1 Workshop on WTO Accession UNDP/UNCTAD Goods Commitments Belarus, October 2008 United Nations Conference on Trade and United Nations Conference on Trade and Development Development Ralf Peters Trade Negotiations and Commercial Diplomacy Branch, DITC UNCTAD, Geneva
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Workshop on WTO Accession UNDP/UNCTAD
Goods Commitments
Belarus, October 2008
United Nations Conference on Trade and DevelopmentUnited Nations Conference on Trade and Development
Ralf PetersTrade Negotiations and Commercial Diplomacy Branch, DITC
GATT Basic principles: Trade without discrimination
• MFN-clause (Most-Favoured-Nation): Art. ICountries cannot (normally) discriminate between their trading partners. E.g. give the same tariff to all trading partners (between foreign suppliers)
• National treatment: Art. IIIOnce goods have cleared customs, imported goods must be treated equally to domestically-produced goods (between domestic and foreign supplier)
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Other important GATT Provisions
Article • 2: Schedule of Concessions (Bound rates: maximum ceiling level,
mentions exceptions such as anti-dumping, normally Article VI)• 11: Elimination of quantitative restrictions (Export restrictions allowed
for food security)• 19: Special Safeguard (emergency action on imports if quantity increased
AND causes or threatens to cause serious injury; right to prevent injury)• 20: General exceptions (protect human, animal or plant life or health)• 24: Free-trade Agreements (only under conditions) • 28: Modification of schedules (negotiate change but pay compensation)
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Outline of the Agreement on Agriculture
“Three Pillars”
Domestic Support• AMS reduction• Green Box• de minimis
Market Access• Tariffication• Tariff reduction• Minimum access• Special Safeguard
Export Subsidies
• Reduction• Prohibition of
new subsidies
• Special and Differential (S&D) Treatment for DCs and LDCs• Related Agreements, e.g. Marrakesh Decision• Establishment of a Committee on Agriculture • Continuation of the reform process
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Tariff ScheduleID HSCODE2002 DESC Bound Final boundImplementationInterim INRs ODCs
1 0101Live horses, asses, mules and hinnies.
2 010110-Pure-bred breeding animals
3 01011010 --Of Arab breed 5 CE25,US 04 01011020 --Other 5 US 05 010190 -Other6 01019010 --Horses for sport 5 07 01019020 --Ponies 5 08 01019030 --Asses 15 09 01019040 --Mules 15 0
10 01019050 --Hinnies 15 011 01019090 --Other 5 0
Saudi Arabia
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Market Access: Current Tariffs
Bound AppliedDeveloped countries 38 34
Developed countries 4 3Developing countries 20 13
25Agriculture
Non-Agriculture
Developing countries 61
Source: UNCTAD TRAINS and UNCTAD calculations based on WTO CTS
Specific Problems:• Tariff escalation• Tariff peaks
Export subsidies Bind & eliminate or reduceOther trade policies
State trading enterprises Article XVII of the GATTTaxation regime Article III of the GATT
Product quality standard Agreements on SPS, TBT
Accession
negotiations
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Multilateral TrackMultilateral TrackWorking Party (WP) Working Party (WP)
meetingsmeetings(negotiations on rules)(negotiations on rules)
1.1. Memorandum of Trade RegimeMemorandum of Trade Regime2.2. Questions & repliesQuestions & replies3.3. Working Party ReportWorking Party Report
Negotiating ProcessNegotiating ProcessAccession
negotiations
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Doha: Negotiating Mandate
• Single undertaking– Impl. Issues and SDT review– Agriculture– Services Market access (reduction of trade barriers)– NAMA– Rules (AD, SCM & RTAs)– TRIPS– Trade and Environment
• Singapore issues– Trade Facilitation (part of single undertaking)
• Non single undertaking– DSU Review
AD = Anti DumpingSCM = Subsidies Countervailing MeasuresRTA = Regional Trade agreementsTRIPS = Trade Related Interlectual PropertyDSU = Dispute Settlement Understanding
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Market Access: Agriculture
Formula:Formula:line-by-lineline-by-line
increasing cutsincreasing cuts
•Level of ambition, S&D?•Exporter – importer•Dev’ed – dev’ing•Preferences
Flexibilities:Flexibilities:Exempt some Exempt some
lines, SP & SePlines, SP & SeP
Special Products (SP) Products essential to achieve food security, livelihood security and rural development Sensitive Products (SeP):Selected number of tariff lines will receive flexibility in tariff cuts (but access is improved)
• Moderate cuts under the tiered formula by 8 ad valorem percentage points in each band
• Exempt their final bound tariffs at or below 10 per cent• VRAMS and SLI_RAM_EIT completely exempted from cuts• Overlapping commitments? Start of implementation for such
tariff lines one year after the end of implementation of accession commitment
• Implementation period for RAMs prolonged by up to two years after the end of the developing countries’ implementation period
VRAMs: Very recently acceded members (Saudi Arabia, Macedonia, Vietnam, Tonga, Ukraine); SLI_RAM_EIT: Small low income RAMs with economies in transition
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Draft Modalities Text July 2008:
Recently acceded membersDomestic Support
• OTDS and AMS cuts: VRAMs and SLI_RAM_EIT exempted; other RAMs 2/3 of cuts
• De minimis: VRAMS and SLI_RAM_EIT exempted; other RAMs with 5% de minimis 1/3 of cuts + five years longer implementation period
• For RAMs, the maximum permitted value of support shall be 5 per cent of the average total value of agricultural production in the 1995-2000 period
VRAMs: Very recently acceded members (Saudi Arabia, Macedonia, Vietnam, Tonga, Ukraine); SLI_RAM_EIT: Small low income RAMs with economies in transition
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Merchandise Trade: Important factors for Acceding Countries
• Development strategy
• Advantages of being a WTO member, e.g. - market access (tariffs, NTBs)- attracting investments- dispute settlement - rule-making - national lobby groups- domestic reforms, …
• Low tariffs: good for consumers and imported inputs
Offensive interestsAccessi
on
negotiations
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Merchandise Trade:Important factors for Acceding Countries
• Protect some sensitive industries (infant industries)• Maintain tariff revenue• Recognition for unilateral liberalisation
=> Starting negotiations from applied rates (no rule)• Formula does not apply BUT• Members take impact on their tariffs into account• Sectorials: Acceding C. may be asked to participate• New rules will apply• New commitments reduce gap
Defensive Interests
Defensive Interests
Doha Round
Challenges in addition to advantages of WTO
Link
Importance of Agricultural Sector
• Value added of agricultural sector in developing countries:9 per cent
• Employment: 38 per cent
• Rural population even higher
Countries Value added in agriculture (% of GDP)
Employment in agriculture (% of total)
High income 2 3Midle income 9 38Least-developed 32 71World 5 38
10 per cent of
world trade
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European Union: bound and applied tariff rates
Note: New AVEs (Paris), Five products with tariffs above 500% not plotted.