World Trade Organization - functions, principles and trade agreements Case Studies include USA vs Mexico (Tuna), USA vs ASIA (Shrimp) and USA vs EU (Poultry)

1. PRESENTED BY:
• Olivia Joanne Rodrigues
• Sayantani Kundu
• Mathew Issac
• Himanshu Mehta
MANIPAL UNIVERSITY DUBAI CAMPUS
JANUARY, 2016

2. What is the World Trade
Organization?
“The World Trade Organization is ‘member-
driven’, with decisions taken by General agreement
among all member of governments and it deals with the
rules of trade between nations at a global or near-global
level. But there is more to it than that.”

3. 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, government purchases,
industrial standards and product safety, food sanitation
regulations, intellectual property, and much more.

4. WTO: The Beginnings/
History
• The World Trade Organization (WTO) came into being on
January 1st 1995. It was the outcome of the lengthy (1986-
1994) Uruguay round of GATT negotiations. The WTO was
essentially an extension of GATT.
• It extended GATT in two major ways. First GATT became
only one of the three major trade agreements that went into the
WTO (the other two being the General Agreement on Trade in
Services (GATS) and the agreements on Trade Related Aspects
of Intellectual Property Rights (TRIPS)).

5. • Second the WTO was put on a much sounder
institutional footing than GATT. With GATT
the support services that helped maintain the
agreement had come into being in an ad hoc
manner as the need arose. The WTO by
contrast is a fully fledged institution (GATT
also was, at least formally, only an agreement
between contracting parties and had no
independent existence of its own while the
WTO is a corporate body recognized under
international law).

6. FACT FILE OF WTO
Location Geneva, Switzerland
Established 1 January 1995
Created by Uruguay Round negotiations
(1986-94)
Membership 164 countries on 29 July 2016
Budget 197 million Swiss francs
for 2015
Secretariat staff 634
Head Roberto Azevêdo (Director-
General)

7. To create more together relationship
with all nations in respect of global
economic policy-making, it would
cooperate with the IMF and the world
bank & its affiliated organizations.
To arrange the forum for deliberations
for the member nations in regard to
their multilateral trade relations in
issues deal with under the agreements
To provide a framework for
implementing of the results arising out
of the deliberations which taken place
at ministerial conference level
To arrange the implementation,
administration and operations of
multilateral and plurilateral
trade agreements
To manage effectively and
efficiency the trade policy
review mechanism (TRIM)
To manage the created
understanding on rules and
procedure governing the
settlement of disputes
WHY WTO?

8. Administering
WTO trade
agreements
Forum for
trade
negotiations
Handling
trade
disputes
Technical
assistance and
training for
developing
countries
Cooperation
with other
international
organizations
Monitoring
national
trade
policies
FUNCTIONS
OF WTO

9. 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.
Most-favoured-nation (MFN):
treating other people equally
Imported and locally-produced goods
should be treated equally — at least after
the foreign goods have entered the market.
The same should apply to foreign and
domestic services, and to foreign and local
trademarks, copyrights and patents.
National treatment: Treating foreigners
and locals equally
PRINCIPLES OF WTO
• Trade Without Discrimination

10. Lowering trade barriers is one of the most
obvious means of encouraging trade. The
barriers concerned include customs duties
(or tariffs) and measures such as import
bans or quotas that restrict quantities
selectively
•Free trade: gradually,
through negotiation
Sometimes, promising not to raise a trade
barrier can be as important as lowering
one, because the promise gives businesses
a clearer view of their future opportunities.
With stability and predictability,
investment is encouraged, jobs are created
and consumers can fully enjoy the benefits
of competition. The multilateral trading
system is an attempt by governments to
make the business environment stable and
predictable.
•Predictability:
through binding and transparency

11. The WTO is sometimes described as a
“free trade” institution, but that is not
entirely accurate. The system does allow
tariffs and, in limited circumstances, other
forms of protection. More accurately, it is
a system of rules dedicated to open, fair
and undistorted competition.
The WTO system contributes to
development. On the other hand,
developing countries need flexibility in
the time they take to implement the
system’s agreements. And the agreements
themselves inherit the earlier provisions
of GATT that allow for special assistance
and trade concessions for developing
countries.
•Encouraging development
and economic reform
•Promoting fair competition

