The International Economics
Study Center


 

GWU Econ 195
Economics of the WTO
Course Syllabus

Spring 2007

This course will look at the theory and practice of the WTO during its first 10+ years of operation. The course will begin with a broad overview of the WTO and its history. We will then move into a more detailed examination of each of the sub agreements, including Agriculture, Services, Textiles, intellectual property, administered protection allowances, etc. One method we will use is to study various dispute cases that have been brought before the WTO on each of these issues. Thus, students will leave the course with a good deal of knowledge about many dispute settlement cases during the past 10 years. Finally we will also discuss the Doha round, its agenda, and prospects for the future. Basic economic analysis will be introduced, as needed, as we discuss each of these issues.

Note this class will fulfill a WID requirement.
 

  Professor: Steve Suranovic
 

Time & Location:
        Jan 17 - May 2, 2007

        MW 12:45 - 2:00pm, 2020 K St, Room 22

  Office: 1957 E St. N.W., Room 501M
  Office Hours: Mondays, 2:15 - 4:45pm or by appt.
  Office Phone: 994-7579
  E-mail: smsuran@gwu.edu

Textbooks

The WTO Website The WTO provides an enormous amount of information that we will take advantage of.

Hoekman, Bernard, et. al. (eds), Development, Trade and the WTO, World Bank, 2002.

Wallach, Lori, Patrick Woodall, and Ralph Nader, "Whose Trade Organization? A Comprehensive Guide to the WTO, 2004.

Steven Suranovic,
    International Trade: Theory and Policy
    Online Lecture Notes at
    http://internationalecon.com/v1.0/index.html


Evaluation (Paper Descriptions)
Paper 1-1 (Draft)
5%
Paper 1-2 (Final)
10%

Paper 2-1 : Q&A

5%
Exam #1
15%
Paper #3-1 : Draft
5%
Paper #2-2 :
(Rough Draft)
5%
Paper #3-2 : Final
10%
Exam #2
15%

Paper #2-3 :
Final Paper

30%

The initial submissions of the 3 papers (1-1, 2-1, 2-2, and 3-1) will each be worth 5% of the grade. This grade will be based on completeness of submission and timeliness - not on quality.

Final Papers (1-2, 2-3 and 3-2) will be graded on the basis of quality relative to the instructions provided.

Late submissions will be penalized 10% per day.

Exams #1 will cover readings and discussion from the first half of class. Exam #2 will cover material from the second half.

Makeup exams, and late submissions without penalty, will be allowed only in extraordinary circumstances and only with prior approval.


Assignment Schedule
Paper 1 (Draft)

Wed, Jan 31
(also, present informally in class)

Paper 1 (Final)
Mon, Feb 19

Paper 2:
Assignment #1 Q&A

Wed, Feb 28
Exam #1
Wed, March 7
Paper #3 - Draft
Mon, March 26
Paper #2
Assignment 2: Rough Draft
Wed, April 4
Paper #3 - Final
Wed, April 18
Exam #2
Wed, May 2
Paper #2
Assignment 3: Final Draft
Mon, May 7 by 5pm

Note: Any student who feels s/he may need an accommodation based on the impact of a disability should contact Disability Support Services, Marvin Center 242, 994-8250, to have the disability documented and reasonable accommodations coordinated.

 

  Course Outline
Week of Jan 17 - Jan 22

Introduction to Course and the WTO

In the first session students are presented with an overview of the entire course. They will learn some of the important results and the methods of analysis.

Readings:

The WTO in Brief
A short document that provides an introduction to the WTO; its purpose, functions and history.

The WTO in Detail
This PDF contains a more extensive description of the purpose, functions and history of the WTO. This will be our main text providing an overview of many issues covered in more detail during the course

Whose WTO?
This page provides an overview of the organizational structure of the WTO.

