World Trade Organization-International Law

World Trade Organization-International Law


The World Trade Organization (WTO) is a global institute whose main area of specialization is the international trade with the objective of enhancing a superior trading environment for the establishment of strong economies (Macrory, 2005). The WTO was instituted in the period 1995 to fit the roles that had been earlier upheld by the General Agreement on Tariffs and Trade (GATT) in a better manner. The organization was founded on revisions concerning the GATT conducted over the periods 1986 to 1994 in the Uruguay Round concession (World Trade Organization, 2011). WTO has at least one hundred and fifty members with sixty seven percent of the nations being considered as developed and least developed nations. Due to this, the interests of developing and least developed nations are accorded special treatment with regard to the various trade requirements accorded in the organization for enhanced trading practices.

Various special treatments that can be noted include the inclusion of additional time required for the execution of trade agreements and the adoption of favorable policies aimed at the enhancement of market rights of entry for increased economic development. Additionally, different safeguards are also used to ensure healthy competition, coupled with aiding policies like the Integrated Framework comprising of the WTO, International Trade Center (ITC), United Nations Development Programme (UNDP), World Bank, International Monetary Fund (IMF) and the United Nations Conference for Trade and Development (UNCTD) as monetary providers for the developed and least developed nations (World Trade Organization, 2011). WTO has incorporated various agreements and procedures towards this cause as noted in the subsequent discussion.

The World Trade Organization Agriculture Agreement

The accord was conceptualized between the periods 1986 and 1994, being instituted in 1995 upon its completion. The agreement’s focal objective is the provision of enhanced security of the trading practices in the agricultural sector through the adoption of market-centric strategies that will enhance trading patterns across all nations (Ingco & John, 2004). Market accessibility has been improved by the implementation of a tariff-only stratagem as opposed to the initial policies that applied non-tariff techniques as well as trade quotas. The agreement is a discriminative policy that has mandated developed nations into reducing their trade tariffs by 36 percent with a lowest cut for every product being at least 15 percent spread over a period of six years (Macrory, 2005). Developing nations are mandated into 24 and 10 percent cuts respectively regarding tariffs, within an allocated period of ten years (Ingco & John, 2004). Least developing nations were not liable to the implementation of tariffs.

Local maintenance of the industry has been achieved by the introduction of subsidies in a bid to enhance the amount of cultivators’ inflows and ultimately improve the living standards. Additionally, subsidies have also been introduced in the export sector so that farmers are well capable of offering quality products at a lower and affordable price in the global markets. With low-priced products, farmers tend to create a competitive edge over their rivals. Developed nations were officially expected to assume a subsidy of 36 percent from the implementation period up to the year 2000, while developing economies were required a 24 percent subsidy up to the year 2004 (Ingco & John, 2004). Government involvement in agricultural trade in developed economies was reduced by 21% for the creation of equitable competition. Developing nations condensed the same with a rate of 13 percent (Ingco & John, 2004). Least developed economies were also exempted from these requirements.

Anti-Dumping Agreement

Dumping refers to the process in which exporters tend to set their prices below that which operates in their local markets to increase their international sales (Diaz-Bonilla, Soren, & Sherman, 2006). This has been quite a hazard in developing and least developed nations as rejected low products are shifted to the mentioned economies leading to economic problems. The most notable adverse effect of dumping is the depression of local industries in terms of profits and production levels, as the low prices tend to be inequitably competitive to the local ones. To decrease the rate of dumping, the accord has instituted superior protection mechanisms that have overcome the initial technique that allowed limitations in the level of imports to protect local industries. Alternative rules have stipulated that if a nation halts imports form another country, the latter be legally freed into a form of recompense, as both nations deem necessary. Another option would be the introduction of a proportionate introduction of a tariff to the importing nation that would accrue the same amount of money accorded to the trading practices (Macrory, 2005).

