Institutionalization of International Organizations

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Institutionalization of International Organizations

The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on 1 January 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade(GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries by providing a framework for negotiating and formalizing trade agreements and a dispute resolution process aimed at enforcing participant's adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986-1994).

The WTO's creation on 1 January 1995 marked the biggest reform of international trade since after the Second World War. It also brought to reality -- in an updated form -- the failed attempt in 1948 to create an International Trade Organization.

From 1948 to 1994, the General Agreement on Tariffs and Trade (GATT) provided the rules for much of world trade and presided over periods that saw some of the highest growth rates in international commerce. It seemed well-established, but throughout those 47 years, it was a provisional agreement and organization.

The original intention was to create a third institution to handle the trade side of international economic cooperation, joining the two “Bretton Woods” institutions, the World Bank and the International Monetary Fund. Over 50 countries participated in negotiations to create an International Trade Organization (ITO) as a specialized agency of the United Nations. The draft ITO Charter was ambitious. It extended beyond world trade disciplines, to include rules on employment, commodity agreements, restrictive business practices, international investment, and services. The aim was to create the ITO at a UN Conference on Trade and Employment in Havana, Cuba in 1947.

Meanwhile, 15 countries had begun talks in December 1945 to reduce and bind customs tariffs. With the Second World War only recently ended, they wanted to give an early boost to trade liberalization, and to begin to correct the legacy of protectionist measures which remained in place from the early 1930s.

This first round of negotiations resulted in a package of trade rules and 45,000 tariff concessions affecting $10 billion of trade, about one fifth of the world's total. The group had expanded to 23 by the time the deal was signed on 30 October 1947. The tariff concessions came into effect by 30 June 1948 through a “Protocol of Provisional Application”. And so the new General Agreement on Tariffs and Trade was born, with 23 founding members (officially “contracting parties”).

The 23 were also part of the larger group negotiating the ITO Charter. One of the provisions of GATT says that they should accept some of the trade rules of the draft. This, they believed, should be done swiftly and “provisionally” in order to protect the value of the tariff concessions they had negotiated. They spelt out how they envisaged the relationship between GATT and the ITO Charter, but they also allowed for the possibility that the ITO might not be created. They were right.

The Havana conference began on 21 November 1947, less than a month after GATT was signed. The ITO Charter was finally agreed in Havana in March 1948, but ratification in some national legislatures proved impossible. The most serious opposition was in the US Congress, even though the US government had been one of the driving forces. In 1950, the United States government announced that it would not seek Congressional ratification of the Havana Charter, and the ITO was effectively dead. So, the GATT became the only multilateral instrument governing international trade from 1948 until the WTO was established in 1995.

For almost half a century, the GATT's basic legal principles remained much as they were in 1948. There were additions in the form of a section on development added in the 1960s and “plurilateral” agreements (i.e. with voluntary membership) in the 1970s, and efforts to reduce tariffs further continued. Much of this was achieved through a series of multilateral negotiations known as “trade rounds” -- the biggest leaps forward in international trade liberalization have come through these rounds which were held under GATT's auspices.

In the early years, the GATT trade rounds concentrated on further reducing tariffs. Then, the Kennedy Round in the mid-sixties brought about a GATT Anti-Dumping Agreement and a section on development. The Tokyo Round during the seventies was the first major attempt to tackle trade barriers that do not take the form of tariffs, and to improve the system. The eighth, the Uruguay Round of 1986-94, was the last and most extensive of all. It led to the WTO and a new set of agreements.

The Tokyo Round: a first try to reform the system

The Tokyo Round lasted from 1973 to 1979, with 102 countries participating. It continued GATT's efforts to progressively reduce tariffs. The results included an average one-third cut in customs duties in the world's nine major industrial markets, bringing the average tariff on industrial products down to 4.7%. The tariff reductions, phased in over a period of eight years, involved an element of “harmonization” -- the higher the tariff, the larger the cut, proportionally.

In other issues, the Tokyo Round had mixed results. It failed to come to grips with the fundamental problems affecting farm trade and also stopped short of providing a modified agreement on “safeguards” (emergency import measures). Nevertheless, a series of agreements on non-tariff barriers did emerge from the negotiations, in some cases interpreting existing GATT rules, in others breaking entirely new ground. In most cases, only a relatively small number of (mainly industrialized) GATT members subscribed to these agreements and arrangements. Because they were not accepted by the full GATT membership, they were often informally called “codes”.

They were not multilateral, but they were a beginning. Several codes were eventually amended in the Uruguay Round and turned into multilateral commitments accepted by all WTO members. Only four remained “plurilateral” -- those on government procurement, bovine meat, civil aircraft and dairy products. In 1997 WTO members agreed to terminate the bovine meat and dairy agreements, leaving only two.

The European Union is based on the rule of law. This means that every action taken by the EU is founded on treaties that have been approved voluntarily and democratically by all EU member countries. For example, if a policy area is not cited in a treaty, the Commission cannot propose a law in that area.

A treaty is a binding agreement between EU member countries. It sets out EU objectives, rules for EU institutions, how decisions are made and the relationship between the EU and its member countries.

