and application of Article VI of GATT 1994 and the Antidumping
Agreement have been the subject of many legal cases and disputes brought before the WTO
panels and the Appellate Body. Some of the key issues that have been addressed by the WTO
jurisprudence include:
i. The definition and calculation of normal value, export price, and dumping margin,
ii. The definition and assessment of injury, and the factors and methods used to
iii. The establishment and demonstration of a causal link between dumping and injury,
and the consideration of other factors that may break or weaken the causal
relationship.
iv. The application of the lesser duty rule and the de minimis and negligible dumping
margins.
v. The initiation and conduct of sunset reviews and the criteria for determining the
vi. The procedural and substantive requirements for public notice and explanation of
vii. The scope and standard of judicial review of anti-dumping measures by the domestic
Antidumping duties (AD) are tariffs imposed by a country on imports that are sold at a price
lower than their normal value in the exporting country, causing injury to the domestic
The legal framework for AD measures is based on the Article VI of the General Agreement
on Tariffs and Trade (GATT) 1994 and the Agreement on Implementation of Article VI of
the GATT 1994 (the Antidumping Agreement), which are part of the World Trade
Organization (WTO) agreements.
The Anti-dumping Agreement sets out the rules and procedures for conducting AD
investigations and imposing AD duties by the WTO members. It defines the concepts of
dumping, injury, causation, and margin of dumping, and provides guidance on the calculation
of normal value, export price, and injury margin. It also specifies the conditions and
minimis margins, sunset reviews, and public notice and explanation of determinations.
The administration and enforcement of AD measures are the responsibility of the national
authorities of the WTO members. Each member has its own legislation and regulations to
implement the Antidumping Agreement, which must be consistent with the WTO rules and
The AD Committee is composed of representatives of all WTO members and oversees the
implementation of the Antidumping Agreement. It reviews the national legislation and
regulations of the members, monitors the AD measures taken by the members, and examines
the policy and practice issues related to AD.
The national authorities of the WTO members are in charge of determining whether dumping
has occurred and calculating the margin of dumping, as well as determining whether the
domestic industry has suffered material injury or threat of material injury by reason of
dumped imports. They also monitor the compliance of exporters with price undertakings, if
any, and conduct sunset reviews to determine whether the AD duties should be continued,
revoked, or modified.
The national customs authorities of the WTO members are the agencies that collect and
enforce the AD duties on imported goods. They also administer the entries and assessments
of AD duties, verify the accuracy and completeness of the information provided by the
importers and exporters, and investigate and penalize the evasion of AD duties.
The WTO dispute settlement mechanism is available for resolving any disputes or complaints
arising from the application of AD measures by the WTO members. The WTO panels and the
Appellate Body can examine the consistency of the AD measures with the WTO agreements
CASES:-
duties on stainless steel billets, hot-rolled coils, and hot-rolled plates from Japan.
Japan claimed that China violated various provisions of the Anti-Dumping Agreement
and Article VI of the GATT 1994 in its determination of dumping, injury, and
causation. The panel report, circulated in 2023, found that China acted inconsistently
with several of its obligations under the Anti-Dumping Agreement and recommended
that China bring its measures into conformity with its WTO commitments.
ii. United States — Anti-Dumping Measures on Certain Oil Country Tubular Goods
from Korea: This case was initiated by Korea in 2014, challenging the United States'
imposition of anti-dumping duties on certain oil country tubular goods (OCTG) from
Korea. Korea claimed that the United States violated the Anti-Dumping Agreement
and Article VI of the GATT 1994 in its calculation of dumping margins, use of
zeroing, and evaluation of injury factors. The panel report, circulated in 2016, found
that the United States acted inconsistently with several of its obligations under the
Anti-Dumping Agreement and recommended that the United States bring its measures
into conformity with its WTO commitments. The Appellate Body report, circulated in
2017, upheld some of the panel's findings and reversed or modified others.
Sawblades from China: This case was initiated by China in 2008, challenging the
sawblades from China. China claimed that the United States violated the Anti-
Dumping Agreement and Article VI of the GATT 1994 in its application of the non-
market economy methodology, use of zeroing, and treatment of separate rates
applicants. The panel report, circulated in 2010, found that the United States acted
inconsistently with several of its obligations under the Anti-Dumping Agreement and
recommended that the United States bring its measures into conformity with its WTO
commitments. The Appellate Body report, circulated in 2011, upheld some of the
Subsidies are financial or other forms of assistance given by governments or public bodies to
domestic producers or exporters. Subsidies can confer an unfair advantage to the recipients
and distort trade by lowering their production costs or increasing their export
competitiveness.
