Technical Barriers to Trade in the WTO
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MODULE 1
Introduction to the World Trade Organization
ESTIMATED TIME: 3 hours
OBJECTIVES OF MODULE 1
. Explain the objectives, functions, principles and organizational structure of the WTO, including the role of the TBT Committee;
. introduce the WTO Agreements and describe how the TBT Agreement is integrated in the WTO legal framework;
. briefly explain the WTO Dispute Settlement System and the specific provisions of the TBT on this subject; and . introduce the TBT Committee.
I. INTRODUCTION TO THE WTO
This module explains what the WTO is. It elucidates the objectives and function of the WTO and it also introduces the TBT Agreement. In this Module, in addition to providing information on the TBT and other WTO agreements, there will be reference to GATT, Uruguay Round, Doha Development Agenda and related Negotiations, and the TBT Committee. These terms will be referred to throughout the course.
I.A. WHAT IS THE WTO?
IN BRIEF
WTO is the acronym of the World Trade Organization.
The WTO is the only global international organization dealing with multilateral rules of international trade between nations. At its heart are the many agreements, which were negotiated and signed by governments and ratified in their parliaments.
IN DETAIL
The WTO came into being in 1995, and though legally distinct from the "GATT", they are interrelated. The WTO was created after the culmination of long, intense negotiations, which took place under the auspices of the "GATT" and are known as the "Uruguay Round" of negotiations.
"GATT" means General Agreement on Tariffs and Trade. Formally, the GATT (1947-1994) was not an international organization but simply an international agreement, concluded in 1947. It contained rules and obligations that governed the trade in goods for almost fifty years between the Member nations party to the agreement (called "The Contracting Parties"). However, the Secretariat of the GATT took up many responsibilities throughout the years, which lead to the GATT being called a de facto international organization.
So while the WTO is still young, the multilateral trading system, which was originally set up under the GATT, is well over 50 years old.
IF YOU WANT TO KNOW MORE ...
THE GATT (GENERAL AGREEMENT ON TARIFFS AND TRADE)
From 1948 to 1994, GATT provided the rules for much of world trade. Although it appeared well established, during its 47 years it was a provisional agreement and organization.
The GATT developed a multilateral trading system through a series of trade negotiations or rounds. The early rounds dealt mainly with tariff reductions on goods, but later negotiations included other areas such
2 as anti-dumping and non-tariff measures. The last round — the 1986-94 Uruguay Round — led to the creation of the WTO in 1995.
The project to establish a multilateral trading system to negotiate lower customs duty rates and other trade barriers and to stimulate expansion in world trade originated in the 1940s.
The original Project involved a dual track approach:
(1) Creation of the International Trade Organization ("ITO");
(2) Launching of multilateral tariff negotiations; and drafting of clauses of obligations relating to tariffs in the "General Agreement on Tariffs and Trade" ("GATT").
The GATT Agreement was adopted, but the ITO was never created. However, the Interim Commission for the International Trade Organization ("ICITO") was established to serve as Secretariat to the GATT.
If you want to know more about the GATT History, check the slideshow: Multilateral Trading System: 50 years of achievement.
As mentioned, from 1947 to 1994, Contracting Parties organized eight rounds of negotiations.
Rounds of trade negotiations
Year Place/name Subjects covered Countries
1947 Geneva Tariffs 23
1949 Annecy Tariffs 13
1951 Torquay Tariffs 38
1956 Geneva Tariffs 26
1960-1961 Geneva, Dillon Round Tariffs 26
1964-1967 Geneva, Kennedy Round Tariffs and anti-dumping measures 62
1973-1979 Geneva, Tokyo Round Tariffs, non-tariff measures, "framework" 102 agreements
1986-1994 Geneva, Uruguay Round Tariffs, non-tariff measures, rules, 123 services, intellectual property, dispute settlement, textiles, agriculture, creation of WTO, etc
Table 1: GATT Rounds of negotiations
3 The major Rounds were:
The Kennedy Round (1964-1967):
substantial reduction of tariff barriers.
The Tokyo Round (1973-1979):
first negotiations on non-tariff barriers;
plurilateral codes; and
the enabling clause (the first major decision on differential treatment and non-reciprocity for developing countries).
The Uruguay Round (1986-1994):
creation of the WTO;
transformation of Tokyo Round plurilateral codes into multilateral agreements;
strengthened dispute settlement system; and
incorporation of the new agreements on trade in services and trade-related aspects of intellectual property rights which considerably broadened the scope of the multilateral trade system.
Participants in the Uruguay Round of Multilateral Trade Negotiations concluded the Round by adopting the "Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations" (the " Final Act"). The Final Act includes the "Marrakesh Agreement Establishing the World Trade Organization" (the " WTO Agreement") and its four Annexes (Annexes 1 (1A, 1B, 1C); 2; 3 and 4).
The WTO Agreement is thus the constitutive agreement which established a new organizational body, the World Trade Organization (the "WTO"). The WTO is in charge of administering the Uruguay Round Agreements.
