Page 268 - DECO503_INTERNATIONAL_TRADE_AND_FINANCE_ENGLISH

International Trade and Finance

Notes Fourth level : Subsidiary bodies
Each of the higher councils has subsidiary bodies that consist of all member countries.
Goods Council : It has 11 committees dealing with specific subjects, such as agriculture, market
access, subsidies, anti-dumping measures, etc.
Services Council : The subsidiary bodies of the Services Council deal with financial services, domestic
services, GATS rules, and specific commitments.
Dispute settlement body : It has two subsidiaries, i.e., the dispute settlement ‘panels’ of experts
appointed to adjudicate on unresolved disputes, and the Appellate Body that deals with appeals at
the General Council level.
Formally all of these councils and committees consist of the full membership of the WTO. But that does
not mean they are the same, or that the distinctions are purely bureaucratic. In practice, the people
participating in the various councils and committees are different because different levels of seniority
and different areas of expertise are needed. Heads of missions in Geneva (usually ambassadors) normally
represent their countries at the General Council level. Some of the committees can be highly specialized
and sometimes governments send expert officials from their countries to participate in these meetings.
Even at the level of the Goods, Services, and TRIPS councils, many delegations assign different officials
to cover different meetings. All WTO members may participate in all councils, etc., except the Appellate
Body, dispute settlement panels, textile monitoring body, and plurilateral committees.
The WTO has a permanent Secretariat based in Geneva, with a staff of around 560 and is headed by
the Director-General. It does not have branch offices outside Geneva. Since decisions are taken by the
members themselves, the Secretariat does not have the decision-making role that other international
bureaucracies are given. The Secretariat’s main duties are to extend technical support for the various
councils and committees and the Ministerial Conferences, to provide technical assistance for
developing countries, to analyse world trade, and to explain WTO affairs to the public and media.
The Secretariat also provides some forms of legal assistance in the dispute settlement process and
advises governments wishing to become members of the WTO.
24.2 Principles of the Multilateral Trading System Under the WTO

For an international business manager, it is difficult to go through the whole of the WTO agreements
which are lengthy and complex being legal texts covering a wide range of activities. The agreements
deal with a wide range of subjects related to international trade, such as agriculture, textiles and
clothing, banking, telecommunications, government purchases, industrial standards and product
safety, food sanitation regulations, and intellectual property. However, a manager dealing in
international markets needs to have an understanding of the basic principles of WTO which form the
foundation of the multilateral trading system. These principles are discussed below.
Trade without discrimination

Under the WTO principles, a country cannot discriminate between its trading partners and products
and services of its own and foreign origin.
Most-favoured nation treatment : Under WTO agreements, countries cannot normally discriminate
between their trading partners. In case a country grants someone a special favour (such as a lower
rate of customs for one of their products), then it has to do the same for all other WTO members. The
principle is known as Most-favoured nation (MFN) treatment. This clause is so important that it is
the first article of the General Agreement on Tariffs and Trade (GATT), which governs trade in goods.
MFN is also a priority in the General Agreement on Trade in Services (GATS, Article 2) and the
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS, Article 4), although in
each agreement, the principle is handled slightly differently. Together, these three agreements cover
all three main areas of trade handled by the WTO.
Some exceptions to the MFN principle are allowed as under :
• Countries can set up a free trade agreement that applies only to goods traded within the group
—discriminating against goods from outside.

262 LOVELY PROFESSIONAL UNIVERSITY