The admission of a new member shall be decided by a two-thirds majority at the Ministerial Conference or the General Council between Conferences. In the first decades of the 20th century, trade issues prompted countries to engage in increasingly complex interactions, creating the need for a platform to facilitate and regulate trade relations. The resulting General Agreement on Tariffs and Trade (GATT) 1947 not only provided a roundtable discussion forum that created a multilateral approach to trade, but also created a system of internationally accepted trade rules. The basic idea was to create a level playing field for all members by « substantially reducing tariffs and other barriers to trade and eliminating discriminatory treatment in international trade ». If a country restricts its imports to protect its domestic producers, it must in principle give something in return. The agreement stipulates that the exporting country or countries may seek compensation through consultations. If no agreement is reached, the exporting country may retaliate, for example by taking appropriate measures, for example by increasing the duties on exports of the country applying the safeguard measure. In certain circumstances, the exporting country must wait three years after the imposition of safeguard measures before it can retaliate in this way, i.e. if the measure complies with the provisions of the Agreement and if it is taken due to an increase in the volume of imports from the exporting country. Like the GATT (and later the WTO), the EU itself was originally designed to remove tariff barriers and promote trade between its member states. The EU`s single market is partly inspired by GATT principles and practices.
The Union has always been one of the main promoters of efficient international trade based on the rule of law. Such a system helps to ensure fair access for its companies to foreign markets, thus supporting economic growth both at national level and in third countries, in particular in less developed countries. The calculation of the magnitude of dumping for a product is not sufficient. Anti-dumping measures may only be applied if dumping harms the industry of the importing country. Therefore, a detailed examination must first be carried out according to predetermined rules. The investigation shall assess all relevant economic factors influencing the situation of the industry concerned. If the investigation reveals dumping and injury to the Canadian industry, the exporting company may undertake to increase its price to an agreed level in order to avoid the imposition of anti-dumping duties. Dispute settlement is the central pillar of the multilateral trading system and the WTO`s unique contribution to the stability of the world economy.
Without a means of resolving disputes, the rules-based system would be less effective because the rules could not be applied. The WTO process emphasizes the rule of law and makes the trading system more secure and predictable. The system is based on clearly defined rules with deadlines for the closure of a case. Initial decisions are taken by a panel and approved (or rejected) by full WTO members. Revisions are possible. The CRO and TCRO have developed an overall architectural design under which the harmonization work programme is to be completed. These include the general rules set out in eight articles provisionally entitled « Scope »: scope; the Harmonized System; Definitions; determination of origin; the remaining rules of origin; minimal operations or processes; Special provisions; and de minimis; three annexes: Annex 1: Wholly Obtained Products; Annex 2: Product Rules – Substantial Transformation; and Appendix 3: Minimum Operations or Processes. Industries or businesses may need protections from their government.
The WTO Agreement establishes requirements for safeguard investigations by national authorities. The emphasis is on transparency and respect for established rules and practices while avoiding arbitrary methods. Investigating authorities must publicly announce the date of hearings and provide interested parties with other appropriate means of presenting evidence. The evidence includes arguments as to whether a measure is in the public interest. Final report: A final report is presented to both parties and circulated to all WTO members three weeks later. If the Panel decides that the challenged trade measure violates a WTO agreement or obligation, it recommends that the measure be brought into conformity with WTO rules. The panel could suggest how this could be done. Article 1 of the Agreement defines rules of origin as laws, regulations and administrative provisions of general application used to determine the country of origin of goods, with the exception of those relating to the granting of tariff preferences. Thus, the Agreement applies only to rules of origin used in non-preferential trade policy instruments such as most-favoured-nation treatment, anti-dumping and countervailing duties, safeguard measures, origin marking requirements and discriminatory quantitative restrictions or tariff quotas, as well as to trade statistics and government procurement. whereas, however, it is provided that the Agreement will not affect findings made for the purpose of determining the domestic industry or the like products of the domestic industry; The Agreement on Rules of Origin aims to harmonise non-preferential rules of origin and to ensure that these rules do not themselves create unnecessary barriers to trade.
The agreement contains a work programme for the harmonisation of rules of origin to be carried out in cooperation with the World Customs Organisation (WCO) following the entry into force of the World Trade Organisation (WTO). Many of the other WTO agreements aim to promote fair competition: for example, in the areas of agriculture, intellectual property and services. The Agreement on Government Procurement (a plurilateral agreement signed by only a few WTO members) extends competition rules to purchases from thousands of government entities in many countries. And so on. It is recognized by all countries that the harmonization of rules of origin, i.e. the definition of rules of origin that will be applied by all countries and that will be the same regardless of the purpose for which they are applied, would facilitate international trade flows. Indeed, the abuse of rules of origin may in itself make them an instrument of trade policy, rather than simply acting as an instrument in support of a trade policy instrument. However, given the diversity of rules of origin, this harmonisation is a complex undertaking. In 1981 the GATT Secretariat prepared a communication on rules of origin and in November 1982 ministers agreed to examine the rules of origin applied by GATT contracting parties. Until much of the Uruguay Round negotiations, little work was done on rules of origin. In the late 1980s, developments in three important areas led to a greater focus on rules of origin issues: some disciplines are similar to those of the Anti-Dumping Agreement. Countervailing duties (parallel to anti-dumping duties) can only be imposed after the importing country has conducted an in-depth investigation similar to that required for anti-dumping measures.
There are detailed rules for deciding whether a product is subsidized (which is not always easy to calculate), criteria for determining whether imports of subsidized products are causing injury to the domestic industry, procedures for initiating and conducting investigations, and rules for the application and duration (normally five years) of countervailing measures. The subsidized exporter may also agree to increase its export prices instead of its exports subject to countervailing duties. First hearing: The complaining country`s arguments and defence: The complaining country(ies), the respondent country and those that have indicated that they have an interest in the dispute present their arguments at the first hearing of the panel. The growing number and importance of rules of origin led Uruguay Round negotiators to address this issue during the negotiations. Until the completion of the three-year work programme on harmonization, Members are expected to ensure that their rules or origin are transparent; they are managed in a consistent, impartial and rational manner; and that they are based on a positive standard. In addition to the legislation specifically mentioned in the WTO Agreements, measures may be taken in favour of developing countries, individually or collectively, including through waivers of key WTO rules. The system also attempts to improve predictability and stability in other ways. One possibility is to discourage the use of quotas and other measures to fix imported quantities. Managing quotas can lead to more bureaucracy and accusations of unfair gambling.