WORLD TRADE

ORGANIZATIO
N

WHAT IS WORLD TRADE

ORGANIZATION
TheWorld Trade Organization(WTO) is
anintergovernmental
organizationwhich
regulatesinternational trade. The WTO officially
commenced on 1 January 1995 under theMarrakesh
Agreement,signedby123nationson15April1994

FUNCTIONS
The main functions of WTO are discussed below:
To

implement rules and provisions related to trade policy

reviewmechanism.
To provide a platform to member countries to decide future
strategiesrelatedtotradeandtariff.
To provide facilities for implementation, administration and
operation of multilateral and bilateral agreements of the
worldtrade.
To administer the rules and processes related to dispute
settlement.
Toensuretheoptimumuseofworldresources.
Toassistinternationalorganizationssuchas,IMFandIBRD
for establishing coherence in Universal Economic Policy
determination.

OBJECTIVES:
The important objectives of WTO are:
To improve the standard of living of people in the
membercountries.
To ensure full employment and broad increase in
effectivedemand.
Toenlargeproductionandtradeofgoods.
Toincreasethetradeofservices.

BINDING AND
ENFORCEABLE
COMMITMENTS.
ThetariffcommitmentsmadebyWTOmembersin
a multilateral trade negotiation and on accession
areenumeratedinaschedule(list)ofconcessions.
These schedules establish "ceiling bindings": a
country can change its bindings, but only after
negotiatingwithitstradingpartners.

TRANSPARENCY.
The WTO members are required to publish their
trade regulations, to maintain institutions allowing
for the review of administrative decisions affecting
trade, to respond to requests for information by
other members, and to notify changes in trade
policiestotheWTO.

SAFETY VALVE :
In specific circumstances, governments are able
torestrict trade. The WTO's agreements permit
members to take measures to protect not only the
environment but also public health, animal health
andplanthealth.

POLICY REVIEW:

The Trade Policy Review Mechanisms purpose is to

improve transparency, to create a greater understanding
ofthepoliciesthatcountriesareadoptingandtoassess
their impact. Many members also see the reviews as
constructivefeedbackontheirpolicies.
All WTO members must undergo periodic scrutiny, each
review containing reports by the country concerned and
theWTOSecretariat.

DISPUTES
Whatcausesadispute?
When a member country of the WTO believes
another member country is violating an
agreement or a commitment that has been set
withintheWTO.
Agreements are those negotiated under the
RoundsofGATT/WTO
Howisitresolved?
The Dispute Settlement Body composed of
member governments (all WTO members) work
togethertosetanagreement.

STEPS (& LENGTHS) OF

SETTLEMENT

Consultation(60days)
ThePanel(45days/6months)
FinalReport(3weeks)
ReportbecomesaRuling(60days)

Eithersidecanappealapanelsruling.

5.AppealsReport(60-90days)
6.AppealsReportbecomesaRuling(30days)

UNITED STATES OF AMERICA AND

THE WTO
The United States of America has been a WTO
member since 1January1995 and a member of
GATTsince1January1948.

TRADE BENEFITS AMERICAS

WORKERS & FAMILIES
Americanbusinesses,farmersandworkingpeople
to find new opportunities, create new jobs, and
raisefamilylivingstandards.

PROMOTING U.S. EXPORTS AND JOBS

WTOruleslowertradebarriersabroadandhelpus
export more of our goods and services to other
countries.
On average, every billion dollars of goods and
services exports results in thousands of jobs here
athome.
Between 1994 and 1998, 1.3 million new jobs
supported by exports of goods and services have
beencreatedintheUnitedStates.

ARTICLE V: FREEDOM OF TRANSIT

Goods (including baggage), and also vessels and other means of
transport, shall be deemed to be in transit across the territory of a
contracting party when the passage across such territory, with or
without transshipment, warehousing, breaking bulk, or change in the
mode of transport, is only a portion of a complete journey beginning and
terminating beyond the frontier of the contracting party across whose
territory the traffic passes. Traffic of this nature is termed in this article
traffic in transit.
All charges and regulations imposed by contracting parties on traffic in
transit to or from the territories of other contracting parties shall be
reasonable, having regard to the conditions of the traffic.
With respect to all charges, regulations and formalities in connection
with transit, each contracting party shall accord to traffic in transit to or
from the territory of any other contracting party treatment no less
favourable than the treatment accorded to traffic in transit to or from any
third country.
The provisions of this Article shall not apply to the operation of aircraft
in transit, but shall apply to air transit of goods (including baggage).