12. STRUCTURES OF WTO
Ministerial Conference
General Council
Dispute
Settlement Body
Trade Policy
Review Body
Goods Council
Intellectual
Property Council
Services Council
The Committee
on T&D and
T&E

13. ROLE OF WTO
The main goal of WTO is to help the
trading industry to become smooth, fair,
free and predictable. It was organized to
become the administrator of multilateral
trade and business agreements between
its member nations. It supports all
occurring negotiations for latest
agreements for trade. WTO also tries to
resolve trade disputes between member
nations.
Multi-lateral agreements are always made
between several countries in the past.
Because of this, such agreements become
very difficult to negotiate but are so
powerful and influential once all the parties
agree and sign the multi-lateral agreement.
WTO acts as the administrator. If there are
unfair trade practices or dumping and there
is complain filed, the staff of WTO are
expected to investigate and check if there
are violations based on the multi-lateral
agreements.

14. TRIMs, AND TRIPS OF WTO
1) Agreement on Trade-Related Investment Measures (TRIMs)
• TRIMs refers to certain conditions or restrictions imposed by
a governments in respect of foreign investment in the country
• The agreement on TRIMs provides that no contracting party
shall apply any TRIM which is inconsistent with the WTO
Articles.

15. • It was negotiated at the end of the Uruguay Round of the General Agreement on
Tariffs and Trade (GATT) in 1994.
• Specifies enforcement procedures, remedies, and dispute resolution procedures.
The Agreement on Trade Related
Aspects of Intellectual Property Rights
(TRIPS) is an international agreement
administered by the World Trade
Organization (WTO) that sets down
minimum standards for many forms of
intellectual property (IP) regulation as
applied to nationals of other WTO
Members
TRIPS contains requirements that nations'
laws must meet for copyright rights,
including the rights of performers,
producers of sound recordings and
broadcasting organizations; geographical
indications, including appellations of
origin; industrial designs; integrated circuit
layout-designs; patents; monopolies for the
developers of new plant varieties;
trademarks; trade dress; and undisclosed or
confidential information.
2)Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS)

16. THE RELEVANCE OF WTO
• The system helps promote peace.
• The system allows disputes to be handled constructively.
• A system based on rules rather than power makes life
easier for all.
• Free trade cuts the cost of living.
• It gives consumers more choice and a broader range of
qualities to choose from.
• Trade raises incomes.
• Trade stimulates economic growth and that can be good
news for employment
• The basic principles make the system economically more
efficient, and they cut costs.

17. DEVELOPING COUNTRIES
• In the agreements: more
time, better terms
• Legal assistance:
Secretariat service
• Least-developed
countries: special focus
• Committees- Trade and
Development Committee
How the WTO deals with the special needs of an increasingly
important group

18. RECENT ISSUES
• WTO issues panel reports regarding Indonesian import
restrictions on agricultural products
• Trade prospects for 2017
• Measures regarding Iron and Steel imports in Asia
• WTO members take anti-dumping actions : panel report of
Canada
• Transparency mechanism for preferential trade
arrangements set for approval
• Trade agreements between developing countries
• Trade policy reviews and monitoring
• Ratification of Trade Facilitation Agreement
• WTO issues panel reports regarding Indonesian import
restrictions on agricultural products
• Initiate membership for Somalia and Timor-Leste

19. UNITED STATES OF
AMERICA
ASIAN COUNTRIES
INDIA, PAKISTAN,
MALAYSIA, THAILAND
DS381: United States —
Measures Concerning the
Importation, Marketing and
Sale of Tuna and Tuna Products
(Complainant: Mexico)

20. Tuna Dolphin case origin was by the US Marine Mammal Protection
Act (MMPA), which banned the imports of tuna from countries that
did not have conservation program to protect the dolphins in the tuna
fishing process.
The tuna/dolphin controversy provides a
useful and current case study in the
conflict between global free trade and
international environmental protection.

21. •As a result of this law, exports of tuna from Mexico to the US
were banned.
• Mexico complained in 1991 under the GATT dispute settlement
procedure.
•The embargo also applies to “intermediary” countries handling the
tuna en route from Mexico to the United States.
1991
If a country exporting tuna to the United States cannot prove to US
authorities that it meets the dolphin protection standards set out in
US law, the US government must embargo all imports of the fish
from that country.

