GATT

The General Agreement on Tariffs and Trade (GATT), which was signed on
October 30. 1947. By 23 nations, was a legal agreement that aimed to
reduce trade barriers by abolishing or decreasing quotas, Tariffs, and
subsidies while retaining considerable restrictions. The GATT was created
to help the world economy recover after World War U by rebuilding and
liberalising global commerce. On January 1.1998. The GATT came into
effect. It has been developed since then, culminating in the founding of
the World Trade Organization (WTO) on January 1, 1995, which integrated
and expanded it. By this time, 125 countries had signed on to its accords,
which covered almost 90% of world commerce. The GATT is overseen by
the Council for Trade in Goods (Goods Council), which is made up of
representatives from all WTO member nations. Market access, agriculture.
Varsities, and anti-dumping measures are among the topics addressed by
the council’s ten committees. This article helps the readers understand
GATT in a better way.

Purpose of GATT

1. Article U (Schedules of Conversions): Agreement to record

“additional levies or charges” paid in addition to the recorded Tariff
in national schedules and bind them at the levels in effect at the
time the Uruguay Round Protocol was signed.
2. Article XVII (State-trading Enterprises): By enforcing stricter
notification and review procedures. They will be able to keep a
closer eye on their operations.
3. Articles XL and XVUL-B (Balance-of-payments provisions):
Agreement that contracting parties should impose balance-of-
payments limitations in the least trade-distorting way possible,
preferring price-based measures such as import surcharges and
import deposits over quantitative limits. The agreement was also
reached on protocols for GATT Balance-of-Payments (BOP)
Committee discussions and notification of BOP measures.
4. Article XXXV (Customs Unions and Free-Trade Areas):
Agreement defining and reinforcing the criteria and processes for
evaluating the implications of new or expanded customs unions or
free-trade zones on third parties. In the event that contracting
parties join a customs unto and wish to increase a binding tariff, the
agreement defines the method to be followed to achieve any
necessary compensating adjustment. Contracting parties’ duties in
relation to actions implemented by regional or local governments or
authorities within their jurisdictions are also defined.
 5. Article XXX (Waivers): Agreement on new processes for awarding
exemptions from GATT disciplines, including the specification of
termination dates for any future waiver and the fixation of expiry
dates for current waivers. However, the major clauses addressing
the granting of exemptions are included in the WTO Agreement.
6. Article XXVIII (Modifications of GATT Scheduler): Agreement
on new processes for discussing compensation when tariff bindings
are amended or removed, including the establishment of a new
negotiating right for the nation whose exports are dominated by the
goods in issue. Smaller and developing nations will be better able to
engage in discussions as a result of this.
7. Article XXXV (Non-application of the General Agreement):
After entering tariff discussions with each other, an agreement to
allow a contracting party or a newly acceding nation to exercise
GATT’s non-application provisions against the other party. Any use of
the WTO Agreement’s non-application provisions must apply to all
multilateral agreements, according to the agreement.

How did GATT contribute to the growth of International Trade Law

The General Agreement on Tariffs and Trade (GATT) significantly

contributed to trade law by establishing a framework for reducing trade
barriers, primarily through tariff reductions and the elimination of quotas,
fostering a more open and predictable global trading environment. It also
created mechanisms for dispute resolution and facilitated multilateral
negotiations to further liberalize trade.

 Reducing Trade Barriers:

 Tariff Negotiations:
GATT provided a platform for member countries to negotiate tariff
reductions on a reciprocal basis, meaning that countries would
lower their tariffs on each other's goods.
 Elimination of Quotas:
GATT aimed to eliminate quantitative restrictions on imports, which
are often used as a form of protectionism.
 Most-Favoured Nation (MFN) Treatment:
A key principle of GATT was MFN, which requires member countries
to treat all other members equally in terms of tariffs and trade
regulations. This ensured that no country could discriminate
against others in trade.
 Creating a Predictable Trading Environment:

 Established Rules and Principles:

 GATT established a set of rules and principles for international
trade, including the principles of non-discrimination and
transparency.
 Dispute Resolution Mechanisms:
GATT provided mechanisms for settling trade disputes between
member countries, helping to ensure that trade rules were adhered
to and that disputes were resolved fairly.
 Multilateral Negotiations:
GATT facilitated regular multilateral trade negotiations, where
member countries would discuss and agree on further reductions in
trade barriers.
 Foundation for the WTO:

 Integration into the WTO:

The agreements reached under GATT were eventually integrated
into the World Trade Organization (WTO) when the WTO was
established in 1995.
 GATT 1994 as a Foundation:
The GATT 1994, which was the final iteration of GATT, became a
foundation for the WTO's operations.
In essence, GATT laid the groundwork for the modern international trade
system by promoting free trade, establishing a set of rules, and providing
mechanisms for dispute resolution and negotiation.