Treaties are amended to make the EU more efficient and transparent, to prepare for new member countries and to introduce new areas of cooperation - such as the single currency.

Under the treaties, EU institutions can adopt legislation, which the member countries then implement. The complete texts of treaties, legislation, case law and legislative proposals can be viewed using the EUR-Lex database of EU law.

The main treaties are:

Treaty establishing the European Coal and Steel Community of 1951. Its purpose was to create interdependence in coal and steel so that one country could no longer mobilise its armed forces without others knowing. This eased distrust and tensions after WWII. The ECSC treaty expired in 2002.

Treaties of Rome: EEC and EURATOM treaties that were Signed on 25th of March, 1957 and entered into force on 1st of January 1958, whose purpose was to set up the European Economic Community (EEC) and the European Atomic Energy Community (Euratom).

The next was Merger Treaty - Brussels Treaty of 1965. Its Purpose was to streamline the European institutions. The main changes that happened creation of a single Commission and a single Council to serve the then three European Communities (EEC, Euratom, ECSC). Repealed by the Treaty of Amsterdam.

Single European Act of 1968, was signed to reform the institutions in preparation for Portugal and Spain's membership and speed up decision-making in preparation for the single market. The main changes were the extension of qualified majority voting in the Council (making it harder for a single country to veto proposed legislation), creation of the cooperation and assent procedures, giving Parliament more influence.

Treaty on European Union - Maastricht Treaty of 1992. Its purpose was to prepare for European Monetary Union and introduce elements of a political union (citizenship, common foreign and internal affairs policy). The main changes were the establishment of the European Union and introduction of the co-decision procedure, giving Parliament more say in decision-making. Furthermore, there were new forms of cooperation between EU governments - for example on defence and justice and home affairs.

Treaty of Amsterdam of 1997. Its purpose was to reform the EU institutions in preparation for the arrival of future member countries. The main changes were amendment, renumbering and consolidation of EU and EEC treaties.

Treaty of Nice of 2001. Its purpose was to reform the institutions so that the EU could function efficiently after reaching 25 member countries. Its main changes were methods for changing the composition of the Commission and redefining the voting system in the Council.

Treaty of Lisbon of 2007. Its purpose was to make the EU more democratic, more efficient and better able to address global problems, such as climate change, with one voice. The main changes were more power for the European Parliament, change of voting procedures in the Council, citizens' initiative, a permanent president of the European Council, a new High Representative for Foreign Affairs, a new EU diplomatic service. The Lisbon treaty clarifies which powers:

belong to the EU

belong to EU member countries

are shared.

The Eurasian Economic Union (EEU) is an economic union which is planned to be established by a treaty signed on 29 May 2014 between the leaders of Belarus, Kazakhstan, and Russia. A treaty to enlarge the EEU to Armenia was signed on October 9, 2014. The Union will officially go into effect on 1 January 2015.

The Eurasian Economic Union would create a single economic market of 171 million people and a gross domestic product of 3 trillion U.S. dollars. The republic of Kyrgyzstan has also expressed interest in joining the organization and plans to take the necessary steps to do so by the end of 2014.

The Eurasian Economic Union is often known as the Eurasian Union, although it is mainly economic as of now. Initially, the president of Kazakhstan, proposed at Moscow State University cooperation among member states in many areas, including the military. Many politicians, philosophers and political scientists have called for further integration towards a political, military and cultural union. However modern-day Kazakhstan has insisted the union stay purely economic as it seeks to keep its independence and sovereignty intact.

The basis for the Eurasian Economic Union consists of international treaties of the Customs Union, because they make up the legal framework of EEU. There are international treaties like:

Customs Union Agreement between the Russian Federation and the Republic of Belarus of January 6, 1995

Customs Union Agreement of January 20, 1995

Agreement on the Customs Union and the Common Economic Space of February 26, 1999

Agreement on the establishment of the Eurasian Economic Community

Agreement on a common procedure of export control of the Eurasian Economic Community dated 28 October 2003

Protocol on the mechanism of application of special protective, antidumping and countervailing measures in trade of the Customs Union of 17 February 2000

Basic Agreement on the harmonization of technical regulations of the Eurasian Economic Community dated 24 March 2005

Agreement on the Application of the One sign of products on the market of EurAsEC member states on May 19, 2006

Protocol on international trade negotiations of the parties to the Agreement on the Customs Union with the accession to the World Trade Organization on June 3, 1997

Protocol of 6 October 2007 on the Amendments to the Agreement on the Establishment of the Eurasian Economic Community

Agreement on coordinated policy in the field of technical regulations, sanitary and phytosanitary measures, the Eurasian Economic Community on January 25, 2008

Agreement on the establishment of the information system of the Eurasian Economic Community in the field of technical regulations, sanitary and phytosanitary measures on December 12, 2008

Protocol of 12 December 2008 on the Amendments to the Basic Agreement on the harmonization of technical regulations states - members of the Eurasian Economic Community dated 24 March 2005.

trade economic antidumping

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