Countervailing duties are tariffs imposed by a country on imports that are found to be
subsidized and causing injury to the domestic industry of the importing country.
Countervailing duties are intended to offset or neutralize the adverse effects of subsidies.
Article VI of GATT 1994 is the core provision that allows WTO members to take
countervailing measures against subsidized imports. It states that subsidies are to be
condemned if they cause or threaten material injury to an established industry in the territory
Article XVI of GATT 1994 is the provision that requires WTO members to notify the WTO
of any subsidies granted or maintained within their territories. It also states that no
contracting party shall grant or maintain any subsidy on the export of any product other than
a primary product, which results in the sale of such product for export at a price lower than
the comparable price charged for the like product to buyers in the domestic market³.
a. The definition and classification of subsidies, and the rules on their legality and
challenge. It distinguishes between prohibited subsidies, which are contingent on
export performance or local content requirements, and actionable subsidies, which are
c. The provisional measures that can be applied pending the final determination of
subsidization and injury. It limits the duration and level of such measures and requires
d. The price undertakings that can be offered by the exporters or the authorities of the
exporting country to suspend or terminate the investigation or the imposition of
duties. It sets out the conditions and procedures for accepting, monitoring, and
subsidy found to exist and the duration of the duty to the period necessary to
f. The duration and review of countervailing duties and price undertakings and their
termination in certain circumstances. It requires the authorities to review the need for
the continuation of the duty or the undertaking at least every five years and to
terminate them if the subsidy or the injury is found to have ceased to exist.
g. The public notice and explanation of determinations and the judicial review of
administrative actions. It requires the authorities to publish and disclose the essential
facts and conclusions of their determinations and to provide an opportunity for the
impartial tribunal.
member to request another WTO member to take countervailing action on its behalf if
it is unable to do so itself.
i. The role and functions of the Committee on Subsidies and Countervailing Measures
and the consultation and dispute settlement mechanisms. It establishes a committee to
oversee the implementation of the SCM Agreement and to examine the notifications
and reports of the WTO members. It also provides for consultations and dispute
The interpretation and application of Article VI and XVI of GATT 1994 and the SCM
Agreement have been the subject of many legal cases and disputes brought before the WTO
panels and the Appellate Body. Some of the key issues that have been addressed by the WTO
jurisprudence include:
i. The definition and calculation of subsidies, normal value, export price, and subsidy
ii. The definition and assessment of injury, and the factors and methods used to
iii. The establishment and demonstration of a causal link between subsidization and
injury, and the consideration of other factors that may break or weaken the causal
relationship.
iv. The application of the de minimis and negligible subsidy margins and the lesser duty
rule.
v. The initiation and conduct of sunset reviews and the criteria for determining the
vi. The procedural and substantive requirements for public notice and explanation of
vii. The scope and standard of judicial review of countervailing measures by the domestic
viii. The identification and classification of prohibited and actionable subsidies and the
Subsidies and CVDs are governed by the World Trade Organization (WTO)
agreements, namely the General Agreement on Tariffs and Trade (GATT) 1994 and
the Agreement on Subsidies and Countervailing Measures (SCM Agreement).
The SCM Agreement defines subsidies as financial or other forms of assistance given
benefit and are specific to an enterprise, industry, or sector. It classifies subsidies into
Prohibited subsidies are those that are contingent on export performance or local
content requirements, and are deemed to distort trade and harm the interests of other
WTO members. Actionable subsidies are those that cause adverse effects to the
trade. Non-actionable subsidies are those that are not specific or that are used for
or environmental protection.
CVDs are tariffs imposed by a WTO member on imports that are found to be
subsidized and causing injury to its domestic industry. CVDs are intended to offset or
interested parties. It also limits the amount and duration of CVDs and provides for
their review and termination in certain circumstances. It also requires the WTO
members to notify and disclose their subsidies and CVDs to the WTO Committee on
Subsidies and Countervailing Measures (the SCM Committee).
reports of the WTO members, monitors their subsidies and CVDs, and examines the
The WTO dispute settlement mechanism is available for resolving any disputes or
complaints arising from the application of subsidies or CVDs by the WTO members.
