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INTRODUCTIONWorld Trade Organization (WTO) is the only
international organization dealing with the global rules of trade.
Run by member governments. All major decisions made by the
membership as a whole.Place to settle trade disputes - try to sort
out the trade problems they face.
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OBJECTIVES OF WTO To promote world trade in a manner that
benefits every country.Developing countries secure a better balance
in the expansion of international trade.To enhance competitiveness
among all trading partners.
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MAIN PRINCIPLES OF WTO
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NON-DISCRIMINATIONShould not discriminate its trading
partners.
Two major components ;a) Most-favored-nation (MFN) rule. Been
main features of international trade policy for a long time.The
term means equal trade advantages as the members.
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NON-DISCRIMINATION b)National treatment Under national
treatment, grants a particular right, benefit or privilege to its
owncitizens. Must provide equal treatment to those citizens of
other states that are participating.
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More beneficial for less developed countriesGiving them more
time to adjust, greater flexibility and special privileges; over
three-quarters of WTO members are developing countries and
countries in transition to the market economies.
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TransparencyThe WTO members are required to publish their trade
regulations, to maintain institutions allowing for the review of
administrative decisions affecting trade, to respond to requests
for information by other members, and to notify changes in trade
policies to the WTO.
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Safety ValvesGovernments are able to restrict trade in order to
protect the environment, public health, animal health and plant
health.There are three types of provision in this connection.
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Articles Aimed at Ensuring Fair CompetitionInclude the right to
impose countervailing duties on imports that have been subsidized
and antidumping duties on imports that have been dumped
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Provisions Permitting Intervention in Trade for Economic
Reasonsthere are provisions allowing actions to be taken in case of
serious balance of payments difficulties or if a government desires
to support an infant industry
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The Stages of Dispute Settlement of WTODefinition of disputes :
as a specific disagreement concerning a matter of fact, law or
policy in which a claim or assertion of one party is met with a
refusal, counter claim or denial by another .
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ConsultationConsultation is informal negotiation that gives
opportunity to the parties of dispute to resolve the conflict.The
request for the consultation must be writing and address all the
issues an reasons to the request. Respondent should reply to the
request within ten days.
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If the respondent failed to respond or find the solution to
satisfies all the parties within 60 days, they can request to the
Dispute Settlement Body to establish panel.This problem can refer
to the expert for the recommendation.In this stage will involve
third party to solve th problem.
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Panel StageThe matter is refer to a panel of experts for their
recommendation.This stage requires up to 45 days for a panel to be
appointed and plus 6 months for the panel to conclude.A request for
establishment of a panel must be made in writing and is addressed
to the Chairman of the Dispute Settlement Body (DSB)
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The responding member can block the panels establishment in the
first DSB meeting which the request is made.However, the panel will
establish unless the DSB decides by consensus not to establish the
panel.
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AppealAfter the panel report submitted to the parties and if
there are an objection with the panel conclusion they can appeal
the report.The report must be appeal before the Dispute Body
Settlement adopts it and it will be refer to the Appellate
Body.Only the parties to disputes are allowed to appeal and third
party may only participate in the appeal which known as third
participant
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Surveillance or Supervision of The ImplementationThe member will
be given 30 days to inform the Dispute Settlement Body on how the
result will be implement.This implementation will be based on the
appellate report or final panel.For the country, they will be give
a reasonable time for the implementation as it cannot be achieved
quickly.
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Related cases TUNA-DOLPHIN CASE-Us banned the importation of
tuna from Mexico due to the incidental kill of dolphins caused by
the perse seine nets-GATT stated that United States could not ban
tuna imports from Mexico because it had not explored other
less-trade restrictive ways of achieving the same environmental
objective
-panel found that one country could not impose its standards on
another country to protect a renewable resource outside its own
territory and labeling of dolphin-safe did not conform to GATT
standards.
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BANANA CASE -European Union (EU) introduced a single import
policy that imposed quotas, duties and import licensing on banana
imports into EU countries (trade barriers)
-US and some other countries such as Mexico and Honduras
complaint WTO because the system was unfair discriminated against
them.
-panel found that it also favored some domestic countries
-in 1999 WTO approve 100 % tariff of EU imports into US.
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Opinion of the effectiveness on dispute settlement of WTO
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Current issues US FAILS TO MEET ITS OBLIGATION IN THE WTO BOEING
CASE
-United States (US) has not rely on obligations to follow with a
World Trade Organization (WTO) by ruling on illegal subsidies which
is Boeing case
-apply for consultation with US at 24 September 2012 to settle
dispute.
- EU can apply for panel to review the issues.
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WTO EFFECTIVENESS IN RESOLVING THE EUROPIAN UNION-UNITED STATES
(EU-US) TRADE CONFLICT-example case between EU and US is Banana
cases ( took many years to resolve)
-US and EU as the frequent user of the WTO dispute settlement
system, especially against each other.