Info Service on WTO and Trade Issues (Oct18/18)
25 October 2018
Third World Network
US-EU-Japan's intrusive transparency proposal targets South
Published in SUNS #8780 dated 24 October 2018
Geneva, 23 Oct (D. Ravi Kanth) - The United States, the European Union,
and Japan are preparing the ground at the WTO for imposing the most
intrusive transparency and notification requirements, including naming
and shaming of countries failing to comply with timely deadlines,
in what appears to be an enveloping trilateral initiative for targeting
China and other developing countries at the global trade body, trade
envoys told SUNS.
In a four-page draft proposal for a General Council (GC) decision,
obtained by SUNS, the three sponsors have argued that they want to
"strengthen and enhance transparency and improve the operation
and effectiveness of notification requirements" in order to address
"the chronic low level of compliance with existing notification
requirements under many WTO agreements."
The proposed draft decision, which is not yet available to all WTO
members, covers "existing notification requirements" so
as to "recommit to providing complete and timely notifications
under the WTO Agreements within the remit of the Council for Trade
It has listed the following WTO Agreements which will be subjected
to the proposed transparency and notification requirements:
(a) Agreement on Agriculture;
(b) Agreement on Implementation of Article VI of the GATT 1994 (Anti-Dumping);
(c) Agreement on Subsidies and Countervailing Measures;
(d) Agreement on Safeguards;
(e) Understanding on the Interpretation of Article XVII of the GATT
1994 (State Trading);
(f) Agreement on Implementation of Article VII of the GATT 1994 (Customs
(g) Agreement on Import Licensing Procedures;
(h) Agreement on Rules of Origin;
(i) Agreement on Preshipment Inspection;
(j) Decision on Notification Procedures for Quantitative Restrictions;
(k) Agreement on Trade Related Investment Measures;
(l) Agreement on the Application of Sanitary and Phytosanitary Measures;
(m) Agreement on Technical Barriers to Trade.
The draft proposal says that "appropriate committees, working
groups or other bodies, such as the Working Group on Notification
Obligations and Procedures (Working Group)" will "assess
and report annually to their designated supervisory bodies on Members'
compliance with notification obligations" for the above agreements.
The committees will also suggest "appropriate steps to reinforce
compliance with the notification requirements under such agreements
(for example, by carrying out notification workshops), and to make
recommendations, as appropriate, on means by which greater compliance
can be encouraged and achieved."
The General Council, according to the draft decision, will "instruct
the Working Group to meet before [x date] to develop recommendations
on improving Member compliance with notification obligations under
the agreements" listed above.
The trilateral proposal says that "the Working Group will consult
with appropriate committees, other working groups and bodies as appropriate,
and consider both systemic and specific improvements that can help
Members improve compliance with notification obligations."
In addition, the proposed Working Group "will also consult with
the WTO Secretariat as appropriate, including the WTO Institute for
Training and Technical Cooperation (ITTC) to assess the contribution
of WTO trade-related technical assistance to improving notification
compliance, as well as the Central Registry of Notifications."
The US, which is particularly targeting China and India among others
on market access for agricultural products, has insisted on the importance
of strengthening and enhancing "the effectiveness of the review
process of the implementation of commitments in the Agreement on Agriculture."
Further, the Trade Policy Review Body, according to the draft proposal,
will "ensure that beginning in 2019, all trade policy reviews
include a specific, standardized focus on the Member's compliance
with its notification obligations under [all] the agreements".
More important, the draft proposal calls on members "to provide
a counter notification on behalf of another Member concerning notification
obligations under the agreements."
Recently, the US had filed a counter notification for the first time
against India over New Delhi's notification on domestic support payment
India had dismissed the US' counter notification on grounds that it
is baseless and prepared at the behest of its powerful farm lobby,
said a trade envoy, who asked not to be quoted.
The draft proposal says that "beginning in [x date], a Member
that fails to provide a required notification" under the agreements
listed above will be given two years or [720 days] in case if the
member had failed to comply with any prior required notification."
The member failing to comply with the timely notification will be
"encouraged to submit to the Committee on Agriculture by [x date]
of each subsequent year an explanation for the delay, the anticipated
time-frame for its notification, and any elements of a partial notification
that a Member can produce to limit any delay in transparency."
The member failing to submit timely notifications, according to the
draft GC decision, will need to provide an explanation as to why it
is unable to submit the notification within the deadline.
The draft says "a developing country Member encountering difficulties
to fulfill notification obligations or the information" can seek
the Secretariat's assistance for filing the notification.
The draft has proposed several administrative measures in the case
of the member failing to comply with timely notifications within a
year and not seeking the WTO Secretariat's assistance or not cooperating
with the Secretariat.
(a) After one but less than two full years from a notification deadline,
the following measures shall be applied to the Member at the beginning
of the second year:
(i) representatives of the Member cannot be nominated to preside over
(ii) questions posed by the Member to another Member during a Trade
Policy Review need not be answered;
(iii) the Member will be assessed a supplement of [x] percent on
its normal assessed contribution to the WTO budget, to be effective
in the following biennial budget cycle;
(iv) the Secretariat will report annually to the Council for Trade
in Goods on the status of the Member's notifications; and
(v) the Member will be subject to specific reporting at the General
(b) After two but less than three full years following a notification
deadline, the following measures shall be applied to the Member at
the beginning of the third year:
(i) the Member will be designated as an Inactive Member;
(ii) representatives of the Member will be called upon in WTO formal
meetings after all other Members have taken the floor, and before
any observers; and
(iii) when the Inactive Member takes the floor in the General Council
it will be identified as such.
(c) The administrative measures shall not apply to Members that have
submitted information on the assistance and support for capacity building
that the Member requires.
More important, the draft proposal says that "at the beginning
of each year when measures will be applied to any Member, the Director-General
will notify the Ministers of those Members responsible for the WTO
of the administrative measures being applied with respect to those
However, the administrative measures will cease to apply once "any
such Member comes into compliance with its notification requirements,"
according to the draft proposal.
The trilateral initiative began at the WTO's eleventh ministerial
meeting in Buenos Aires, in December 2017.
The draft decisions says that "taking into account the decision
of Ministers at the 11th Ministerial Conference to recommit to the
implementation of existing notification obligations for fisheries
subsidies, and recognizing the significant contribution that enhanced
fisheries subsidies notifications would make to the negotiation and
implementation of prohibitions on harmful fisheries subsidies, the
Rules Negotiating Group will develop enhanced notification procedures
as part of the ongoing fisheries subsidies negotiations in that body,
in consultation with the Committee on Subsidies and Countervailing
Measures as appropriate."
In conclusion, it is clear as daylight that the assault on developing
and poorest countries, which are already finding it difficult to comply
with burdensome notification requirements because of lack of appropriate
agencies in most of the countries, will now be subjected to an aggressive
form of naming and shaming. Unless they join forces, they will not
be able to withstand the current crisis, said trade envoys, who asked
not to be quoted.