Abstract
This Chapter outlines the institutional arrangements of the World Trade Organization. It begins with a bit of history, in which the institutional inadequacies of GATT are considered, since thosewere in large part the impetus for the creation of a neworganization in the Uruguay Round. After a brief description of the negotiations on institutional arrangements in that Round, the bulk of the Chapter examines the resulting institution in detail. In doing so, it largely follows the structure of the WTO Agreement.1 The Chapter concludes with an overall assessment of theWTO’s institutional arrangements, including an analysis of a number of weaknesses that could ultimately undermine the effectiveness of the WTO if its Members do not correct them.
Former Director, WTO Legal Affairs Division (1995–1999). The author would like to thank Jeff Gertler, John Kingery and Gabrielle Marceau of the WTO Secretariat for comments on an early draft of this chapter.
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References
Marrakesh Agreement Establishing the World Trade Organization (“The WTO Agreement”), in The Results of the Uruguay Round of Multilateral Trade Negotiations: The Legal Texts 4 (1995) (“The Legal Texts”).
See generallyWilliam A. Brown, Jr., The United States and The Restoration of World Trade (1950); Clair Wilcox, A Charter for World Trade (1949).
Brown, supraWilliam A. Brown, Jr., The United States and The Restoration of World Trade (1950) note 2, at 131–134.
The Havana Charter of the International Trade Organization is formally known as the Final Act of the United Nations Conference on Trade and Employment, March 24, 1948, UN Doc. E/Conf.2/78. It was published by the U.S. Dept. of State as Havana Charter for an International Trade Organization, Commercial Policy Series 114 (PUB. NO. 3206, 1948).
Protocol of Provisional Application, IV GATT, BISD 76–77 (1969).
To qualify as “existing legislation,” measures were required to be legislation in the formal sense, predate the Protocol and be mandatory in character. Report of the GATT Panel (adopted), Norway-Restrictions on Imports of Apples and Pears, BISD 36th Supp. 306 (1990); Report of the GATT Panel (adopted), United States—Manufacturing Clause, BISD 31st Supp. 75 (1985).
The WTO Agreement carries over the existing legislation exemption only in respect of certain cabotage measures that may be inconsistent with the GATT. In practical terms, the exception applies only to the United States. WTO Agreement, Annex 1A, General Agreement on Tariffs and Trade 1994, Note 3(e). As of 2002, the continuing need for the exemption is currently under review by the WTO’s General Council. WTO General Council, Annual Report (2000), WT/GC/44, p. 28 (February 12, 2001). The review was not mentioned in the Council’s 2001 Annual Report, but the matter appeared on the Council’s agenda in 2002.
This history is recounted in GATT, Analytical Index: Guide to Gatt Law and Practice 1119–1125 (Updated 6Th Edition 1995) (“GATT Analytical Index”).
John H. Jackson, Gatt and the Law of World Trade 145 (1969).
Id. at 119–121.
GATT, Art. XXV.
GATT Analytical Index, supra 10, at 1100–1110.
For a catalog of these and other problems, see John H. Jackson, William J. Davey and Alan O. Sykes, Legal Problems of International Economic Relations 214–216 (2002).
Ministerial Declaration of September 20, 1986, Part I(E), BISD, 33rd Supp. 19, 26 (1987).
For a general history of the Uruguay Round, including descriptions of the activities of the FOGS Group, see John Croome, Reshaping Theworld Trading System: A History of the Uruguay Round 129–136, 229–235 (2d ed. 1999). This volume was prepared for and published by the WTO.
Declaration on the Contribution of the World Trade Organization to Achieving Greater Coherence in Global Economic Policymaking and Declaration on Notification Procedures, in The Legal Texts, supra note 1, at 386, 388.
John H. Jackson, Restructuring the Gatt System (1990).
Croome, supraJohn Croome, Reshaping Theworld Trading System: A History of the Uruguay Round (2d ed. 1999) note 17, at 233–234.
Id.
Draft Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, MTN.TNC/W/FA (December 20, 1991), Annex IV.