22. FEBRUARY
1991
SEPTEMBER
1991
Mexico asked for a panel in February 1991
The panel reported to GATT members and it concluded:
•That the US could not embargo imports of tuna products from Mexico
simply because Mexican regulations on the way tuna was produced did not
satisfy US regulations.
• GATT rules did not allow one country to take trade action for the purpose
of attempting to enforce its own domestic laws in another country

23. The report was never adopted
Mexico decided not to pursue the case and the panel report was never adopted even
though some of the “intermediary” countries pressed for its adoption. (Under the
present WTO system, if WTO members do not by consensus reject a panel report
after 60 days, it is automatically accepted.)
Mexico and the United States held their own
bilateral consultations aimed at reaching
agreement outside GATT.

24. This led to a second panel report circulated to GATT members in mid
1994.
GATT found that the United States violated Article XI of GATT,
by adopting quantitative restrictions on imports.
• The US argued that the restrictions were internal regulations enforced
at the point of entry as permitted by Article III:4;
• nevertheless, GATT I's panel put aside this argument aside on grounds
that Article III restrictions could only be applied to products and not
processes by which the product was produced.
• The panel was also asked to judge the US policy of requiring tuna
products to be labeled “dolphin-safe”
• It concluded that this did not violate GATT rules
because it was designed to prevent deceptive
advertising practices on all tuna products
1992
The European Union lodged its own compliant.
1994

25. A compliance panel is established in the tuna case (DS381)
COMPLIANCE PANEL is a multi-member committee chartered to
investigate conformance to laws, rules or regulations.
2009
A dispute settlement (DS381) is established on the case for
the Tuna case between Mexico and the US.
Dispute settlement is the central pillar of the multilateral trading system, and
the WTO's unique contribution to the stability of the global economy. Without a
means of settling disputes, the rules-based system would be less effective
because the rules could not be enforced.
WTO rules against U.S. "dolphin safe" tuna
A World Trade Organization appellate panel on Wednesday said U.S. "dolphin
safe" tuna labeling rules unfairly discriminate against Mexico, raising the
possibility of sanctions on U.S. goods if the rules are not modified or dropped.
2012
Recent events on the case
2015
Mexico wins ruling on tuna labels
The World Trade Organization (WTO) ruled that the U.S. requirement that
labels declare the tuna to be “dolphin-safe” is unfair to Mexican fishermen
because “less favorable treatment” is given to Mexican tuna products because
the rules set different requirements based on where a fish is caught.
MAY
2016

26. UNITED STATES OF
AMERICA
ASIAN COUNTRIES
INDIA, PAKISTAN,
MALAYSIA, THAILAND
DS58: United States — Import
Prohibition of Certain Shrimp
and Shrimp Products
(Complainants: India; Malaysia;
Pakistan; Thailand)

27. India, Malaysia, Pakistan and Thailand requested
consultations with the United States concerning a ban on
importation of shrimp and shrimp products from these
complainants imposed by the US under Section 609 of US
Public Law 101-162. Violations of Articles I, XI and XIII of
the GATT 1994, as well nullification and impairment of
benefits, were alleged.
Malaysia and Thailand requested the establishment of a panel. At its
meeting on 22 January 1997, the DSB deferred the establishment of a
panel. On 30 January 1997, Pakistan also requested the establishment of a
panel.
9 JANUARY
1997
8 OCTOBER
1996

28. 25 FEBRUARY
1997
Further to Malaysia’s and Thailand's request, the DSB established a Panel
at its meeting ( also made in accordance with the request made Pakistan)
It also agreed that the two panels would be consolidated in a single panel,
pursuant to Article 9.1 of the DSU with standard terms of reference.
Australia, Colombia, Costa Rica, Ecuador, the European Communities,
Guatemala, Hong Kong, India, Japan, Mexico, Nigeria, the Philippines,
Senegal, Singapore and Sri Lanka reserved their third-party rights.
India also requested the establishment of a panel on the same matter.
10 APRIL
1997
The DSB agreed that this panel would be consolidated with the panel
already established at the request of Malaysia, Thailand and Pakistan. El
Salvador and Venezuela reserved their third party rights, in addition to
those delegations who had reserved their third-party rights to the panel
established at the requests of Malaysia, Pakistan and Thailand.
15 APRIL
1997
The panel was composed

29. 15 MAY
1998
13 JULY
1998
6 NOVEMBER
1998
The panel report was circulated to Members. The panel found that the import
ban in shrimp and shrimp products as applied by the United States is
inconsistent with Article XI:1 of the GATT 1994, and cannot be justified
under Article XX of the GATT 1994.
The United States notified its intention to appeal certain issues of law and
legal interpretations developed by the panel.
The Appellate Body reversed the panel’s finding that the US measure at issue
is not within the scope of measures permitted under the chapeau of Article
XX of the GATT 1994, but concluded that the US measure, while qualifying
for provisional justification under Article XX(g), fails to meet the
requirements of the chapeau of Article XX.
The DSB adopted the Appellate Body report and the Panel report, as
modified by the Appellate Body report.

