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WTO Consultancy |
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The World Trade Organization
(WTO) began life on 1 January 1995, but its trading
system is half a century older. Since 1948 the General
Agreement on Tariffs and Trade (GATT) had provided the
rules for the system.
The last and longest GATT round was
the Uruguay Round, which lasted from 1986 to 1994 and
led to the creation of the WTO. Whereas GATT had mainly
dealt with trade in goods, the WTO agreements now cover
trade in services, inventions, creations and designs
(intellectual property).
There are a number of ways of looking
at the WTO. It’s an organization for liberalizing
trade. It’s a forum for governments to negotiate
trade agreements. It’s a place for them to settle
trade disputes. It operates a system of trade rules.
Essentially, the WTO is a place where member governments
try to sort out the trade problems they face with each
other:
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As the WTO was born
out of negotiations, everything that WTO does is
the result of negotiations. The bulk of the WTO's
current work comes from the 1986-94 negotiations
called the Uruguay Round and earlier negotiations
under the General Agreement on Tariffs and Trade
(GATT).
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At its heart are the WTO agreements
negotiated and signed by most of the world's trading
nations. These documents provide the legal ground-rules
for international commerce. They are essentially
contracts, binding governments to keep their trade
policies within agreed limits. Although negotiated
and signed by governments, the goal is to help producers
of goods and services, exporters, and importers
to conduct their business, while allowing governments
to meet social and environmental objectives.
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The system's overriding purpose
is to help trade flow as freely as possible - so
long as - there are no undesirable side effects.
That partly means removing obstacles. It also means
ensuring that individuals, companies and governments
know what the trade rules are around the world,
and giving them the confidence that there will be
no sudden changes of policy. In other words, the
rules have to be "transparent" and “predictable”.
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It helps to settle disputes. Trade
relations often involve conflicting interests. Agreements,
including those painstakingly negotiated in the
WTO system, often need interpretation. The most
harmonious way to settle these differences is through
some neutral procedure based on an agreed legal
foundation. That is the purpose behind the dispute
settlement process written in the WTO agreements |
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Principal
of the trading system |
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The WTO agreements are lengthy and complex because
they are legal texts covering a wide range of activities.
They deal with: agriculture, textiles and clothing,
banking, telecommunications, antidumping, government
purchases. Industrial standards and product safety,
food sanitation regulations, intellectual property,
and much more. But a number of simple fundamental principles
run throughout all of these documents. These principles
are the foundation of the multilateral trading system.
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Most-favoured-nation (MFN):
treating other people equally under the WTO agreements,
countries cannot normally discriminate between
their trading partners. Grant someone a special
favour (such as a lower customs duty rate for
one of their products) and you have to do the
same for all other WTO members.
This principle is known as MFN
treatment. It is so important that it is the first
article of the GATT, which governs trade in goods.
MFN is also a priority in the General Agreement
on Trade in Services (GATS) (Article 2) and the
Agreement on Trade Related Aspects of Intellectual
Property Rights (TRIPS) (Article 4), although
in each agreement the principle is handled slightly
differently. Together, those three agreements
cover all three main areas of trade handled by
the WTO.
Some exceptions are also allowed
by the WTO. For example, countries can set up
a free trade agreement that applies only to goods
traded within the group - discriminating against
goods from outside. Or they can give developing
countries special access to their markets. Or
a country can raise barriers against products
that are considered to be traded unfairly from
specific countries. And in services, countries
are allowed, in limited circumstances, to discriminate.
But the agreements only permit these exceptions
under strict conditions. In general, MFN means
that every time a country lowers a trade barrier
or opens up a market, it has to do so for the
same goods or services for all its trading partners
- whether rich or poor, weak or strong.
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National treatment: Foreign
and locally-produced goods should be treated equally
- at least after the foreign goods have entered
the domestic market. The same should apply to
foreign and domestic services, and to foreign
and local trademarks, copyrights and patents.
This principle of "national treatment"
(giving others the same treatment as one's own
nationals) is also found in all the three main
WTO agreements (Article 3 of GATT, Article 17
of GATS and Article 3 of TRIPS), although once
again the principle is handled slightly differently
in each of these.
National treatment only applies
once a product, service or item of intellectual
property has entered the domestic market. Therefore,
charging customs duty on an import is not a violation
of national treatment even if locally produced
products are not charged an equivalent tax. |
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Special
and differential treatment of developing and least developed
countries |
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The multilateral Agreements recognize that developing,
including least developed, countries may have difficulties
in accepting all or some of the obligations, which they
impose and provide for the extension of special and
differential treatment to these countries. These provisions
can be broadly divided into three categories:
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Provisions requiring
countries (developed and developing) to take measures
facilitating the trade of developing and least developed
countries.
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Flexibility available to
developing and least developed counties in accepting
the obligations, which the WTO Agreements impose.
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Provision of technical assistance
to developing and least developed countries to build
their capacity for implementing the Agreements. |
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Our Services |
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Keeping in line the unprecedented
growth, globalization and the rapidly changing environment
of multilateral trading systems needs specialization
in various disciplines to meet the challenges posed
by these changes. This pre-requisite of specialization
is already with S. U. Khan Associates that has achieved
the highest level of competency in this area through
its in-house expertise and through external collaborations
with international consultants and are known as market
leader in this area. The services available in this
context cover:
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