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Hong Kong, China - 2005

HONG KONG WTO MINISTERIAL 2005: BRIEFING NOTES

JARGON BUSTER
An informal guide to ‘WTOspeak’

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Contents
> Director-General’s letter to journalists
> The Doha Development Agenda
> Agriculture
Cotton
> Services
> Market access, non-agricultural products
> Intellectual property (TRIPS)
> Trade facilitation
> Rules: ad, scm including fisheries subsidies
> Rules: regional agreements
> Dispute settlement
> Trade and environment
> Small economies
> Trade, debt and finance
> Trade and technology transfer
> Technical cooperation
> Least-developed countries
> Special and differential treatment
> Implementation issues
> Electronic commerce
> Members and accessions
> Members
> Bananas
> Statistics, Textiles and Clothing
> Statistics, Facts and Figures
> Jargon buster, Country groupings
> Jargon buster, An informal guide to ‘WTOspeak’


accounting rate In telecoms, the charge made by one country’s telephone network operator for calls originating in another country.

ad valorem tariff A tariff rate charged as percentage of the price.

Agenda 21 The Agenda for the 21st Century — a declaration from the 1992 Earth Summit (UN Conference on the Environment and Development) held in Rio de Janeiro.

agricultural product Defined for the coverage of the WTO’s Agriculture Agreement, by the agreement’s Annex 1. This excludes, for example, fish and forestry products. It includes various degrees of processing for different commodities.

anti-dumping duties GATT’s Article 6 allows anti-dumping duties to be imposed on goods that are deemed to be exported below their normal prices, thus causing injury to producers of competing products in the importing country. These duties are equal to the difference between the goods’ export price and their normal value, if dumping causes injury.

Appellate Body An independent seven-person body that considers appeals in WTO disputes. When one or more parties to the dispute appeals, the Appellate Body reviews the findings in panel reports.

Article XX (i.e. 20) A GATT article listing allowed exceptions to the trade rules.

ATC The WTO Agreement on Textiles and Clothing, which integrated trade in this sector back to GATT rules on 1 January 2005. The ATC expired on 1 January 2005.

AVE Ad-valorem equivalent: a specific or other non-ad-valorem duty that is converted to its percentage or ad valorem equivalent.

automaticity In disputes, the “automatic” chronological progression for settling trade disputes in regard to panel establishment, terms of reference, composition and adoption procedures.

Basel Convention A multilateral environmental agreement dealing with hazardous waste.

Berne Convention A treaty, administered by WIPO, for the protection of the rights of authors in their literary and artistic works.

binding, bound See “tariff binding”

BIT Bilateral investment treaties

border protection Any measure which acts to restrain imports at point of entry.

box In agriculture, a category of domestic support. Green box: supports considered not to distort trade and therefore permitted with no limits. Blue box: permitted supports linked to production, but subject to production limits, and therefore minimally trade-distorting. Amber box: supports considered to distort trade and therefore subject to reduction commitments.

BSE Bovine spongiform encephalopathy, or “mad cow disease”.

BTA Border tax adjustment

CAP Common Agricultural Policy — The EU’s comprehensive system of production targets and marketing mechanisms designed to manage agricultural trade within the EU and with the rest of the world.

carry forward When an exporting country uses part of the following year’s quota during the current year.

carry over When an exporting country utilizes the previous year’s unused quota.

CBD Convention on Biological Diversity. It aims for the equitable sharing of benefits arising out of the utilization of genetic resources, and includes provisions concerning the access to genetic resources and the transfer of relevant technologies.

circumvention Getting around commitments in the WTO such as commitments to limit agricultural export subsidies. Includes avoiding quotas and other restrictions by altering the country of origin of a product; measures taken by exporters to evade anti-dumping or countervailing duties.

CITES Convention on International Trade in Endangered Species. A multilateral environmental agreement.

Codex Alimentarius FAO/WHO commission that deals with international standards on food safety.

commercial presence Having an office, branch, or subsidiary in a foreign country. In services, “mode 3” (see “modes of delivery”).

compound tariff A tariff expressed as a combination of an “ad valorem” duty and a “specific” duty, added together or one subtracted from the other.

compulsory licensing For patents: when the authorities license companies or individuals other than the patent owner to use the rights of the patent — to make, use, sell or import a product under patent (i.e. a patented product or a product made by a patented process) — without the permission of the patent owner. Allowed under the WTO’s TRIPS (intellectual property) Agreement provided certain procedures and conditions are fulfilled. See also government use.

counterfeit Unauthorized representation of a registered trademark carried on goods identical or similar to goods for which the trademark is registered, with a view to deceiving the purchaser into believing that he/she is buying the original goods.

countervailing measures Action taken by the importing country, usually in the form of increased duties, to offset subsidies given to producers or exporters in the exporting country.

CTD The WTO Committee on Trade and Development

CTE The WTO Committee on Trade and Environment.

CTG Council for Trade in Goods — oversees WTO agreements on goods.

customs union Members apply a common external tariff (e.g. the European Union).

deficiency payment A type of agricultural domestic support, paid by governments to producers of certain commodities and based on the difference between a target price and the domestic market price or loan rate, whichever is the less.

de minimis A minimal (i.e. small) permitted amount: for trade-distorting domestic support in agriculture (of the amber box type), developed countries are allowed up to 5% of their agricultural production, developing countries up to 10%.

distortion When prices and production are higher or lower than levels that would usually exist in a competitive market.

domestic support (Sometimes “internal support”.) In agriculture, any domestic subsidy or other measure which acts to maintain producer prices at levels above those prevailing in international trade; direct payments to producers, including deficiency payments, and input and marketing cost reduction measures available only for agricultural production.

