Effectiveness of World Trade Organization - Essay Example

World Trade Organization By 15th, May The development of the World Trade Organization came at a time whenthe world has increased international trade. The growth of international trade, therefore, required an organization that oversees the practice and adherence of better trade conducts to avoid exploitation and exhaustion of weaker countries by the economic powers of the world. Therefore, with the establishment of WTO came the dispute resolution panel and Appellate Body that has exercised its mandate in an efficient way that have left praise of the organization (Trachtman, 1999). The Dispute resolution committee has so much power over domestic regulation and has contributed to its criticism in European countries and others that the organization has ruled against. This essay embark on analyzing the effectiveness of WTO dispute resolution in the EU vs. US Hormone Treated Beef Dispute, Asbestos Containing Product case and other effective role. The case of the European Communities on the issue of asbestos presented a big challenge to the World Trade Organization because the matter are relatively incline to domestic health and safety more than the synonymous of the constitution framework of WTO dispute resolution tribunal on free trade practices (Footer & ZIa-Zarifi, 2002). The use of asbestos as an industrial product date back over 100 years ago, but its effect on human health was document in the 19th Century when it deposits were found in products in Ural and Quebec in Canada (Footer & ZIa-Zarifi, 2002). It was found to have a considerable effect in human health by causing life threatening illness such as lung cancer, asbestosis, pneumoconiosis and Pleural cancer (Footer & ZIa-Zarifi, 2002). For this reason scholars and medical practitioner have called for control use of the product to minimize and mitigate the adverse effect of asbestos. France has restricted the importation of asbestos product from Canada as a result of the effect of the deadly carcinogen. Moreover, the country has provided favorable conditions to other commodities that came in the country from Canada and other countries. Therefore, Canada was aggrieved by the discrimination of it product and took the issue to the WTO dispute tribunal which upon hearing the case found France to have faulted the Article III: 4 of GATT regulations (Howse & Tuerk, n.d.). The economic situation of the period before the start of the Second World War was characterized by discrimination among trade partners where one country would export more goods and restrict others to access their own market in their countries. Given these circumstances the founding fathers of General Agreement on Trade and Tariff ensured they create regulations that would eliminate discriminatory practices such as quotas, tariffs, border restriction and other domestic policy regulations (Howse & Tuerk, n.d.). Therefore, the WTO regulation has been explicit to ensure fair trade practices in the world. The asbestos given that it was contained in products made it possible for the WTO Dispute Tribunal to deny the defendant the right to discriminate such product entry into European market. It was ruled that though the product might dangerous they should be treated equally to other products and imposition of an unfair policy was against the GATT regulations. World Trade organization has effectively ensured that the world practice free trade to all the members that are signatory to it. This is demonstrated in the European Community case against asbestos. Though the European Community had reasonable ground to ban asbestos and asbestos product from Canada due to human health precaution, it would have amounted to the loss of revenue by Canada companies that manufacture those products. Moreover, asbestos have other benefit in cement making and the plaintiff did not dispute the products were hazardous to the human being, but rather argued that there should be a distinction between chrysotile fibers which dangerous and chrysotile mixed in the cement matrix which does not endanger the life of human beings. Given this distinction France failed to provide studies of an alternative substance that it intended to use that did not have a harmful effect on the human body. The major role of the Dispute Resolution of the WTO is to provide a mechanism that trade related dispute can be settled and for this reason the GATT provides the customary rules or international regulations that guide in the adjudication of disputes (Trachtman, 1999). Therefore, Dispute Resolution Tribunal eliminate disagreement that might lead to crisis and economic sabotage of one country to another. To demonstrate this Canada would have lost trade partners in Europe and decreased Gross National Product when EC banned the use of Asbestos in Europe. However, due to the laid down rules all countries have a share of other countries market in an international trade and thus ensure growth and development of all economies that are engaging in trade. The WTO has the power over states legislative laws that touch on trade and no country can deny another a chance to an equal treatment in matters of trade. The regulations do not limit their application due to location, timing and persons involved in a dispute. Moreover, before the matter can be heard it is subjected to consultations among warring parties and its only proceed to panel hearing after consultations fails to bear fruitful results. In addition, when the matter is brought to the Panel and determined the