World Trade Organization WTO
Multilateral trade negotiations carried out within the framework of the WTO have long been some of the basic elements of Finnish and EU commercial policy. In Finland, the principal responsibility for WTO negotiations lies with the Ministry for Foreign Affairs.
The WTO acts as a trade negotiation forum between member states. The current WTO agreements were mainly drawn up during the Uruguay Round. The WTO covers approximately 98% of the world’s trade. Despite their obvious strengths, the WTO and the multilateral trade system are facing huge challenges.
Started in 2001, the Doha Round, also known as the Doha Development Agenda (DDA), has still not been concluded. The aim of the negotiations is to agree on ways to facilitate products' market access by reducing customs duty rates or removing trade barriers in various economic sectors. An additional aim is to agree on the rules for reducing trade-distorting support. Special attention is paid to facilitating the trading prospects of developing countries.
The key sectors in the negotiations are agriculture, industrial products and the trade in services. The negotiations have also dealt with a wide range of other subjects, such as development issues, geographical indications and rules of origin. No actual breakthroughs have been achieved, with the exception of the Trade Facilitation Agreement (TFA), which simplifies trade procedures, and the agreement on export competition in agriculture. Also, the Information Technology Agreement negotiated in the 1990s has been updated (known as ITA II).
The nature of world trade has changed with the developments in value chains, trade in services and electronic trade. Alongside the “old” subjects in the Doha Round, new subjects have been included, such as electronic trade and facilitating investments. However, the member states do not see eye to eye on the future of the DDA and the status of the new subjects in the WTO negotiations.
The WTO's 11th Ministerial Conference was held in Buenos Aires in December 2017. No Ministerial Declaration or broad consensus of other kind was achieved during the conference. Negotiations will continue in Geneva and some of the new initiatives will be promoted, as far as possible, also through multilateral negotiations.
Finland supports maintaining and strengthening a multilateral, rule-based trade system, including dispute resolution. We are committed to achieving results on the outstanding issues of the Doha Round (DDA). At the same time, Finland considers it important to start negotiations also on new issues at the WTO. Furthermore, it is important to utilise the opportunity to engage in multilateral negotiations as far as possible while the opportunity is there.
WTO’s dispute settlement system
A member of the WTO may have to defend themselves in the WTO's Dispute Settlement Body if it violates or is suspected of violating a WTO agreement. The system is based on the procedures and provisions set out in the WTO’s Dispute Settlement Understanding and consists of three parts: if no mutually agreed solution is reached during consultations, the dispute can be brought to a panel and, if necessary, the panel’s ruling can be brought to the Appellate Body.
Violations of an agreement must be justifiable and proven with article-specific accuracy. Members with a significant interest in the end result can register as third parties to the dispute and they will be given an opportunity to be heard during the process. All EU member states are represented in disputes by the European Commission.
Historically, about 70% of all the disputes addressed by the panels have been appealed, but over the last few years this figure has reached almost 90%. It is the duty of the Appellate Body not only to interpret the provisions of WTO agreements, but to create case law.
The whole process from consultation to the appeal stage, if any, should take between 12 and 15 months. However, the high rate of the system’s utilisation and especially the recent congestion of the Appellate Body have led to prolonged handling times. The reports of the panels and Appellate Body are accepted by the Dispute Settlement Body. The rulings are binding. The unsuccessful party in the dispute must make their operations WTO-compatible within the agreed-upon time-frame (usually 10–15 months).
The Dispute Settlement Body monitors the implementation of rulings. The implementation measures taken can also be contested and, in the last resort, the system offers the possibility of counter-measures, although seeking a compromise that is favourable to both parties is encouraged in the settlement of disputes.