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Agreement on Agriculture

The Agreement on Agriculture (AoA) is a World Trade Organisation treaty

that focuses on reducing the agricultural support and subsidies given to
domestic producers by countries. It is one of the most contentious
agreements within the WTO. In this article, you can read all about the
WTO Agreement on Agriculture, its impact on India and also how
developed countries have been taking advantage of the WTO regime in
their favour.

The Agreement on Agriculture (AoA) is a WTO treaty that was negotiated

during the Uruguay Round of the General Agreement on Tariffs and Trade
(GATT) and formally ratified in 1994 at Marrakesh, Morocco. The AoA came
into effect in 1995.

 According to its provisions, developing countries were to complete

their reduction commitments by 2000 and developing countries by
2004.
  The Least Developed Countries were not required to make any
reductions.
 The Agreement covers products that are normally considered part of
agriculture but excludes forestry and fishery products and also
rubber, sisal, jute, coir and abaca.
 The focus of the AoA is the elimination of what are called “trade
distorting” agricultural subsidies.
 According to the WTO, the overall aim of the Agreement is “to
establish a fairer trading system that will increase market access
and improve the livelihoods of farmers around the world.”

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The Sanitary and Phytosanitary Measures

Agreement
The Agreement on the Application of Sanitary and Phytosanitary Measures
sets out the basic rules for food safety and animal and plant health
standards.

It allows countries to set their own standards. But it also says regulations
must be based on science. They should be applied only to the extent
necessary to protect human, animal or plant life or health. And they
should not arbitrarily or unjustifiably discriminate between countries
where identical or similar conditions prevail.

Member countries are encouraged to use international standards,

guidelines and recommendations where they exist. However, members
may use measures which result in higher standards if there is scientific
justification. They can also set higher standards based on appropriate
assessment of risks so long as the approach is consistent, not arbitrary.

The agreement still allows countries to use different standards and

different methods of inspecting products.

Key Features

All countries maintain measures to ensure that food is safe for consumers,
and to prevent the spread of pests or diseases among animals and plants.
These sanitary and phytosanitary measures can take many forms, such as
requiring products to come from a disease-free area, inspection of
products, specific treatment or processing of products, setting of allowable
maximum levels of pesticide residues or permitted use of only certain
additives in food. Sanitary (human and animal health) and phytosanitary
(plant health) measures apply to domestically produced food or local
animal and plant diseases, as well as to products coming from other
countries.

1.Protection or protectionism?

Sanitary and phytosanitary measures, by their very nature, may result in

restrictions on trade. All governments accept the fact that some trade
restrictions may be necessary to ensure food safety and animal and plant
health protection. However, governments are sometimes pressured to go
beyond what is needed for health protection and to use sanitary and
phytosanitary restrictions to shield domestic producers from economic
competition. Such pressure is likely to increase as other trade barriers are
reduced as a result of the Uruguay Round agreements. A sanitary or
phytosanitary restriction which is not actually required for health reasons
can be a very effective protectionist device, and because of its technical
complexity, a particularly deceptive and difficult barrier to challenge.

The Agreement on Sanitary and Phytosanitary Measures (SPS) builds on

previous GATT rules to restrict the use of unjustified sanitary and
phytosanitary measures for the purpose of trade protection. The basic aim
of the SPS Agreement is to maintain the sovereign right of any
government to provide the level of health protection it deems appropriate,
but to ensure that these sovereign rights are not misused for protectionist
purposes and do not result in unnecessary barriers to international trade.

2.Adapting to conditions

Due to differences in climate, existing pests or diseases, or food safety

conditions, it is not always appropriate to impose the same sanitary and
phytosanitary requirements on food, animal or plant products coming from
different countries. Therefore, sanitary and phytosanitary measures
sometimes vary, depending on the country of origin of the food, animal or
plant product concerned. This is taken into account in the SPS Agreement.
Governments should also recognize disease-free areas which may not
correspond to political boundaries, and appropriately adapt their
requirements to products from these areas. The agreement, however,
checks unjustified discrimination in the use of sanitary and phytosanitary
measures, whether in favour of domestic producers or among foreign
suppliers.

3.Justification of measures

The SPS Agreement, while permitting governments to maintain

appropriate sanitary and phytosanitary protection, reduces possible
arbitrariness of decisions and encourages consistent decision-making. It
requires that sanitary and phytosanitary measures be applied for no other
purpose than that of ensuring food safety and animal and plant health. In
particular, the agreement clarifies which factors should be taken into
account in the assessment of the risk involved. Measures to ensure food
safety and to protect the health of animals and plants should be based as
far as possible on the analysis and assessment of objective and accurate
scientific data.