Videos:

To The Heart of the WTO (Win Med, Hi Res)
This video explains the WTO through member governments' eyes. It seeks to shed light on how the WTO system works, through the experience and motivations of two very different countries: Brazil, a large developing nation, and Norway, a small but economically advanced state. (23 Mins) (Real Media - Hi Res)

Week of Jan 29 - Feb 5

A Little Trade History and the WTO

This session continues with more background information about the world of international trade. It covers bits and pieces of US trade history, a discussion of some international trade laws and an introduction to the World Trade Organization. It is not intended to be a comprehensive overview, but rather a way for students to learn some of the important real world issues to which the theory will later relate.

Readings:

Chapter 10 - Trade Policy Tools
Sections 10-0 to 10-7

Chapter 20 - Trade History and Trade Law
Sections 20-0 to 20-3

Handout:
The WTO: Functions and Basic Principles, Bernard Hoekman, Chapter 6 in Development Trade and the WTO.

Supplementary Resources:

A Summary of the WTO Agreement
this page provides a summary of each section of the Uruguay round agreement that established the WTO.

Current WTO Bound Tariff Rates
The WTO has made available each WTO member country's "schedule of concessions." This includes the country's bound tariff rates for all categories of goods. The data are provided in spreadsheet form and must be read using Lotus or MSExcel. (Use this only as a reference source if ever needed)

China's WTO Schedule of Concessions
This is a direct link to China's current bound tariff rates under the WTO.

Practice Problems:

Weeks of Feb 12 - Feb 19

Dispute Settlement in the WTO

Readings:

A Summary of the Dispute Settlement Understanding from the WTO

Settling Disputes: The WTO’s ‘most individual contribution’, from Trading into the Future, the introduction to the WTO on the WTO website.

Implementation in WTO Dispute Settlement: An Introduction to the Problems and Possible Solutions, William J Davey

The Adequacy of the WTO Dispute Settlement Remedies, Robert Hudec, Chapter 10 in Development, Trade and the WTO

Developing Countries and the WTO Dispute Settlement System, Valentina Delich, Chapter 9 in Development, Trade and the WTO.

The WTO’s Controversial Dispute Settlement Procedure, by Lori Wallach and Patrick Woodall, excerpt from Whose Trade Organization.

Videos:

Case studies of WTO dispute settlement (Win Med, Hi Res)
The case on environmental standards for gasoline, brought by Venezuela and Brazil against the US and the case on sound recordings brought by the US and EC against Japan are taken as examples to explain the WTO dispute settlement process.
(Real Media - Hi Res)

WTO Dispute Cases:

DS31 Canada- Certain Measures Concerning Periodicals case brought by the US.

DS27 EC - Regime for the Importation, Sale, and Distribution of Bananas case brought by Ecuador, the US and others.

DS14 EC - Trade Description of Scallops case brought by Chile, and others, that was settled thru consultations.

Practice Problems:

Week of Feb 26 - Mar 5

Trade Policies Affecting Merchandise Trade

This session will focus on some of the practical problems and issues that are faced by importers and exporters and the role of WTO agreeements in resolving them.

Readings:

Chapter 90 - Trade Policy Effects with Perfectly Competitive Markets
Read sections 90-0 to 90-16

Chapter 105 - Political Economy and International Trade
Read sections 105-0 to 105-7

Section 110-1 - Retaliation and Trade Wars

Tariffs: more bindings and closer to zero from Understanding the WTO

Formula Approaches to Reciprocal Tariff Liberalization, Arvind Panagariya, Chapter 53 in Development, Trade and the WTO.

Binding Tariffs: Why Do It?, Joseph Francois and Will Martin, Chapter 54 in Development, Trade and the WTO.

Market Access Issues and the WTO, Sam Laird, Chapter 11 in Development, Trade and the WTO.

Tariff Peaks and Preferences, Marcelo Olarreaga and Francis Ng, Chapter 12 in Development, Trade and the WTO.

Customs Valuations and Customs Reform, Vinod Rege, Chapter 15 in Development, Trade and the WTO.

