World Trade Organisation

INTERNATIONAL TRADE

The WTO is situated at the centre of the international trade relations among states. This makes it imperative that we take a look at the WTO - its mandate and its institutional setup (which is considered among one of the most effective IOs) closely.

A look at the basic structure of the WTO shows its really wide mandate in regulating international trade, with the agreement covering the trade in goods, services and intellectual property rights. 

If you recollect the earlier lessons, I pointed out how international law is evident in our day-to-day life and the mandate of the WTO is something that is quite wide and extensive and touches our lives everyday.

For example, many of the goods that we consume are dependent on world trade. It has been illustrated that a jar of Nutella is something that is truly global and the sale of goods across the borders is facilitated by the WTO rules.

"Nutella is the product of a vast, global network, a spontaneous order through which international, cross-cultural, and cross-lingual cooperation emerges with no central authority in charge of it. The corporate headquarters of the Ferrero Group, which manufactures Nutella, is in Alba, Italy. The sugar comes from producers in Brazil and from France, which also contribute vanillin to the process. The hazelnuts come from Turkish producers, the cocoa from Nigerians, the palm oil from Malaysians. The factories are in Brantford, Stadtallendorf, Belsk, Vladimir, Lithgow, Poços de Caldas, and Los Cardales. Of course, those are only the producers near the end of the process — before them come the makers of the machinery they use, the producers of the steel used to make that machinery, the roughnecks bringing up oil that will make the diesel that powers the trucks and ships that move those 250,000 tons of Nutella around the world, the bankers who financed these endeavors, etc."

SOURCE: https://www.theatlantic.com/business/archive/2013/12/map-all-the-countries-that-contribute-to-a-single-jar-of-nutella/282252/

India is a good example of WTO facilitating opportunities to trade in services. India's software exports by the top IT companies provides us with a beneficial source of foreign exchange, which helps us to pay for the imports of goods, especially oil.

As for protection of Intellectual Property, the products of Microsoft, Google etc. are examples of trade facilitated by protecting IP rights. The ubiquitousness of Android platform in smartphones or the consumption of movies from around the world through Netflix or Amazon Prime shows how the WTO's measures have touched our lives - from essential needs to entertainment needs.

ORGANISATION CHART

The organisation of the WTO is illustrated below which shows a complex institutional mechanism that facilitates trade among the 164 member states. 

As we can see below it is an almost universal organisation.

An interactive on the volumes of trade is available here - https://www.wto.org/english/res_e/statis_e/statis_maps_e.htm and https://www.wto.org/english/res_e/statis_e/statis_e.htm.

DISPUTE SETTLEMENT

The WTO stands out for its effective dispute settlement process. This is feasible due to two aspects - compulsory jurisdiction and time-bound process. Unlike traditional dispute settlement where states have a choice on whether they would like to be part of a judicial settlement when a dispute arises with other state(s), the WTO dispute settlement process is automatically binding on parties of the WTO. In fact, third parties are also invited to join when a dispute arises, if their interests are affected. 

The other aspect is a strict time-bound process. A typical panel process of the dispute settlement is illustrated below.

Source: https://www.wto.org/images/img_tif/disp_s_e.gif

A case study of this process is provided here and the timeline is illustrated below.

Time (0 = start of case)	Target/ actual period	Date	Action
-5 years		1990	US Clean Air Act amended
-4 months		September 1994	US restricts gasoline imports under Clean Air Act
0	“60 days”	23 January 1995	Venezuela complains to Dispute Settlement Body, asks for consultation with US
+1 month		24 February 1995	Consultations take place. Fail.
+2 months		25 March 1995	Venezuela asks Dispute Settlement Body for a panel
+2½ months	“30 days”	10 April 1995	Dispute Settlement Body agrees to appoint panel. US does not block. (Brazil starts complaint, requests consultation with US.)
+3 months		28 April 1995	Panel appointed. (31 May, panel assigned to Brazilian complaint as well)
+6 months	9 months (target is 6-9)	10-12 July and 13-15 July 1995	Panel meets
+11 months		11 December 1995	Panel gives interim report to US, Venezuela and Brazil for comment
+1 year		29 January 1996	Panel circulates final report to members
+1 year, 1 month		21 February 1996	US appeals
+1 year, 3 months	“60 days”	29 April 1996	Appellate Body submits report
+1 year, 4 months	“30 days”	20 May 1996	Dispute Settlement Body adopts panel and appeal reports
+1 year, 10½ months		3 December 1996	US and Venezuela agree on what US should do (implementation period is 15 months from 20 May)
+1 year, 11½ months		9 January 1997	US makes first of monthly reports to Dispute Settlement Body on status of implementation
+2 years, 7 months		19-20 August 1997	US signs new regulation (19th). End of agreed implementation period (20th)

For more information on Dispute Settlement see here.

India has been an active member is utilising the Dispute Settlement Process. It has been a involved as a complainant — 24 case(s): as respondent — 32 case(s): as third party — 160 case(s). An illustration of India is below.