CONT.

There shall be freedom of transit through the

territory of each contracting party, via the routes
most convenient for international transit, for
traffic in transit to or from the territory of other
contracting parties. No distinction shall be made
which is based on the flag of vessels, the place of
origin, departure, entry, exit or destination, or on
any circumstances relating to the ownership of
goods, of vessels or of other means of transport.

CASE 1

UNITED STATES ANTI-DUMPING

ACT OF 1916
Short title:

US 1916 Act (Japan)

Complainant:

Japan

Respondent:

United States

Third Parties:

European Communities; India

Agreements cited:

Anti-dumping (Article VI of GATT

(as cited in request for consultations)

1994): Art.1,2,3,4,5,9,11,18.1,18.4
GATT 1994: Art.III,III:4,VI,XI
Agreement Establishing the World
Trade Organization: Art.XVI:4

Request for Consultationsreceived: 10February1999

Panel Reportcirculated:

29May2000

Appellate Body Reportcirculated:

28August2000

Article21.3(c) Arbitration Report

28February2001

circulated:

SUMMARY OF THE DISPUTE TO

DATE
On 10 February 1999, Japan requested consultations with the
United States in respect of the US Anti-Dumping Act of 1916,
15 U.S.C. 72 (1994), (US 1916 Act). Japan alleged that the
US 1916 Act stipulates that the importation or sale of
imported goods within the US market in certain circumstances
is unlawful, constituting a criminal offence and inviting civil
liability. Japan further alleged that judicial decisions under
the US 1916 Act are made without the procedural safeguards
provided for in the Anti-Dumping Agreement. Japan stated
that a court action had been brought under the US 1916 Act
against affiliates of Japanese companies. Japan contended that
the US 1916 Act is inconsistent with Articles III, VI and XI of
the GATT 1994, and the Anti-Dumping Agreement.
On 3 June 1999, Japan requested the establishment of a panel.
At its meeting on 16 June 1999, the DSB deferred the
establishment of a panel.

PANEL AND APPELLATE BODY

PROCEEDINGS
Further to a second request to establish a panel by Japan, the DSB
established a panel at its meeting on 26 July 1999. The European
Communities and India reserved their third-party rights. On 11
August 1999, the panel was composed. The panel next went on to find
that:
by providing for the imposition of treble damages, fines or
imprisonment, instead of anti-dumping duties, the 1916 Act
violated Article VI:2 of the GATT 1994 and Article 18.1 of the AntiDumping Agreement;
by not providing for a number of procedural requirements found in
Article VI:1 of the GATT1994 and the Anti-Dumping Agreement,
the 1916 Act violated Articles VI:1 of the GATT 1994 and Articles
1, 4.1, 5.1, 5.2, 5.4 and 18.1 of the Anti-Dumping Agreement;
by violating Articles VI:1 and VI:2 of the GATT 1994, and Articles
1, 4.1, 5.1, 5.2, 5.4 and 18.1 of the Anti-Dumping Agreement, the
1916 Act violated Article XVI:4 of the WTOAgreement and Article
18.4 of the Anti-Dumping Agreement.

REASONABLE PERIOD OF TIME

At the DSB meeting of 23 October 2000, the United
States informed the DSB that it intended to
implement the DSBs recommendations and rulings.
The United States also stated that it would require a
reasonable period of time for implementation and that
it would consult with Japan on this matter.
On 12 July 2001, the United States proposed that the
reasonable period of time for implementation be
extended until 31December 2001 or the end of the
current session of the US Congress, whichever was
earlier and informed the DSB it would consult with
Japan on this matter. Japan did not object to this
proposal, which was agreed by the DSB at its meeting
on 24July 2001.

