November
1999
WTO
Glossary |
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AD: Anti-Dumping.
Dumping occurs when a company sells its goods more cheaply in export markets
than in home markets with the intention of hurting the foreign industry,
and interjecting itself into their market.
Free Trade: The concept that governments should not interfere in
or regulate international business with restraints such as tariffs (import
taxes or duties).
FTA: Free Trade Agreement. An agreement between countries to reduce/eliminate
tariffs on certain goods. When an FTA is formed between two or more WTO
member countries, they agree to lower their tariffs to zero between each
other, but maintain their prior negotiated tariffs on the products of
other WTO countries. FTAs, such as NAFTA (North American Free Trade Agreement
between Canada, Mexico, and the U.S.), are not in accord with the MFN
nondiscrimination policy (see below) but are allowed because they represent
a significant commitment to free trade.
GATS: General Agreement on Trade in Services, est. Jan. 1995. Examples
of services include banking, insurance, telecommunications, and transportation.
GATT: General Agreement on Tariffs and Trade (in goods), est. Jan.
1948. The GATT, GATS and TRIPS (see below) are the three main WTO agreements
that make up its multilateral trading system.
LDC: Least Developed Country. Countries are sometimes divided into
three categories, developed, developing, and LDC. For example, when transition
time schedules are set up for countries to comply with WTO trade agreements,
LDCs are often given more time than developed countries to comply.
Liberalization: The process of deregulating trade by reducing trade
restrictions imposed by governments.
MAI: Multilateral Agreement on Investment [see Rysavy article].
This agreement was negotiated by the OECD (Organization for Economic Cooperation
and Development, an alliance of 29 of the wealthiest countries), with
the support of transnational corporations and business lobbies to set
rules restricting the ability of governments to regulate currency speculation,
investment in land, factories, services, stocks, etc. However, it did
not receive enough support and was dropped in 1998. Now many OECD countries
want to revive the MAI, and are pushing to have it incorporated as a multilateral
agreement into the WTO. The Agreement on TRIMs (see below) is a less comprehensive,
watered down version of the MAI, dealing only with investment affecting
trade in goods.
MFN: Most Favored Nation. A WTO policy that all member countries
have equal status and there can be no discrimination between members.
For example, if one member favors another member by lowering its tariffs
on that country’s goods, that agreement has to be applied to all
other WTO members so that they are all equally “most-favored.” MFN
status does not apply to non-WTO countries.
Multilateral: The term used to describe the WTO agreements because
they apply to multiple countries and commit all members to liberalizing
trade simultaneously. “Multilateral” also refers to the global
nature of WTO activities, as opposed to those of smaller, often regional
organizations like the EU, NAFTA, and ASEAN (Association of South East
Asian Nations).
The Quad: The four WTO members with the largest shares of world
trade: Japan, the U.S., Canada, and the EU.
TNC/MNC: Transnational Corporation/Multinational Corporation. Representatives
from TNCs are involved in lobbying governments and pushing for WTO negotiations.
TPRB: Trade Policy Review Body. A part of the General Council
of the WTO that conducts reviews of members’ trade policies for
the TPRM (see below).
TPRM: Trade Policy Review Mechanism. A WTO agreement that requires
regular reviews of a members’ trade policies and makes them “transparent” or
public for other members.
TRIMS: Trade Related Investment Measures. The WTO Agreement on
TRIMs prohibits members from imposing or maintaining measures relating
to investment that adversely affect trade in goods. Under the agreement,
member countries agree not to pass any foreign investment laws that violate
GATT rules, and to eliminate any existing TRIMs that do. Countries also
agree to make their TRIMs transparent to other members for review.
TRIPS: Agreement on Trade-Related Aspects of Intellectual Property
Rights, est. Jan. 1995. Sets out rules for trade and investment in ideas,
inventions, and industrial designs. Intellectual Property Rights (IPRs)
are the rights given to individuals over intellectual creations, including
copyrights, patents, trademarks, etc.—S.K.