For an excellent, complete description of the negotiation of the WTO Agreement, see Debra Steger, The World Trade Organization: A NewConstitution for the Trading System, in Newdirections in International Economic Law: Essays Inhonor of John H. Jackson 135, 143–146 (Marco Bronckers and Reinhard Quick eds. 2000).
The Final Act of the Uruguay Round provided for a ministerial decision (¶ 3), but ministers agreed at Marrakech that the implementation conference would be held at the level of heads of delegations. MTN.TNC/45(MIN). For more details on the transition arrangements from GATT 1947 to the WTO, see GATT Analytical Index, supra note 10, at 1087–1093.
WTO Agreement, Art. II:1.
WTO Agreement, Art. III:1. It is also to provide such a framework for the Plurilateral Trade Agreements. Id.
WTO, Second GATS Protocol: Revised Schedules of Commitments on Financial Services; WTO, Third GATS Protocol: Schedules of Specific Commitments relating to Movement of Natural Persons; WTO, Fourth GATS Protocol: Schedules of Specific Commitments concerning Basic Telecommunications; WTO, Fifth GATS Protocol: Schedules of Specific Commitments and Lists of Exemptions from Article II concerning Financial Services. There was no First Protocol.
Agreement on Rules of Origin, Art. 9.
Ministerial Declaration (on the Doha Development Agenda), adopted November 14, 2001, WT/MIN(01)/DEC/1 (November 20, 2001).
Ministerial Declaration on Trade in Information Technology Products, WT/MIN(96)/16(December 13, 1996) (issued by the ministers of fourteen Members and accession candidates, accounting for over eighty percent of trade in such products).
See generallyAnwarul Hoda, Tariff Negotiations and Renegotiations under the GATT and the WTO: Procedures and Practices (2001).
WTO Agreement, Art. III:3.
WTO Agreement, Art. III:4.
WTO Agreement, Annex 3, para. A(i).
WTO, Annual Report 2001, at 105. Each trade policy review is published as a separate volume. The reports of the Secretariat and individual members are also available on the WTO website.
WTO, Annual Report 2001, at 112.
WTO Agreement, Art. IV.
Croome, supraJohn Croome, Reshaping Theworld Trading System: A History of the Uruguay Round (2d ed.1999) note 17, at 130–131.
Singapore Ministerial Declaration, WT/MIN(96)DEC (December 18, 1996), ¶¶ 4, 20 and 21 (reproduced in the Appendix to this book).
See text accompanying note 36 supra.
Ministerial Declaration on Trade in Information Technology Products, WT/MIN(96)/16 (December 13, 1996) (issued by the ministers of fourteen Members and accession candidates, accounting for over eighty per cent of trade in such products) reproduced in the Appendix to this book.
Ministerial Declaration of May 20, 1998, WT/MIN(98)/DEC/1 (May 25, 1998), reproduced in the Appendix to this book.
Ministerial Declaration on Global Electronic Commerce, WT/MIN(98)/DEC/2 (May 25, 1998), reproduced in the Appendix to this book: An interesting question is the enforceability of the commitment on customs duties. Since the declaration is not one of the so-called “covered agreements” under the DSU, could its violation give rise to a claim in WTO dispute settlement? Or in some other forum?
For a flavor of the commentary on the Seattle Ministerial, see Thewto After Seattle (Jeffrey A. Schott ed. 2000); Quick Reactions to Seattle, 3 Journal of International Economic Law 167 (2000) (five brief articles).
Kimberly Ann Elliott, Getting Beyond No...! Promoting Worker Rights and Trade, in Schott, supra note 59, at 187, 188, citing Seattle Post-Intelligencer, Dec. 1, 1999, p.1.
WT/MIN(01)/DEC/1 (November 20, 2001).
Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/2 (November 20, 2001), especially ¶¶ 4 and 5, reproduced in the Appendix to this book.
WT/GC/5 (February 7, 1996); WT/GC/7 (November 20, 1996); WT/GC/10 (January 7, 1998); WT/GC/10/Add.1 (May 8, 1998) (a partial year report prepared for the Geneva ministerial); WT/GC/15 (January 26, 1999); WT/GC/28 (November 12, 1999); WT/GC/44 (February 12, 2001); WT/GC/53 (November 5, 2001). The reports are quite summary and reference to the minutes of the meetings referred to is necessary to understand the issues involved and the action taken. The minutes are found in document series WT/GC/M/—.
