An Introduction to the WTO

By Floyd Allen,2014-07-17 22:58
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An Introduction to the WTO

An Introduction to the WTO

    An Introduction to the WTO

    1. Teaching Objectives

    2.Module Schedule *

    3. Textbook

    4. Assessment and Examination

    Attendance and classroom participation:20% Presentation : 20%

    Final exam: 60%

Contact Means


Mobile: 13360025957

    Chapter I

    A General Introduction

I. Why do nations trade?

    II. Regulation of trade

    III. From the GATT to the WTO

    IV. China and the GATT / WTO

Starting/Warm-up Questions

    1. What is the WTO? What does it do? 2. When did the WTO come into being? 3. What is the GATT?

    4.What is GATT 1947? And what is GATT 1994? 5. Has the GATT stopped functioning? 6. When did China become a Contracting Party of the GATT?

    7. When did China become a Member of the WTO?

Section One

     Why do nations trade?

    1.1 To meet domestic needs.

    1.2. To increase national wealth.


    1.3. To increase job opportunities. 1.4. To increase the general wealth of all nations concerned.

     Adam Smith: Theory of Absolute Advantage; The Wealth of Nations (1776)

     David Ricardo: Theory of Comparative Advantage; On the Principles of Political Economy and

    Taxation (1879)


Example 1

    Country A can produce one widget using one unit of labor.

    Country B can produce one widget using two units of labor.

    Country A has an absolute advantage over Country B in producing widgets.

    Example 2

    England: 100 units of labor

     100 tons of cloth

     120 units of labor

     100 tons of wine Portugal;90 units of labor

     100 tons of cloth

     80 units of labor

     100 tons of wine Section Two

    Regulation of Trade

    2.I Why do countries regulate trade? Mercantilism

     2.1.1 BOP problems.

     2.1.2 Domestic employment situation. 2.1.3 protect domestic industries. 2.1.4 Foreign policy considerations. 2.2 How to regulate trade?

     2.2.1Tariff barriers P. 19 Chapter 5 Functions of tariffs

Collection of revenue

     Revenue tariff

    Implementation of foreign policy Discriminative tariff

    Protection of domestic industries and employment

     Protective tariff

    Retaliation against foreign government‟s trade policies

     Retaliative tariff Types of tariffs

    In terms of functions:

     revenue tariff;

     discriminative tariff;

     protective tariff;

     retaliative tariff


In terms of methods of collection:

     ad valorem duty;

     specific duty ;

     compound duty Explanation of tariff schedule P.26


Harmonized Commodity Description and Coding System (HS) “


    six digits: first two refer to the chapter, the second two designate the heading, the next two are subheadings.

    bound rate of duty:约束税率

    Initial Negotiating Right (INR):初谈权

    2.2.2 Non-tariff barriers: quantitative restrictions such as quotas; embargo; monetary and exchange controls; government procurement policies; performance standards; product specifications; health and safety standards; customs procedures; licensing procedures; documentation requirements; inspection procedures etc.

Section Three

    From the GATT to the WTO

    The Great Depression: Smoot-Hawley Act of 1930, trade war, Reciprocal Trade Agreement Act 1934

     An attempt to build a new international economic structure based on three institutions: The IMF, the World Bank and the ITO

    3.1 The abortion of an ITO

     Havana Charter: the draft for ITO, (signed in Havana) was completed in 1947.

    The ITO, created in Chapter VII of that Charter, was going to be the central organization of the United Nations responsible for co-ordinating the various aspects of international economic co-operation among States.

    The ratification of the ITO ran into trouble.

     The U.S. congress was not favourable to the ITO and did not ratify the ITO charter.

3.2 The GATT

     Tariff concessions

     The negotiations for the GATT were concluded in the autumn of 1947, with the signature of 23 Contracting Parties.

     Protocol of Provisional Application of the General Agreement on Tariffs and Trade

     The GATT entered into force on a provisional basis on 1 January 1948.

Professor Jackson pointed out that,

     "the theory of the GATT was that it would be a specific trade agreement within the broader institutional context of the ITO Charter and that the ITO would furnish the necessary organizational and secretariat support for the GATT" .


3.3 The 8 rounds of multilateral trade negotiations under the auspices of the GATT *

    3.4 The Uruguay Round:


     3.4.1 In the field of trade in goods Tariff concessions

Agricultural products and textiles were brought under the world‟s trading system

     GATT 1994 replaced GATT 1947

    3.4.2 Conclusion of GATS and TRIPs Agreements 3.4.3 Establishment of the WTO

Section Four

     China and the GATT/WTO

    4.1 Original contracting party of the GATT 4.2 Taiwan authorities‟ withdrawal

    4.3 China‟s decision to restore its status as the original contracting party of the GATT

    4.4 Negotiation for the restoration of China‟s status as the original contracting party of the GATT 4.5 Negotiation for China‟s accession to the WTO

On November 11, 2001, China signed the Protocol on Accession of the People‟s Republic of China,

    and became the 143rd member of the WTO.


    1. Understanding the WTO (pdf): Chapter 1 Basics 2. An Introduction to the WTO Agreements: Chapter 1 THANK YOU

Chapter Two

    The WTO Institutional Structure and Its Legal Framework

I. The WTO Institutional Structure

     Article IV of Marrakesh Agreement Establishing the World Trade Organization

    See the diagram *

    The Ministerial Conference

    The General Council (TPRB & DSB)

    Special Committees and Sectorial Councils Subsidiary Committees or working groups under Sectorial Councils

    The Director-General and the Secretariat


II. The WTO Legal Framework

    Article II of the Marrakesh Agreement Establishing the World Trade Organization

     1. Marrakesh Agreement Establishing the WTO/ The WTO Agreement

     2. Annex I A,B & C

     3. Annex II Understanding on Rules and Procedures Governing the Settlement of Disputes

Annex III Trade Policy Review Mechanism

    Annex IV Plurilateral Trade Agreements


    1. If a provision in other agreements conflicts with a provision in the WTO Agreement, the latter prevails.