World trade organization
|World Trade Organization
|World Trade Organization (WTO)
|Organization Mondiale du Commerce (OMC)
|International law subject
|Seat of the organs
Geneva , Rue de Lausanne 154
|Official and working languages
|April 15, 1994
The World Trade Organization (English World Trade Organization , WTO , French organization du mondiale commerce , OMC , Spanish Organización Mundial de Comercio , OMC , usually in German with WTO abbreviated and rarely with WHO that a different organization is) is an international organization with Seat in Geneva , which deals with the regulation of trade and economic relations. It became on April 15, 1994 from the General Agreement on Tariffs and Trade(GATT) founded in the Uruguay Round after seven years of negotiation. On January 1, 1995, she started work in Geneva. Alongside the IMF and the World Bank, the WTO is one of the central international organizations that negotiates trade and economic policy with a global reach.
On the night of December 10th to 11th, 2019, the term of office of two arbitrators of the WTO's dispute settlement mechanism, which last comprised only three people, ended, so that the organization has since been considered incapable of acting. The United States under President Donald Trump prevented the vacant positions from being filled.
Foundation and goals
The WTO was founded on April 15, 1994 in Marrakech , Morocco ; the corresponding treaty came into force on January 1, 1995; it is the umbrella organization for the GATT , GATS and TRIPS agreements . The aim of the WTO is the dismantling of trade barriers and thus the liberalization of international trade with the further aim of international free trade . In addition, she is responsible for settling trade disputes . The core of these efforts are the WTO agreements, which have been drawn up and signed by the most important trading nations. The current treaties are the result of the so-called Uruguay Round , in which the GATT treaty was revised. In terms of economic policy , the WTO pursues a liberal foreign trade policy that goes hand in hand with deregulation and privatization .
Duties and powers
The task of the WTO is to advise its member states on their trade policy and then to coordinate the policies of the individual countries with one another. This mostly happens in multilateral negotiations. Furthermore, the WTO endeavors to link a coordinated trade policy with the desired currency and development policy through cooperation with the International Monetary Fund (IMF), the World Bank and other international institutions.
Dispute settlement function
The World Trade Organization's dispute settlement is the responsibility of the Dispute Settlement Body (DSB). The executive body is the General Council of the WTO. The DPO himself has no authority to enforce the decisions he has made; therefore it is partly disputed to what extent these are not more about proposed solutions and guidelines than about resolutions. Therefore, the DPO is initially an authority with a moral and diplomatic function. The DPO can authorize states that see themselves at a disadvantage to react to a breach of the law with trade sanctions. With the dispute settlement procedure, the WTO is the only global international organization with an efficient, internal dispute settlement mechanism. Every year 20 to 40 cases are brought before the DPO; from 1995 to November 2009 there were a total of 401 cases. A prominent case was the steel dispute between the European Union and the USA in 2002/2003. The judgments that the DSB is supposed to enforce are made beforehand by the so-called Appellate Body , which itself had seven members. The minimum number of referees was set at three.
After several members left without a replacement, the Appellate Body fell below the minimum number of three arbitrators on the night of December 10th to 11th, 2019 and is therefore no longer quorate. US President Donald Trump prevented the new appointments because from his point of view developing countries benefit unfairly from the WTO, since from the point of view of the WTO, China also belongs to these countries, which is one of the richest countries in the world, which he emphasized on Twitter.
"The WTO is BROKEN when the world's RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more !!! Today I directed the US Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA! "
Persistent inability to act may mean the end of the WTO in its current form. The United States is also bothered by the WTO budget and the payment of commercial judges, so that at times a budget blockade for 2021 was feared. The EU Commission von der Leyen is considering measures should the WTO remain incapable of acting in the long term.
Influence on national law
The WTO agreements affect national and European law, as the member states fundamentally undertook to adapt their national laws to their obligations under the world trade treaties. By joining the WTO, the European Union undertook to recognize the "agreements and related legal instruments (dispute settlement procedures)."
According to the established case law of the ECJ , the world trade law of the WTO is in principle not directly applicable in the EU. Individual citizens or companies cannot invoke this directly in national courts. Violations of the law can only be attacked by the governments of other states via the WTO dispute settlement procedure.