WT/L/105 (November 24, 1995).
WT/L/46 (February 23, 1995).
WT/COMTD/2 (July 18, 1995).
Understanding on the Balance-of-Payments Provisions of GATT 1994, para. 13.
General Council, Annual Report (2001), WT/GC/53, at 5 (November 5, 2001).
Reports of the WTO Panel and the Appellate Body, India—Quantitative Restrictions on Imports of Agricultural, Textiles and Industrial Products, WT/DS90/R and AB/R (1999).
WT/BFA/55 (October 10, 2001). This was the only committee document publicly available on the WTO website in late 2001.
WTO, Annual Report 2001, at 147–148. CHF 14.4 million of the budget is the WTO’s contribution to the operation of an independent agency, the International Trade Center, which is also supported by UNCTAD.
OECD, Annual Report 2001, at 9.
From the UNCTAD website (visited December 13, 2001) http://www.unctad.org/en/aboutorg/aboutorg.htm).
From IMF website (visited July 9, 2002) (http://www.imf.org/external/np/tre/ffo/2001/fin.htm).
From the World Bank website (visited July 9, 2002) (http://www.worldbank.org/annualreport/2001/pdf/appendix.pdf).
WTO, Annual Report 2001, at 148–151.
See also Gregory C. Shaffer, The World Trade Organization Under Challenge: Democracy and the Law and Politics Of The WTO’s Treatment of Trade and Environment Matters, 25 Harv. Envtl. L. Rev. 1 (2001).
Decision of the Contracting Parties of November 28, 1979, on Differential and More Favorable Treatment, Reciprocity and Fuller Participation of Developing Countries, BISD, 26th Supp. 203 (1980) (known as the Enabling Clause).
WT/L/127 (February 7, 1996). The Committee is also charged with considering the systemic implications of regional agreements and initiatives for the multilateral trading system and the relationship between them, and making appropriate recommendations to the General Council.
GATT Analytical Index, supra note 10, at 817–818.
TN/C/1, 4 February 2002.
For example, at one point in 1999 Egypt suggested that given the absence of a consensus on any one individual, the Director-General should be chosen by voting, as provided for in Article IX, but the chair chose to continue to seek a consensus, which was eventually achieved. WT/GC/M/40/Add.4, at 10 (July 5, 1999). Earlier in 1999, the EC had requested a vote on whether to overturn a ruling of the chair of the DSB in connection with the EC Bananas dispute, but the chair declined to take a vote. WT/DSB/M/54, at 26–30 (April 20, 1999).
See, e.g., S/L/15 (October 19, 1995) (Rule 33 of the rules of procedure of the Services Council provides: “Where a decision cannot be arrived at by consensus, the matter shall be referred to the General Council for decision.”).
The rules of procedure of WTO bodies generally require that the first item of business of a meeting is to adopt the proposed agenda of the meeting, which like everything else is normally done by consensus. Threatening to block consensus on the adoption of the agenda has occasionally been used in the DSB and elsewhere informally to force items to be removed from the agenda. In dealing with a lack of consensus on adoption of the agenda in a DSB meeting relating to the EC Bananas dispute, the chair of the DSB ruled that the meeting at issue would go forward on the basis of the proposed agenda, even in the absence of consensus. WT/DSB/M/54, at 1–10 (April 20, 1999). Any other result could defeat the automatic nature of the dispute settlement system. It is unclear whether the DSB chair’s decision would apply in other contexts.
WT/GC/W/133 (January 25, 1999). The General Council took no action on the request, which concerned the so-called sequencing problem and which has been the subject of further negotiations and proposals to amend the DSU. See Chapter 28 of this book.
The annual reports of the General Council catalog the new waivers granted each year and the multi-year waivers reviewed. See, e.g., WT/GC/53, at 6–9 (November 5, 2001).
