WTO and TBT What Are They and Why do I Care?

Dan Bart, Senior Vice President,

Standards and Special Projects, TIA

THE WTO …… In brief

The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.

THE RESULT is assurance and compliance.

THE GOAL is to improve the welfare of the people of the member countries.

THE WORLD TRADE ORGANIZATION (WTO)

At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations (140). These documents provide the legal ground-rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits.

Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business.

THE WTO’sTHREE MAIN PURPOSES

Help trade flow as freely as possible

Serve as a forum for trade negotiations

Set up an impartial means of settling disputes

THE WTO

THE MULTILATERAL TRADING SYSTEM -- past, present, and future

The World Trade Organization came into being in 1995.

One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.

THE ORGANIZATION

If the WTO’s overriding objective is to help trade flow smoothly, freely, fairly and predictably, how?

It does this by:

• Acting as a forum for trade negotiations

• Reviewing national trade policies

• Administering trade agreements

• Settling trade disputes

• Assisting developing countries in trade policy issues, through technical assistance and training programs

• Cooperating with other international organizations

THE STRUCTURE

MINISTERIAL CONFERENCE

GENERAL COUNCIL

GOODS COUNCIL, SERVICES COUNCIL, INTELLECTUAL PROPERTY (TRIPS) COUNCIL

10 Benefits of the WTO

The system helps promote peace

Disputes are handled constructively

Rules make life easier for all

Freer trade cuts the costs of living

It provides more choices of products and qualities

Trade raises incomes Trade stimulates

economic growth The basic principles

make life more efficient Governments are

shielded from lobbying The system encourages

good government

10 Common Misunderstandings of the WTO

The WTO dictates policy The WTO is for free trade

at any cost Commercial interests take

priority over development… …and over the environment …and over health and

safety

The WTO destroys jobs, worsens poverty

Small countries are powerless in the WTO

The WTO is the tool of powerful lobbies

Weaker countries are forced to the join the WTO

The WTO is undemocratic

THE WTO AGREEMENTS

How can you ensure that trade is as fair as possible, and as free as is practical? By negotiating rules and abiding by them.

The WTO’s rules -- the agreements -- are the result of negotiations between the members.

The current set were the outcome of the 1986-94 Uruguay Round negotiations which included major revision of the original General Agreement on Tariffs and Trade (GATT).

DEVELOPING COUNTRIESOver three-quarters of WTO members are developing or least-developed countries. Special provisions for these members are included in all the WTO agreements.

The special provisions include:

• longer time periods for implementing agreements and comments,

• measures to increase trading opportunities for these countries,

• provisions requiring all WTO members to safeguard the trade interests of developing countries,

• and support to help developing countries build the infrastructure for WTO work, handle disputes, and implement technical standards.

TECHNICAL BARRIERS TO TRADE

•Technical regulations and industrial standards may vary from country to country. Having too many different standards makes life difficult for producers and exporters.

•If the standards are set arbitrarily, they could be used as an excuse for protectionism. The Agreement on Technical Barriers to Trade (TBT) tries to ensure that regulations, standards, testing, and certification procedures do not create unnecessary obstacles.

THE WTO’S “MOST INDIVIDUAL CONTRIBUTION” Without a means of settling disputes, the rules-based system would be

worthless because the rules could not be enforced. The WTO’s procedure underscores the rule of law, and it makes the trading system more secure and predictable. The system is based on clearly-defined rules, with timetables for completing a case.

First rulings are made by a panel and endorsed (or rejected) by the WTO’s full membership. Appeals based on points of law are possible.

However, the point is not to just make rulings. The priority is to settle disputes, through consultations, if possible. By July 2000, 32 out of 203 cases had been settled “out of court,” without going through the full panel process.

TBT: The Code of Good Practice

Why a Code of Good Practice?

Who can accept the Code?

What does membership entail?

Why a Code of Good Practice?

Product standards can be prepared by governmental or non-governmental standardizing bodies. The Code of Good Practice, contained in Annex 3 of the WTO TBT Agreement provides disciplines, including those related to transparency, for the preparation, adoption and application of standards by all central governmental, local government, non-governmental and regional standardizing bodies.

Non-governmental = SDO

Who can accept the Code?

• The Code is open for acceptance to any standardizing bodies, whether central government, local government or non-governmental (i.e., SDO ) and regional standardizing bodies.

• The Code of Good Practice contained in Annex 3 of the WTO TBT Agreement seeks to bring all standards within its purview and provides for [and gives] transparency in the preparation, adoption and application of standards.

What does membership entail?

Members of the TBT Agreement are responsible for the acceptance and compliance with the Code of Good Practice by their central government standardizing bodies.

Furthermore, they are required to take such reasonable measures as may be available to them to ensure also that local government and non-governmental standardizing bodies (i.e., SDOs) within their territories, and regional standardizing bodies of which they are members, accept and comply with the Code.

What does it mean to me,I haven’t accepted any Code!

If SDOs, as non-governmental standardizing bodies, must “accept” the Code, I’m home free cause I have not accepted it!!

USTR/ANSI

ANSI, at the request of the USTR, has accepted the Code on behalf of ALL ANSI SDOs, as related to American National Standards

Notice provided to ISO several years ago

Oops, What do I have to do now?

Annex 3 of TBT sets forth agreements

Annex 3Code of good practice for the preparation, adoption

and application of standards

Annex 3 Overview

open to acceptance by any standardizing body within the territory of a Member of the WTO

Standardizing bodies that have accepted or withdrawn from this Code shall notify this fact to the ISO/IEC Information Centre in Geneva

the standardizing body shall accord treatment to products originating in the territory of any other Member of the WTO no less favourable than products of national origin and to like products originating in any other country

Annex 3

standards shall not be prepared, adopted or applied with a view to, or with the effect of, creating unnecessary obstacles to international trade

where international standards exist or their completion is imminent, the standardizing body shall use them, or the relevant parts of them, as a basis for the standards it develops, except where such international standards or relevant parts would be ineffective or inappropriate

Annex 3

the standardizing body shall play a full part in the preparation by relevant international standardizing bodies

of international standards avoid duplication of, or overlap with, the work of other

standardizing bodies specify standards based on product requirements in

terms of performance rather than design or descriptive characteristics

at least once every six months publish a work programme titles of specific draft standards shall, upon request, be

provided in English, French or Spanish.

Annex 3

the work programme shall indicate the classification relevant to the subject matter, the stage attained in the standard’s development, and the references of any international standards taken as a basis

before adopting a standard, the standardizing body shall allow a period of at least 60 days for the submission of comments on the draft standard by interested parties within the territory of a Member of the WTO

take into account the comments received notice whether the draft standard deviates from

relevant international standards

Annex 3

provide a copy of a draft standard with any fees charged for this service (apart from the real cost of delivery) the same for foreign and domestic parties

promptly publish the standard after it is adopted promptly provide a copy of its work programme and

standards with any fees charged for this service (apart from the real cost of delivery) the same for foreign and domestic parties

make an objective effort to solve any complaints with respect to the Code.

Questions?