I.B. OBJECTIVES OF THE WTO
IN BRIEF
The Preamble to the Marrakesh Agreement establishing the WTO encapsulates its objectives, which are to improve the welfare of the peoples of its Member countries (standard of living, employment, income, etc.). The expansion of the production and trade of goods and services – or free trade - is the means chose by Members to achieve these objectives, through negotiations leading to trade liberalization or by "entering into reciprocal and mutually advantageous arrangements" as mentioned in the text of the GATT 1947.
This objective should be attained in accordance with sustainable development and with due consideration of the development needs of developing countries.
4 IN DETAIL
In the Preamble to the Marrakesh Agreement establishing the WTO ("the WTO Agreement"), the parties to the Agreement recognize certain objectives they wish to attain through the multilateral trading system:
raise living standards;
ensure full employment;
ensure a large and steadily growing volume of real income and effective demand; and
expand the production of and trade in, goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development.
The Preamble of the Agreement also recognizes the need for "positive efforts to ensure that developing countries, and especially the least-developed among them, secure a share in the growth in international trade commensurate with … their economic development".
I.C. FUNCTIONS OF THE WTO
IN BRIEF
The main functions of the WTO are to:
1. Administer trade agreements;
2. Serve as a forum for trade negotiations;
3. Settle trade disputes;
4. Review Member's trade policies; and
5. Cooperate with other international organizations.
IN DETAIL
Article III of the WTO Agreement expounds the functions of the WTO. Paragraphs 1-2 refer to the role of the WTO of providing a permanent institutional forum for trade negotiations among its Members. These negotiations may be on subjects already covered under the WTO agreements or in respect of "new issues" to be disciplined by the WTO.
Paragraph 3 of Article III of the WTO Agreement obliges the WTO to administer the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU") in Annex 2 of the WTO Agreement. It refers to the role of the WTO as a forum for the settlement of disputes between its Members in accordance with the disciplines and procedures elaborated in the Dispute Settlement Understanding. When Members are unable to reach a mutually acceptable solution to a dispute arising under one of the agreements covered by the DSU, they may have recourse to the Dispute Settlement Procedure.
5 Paragraph 4 of Article III of the WTO Agreement obliges the WTO to administer the Trade Policy Review Mechanism ("TPRM") provided for in Annex 3 to the WTO Agreement. This is a mechanism to ensure "surveillance" of national trade policies, by which WTO members are reviewed, the frequency of each country's review varying according to its share of world trade.
This function underscores the role of the WTO in the transparency mechanism designed by Members during the Uruguay Round. The TPRM was one of the few elements of the WTO Agreement that formed part of the "Early Harvest" realized before the Uruguay Round ended, i.e. when at the "Mid-Term Review" Ministerial Meeting, held in Montreal in 1988, GATT Contracting Parties agreed that certain results of the negotiations, on which a clear consensus already existed, would enter into force immediately then on a provisional basis.
Finally, the final paragraph of Article III of the WTO Agreement, paragraph 5, identifies one aspect that Members have to consider when they enter into negotiations to design an international regulatory framework: they must cooperate with other multilateral agencies.
On that which relates to TBT matters, the WTO cooperates with relevant international standardizing bodies, both public and private. As we are going to learn in Module 6, there are many organizations whose work is related to technical regulations, standards and conformity assessment procedures (which are the measures within the scope of the TBT Agreement).
TIP
The WTO rights and obligations constitute the Multilateral Trading System (also referred to as "MTS") which regulates and affects most international trade transactions.
Other organizations and agreements also affect trade. For example, regulations of the International Monetary Fund ("IMF") influence how countries trade, as its work is related to the regulation of currency rates and balance of payments.
EXERCISES:
1. How are Members of the WTO to achieve the objectives of the organization (improve the welfare of the peoples of its Member countries standard of living, employment, income, etc)?
2. What are some of the achievements of the Uruguay Round?
3. What is the Final Act?
6 I.D. WTO ORGANIZATIONAL STRUCTURE
WTO Members established a working structure for the WTO to allow them to monitor the implementation and the development of the WTO. This shown in the chart below:
Figure 1: WTO organization chart
I.D.1. THE MINISTERIAL CONFERENCE
The Ministerial Conference is the highest authority in the WTO. Its sessions must take place at least once every two years. The Ministerial Conference can take decisions on all matters under all multilateral trade agreements.
7 I.D.2. THE GENERAL COUNCIL
The General Council constitutes the second tier in the WTO Structure. It comprises representatives from all Member countries, usually Ambassadors/Permanent Representatives based in Geneva. It meets regularly (approximately once a month) to adopt Decisions, mostly on behalf of the Ministerial Conference when the Conference is not in session.
The General Council has authority over the Trade Negotiations Committee ("TNC"), which is in charge of the negotiations mandated by the Doha Development Agenda. The General Council also meets as:
The Trade Policy Review Body ("TPRB"), with its own Chairperson, to carry out trade policy reviews as mandated by the Trade Policy Review Mechanism (Annex 3 of the WTO Agreement).
The Dispute Settlement Body ("DSB"), with its own Chairperson, to administer the Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU").
The DSB has the authority to establish panels on an ad hoc basis, at the request of a Member (or Members). It is responsible for adopting Panel and Appellate Body Reports, overseeing the implementation of rulings and recommendations, and authorizing the suspension of concessions and other obligations under the agreements for which disputes can be settled by the DSU - the "covered agreements". The DSB also appoints persons to serve on the Appellate Body.
