Overview of The WTO

 Objective of presentation

 WTO: The Beginnings

 Growth in Trade Underway

 A New Multilateral Organization

 The WTO: what is it?

 How does the WTO function?

 Principles of the Trading System

 Provisions for developing countries

 Progressing by packages

 The Round to end all rounds

 The WTO Agreement

 Liberalising trade in goods

 Textiles - back in the mainstream

 Agriculture: fairer markets for all

 Trade remedies

 Standards and procedures

 Administrative procedures

 Services: rules for growth and investment

 Services: the key rules

 Services: Better Access to Markets

 Intellectual Property: protection and enforcement of rights

 TRIPS: what does it cover?

 Settling Disputes: the heart of the system

 Meetings of Ministers

  Singapore Ministerial

 Geneva and Seattle Ministerials

 Doha Ministerial Meeting

 Cancun Ministerial Meeting

 Recent Developments

Principles of the Trading System

Much in common

The various multilateral agreements are sometimes complex and difficult to understand. However, they are all underpinned by the same basic principles. Understanding these principles simplifies the task of comprehending the agreements.

 Non discrimination

The pillar of the rules based multilateral trading system is non-discrimination. But what does this mean in operational terms? How is it interpreted in the various WTO Agreements? In answering these questions, there are two important aspects to consider.

• MFN

First, non discrimination means that countries cannot discriminate between the same goods coming from different trading partners. This principle is known as most-favoured-nation - or MFN - treatment. The name sounds like a contradiction. It suggests some kind of special or favoured treatment for one specific country. But in the WTO, it actually means the opposite. What happens under the WTO Agreement is this. Each member treats all the other members equally as "most-favoured" trading partners. If a country improves the benefits that it gives to one trading partner, it has to give the same "best" treatment to all other WTO members. In this manner, they all remain "most-favoured". This of course has very practical implications. Grant someone a special favour - such as in terms of a lower tariff - then you have to do the same for all other WTO members.

• National treatment

However, in WTO rules, non-discrimination applies not only to goods and services from different supplying countries. It also means that imported and locally-produced goods should be treated equally after the foreign goods have entered the local market. Foreign goods and services can not be discriminated against in the local market just because they are imported. This principle of "national treatment" means giving others the same treatment as one's own nationals. But it also means that charging customs duties on an imported good is not a violation of national treatment even if locally-produced products are not charged an equivalent tax. National treatment only applies after border regulations have been dealt with.

Freer trade

Some of the multilateral trade agreements are also characterized by provisions to ensure that trade is carried out in a progressively freer manner.  In the past, tariff negotiations have been launched periodically under the auspices of the GATT. While industrial tariffs have been greatly reduced over the past 50 years, tariff negotiations remain an important aspect of the Doha Development Agenda. With respect to agricultural products, all non-tariff barriers have been eliminated and substituted by tariffs.  However, these tariffs are in many cases at very high levels and an objective of the current agricultural negotiations is to reduce them. Similarly, as far as services trade is concerned, there is a WTO Agreement which establishes a multilateral framework which provides for the progressive liberalization of trade in services.

Predictable and Transparent

A further characteristic of the multilateral trading system is the importance it assigns to conducting business in a predictable and transparent manner. This means that foreign companies, investors and governments should be confident that trade barriers will not be raised arbitrarily. The WTO has created a wide variety of obligations and notification procedures to ensure that regulations affecting international trade are publicly and freely available. In addition, the WTO Trade Policy Review Mechanism provides the possibility for WTO Members to discuss the trade policies of other countries.

A further important means to ensure security and predictability in market transactions is through the commitment to bind market openness. A "bound" tariff, for example, is a tariff where there is a legal commitment not to raise it beyond the bound level. The binding of a tariff is considered to be an important contribution to market openness and a legitimate contribution to the process of trade liberalisation.