30. 25 NOVEMBER
1998
22 DECEMBER
1999
12 OCTOBER
2000
The United States informed the DSB that it was committed to
implementing the recommendations of the DSB and was looking forward
to discussing with the complainants the question of implementation.
The parties to the dispute announced that they had agreed on an
implementation period of 13 months from the date of adoption of the
Appellate Body and Panel reports, i.e. it expired on 6 December 1999.
Malaysia and the United States informed the DSB that they had reached an
understanding regarding possible proceedings under Articles 21 and 22 of
the DSU.
On the grounds that the United States had not implemented appropriately
the recommendations of the DSB, on 12 October 2000, Malaysia requested
that the matter be referred to the original panel pursuant to Article 21.5 of
the DSU

31. 15 JUNE
2001
The compliance panel circulated its report and concluded that:
The measure adopted by the United
States in order to comply with the
recommendations and rulings of the
DSB violated Article XI:1 of the GATT
1994
In light of the recommendations and rulings of the
DSB, Section 609 of Public Law 101-162, as
implemented by the Revised Guidelines of 8 July
1999 and as applied so far by the US authorities, was
justified under Article XX of the GATT 1994 as long
as the conditions stated in the findings of this Report,
in particular the ongoing serious good faith efforts to
reach a multilateral agreement, remain satisfied.
Should any one of the
conditions referred to above
cease to be met in the future,
the recommendations of the
DSB may no longer be
complied with. In such a
case, any complaining party
in the original case may be
entitled to have further
recourse to Article 21.5 of
the DSU.

32. 21 NOVEMBER
2001
Implementation of adopted reports
At the DSB meeting on the adoption of the Appellate Body
report and the compliance panel report.
The United States stated that was pleased that both the Article
21.5 panel and the Appellate Body had found that the United
States had implemented the DSB's recommendations and
rulings insofar as it had found that the US compliance measure
was justified as a conservation measure under Article XX(g)
of the GATT 1994 and that the United States had rectified the
prior measure's discriminatory aspects.

33. DS61 United States — Import Prohibition of Certain Shrimp and
Shrimp Products (Complainant: Philippines)
25 October 1996
DS324 United States — Provisional Anti-Dumping Measures on
Shrimp from Thailand (Complainant: Thailand)
9 December 2004
DS335 United States — Anti-Dumping Measure on Shrimp from
Ecuador (Complainant: Ecuador)
17 November 2005
DS343 United States — Measures Relating to Shrimp from Thailand
(Complainant: Thailand)
24 April 2006
DS345 United States — Customs Bond Directive for Merchandise
Subject to Anti-Dumping/Countervailing Duties
(Complainant: India)
6 June 2006
DS404 United States — Anti-dumping Measures on Certain Shrimp
from Viet Nam (Complainant: Viet Nam)
1 February 2010
DS422 United States — Anti-Dumping Measures on Shrimp and
Diamond Sawblades from China (Complainant: China)
28 February 2011
DS429 United States — Anti-Dumping Measures on Certain Shrimp
from Viet Nam (Complainant: Viet Nam)
20 February 2012
Additional Cases

34. DS389: European Union —
Certain Measures Affecting
Poultry Meat and Poultry Meat
Products from the United States
(Complainant: United States)
UNITED STATES OF
AMERICA
EUROPEAN UNION
(European Communities )

35. Under the WTO Agreement on the Application of Sanitary and Phytosanitary
(SPS) Measures all measures aimed at protecting human, animal and plant health
must be based on scientific principles, and not discriminate arbitrarily or
unjustifiably.
The ongoing poultry dispute, as well as the earlier beef and GMO disputes,
highlight the significant divergence in understandings of scientific evidence,
scientifically proven risk and the precautionary principle
between the US and EU.