When adopted by the DSB, the Panel Report as upheld, amended, or reversed by the Appellate Body becomes binding on the disputing Members.
I.D.3. THE COUNCILS & SUBSIDIARY BODIES
The Councils can be described as subsidiary bodies to the General Council. They are composed of all WTO Members. There are three:
The Council for Trade in Goods (the "Goods Council") oversees all the issues related to the Agreements on trade in goods.
The Council for Trade in Services (the "GATS Council") oversees all issues related to the GATS Agreement.
The Council for Trade-Related Aspects of Intellectual Property Rights (the "TRIPS Council") administers the TRIPS Agreement.
The Goods and Services Councils have subsidiary bodies.
The Goods Council has 11 committees working on subjects covered on the specific agreements on goods (such as technical barriers to trade, agriculture, market access, subsidies, anti-dumping measures, etc.). All of these committees are composed of all Members.
Subsidiary bodies of the Services Council deal with financial services, domestic regulations, GATS rules, and specific commitments. This Council does not have a permanently fixed number of subsidiary bodies. For example, the Negotiating Group on Basic Telecommunications was dissolved in February 1997 when its work ended.
8 Several other bodies, which focus on specific issues, report to the General Council. They are usually called Committees, Working Groups or Working Parties; they are:
Committee on Trade and Development ("CTD");
Committee on Trade and Environment ("CTE");
Committee on Regional Trade Agreements ("CRTA");
Committee on Balance-of-Payment Restrictions ("BOP Committee"); and
Committee on Budget, Finance and Administration ("CBFA").
Working Parties on Accession;
Working Group on Trade, Debt and Finance;
Working Group on Trade and Technology Transfer.
Besides these, there is another important organ which responds directly to the General Council: The Trade Negotiations Committee (TNC). It was set up by the Doha Declaration, which in turn assigned it to create subsidiary negotiating bodies to handle negotiations for enumerated (mandated) topics. Its chairman is Mr. Pascal Lamy, presently the WTO Director-General.
Its subsidiary bodies include the Special Sessions of various Committees that currently carry a mandate to negotiate (such as Agriculture, Trade and Environment, Subsidies, etc). These Special Sessions have different Chairmen from those of the Committee Regular Sessions (the latter submitted to the Council for Trade in Goods).
Remember that the TBT Committee, which works under the Goods Council, does not have Special Sessions meetings linked to the Doha Development Agenda negotiations.
EXERCISES:
4. Please arrange the following WTO bodies in hierarchical order:
(a) General Council
(b) Committee on Technical Barriers to Trade
(c) Council for Trade in Goods
(d) Ministerial Conference
5. Please state the function of the following WTO bodies:
(a) Ministerial Conference
(b) General Council
(c) Council for Trade in Goods
(d) Committee on Technical Barriers to Trade
9 I.E. DECISION-MAKING IN THE WTO
CONSENSUS VERSUS ...
The WTO is a member-driven, consensus-based organization. Consensus is defined in Article IX ( Footnote 1) of the WTO Agreement, which states:
"The Body concerned shall be deemed to have decided by consensus on a matter submitted for its consideration, if no Member present at the meeting when the decision is taken, formally objects to the proposed decision."
VOTING
Where consensus is not possible, the WTO Agreement permits voting — a vote being won by a tally of the majority of votes cast, and based on "one country, one vote". The WTO Agreement envisages voting in four specific situations:
to adopt an interpretation of any of a multilateral trade agreements, requiring a three-quarters majority of WTO Members;
to waive an obligation imposed on a Member by a multilateral agreement, requiring a three-quarters majority at a the Ministerial Conference;
to take a decision to amend provisions of the multilateral agreements, requiring all Members or a two- thirds majority (depending on the provision of the agreement being voted upon). However, the amendments only apply to WTO Members that accept them;
to take a decision to admit a new Member, requiring a two-thirds majority at a Ministerial Conference or at the General Council in between conferences.
Voting is not possible in all Committees. The SPS Agreement, for example, explicitly states that the SPS Committee shall reach its decisions by consensus.
FORMALS AND INFORMALS
Important breakthroughs are rarely made in formal WTO meetings, or in the higher level Councils. Since decisions are generally made by consensus, without voting, WTO informal consultations play a vital role in bringing the diverse Membership to an agreement.
One tier below the formal meetings is informal meetings. Informal meetings may also include the full membership, but permit more frank discussions, off the record. Informal meetings can be held including, for example, only Heads of Delegations. Issues that are difficult are easier to discuss in smaller groups. A recent practice is the attempt to forge a compromise by the chairperson of a negotiating group, through consultations with delegations in twos or threes, or in groups of 20-30 (of the most interested delegations in the particular issue at hand).
10 These smaller meetings have to be handled with sensitivity. The key is to ensure that everyone is kept informed even if they are not in a particular consultation or meeting (the process must be "transparent"), and that they have an opportunity to participate or to provide input (it must be "inclusive").