WTOAgreement, Art. XII:2. The General Council, under the same practice as applies towaivers, normally takes accession decisions on a consensus basis. WT/L/93 (November 24, 1995). See note 99 supra.
World Trade Organization, Basic Instruments and Selected Documents, Volume I, 59–77 (2002).
The agreement with WIPO is found in IP/C/6 (December 13, 1995); the agreement with the ITU is found in S/C/11 (September 21, 2000).
The letters are set out in WT/GC/W/10 (November 3, 1995); they were simply noted by the General Council. WT/GC/M/8, point 10 (December 13, 1995).
WT/L/162 (July 23, 1996).
WTO, Annual Report (2001), at 113.
WT/L/93 (November 23, 1995).
Technically, there were five GATT parties that did not become original members of the WTO because negotiations on their schedules were not completed in time. They were permitted to accede under expedited procedures, without involvement of a working party, when their schedules were completed. See WTO/L/30 (February 7, 1995). The five countries were Grenada, Qatar, Papua New Guinea, St. Kitts & Nevis, and the United Arabs Emirates. See World Trade Organization, WTO Analytical Index 95–96 (1st ed. 2003). The WTO website does not mention these parties as having acceded to the WTO.
For a detailed explanation of the accession process, see WT/ACC/7/Rev.2 (November 1, 2000), which is a technical note by the WTO Secretariat on the accession process.
The outline of the memorandum is specified in WT/ACC/1 (March 24, 1995), entitled “Accession to the World Trade Organization: Procedures for Negotiations Under Article XII: Note by the Secretariat)”. There are also four technical notes by the Secretariat dealing with information to be provided in respect of agriculture (WT/ACC/4), services (WT/ACC/5), SPS and TBT matters (WT/ACC/8) and intellectual property protection (WT/ACC/9).
A description of technical assistance provided by the WTO Secretariat, along with some information on other sources of assistance, can be found in WTO/ACC/10 (Dec. 21, 2001), at pp. 32–35.
For a timetable setting out the time taken by the various stages of the accession process for the first sixteen accessions, see WTO/ACC/10 (December 21, 2001), pp. 10–11.
For tariff bindings, see WTO/ACC/10 (December 21, 2001), Table 2, at pp. 23–26; for services commitments, see id., Table 3, at pp. 30–31.
The_standard accession protocol is set out in WTO/ACC/10 (December 21, 2001), at pp. 39–40.
Most protocols have deviated from the standard protocol in minor respects. See WT/ACC/10 (December 21, 2001), at pp. 40–41 for the provisions in question.
WT/L/432 (November 23, 2001). The position of China in the WTO is discussed in more detail in Chapter 67.
WT/L/432 (November 23, 2001), Secs. I(2)(C)-(D), I(5).
Id., Sec. I(16).
WTO/ACC/10 (December 21, 2001), at p. 43.
Id., at pp. 43–157.
WTO/ACC/10 (December 21, 2001), at p. 39 (Part I(3)).
Three non-market economies in Eastern Europe — Hungary, Poland and Romania—acceded to GATT. The first was Poland, and in order to allay concerns that imports into Poland could be kept artificially low by the policies of state-trading enterprises charged with importing, the Polish accession protocol contained a commitment by Poland to increase its imports each year by a specified amount. Because of balance of payments problems, Poland was not able to comply with this obligation. The second of these countries to accede to GATT was Romania. In its accession protocol, Romania committed to increase its imports from other GATT parties in line with its increase of imports generally. That provision also failed to work effectively. In the case of Hungary, no such import commitment was required, as the Hungarians successfully argued that they had a working tariff system and that a commitment to bind tariffs was sufficient. Because of concerns over whether exports to these countries would increase, the other GATT parties reserved the right in the protocols of accession to use selective safeguards against imports from the three countries. All in all, the experience of trying to admit non-market economies into GATT seemed generally negative. See generally M.M. Kostecki, East-West Trade and the Gatt System (1978); Jackson, Davey & Sykes, supra note 15, at 1150–1152.
WT/ACC/10 (December 21, 2001), at pp.46–53 (compiling commitments on state ownership and privatization, and pricing policies).