The WTO panels and the Appellate Body can examine the consistency of the
subsidies or CVDs with the WTO agreements and issue recommendations or rulings
CASES:-
Products from India: This case was initiated by India in 2012, challenging the United
products from India. India claimed that the United States violated the SCM
Agreement and Article VI of the GATT 1994 in its determination of subsidies, injury,
and causation. The panel report, circulated in 2014, found that the United States acted
inconsistently with several of its obligations under the SCM Agreement and
recommended that the United States bring its measures into conformity with its WTO
commitments. The Appellate Body report, circulated in 2014, upheld some of the
ii. United States — Countervailing Measures on Certain Oil Country Tubular Goods
from Korea: This case was initiated by Korea in 2014, challenging the United States'
imposition of countervailing duties on certain oil country tubular goods (OCTG) from
Korea. Korea claimed that the United States violated the SCM Agreement and Article
VI of the GATT 1994 in its calculation of subsidy margins, use of facts available, and
evaluation of injury factors. The panel report, circulated in 2016, found that the
United States acted inconsistently with several of its obligations under the SCM
Agreement and recommended that the United States bring its measures into
conformity with its WTO commitments. The Appellate Body report, circulated in
2017, upheld some of the panel's findings and reversed or modified others.
Products from China: This case was initiated by China in 2008, challenging the
products from China, such as off-the-road tires, circular welded pipes, and light-
walled rectangular pipes. China claimed that the United States violated the SCM
Agreement, the Anti-Dumping Agreement, and Article VI of the GATT 1994 in its
application of the non-market economy methodology, the simultaneous imposition of
anti-dumping and countervailing duties, and the treatment of separate rates applicants.
The panel report, circulated in 2010, found that the United States acted inconsistently
with several of its obligations under the SCM Agreement, the Anti-Dumping
Agreement, and Article VI of the GATT 1994 and recommended that the United
States bring its measures into conformity with its WTO commitments. The Appellate
Body report, circulated in 2011, upheld some of the panel's findings and reversed or
modified others.
Safeguard measures are emergency actions taken by a WTO member to protect its domestic
industry from a surge of imports that causes or threatens to cause serious injury. Serious
injury means a significant overall impairment in the position of the domestic industry.
Article XIX of GATT 1994 is the core provision that authorizes WTO members to apply
safeguard measures. It states that a WTO member may suspend its obligations or withdraw or
modify its concessions under the GATT 1994 if, as a result of unforeseen developments and
of the effect of the obligations incurred, a product is being imported in such increased
quantities and under such conditions as to cause or threaten to cause serious injury to the
The Safeguards Agreement is the WTO agreement that implements and clarifies Article
XIX of GATT 1994 and provides detailed rules and procedures for conducting safeguard
investigations and imposing safeguard measures. It covers the following aspects:
a. The principles and criteria for determining serious injury or threat thereof, and the
factors and methods used to assess the impact of imports on the domestic industry.
means for the interested parties to present their views and evidence, and to publish
c. The provisional measures that can be applied pending the final determination of
serious injury or threat thereof. It limits the duration of such measures to 200 days and
requires them to take the form of tariff increases and to be promptly refunded if the
subsequent investigation does not confirm the serious injury or threat thereof.
“MFN”) basis to all sources of imports, unless imports from certain developing
country members are excluded under certain conditions. It also requires the measures
e. The duration and extension of safeguard measures. It limits the initial period of
application of the measures to four years, which may be extended up to eight years in
total, subject to certain conditions and limitations. It also prohibits the imposition of
the same or substantially the same measure on a product that has been subject to a
safeguard measure within a period equal to the duration of the previous measure.
f. The compensation and retaliation for safeguard measures. It requires the member
applying a safeguard measure to provide adequate opportunity for consultations with
the members having a substantial interest in the product concerned, with a view to
consultations.
g. The special and differential treatment for developing country members - It grants
certain exemptions and flexibilities to developing country members with regard to the
h. The role and functions of the Committee on Safeguards and the consultation and
dispute settlement mechanisms. It establishes a committee to oversee the
reports of the WTO members. It also provides for consultations and dispute settlement
safeguard measures.