Some meetings take place in the "Green Room". The "Green Room" is a phrase taken from the informal name of the Director-General's conference room. The term refers to meetings of 20-40 delegations. These meetings can be called by a committee chairperson as well as by the Director-General, and can take place elsewhere, such as at Ministerial Conferences.
In the past, delegations have sometimes felt that Green Room meetings could lead to compromises being made without their input or consent. Accordingly, measures are taken to ensure that the process is handled correctly, with regular reports submitted to the full membership. In the end, decisions are taken by all Members by consensus.
The negotiations on market access also involve small groups, but for a completely different reason. The outcome is a multilateral package of individual countries' commitments, which are the result of numerous informal bilateral bargaining sessions, and in the interest of individual countries (examples are the tariff, and market access negotiations on trade in services).
Consequently, informal consultations play a vital role in facilitating consensus, but they do not appear in organizational charts because they are informal. However, informal consultations are not separate from formal meetings. They are necessary to facilitate formal decisions in the Councils and Committees. Nor are the formal meetings unimportant. Formal meetings are the forums for exchanging views, putting countries' positions on the record, and ultimately confirming decisions. The art of achieving agreement among all WTO Members is to strike an appropriate balance, so that a breakthrough achieved among only a few countries is acceptable to the rest of the membership.
These formal and informal meetings form the basis of negotiations in the WTO, and often of the advancement on difficult issues in the regular Committees.
11 II. THE WTO AGREEMENTS
You have seen reference made above to the WTO agreements. What are these agreements?
IN BRIEF
Most of the WTO agreements are the result of the 1986–94 Uruguay Round negotiations, signed at the Marrakesh Ministerial Meeting in April 1994. There are about 60 Agreements and Decisions totalling 550 pages. It also included a major revision of the original GATT text. (Negotiations since then have produced additional legal texts such as the Information Technology Agreement, Services and Accession Protocols).
The Final Act signed in Marrakesh in 1994 is like a cover note. Everything else is attached to this. Foremost is the Agreement Establishing the WTO (the "WTO Agreement"), which serves as an umbrella agreement. Annexed to the Agreement Establishing the WTO are the Agreements on Goods, Services and Intellectual Property, Dispute Settlement, Trade Policy Review Mechanism and the Plurilateral Agreements. The Schedules of Commitments also form part of the Uruguay Round agreements. These schedules contain the commitments made by individual WTO members allowing specific foreign products or service-providers access to their markets. In the print version these schedules comprise about 30,000 pages for all WTO Members.
The ensemble of these agreements are often called the "WTO's Trade Rules", or the "WTO Law".
In other words:
The agreements include individual countries' commitments to lower customs tariffs and other trade barriers, to open services markets and keep them open, and to protect intellectual property rights.
The agreements set out procedures for settling disputes.
The agreements prescribe special treatment for developing countries.
The agreements require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted, and through regular reports by the secretariat on countries' trade policies.
12 In a nutshell
The basic structure of the WTO agreements: how the six main areas fit together — the umbrella WTO Agreement, goods, services, intellectual property, dispute settlement, trade policy reviews and the plurilateral agreements.
Umbrella AGREEMENT ESTABLISHING WTO
Goods (Annex 1A) Services (Annex 1B) Intellectual Property (Annex 1C)
Basic Rules GATT GATS TRIPS
Additional details Other goods agreements Services annexes 2 and annexes 1
Market access Countries' schedules of Countries' schedules of commitments commitments commitments(and MFN exemptions)
Dispute settlement DISPUTE SETTLEMENT ( Annex 2)
Transparency TRADE POLICY REVIEWS (Annex 3)
Plurilateral commitments Plurilateral Agreements (Annex 4)
Table 2: Basic structure of the WTO Agreements
TIP
If you click on the hyperlinks, you will be able to read a brief summary about the Agreements.
IF YOU WANT TO KNOW MORE ...
For more information on the GATS, there is a self-training module on the WTO site at the following address: http://www.wto.org/english/tratop_e/serv_e/cbt_course_e/signin_e.htm
1 The Agreements that disciplines the trade in Goods (Annex 1A) are the: General Agreement on Tariffs and Trade (GATT 1994); Agreement on Agriculture; Agreement on Sanitary and Phytosanitary Measures; Agreement on Textiles and Clothing (ATC, terminated on 1 January 2005); Agreement on Technical Barriers to Trade; Agreement on Trade Related Investment Measures; Agreement on Anti-dumping; Agreement on Customs Valuation; Agreement on Preshipment Inspection; Agreement on Rules of Origin; Agreement on Import Licensing; Agreement on Subsidies and Countervailing Measures; Agreement on Safeguards.
2 The Agreement that disciplines the trade in Services (Annex 1B), is the General Agreement on Trade in Services. This Agreement has several annexes: Annex on Article II Exemptions; Annex on Movement of Natural Persons Supplying Services under the Agreement; Annex on Air Transport Services; Annex on Financial Services and Second Annex on Financial Services; Annex on Telecommunications and Annex on Negotiations on Basic Telecommunications; Annex on Negotiations on Maritime Transport Services.