This agreement favors developing nations, as they are only liable to such penalties if the export levels constitute to 3 percent or more of the total amount of imports to the other nation. Alternatively, if the importing nation has acquired the products from several developing nations, then the accrued level has to exceed 9 percent for the affected nation to impose the recompense strategies to the developing nation legally. With developed countries, any form of import halting leads mandates a proportionate compensation to the affected nation despite the percentage level of products traded (Macrory, 2005). To overcome the penalties accorded to importation barring, nations affected with product dumping are required to perform a research that certifies the presence of the illegal trade, as well as evaluate the damage caused for the WTO to warrant and direction the penalty to be accorded.

General Agreement on Trade in Services

            It allows specific nations into employing limitation into the amount of goods and services being injected into the country from foreign sources. The agreement is divided into two segments, Article XII and Article XVIII B (Hoekman, Aaditya & Philip, 2002). Both clauses were adopted in a bid to ensure that member nations maintain an equilibrium state in their trading practices. Article XII is applicable to all members and it involves quantity limitations by one country in another in cases where the balance of payments increase in a manner that creates a huge external debt that is unhealthy for the affected nation. This clause was a revision of the former provision that barred an application of the same as economic scholars noted that the higher the external debt, the lower the economic development achieved with the long-run effect of unsustainable economies (Ingco & John, 2004). Therefore, prudence accorded the ability of nations to withdraw imports when faced with same as a constructive move until stability was created in the balance of payments.

Article XVIII B was infused for the developing and underdeveloped nations only up to the level in which such countries are able to attain credible sustenance in their in international monetary positioning for the realization of economic expansion (Hoekman, et al., 2002). The latter clause has to follow the stipulated legal criteria, which begin with a public declaration as to the reason for the adoption of the trade limitation and the various techniques that could be employed as solutions to the balance of payments. This acts as the justification point for the proposed method as an appraisal of the success level. The lower the interruption effect of the technique on trading practices, the higher the preference. The affected nation is also mandated to the provision of a rationalization as to why price mechanisms cannot be used to alleviate the situation. Once these stipulated stages are successfully completed, the nation is only allowed to implement the recommendations to the named products, with each product only liable to one restraining technique.

The XVIII B clause was infused for the developing and least developed nations as the most affected in terms of balance of payment due to their elevated debt levels. Note that, both clauses are also covered in the Agreement on Trade-Related Investment Measures (TRIMs) for standardized trading observances.

The World Trade Organization Agreement on Customs Valuation

            This agreement was implemented as a way of ensuring that precise valuations are given to imports and reduce exporters’ repression in terms of pricing. Import permits are allowed to take a maximum of thirty days for maturation and all traders are to be accorded the same time schedule. Uniform valuation techniques are accorded by the WTO with the legal right of the importer to challenge the valuation process or figure in cases where the incorrect process has been applied. Export products are mandated to pre-shipment checks, especially in developing nations to enforce the product excellence, confirm product quantity and value of the goods (Bernal, 2001). Pre-shipment procedures are directed by private organizations who tend to be neutral participants for fair assessments. Investors are allowed to import the any amount of products as this stimulates fair trade involvements against the level of import products attributed to foreign investors in a nation.

The time limit accorded for the total implementation was two years for developed economies as they have high capital bases to support the alterations while developing nations were accorded an additional three years, bring the total period to five years (Correa, 2000). All developed nations were mandated to the requirements by the period 1996 while developing nations had up to the year 1999. Least developed nations had a specified seven years pushing its legal deadline to the year 2001 (Bernal, 2001). The implementation of the customs valuation accord was rather rigid for developed economies with only two years for the adoption of the revised standards. However, with developing and least developed nations facing a significant constraint in terms of capital, the policy was flexible enough to offer extensions to nations that were not capable of meeting the set period.

An additional clause that enhances the fair observances in the trading field is the Agreement on Safeguards. This is highly congruent to the customs valuation practice as it accords protection to local manufacturers against imported items that are not considered as threats in terms of pricing. This marks the difference with the dumping clause that aims at ensuring that local manufacturers are not affected by unfair foreign products in the domestic market. Fairly introduced products my accord inequitable competition with regard to the process of advertising as investors tend to have higher capital bases and this would result to lower local sales, which is unmerited to the local producer. This policy is very helpful to developing and least developed nations as it affords an enhanced level of safeguard to the immature organizations and industries in the affected countries (Bernal, 2001).