Safeguard measures are emergency actions taken by a WTO member to protect its domestic
industry from a surge of imports that causes or threatens to cause serious injury. The
i. To allow the domestic industry to adjust to the increased competition from imports
and to improve its competitiveness in the long run. Safeguard measures are temporary
ii. To maintain the balance of rights and obligations among WTO members and to
prevent the escalation of trade disputes. Safeguard measures are subject to multilateral
discipline and oversight by the WTO, and the member applying them must pay
iii. To avoid the use of unilateral or discriminatory measures that escape WTO control
and undermine the multilateral trading system. Safeguard measures must be applied
Alternatives to safeguards
i. Regional trade agreements (RTAs): RTAs are agreements between two or more
countries or regions to reduce or eliminate trade barriers and enhance cooperation.
RTAs can provide preferential access to each other's markets, as well as mechanisms
for resolving trade disputes and addressing trade-related issues. RTAs can also serve
ii. Trade adjustment assistance (TAA): TAA is a program that provides financial and
technical support to workers, firms, farmers, and communities that are adversely
affected by trade liberalization. TAA can help them cope with the adjustment costs
and transition to new jobs, markets, or activities. TAA can also foster social
acceptance and political support for trade openness.
iii. Trade remedies: Trade remedies are measures that allow a country to take action
multilateral discipline and oversight by the WTO, and must be applied in accordance
CASES:
i. US – Lamb: This case was initiated by New Zealand and Australia in 1999,
challenging the US imposition of safeguard measures on imports of fresh, chilled or
frozen lamb meat. The panel and the Appellate Body found that the US measures
were inconsistent with the Safeguards Agreement and Article XIX of GATT 1994, as
the US failed to demonstrate the existence of unforeseen developments, the causal
link between increased imports and serious injury, and the conformity of the measures
pipe. The panel and the Appellate Body found that the US measures were inconsistent
with the Safeguards Agreement and Article XIX of GATT 1994, as the US failed to
provide a reasoned and adequate explanation of how the increased imports caused
serious injury to the domestic industry, and how the measures were applied only to
iii. Chile – Price Band: This case was initiated by Argentina in 2001, challenging the
Chilean price band system and safeguard measures on imports of certain agricultural
products, such as wheat, wheat flour, and edible vegetable oils. The panel and the
Appellate Body found that the Chilean measures were inconsistent with the
rates, and the safeguard measures were not based on a proper determination of serious
Sustainable Development
of the WTO Agreement as one of the fundamental goals of the multilateral trading system,
along with the optimal use of the world's resources and the protection and preservation of the
environment. The WTO recognizes that trade can contribute to sustainable development by
fostering economic growth, reducing poverty, enhancing human welfare and creating positive
environmental outcomes. However, trade can also have negative impacts on the environment
or climate change. Therefore, the WTO seeks to ensure that its rules and policies are
consistent with and supportive of sustainable development, and that they do not prevent or
protect or improve the environment, such as regulations, standards, taxes, subsidies, bans,
that are legally binding instruments negotiated and adopted by a number of countries to
address specific environmental issues, such as the Montreal Protocol on ozone depletion, the
affect the conditions of access, competitiveness, costs or benefits of trade in goods and
services. The WTO acknowledges the importance and legitimacy of environmental measures
and MTAs, and allows its members to adopt trade-related measures for environmental
purposes, provided that they comply with certain conditions and principles to avoid the
misuse or abuse of such measures for protectionist ends. These conditions and principles
The WTO does not have a specific agreement dealing with the environment, but several of its
agreements contain provisions that address environmental issues or allow for environmental
exceptions. For example, Article XX of the GATT 1994 and Article XIV of the GATS
provide general exceptions for measures necessary to protect human, animal or plant life or
requirement that they are not applied in a manner that constitutes arbitrary or unjustifiable
Barriers to Trade (TBT) and the Agreement on the Application of Sanitary and Phytosanitary
Measures (SPS) set out rules and disciplines for the adoption and application of technical
regulations, standards and conformity assessment procedures, and sanitary and phytosanitary
measures, that may have an impact on the environment. The Agreement on Subsidies and
Countervailing Measures (SCM) and the Agreement on Agriculture (AoA) allow for certain
subsidies or support measures for environmental purposes, such as research and development,
of Intellectual Property Rights (TRIPS) recognizes the need to protect and promote
innovation and technology transfer for environmental purposes, and provides for certain
Measures (TRIMS) prohibits certain investment measures that may have trade-restrictive or
distorting effects, but does not prevent members from regulating investment for
environmental reasons, as long as they do not violate the national treatment or quantitative
The Committee on Trade and Environment (CTE) is the main forum within the WTO to
discuss the relationship between trade and environment, and to make recommendations on
any changes that might be needed in the WTO agreements. The CTE has a broad mandate
covering all areas of the multilateral trading system, and follows a comprehensive work
programme that includes topics such as the effects of environmental measures on market
access, the relationship between WTO rules and MEAs, the role of eco-labels, the protection
of the environment and the optimal use of natural resources, and the trade-related aspects of
the transfer of environmentally sound technologies. Eco-labels are voluntary schemes that
products or services, such as their energy efficiency, carbon footprint, organic content or
production, and to create market incentives for green products and services. However, eco-
labels can also pose challenges for international trade, as they may create technical barriers,
increase costs or discriminate against foreign suppliers, especially from developing countries.