4.International standards

The SPS Agreement encourages governments to establish national SPS

measures consistent with international standards, guidelines and
recommendations. This process is often referred to as “harmonization”.
The WTO itself does not and will not develop such standards. However,
most of the WTO’s member governments (132 at the date of drafting)
participate in the development of these standards in other international
bodies. The standards are developed by leading scientists in the field and
governmental experts on health protection and are subject to
international scrutiny and review.

5.Alternative measures

An acceptable level of risk can often be achieved in alternative ways.

Among the alternatives — and on the assumption that they are technically
and economically feasible and provide the same level of food safety or
animal and plant health — governments should select those which are not
more trade restrictive than required to meet their health objective.
Furthermore, if another country can show that the measures it applies
provide the same level of health protection, these should be accepted as
equivalent. This helps ensure that protection is maintained while providing
the greatest quantity and variety of safe foodstuffs for consumers, the
best availability of safe inputs for producers, and healthy economic
competition.

6.Risk Assessment

The SPS Agreement increases the transparency of sanitary and

phytosanitary measures. Countries must establish SPS measures on the
basis of an appropriate assessment of the actual risks involved, and, if
requested, make known what factors they took into consideration, the
assessment procedures they used and the level of risk they determined to
be acceptable. Although many governments already use risk assessment
in their management of food safety and animal and plant health, the SPS
Agreement encourages the wider use of systematic risk assessment
among all WTO member governments and for all relevant products.

7.Transparency
Governments are required to notify other countries of any new or changed
sanitary and phytosanitary requirements which affect trade, and to set up
offices (called “Enquiry Points”) to respond to requests for more
information on new or existing measures. They also must open to scrutiny
how they apply their food safety and animal and plant health regulations.
The systematic communication of information and exchange of
experiences among the WTO’s member governments provides a better
basis for national standards. Such increased transparency also protects
the interests of consumers, as well as of trading partners, from hidden
protectionism through unnecessary technical requirements.

A special Committee has been established within the WTO as a forum for
the exchange of information among member governments on all aspects
related to the implementation of the SPS Agreement. The SPS Committee
reviews compliance with the agreement, discusses matters with potential
trade impacts, and maintains close co-operation with the appropriate
technical organizations.

Anti Dumping Agreement

The Anti-Dumping Agreement, officially titled the “Agreement on

Implementation of Article VI of the General Agreement on Tariffs and Trade
1994,” is a multilateral trade agreement within the World Trade
Organization (WTO). It outlines the procedures and rules for countries to
apply anti-dumping measures on imported goods that are sold at prices
lower than their normal value, potentially causing injury to a domestic
industry.

Key aspects of the Anti-Dumping Agreement:

Defining Dumping:

The agreement defines dumping as selling a product in another country’s

market at a price lower than its “normal value” (generally the price in the
exporter’s home market).

Conditions for Anti-Dumping Measures:

A country can only impose anti-dumping measures if, after an

investigation, it determines that dumping is occurring, that it is causing
material injury to the domestic industry, and that there is a causal link
between the dumping and the injury.

Investigation Procedures:
The agreement sets out detailed procedures for conducting anti-dumping
investigations, including the timeframes, information requirements, and
opportunities for affected parties to be heard.

Calculation of Dumping Margins:

The agreement provides rules for calculating the difference between the
export price and the normal value, which is known as the dumping
margin.

Imposing Anti-Dumping Duties:

If dumping is found to be causing material injury, countries can impose

anti-dumping duties (additional tariffs) on the dumped imports.

Review and Sunset Provisions:

Anti-dumping duties are generally limited to a five-year period and can be

reviewed to assess their continued need and effectiveness.

Dispute Settlement:

The WTO’s dispute settlement mechanism allows countries to challenge

anti-dumping measures that they believe are not in accordance with the
agreement.

Committee on Anti-Dumping Practices:

The agreement establishes a Committee on Anti-Dumping Practices,

where member countries can consult on matters related to the operation
of the agreement.

Process of imposing anti dumping duty

The process of imposing anti-dumping duty involves a series of steps,

starting with an investigation to determine if dumping is occurring and
causing injury to a domestic industry. This includes filing a complaint,
gathering evidence, assessing the impact of imports, and finally,
determining the margin of dumping and the extent of injury. If these
conditions are met, an anti-dumping duty is imposed to offset the unfair
price advantage of the dumped imports.

1. Investigation Initiation:

Complaint Filing: A domestic industry, trade association, or government

can file a complaint alleging that imports are being dumped, meaning
they are sold at prices lower than their normal value in the exporting
country.
Preliminary Investigation: The Designated Authority (DA) reviews the
complaint to determine if there’s sufficient evidence of dumping and
injury to proceed with a full investigation.