WT/ACC/10 (December 21, 2001), at pp. 10–11.
Accession of Least-Developed Countries, WT/L/508 (January 20, 2003).
The nine are Bhutan, Cambodia, Cape Verde, Laos, Nepal, Samoa, Sudan, Vanuatu and Yemen. Since the decision, a working party on the accession of Ethiopia has been established. The two observer countries to the WTO that are not now in the accession process—Equatorial Guinea and Sao Tome & Principe—are LDCs. For general information on the accession of LDCs, including a description of technical assistance provided to them in respect of accession, see Summary State of Play in Working Parties on the Accession of Least-Developed Countries, WT/ACC/12 (July 4, 2002).
WT/L/11 (January 27, 1995).
WT/L/203 (February 20, 1997).
Mongolia-WT/L/159 (July 17, 1996); Kyrgyz Republic-WT/L/275 (October 12, 1998); Georgia-WT/L/318 (October 1, 2000); Moldova-WT/L/395 (May 4, 2001); Armenia-WT/L/505 (December 10, 2002).
On the Jackson-Vanik rules, see Jackson, Davey and Sykes, supra WILLIAM J. DAVEY and ALAN O. SYKES, Legal Problems of International Economic Relations (2002) note 15, at 445–446. The Jackson-Vanik rules required Communist countries to meet certain criteria with respect to freedom of emigration before they were eligible to receive MFN treatment from the United States. At the time of their adoption, they effectively prevented the entry into force of a trade agreement between the United States and the Soviet Union that had been negotiated by President Nixon. However, under certain circumstances the President could waive the rules from time to time, subject to being overruled by Congress. In recent years, the annual Presidential decisions to extend MFN treatment to China were often controversial, although they were never reversed by Congress, which removed China from the coverage of the Jackson-Vanik rules effective on its accession to the WTO.
Mongolia-WT/L/306 (July 8, 1999); Kyrgyz Republic-WT/L/363 (September 20, 2000); Georgia-WT/L/385 (January 10, 2001).
WT/L/429 (November 7, 2001).
WT/L/501 (December 3, 2002).
Report of the Appellate Body, United States—Import Prohibition of Certain Shrimp and Shrimp Products, AB-1998-4, WT/DS58/AB/R, ¶¶ 129–131 (1998). See Chapter 5 infra.
Report of the Appellate Body, Japan—Taxes on Alcoholic Beverages, AB-1996-2, WT/DS8, 10 & 11/AB/R, p. 14 (1996).
See, e.g., Report of the WTO Panel, United States—Sections 301–310 of the Trade Act of 1974, WT/DS152/R, ¶¶ 7.41–7.42 (1999).
In this regard, it should be noted that the standard practice with respect to waivers is to provide that a Member adversely affected by the waiver may bring a non-violation nullification or impairment complaint. See, e.g., Understanding in Respect of Waivers of Obligations Under GATT 1994, ¶ 3. Thus, although a waiver does alter the balance of rights and obligations (even though it does not impose new obligations), affected parties are not left without the possibility of recourse to obtain a rebalancing of rights and obligations. While most Members would presumably not avail themselves of the possibility of initiating such an action, it would be a safety valve for Members who feel that their interests have not been properly or adequately considered in the negotiations over the terms and conditions of the waiver. Since voting on waivers was the practice in GATT and since the possibility of asking for a vote is specifically mentioned in the General Council decision on procedures for adoption waivers (WT/L/93, November 24, 1995), what is proposed would not be a complete innovation, although it would obviously change current practice.
Report of the Appellate Body, United States—Import Prohibition of Certain Shrimp and Shrimp Products, AB-1998-4, WT/DS58/AB/R, ¶¶ 99–110 (1998) (Panels have the authority to accept and consider unsolicited submissions from non-Members); Report of the Appellate Body, United States—Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, AB-2000-1, WT/DS138/AB/R, ¶¶ 36—42 (2000) (Appellate Body has the authority to accept and consider submissions from non-Members); Report of the Appellate Body, European Communities-Measures Affecting Asbestos and Asbestos-Containing Products, AB-2000-11, WT/DS135/AB/R, ¶¶ 50–57 (2001) (Appellate Body issued procedures for applying to it for permission to submit amicus briefs in the case, but then rejected all applications).
