The WTO at Twenty Challenges and Achievements
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The WTO at Twenty Challenges and achievements The WTO at Twenty Challenges and achievements Contents 3 WTO “widening” – Foreword by WTO more members, Director-General more participation 20 Accessions: building Roberto Azevêdo a 'global' WTO 21 Empowering developing countries 27 1 Conclusion 33 Introduction 06 2 Building a trade organization – strengthening the institutional foundations for global trade cooperation 10 Establishment of the WTO – the building of a permanent institution 11 WTO Secretariat 16 Negotiations in the WTO 16 4 Conclusion 19 WTO “deepening” – reducing barriers and expanding rules 34 Consolidating and expanding tariff commitments 35 Consolidating and expanding the regulatory framework for trade in goods 37 Consolidating and expanding the disciplines on trade in services 45 Modernizing and expanding the reach of disciplines on government procurement 47 Conclusion 49 2 5 Improving transparency – strengthening monitoring, surveillance and consultation 50 Reviewing trade policies to encourage policy dialogue 51 Monitoring trade policies to understand trends and contain protectionism 53 8 Monitoring and Strengthening documenting RTAs 54 outreach – Increasing transparency towards enhanced through notifications 55 engagement 78 Conclusion 58 7 Conclusion 81 Strengthening policy coherence – cooperation with other organizations 68 Expanding policy coherence: Art III.5 and beyond 69 6 Coherence in action 74 Dispute settlement – Conclusion 77 clarifying rules and resolving disputes 60 An accessible dispute settlement system 61 9 Establishing a rules-based Conclusion 82 system for resolving disputes 62 Lessons, issues, and principles from 20 years of WTO case-law 64 Conclusion 67 3 Foreword by WTO Director-General Roberto Azevêdo When the World Trade Organization was launched elimination of all remaining global tariffs. The July 20 years ago it represented more than a reform of 2015 agreement to expand the scope of the WTO the old GATT system. The WTO was seen as the key Information Technology Agreement (ITA) promises pillar of a new kind of global economic order – open, to eliminate tariffs on high tech products which inclusive, cooperative – that was taking shape in represent 7 per cent of global trade – more than the wake of the end of the Cold War. Countries that trade in textiles, apparel, iron and steel combined. were largely closed to the world economy for almost half a century were turning to open markets and Meanwhile the WTO as an institution provides economic integration. Many developing countries, for a key forum for policy dialogue, information decades left behind by the more industrialized, were sharing, and economic cooperation among its beginning a rapid economic catch up. New transport, 161 members – making it an increasingly critical communications, and information technologies pillar of today's system of global governance. were weaving economies more tightly together, reshaping international relations in the process. If Most importantly, the WTO has helped to the GATT was the product of a divided world, the underpin an unprecedented period of widening WTO offered the promise of a more unified one. global growth and development. Since 1995, the developing countries' share of global merchandise So far the WTO has lived up to these trade has grown from 27 per cent to over 43 per expectations. Thirty-three new members have joined cent – and their share of global GDP has risen since 1995, including giants like China and Russia, from 41 per cent to over 53 per cent. Emerging meaning that almost all of the world's economies economies such as China, India, and Brazil have are now part of a single trading system. International become indispensable drivers of the global economy, rules, not power, increasingly govern trade relations, as well as leading voices in the international and conflicts are settled, not in trade wars, but in the economic system. There are many reasons why WTO's dispute settlement system – which serves developing countries have achieved economic as a global trade court. Trade barriers continue to lift-off, but surely none is more important than their fall – to the point where well over half of global trade integration into the global economy – a process is now tariff free – and economies are becoming ever that has depended, in turn, on today's extraordinarily more interconnected. While progress in the Doha open, reliable and secure world trading system. Development Agenda – the latest in a long line of trade 'rounds' – has proved very difficult, a growing This book is intended first and foremost to be list of new WTO agreements – covering everything a reminder of these achievements – achievements from customs reform, to information technology that are sometimes overlooked amid the day-to-day products, to government procurement, to financial challenges of managing an increasingly complex and and telecommunications services – are opening up diverse global trading system. Prepared