13 For more information on the DSU, there is a self-training module available on the WTO site at the following address: http://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/signin_e.htm
IN DETAIL
Let us take a closer look at the structure of the WTO Agreement, with a view to better understand how the TBT Agreement is integrated into the WTO legal framework.
The Marrakesh Agreement establishing the World Trade Organization (the WTO Agreement) includes provisions on establishment, scope, functions and structure of the WTO. It defines the WTO relationship with other organizations, its secretariat, budget and contributions, legal status, and decision-making and amendment procedures (including special voting procedures). Additionally, it presents information on the definition of original Members, accession, non-application, acceptance, entry into force and deposit, denunciation and final provisions.
The WTO Agreement has four Annexes – Annexes 1, 2, 3 and 4.
Annexes 1, 2, and 3 are termed "Multilateral Trade Agreements".
Annex 4 is termed "Plurilateral Trade Agreements".
Note
Multilateral Agreements are agreements signed by all Members and therefore binding on all WTO Members.
Plurilateral Agreements bind only those Members party to the agreement.
The Multilateral Trade Agreements (Annex 1, 2, 3) are applicable to all Members and as such have to be complied with simultaneously, without the possibility, for the Member, of choosing just this or that agreement to be bound by. This is the "single undertaking" principle, which is further explained below.
WHAT IS THE SINGLE UNDERTAKING?
Agreements related to GATT 1947 were negotiated during negotiating rounds prior to the Uruguay Round. In particular, some agreements on non-tariff barriers were negotiated during the Tokyo Round (1973-1979). However, these agreements were not adopted by all GATT Contracting Parties; they applied only to those countries who agreed to be bound by them. This is what was called "GATT à la carte".
In the Uruguay Round, a different approach was adopted - it was decided that the multilateral agreements negotiated were to be accepted as a whole. The General Agreement on Tariffs and Trade, the Agreement on Technical Barriers to Trade, the Agreement on Agriculture, the Agreement on Trade-Related Aspects of Intellectual Property Rights, the General Agreement on Trade in Services, as well as most of the other agreements negotiated during the Uruguay Round are part of this "single undertaking".
However, there are four plurilateral trade agreements (Uruguay Round Agreements) that bind only those Members who negotiated and accepted to be bound by each agreement. These are the Agreement on Trade in
14 Civil Aircraft, the Agreement on Government Procurement, the International Dairy Agreement and the International Bovine Meat Agreement. The latter two were terminated at the end of 1997.
EXERCISES:
6. What is the WTO Agreement and what is covered by its annexes?
15 III. DISPUTE SETTLEMENT
The task of ensuring that all Members live up to their commitments, and that there is a common understanding of the nature of those commitments, is a central part of the work of the WTO. It is two-fold and involves:
the broad multilateral review and transparency aspect; and
the aspect relating to individualised disputes, arisen out of diverging interpretations of WTO obligations by Members.
Thus, the dispute settlement not only ensures security and predictability to the multilateral trading system, but is also concerned with situations where a Member seeks a remedy for (a perceived) damage to its trade interests caused by the actions/inaction of other Member/s.
To sum up, the system serves to preserve the Members' rights and obligations under the WTO Agreements.
The Dispute Settlement Understanding (DSU) provides one set of rules to cover disputes that arise under any of the Agreements to which the DSU applies (called "the covered agreements" and enumerated in Appendix 1 of the DSU). These include the WTO Agreement, the GATT 1994 and all the Agreements on trade in goods attached to it, the GATS and the TRIPS Agreements. Thus, it includes the TBT Agreement.
In contrast to the old GATT dispute settlement arrangement, the new rules are more detailed and provide for deadlines and approval procedures that speed up the dispute settlement process, thereby preventing undue delays in the settlement of disputes.
Panels and the Appellate Body are in charge of adjudicating disputes between Members. Panels are composed of three, and exceptionally five, experts selected on an ad hoc basis. The Appellate Body is a permanent group of seven experts in trade issues and trade law, in charge of reviewing the legal aspects of the reports issued by panels.
Reports by panels and the Appellate Body must be adopted by the Dispute Settlement Body. Perhaps the most important difference between the GATT and WTO dispute settlement rules is the change introduced in the decision-making procedures. Under the GATT, dispute settlement decisions depended on the consensus agreement of Contracting Parties. If a party to a dispute was unwilling to have a panel established, or objected to its membership or terms of reference, or did not accept the Panel's conclusions, it could "block" a consensus being formed on any of those issues. In the absence of consensus, no action could be taken even where a determination was made in a Contracting Party's favour.
In the DSU the consensus requirement is reversed and a panel report is adopted "unless there is a consensus not to adopt it", i.e. all Members are against the adoption. This is called the negative consensus rule.
Furthermore, the DSB has the authority to:
establish panels;
adopt panel and Appellate Body reports;
maintain the surveillance of the implementation of rulings and recommendations made by the panels and the Appellate Body; and
authorize the suspension of obligations under the covered agreements.
16 a. HOW LONG TO SETTLE A DISPUTE?
These approximate periods for each stage of a dispute settlement procedure are target figures — the agreement is flexible. In addition the countries can settle their dispute themselves at any stage. Totals are also approximate.
