Commercial Trade Policy: The WTO

For this discussion, you group is your WTO simulation group. As a team, you will conduct some discovery work. On Wednesday October 17rd, your group will meet in class to discuss what you have each learned from your readings. In class on the 17th, you will plan a class presentation of your work for Monday October 22th (note: presentation date was changed from the 19th to the 22nd)

I’ve done my best to divide up the tworeadings below by the following 4 topics:

  1. Agriculture: History of the WTO
  2. Raw Materials: Who is the WTO?
  3. Solar Panels: Agreements and trade issues
  4. Steel and Aluminum: WTO Dispute Settlement system

For Wednesday October 17th: Your job is to read and write responses to the reading questions that your group has been assigned below. Bring the text (electronic is fine) to class and be prepared to share and compile information. Please note that you are only required to work on your assigned readings, but you will find more information the more you read! Please bring in hard copies (or use the OneDrive folder) of your answers to the reading questions.

For Friday October 22nd: Your group’s job is to compile a 10-15 minute presentation for the class on what you have discovered on your topic. You are encouraged to use PowerPoint-type slides to present. I encourage you to think carefully about how best to present: timeline, flow-chart, lists/bullets.

1st reading: Free Trade Under Fire, Douglas Irwin, Chapter 7: The World Trading System: The WTO, Trade Disputes and Regional Agreements, p. 239-269

The Origins of the GATT System - Agriculture

  1. P. 240. What was the source of the rise in global protectionism in the 1930s?
  2. P. 240. What does “beggar thy neighbor” mean?
  3. P. 240. What did the Smoot-Hawley tariff do to patterns of global trade protection?
  4. P. 240-242. What was the Reciprocal Trade Agreements Act (RTAA)? And how did it work to change the way trade politics work?
  5. P. 241. What is the mostfavored nation (MFN) clause?

The General Agreement on Tariffs and Trade–Raw Materials

  1. P. 242. What was the General Agreement on Tariffs and Trade (GATT)?
  2. P. 243. How were tariff negotiations conducted under GATT? And what was the role of the MFN clause?
  3. P. 243-244. What are key points under GATT articles: 1, 6, 16, 11, and 18?
  4. P. 245. Is the GATT an organization?

The General Agreement on Tariffs and Trade - Agriculture

  1. P. 245. When was the European Economic Community formed (EEC)?
  2. P. 245-248. Briefly characterized the results/success/constraints of the following GATT negotiating rounds of: Kennedy Round, Tokyo Round, and Uruguay Round
  3. P. 246. What is “fast-track” or “trade protection authority”?
  4. P. 247. When/how was the WTO created?

The General Agreement on Tariffs and Trade –Steel and Aluminum

  1. P. 248. What did the Uruguay Round’s Agreement on Agriculture do? What is ‘tariffication’?
  2. P. 249. While export subsidies are prohibited, how has OECD countries supported domestic agriculture? How have these domestic policies changed?
  3. P. 250. Briefly describe: General Agreement on Trade and Services (GATS), Trade-related investment measures (TRIMs) and trade-related intellectual property (TRIPs).
  4. P. 251. Why is TRIPs controversial?
  5. P. 252. What does a “single undertaking” mean?

Has the GATT been a Success? - skip

  1. P. 253-254. What are the GATT successes described in this section?
  2. P. 255. Why has reciprocity via multilateral agreements worked well?
  3. P. 256. Why did non-GATT countries want to join the WTO?
  4. P. 256. Describe the GATT defects.
  5. P. 258. How may have the WTO helped avoid increase protectionism after the 2008 financial crisis?

The World Trade Organization – Raw Materials

  1. P. 259. When was this established?
  2. P. 259. What is a fundamental difference between the GATT and the WTO?
  3. P. 260. How does the budget/staff of the WTO differ from the World Bank and IMF? Why?
  4. P. 260. What can the WTO not do? Who has policy power in the WTO?
  5. P. 261. Why do developing countries feel disappointed after the Uruguay Round of the GATT?
  6. P. 261. When was Doha Development Round launched? What were its goals? Areas? Problems?
  7. P. 262. When was the Doha Round supposed to be completed? What is one reason why it has not yet been completed?
  8. P. 263. What is some evidence that the WTO may not be perceived to be important anymore?

The WTO and Dispute Settlement - Steel and Aluminum

  1. P. 263. What is one difference between the GATT and the WTO?
  2. P. 264. Describe the steps in the dispute settlement process.
  3. P. 265. Describe the number and trends in disputes as of 2014.
  4. P. 266. Give an example of a “small stakes” case and “large stakes” case.
  5. P. 266-267. What is the US role in disputes?
  6. P. 267-268. Can the WTO change US domestic law?
  7. P. 268. Give an example of dispute settlement controversy.

2nd reading: Understanding the WTO

Chapter 1: Basics - Agriculture

  1. P. 9. How is the WTO like a table?
  2. P. 10. Why is the WTO a multilateral trading system and not a global or international system?
  3. P. 10. What are the key principals of what the WTO trading system should be? Summary of the information is on page 10, but more detail follows in pages 10-12.
  4. P. 15-16. What was the International Trade Organization (ITO)? What happened to it?
  5. P. 17. By the 1980’s what were the main GATT problems?
  6. P. 19. The Uruguay Round took 7.5 years to complete. What were some of the merits of the delay?

Chapter 2: The Agreements–Solar Panels

This chapter outlines the major Uruguay Round agreements. For each of the following sections, briefly summarize the key issue:

2. Tariffs: more bindings and closer to zero

3. Agriculture: fairer markets for farmers

4. Standards and safety

5. Textiles: back in the mainstream

6. Services: rules for growth and investment

7. Intellectual property: protection and enforcement

8. Anti-dumping, subsidies, safeguards: contingencies, etc.

9. Non-tariff barriers: red tape, etc.

Chapter 3: Settling Disputes - Steel and Aluminum

  1. P. 55. How are panels chosen?
  2. P. 56. What are the stages of dispute settlement?
  3. P. 57. What is a typical timeline for dispute settlement? (See Box)
  4. P. 58. What are the steps that can happen after a case has been decided?

Chapter 7: The Organization – Raw materials

  1. P. 101.Who is the WTO??
  2. P. 101-102. Briefly describe the four levels of ‘authority’.
  3. P. 105. What are the stages of membership into the WTO.
  4. P. 106. Increasingly countries within the WTO have started to form groups. Why? Give some examples.