IMPLEMENTATION OF ADOPTED
REPORTS

At the DSB meeting on 26 November 2004, the

United States reported that the US Congress had
completed steps to repeal the 1916 Act, thereby
implementing the DSB's recommendations and
rulings. At the DSB meeting of 17 December 2004,
the United States informed that on 3 December
2004, the USPresident had signed into law the
Miscellaneous Trade and Technical Corrections Act
of 2004. That Act included a provision that repealed
the 1916 Act. UnitedStates reiterated its statement
at the DSB November meeting that that action had
brought the United States into compliance with the
DSB's recommendations and rulings in this dispute.

CASE 2

MEXICO DEFINITIVE ANTI-DUMPING

MEASURES ON BEEF AND RICE
Short title:

Mexico Anti-Dumping Measures on

Rice

Complainant:

United States

Respondent:

Mexico

Third Parties:

China; European Communities; Turkey

Agreements cited:

Anti-dumping (Article VI of GATT 1994):

(as cited in request for consultations)

Art.1,3,3.1,3.2,3.4,3.5,4.1,5.8,6,6.1,
6.1.1,6.2,6.4,6.8,6.9,6.10,7,9,9.3,9.4,
9.5,10.6,11,11.1,11.9,12,12.1,12.2,18.1
,19.3,21.1,21.2,32.1,Annex II
GATT 1994: Art.VI,VI:2
Subsidies and Countervailing Measures:
Art.11.9,12.1.1,12.5,12.7,17,19,19.3,
20.6,21,21.1,21.2,32.1

Request for Consultationsreceived:

16June2003

SUMMARY OF THE DISPUTE TO

DATE
On 16 June 2003, the United States requested consultations with Mexico
concerning its definitive anti-dumping measures on beef and long grain
white rice as well as certain provisions of Mexicos Foreign Trade Act and
its Federal Code of Civil Procedure.
The US claimed that these measures were inconsistent with Mexicos
obligations under the provisions of GATT 1994, the Anti-Dumping
Agreement and the SCM Agreement. In particular, the US claimed that:

Mexicos definitive anti-dumping measures on beef and long grain

white rice were inconsistent with at least Articles 3, 5.8, 6, 9, 12, 11.1
and Annex II of the Anti-Dumping Agreement.
Certain provisions of Mexicos Foreign Trade Act and its Federal Code
of Civil Procedure were inconsistent with Articles 5.8, 6, 6.1.1, 6.8, 7,
9, 9.5, 10.6, 11 and 11.1 of the Anti-Dumping Agreement and Articles
11.9, 12.1.1, 12.7, 17, 19, 19.3, 20.6, 21 and 21.1 of the SCM
Agreement.
The US also claimed that Mexicos measures appear to nullify or
impair benefits accruing to the US directly or indirectly under the
cited agreements.

PANEL AND APPELLATE BODY

PROCEEDINGS
On 6 June 2005, the Report of the Panel was circulated
to Members. In its Report:
The Panel upheld all of the United States claims
concerning both the injury and the dumping margin
determination of the Mexican investigating authority
in the rice investigation, applying judicial economy
with respect to some other related claims.
With regard to the claims concerning Mexicos Foreign
Trade Act as such, the Panel also finds in favour of the
United States on practically all accounts. The Panel
rejected the US claim with regard to Mexicos Federal
Code of Civil Procedure.

IMPLEMENTATION OF ADOPTED
REPORTS
At the DSB meeting on 20 January 2006, Mexico stated that
it intended to implement the recommendations and rulings
of the DSB but that it would need a reasonable period of
time to do so. Mexico was ready to consult with the United
States with a view to agreeing on the duration of the
reasonable period of time. On 18 May 2006, the parties
informed the DSB that they had agreed that the reasonable
period of time:
with respect to paragraphs 8.1 and 8.3 of the panel report,
and paragraph 350(b) and (c) of the Appellate Body
report, shall be 8 months, expiring on 20 August 2006
with respect to paragraph 8.5 of thepanel reportand
paragraph 350(d) of the Appellate Body report, shall be 12
months, expiring on 20 December 2006

THANK
YOU