The WTO legal norms could also influence measures which, according to national tradition, have so far been part of the sovereign administration. State measures of services of general interest could be regarded as barriers to trade under the GATS regulations.
The WTO currently has 164 members , including since 1995 the USA, Japan, Brazil, India and the member states of the European Union ; China since 2001 and Russia since 2012. Afghanistan became the 164th member state to join in July 2016.
The WTO members generate 98% of the world trade volume . Some states of the former Soviet Union as well as several states in North Africa and the Middle East are significant non-members . As of February 4, 2018, there are 23 countries with observer status which (with the exception of the Holy See , which represents the Vatican City internationally as an independent, non-governmental subject ) must begin accession negotiations within five years. Accession is regulated in Art. XII of the WTO Agreement. Upon accession or after certain transition periods, the conditions of the individual WTO agreements must be met. The membership decisions are made by the Ministerial Conference with a two-thirds majority .
The European Union is also a member of the WTO in addition to its individual member states . It represents the interests of all Member States , which have been coordinated in the course of the common commercial policy . The commissioner for foreign trade is the negotiator , but representatives of the individual member states are also often sent. At the WTO, decisions are usually made by consensus ; if a majority decision takes place, the EU exercises the right to vote for all of its members. That is why the EU has 27 votes: the EU's voice as an independent WTO member is no longer applicable.
About two thirds of the WTO members are developing countries . Some of them are subject to separate regulations (e.g. GATT Part IV on trade and development) and the WTO Secretariat supports them on some issues. There is no definition of developing country status in WTO law. The categorization is based on a statement by the state that other states can question. In the case of new members, the future status will be clarified during the accession negotiations. 32 members of the WTO are as defined by the UN as Least Developed Countries ( English Least Developed Countries , shortly LDCs ), whose status can not be revoked.
The various developing countries often have very different problems or interests. However, there are various informal, partly overlapping alliances of developing countries in the WTO, for example the G90 as a coalition of the African Union (AU), the African, Caribbean and Pacific states ( ACP states ) and the Least Developed Countries (LDC) . The most important alliance at the moment is the G20 of developing countries , which was founded before the WTO ministerial conference in Cancun , Mexico (September 2003) , under the leadership of the economically strongest developing countries, the People's Republic of China , India , Brazil and South Africa .
Many WTO critics doubt whether the special rights granted are sufficient to offset the disadvantages of developing countries compared to industrialized countries. For example, while the WTO offers training programs for workers in developing countries, some countries are not even able to pay enough delegates to take part in all negotiations.
There are various political or (regional) economic alliances between individual WTO members, some of which are long-term, some of which are short-term or consist of changing members. Within an economic area such as the EU, NAFTA , ASEAN or Mercosur , special rules apply to the most-favored nation principle .
The so-called Cairns Group acts as a political alliance for liberalization in the agricultural sector. These include 17 countries from four continents that are differently developed.
The four major economic powers (EU, Japan, Canada, USA) are known as The Quad or Quadrilaterals .
The World Trade Organization consists of three main bodies . The Ministerial Conference is the highest body and meets at least every two years. (Art. IV: 1 WTO-Con). The General Council , regulated in Art. VI: 2 WTO Convention, is the permanent body of all members. The WTO Secretariat is under the direction of the Director General (Art. VI WTO-Con).
The highest organ of the WTO is the Ministerial Conference of Economics and Trade Ministers, which meets at least every two years. Each Member State has one vote. Although decisions can be made with a simple majority, decisions are generally made by consensus. Voting takes place, for example, on interpretations or amendments to conventions or exemptions of individual members from obligations (two-thirds or three-quarters majority of members, depending on the subject). The Ministerial Conferences are chaired by the Director General, currently Roberto Azevêdo . The ministerial conference is usually opened in a rather unusual place and then the actual negotiations continue in Geneva. The aim of the conferences is to pass resolutions on the closer connection of world economic trade, as well as the establishment of standing committees.
At the Ministerial Conference of Economic and Trade Ministers of the WTO in Seattle in 1999 , negotiations failed, and there were massive protests and demonstrations by critics of globalization .