Source: https://www.wto.org/english/tratop_e/dispu_e/dispu_maps_e.htm?country_selected=IND&sense=e

The subject matters which are disputed number 238 disputes involving goods; 13 involving intellectual property; and 29 involving services.

A4 Copy Paper	Agricultural Goods	Agricultural Producers
Agricultural Products	Agricultural and Food	Air conditioning machines
Aircraft	Airport Construction	Alcoholic Beverages
All Goods	Aluminium and Steel Products	Ammonium nitrate
Animal Products	Animals	Apparel
Apples	Asbestos	Automobile Parts
Automobiles	Automotive Leather	Automotive
BSE	Bananas	Batteries
Beef	Beer	Biaxially Oriented Polypropylene Film
Biodiesels	Blanketing	Bovine Meat
Broiler Products	Broom Corn Brooms	Building materials industries
Buses	Butter	Byrd Amendment
Canola Seed	Carbon Steel Welded Pipe	Carbon-Quality Steel
Carousel	Carton Board	Cast Iron
Cattle	Cellulose Pulp	Cement
Ceramic Floor Tiles	Cereals	Certain Agricultural and Manufacturing Products
Certain Goods	Certain Products	Change of Ownership
Chicken Meat	Chicken Products	Cigarettes
Coconut	Coffee	Cold-Rolled Flat Steel Products
Commercial Aircraft	Commercial vessels	Computers
Corn Gluten Feed	Cotton Yarn	Cotton
Crystalline Silicon Photovoltaic Products	Customs Bond	Customs
DRAMS	DSU	Dairy Products
Diamond Sawblade	Domestic Support	Drill Bits
Edible Oils	Electric Transformers	Energy
Environmental Charge	Export Related Measures	Export Restrictions
Fasteners	Fatty Alcohol	Feed-In Tariff Program
Fibreboard	Film Tax	Fish fillets
Fish	Flat-rolled product of iron	Flight Management System
Flour	Footwear	Foreign Sales Corporations
Fresh avocados	GMOs	Garlic
Gasoline	General System of Preferences	General
Goods	Grain	Grants and Loans
Groundnuts	Harbour Maintenance Tax	Hardware industries
Herring	Hides and Skins	High-Fructose Corn Syrup
Hormones, Meat	Horticultural Products	Hot-rolled Steel
Import Licensing	Import Measures	Import Restrictions
Import bans	Importation	Imported spirits
Indicative Prices	Information Technology Products	Information and Communications Technology Sector
Iron and Steel Products	Jute Bags	Labelling
Lamb	Large Residential Washers	Leather
Lemons	Light Commercial Vehicles	Light industry
Liquid fuels	Lumber	Macaroni and Spaghetti
Machinery and Appliances	Massachusetts-Myanmar	Matches
Meat	Medical products	Methodologies
Minimum Import Prices	Myanmar-Massachusetts	Non-Agricultural Goods
Non-alloy steel	Olive Oil	Orange Juice
Other Products	PET	Packaging
Pangasius Seafood Product	Paper Sheets, Coated Woodfree	Paper
Pasta	Peaches	Periodicals
Pet Food	Petrochemical	Pharmaceutical
Photographic Film and Paper	Pipe and Tube Products	Pneumatic valves
Polyethylene and Polypropylene	Polypropylene	Pork and Poultry
Pork	Ports of Entry	Poultry
Price Band	Primary Aluminium	Processed Cheese
Procurement	Products and Technology	Publications
Quantitative Restrictions	Railway equipment and parts	Rare Earths
Raw Materials	Raw and Semi-finished	Recycling Fee
Renewable Energy	Resins	Rice
Ripe olives	Rum	Salmon
Sardines	Satellite Equipment	Scallops
School Exercise Books	Seal	Seaweed / Laver
Section 211	Section 306 of 1974 US Trade Act	Section 771(5) of US 1930 Tariff Act
Sections 301-310	Shelf-life of Products	Ships
Shrimps	Soft Drinks	Solar Energy
Solar Panels	Soybean Oil	Special chemical engineering
Spirits	Stainless Steel	Steel Pipes
Steel	Sugar Syrups	Sugar
Sugarcane	Supercalendered Paper	Swine
Swordfish	Tax Treatment for Exports	Tax Treatment on Imports
Tax	Telecommunications Equipment	Telecommunications Procurement
Televisions	Testing and certification requirements	Textile Products
Textiles	Tobacco	Tomatoes
Traffic in Transit	Transfer of Technology	Transit
Tubular Goods	Tuna	Tyres
USB flash drives	Urea, Solid	Vehicles
Washers	Water, Bottled	Wheat Gluten
Wheat	Wind Power Equipment	Wine (Oenological Practices)
Wine	Wood	X-ray Security Inspection Equipment
Zeroing

SOURCE: https://www.wto.org/english/tratop_e/dispu_e/dispu_subjects_index_e.htm

ASSESSMENT

Expansion of WTO agenda - DOHA Round.

Alternate trading mechanisms - RCEP, Transatlantic Trade and Investment Partnership, Trans-Pacific Partnership.