60 days Consultations, mediation, etc
45 days Panel set up and panellists appointed
6 months Final panel report to parties
3 weeks Final panel report to WTO members
60 days Dispute Settlement Body adopts report (if no appeal)
Total = 1 year (without appeal)
60-90 days Appeals report
30 days Dispute Settlement Body adopts appeals report
Total = 1y 3m (with appeal)
Table 3: WTO dispute settlement timeline
Finally, in the DSU, the priority is to settle disputes through consultations. A majority of disputes so far in the WTO (about two-thirds) have not proceeded beyond consultations, either because a satisfactory settlement was found, or because the complainant decided not to pursue the matter further. This shows that consultations are often an effective means of dispute resolution in the WTO and that Members are cautions about not misusing the instruments of adjudication and enforcement provided by the dispute settlement system.
Another important set of principles, appropriately entitled "Strengthening of the Multilateral System", is set out under Article 23 of the DSU. This prohibits unilateral actions by Members to redress what they see as violations of obligations, or the nullification or impairment of benefits, under any of the WTO agreements. Members are required to use the WTO dispute settlement procedures, which includes consultations throughout the whole process, to settle grievances related to covered agreements.
III.A.DISPUTE SETTLEMENT IN THE TBT AGREEMENT
Pursuant to Article 14.1, the TBT Agreement is subject to the dispute settlement procedures contained in Articles XXII and XXIII of GATT 1994, as elaborated and applied by the WTO's Dispute Settlement Understanding (DSU).
Some WTO covered agreements contain "special and additional rules and procedures" on dispute settlement ( Article 1.2 and Appendix 2 of the DSU). The TBT Agreement is one of them. Specific rules and procedures designed to deal with the particularities of disputes under the TBT Agreement take precedence over the rules in the DSU "where the provision of the DSU and the special or additional rules and procedures of a covered agreement cannot be read as complementing each other" (Article 1.2 of the DSU).
17 TBT-specific provisions on dispute settlement are contained in Articles 14.2 to 14.4 and Annex 2 (Technical Expert Groups) of the TBT Agreement. These norms relate to the establishment of a technical expert group and to dispute settlement in relation to the activities of entities other than central government bodies, for which Members may also be held responsible. So far, these provisions have not been used.
TECHNICAL EXPERT GROUP
Article 14.2 of the TBT Agreement specifies that, at the request of a party to a dispute, or at its own initiative, a Panel may establish a technical expert group to assist in questions of a technical nature with a view to submitting a report to the panel (see Annex 2, paragraph 6).
Article 14.2 reads:
At the request of a party to a dispute, or at its own initiative, a panel may establish a technical expert group to assist in questions of a technical nature, requiring detailed consideration by experts.
Procedures governing technical expert groups are set out in Annex 2 of the Agreement, which provides that such groups are under the panel's authority.
CASES RELATED TO THE TBT AGREEMENT
Two WTO dispute settlement cases are directly related to the TBT Agreement: the EC – Asbestos (European Communities - Measures Affecting Asbestos and Products Containing Asbestos, WT/DS135) case brought by Canada in 1998, and the EC – Sardines (European Communities - Trade Description of Sardines WT/DS231) case brought by Peru in 2001. However, only the latter case was decided on the basis of the TBT Agreement; the EC – Asbestos decision examined the applicability of the TBT Agreement but based its decision on the analysis of the GATT 1994.
The two dispute cases have served to clarify several major issues relating to the meaning of terms used in the TBT Agreement. For instance, they have clarified the definition of a "technical regulation"; dealt with the issue of the temporal application of the Agreement; and provided guidance on questions regarding "international standards" and "relevant international standards".
18 IV. TBT-RELATED WORK IN THE WTO
IN BRIEF
TBT-related work in the WTO takes place in the Committee on Technical Barriers to Trade (the "TBT Committee"), which responds directly to the Council for Trade in Goods, and is open to all members of the WTO. The TBT Committee affords Members:
the opportunity to consult on any matters relating to the operation of the TBT Agreement ( Article 13.1);
the opportunity to consult on any matters relating to the furtherance of its objectives ( Article 13.1); and
the carrying out of such responsibilities as assigned to it under the TBT Agreement or the WTO Members ( Article 13.1).
Work in the TBT Committee
The TBT Committee meets in "regular sessions" (in this case, regular meetings). There are no "special sessions" for negotiations in the TBT Committee, although special meetings on specific issues can be convened. The TBT Committee meets as necessary, but not less than once a year. In practice, it usually meets three to four times a year.
RECALL
SPECIAL SESSIONS
Special sessions are envisaged for negotiations established by a mandate under the Doha Development Agenda. There is no mandate for negotiations on the TBT Agreement under the DDA, and therefore, no Special Sessions for the TBT Committee were established.
19 WHO CAN ATTEND THE MEETINGS?
The meetings of the TBT Committee are open to all WTO Members and other governments with observer status in WTO bodies. In addition, certain international intergovernmental organizations have been granted observer status in the Committee either on a permanent basis, or on an ad hoc meeting by-meeting basis.