The WTO rules, particularly the TBT Agreement and its Code of Good Practice, provide
guidance and discipline for the development and implementation of eco-labels, to ensure that
assistance is the provision of support and capacity-building to developing countries and least-
developed countries (LDCs) to help them participate effectively in the multilateral trading
system, and to take advantage of the trade opportunities and benefits offered by the WTO
agreements. The WTO provides technical assistance on trade and environment issues through
publications and databases. The main objectives of the technical assistance on trade and
environment are to enhance the understanding and awareness of the linkages between trade
and environment, to assist developing countries and LDCs in implementing their obligations
and exercising their rights under the WTO agreements, and to facilitate their participation in
The WTO does not have a specific agreement or mechanism to address human rights issues,
but it recognizes that trade can have both positive and negative impacts on human rights, such
as the right to development, the right to health, the right to food, and the right to work. The
WTO allows its members to adopt trade-related measures for human rights purposes, as long
as they comply with the general principles and obligations of the WTO agreements, such as
non-discrimination, transparency, and proportionality. The WTO also provides for certain
measures that are necessary to protect human rights, such as the general exceptions under
Article XX of the GATT and Article XIV of the GATS, the security exceptions under Article
XXI of the GATT and Article XIV bis of the GATS, and the special and differential
treatment for developing countries and least-developed countries under various WTO
agreements. However, the WTO dispute settlement system is not designed or equipped to
adjudicate human rights claims or to balance trade and human rights interests, and the
interpretation and application of the WTO rules and exceptions in relation to human rights
These are two of the general exceptions under Article XX of the GATT and Article XIV of
the GATS that can be used by WTO members to justify trade-restrictive measures that are
aimed at protecting public moral or human, animal or plant life or health. Public moral refers
to the standards of right and wrong conduct that are generally accepted and recognized by a
given society or community, and may vary from country to country depending on their
cultural, religious, or ethical values. Human, animal or plant life or health refers to the
physical or biological well-being of living beings, and may include the prevention of
diseases, the reduction of risks, or the promotion of safety. WTO members have the right to
determine their own level of protection for public moral or human, animal or plant life or
health, as long as they do not abuse this right for protectionist or discriminatory purposes. To
invoke these exceptions, WTO members must demonstrate that their measures are necessary
to achieve their objectives, that there are no less trade-restrictive alternatives available, and
that their measures are applied in a manner that does not constitute arbitrary or unjustifiable
discrimination or a disguised restriction on international trade. The WTO panels and the
Appellate Body have examined several cases involving these exceptions, such as measures
related to gambling services, tobacco products, asbestos products, seal products, and dolphin-
Prison labour is a form of forced labour that involves the use of prisoners to perform work or
services for public or private entities, often under harsh or exploitative conditions, and with
little or no remuneration. Prison labour is prohibited or restricted by several international
human rights instruments, such as the Universal Declaration of Human Rights, the
exception or provision that allows WTO members to take trade-related measures to prevent
or combat prison labour. The only possible exception that may be relevant is the general
exception under Article XX (a) of the GATT and Article XIV (a) of the GATS, which
permits WTO members to adopt measures necessary to protect public morals. However, this
exception has not been tested or applied in relation to prison labour, and it is unclear whether
it would cover measures that target the products or services made by prison labour in other
This is another general exception under Article XX (g) of the GATT and Article XIV (b) of
the GATS that can be invoked by WTO members to justify trade-restrictive measures that are
related to the conservation of exhaustible natural resources. Exhaustible natural resources are
those resources that are finite or limited in quantity, and that can be depleted or exhausted by
human use or exploitation. The WTO panels and the Appellate Body have interpreted this
term broadly to include both mineral or non-living resources, such as oil, gas, or minerals,
and living or renewable resources, such as fish, wildlife, or plants, as long as they are
demonstrate that their measures are related to the conservation of exhaustible natural
resources, that their measures are made effective in conjunction with restrictions on domestic
production or consumption, and that their measures are applied in a manner that does not
trade. The WTO panels and the Appellate Body have examined several cases involving this
economic policy that affect the flows and conditions of cross-border transactions of goods,
