Gabon, Kyrgyz Republic ratify WTO Trade Facilitation Agreement into force and other WTO News

Gabon, Kyrgyz Republic ratify WTO Trade Facilitation and other WTO News

Gabon and the Kyrgyz Republic have ratified TFA, the Trade Facilitation Agreement, putting the total number of ratifications from members at 102. Only 8 more ratifications are needed to bring the TFA into force

Gabon’s WTO ambassador Marianne Odette Bibalou Bounda submitted her country’s instrument of acceptance to WTO Director-General Roberto Azevêdo on 5 December. On 6 December the Kyrgyz Republic’s WTO ambassador Daniiar Mukashev submitted his country’s instrument of acceptance to DG Azevêdo. 

Earlier, on December 1, 2014, Gabon submitted its Category A notification to the WTO outlining which substantive provisions of the TFA it intends to implement upon entry into force of the Agreement. The Kyrgyz Republic submitted its Category A notification to the WTO on 31 July 2014.

The TFA will enter into force once two-thirds of the WTO membership has formally accepted the Agreement.

In addition to Gabon and the Kyrgyz Republic, the following WTO members have also accepted the TFA: Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia, Kenya, Myanmar, Norway, Viet Nam, Brunei, Ukraine, Zambia, Lesotho, Georgia, Seychelles, Jamaica, Mali, Cambodia, Paraguay, Turkey, Brazil, Macao China, the United Arab Emirates, Samoa, India, the Russian Federation, Montenegro, Albania, Kazakhstan, Sri Lanka, St. Kitts and Nevis, Madagascar, the Republic of Moldova, El Salvador, Honduras, Mexico, Peru, Saudi Arabia, Bahrain, Bangladesh, the Philippines, Iceland, Chile, Swaziland, Dominica and Mongolia.

The TFA broke new ground for developing countries and LDCs in the way it will be implemented. For the first time in WTO history, the requirement to implement the Agreement was directly linked to the capacity of the country to do so. In addition, the Agreement states that assistance and support should be provided to help them achieve that capacity.

A Trade Facilitation Agreement Facility (TFAF) was also created at the request of developing and least-developed country members to help ensure that they receive the assistance needed to reap the full benefits of the TFA and to support the ultimate goal of full implementation of the new agreement by all members.  Further information on TFAF is available at www.TFAFacility.org.

Implementation of the WTO Trade Facilitation Agreement has the potential to increase global merchandise exports by up to USD 1 trillion per annum, according to the WTO’s flagship World Trade Report released on October 26, 2015.  Significantly, the Report also found that developing countries will benefit significantly from the TFA, capturing more than half of the available gains.

Tunesia could profit on trade

WTO Director-General Roberto Azevêdo visited Tunisia on November 29-30, to hold meetings with Prime Minister Youssef Chahed, Minister of Trade Zied Ladhari and Minister of Foreign Affairs Khemaies Jhinaoui. As part of his visit, he also participated in the “Tunisia 2020 conference”, where he discussed the role of trade and the WTO in helping Tunisia’s economic development.

Progress made on Environmental Goods Agreement, setting stage for further talks

Ministers and senior officials from the 18 participants in the Environmental Goods Agreement (representing 46 WTO members) met in Geneva this weekend to work towards liberalising trade on a range of important environmental goods. Constructive talks were held and progress was made, but participants were not in a position to close the existing gaps at this point. The intensive discussions set the stage for further talks in the near future.

The 18 participants representing 46 WTO members account for most of the global trade in environmental goods. Since January 2014, they have been engaged in negotiations to slash duties on products used in a variety of environmentally-related functions including: generating clean and renewable energy; improving energy and resource efficiency; reducing air, water and soil pollution; managing solid and hazardous waste; noise abatement; and monitoring environmental quality.

The EGA participants are: Australia; Canada; China; Costa Rica; the European Union (representing Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom); Hong Kong, China; Iceland; Israel; Japan; Korea; New Zealand; Norway; Singapore; Switzerland; Liechtenstein; Chinese Taipei; Turkey; and the United States.

Proposal for e-commerce negotiations draws interest

China and Pakistan’s proposed approach to e-commerce negotiations drew interest at the November meeting of the WTO Goods Council. Over 20 members took the floor, with many emphasizing the importance of delivering an outcome for next year’s Ministerial Conference.

China, introducing the proposal, said that discussions should focus on the promotion and facilitation of cross-border trade in goods enabled by the Internet. It said discussions could also include services directly supporting this, such as payment and logistic services. Discussions should not lead to new market access commitments, China said, adding that the needs of developing countries should be reflected in any outcomes. Priority should be given to “easy issues”, with a focus on realizing “pragmatic progress” at the 11th Ministerial Conference (MC11) to be held in December 2017, China said.

Pakistan meanwhile said it was ready to engage with other WTO members to continue work on e-commerce.

