Info Service on WTO and Trade Issues (Nov18/12)
22 November 2018
Third World Network
South countries strongly oppose joint proposal on WTO notifications
Published in SUNS #8796 dated 15 November 2018
Geneva, 14 Nov (D. Ravi Kanth) - Many developing and poorest countries
on Monday opposed a proposal circulated by the United States and five
other countries for enhanced transparency and notification requirements
in World Trade Organization (WTO) agreements, saying that it would
impose "punitive measures and sanctions" and burdensome
requirements on members, trade envoys told SUNS.
At a meeting of the WTO's Goods Council, many developing countries,
particularly the African Group, spoke against the proposal circulated
by the United States, the European Union, Japan, Costa Rica, Chinese
Taipei and Argentina for enhancing transparency and for strengthening
the notification requirements.
The joint proposal by the six countries stemmed from a draft prepared
by the Trilateral Group - the US, the EU, and Japan - for the proposed
rule-making reforms at the WTO, without any mandate. (See SUNS #8780
dated 24 October 2018).
Later, it gained ground at the recently-held informal trade ministerial
summit of 13 countries in Ottawa, led by Canada, the EU, Japan, Australia,
and Brazil among others, who had also called for strengthening transparency
and notification requirements at the WTO.
In their proposal (Job/GC/204) circulated on 1 November, the US, the
EU, Ja pan, Costa Rica, Chinese Taipei and Argentina made a strong
case that "transparency and notification requirements constitute
fundamental elements of many WTO agreements and a properly functioning
WTO system, and thus of Members' obligations."
The proponents complained about "the chronic low level of compliance
with existing notification requirements under many WTO agreements."
Therefore, they called for strengthening transparency and notification
Instead of pursuing the issue either at the Doha negotiating body
or the General Council, the proponents brought the issue to the WTO's
Council for Trade in Goods.
The proposal has listed the following WTO Agreements that 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.
It 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 proposal, 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.
It argues 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 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 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
programs for rice and wheat.
Subsequently, the US also filed another counter-notification against
India on cotton, challenging India's notification on cotton subsidy
In short, the proponents are seeking to undermine the "sovereign"
functions of a WTO member country by filing counter-notifications
and by resorting to a heightened form of naming and shaming, said
a trade envoy, who asked not to be quoted.
During the WTO's CTG meeting, the African Group issued the strongest
statement yet on the deleterious implications of the proposal circulated
by the US, the EU, Japan, Costa Rica, Chinese Taipei, and Argentina.
The African Group, which includes more than 50 countries, said while
the Group agrees that "transparency and compliance with notification
obligations in the WTO are important," it presents them "with
numerous and serious difficulties."
The African Group said "first, and most importantly, it [the
proposal] proposes a series of punitive measures and sanctions without
having offered a proper assessment of the varied reasons why Members
do not or are unable to comply with their notification obligations."
It is well documented in several studies that several developing and
poorest countries lack appropriate institutions for collecting data
and complying with timely requirements.
"For many of us, the heart of the problem is the lack of institutional
capacity to comply with notification requirements on technically complex
matters," the African Group said.
It pointed out that "this should be evident in the WTO Notification
Compliance Reports that sets out reasons why some developing and least
developed countries are unable to meet their notification requirements."
According to the African Group, the second biggest difficulty arising
from the proposal circulated by the US, the EU, Japan, Costa Rica,
Argentina, and Chinese Taipei is that it shifts the burden of implementation
"disproportionately on developing and least developed countries."
Consequently, "countries that are least able to comply with existing
commitments" will be severely penalized, instead of being supported
assisted, the African Group argued at the meeting.
More disturbing, several poor countries are "in arrears and have
already lost access to WTO resources and support," the African
Group said in its statement.
The proponents who are calling for enhanced transparency and notification
requirements also failed to provide adequate special and different
treatment flexibilities, the African Group maintained.
"The special and differential treatment provisions are woefully
inadequate, " the African Group said, maintaining that "they
do not provide any solution to the real reasons that many countries
are unable to comply with their notification obligations."
The "idea of limited time extension for notification and vague
offers of technical support do not provide any comfort," the
African Group argued.
More dangerously, "the idea to enhance the role of the Secretariat
in notifications would open the way for actions that could both compromise
the Secretariat's impartiality in the work of the organization and
pressure Members to comply with notification requirements in ways
that impinge on national sovereignty," the African Group argued.
Commenting on the issue of counter-notifications as suggested by the
proponents, the African Group said "the idea of introducing counter-notifications
in some WTO Agreements will simply create a new source of division
and conflict between Members."
The African Group characterized the proposal as "a negotiating
proposal that will introduce significant changes to current agreements,"
maintaining that "any substantive negotiating proposal must obtain
a negotiating mandate that is agreed by all Members."
Further, "a negotiating mandate would also need to establish
a negotiating body in which to pursue the negotiations," the
African Group said.
It reminded the proponents that "there is no negotiating mandate
on this matter and the CTG is not a venue for negotiations."
"According to the Marrakesh Agreement, "The Council for
Trade in Goods shall oversee the functioning of the Multilateral Trade
Agreements in Annex 1A". In principle, the role of the CTG is
to implement existing agreements, not to engage in discussions that
would change or add to those obligations," the African Group
Against this backdrop, the African Group said it cannot support the
proposal. "Nevertheless, we may be able to agree that the CTG
engage in an assessment of compliance of existing notification obligations
and on the real reasons for non-compliance," it argued.
The African Group said the proposal is unlikely to get "the support
it needs so long as there is no clarity on the more fundamental and
more urgent question on the future of the Appellate Body and Dispute
Settlement Mechanism, which we view as an indispensable part of a
proper functioning WTO system."
At the WTO's Goods Council meeting, the US underscored the need for
improving WTO notifications so as to facilitate negotiations on a
The EU defended the joint proposal, saying that it formed part of
its comprehensive paper for modernizing the WTO in all three pillars
- the negotiating function, the dispute settlement system, and the
strengthening of the Secretariat, specifically on the transparency
and notifications side.
Japan maintained that the rules-based multilateral trading system
was founded on transparency and predictability involving strong compliance
and notification obligations.
China criticised the proposal, saying that there is not one single
country that has completely fulfilled all the notification obligations
as set out in the WTO agreements.
Punitive approaches for improving compliance notifications is not
a good option, China said. Beijing sought to know whether the sponsors
of the proposal will also file their respective notifications on how
they implemented their services commitments.
In short, the developing and poorest countries need to remain vigilant
about the combined assault by the US, along with other industrialized
and developing countries, who want to transform the multilateral WTO
into a plurilateral trade body, said trade envoys who asked not to