Suo Moto Initiation: In some cases, the DA can initiate the investigation
on its own

2. Investigation:

Determining Dumping: The DA investigates the prices of the imported

goods, comparing them to the prices charged in the exporting country
(the “normal value”).

Injury Determination: The DA assesses the impact of the dumped

imports on the domestic industry, looking at factors like price effects,
volume effects, and market share.

Causal Link: The DA determines if the dumping has caused or threatened

to cause material injury to the domestic industry.

3. Decision and Duty Imposition:

Final Determination: If the DA finds that dumping and injury exist, a

final determination is made, and an anti-dumping duty is recommended to
the government.

Duty Calculation: The anti-dumping duty is calculated as the difference

between the export price and the normal value (the margin of dumping).

Duty Imposition: The government then officially imposes the anti-

dumping duty on the imported goods.

4. Review and Sunset:

Review: Anti-dumping duties are reviewed periodically (usually after five

years) to determine if they are still necessary.

Sunset: If the review determines that the duty is no longer necessary, it

is terminated.

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Agreement on Safeguards

The Agreement on Safeguards (“SG Agreement”) sets forth the rules for
application of safeguard measures pursuant to Article XIX of GATT 1994.
Safeguard measures are defined as “emergency” actions with respect to
increased imports of particular products, where such imports have caused
or threaten to cause serious injury to the importing Member’s domestic
industry. Such measures, which in broad terms take the form of
suspension of concessions or obligations, can consist of quantitative
import restrictions or of duty increases to higher than bound rates.

Major guiding principles of the Agreement with respect to safeguard

measures are that such measures must be temporary; that they may be
imposed only when imports are found to cause or threaten serious injury
to a competing domestic industry; that they be applied on a non-selective
(i.e., most-favoured-nation, or “MFN”, basis; that they be progressively
liberalized while in effect; and that the Member imposing them must pay
compensation to the Members whose trade is affected

The SG Agreement, which explicitly applies equally to all Members, aims

to:

(1) clarify and reinforce GATT disciplines, particularly those of Article XIX;

(2) re-establish multilateral control over safeguards and eliminate

measures that escape such control; and

(3) encourage structural adjustment on the part of industries adversely

affected by increased imports, thereby enhancing competition in
international markets.

Structure of the Agreement

The Agreement consists of 14 articles and one annex. In general terms, it

has four main components: (1) general provisions (Articles 1 and 2); (2)
rules governing Members’ application of new safeguard measures (i.e.,
those applied after entry into force of WTO Agreement (Articles 3-9)); (3)
rules pertaining to pre-existing measures that were applied before the
WTO’s entry into force (Articles 10 and 11); and (4) multilateral
surveillance and institutions (Articles 12-14).

Rules governing new safeguard measures (applied after entry

into force of WTO Agreement)

1.Investigative Requirements

New safeguard measures may be applied only following an investigation

conducted by competent authorities pursuant to previously published
procedures. Although the Agreement does not contain detailed procedural
requirements, it does require reasonable public notice of the investigation,
and that interested parties (importers, exporters, producers, etc.) be given
the opportunity to present their views and to respond to the views of
others. Among the topics on which views are to be sought is whether or
not a safeguard measure would be in the public interest. The relevant
authorities are obligated to publish a report presenting and explaining
their findings on all pertinent issues, including a demonstration of the
relevance of the factors examined. The Agreement also contains specific
rules for the handling of confidential information in the context of an
investigation.

2.Factual Basis for Determination of Serious Injury or Threat

Thereof

The Agreement defines “serious injury” as significant impairment in the

position of a domestic industry. “Threat of serious injury” is threat that is
clearly imminent as shown by facts, and not based on mere allegation,
conjecture or remote possibility. A “domestic industry” is defined as the
producers as a whole of the like or directly competitive products operating
within the territory of a Member, or producers who collectively account for
a major proportion of the total domestic production of those products.

In determining whether serious injury or threat is present, investigating

authorities are to evaluate all relevant factors having a bearing on the
condition of the industry . Factors that must be analysed are the absolute
and relative rate and amount of increase in imports, the market share
taken by the increased imports, and changes in level of sales, production,
productivity, capacity utilization, profits and losses, and employment of
the domestic industry.

3.Application of Measures

Safeguard measures may only be applied to the extent necessary to

remedy or prevent serious injury and to facilitate adjustment, within
certain limits. If the measure takes the form of a quantitative restriction,
the level must not be below the actual import level of the most recent
three representative years, unless there is clear justification for doing
otherwise. Rules also apply as to how quota shares are to be allocated
among supplier countries, as to compensation to Members whose trade is
affected, and as to consultations with affected Members.