China and Pakistan’s proposal was well received by delegations and provoked comments from 22 members. Several affirmed the importance of working towards delivering outcomes at MC11. There was also support for incorporating the needs and concerns of developing country members in the deliberations. Some members emphasized the importance of maintaining discussions on other aspects of e-commerce, such as online trade in services as well as commitments for consumer protection, data privacy, and intellectual property rights. Several delegations said there is a need to make permanent the moratorium on customs duties on electronic transmissions instead of continuing with the current practice of renewing the moratorium every two years. Some said that taxation issues contained in China and Pakistan’s proposal were outside the scope of the WTO.

A number of delegations said negotiations should continue in line with the Work Programme on E-Commerce approved in 1998, which calls on members to examine in mandated WTO bodies the trade-related e-commerce issues relating to goods, services, intellectual property and the needs of developing countries. China said that their proposal intends that discussions, at the present stage, should be based on the existing mandate.

At their 10th Ministerial Conference in Nairobi last December, trade ministers agreed to continue work under the WTO’s existing Work Programme on Electronic Commerce. They also instructed the General Council to hold periodic reviews, based on the discussions in the Goods Council and other WTO bodies, in its sessions of July and December 2016 and July 2017 and to report back to the next Ministerial Conference.

To advance the e-commerce discussions, China said a seminar on e-commerce and trade in goods should be organized under the auspices of the Council for Trade in Goods. Several members supported holding a joint informal meeting of the mandated WTO bodies.

Trade concerns

The Goods Council is the forum for hearing members’ concerns over certain measures affecting trade in goods. Russia, Japan and the European Union brought new trade concerns to the Council’s attention.

Russia expressed concerns about measures in Croatia restricting imports of Russian petroleum products and biofuel in favour of imports from the EU and other countries. These include  pre-approval requirements, mandatory use of warehouses, and licensing. The EU said it will address the matter in consultation with Croatia.

Japan voiced concerns about Turkey’s duties on imported tyres, which it said were higher than what it had committed to the WTO. Turkey said it was working on this issue and assured members its policies were consistent with its WTO commitments.

The EU raised concerns about Russia’s mandatory certification measures for cement, which it said were a de facto ban on EU cement imports. The EU said certificates previously approved had been cancelled. Russia responded that the measures are justified due to a sharp decline in the quality of cement and that it applied the measure in a non-discriminatory manner.

Issues involving seafood were raised. China complained about a draft US measure to combat illegal fishing and seafood fraud, warning that the measure poses significant burdens on seafood exporters to the US. Russia, which had raised the same issue previously, said it was closely following the matter. The US said it was carefully considering information and its international obligations as it finalizes the first phase of the programme. Norway reiterated its complaint against the lack of transparency and technical consultations over China’s measures for imported seafood which include testing, licensing, and quarantine. China said the measures were justified due to detections of parasites and virus in certain seafood from Norway.

Nigeria’s import restrictions, particularly in the form of foreign exchange restrictions for importers and local content requirements in the oil and gas sector, remained a cause for concern for the EU, Uruguay, US, Norway, Iceland, Thailand, Argentina, Australia and Japan.  These measures are currently under review, Nigeria said, adding that it was committed to its WTO obligations.

Various import restricting measures in India continued to concern the EU, US, New Zealand, Thailand, Japan, Australia, Korea, Canada, Chinese Taipei, and China. These include India’s 10% customs duty on certain information technology (IT) goods, minimum import prices on steel, and port restrictions on apple imports.  India said the steel measures were temporary and a response to a surge in steel exports by some major steel producers.

Nine members (US, Japan, EU, Brazil, New Zealand, Chinese Taipei, Korea, Australia, Canada) reiterated their complaints against Indonesian measures affecting meat, dairy, fresh plants, wood, mobile phones, telecommunications, retail, energy, and more. Indonesia renewed its statement that it did not intend to implement trade barriers and that the measures were justified due to considerations over the environment, health, and public morals.

For the fourth Goods Council meeting in a row, China reminded WTO members that a provision in its 2001 Protocol of Accession, Section 15(a), will expire on December 11, 2016. China thus reiterated its call for members to take steps to amend or put their legislation in line with the new conditions after the expiry date. According to China, this means that, after December 11, 2016, WTO members shall stop using surrogate or analogue country methodologies in anti-dumping investigations against Chinese imports, and determine the dumping margins on the basis of the prices and costs reported by Chinese companies.

The US disagreed with China’s interpretation of its accession protocol. The US said that if it were to accept China’s interpretation, it would require more than one provision to expire; however this was not the case, the US added. The US also said that it continues to encourage China to take additional steps to reform its economy and to limit government intervention in sectors to lessen distortions in prices and costs of goods.

The EU said it had a legislative proposal before the EU Parliament and Council to amend anti-dumping regulations to address overcapacity in sectors like steel while fully meeting its WTO obligations. Canada urged further discussions on this “systemic issue” while Mexico similarly said it would like to see members advance on a feasible path.

Japan registered its interest in China’s import taxes on personal effects (hand luggage). China said it indeed imposes a flat duty rate on personal effects brought in by inward passengers and that there was no prohibition against this.

Several members reiterated their reservations against Ecuador’s import restricting measures intended to address Balance of Payment (BOP) issues, which have affected a variety of goods, most notably imported automobiles and phones.

The next meeting of the Council is scheduled for April 6, 2017.

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