parties are bound to appeal the ruling if they are aggrieved by the outcomes and the Appellate Body take over where it conduct hearing and submit it report to the Dispute Settlement Body for adoption or rejection if it found it necessary to do so (Trachtman, 1999). Therefore, WTO provides a transparent avenue which has envied the world. The U.S and Europe both abide by the regulations of the WTO, but they are constantly at dispute with one another for trade related disputes. The U.S is notable for violating some of the regulations to further its interest in Europe given that it will gain vehemently for which case the Congress will not fault the government (Lawrence, 2007). However, it take other parties who take advantage of it course in trade seriously by referring to the WTO Dispute Resolution panel. The U.S –EU dispute over beef hormone trade to the European Communities has proved to be one of the major food safety trade conflict in the history of WTO. By the year 1970s, the European consumers have been alarmed of the danger of hormones contained in livestock products. It was argued that livestock production by use of hormonal booster had an effect on human. For this reason, the EU proceeded to impose a ban on meat from livestock’s that has been given these hormones (Josling, et al., n.d.). The U.S and other exporters of daily products including meat and milk to Europe protested the move by the European Community. In the 1980s the U. S had reported the issue with the WTO and the EU was stricken by the harsh regulations that have become of the World Trade Organization. The food industry has been over the years been a matter of national interest, but the industry has grown and has become an international business. Therefore, the conflict such as the hormone beef dispute is an example of differences that exist among nations of food policy. Therefore, to bridge the gap WTO have devoted time, resources in research of better regulations to oversee the food industry business. The national regulations have been viewed as protecting too much the interest of the country and thus hinders free movement of goods from other countries. However, these regulations have been rendered null and void by the WTO dispute resolutions panel. This is demonstrated by the uplifting of the European ban of meat and other animal products to the EU (Josling, et al., n.d.). It has been argued that countries that need to protect their infancy industries from competition uses ill-founded excuses and scares and other xenophobic motive to ensure that their goals succeed. Nevertheless, the Sanitary and Phytosanitary Measures (SPS Agreement) has made it easier to differentiate legitimate regulation from protectionism (Josling, et al., n.d.). Through this the WTO has effectively improved and enhanced global trade and globalization. The Beef hormones dispute was a case of political and non-governmental involvement in a matter of boosting the economy in Europe countries. The continent has established non-governmental organization such as environmental groups, consumer protection organization and a European parliament. Therefore, because the European farmers were looking for ways of increasing the growth cattle they resulted to the use of chemical without the knowledge of their effect on human (Josling, et al., n.d.). In the 1970s, Europe suffered rare cases of abnormal defect in children and the EU Agriculture Council banned the use chemicals in cattle (Josling, et al., n.d.). However, not all European countries agreed with a total banned to all six chemical that were used in the growth of cattle. United Kingdom, Ireland and Belgium were aggrieved to the ban on some chemical they viewed were had no major effect and together with other countries that feared losing the EU market opposed to the EU resolutions. Therefore, the EU have its own dispute among member’s states which are well adjudicated in the WTO Dispute Resolutions. The lifting of the ban of the use of chemical being one of the example that resolved issues raised by United Kingdom, Ireland and Belgium. The European parliament with full aware of international regulation threatened the ban of products with hormonal substance without citing any scientific evidence on it effect as proof of the reason to impose a restriction on the sale of animal products that have been raised up being fed hormones to increase their weight and health. When the U.S first raised the issue with GATT it was reject on group that hormonal use are not products, and there do not fall under the GATT regulations. In response to this, the U.S imposed a 100% duties on import from Europe as a reiteration, but the two later found consensus and allowed substantial exchanges of beef products from each other (Josling, et al., n.d.). The Uruguay resolution brought a relief in the dispute of U.S-EU hormones crisis, and it included the technical barrier and production methods as a measure to regulate trade practices. Earlier inefficiency that hindered dispute resolution had been revised and a new one which were effective and provided credible ways of solving disputed has been put in place. The U.S proved that the EU has issued a ban and has not done a risk assessment study to prove the danger of toxin in hormone used in livestock. The case moved from the panel to the Appellate Body where the EU was accused of trade malpractices. The Beef-Hormone case brings the differences in political economies between the U.S and the EU. The European Union has entrenched legal traditions and laws that guide