After the ministerial conference of the WTO in Doha / Qatar (2001), a new world trade round (the so-called Doha Development Agenda ) took place, which should be completed by December 31, 2004. Most recently, in Cancun / Mexico in September 2003, the 5th WTO Ministerial Conference failed due to the resistance of numerous developing countries ( G20 ) against the agenda of the “North” (the EU and the USA). Groups critical of globalization and non-governmental organizations (NGOs) were also strongly represented on site . In February 2004 the negotiations at civil servant level were resumed and led to an initial agreement on July 31, 2004, an agricultural framework agreement was concluded, which has yet to be specified, which is why it is not yet clear whether it will be a success for developing countries, industrialized countries or the WTO can be viewed.
The ministerial conference in Hong Kong / China from December 13th to 18th, 2005 ended with a compromise proposal: agricultural export support should be dismantled in developed countries (especially EU, USA, Canada) by 2013 (for cotton by the end of 2006). However, this dismantling was previously decided by the EU and thus served as a smoke candle. The industrially least developed countries are to receive largely duty-free and quota-free access to the world market for 97% of their products by 2008. Textile products are excluded at the request of the USA. The next ministerial meeting in Geneva began on June 29, 2006. It was broken off on July 1 without result. The main point of contention between the EU and the USA on the one hand and the emerging economies represented in the group of developing countries under the leadership of Brazil and India on the other hand was again the agricultural market. US officials were unwilling to make any concessions to cut agricultural subsidies , which was a major demand from developing countries.
The 7th WTO ministerial conference ended on December 2, 2009 in Geneva, only a free trade agreement was signed. The 8th WTO Ministerial Conference took place from December 15-17, 2011 in Geneva. In addition to a plenary session, three working sessions took place on the following topics: "The importance of the multilateral trading system and the WTO", "Trade and development" and the "Doha development agenda". A resumption of negotiations in the Doha Round was not to be expected in Geneva. At the 9th WTO Ministerial Conference in Bali in 2013, the first multilateral agreement since the WTO was founded was concluded. The developing countries are thus supported accelerated customs clearance. In the agricultural sector, they also received the promise that adjustments would be made if tariff quotas were not exhausted. The results of the 10th WTO Ministerial Conference were seen as symbolic. The member states must then end their export subsidies for agricultural products. The EU ended agricultural export subsidies earlier. Export subsidies for cotton had to end at the beginning of 2017, in developing countries by 2018, Canada, Norway and Switzerland had to cut their subsidies by 2020. There was still no agreement on whether to continue the Doha Round , with which the developing countries should be promoted.
Previous / planned ministerial conferences
|Nur-Sultan (until 2019 Astana)
|11-14 December 2017
|15-19 December 2015
|3rd-6th December 2013
|15-17 December 2011
|November 30–2. December 2009
|13-18 December 2005
|People's Republic of China
|10-14 September 2003
|9-13 November 2001
|November 30–3. December 1999
|18. – 20. May 1998
|9-13 December 1996
General Council, Dispute Settlement Panel, and Trade Policy Review Panel
The current business of the Ministerial Conference are governed by three institutions: the General Council (General Council) , the Dispute Settlement Body ( Dispute Settlement Body , Art. IV: 3 WTO Conv) and the committee for the review of trade policy ( Trade Policy Review Body , TPRB , Art. IV: 4 WTO-Con).
The General Council is the WTO's top decision-maker in Geneva. It meets regularly between the meetings of the Ministerial Conference in order to carry out the tasks of the WTO and also to exercise its own responsibilities that have been assigned to itself. He oversees the accession of new members to the World Trade Organization and the management of the Special Councils of GATT, GATS and TRIPS. The General Council is also responsible for reviewing the individual trade policies of the Member States. Its representatives come from all Member States and are generally ambassadors or people in similar positions. The difference to the ministerial conference is not the composition, but the rank of the delegates.
The Dispute Settlement Body : How the General Council is the Dispute Settlement Body ( Dispute Settlement Body , DSB ) of representatives of all Member States. Its job is to resolve trade disputes between member states when bilateral talks fail to reach an agreement. A panel will be set up as an arbitration body. It comprises three legal or commercial experts whose countries are not directly involved in the dispute. After nine months a judgment must be made by this body. The judgment can be appealed to a second instance, the Appellate Body . Legal and commercial experts are also represented here. The panel examines procedural issues. The judgment of the appellate body can only be annulled by a unanimous vote of all WTO members. An important innovation since the WTO was founded is the maximum duration of a dispute settlement of one year and, if the appeal is used, 18 months. The country of complaint has the right to retaliate in the event of non-compliance with the specified guidelines, without these being deemed to be violations of WTO guidelines. For example, a country of action could restrict exports to its trading partner or temporarily impose tariffs on certain goods.