WT/GC/M/60 (January 23, 2001).
See William J. Davey, Comment, in Efficiency, Equity, and Legitimacy: the Multilateral Trading System at Themillennium 329 (Roger B. Porter, Pierre Sauvé, Arvind Subramanian and Americo Beviglia Zampeti eds. 2001).
See Frieder Roessler, Are the Judicial Organs of the World Trade Organization Overburdened, in Efficiency, Equity, and Legitimacy: the Multilateral Trading System at The Millennium, supra Pierre Sauvé, Arvind Subramanian and Americo Beviglia Zampeti eds. 2001 note 184, at 308.
See, e.g., Claude Barfield, Free Trade, Sovereignty, Democracy: the Future of Theworld Trade Organization 111–129 (2001).
See, e.g., John H. Jackson, Dispute Settlement and the WTO: Emerging Problems, 1 Journal of International Economic Law 329 (1998).
The prime complaint of WTO Members in this regard concerns the Appellate Body’s decisions regarding amicus briefs, see text accompanying notes 180–182 supra, which do not impose newsubstantive obligations. Indeed, despite its position that it could, the Appellate Body has not yet relied on such briefs. On the issue of the extent to which the WTO dispute settlement system has resulted in decisions that go beyond what reasonable interpretation of the agreements would predict, see generally William J. Davey, Has the WTO Dispute Settlement System Exceeded Its Authority?, 4 Journal of International Economic Law 79 (2001) (concluding that the system has not done so).
See Davey, supra William J. Davey, Comment, in Efficiency, Equity, and Legitimacy: the Multilateral Trading System at Themillennium 329 (Roger B. Porter, Pierre Sauvé, Arvind Subramanian and Americo Beviglia Zampeti eds. 2001) note 184, at 331–332.
Jackson, Davey & Sykes, supra WILLIAM J. DAVEY and ALAN O. SYKES, Legal Problems of International Economic Relations (2002) note 15, at 214. GATT was amended in the 1950s, but some amendments proposed at that time never came into force because of Uruguay’s refusal to accept them. John H. Jackson & William J. Davey, Legal Problems of International Economic Relations 310 (1986).
Moore, Barshefsky Stress Need for New WTO Rules after Breakdown, Inside Us Trade, December 4, 1999.
WT/GC/M/57, at 24–25 (September 14, 2000). See also WTO, Annual Report 2001, at 47.
The 2001 Annual Report of the General Council does not mention the internal transparency issue. WT/GC/53 (November 5, 2001).
See WT/GC/M/74 (Meeting of May 13–14,2002) at 17–32; WT/GC/M/75 (Meeting of July 8 and 31, 2002) at 7–27.
See 1999 Annual Report of the General Council, WT/GC/28, at 14–15 (November 12, 1999) and materials cited therein.
For a detailed elaboration of this position, see Barfield, supra note 206, at 97–110, 135–143. For development of the argument that the WTO needs to be more inclusive in order to be “legitimate”, see Robert O. Keohane and Joseph S. Nye, Jr., The Club Model of Multilateral Cooperation and Problems of Democratic Legitimacy and comments thereon by Robert E. Hudec and Daniel C. Esty; and Robert Howse and Kalypso Nicolaïdis, Legitimacy and Global Governance: Why Constitutionalizing the WTO Is a Step Too Far and comments thereon by Steve Charnowitz and Gary N. Horlick in Efficiency, Equity, and Legitimacy: The Multilateral Trading System at the Millennium, supra note 184, at 227–307.
WT/L/162 (July 23, 1996).
The current rules for circulation and derestriction of documents are found in WT/L/452 (May 16, 2002).
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Davey, W.J. (2005). Institutional Framework. In: Macrory, P.F.J., Appleton, A.E., Plummer, M.G. (eds) The World Trade Organization: Legal, Economic and Political Analysis. Springer, Boston, MA. https://doi.org/10.1007/0-387-22688-5_4
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