The maximum duration of any safeguard measure is four years, unless it

is extended consistent with the Agreement’s provisions. In particular, a
measure may be extended only if its continuation is found to be necessary
to prevent or remedy serious injury, and only if evidence shows that the
industry is adjusting.

The initial period of application plus any extension normally cannot

exceed eight years. In addition, safeguard measures in place for longer
than one year must be progressively liberalized at regular intervals during
the period of application. If a measure is extended beyond the initial
period of application, it can be no more restrictive during this period than
it was at the end of the initial period, and it should continue to be
liberalized.

Any measure of more than three years duration must be reviewed at mid-
term. If appropriate based on that review, the Member applying the
measure must withdraw it or increase the pace of its liberalization.

Under critical circumstances, defined as circumstances where delay would

cause damage that would be difficult to repair, provisional measures may
be imposed. Such measures may be in the form of tariff increases only,
and may be kept in place for a maximum of 200 days. In addition, the
period of application of any provisional measure must be included in the
total period of application of a safeguard measure.

Repeated application of safeguards with respect to a given product is

limited by the Agreement. Ordinarily, a safeguard may not be applied
again to a product until a period equal to the duration of the original
safeguard has elapsed, so long as the period of non-application is at least
two years.

Nonetheless, if a new safeguard measure has a duration of 180 days or

less, it may be applied so long as one year has elapsed since the date the
original safeguard measure was introduced, and so long as no more than
two safeguard measures have been applied on the product during the five
years immediately preceding the date of introduction of the new
safeguard measure.

4.Concessions and Other Obligations

In applying a safeguard measure, the Member must maintain a

substantially equivalent level of concessions and other obligations with
respect to affected exporting Members. To do so, any adequate means of
trade compensation may be agreed with the affected Members. Absent
such agreement, the affected exporting Members individually may
suspend substantially equivalent concessions and other obligations. This
latter right cannot be exercised during the first three years of application
of a safeguard measure if the measure is taken based on an absolute
increase in imports, and otherwise conforms to the provisions of the
Agreement.

5.Developing Country Members

Developing country Members receive special and differential treatment

with respect to other Members’ safeguard measures, and with respect to
applying their own such measures. A safeguard measure shall not be
applied to low volume imports from developing country Members, that is,
where a single developing country Member’s products account for no
more than 3 percent of the total subject imports, as long as products
originating in those low-import-share developing country Members
collectively do not exceed 9 percent of imports.

In applying safeguard measures, developing country Members may

extend the application of a safeguard measure for an extra two years
beyond that normally permitted. In addition, the rules for re-applying
safeguard measures with respect to a given product are relaxed for
developing country Members.

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Ongoing Multilateral Negotiations

Multilateral trade agreements are trade agreements between three

countries or more. The negotiations lower the tariffs and make import and
export simpler for companies. These are difficult to negotiate because
they are among several nations. When all the parties sign, the same broad
reach of these agreements makes them even more robust and reliable
compared to other forms of trade agreements. It is easier to negotiate and
sign bilateral agreements because these are only between the two
countries. These do not have as great an impact on economic
development as the multilateral agreements would.

Multilateral agreements, once negotiated, are very effective and powerful.

They cover a wider geographical region that gives the signatories a
significant competitive advantage. All nations generally give one another
the position of the most-favoured-nation, offering favourable deals and
even the minimum possible tariffs for mutually beneficial trade. Through
making developing nations more competitive the multilateral trade
agreements are improving and supporting the global economy. These
agreements regulate the import and export procedures to conform to set
standards which benefit all the member states economically. The intricacy
of such agreements supports those nations who are able to take
advantage of globalization, the countries who are unable to so, often face
hardships.

International trade at present

*Regional trading, as per the WTO statistics grew from approximately

$290 billion in 1993 over the first two decades to more than $1.1 trillion
by. 2016. Overall international trade stood at $39.7 trillion in 2018, which
includes trade of about 20.8 trillion dollars in exports and 18.9 trillion
dollars in imports. Approximately 46% of the $86 trillion world economy is
driven by trade. Of the goods traded, more than one-fourth are machinery
and electronics, such as computers, boilers, and scientific instruments.
Nearly 12 percent were automobiles and several other means of transport.

*Then follows oil as well as other fuels, which contribute about 11%.
Chemicals inclusive of pharmaceuticals furthermore add 10% to the total
economy.

*In terms of percentage, global trade accounts for about 50% of

international economic activities. World trade unlocks new market
opportunities and is exposing nations to products and services which are
in short supply in their domestic economies. Nations that export usually
grow companies that understand how and when to gain a strategic
advantage in the global market. Trade deals can improve exports and
economic development, but the increased competition is also harmful to
micro, small and domestic businesses.