The Trade Policy Review Panel : The General Council also meets as the Trade Policy Review Panel. This body is also open to all WTO members. Its task is to regularly review the trade policies of the members according to a set procedure. For this purpose, a different chairman can be appointed and other procedural rules can be determined. The frequency of the reviews of the individual states depends on their share in world trade.
Other councils are active under the direction of the General Council (Art. IV: 5 WTO-Con). In particular, these are the Council for Trade in Goods (GATT Council), the Council for Trade in Services (GATS Council) and the Council for Trade-Related Aspects of Intellectual Property Rights (Council for TRIPS ). They monitor compliance with and the effectiveness of the WTO agreements. Thematically working committees are subordinate to the councils.
The Secretariat of the World Trade Organization was under the direction of Secretary General Roberto Azevêdo from September 1, 2013 to August 31, 2020 . The secretariat only has an advisory role. The aim is to provide technical, professional and legal support to the Member States, the General Council and the Ministerial Conference. One of the main tasks of the Secretariat is to analyze and document the development of world trade and to advise governments that want to become WTO members. The secretariat is also responsible for preparing and conducting negotiations between member states and providing legal support in dispute settlement processes. The WTO Secretariat, with its permanent seat in Geneva, currently has 630 regular staff, including the Director General as Chairman. The Secretariat implements the decisions of the Ministerial Conference and the General Council and reports regularly to the Ministerial Conference and the Council on the day-to-day business of the WTO. It has no decision-making power, this is reserved for the members of the WTO.
- Peter Sutherland (until April 1995)
- Renato Ruggiero (1995-1999)
- Mike Moore (1999-2002)
- Supachai Panitchpakdi (2002-2005)
- Pascal Lamy (September 2005 – August 2013)
- Roberto Azevêdo (September 2013 – August 2020)
- Ngozi Okonjo-Iweala (from March 2021)
In principle, the WTO is based on three main pillars and several subsidiary agreements. The main pillars are the General Agreement on Tariffs and Trade (GATT) , General Agreement on Trade in Services (GATS) and Trade Related Aspects of Intellectual Property Rights (TRIPS) . Members of the three main agreements have been obliged to participate in almost all side agreements since the WTO was founded. The "all or nothing principle" is also used here. The aim of compulsory participation is to achieve the greatest possible uniformity between the partner countries. The dispute settlement body of the Dispute Settlement Body (DSB) forms the institutional framework of the World Trade Organization . This gives the global system of the WTO legally binding character, which enables the various trade agreements with 160 member states to be implemented.
The General Agreement on Tariffs and Trade (english General Agreement on Tariffs and Trade , GATT ), the largest component of the WTO system is the regulations of GATT amounts essentially on four basic ideas. It is firstly the central ban international trade restrictions (Art. XI GATT), secondly the fixing and continuous reduction of tariffs (Art. II GATT), thirdly most-favored nation treatment (Art. I GATT) and fourth, national treatment (Art. III GATT). In addition to the four basic ideas, there are subsidiary agreements that regulate special cases and exceptions.
The General Agreement on Trade in Services (english General Agreement on Trade in Services , GATS ) entered into force on 1 January 1995th In view of the steadily growing service sector in the industrialized nations, the GATS was long overdue at this point. For the first time, comprehensive international prerequisites were created that enable cross-border services. In particular, the GATS includes services in the banking sector , insurance companies and consulting institutes. The particular difficulty in designing the GATS is to be found in the difference between trade in goods and trade in services. The provision of services is essentially linked to the following four factors: In order to provide a service, the coming together of people is essential. Due to the developments in telecommunications, this process is much easier to cope with today, but is by no means indispensable. Furthermore, professional qualifications must be recognized and approved. Another major problem are the different social security systems . Great progress has already taken place within the EU, but hardly any further development globally. Ultimately, services require a long-term personnel presence in one place and thus require cross-border investments. Ultimately, the service agreement only provides a framework that calls on the WTI members to create individual and at the same time universal regulations in the trade in services in order to reduce barriers to trade in services.
