The World Trade Organisation and International Trade Law1. INTRODUCTION. The World Trade Organization (WTO) is an international trade organization formed under the General Agreement on Tariffs and Trade (GATT) to replace GATT and implement measures agreed at the Uruguay Round (1994) by 2002. (Martin and Law, 2006). The GAAT (General Agreement of Tariffs and Trade) was an international treaty signed in 1947 to provide for some measure of world free trade with the aim of reducing high tariffs on goods. (Martin and Law, 2006). The WTO began operating on 1 January 1995. The WTO's aims are to continue the work of GATT in agreeing international trading rules and furthering the liberalization of international trade.
The WTO extends its jurisdiction into such aspects of trading as intellectual property rights. (Law and Martin, 2006). WTO rules are very important in international trade contracts. The highest authority of the WTO is the Ministerial Conference, held at least every two years. By 2006 the WTO had 149 member states. (Martin and Law, 2006; Bermann, 2007). The World Trade organisations have a series of compelementary functions that work together to phase out most forms of trade restrictions.
(Bermann, 2007). According to Bermann (2007), these functions can be subdivided into two groups including “substantive” and “procedural” groupings. Under the substantive grouping on the one hand, the organisation attempts to effect and enforce international trade rules negotitated by its member countries. (Bremann, 2007). The scope of this regulation includes trade in in goods and services to the protection of intellectual property. (Bremann, 2007). The aim of each of the substantive agreements is to eliminate or reduce trade barriers, such as tariffs, quotas, subsidies and domestic regulatory protectionism although they cover a wide spectrum of commercial subjects, each having its own particular considerations.
(Bremann, 2007). On the other hand, the procedural grouping aims at peacefully concluding disputes arising under the substantive agreements of the WTO. The disputes settlement Understanding outlines a multilateral approach that aims to ensure security and predictability, promote the prompt settlement of disputes, and exact compliance with the WTO substantive obligations. (Bremann, 2007). There is a preference for multilateral and non-adversarial methods of dispute resolution. (Bremann, 2007).
Conversely, in the absence of a mutually agreed solution, the first objective of the dispute settlement mechanism is usually to ensure the withdrawal of the measures concerned. (Bremann, 2007). The world trade organisation was formed from a system of long-term trade agreements. Its objective is to help in the development and enforcement of trade regulations negotiated by its member states. (Bremann, 2007). According to Bremann (2007), the dispute settlement system embodied in the Dispute Settlement Understanding (DSU) performs two notable functions including: It operates to “complete” the “incomplete” WTO substantive contract, giving content to areas left vague or silent in the relevant agreements. It adjudicates and resolves trade disputes brought pursuant to WTO agreements. According to Bermann (2007), the current DSU language presents an unnecessary obstacle to the WTO procedural and substantive aims.
For example, one country initiates recourse to the dispute settlement system based on another’s alleged violation of one or more agreements. (Bermann, 2007). The complaining country can take counter measures only after the WTO determines that a violation has occurred and the responding state fails to comply with its recommendations.
(Bermann, 2007). A post-retaliation complaint arises when one of the disputing parties requests a ruling as to whether the offending country, following the authorization of countermeasures, has since brought its measures into compliance with WTO agreements. (Law and Martin, 2006).