*The world’s largest multilateral agreement is the U.S.-Mexico-Canada

Agreement (USMCA, previously known as the North American Free Trade
Agreement or NAFTA), which is between the United States, Canada, and
Mexico and which presently encompasses the world’s largest free-trade
region. It removes all barriers and tariffs between the three nations,
allowing the trade to triple to $1.2 trillion.

*U.S. exports in 2019 amounted to $2.5 trillion, contributing 11.7 percent

to gross domestic product. The majority of the manufactured goods
produced by the United States economy are mainly for domestic
consumption and are not exported. A major part of the economy also
includes services, although they are harder to export. Irrespective of what
the US produces, it imports much more than it exports. Imports were at
$3.1 trillion in 2019 and led the United States towards having a significant
trade deficit. In 2019 global trade deducted $616 billion from its GDP.
Statistics on the U.S.A.’s import and export of products reveal that the
country’s amount of imported goods and services surpass what it is
exporting in the global market.

*Owing to the trade war launched by President Donald Trump in March

2018, the trade deficit has reduced. Trade policies introduced by Trump
contain a tariff of 25 percent on import of steel products and a tariff of 10
percent on aluminium, China, the European Union, Mexico, and Canada all
proposed retaliatory tariffs that affected U.S. exports, and an agreement
eliminating the tariffs was signed in May 2019. Analysts were concerned
that Trump might have started a trade war that could have harmed the
global trade and market.

Examples of Multilateral Agreements:

-United Nations Charter: A foundational document for international
cooperation.

-Kyoto Protocol: An agreement on climate change.

-Paris Agreement: Another climate change agreement.

-General Agreement on Tariffs and Trade (GATT): A predecessor to the

WTO, focused on trade liberalization.

-Multilateral Investment Treaties (MITs): Agreements between multiple

nations regarding investment.

Need for multilateral trade Rules

With the passing of the Second World War generations, the awareness
about why peace and trade were seen as mutually beneficial gradually
disappeared. International peace is no longer a commonly acknowledged
basis for the maintenance of the multilateral system of trade. The
evidence cited for the assertion:

That the prevailing geopolitical status is collapsing takes into account the
growth in populism,

The movement in a substantial number of nations towards increased

authoritarian regimes,

The considerable number of local armed conflicts and rising border

disputes,

The difficulties encountered because of non-state actors, and

The major changes in the relative positions of competing centres of power

and possible splits in prevailing alliances between nations.

The multilateral system is claimed to be:

Weakened because of the conflicting economic structures of major trading

countries,

Weakened by an increase in unilateral trade policies,

Weakened by disagreements about what is required to encourage global

economic growth,

Weakened by an increase in populism, imperialism, wage disparity,

nationalism and a lack of political will to further liberalize trade by new
trade deals,

Weakened by a decline in confidence,

Weakened by rising anxiety that prevailing trade agreements are not
mutually advantageous,

Weakened by the lack of unanimity among all WTO members in terms of

the path ahead, along with an overarching perception that the duration
when it was possible to achieve multilateral agreements has come to an
end with one outcome being the continued growth of bilateral and
regional agreements.

Advantages of multilateral negotiation

Multilateral agreements ensure equal treatment of all signatories. No

nation could offer one nation better trade deals as compared to what it
offered to other nations and this helps level the playing field.

1)It is particularly critical for the developing economies as most

businesses are small in scale which makes them less competitive in
nature. The status of the most favoured country provides a nation with the
best trade terms from a trading partner. This trade status is most
beneficial for developing countries.

2)The second advantage is that each participant will enjoy an increase in

trade. They have low tariffs for their businesses that reduce the cost of
their exports.

3)The third advantage is that all trading partners are regulated by

common export regulations. Companies save legal expenses because, for
each nation, they adhere to the same laws.

4)The fourth advantage would be that nations can negotiate trade

agreements at a time with more than just one nation. A detailed approval
process is undertaken for trade agreements.

5)The fifth advantage refers to the developing markets. The nation with
the strongest economy is continuing to benefit from bilateral trade
agreements which generally proves to be a drawback for the countries
with developing economies. But by strengthening the growing markets it
will help the developed economies in the future.

Drawbacks of multilateral negotiation

1)The most considerable drawback of Multilateral trade agreements is that

they are complex and complicated in nature, which makes them harder to
negotiate and thus are time-consuming. The duration of the talks also
means it won’t happen at all.

2)The second drawback is that the negotiation details concern business

and trade activities in particular and these are often misunderstood by the
public. As a consequence of which they attract lots of media coverage,
debate controversies, and protests.