The agreement on the protection of intellectual property (English Trade-Related Aspects of Intellectual Property Rights , TRIPS ) also became part of the WTO system in 1995. In particular, plagiarism and products “similar” to the original product inhibited the transfer of necessary know-how for a long time. This shows that the economic success of the countries depends not only on monetary, but also on intellectual capital. The TRIPS is a comprehensive set of rules on the international protection of patents , copyrights , designs and the like. The agreement is binding and provides a solid basis, especially for those countries that had no or only very incomplete regulations on the protection of intellectual property . The provisions on the protection of intellectual property are particularly effective thanks to the possibility of certain minimum standards being enforceable by the courts.
Trade Agreement 2013
On December 7, 2013, the member countries agreed on a new trade agreement. In mid-2014 India announced that it would not sign the agreement. After further negotiations and a transition clause for India after a compromise with the USA, the last country has now also agreed to the Bali package. Before it comes into force, the agreement has to be ratified by two thirds of the 160 members.
All WTO members undertook to comply with a number of basic rules when structuring their foreign trade relations. From an economic point of view, priority is given to the dismantling of tariffs and trade barriers. However, socio-economic goals also play a role. Discrimination of all kinds is to be reduced and the general standard of living raised. In particular, the three principles of non-discrimination, the dismantling of tariffs and trade barriers and reciprocity are assumed as the basis for negotiations.
The principle of non-discrimination regulated in WTO agreements can be divided into two principles. First, there is the principle of MFN ( Most favored nation Principle , Article 1 GATT). All advantages and privileges that one member state grants over another should immediately be granted to all other WTO nations as well. The only exception applies to the merger of WTO countries to form a free trade area or a customs union, as was the case when the European countries merged to form the EU. This is justified with the assumption that free trade areas and customs unions are an important step towards global free trade. On the other hand, the principle of equal treatment for nationals applies ( National Treatment Obligation , Article 3 GATT). Foreign products must not be disadvantaged compared to domestic products. Here, too, there is an exception for products from developing countries in order to promote and protect the development of the economy in developing countries and not to inhibit it with cheaper imported products. The principle of national treatment only applies to services if the states opened the market for a service sector.
Removal of trade barriers and customs
The guideline on the dismantling of customs duties and the removal of various trade barriers (prohibition on trade restrictions other than tariffs) serves for generalized and simplified customs assessment. In principle, customs duties may be levied to protect domestic products, but no quotas. Existing tariffs or tariffs that have already been reduced may not be increased. The prohibition of quantitative restrictions states that domestic producers may be protected by tariffs, but not by import quotas or the complete exclusion of imports (Article 11 GATT). The aim of these measures is to reduce trade barriers.
The reciprocity clause supplements the principle of most favored nation treatment. The content of this compensation regulation is the granting of equal concessions among the nations. If country 1 grants country 2 certain trade privileges, country 2 in turn is required to grant country 1 similar privileges. With the founding of the WTO and its predecessor organization, the principle of reciprocity faded more and more into the background.
Currently, the principles of the WTO are mostly summarized under the single keyword of multilateralism . Equal, cooperative, mutually beneficial negotiation and behavior by all nations in the WTO is deliberately promoted, while plurilateral agreements ( e.g. free trade agreements that are only intended to apply to some of the WTO members) are actually undesirable and only permitted under certain conditions. The aim is to gradually free all world trade from tariffs and other trade barriers so that all countries benefit from them instead of just some. That goal has stalled since the Doha Round . Since then, plurilateral agreements (such as CETA and TPP ) have been on the rise again.
Furthermore, increasing transparency and thus increasing understanding from the public play an important role. The regulations and resolutions of the WTO require publication and strict implementation.
Critical positions on the WTO and its politics are mostly represented by non-governmental organizations such as Attac , church-oriented groups such as Bread for the World and trade unions , as well as by some economists such as Michel Chossudovsky in his book Global Brutal. World trade unleashed, poverty, war . The OWINFS network “our world is not for sale” is an amalgamation of organizations and associations from worldwide social movements. The OWINFS network opposes the economically liberal views of the WTO as a model of a multilateral trading system that should be sustainable, socially just, democratic and responsible.