Information Technology Agreement

With the advent of the internet and the computer era, information technology (IT) has become a significant trading sector in the world economy. To improve on the trading practices of the same, WTO introduced a comprehensive record that contains IT products that are covered by the agreement. Trading barriers instituted towards such products were totally abolished to ensure higher trading practices concerning the identified products. Developed nations were accorded a restrictive period in ensuring that all barriers had been eliminated. Developing and least developed nations were faced with the same stringent measures in certain products, but an extension was offered in other products for balanced and equitable patterns of implementation. An extension of the technology transmission and mobility is covered in The Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) concerning the developed and least developed nations (Hoekman, 2001). The underlying proposal in such nations has argued that in response to the requirement of upholding set intellectual property rules, the WTO has to retaliate with a recompense policy that will allow an enhanced exchange of technology between developing and least developed nations.

High technological shifts between the two players will be beneficial to the producers and end users in terms of monetary and non-monetary aspects. With technological advancements, the productive ability will be expanded in the realization of economies of scale with heightened effectiveness. Labor development is realized through optimal operation of the same in full capacity as new training session are required as an orientation towards the new forms of technology (Hoekman, 2001). As each technology aims at enhancing consumer interactivity, end users also benefit from the setting. State and economic leader in developed nations are mandated under the WTO accord in the adoption of technological incentives to create a healthy environment for technology shifts to least developed nations as a prerequisite for economic development. This proposal was concludes in 2003 and is being implemented in a three phased tiered arrangement until the optimal results have been ascertained.

Sanitary and Phytosanitary Measures Agreement

The accord has two main objectives. The initial one deals with consumer wellbeing as it ensures that imported food items are hygienically handled to enforce safety for the customer as the end users. The second objective deals with producers’ welfare, both local and foreign, to ensure that the accorded rules are consistently upheld for impartial competition between both suppliers (Diaz-Bonilla, et al., 2006). The WTO has offered a document that aligns to international regulations with regard to health and hygiene handling for its member countries. A flexible approach has however been accorded with members being allowed to devise their own regulations provided that they conform to all health requirements as set by the international community. The main demerit attached to own regulation occurs when a conflict occurs as legal actions have to be enforced while in the case of WTO regulations, the products will only be withdrawn wit no further actions being taken towards the case.

The agreement accorded a uniform rate of adoption to all nations, as food products are very sensitive. Hover, the allocated period was mindful of the developing and least developed nations in terms of time and monetary allocations. The WTO bears the knowledge that various nations are challenged by climatic conditions and geographical locations creating a variation in the pests and diseases that may affect the food products. The tropical environment experienced in warm countries harbors different illnesses when compared to the cold nations. Therefore, WTO assesses illnesses according to the nation in which the food supplements are acquired from. This ensures protection to the developing nations in ensuring that minimal cases of food poisoning occur due to improper handling (Diaz-Bonilla, et al., 2006). With uniformed appraisals, the WTO protects developing and least developed nations from an unjust application of all disease rules to situations that are not applicable.

The Sanitary and Phytosanitary Measures Agreement is used to ensure that hygienic and fit products are offered into the market for consumer well being. To ensure that fair competition is enhanced in both foreign and local manufacturers, the Agreement on Technical Barriers to Trade (TBT) is used. This accord ensures frequent appraisals to privately made regulations to ensure their credibility and avoid market exclusion through unhealthy competition. Therefore, both policies are applied concurrently to nations that opt for the implementation of own parameters. A notable requirement in both accords is the necessity of scientific techniques of food assessment to ensure precise decisions and appraisals.

The Agreement on Textiles and Clothing

A majority of developing nations are involved with the clothing industry by the fact that a high bulk of the raw materials used in the given sector is sourced from such nations. Export Processing Zones (EPZ) are examples of free trade areas that have been adopted in developing nations to improve the textile industry by allowing foreign investors to aid with the machinery required in clothes manufacture while the materials and labor resources are acquired form the exporting nation. The textile accord was adopted in the period 1995 for a testing period of ten years. The initial part of the accord was dedicated to the categorization of all items and raw materials used in the textile industry like yearns, wool and assorted cloths (Lee & Rorden, 2007). The initial set of implementation covered a period of three years, both for the developed, developing and least developed nations with each nation mandated to a minimal production of 16 percent of the amount of imports. The second phase had four-year duration with the target supply for each country being fixed at a minimum of 17 percent.