services, capital and technology. They are also subject to different sets of rules and
disciplines at the multilateral, regional and bilateral levels, which may create synergies or
International trade policy refers to the rules and measures that regulate the access, treatment
and protection of foreign products and service providers in a country's market. It includes
tariffs, quotas, subsidies, technical regulations, sanitary and phytosanitary measures, trade
remedies, trade facilitation and trade-related aspects of intellectual property rights. The main
source of international trade rules is the World Trade Organization (WTO), which covers
trade in goods, services and intellectual property, and provides for dispute settlement and
trade policy review mechanisms. However, many countries also engage in regional trade
agreements (RTAs) or bilateral trade agreements (BTAs) that may go beyond the WTO
commitments or cover new issues, such as e-commerce, labour, environment or human rights.
International investment policy refers to the rules and measures that regulate the admission,
and dispute resolution. The main source of international investment rules is the network of
bilateral investment treaties (BITs) and investment chapters in RTAs or BTAs, which grant
investors certain rights and obligations, and provide for investor-state dispute settlement
(ISDS) mechanisms. However, there is no global framework for investment rules, and the
existing treaties vary widely in their scope, content and interpretation. There are also some
multilateral initiatives to address investment issues, such as the OECD Guidelines for
International competition policy refers to the rules and measures that aim to prevent or
remedy anti-competitive practices or market distortions that may affect international trade or
investment. It includes competition laws, policies and authorities that deal with issues such as
cartels, abuse of dominance, mergers, state aid, state-owned enterprises, public procurement
and consumer protection. The main source of international competition rules is the national or
regional level, as there is no global competition authority or agreement. However, there are
some international forums and instruments that promote cooperation and convergence among
competition authorities, such as the International Competition Network, the OECD
Competition Committee, the UNCTAD Intergovernmental Group of Experts on Competition
Law and Policy, or the WTO Working Group on the Interaction between Trade and
Competition Policy.
Agreement on Agriculture
The Agreement on Agriculture (AoA) is a World Trade Organization (WTO) treaty that was
negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade
(GATT) and ratified in Marrakesh, Morocco, in 1994. The AoA aims to establish a fair and
market-oriented agricultural trading system by initiating a process of reform of trade and
domestic policies that distort agricultural markets and trade. The AoA covers three main
areas: market access, domestic support, and export competition. Under the AoA, WTO
members agree to schedules or lists of commitments that set limits on the tariffs they can
apply to individual products and on levels of domestic support and export subsidies. The
AoA also provides for special and differential treatment for developing countries and least-
developed countries, and addresses other issues such as food security, sanitary and
Agricultural exceptionalism is a term that refers to the special treatment or protection of the
agricultural sector in trade and domestic policies, especially in many developed countries.
ensuring access to affordable food, ensuring a livable income for farmers, and preserving
traditional rural lifestyles and communities. However, these arguments are not very
convincing either relative to other economic sectors or in terms of first-best policy responses
effects on the welfare, resilience, and food security of consumers and producers, as well as on
agricultural sustainability, and also reduces agricultural and food trade volumes.
Food security is the condition in which all people, at all times, have physical and economic
access to sufficient, safe, and nutritious food to meet their dietary needs and food preferences
for an active and healthy life. Trade liberalization is the process of reducing or eliminating
barriers to trade, such as tariffs, quotas, subsidies, or regulations, that restrict the free flow of
goods and services across borders. Trade liberalization has the potential to enhance food
fostering economic growth, reducing poverty, and improving nutrition. However, trade
liberalization also poses some challenges and risks for food security, such as exposing
domestic producers and consumers to price volatility, competition, and shocks, affecting the
distribution of income and welfare, and undermining the policy space and sovereignty of
Agricultural protectionism is the use of trade and domestic policies that favour or protect the
domestic agricultural sector from foreign competition, such as tariffs, quotas, subsidies, or
three or more countries on a given issue or policy area, such as trade, security, or
the rules and disciplines of the multilateral trading system, such as the WTO agreements, and
creates trade disputes and frictions among countries. Agricultural protectionism also hinders
the progress and benefits of multilateral trade liberalization and reform, which could lead to a
more open, fair, and efficient global market for agricultural products.
