World Trade Organization
Since the World Trade Organization was started in 1995, it has been given the responsibility of liberalizing and managing the international trading system. It has been given responsibilities that exceed those that the organization before it, the General Agreement on Tariffs and Trade (GATT) had. A dispute settlement mechanism was created through the Understanding on Rules and Procedures Governing the Settlement of Disputes (Dispute Settlement Understanding : DSU) which was adopted during the Uruguay Round agreement signed in Marrakech on April 15 1994 that gave rise to the World Trade Organization (WTO). New areas of trade were brought into account, reflecting on how trade has been achieved throughout the past few decades. Trade in services and in agricultural products was now subject to the liberalization efforts of the WTO. With the Uruguay Round trade agreement; the WTO had an improved dispute settlement mechanism and a tightening of the GATT exemption on regional agreements. Trade liberalization under GATT has been incorporated into international trading relations since 1947. These two organizations have worked together in mutual tolerance, driven by the pursuit of distinct and independent goals, despite the numerous differe
Farrell points to the weaknesses of the DSB and more broadly of the regulatory system of the WTO, especially as compared to the EU regulatory framework. It is significant that she asserts that “apart from the addition of many new subjects to the substantive annexes, the WTO has no more real legal power than that which existed for the GATT under the previous agreements.” Farrell also points to several weaknesses of the DSB which constitute substantial limits to the effectiveness of the DSB.
Farrell sheds light on the considerable benefits that the EU may enjoy from her membership to the WTO. Indeed, the liberalization of international trade carried out by the WTO fosters EU’s interests on the international stage: “a liberal trading system is fundamental to the prosperity of the Union as a bloc and to the individual member states.” In this regard, Farrell asserts that “there is no doubt that the European Union entered into the GATT multilateral negotiations […] in the belief that liberalization could bring significant benefits for European producers in terms of wider export and import markets.” . So therefore, “concessions on internal policies could be compensated for by the overall economic gains to the European Union anticipated from multilateral trade liberalization. Equally, the EU’ s acceptance of other areas of the Uruguay Round, such as the provision on preferential trade agreements and the introduction of an improved dispute settlement mechanism, and indeed the introduction of the WTO itself, was based upon the view that the gains exceeded the losses, whether these were calculated on an economic or political basis.”
Apart from the influence that the EU may exert on the WTO at the structural level, that is by using its weight as a trading entity, the EU may, according to Farrell, exert an influence on the WTO at the “systemic level.” This “systemic influence”, Farrell argues, stems from the possibility for the WTO to use the extensive experience that the EU has acquired in designing and implementing the rules of a multilateral system. Farrell’s reasoning focuses especially on the area of competition where, she argues, there has been a “recognition of EU s competition policy among the international business community.” Hence, “the EU model does have much to offer in the design of the multilateral system, since it indicates the basic prerequisites needed to create an effective system for the regulation of competition.”
Farrell challenges the real effectiveness of the DSB, especially compared to other international courts such as the ECJ. The DSB has indeed a narrow economic purpose compared to the European Court of Justice. As far as integration achieved by the WTO, Ferrell believes that the more the WTO is considered an integrated organization, the more likely its norms will have a direct
Some topics in this essay:
European Union, World Trade Organization, International Trade, General Agreement On Tariffs And Trade, United Kingdom, Farrell, Treaty Of Lisbon, Council Of The European Union, Uruguay, Enlargement Of The European Union,
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