The last phase ending at the year 2004 took three years with predetermined target of 18 percent. Broad categorization of the textile products were tops and fibers, cloths, manufactured fabrics and clothing. Each country was given the liberty to choose the best product to be used for any export session if the product was within the specified categories. Trade limitations had been accorded to four nations/trading blocs namely, Norway, European Community, United States of America and Canada (Lee & Rorden, 2007). However, to ensure fair competition to the developing and least developed nations, the ceilings were abolished with the affected nations liable to the stipulated regulations in the various performance phases. To ensure that involved nations were accorded equal protection in the level of exports, percentage figures were used to ensure that uniform increments were realized. In the three identified phases, increases were allotted as 16, 25 and 27 percent as all enabled the nations to meet the minimum level identified target requirements. With this, the developing and developed nations were safeguarded against unrealistic goals against the effluent developed economies.

Agreement on Subsidies and Countervailing Measures

It is an extension of the trade agreement offering a classification of the various tariffs available in WTO and the requirements necessary before the adoption of any of the given types. Prohibited subsidies are applied to the export and import sectors. Developed nations are required to abolish such for enhanced economic autonomy but developing and least developed economies that have a per capita income that equals to or is less than one thousand dollars are disallowed from the policy. Developing nations having an average income that is above one thousand dollars are therefore expected to implement the requirement in their trading patterns (World Trade Organization, 2011). Excluded nations are freed to the application of their tariff programs as a means of acquiring foreign inflows that enhance the level of per capita proceeds. The second type of tariffs are referred to as non-actionable tariffs are those accorded to research requirements for developing and least developed economies to enhance the growth and expansion process.

Additionally, the tariff is used for environmental and ecological preservation needs, majorly in the developing and least developed areas. It is a known fact that developing and least developed nations require a lot of research in various areas like economics, social in terms of infrastructures, and communal aspects like projects that enhance the ability to acquire sustainable expansions. With regard to the environment, developed nations have been rated as the highest emitters of industrial pollutions yet the devastating effect of the same have a global impact. Developed nations therefore have to account for the highest share of recompense in the situation as noted by an example of the payments accorded to developing and least developed nations towards the preservation of forests and wetlands that help with the elimination of the industrial wastes.

This is justified by the fact that, as developing and least developed nations are highly agricultural they tend towards high environmental clearances in a bid to acquire more cultivation land and reduce the level of unemployment plaguing such countries (World Trade Organization, 2011). Additionally, note that the lands are also used for settlement purposes due to the heightened population levels experiences in the locations. Therefore, with tariffs being allocated towards these needs, it becomes easier to provide alternative solutions in terms of employment and housing facilities in a manner that is beneficial to the world. All other forms of duty levies are termed as the actionable tariffs, which are also implemented on discriminative terms, with developing and least developed nations included in an adoption of the same yet accorded a higher implementation period than the developed economies.

The Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS)

An extension of the information technology concord enforcing protection in other art disciplines like movie productions, publications and the print media, paintings, music, computer packages, amongst others. WTO extends copyright opportunities in which the mentioned art categories are safeguarded to the original author for a duration of not less than fifty years upon the demise of the inventor. Within the same provision are the neighboring rights that are accorded to assistants in a given art work; for instance, in film production, this would be extended to the cast and actors. Copyrights are infused to enhance the creativity of the inventor as well as the monetary gain as a job opportunity (Correa, 2000). Industrial properties are mainly covered by patents and trademarks with the latter being employed towards the safeguard of one’s products from other similar goods in the market as well as the geographical source in which the products have been acquired from.