3)The third drawback of almost any trade agreement is common, some

industries and regions of the nation have to struggle from the lack of trade
boundaries.

4)The fourth drawback is for the smaller businesses of a country. A

multilateral deal provides giant multinationals with a competitive
advantage as these corporations already know how to operate in a global
environment.

As a result, small companies are unable to compete and are forced to lay
off workers in order to cut costs. Other businesses may relocate their
plants to nations with lower living standards, and if such an area was
dependent on these industries, then they would encounter higher rates of
unemployment. As a consequence of which the multilateral trade
agreements are generally considered as unpopular or controversial.

Dispute Settlement under the International Trade Dispute

Resolution

The World Trade Organization (WTO) is responsible for maintaining the

free flow of trade between its member countries. WTO, in the form of
Dispute Settlement Undertaking (DSU), provides an instrument for the
settling of trade disputes between the parties. The dispute generally
arises when any member country violates any provision of WTO
agreement which other member countries think unreasonable..

This dispute settlement process is the outcome of the Uruguay round

(1996-1994). This mechanism provides a speedy resolution of a trade
dispute. This settlement system applies to all disputes covered under the
WTO agreement. The Dispute Settlement Body (DSB) is responsible for
DSU to resolve a dispute between parties.

Stages in settlement of trade disputes

Stage 1: Consultations (Article 4 of the DSU)

Before referring any dispute to mediation or taking any other actions, both
the WTO member countries shall affirm to resolve their disputes through
consultation. If a WTO member requests for consultation with another
Member concerning measures affecting the operations of the former
member, the latter member must accept such request within a period 10
days after the date of receipt of such request and shall enter into
consultation within 30 days.
If the consultation fails to provide a satisfactory solution to the problem
within 60 days after the date of receipt of the request for consultation,
then the complaining party may request for construction of the panel. All
such requests for consultation and construction shall be notified in writing
including reasons for such requests to the Dispute Settlement Body by the
complaining member.

Stage 2: Establishment of Panels (Articles 6, 8 and 11 of the DSU)

If no satisfactory solution is reached through consultation between the

member countries, the complaining member may request for the
establishment of panels in writing to the Dispute Settlement Body
including a summary of the case and issues involved. The panel is
established at the second meeting of DSB at which request appears as an
agenda item of the meeting.

The function of the Panel is to aid the Dispute Settlement Body in

resolving the matter in dispute. The panel assesses the entire dispute,
including the facts of the case and issues involved therein and examines
whether it conforms with the covered agreement between the member
countries. The Panel shall provide its final report to the parties within 6
months from the date when panel procedures start..

Stage 3: Selection of panellists (Article 8 of the DSU)

After the establishment of the panel, the next step is to select panellists.
The panellists are selected by the WTO Secretariat. The parties cannot
oppose the selection unless they state reasons satisfactory to the
Secretariat. The panel shall consist of three panellists. The parties can
agree to have five panellists on board if they consider necessary within 10
days from the establishment of the panel.

The WTO Secretariat assists the parties in the selection of panellists by

creating a list of all governmental and non-governmental individuals
having certain qualifications from which panellists may be chosen by the
parties.

Members may, at any reasonable time, make an addition to the list of

individuals by suggesting the name of individuals who can assist the
parties by providing any information related to international trade law or
any of the matter as covered in the agreement because of which dispute
arose in the first place. The addition to the list can be made only after the
approval of the Dispute Settlement Body.

If panellists are not selected within 20 days after the date of

establishment of the panel, the Director-General, in consultation with the
Chairman of Dispute Settlement Body and Chairman of relevant Council or
Committee appoint panellists which they consider appropriate. The
chairman of the Dispute Settlement Body, then informs the members of
the composition of the panel within 10 days.

Stage 4: Procedure of Panel (Articles 10 and 12 of the DSU)

The panellists shall, within one week after the composition of the panel fix
a timetable for the panel process. After this, the panel decides a deadline
for written submission to be made by each party. Each party has to submit
its submissions with the secretariat which shall transfer each submission
to the panel and submission made by one party shall be sent to the other
party as well. At the first substantive meeting of the panel, the
complaining party shall be the first to present their case ahead of the
responding party.

The third parties who have notified the Dispute Settlement Body having
substantial interest in the subject matter of the dispute are also asked to
present their views during the same meeting. Any rebuttals between the
parties shall be made at the subsequent meeting of the panel. Here, the
responding party shall be the first to respond against the complaining
party. The parties, before that meeting, have to submit their written
rebuttals to the panel. The panel, if they consider necessary, put any
questions before the parties to be answered in the duration of that
meeting.