Women and international trade are two interrelated topics that have gained increasing
attention and relevance in the global economy and policy arena. Women play multiple and
from international trade, depending on their economic, social, and legal status and context.
Women and international trade are influenced by various factors, such as trade policies and
agreements, trade facilitation and infrastructure, trade finance and digital technologies, trade
and gender statistics and analysis, and trade and gender capacity building and mainstreaming.
This is a non-binding declaration that was endorsed by 118 WTO members and observers at
the 11th Ministerial Conference in Buenos Aires in December 2017. The declaration aims to
remove barriers to trade for women and foster their economic empowerment.
b. Sharing best practices for conducting gender-based analysis of trade policies and for
monitoring their effects.
e. Ensuring that Aid for Trade supports tools and know-how for designing and
implementing more gender-responsive trade policies.
This is a group of WTO members and observers that was established in September 2020 as a
follow-up to the Buenos Aires Declaration. The group aims to intensify efforts to increase
women's participation in global trade and to apply a gender lens to the work of the WTO.
ii. Considering the scope for a gender lens to be applied to the work of the WTO.
iv. Contributing to the Aid for Trade work programme as a means of increasing women's
participation in trade.
The Sustainable Development Goals (SDGs) are a set of 17 global goals and 169 targets that
aim to end poverty, protect the planet, and ensure peace and prosperity for all by 2030. The
SDGs cover various aspects of economic, social and environmental development, and
recognize the interlinkages and synergies among them. Trade is an important means of
implementation for the SDGs, as it can contribute to economic growth, poverty reduction, job
The World Trade Organization (WTO) is the main multilateral institution that regulates and
facilitates international trade in goods, services and intellectual property. The WTO has a
central role in achieving the SDGs, as it provides a rules-based, transparent and predictable
trading system that supports the integration of developing countries and least-developed
countries into the global economy, and promotes cooperation and dialogue among its 164
members. The WTO also addresses various trade-related issues that are relevant for the
SDGs, such as food security, health, education, gender equality, climate change, and digital
trade.
The socio-economic and ancillary dimension of trade in the SDGs refers to the impact of
trade on the social and economic well-being of people and communities, as well as on the
cross-cutting and enabling factors that affect trade performance and outcomes. Some of the
key SDGs that relate to this dimension are:
- SDG 1: No Poverty. Trade can help reduce poverty by creating income and employment
opportunities, enhancing productivity and competitiveness, and lowering the cost and
increasing the variety of goods and services for consumers. The WTO supports poverty
reduction by providing market access and trade preferences for developing countries and least
-developed countries, facilitating trade and reducing trade costs, and assisting with trade-
- SDG 5: Gender Equality. Trade can empower women by expanding their economic
opportunities, increasing their income and bargaining power, and improving their access to
education, health, and technology. The WTO promotes gender equality by mainstreaming
gender issues into its work, supporting the implementation of the Buenos Aires Declaration
on Trade and Women's Economic Empowerment, and enhancing the participation and
- SDG 8: Decent Work and Economic Growth. Trade can foster economic growth and
development by stimulating investment, innovation, and structural transformation, and by
creating decent jobs and improving working conditions. The WTO fosters economic growth
and development by ensuring a fair and open trading system, promoting coherence and
- SDG 10: Reduced Inequalities. Trade can reduce inequalities within and among countries
countries in the global market, and by facilitating the transfer of technology, knowledge, and
skills. The WTO reduces inequalities by providing special and differential treatment for
graduation processes, and strengthening their voice and influence in the multilateral trading
system.
- SDG 16: Peace, Justice and Strong Institutions. Trade can promote peace, justice and strong
institutions by fostering cooperation and dialogue among countries, preventing and resolving
trade disputes, and supporting the rule of law and good governance. The WTO promotes
peace, justice and strong institutions by providing a transparent and predictable framework
for trade relations, offering a fair and effective dispute settlement mechanism, and enhancing
the transparency and accountability of trade policies and practices.
