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SOME BASIC INTERNATIONAL LAW CONCEPTS
The world trading system is based on international law, i.e. law regulating relationships among States
State’s equality and sovereignty Customary law Treaty law Acts of international organisations
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SOME BASIC INTERNATIONAL LAW CONCEPTS
Custom: - non written - addressed to all States- made of practice and opinio juris - ex. prevention of environmental harm
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SOME BASIC INTERNATIONAL LAW CONCEPTS
Treaty law- binding only upon contracting parties- difference between signature and
ratification - it prevails upon customary law - GATT and WTO are examples of treaty
law
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SOME BASIC INTERNATIONAL LAW CONCEPTS
Acts of international organisations - IOs are created by a treaty among the parties wishing to join the IO- the IO can then emanate acts, binding upon members and subordinate to the establishing treaty- ex. the awards rendered by WTO judicial organs are acts of an IO
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INTERNATIONAL TRADE TOOLSTariff obstacles (duties)Non tariff obstacles (quota) Tariff quota
Tariff can be ad valorem or on a specific basis- revenue for the State- protection of national industry
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INTERNATIONAL TRADE TOOLS
Tariff binding Tariff peak (industrial products)Tariff escalationNuisance tariff
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INTERNATIONAL TRADE TOOLSTrade defence measures:- dumping - safeguard measure - anti-subsidy measureBasic obligations:- most favourite nation clause - national treatment
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HISTORICAL BACKGROUNDClassical liberalism - between industrial revolution (1750-1880) and
WW1- States do not intervene in economic relationships- “friendship, navigation and trade” treaties based
on MFN and NT- trade regulation only based on duty collection
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HISTORICAL BACKGROUNDProtectionism (between WW1 and WW2)- State intervention in the economy to
reconstruct and to face the crisis- trade wars and economic autarchy - duties, anticompetitive practices and beggar-
thy- neighbour policies - bilateral treaties (quota)
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HISTORICAL BACKGROUNDmanaged free trade (neoliberalism)- after WW2- economic freedom - set of rules guaranteed by States and IOs- delegation of power to IOs- erosion of domestic jurisdiction
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THE BRETTON WOOD CONFERENCEcreation of the post-war economic ordercomplementing UN policy on peace and
securityIMF = int’l monetary stability and BOP
problemsIBRD (the WB group) = development projects ITO = trade- UN Conference on trade and labor (1946-1948)
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THE WORLD BANK GROUP Int'l financing Corporation: loans to private
firms Int'l Development Agency: loands to LDCs
(long term, low rates) Multilateral Investment Guarantee Agency :
investment insurance Int'l Centre for the settlement of investment
disputes : arbitration procedure
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THE ITO
ITO (not born) = trade regulation but also labour, competition etc
- UN specialised agency failure:- protectionism vs push for liberalisation - US vs UK- cold war- 1 State =1 vote
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THE GATTsigned in Geneva in 1947 while the UN
conference is still going on tariff concessions provisional no institutional structureweaker than the Avana Charter
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THE GATTlack of formal strengthbased on “rounds”tariff reduction vs technical obstacles “genuine” technical standards vs protectionist
onesexamples: procurement policies, subsidies,
custom valuation methods
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THE TOKYO ROUND AND THE SEVENTIESTR focused on technical obstacles GATT “à la carte”confusion and free riding
The 70s: general recession and oil price shockrise of Japan and NICsprotectionism and managed trade (MFA)
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DCs, LDCs, …difficult to distinguish different categories of
countries according to dev’t levelDCs & LDCstransition economies NICs and big DCsrole of UNCTAD in GATT/WTOtrade as a tool for dev’t
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The Uruguay Round and the Marrakesh Agreement
1986- 1994the transition from GATT to WTOnew subjects (services)the single undertaking principle : end of free
riding and unity of the system plurilateral agreements
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THE INSTITUTIONAL STRUCTURETraditional structure of IOs:- assembly or plenary- restricted organ- secretariatWTO structure- Ministerial Conference- General Council- Secretariat
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URUGUAY ROUND AGREEMENTS
http://www.wto.org/english/docs_e/legal_e/legal_e.htm
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THE INSTITUTIONAL STRUCTUREMinisterial Conference - all members - Ministerial rank of representatives- general competence - political guidelines about the development of
the organisation- meets every 2 years
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THE INSTITUTIONAL STRUCTUREGeneral Council- all members- diplomatic rank- implementation of the MC decisions - interpretation of WTO legal texts- meets whenever necessary- DSB and TPR boby
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THE INSTITUTIONAL STRUCTURE
Secretariat :- carries out the TPRM- provides technical assistance- cannot accept instructions by States- chosen by the DG
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THE INSTITUTIONAL STRUCTUREThe Director General- chosen by the General Council- acts in its individual capacity - responsible of the budget- he represents the organisation in front of other
States- diplomatic role in negotiations
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THE INSTITUTIONAL STRUCTUREevery agreement is managed by a Council - assessment of compliance - discussing future developments- GATT 1947 = GATT Council - SPS = SPS Council - but the GATT Council can intervene in other
councils’ issues
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THE INSTITUTIONAL STRUCTURElack of tranparency and civil society
involvement participation of DCs and LDCs - green room negotiations- consensus techniquenon-trade issues actually the real problem now is the lack of
progressi in negotiations!
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THE DOHA ROUND (2001 -???)big momentum in 2001 vs economic crisis industrial market access and agriculture big issues
blocking other issuesproliferation of bilateral agreements and regional
trading blocksDSS prevailing over negotiations protectionis moves (export bans, currency
manipulation, import obstacles)