Ignoring environmental concerns
Environmental organizations like Greenpeace complained about the WTO's lack of consideration for environmental protection . The frequent classification of environmental protection measures as barriers to trade reduces the state's ability to actively protect nature . Examples of environmental protection measures classified as trade barriers are keeping the air clean , protecting animals and restricting genetic engineering . Against this, the objection is that states could possibly use environmental protection efforts merely as a pretext for hidden protectionism .
Excessive corporate influence
Another point of criticism is the influence that transnational corporations and associations such as the International Chamber of Commerce (ICC) have on the decision-making processes of the WTO. National - often democratically declared - legislation in areas such as social policy , occupational health and safety or environmental protection could only be enforced to a limited extent due to restrictions on the influence of governments on economic policy.
Negative impact on the global south
The organization Bread for the World deplores the role of the WTO in the progressive globalization of the economies of southern countries through demands for the privatization of the water market and for the dismantling of protective tariffs and quotas. Countries that have little water are forced to grow water-intensive products such as grain or sugar instead of staple foods that require little water. However, the often more expensive production of export products for the world market endangers the existence of local smallholders . In addition, arid countries would then have to import many staple foods from industrialized countries, which are often subsidized in the producing country. The food security of many countries is therefore increasingly dependent on production in industrialized countries, on the world market and on powerful trading groups.
Jean Feyder does not think that liberalized trade makes sense because the market participants would have unequal competitive conditions or advantages. In the agricultural sector, for example, untrained smallholders with plots of less than one hectare and without access to spray or fertilizers compete with large agro-industrial companies. The withdrawal of the state from fertilization advice, seed allocation and harvesting, which is required at the same time as the dismantling of protective tariffs, is not being replaced "by the market" quickly enough, which puts small farmers at a disadvantage. If then highly subsidized agricultural products are imported at prices below the production price, smallholders cannot sell their products. They lack money for modernization or even to survive.
It is also claimed that without high tariffs on imports, the developing countries would have no way of building their own stable industries. Thus, the WTO system "today blocks all important ways and means with the help of which countries successfully initiated catching up development in the past, for example the USA in the race to catch up with Great Britain". In this context, WTO critics claim that industrialized countries make decisions “behind closed doors”. This unprotected negotiation practice, known as green rooming, excludes developing countries from decision-making processes.
On the other hand, there is permitted protectionism through subsidies : Since tariffs as a means of state protectionism can only be used to a limited extent, other forms of export promotion through subsidies have established themselves. The WTO differentiates between different types of subsidies, of which only one type (yellow box) is restricted and can be phased out in the long term, while the other types (green box, blue box) remain permitted. Most of the subsidies of the "subsidy superpowers" USA and EU are assigned to the unrestricted subsidy categories.
Lack of transparency
The lack of transparency and the lack of controls are also criticisms of the WTO. There are considerations about the establishment of a quasi-parliamentary body, but so far the WTO lacks control mechanisms. She is neither obliged to enter into dialogue with the UN nor with the media. The minutes of meetings would not be sufficiently accessible to the public. The criticism of the non-governmental organizations often comes from the fact that - in contrast to the UN General Assembly - they lack opportunities to articulate their interests. In the dispute arbitration procedure statements 13 Dispute Settlement Under Understanding (DSU) are in this case of NGOs under Art. Possible. How can companies NGOs amicus Curae briefs submitted, which often find quite consideration. Some member states, in turn, strongly criticize this possibility.
Sustainable Development Goals
Target 17.10 reads: “Promote a universal, rules-based, open, non-discriminatory and fair multilateral trading system under the umbrella of the World Trade Organization, in particular by concluding the negotiations as part of its Doha Development Agenda ”.
Target 17.11 calls on the world of states to "increase the exports of developing countries significantly, particularly with a view to doubling the share of least developed countries ( LDCs ) in global exports by 2020".
Target 17.12 reads: “To achieve the rapid implementation of duty-free and quota-free market access on a permanent basis for the least developed countries in accordance with the decisions of the World Trade Organization, among other things by ensuring that those applicable to imports from the least developed countries preferential rules of origin are transparent and simple and contribute to facilitating market access ”.
In May 2015, the Council of the European Union formally stated that international trade regulated by the WTO is an essential instrument for implementing the post-2015 agenda . He is committed to the "decisive role of small farmers".
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