•An Introduction to the WTO
An Introduction to the WTO
•1. Teaching Objectives
•2.Module Schedule *
•4. Assessment and Examination
•Attendance and classroom participation:20% •Presentation : 20%
•Final exam: 60%
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
•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?
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
•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.
•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 • 18.104.22.168 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
•22.214.171.124 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
•126.96.36.199 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.
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
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
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.