Intergovernmental Organisations with Observer Status in the TBT Committee (as of July 2006)
African, Caribbean and Pacific Group (ACP)
European Free Trade Association (EFTA)
United Nations Food and Agriculture Organization (FAO)
International Electrotechnical Commission (IEC)
International Monetary Fund (IMF)
International Organization for Standardization (ISO)
International Organization for Legal Metrology (OILM)
International Trade Centre UNCTAD/WTO (ITC)
Latin American Integration Association (ALADI)
World Organisation for Animal Health
Organization for Economic Cooperation and Development (OECD)
United Nations Conference on Trade and Development (UNCTAD)
United Nations Economic Commission for Europe (UNECE)
United Nations Industrial Development Organization (UNIDO)
World Health Organization (WHO)
WHO/FAO Codex Alimentarius Commission (Codex)
World Bank
We are going to further explore some of these Observer organisations, in particular the work of international standardizing bodies, when we talk about harmonization and the use of international standards (Module 6), and technical assistance (Module 8).
Regular meetings of the TBT Committee may be composed of a formal and an informal segment. Formal and informal meetings have already been explained in the previous session. Take another look there, if you think it is useful!
Important Note
The TBT Committee has established its rules of procedures to conduct its meetings (see document: G/TBT/1/Rev.8).
20 An official record of the discussions held during formal meetings is prepared by the WTO Secretariat and is made publicly available (See document series: G/TBT/M/XX), while no such records are prepared for informal meetings.
In addition to these regular meetings, the TBT Committee holds workshops on topics of particular interest to Members (for instance, workshops on information exchange, supplier's declaration of conformity, different approaches to conformity assessment, technical assistance, etc.).
Moreover, the TBT Committee is responsible for:
Granting, upon request, specified, time-limited exceptions in whole or in part from obligations under the TBT Agreement, with a view to ensuring that developing country Members are able to comply with the Agreement ( Article 12.8);
periodically examining the special and differential treatment granted to developing country Members on national and international levels ( Article 12.10);
setting up working parties or other bodies as may be appropriate in order to carry out special responsibilities ( Article 13.2);
avoiding unnecessary duplication between its work and that of governments in other technical bodies ( Article 13.3);
annually reviewing the implementation and operation of the TBT Agreement ( Article 15.3); and
reviewing the operation and implementation of the TBT Agreement at the end of each three-year period ( Article 15.4).
Important note
There are common misunderstandings about the role that the WTO plays in standardization. Therefore, it is very important to clarify what the TBT Agreement and the TBT Committee do not do.
What the TBT Committee does not do:
The TBT Committee does not set the technical regulations and standards that Members should apply domestically or internationally.
The TBT Agreement, actually, sets the principles (obligations that a Member must comply with) that a Member should follow while elaborating, adopting and/or enforcing technical regulations, standards and related conformity assessment procedures, for these must be transparent and not hinder the rights of the other WTO Members, so as to bring predictability and stability to the Multilateral Trading System.
In fact, standards and technical regulations are set by the interested Members, through domestic regulation and legislation process, preferably based on international standards. International standards are those set by relevant international standardizing bodies, which can be both private and public bodies. Scientific and regulatory experts from governments and, in some cases, the international community, members of civil society, industries, etc., participate in international standard-setting.
21 The TBT Agreement encourages WTO Members to play a full part, within the limits of their resources, in the preparation of international standards by appropriate international standardizing bodies. This is done with a view to harmonize measures on as wide a basis as possible.
More on the work of the TBT Committee shall be discussed in detail in Module 8, where we will present its work and the current issues before it, especially in the context of the triennial reviews of the Agreement.
EXERCISES:
7. What is the WTO body in charge of Technical Barriers to Trade issues? To whom does it respond?
8. What are the assigned tasks to the TBT Committee? And what does it not do?
22 V. CONCLUSION
OBJECTIVES OF THE WTO
The objective of the WTO stated in the Preamble is to improve the welfare of the people of its Member countries (standard of living, employment, income) by expanding the production of, and trade in, goods and services.
FUNCTIONS OF THE WTO
Facilitate the implementation, administration and operation of the WTO Agreements (including the Plurilateral Agreements), together with furthering their objectives;
Serve as a forum for trade negotiations;
Administer the Dispute Settlement Understanding (DSU);
Administer the Trade Policy Review Mechanism (TPRM); and
Cooperate inter alia with the IMF and the IBRD (World Bank) to achieve coherence in global economic policy making.
STRUCTURE OF THE WTO
Ministerial Conference | General Council (also DSB and TPRB) | Councils for Goods, Services, Intellectual Property | Committees | Sub-Committees
THE WTO AGREEMENT CONTAINS FOUR ANNEXES - ANNEXES 1, 2, 3 AND 4
Annexes 1, 2, and 3 - the "Multilateral Trade Agreements"
Annex 1 is divided into three sections:
Annex 1A (Multilateral Agreements on Trade in Goods)
Annex 1B (General Agreement on Trade in Services)
Annex 1C (Agreement on Trade-Related Aspects of Intellectual Property Rights)
Annex 2 contains the Dispute Settlement Understanding
Annex 3 contains the Trade Policy Review Mechanism
Annex 4 comprises the Plurilateral Trade Agreements, which are only binding on their signatories.