- SDG 17: Partnerships for the Goals. Trade can enhance partnerships for the goals by
mobilizing resources, building capacity, and sharing best practices for the implementation of
the SDGs. The WTO enhances partnerships for the goals by collaborating with other
international organizations, civil society, the private sector, and academia, and by providing a
platform for dialogue and cooperation among its members and stakeholders.
The Twelfth WTO Ministerial Conference (MC12) was held in Geneva, Switzerland, from 12
to 17 June 2022. It was co-hosted by Kazakhstan and chaired by Mr Timur Suleimenov,
Deputy Chief of Staff of Kazakhstan's President. The conference was originally scheduled to
take place in June 2020, but was postponed due to the COVID-19 pandemic.
The conference concluded successfully with a package of key trade initiatives, which were
adopted by the WTO members. The “Geneva package” included the following outcomes:
trading system and its rules, and set out a work programme for the future.
purposes.
cooperation.
concerning the use of compulsory licences to produce COVID-19 vaccines for the
next five years.
members.
iv. An Agreement on Fisheries Subsidies, which set new global rules to curb harmful
sustainability of marine resources, while taking into account the needs of developing
v. Two decisions on the Work Programme on Small Economies and on the TRIPS non-
violation and situation complaints, which reaffirmed the members' support for the
vi. A Sanitary and Phytosanitary Declaration for the Twelfth WTO Ministerial
Conference: Responding to Modern SPS Challenges, which highlighted the
importance of science-based and transparent SPS measures and the need to enhance
The Ministerial Decision on World Food Programme (WFP) Food Purchases Exemptions
from Export Prohibitions or Restrictions was adopted by the WTO members as part of the
package on WTO response to emergencies. The decision aimed to ensure that the WFP,
which provides critical humanitarian support to millions of people facing hunger and
malnutrition, could procure foodstuffs without being affected by export restrictions imposed
by members.
The decision stated that members shall not impose export prohibitions or restrictions on
foodstuffs purchased by the WFP for non-commercial humanitarian purposes, and that this
decision shall not prevent members from adopting measures to ensure their domestic food
The decision also recognized that the WFP always takes procurement decisions based on its
principles to "do no harm" to the supplying member and to promote local and regional food
procurement.
The Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and
Preparedness for Future Pandemics was adopted by the WTO members as part of the package
on WTO response to emergencies. The declaration acknowledged the impact of the COVID-
19 pandemic on the global economy and trade, and the need for a coordinated and effective
The declaration called on the relevant WTO bodies to continue or initiate work on the
following areas:
iii. Trade facilitation and customs cooperation, including the implementation of the Trade
Facilitation Agreement and the promotion of paperless trade and digital solutions.
iv. Technical barriers to trade and sanitary and phytosanitary measures, including the
the TRIPS Agreement and the facilitation of access to and transfer of technology,
especially for COVID-19 vaccines and treatments.
vi. Services trade and investment, including the promotion of trade in health-related
services and the removal of barriers to the movement of health professionals and
vii. Development and special and differential treatment, including the provision of
countries to enhance their participation in the multilateral trading system and their
The declaration also expressed the members' support for the role of the WTO Director-
General and the Secretariat in advancing the WTO's response to the COVID-19 pandemic
and preparedness for future pandemics, and urged them to continue their efforts in this
regard.
The Agreement on Fisheries Subsidies was adopted by the WTO members as one of the main
outcomes of the Twelfth Ministerial Conference. The agreement aimed to address the
problem of overfishing and overcapacity in the global fisheries sector, which poses a serious
The agreement set new global rules to prohibit certain forms of fisheries subsidies that
contribute to illegal, unreported and unregulated (IUU) fishing, and to limit subsidies for
fishing that negatively affect fish stocks that are in an overfished condition or subject to
overfishing. The agreement also established disciplines on subsidies for fishing outside of a
member's territorial waters, and on subsidies for fishing vessels that are not flagged to the
subsidizing member.
The agreement recognized the special and differential treatment of developing and least-
developed countries, and provided them with appropriate and effective transitional periods,
exemptions, and flexibilities to implement their obligations under the agreement. The
agreement also encouraged members to provide subsidies that support the sustainable
development and management of fisheries, such as those for research, monitoring,
agreement. The agreement also mandated the regular review of the operation and