World Trade Organization (WTO)
The World Trade Organization supersedes the General Agreement on Tariffs and Trade (GATT) as the organisation dealing with international trade; and provides a common institutional framework for trade relations between contracting parties. It represents a crucial aspect of international commercial law through its objectives of facilitating global trade flow; liberalising trade barriers; and providing an effective dispute settlement mechanism.
Major functions of the WTO include to:
- Implement and administer the WTO and its annexes.
- Provide a forum for negotiating trade-related issues; and issues arising from the WTO Agreement.
- Provide a dispute settlement mechanism pursuant to the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU)./>
- Administer the Trade Policy Review Mechanism (TPRM) which examines the trade policies of members.
- Cooperate with the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD).
GATT 1994 is incorporated into the WTO Agreement, and contains three important basic principles in the context of international commercial law:
Most-favoured nation principle (MFN): expresses that any advantage to a product originating or destined for another country shall be treated in accordance with a like product originating in or destined for the contracting country . Each GATT member must treat all trading partners as well as its most favoured trading partner.
National treatment principle': prohibits discrimination between imported and like domestic products, other than through the imposition of tariffs. The WTO panels consider tariff classifications, product nature, intended use, commercial value, price and sustainability.
Reciprocity principle: encourages negotiations between contracting parties on a reciprocal and mutually advantageous basis, directed towards the reduction of tariffs and other charges on imports and exports.
Read more about this topic: International Commercial Law
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