by the WTO new trade opportunities, in new sectors, often in secretariat, it provides a detailed and factual look at innovative ways. It is estimated that the 2013 WTO the WTO's activities and accomplishments over its first Trade Facilitation Agreement alone could have a twenty years. The WTO's short history is obviously not bigger impact on reducing trade costs than the one of unbroken success – disappointing progress 4 THE wto at twentY FOREWORD in the long-running Doha Round is a lingering and The WTO is ultimately the result, not the high profile reminder. But as the following pages cause, of members' willingness to cooperate on make clear, the WTO's contribution to the world trade. Its creation and subsequent success reflects economy in general, and to development in particular, the growing realization among more and more is much broader than the Doha negotiations, countries that trade opening can lead to growth even as they remain a key element of our work. and development, that agreed rules strengthen, not weaken, sovereignty, and that advancing our national In looking back at the WTO's achievements, interests increasingly depends on advancing our the book also serves as a reminder of how hard we collective interests. As today's global economy grows had to work to make the system what it is today. increasingly open, interdependent and multipolar, it Non-multilateral initiatives will naturally continue to is clear that international trade cooperation, and the blossom, but we must maintain the WTO as a strong world trading system, is becoming more, not less, and comprehensive foundation of global trade. The important. But just because the WTO is important WTO was not the first attempt to create a global does not make it invulnerable. The WTO's first twenty trading system, nor the first time that policy makers years have been successful because of members' aimed to realize the vision of global peace through decisions; whether its next twenty years are as shared prosperity. After the Second World War, the successful will be up to the members as well. international community also saw the building of an open global trading system as essential precursor to building a new post-war international order. But the bold plan to create an International Trade Organization soon fell victim to Cold War rivalries and waning support for internationalism. It was not until the WTO's creation five decades later that the dream of a permanent and global trade organization was realized – making the WTO the first truly Roberto Azevêdo international institution of the post-Cold War era. Director-General 5 1 The headquarters of the WTO in Geneva, Switzerland. 6 THE wto at twentY CHAPTER 1 Introduction The WTO's first 20 years have certainly not been 1947, the WTO now has 161 — a fifth of whom have without challenges. Its Doha Round of trade joined since its launch. With the accession of giants negotiations has made slow progress as WTO like China in 2001, Saudi Arabia in 2005 and Russia members grapple with the tough and complex issues in 2012, all of the world's major economies are now raised by deepening integration. Its dispute settlement part of a single economic system – covering 98 per system is dealing with a growing number of trade cent of global commerce – for the first time. And while conflicts – often involving the biggest trade powers industrialized countries dominated the GATT, developing and the most contentious policy questions – as the countries play a key role in managing the WTO, world's economies become more intertwined. As a shaping its agenda and negotiating its agreements. main locus of global economic coordination, the WTO That the WTO is successfully integrating a fast-rising also finds itself at the centre of growing debates developing world – easily the biggest economic about globalization, development, climate change transformation in history – into an open global economy and many other issues that now transcend national represents one of its most significant achievements. borders – placing the world trading system in the public spotlight as never before. These challenges Consider too the system's success in bringing should not be underestimated. But nor should it be the rule of law to international economic relations. forgotten that they are the result not of the WTO's Now when countries clash over anti-dumping duties or failings but of its successes. Having created an aircraft subsidies, they battle it out, not in destructive unprecedentedly open and integrated world trading trade wars, but in the WTO’s dispute settlement order – the most far-reaching system of global system, its trade court. The WTO has dealt with five economic cooperation in history – the WTO now times as many disputes in 20 years – some 500 faces the often formidable task of managing it. cases – as the GATT in almost 50 years. Use of the system is increasing fastest among developing To appreciate how far the WTO has advanced it countries – a reflection not only of their growing is important to remember where – and why – it began.