SOME BASIC INTERNATIONAL LAW
CONCEPTS
 The world trading system is based on
international law, i.e. law regulating
relationships among States
 State’s equality and sovereignty
 Customary law
 Treaty law
 Acts of international organisations
SOME BASIC INTERNATIONAL LAW
CONCEPTS
 Custom:
- non written
- addressed to all States
- made of practice and opinio juris
- ex. prevention of environmental harm
SOME BASIC INTERNATIONAL LAW
CONCEPTS
 Treaty law
- binding only upon contracting parties
- difference between signature and
ratification
- it prevails upon customary law
- GATT and WTO are examples of treaty law
SOME BASIC INTERNATIONAL LAW
CONCEPTS
 Acts of international organisations
- IOs are created by a treaty among the parties
wishing to join the IO
- the IO can then emanate acts, binding upon
members and subordinate to the establishing
treaty
- ex. the awards rendered by WTO judicial
organs are acts of an IO
INTERNATIONAL TRADE TOOLS
 Tariff obstacles (duties)
 Non tariff obstacles (quota)
 Tariff quota
 Tariff can be ad valorem or on a specific basis
- revenue for the State
- protection of national industry
INTERNATIONAL TRADE TOOLS
 Tariff binding
 Tariff peak (industrial products)
 Tariff escalation
 Nuisance tariff
INTERNATIONAL TRADE TOOLS
 Trade defence measures:
- dumping
- safeguard measure
- anti-subsidy measure
 Basic obligations:
- most favourite nation clause
- national treatment
HISTORICAL BACKGROUND
 Classical liberalism
- between industrial revolution (1750-1880) and
WW1
- States do not intervene in economic relationships
- “friendship, navigation and trade” treaties based
on MFN and NT
- trade regulation only based on duty collection
HISTORICAL BACKGROUND
 Protectionism (between WW1 and WW2)
- State intervention in the economy to
reconstruct and to face the crisis
- trade wars and economic autarchy
- duties, anticompetitive practices and beggarthy- neighbour policies
- bilateral treaties (quota)
HISTORICAL BACKGROUND
 managed free trade (neoliberalism)
- after WW2
- economic freedom
- set of rules guaranteed by States and IOs
- delegation of power to IOs
- erosion of domestic jurisdiction
THE BRETTON WOOD CONFERENCE
 creation of the post-war economic order
 complementing UN policy on peace and
security
 IMF = int’l monetary stability and BOP
problems
 IBRD (the WB group) = development projects
 ITO = trade
- UN Conference on trade and labor (1946-1948)
THE WORLD BANK GROUP
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Int'l financing Corporation: loans to private
firms
Int'l Development Agency: loands to LDCs
(long term, low rates)
Multilateral Investment Guarantee Agency :
investment insurance
Int'l Centre for the settlement of investment
disputes : arbitration procedure
THE ITO
 ITO (not born) = trade regulation but also labour,
competition etc
- UN specialised agency
 failure:
- protectionism vs push for liberalisation
- US vs UK
- cold war
- 1 State =1 vote
THE GATT
 signed in Geneva in 1947 while the UN
conference is still going on
 tariff concessions
 provisional
 no institutional structure
 weaker than the Avana Charter
THE GATT
 lack of formal strength
 based on “rounds”
 tariff reduction vs technical obstacles
 “genuine” technical standards vs protectionist
ones
 examples: procurement policies, subsidies,
custom valuation methods
THE TOKYO ROUND AND THE SEVENTIES
 TR focused on technical obstacles
 GATT “à la carte”
 confusion and free riding
 The 70s: general recession and oil price shock
 rise of Japan and NICs
 protectionism and managed trade (MFA)
DCs, LDCs, …
 difficult to distinguish different categories of
countries according to dev’t level
 DCs & LDCs
 transition economies
 NICs and big DCs
 role of UNCTAD in GATT/WTO
 trade as a tool for dev’t
The Uruguay Round and the Marrakesh
Agreement
 1986- 1994
 the transition from GATT to WTO
 new subjects (services)
 the single undertaking principle : end of free
riding and unity of the system
 plurilateral agreements
THE INSTITUTIONAL STRUCTURE
 Traditional structure of IOs:
- assembly or plenary
- restricted organ
- secretariat
 WTO structure
- Ministerial Conference
- General Council
- Secretariat
URUGUAY ROUND AGREEMENTS
http://www.wto.org/english/docs_e/legal_e/legal_e.htm
THE INSTITUTIONAL STRUCTURE
 Ministerial Conference
- all members
- Ministerial rank of representatives
- general competence
- political guidelines about the development of
the organisation
- meets every 2 years
THE INSTITUTIONAL STRUCTURE
 General Council
- all members
- diplomatic rank
- implementation of the MC decisions
- interpretation of WTO legal texts
- meets whenever necessary
- DSB and TPR boby
THE INSTITUTIONAL STRUCTURE
 Secretariat :
- carries out the TPRM
- provides technical assistance
- cannot accept instructions by States
- chosen by the DG
THE INSTITUTIONAL STRUCTURE
 The Director General
- chosen by the General Council
- acts in its individual capacity
- responsible of the budget
- he represents the organisation in front of other
States
- diplomatic role in negotiations
THE INSTITUTIONAL STRUCTURE
 every agreement is managed by a Council
- assessment of compliance
- discussing future developments
- GATT 1947 = GATT Council
- SPS = SPS Council
- but the GATT Council can intervene in other
councils’ issues
THE INSTITUTIONAL STRUCTURE
 lack of tranparency and civil society
involvement
 participation of DCs and LDCs
- green room negotiations
- consensus technique
 non-trade issues
 actually the real problem now is the lack of
progressi in negotiations!
THE DOHA ROUND (2001 -???)
 big momentum in 2001 vs economic crisis
 industrial market access and agriculture big issues
blocking other issues
 proliferation of bilateral agreements and regional
trading blocks
 DSS prevailing over negotiations
 protectionis moves (export bans, currency
manipulation, import obstacles)