Where after the examination, a solution has been reached between the
parties, the panel shall submit a written report to the Dispute Settlement
Body which shall have a brief description of the case along with the
solution which has been reached. Where the solution has not been found,
the panel shall send a written report to the Dispute Settlement Body
mentioning its findings of the case and recommendations, if any, it makes.

The report has to be sent within six months of its examination. In case of
urgency, including the case of perishable goods, the report has to be sent
within three months. The maximum period during which the report has to
send is nine months from the establishment of the panel.

Stage 5: Interim report (Article 15 of the DSU)

Following the oral arguments and rebuttal that has been performed and
examination has been made, the panel shall issue a draft report to the
parties. The parties have to submit their comments in writing after
receiving the draft report within the period set by the panel.

After the expiration of the said period for receiving the comments from the
parties, the panel shall issue an interim report, including its findings in the
draft report and its new findings and conclusion. Both the parties, within
the time given the panel may submit its written request to revise its
interim report accordingly.

At the request made by the parties, the panel shall call for a further
meeting to discuss the comments made by the parties to the dispute. If
both the parties are satisfied with the solution reached, then such a
revised interim report shall be the final panel report and is circulated
among the members.

In case, the parties are not satisfied with the outcome of the report
reached then any objections of the members shall be considered at the
meeting of the Dispute Settlement Body. Such objections have to be
reported at least 10 days before the meeting of the Dispute Settlement
Body.

The final report shall be adopted by the Dispute Settlement Body within
60 days from the date panel report is circulated to the members unless
any party to the dispute is unsatisfied with such report and notifies its
decision of appeal to Dispute Settlement Body or the Dispute Settlement
Body unanimously decides not to adopt such report, as the case may be.
In case of an appeal, the report shall deem to be invalid for adoption by
the Dispute Settlement Body unless the Standing Appellate Body provides
its Appellate Body Report.

Stage 6: Appeal (Article 17 of the DSU)

Either of the parties unsatisfied with the ruling of the panel report can
appeal to the Standing Appellate Body established by the Dispute
Settlement Body. Only parties to the dispute can appeal to a panel report
and not the third parties. Third parties can be allowed to be heard only in
case such third party has notified in writing to the Dispute Settlement
Body of its substantial interest in such dispute.

The proceeding of the Appellate Body shall not exceed 60 days from the
date a party to the dispute notifies its intention of appealing to the
Appellate Body to the Dispute Settlement Body. In case of delay, the
maximum period granted to the Appellate Body is 90 days. The Appellate
Body has to submit in writing to the Dispute Settlement Body its reasons
for the delay together with the period within which the final decision is
notified.

The Appellate Body will not re-examine any shreds of evidence, issues or
previous arguments but its examination shall be limited to laws covered in
the panel report or legal interpretation evolved by the panellists. The
Appellate Body has the power to uphold, modify or reverse the panel
report and provide a conclusive report.
Stage 7: Acceptance of report by Dispute Settlement Body
(Article 30 of the DSU)

The Dispute Settlement Body has to either accept the Appellate Body
report or reject it within a maximum period of 30 days after receiving such
a report. The report can only be rejected unanimously.

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Enforcement and remedies under the International Trade Dispute

Resolution

Enforcement in International Trade Dispute Resolution is a complex

process, primarily relying on the self-enforcement by member nations
through various measures like trade sanctions and retaliatory measures.
While the World Trade Organization (WTO) plays a role in resolving
disputes and providing rulings, it lacks direct enforcement power. Instead,
it relies on its members to implement the rulings and comply with the
recommendations made by the Dispute Settlement Body (DSB).

Key aspects of enforcement in the WTO context:

Self-Enforcement:WTO members are responsible for enforcing the

rulings and recommendations of the DSB.

Retaliatory Measures:If a member fails to comply with a ruling, the

affected member can utilize retaliatory measures (e.g., trade sanctions) to
encourage compliance.

Surveillance of Implementation:The WTO monitors the

implementation of recommendations and rulings to ensure they are
adhered to.

Role of the DSB:The DSB, comprised of all WTO members, is responsible

for overseeing the dispute settlement process.

Legal Framework:The WTO’s Dispute Settlement Understanding (DSU)

provides the legal framework for dispute settlement, including
enforcement mechanisms.

Complexity:The complexity of trade agreements and the potential for

protectionism can further complicate enforcement.

Other relevant aspects of international trade dispute resolution:

Arbitration:Arbitration, a form of dispute resolution, can also be used in

international trade disputes, but it requires the consent of all parties
involved.
Enforcement of Arbitration Awards:In India, for example, there are
mechanisms for enforcing arbitral awards, including foreign arbitral
awards, through the courts.

Legal Representation:Legal firms and lawyers can provide expertise

and representation in international trade disputes, helping parties
navigate the legal complexities.