World trading system
The new publication draws on feedback to the earlier publication from the business community, trade negotiators and foreign trade officials. While maintaining the overall approach, it reflects major developments since and contains a new section touching upon emerging trade topics. The rules are explained in a manner that is easy to understand, yet care has been taken to ensure that the Guide correctly reflects the legal situation, by collaborating closely with the WTO Secretariat in its production and review.
Understanding the rules is not easy - they are both voluminous and complex. The texts of the legal instruments run over pages. These are supplemented by national "schedules" which list in more than 22, pages the specific liberalization commitments assumed by WTO member countries. It is usually difficult for business persons not familiar with the WTO to understand the system's legal language.
Yet ability of industries and business enterprises to benefit fully from this rule-based system in today's fast globalizing economy depends on their knowledge and understanding of the detailed rules. The Business Guide to the World Trading System helps them navigate through this rule-based system more effectively. Sometimes countries tax imports at rates that are lower than the bound rates.
Frequently this is the case in developing countries. In developed countries the rates actually charged and the bound rates tend to be the same. A country can change its bindings, but only after negotiating with its trading partners, which could mean compensating them for loss of trade. One of the achievements of the Uruguay Round of multilateral trade talks was to increase the amount of trade under binding commitments see table.
The result of all this: The system tries to improve predictability and stability in other ways as well. Many WTO agreements require governments to disclose their policies and practices publicly within the country or by notifying the WTO. The regular surveillance of national trade policies through the Trade Policy Review Mechanism provides a further means of encouraging transparency both domestically and at the multilateral level.
The system does allow tariffs and, in limited circumstances, other forms of protection. More accurately, it is a system of rules dedicated to open, fair and undistorted competition. So too are those on dumping exporting at below cost to gain market share and subsidies.
The issues are complex, and the rules try to establish what is fair or unfair, and how governments can respond, in particular by charging additional import duties calculated to compensate for damage caused by unfair trade.
Many of the other WTO agreements aim to support fair competition: The WTO system contributes to development. And the agreements themselves inherit the earlier provisions of GATT that allow for special assistance and trade concessions for developing countries. Over three quarters of WTO members are developing countries and countries in transition to market economies.
During the seven and a half years of the Uruguay Round, over 60 of these countries implemented trade liberalization programmes autonomously. At the same time, developing countries and transition economies were much more active and influential in the Uruguay Round negotiations than in any previous round, and they are even more so in the current Doha Development Agenda.
The Guide has three features which make it unique. First, it describes the WTO legal framework from a business perspective, using simple language and highlighting business implications. Third, it is the only description of the WTO framework from a business angle which has been reviewed and approved by the WTO Secretariat. The Guide explained the legal framework for international trade resulting from these Agreements in simple language, emphasizing the business implications of specific provisions and rules.
The initial Guide was very well received by the business community, trade negotiators and foreign trade officials alike. More than 17, copies in English, French and Spanish were distributed and the Guide has since been translated by partner organizations into Arabic, Chinese, Greek, Romanian, Russian and other languages. More than seminars and information events on the provisions of the Multilateral Trading System for the business community in developing countries and transition economies have been organized using the Guide as a comprehensive reference tool.
The new publication draws on feedback to the earlier publication from the business community, trade negotiators and foreign trade officials. While maintaining the overall approach, it reflects major developments since and contains a new section touching upon emerging trade topics.