Videos:

The Case for Trade Liberalization - Patrick Low (WinMed, Hi Res)
Gains deriving from trade specialization are explained: better efficiency in resource allocation, gains to consumers, links between imports and exports. The dynamic arguments for trade, which include reciprocal influence between trade and growth, diffusion of technology, challenges facing small domestic markets are also covered, as well as arguments against opening trade.
(70 mins) (Real Media - Hi Res)

WTO Dispute Cases:

Practice Problems:

Week of Mar 12

 

No Class - Spring Break

 

Week of Mar 19 - Mar 26

Administered Protection: Antidumping

Readings:

WTO Dispute Cases:

DS294 US - Laws, Regulations, and Methodology for Calculating Dumping Margins (Zeroing) case brought by EC and others.

Timken Letter to House Committee - this letter is a good example of a lobbying effort, by a US company benefiting from AD actions, to convince Congress NOT to comply with the WTO request concerning zeroing.

CITAC Letter to House Committee - this letter shows lobbying effort in support of eliminating zeroing.

DS217 US — Continued Dumping and Subsidy Offset Act of 2000
case against the Byrd Amendnment brought by EC and others.

The Byrd Amendment: For and Against - online article discussing the Byrd Amendment

DS268 US - Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina case brought by Argentina and others. See also DS244 for another Sunset review case.

DS136 US - Anti-Dumping Act of 1916 case brought by EC and others.

DS122 Thailand - Anti-dumping Duties on Angles, Shapes, and Sections of Iron or NonAlloy Steel and H-Beams from Poland case brought by Poland.

 

Week of Apr 2

Administered Protection: Safeguards

Readings:

A Summary on the Agreement on Safeguards from the WTO

Anti-dumping, subsidies, safeguards: contingencies, etc from Understanding the WTO. Read the section on safeguards.

Chapter 95 - Domestic Policies and International Trade
Read sections 95-0 to 95-2

Chapter 100 - Trade Policies with Market Imperfections and Distortions
Read sections 100-0 to 100-3

Safeguards, J Michael Finger, Chapter 22 in Development, Trade and the WTO.

WTO Dispute Cases:

Week of Apr 2

Administered Protection: Anti-Subsidy Cases

Readings:

A Summary on the Agreement on Subsidies and Countervailing Measures from the WTO

Anti-dumping, subsidies, safeguards: contingencies, etc from Understanding the WTO. Read the section on subsidies.

Chapter 90 - Trade Policy Effects with Perfectly Competitive Markets
Read sections 90-26 to 90-27

Section 110-3a Countervailing Duties

Dealing with US Trade Laws, Gary Horlick, Eleanor Shea, Chapter 23 in Development, Trade and the WTO.

The Nonmarket Economy Trade Remedy Act of 2007 - this legislation introduced in the US House intends to extend the scope of Anti-subdy cases.

WTO Dispute Cases:

Week of Apr 9

The General Agreement on Trade in Services (GATS)

Readings:

A Summary of the GATS from the WTO

Services: rules for growth and investment from Understanding the WTO

Chapter 4: Whose Trade Organization

The GATS: Key Features and Sectors, Rudolf Adlong, et.al., Chapter 27 in Development, Trade and the WTO.

Quantifying Barriers to Trade in Services, Sam Laird, Chapter 26 in Development, Trade and the WTO.

Liberalization of Trade in Services in Developing Countries, James Hodge, Chapter 24 in Development, Trade and the WTO.

Completing the GATS Framework: Safeguards, Subsidies, and Govt. Procurement, Pierre Suave, Chapter 32 in Development, Trade and the WTO.

Big Box Backlash: The Stealth Campaign at the World Trade Organization to Preempt Local Control Over Land Use, from Public citizen

Videos:

The GATS (WinMed, Hi Res)
Based on the structure of the GATT (legal rules and lists of commitments), the GATS is the only set of multilateral rules covering trade in services. It provides for flexibility and recognizes the right of governments to regulate, including for instance through prudential measures taken in the financial services area. The increased participation of developing countries in trade in services is encouraged by the GATS. D. Hartridge also provides in-depth information on the various modes of delivery for services, on on-going and future negotiations, as well as on the impact of the GATS on electronic commerce.
(Real Media - Hi Res)

WTO Dispute Cases:

 

Week of Apr 11

The TRIPs Agreement

Readings:

A Summary on the TRIPs Agreement from the WTO

Intellectual property: protection and enforcement from Understanding the WTO

TRIPs FAQ from the WTO

Compulsory licensing of pharmaceuticals and TRIPS from the WTO

Implementing the TRIPs Agreement, Jayashree Watal, Chapter 35 in Development, Trade and the WTO.