The former on the other hand is used for discoveries to enforce trade secrets as this enhances a protective edge against industry rivals, for example the coca-cola company. Unlike copyrights, patents tend to be limited in nature with the most notable duration being twenty years (Ingco & John, 2004). This agreement is flexible as it allows various governments in the creation and adoption of their own frameworks with regard to the same with the official year of implementation being 1995 (Correa, 2000). Developed economies taking part in the WTO agreement were accorded a year for the revision of existing decrees to conform to the intellectual property requirements with developing nations being given five years. The difference in time length is attributed to the fact that developing economies face a monetary constraint that makes it harder for the implementation and thereby necessitating a higher timeline before enough capital can be accrued for effectual execution. With least developed nations being worst hit in terms of monetary functions, the same were accorded eleven years for their policy alterations.

Notably, following the economic disparities caused by the depression phases in world economies, least developed nations have incurred setbacks in the realization of the required rights and this has necessitated additional periods with common industrial products granted a seven year extension whereas pharmaceutical products have been accorded an additional ten years. Prior to the realization of own strategies, the WTO framework will be applied as defensive measures for intellectual possessions. The TRIPS framework was completed in the period 2000 enabling the least developed nations to gain more time into the creation of own decrees  that are pragmatic and effectual in nature (Ingco & John, 2004).

Plurilateral Agreement on Trade in Civil Aircraft

The accord was instituted in the period 1980 with an initial membership of thirty-one states although over the years it has expanded to encompass all WTO member states (World Trade Organization, 2011). The agreement was infused for the aeronautical industry as a means of stimulating air transport in terms of passengers and products in the export and import industry. Developing and least developed nations rely on the agricultural and floricultural sectors as their economic mainstays and therefore rely on aircrafts for international transportation, especially beneficial to perishable products. Air travel is an expensive transportation means and these costs tend to have a ripple effect on the fixed overheads in trading activities, with the producers beating the bulk of the cost. Therefore, reducing such charges enables the products to be fairly priced in the global markets and consequently leads to enhanced sales and proceeds.

The accord therefore abolished tariffs on all aircrafts with an exemption of those used for military purposes for overhead reductions that would enable the aircraft industry into according affordable services to both passengers and products (World Trade Organization, 2011). With air transport, economic players believe that a higher state of liberalization will be achieved as a notable requirement for economic expansion in developing and least developed nations. The agreement has been very beneficial to the agricultural industry as noted in the level of dairy and bovine products that have been shifted to the international markets since the period 1997 World Trade Organization, 2011). The amounts of averted finances have been redirected into the enhancement of healthy handling in terms of cold storages aboard the aircraft in relation to the Sanitary and Phytosanitary Measures Agreement and the World Trade Organization Agriculture Agreement. This has made the industry more competitive in the international front by the high level of branding achieved.

Concerning passenger flights, it is a known fact that employment mobility creates a healthy environment for idea exchange enhancing intercultural associations that tend to enhance ideas generated towards a given problem and consequently the solutions. As the human factor moves between nations, superior management may be acquired to enhance economic growth as geographical boundaries are demolished.


The discussion has clearly outlined the various strategies and agreements applied by the WTO in the realization of better trading pattern across the globe with a notable bias towards the developing and least developed nations. Accords that have applied a discriminative tendency in terms of time allocations required before effectual revisions to existing rules can be achieved in alignment to the WTO stipulations include The World Trade Organization Agriculture Agreement, The World Trade Organization Agreement on Customs Valuation, Information Technology Agreement and The Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). This is in a bid to ensure that the developing and least developed nations are offered a pragmatic timeline especially due to the monetary constraint in the application of the set standards (Keyzer, Max & Geert, 2000). Improved business opportunities through the creation of heightened market rights of entry have been achieved through the General Agreement on Trade in Services and The Agreement on Textiles and Clothing.

Protective instances against inequitable competition and trading activities are noted in the Anti-Dumping Agreement, Agreement on Subsidies and Countervailing Measures together with Sanitary and Phytosanitary Measures Agreement. The Plurilateral Agreement on Trade in Civil Aircraft is a fine example of an aid policy geared towards the enhancement of income flows through superior cost structures within the developing and developed nations. Although the WTO has been criticized with regard to the low economic development achieved over the periods, the liability cannot be traced to wrong policies but rather ineffectual implementations that have led to limited levels of success.

















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