its countries in the issue of environmental and health policy while the U.S have no such laws. Consequently, the WTO provide an amicable ground that addresses the shortcoming of national and customarily laws on a wide range of issues relating to international trade. The EU has shown that it have lost trust on science in food safety and have instead respond to food scare, farming methods and novel food to determine the safety and subsequent legislation to ensure that consumers are protected from such scares (Josling, et al., n.d.). This is true as there is considerable number of consumer and environmental movement that guide the public agenda on food security not based on science, but on unproven theories. World Health Organization does not impose a judgment to the disputing parties, but rather settle disputes through negotiation and consensus. Over the year, the Dispute Settlement System have overseen a number of cases, and therefore there have been an incremental buildup of case law upon which legal interpretation and precedent are referred (Gaisford, 2005). Before the GATT rules were revised members states in a dispute had power to veto decision made by the Dispute Settlement. This is evidence of why the US-EU Hormone Beef Dispute prolonged for a long period because the European Communities used to veto decision that would have made them comply with harsh penalty of compensating the U.S for the loss it has encored since the application of the ban was effected. However, not all decisions that have been made by the WTO Dispute Settlement System that has been welcomed by the EU and other members states. More recently the institution suffered a setback when massive protest characterized it November 1999 convention in Seattle (Lida, 2004). However, both the critics and defendants of dispute Settlement Resolutions believe that the institution is effective, but the assumption should be demonstrated by objective and systematic action (Lida, 2004). It is evidenced that there have been effective compliance by defendant in all the decision that have been agreed upon by the World Health Organization. The European Community has to allow the U.S to export meat and other livestock products to the EU and also France had to allow Canada to export asbestos and asbestos products. This demonstrate the high degree of efficiency and effectiveness of the WTO. Moreover, there has been political effectiveness as a result of WTO decisions in Europe. The EU has in time been compromised to change its domestic laws that contravened with the international standard in food safety and environment policies. The regime has complied effectively to international politics brought about by being a member of the World health organization. However, the US-EU relations have suffered a great deal as a result of suspicions of trade malpractices. The U.S have accused European Community of a number of time of restricting it market for U.S goods. This was the case of the hormone dispute. Therefore, failure of the WTO to resolve the dispute within a short time rendered to the U.S to ban EU from the sale of foreign corporations (Lida, 2004). The European Community has been as fault with the World Trade organization for much time. The WTO agreement constitutes and covers a wide range of issues which prior to the establishment of the body were at the confine of individual countries and within the bound of European Community (Suranovic, 1998). Therefore, WTO have reversed substantial national government policies due to their inconsistence with the GATT policies. This has challenged the effectiveness of the EU in making policy on agriculture and food safety. However, the negative effect of rolling out European policies have not affect the growth of trade, but has ensured an increased amount of revenue from foreign companies that export goods and consumer confidence as a result of increased variety of goods to choose from. The ramification of the WTO dispute settlement is important because it has ensured continuity of trade between nations after conflict over market restriction (Peter, 2012). The fault of EU and U.S has prolonged a trade suspicions that affected farmers in both continents. Moreover, the tension over hormonal beef dispute made the WTO to review its GATT policies to ensure that such an ambiguous dispute was easily resolved in the future. Therefore, through constant engagement of nations to the WTO dispute panel has ensured development of new ideas that help in improving trade relations and local and international laws. References Footer, M. & ZIa-Zarifi, S., 2002. European Communities- Meadures Affecting Asbesto and asbesto-Containing Products. Melbourne Journal of International Law , Volume 3, pp. 1-23. Gaisford, J. W., 2005. Dispute Settlement, Compensation and Retaliation Under the WTO. In: R. Read, ed. Handbook on Trade Policy. Cheltenham: Edward Elgar, pp. 1-25. Howse, R. & Tuerk, E., n.d. The WTO Impact on Internal Regulation- A Case Study of the Canada-EC Asbestos Dispute. The WTO Impact on International Regulations , pp. 283-328. Josling, T., Roberts, D. & Hassan, A., n.d. The Beef-Hormone DIspute and its Implications for trade Policy. [Online] Available at: http://www.pf.uni-lj.si/media/beef.hormones.pdf [Accessed 14 May 2014]. Lawrence, R. Z., 2007. The United States and the WTO DIspute Settlement System , New York : COuncil of Foreign Relations. Lida, K., 2004. Is WTO Disapute Settlement Effective?. Global Governance, pp. 207-225. Peter, L., 2012. 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