Benefiting from Intellectual Property Protection, Keith Maskus, Chapter 36 in Development, Trade and the WTO.

Cultural Industries and Intellectual Property Rights, Frank Penna and Coenraad Visser, Chapter 38 in Development, Trade and the WTO.

Trademarks, Geographical Indications, and Developing Countries, Carsten Fink and Beata Smarzynska, Chapter 39 in Development, Trade and the WTO.

Videos:

The TRIPS (WinMed, Hi Res)
The various IP rights covered are defined and the Uruguay Round process which led to the TRIPS Agreement is explained. The architecture of the Agreement is presented in detail, in particular its basic principles, how protection is provided and enforced, the settlement of disputes, transition periods for developing and least-developed countries, and notification obligations. (64 mins.)
(Real Media - Hi Res)

WTO Dispute Cases:

 

Week of Apr 19

Agreement on Agriculture

Readings:

A Summary on the Agreement on Agriculture from the WTO

A Summary on the Agreement on Sanitary and Phytosanitary Measures from the WTO

Chapter 7: Whose Trade Organization

Economics of Tariff-Rate Quota Administration, by David W. Skully.
Market and Trade Economics Division, Economic Research Service, U.S. Departmentof Agriculture

Chapter 95 - Domestic Policy Effects on International Trade
Read sections 95-0 to 95-3

The WTO on Agriculture: Food as a Commodity, Not a Right, by Lori Wallach and Patrick Woodall, excerpt from Whose Trade Organization.

WTO Dispute Cases:

DS283 EU - Export Subsidies on Sugar case brought by Thailand plus other third parties.

DS245 Japan - Measures Affecting the Importation of Apples case brought by US plus other third parties.

DS267 US - Subsidies on Upland Cotton case brought by Brazil plus other third parties.

 

Week of Apr 23

Other Issues: Trade and Environment and Health

Readings:

A Summary on the Agreement on Technical Barriers to Trade from the WTO

Chapter 100 - Trade Policies with Market Imperfections and Distortions
Read sections 100-0 100-2 and 100-8

Chapter 1: Whose Trade Organization

The WTO’s Environmental Impact: First, Gattzilla Ate Flipper, by Lori Wallach and Patrick Woodall, excerpt from Whose Trade Organization.

WTO Dispute Cases:

DS58 US - Import Prohibition of Certain Shrimp and Shrimp Products case brought by India, Malaysia, Pakistan and Thailand, plus others.

DS2 US - Standards for Reformulated and Conventional Gasoline case brought by Venezuela plus EU and Norway.

 

Week of Apr 23

Other Issues: Agreement on Textiles and Clothing - History and Repercussions

This session presents the theory of purchasing power parity. The logic of the theory as an explanation for exchange rate movements is provided. More importantly, the supplemental readings help teach the way PPP exchange rates are used to make international comparisons of economic data.

Readings:

A Summary on the Agreement on Textiles and Clothing from the WTO

Textiles: back in the mainstream from Understanding the WTO.

Implementing the Agreement onTextiles and Clothing, Hanaa Kheir-el-Dun, Chapter 21 in Development, Trade and the WTO.

 
Week of Apr 23

Accession Process (Russia, Vietnam, Iran Iraq etc.)

Readings:

WTO Accession, Constantine Michalopolous, Chapter 8 in Development, Trade and the WTO.

Table of Current Accessions

Current Status of Accessions to the WTO

Vietnam: The Latest Accession WTO page on Vietnam

Week of Apr 30

Doha Development Round Agenda

Readings:

The Doha Declaration explained guide on the Doha agenda from the WTO

NAMA Negotiations guide from the WTO


Last Updated on 3/28/07