36. Summary of the Dispute
• The United States noticed that the EU had prohibited the
import of poultry treated with any substance unless that
substance has been approved by the EU except water.
• This led to the prohibition of import of poultry that is treated
with chemicals to reduce the production of microbes.
• The EU also maintained a market standard, which defines
“poultry meat” as only “poultry meat suitable for human
consumption, which has not undergone any treatment other
than cold treatment.”

37. United States had requested the EU to approve four Pathogen Reduction
Treatment (PRT), chlorine dioxide, acidified sodium chlorite, trisodium
phosphate, and peroxyacids.2002
By the EU, after six years of delay, rejected the approval of the use of these four PRTs.
The United States objected that though numerous laboratories have tested the chemicals
and cumulatively concluded that importation and consumption of poultry processed with
these four PRTs does not pose a risk to human health, still the EU rejected the proposal.

38. The EU Agricultural and Fisheries Council rejected the same
Commission proposal as SCoFCAH had.
According to the United States. the EC measures appear to be
inconsistent with the EC's WTO obligations, including, but not
limited to, the following:
• SPS Agreement Articles 2.2, 5, and 8, and Annex C(1)
• GATT 1994 Articles X:1 and XI:1
• Agriculture Agreement Article 4.2
• TBT Agreement Article 2
2 JUNE
2008
The EU Standing Committee on Food Chain and Animal Health
(SCoFCAH) rejected the Commission's proposal.
18 DECEMBER
2008

39. The DSB established a panel
Australia, China, Korea and Norway reserved their third-
party rights. Subsequently, Guatemala, New Zealand and
Chinese Taipei reserved their third-party rights.
30 JANUARY
2009
Australia requested to join the consultations
8 OCTOBER
2009
The United States requested the establishment of a
panel.
19 NOVEMBER
2009
DSB deferred the establishment of a panel
23 OCTOBER
2009

40. The U.S. poultry industry supported the WTO
filing and encouraged the Obama
Administration to continue to pursue the case.
In February 2009, the United States and the EU
held consultations.
FEBRUARY
2009

41. The United States has asked the panel to
review whether the EU’s ban on the
import and marketing of poultry meat
and poultry meat products processed
with PRTs judged safe by the United
States and also by European food safety
authorities is consistent with the EU’s
WTO obligations.
Even if the case advances to a
dispute resolution panel, a solution
appears to be elusive. The two sides
maintain widely divergent views not
only on the poultry issue but on some
aspects of their basic approach to food
safety regulation.
The case is still not resolved and is an
ongoing case.

42. CONCLUSION
• It is the place where the member country comes and talks
together and shares their grievance in order to resolve their
problem related to International trade.
• The countries make their decisions through various councils
and committees, whose membership consists of all WTO
members.
• The system helps promote peace, by handling Dispute of
member countries. It provides free trade which cuts the costs
of living and provides more choice of products and qualities
and stimulates economic growth.

43. • The WTO agreements cover goods,
services and intellectual property.
They spell out the principles of
liberalization, and the permitted
exceptions. They include individual
countries’ commitments to lower
customs tariffs and other trade
barriers, and to open and keep open
services markets. They set procedures
for settling disputes. They prescribe
special treatment for developing
countries. They require governments
to make their trade policies transparent
WTO deals with the special needs of
developing countries as two thirds of the
WTO members are developing countries and
they play an increasingly important and active
role in the WTO because of their numbers,
because they are becoming more important in
the global economy, and because they
increasingly look to trade as a vital tool in
their development efforts.

44. WORLD TRADE ORGANISATION
• https://www.wto.org
• https://www.wto.org/english/news_e/news_e.htm
US vs. Mexico (Tuna)
• https://www.wto.org/english/tratop_e/envir_e/edis04_e.htm
• https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds381_e.htm
• http://www1.american.edu/ted/TUNA.HTM
• http://www1.american.edu/ted/TUNA2.HTM
News reference
http://www.reuters.com/article/us-usa-mexico-trade-idUSBRE84F1EY20120516
http://mexiconewsdaily.com/news/mexico-wins-ruling-on-tuna-labels-again/
US vs. European Union (Poultry)
• https://fas.org/sgp/crs/row/R40199.pdf
• https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds389_e.htm
US vs. Asian Countries (Shrimp)
• https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds58_e.htm
• http://www1.american.edu/ted/shrimp3.htm
REFERENCES