23 THE DISPUTE SETTLEMENT SYSTEM OF THE WTO
The dispute settlement system of the WTO "is a central element in providing security and predictability to the multilateral trading system". It serves to preserve rights and obligations entered into by WTO Members and it is an important tool to ensure that all Members live up to their commitments, and that there is a common understanding of the nature of those commitments.
THE WTO'S DISPUTE SETTLEMENT BODY HAS THE AUTHORITY TO
Establish panels;
adopt panel and Appellate Body reports;
maintain the surveillance of the implementation of rulings and recommendations; and
authorize the suspension of obligations under the covered agreements.
THE TBT COMMITTEE
TBT related work in the WTO takes place in the Committee on Technical Barriers to Trade ("TBT Committee"), which reports directly to the Council for Trade in Goods, and is open to all members of the WTO.
The TBT Committee affords Members the opportunity to consult on any matters relating to the operation of the TBT Agreement or the furtherance of its objectives. It also carries out such responsibilities as assigned to it by the TBT Agreement or WTO Members.
24 PROPOSED ANSWERS:
9. Although the WTO's objectives do not mention trade liberalization as the means to establish free trade between Members, the drafters, nevertheless, considered "substantial reduction of tariffs and other barriers to trade and the elimination of discriminatory treatment in international trade relations" as significant means to achieving its objectives.
A second means to achieve the objectives set in the preamble is the practice of Members of "entering into reciprocal and mutually advantageous arrangements".
10. Some of the achievements of the Uruguay Round are:
(i) creation of the WTO;
(ii) transformation of the plurilateral codes (agreements) from the Tokyo Round into multilateral agreements;
(iii) strengthened dispute settlement system; and
(iv) incorporation of the new agreements on trade in services and trade-related aspects of intellectual property rights.
11. The Final Act (Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations) includes the "Marrakesh Agreement Establishing the World Trade Organization" ("the WTO Agreement") and its Annexes. It was signed in 1994, and is the Agreement which the participants in the Uruguay Round of Multilateral Trade Negotiations adopted to conclude the Round.
12. (a) Ministerial Conference;
(b) General Council;
(c) Council for Trade in Goods;
(d) Committee on Technical Barriers to Trade.
13. The Ministerial Conference is the highest authority of the WTO. It can take decisions on all matters under all multilateral trade agreements. It meets at least once every two years.
Below the Ministerial Conference in rank is the General Council. It takes all decisions on behalf of the Ministerial Conference when the Ministerial Conference is not in session. The General Council meets regularly (in principle, monthly), usually at the Geneva Headquarters, and reports to the Ministerial Conference.
Below the General Council is the Council for Trade in Goods (CTG). It oversees the implementation of the multilateral agreements on trade in goods (Annex 1A of the Marrakesh Agreement), and reports to the General Council.
The Committee on Technical Barriers to Trade is one of several subsidiary bodies of the CTG. It is responsible for discussing matters related to the implementation of specific provisions of one Agreement, the TBT Agreement.
25 All Members participate in the work of all WTO Bodies. However, only the interested Members participate in the work of the Plurilateral Agreements Committees (Trade in Civil Aircraft Committee and Government Procurement Committee).
14. The WTO Agreement is the 1994 Marrakesh Agreement Establishing the WTO. It has four Annexes.
Annex 1 includes the Multilateral Agreements on Trade. It is divided into three sections:
Annex 1A (the Multilateral Agreements on Trade in Goods);
Annex 1B (the General Agreement on Trade in Services); and
Annex 1C (the Agreement on Trade-Related Aspects of Intellectual Property Rights).
Annex 2 contains the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). It is dedicated to rules governing the dispute settlement system in the WTO.
Annex 3 is dedicated to rules governing the Trade Policy Review Mechanism (TPRM) in the WTO.
Annex 4 contains the Plurilateral Trade Agreements.
15. TBT-related work in the WTO takes place in the Committee on Technical Barriers to Trade ("TBT Committee"), which responds directly to the Council for Trade in Goods, and is open to all Members of the WTO. The TBT Committee affords Members the opportunity of consulting on any matters relating to the operation of the TBT Agreement or the furtherance of its objectives. It also carries out such responsibilities as assigned to it under the TBT Agreement or by WTO Members.
16. The TBT Committee is responsible for:
1) Granting, upon request, specified, time-limited exceptions in whole or in part, from obligations under the TBT Agreement, with a view to ensuring that developing country Members are able to comply with the Agreement (Article 12.8);
2) Periodically examining the special and differential treatment granted to developing country Members on national and international levels (Article 12.10);
3) Setting up working parties or other bodies as may be appropriate, in order to carry out special responsibilities (Article 13.2);
4) Avoiding unnecessary duplication between its work and that of governments in other technical bodies (Article 13.3);
5) Annually reviewing the implementation and operation of the TBT Agreement (Article 15.3); and
6) Reviewing the operation and implementation of the TBT Agreement at the end of each three-year period (Article 15.4).
The TBT Committee is not a standardizing body, neither is the WTO. Several international standardizing bodies, which are Observers to the TBT Committee, set international standards with the participation or cooperation of technical and scientific experts.
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