Establishment of international trade rules reasons:

1)elimination of trade-restrictive measures in national legal orders;

2) need for security and predictability of trade rules;

3) challenges presented by economic globalisation (environmental issues, consumer safety, labour standards, cultural identity);

4) achievement of a greater measure of equity in international economic relations.

ITO Charter

Havana Conference 1948

Complementarity with IMF and WB

No entry into force: USA didn’t support the

project anymore Congress controlled by

Republicans).

GATT 1947

The GATT 1947 contains substantive trade rules (most-favoured nation clause, national treatment, barrier to market access, subsidies and countervailing duties, antidumping etc.).

No entry into force provisional application as from 1st January 1948 adoption of a specific Protocol.

Birth defects of GATT 1947 (Jackson)

• The lack of a charter: no legal personality, no procedural and institutional structure;

• Provisional character of its application;

• Grandfather rights;

• Ambiguity and confusion about GATT’s authority.

Birth defects of GATT 1947 (II)

Very scant institutional structure (art. XXV GATT 1947):

- meetings of Contracting Parties (one State,

one vote; majority rule actual use of consensus method);

- decisions of GATT Contracting Parties and Panels reports.

The evolution from GATT to WTO

Lengthy Negotiating Rounds:

• failure of Tokyo Round: adoption of Plurilateral agreements, binding only on States which accepted them.

• Uruguay Round (1989-1994): success in creating a new multilateral organization

Marrakesh Final Act (1994)

- institution of the World Trade Organization and signature of the WTO Agreement

- creation of a Multilateral Trade Organization and modification of FOGS (functioning of GATT system)

- the single undertaking: Members of the Organization should be bound by all the agreements in the GATT system

Package of agreements annexed to the WTO Agreement

• Annex 1A: Multilateral Agreements on Trade in Goods GATT 1994 (incorporating GATT 1947 and legal instruments adopted by GATT Contracting Parties with reference to it) + agreements on specific matters;

• Annex 1B: General Agreement on Trade in Services;• Annex 1C: Agreement on Trade-Related Aspects of

Intellectual Property Rights;• Annex 2: Disputes Settlement Understanding;• Annex 3: Trade Policy Review Mechanism;• Annex 4: Plurilateral Trade Agreements.