DSB Dispute Settlement Body — when the WTO General Council meets to settle trade disputes.

DSU Dispute Settlement Understanding, the WTO agreement that covers dispute settlement — in full, the Understanding on Rules and Procedures Governing the Settlement of Disputes.

dumping Occurs when goods are exported at a price less than their normal value, generally meaning they are exported for less than they are sold in the domestic market or third-country markets, or at less than production cost.

EEP Export Enhancement Programme — programme of US export subsidies given generally to compete with subsidized agricultural exports from the EU on certain export markets.

electronic commerce The production, advertising, sale and distribution of products via telecommunications networks.

EST Environmentally-sound technology.

EST&P Environmentally-sound technology and products.

ex ante, ex post Before and after a measure is applied. exhaustion In intellectual property protection, the principle that once a product has been sold on a market, the intellectual property owner no longer has any rights over it. (A debate among WTO member governments is whether this applies to products put on the market under compulsory licences.) Countries’ laws vary as to whether the right continues to be exhausted if the product is imported from one market into another, which affects the owner’s rights over trade in the protected product. See also parallel imports.

export-performance measure Requirement that a certain quantity of production must be exported.

FDI Foreign direct investment.

food security Concept which discourages opening the domestic market to foreign agricultural products on the principle that a country must be as self-sufficient as possible for its basic dietary needs.

Framework (Sometimes Agreed Framework) Annexes of General Council decision of 1 August 2004 outlining key points of modalities in agriculture and non-agricultural market access.

free trade area (FTA) Trade within the group is duty-free but members set their own tariffs on imports from non-members (e.g. NAFTA).

free-rider A casual term used to infer that a country which does not make any trade concessions, profits, nonetheless, from tariff cuts and concessions made by other countries in negotiations under the most-favoured-nation principle.

GATS The WTO’s General Agreement on Trade in Services.

GATT General Agreement on Tariffs and Trade, which has been superseded as an international organization by the WTO. An updated General Agreement is now the WTO agreement governing trade in goods. GATT 1947: The official legal term for the old (pre-1994) version of the GATT. GATT 1994: The official legal term for new version of the General Agreement, incorporated into the WTO, and including GATT 1947.

general obligations Obligations which should be applied to all services sectors at the entry into force of the GATS agreement. geographical indications Place names (or words associated with a place) used to identify products (for example, “Champagne”, “Tequila” or “Roquefort”) which have a particular quality, reputation or other characteristic because they come from that place.

government use For patents: when the government itself uses or authorizes other persons to use the rights over a patented product or process, for government purposes, without the permission of the patent owner. See also compulsory licensing.

GSP Generalized System of Preferences — programmes by developed countries granting preferential tariffs to imports from developing countries.

Harmonized System An international nomenclature developed by the World Customs Organization, which is arranged in six-digit codes allowing all participating countries to classify traded goods on a common basis. Beyond the six-digit level, countries are free to introduce national distinctions for tariffs and many other purposes.

harmonizing formula Used in tariff negotiations for much steeper reductions in higher tariffs than in lower tariffs, the final rates being “harmonized” i.e. closer together. Examples include “Swiss formula” and “tiered formula”.

initial commitments Trade liberalizing commitments in services which members are prepared to make early on.

integration programme In textiles and clothing, the phasing out of Multifibre Arrangement restrictions in four stages starting on 1 January 1995 and ending on 1 January 2005.

intellectual property rights Ownership of ideas, including literary and artistic works (protected by copyright), inventions (protected by patents), signs for distinguishing goods of an enterprise (protected by trademarks) and other elements of industrial property.

internal support See “domestic support” (agriculture).

International Office of Epizootics (Now known in English as the World Organization for Animal Health.) Deals with international standards concerning animal health.

IPRs Intellectual property rights.

ITA Information Technology Agreement, or formally the Ministerial Declaration on Trade in Information Technology Products.

ITC The International Trade Centre, originally established by the old GATT and is now operated jointly by the WTO and the UN, the latter acting through the UN Conference on Trade and Development (UNCTAD). Focal point for technical cooperation on trade promotion of developing countries.

July Package Package of Doha Development Agenda issues negotiated in July 2004 and agreed by the General Council on 1 August 2004. The package sealed key issues that were deadlocked at the 2003 Cancún Ministerial Conference. Included frameworks or outlines of modalities in agriculture and non-agricultural market access.

LCA Life cycle analysis — a method of assessing whether a good or service is environmentally friendly.

LDCs Least-developed countries.

linear formula Tariff reduction formula in the form of a linear function. The simplest form is a straight percentage cut e.g. a cut of 80% or 32%. Linear formulas have less of a narrowing effect on the final range of tariffs.

Lisbon Agreement Treaty, administered by the World Intellectual Property Organization (WIPO), for the protection of geographical indications and their international registration.

local-content requirement Demand that the investor purchase a certain amount of local materials for incorporation in the product.

Madrid Agreement Treaty, administered by the World Intellectual Property Organization (WIPO), for the repression of false or deceptive indications of source on goods.

mailbox In intellectual property, refers to the requirement of the TRIPS Agreement applying to WTO members which do not yet provide product patent protection for pharmaceuticals and for agricultural chemicals. Since 1 January 1995, when the WTO agreements entered into force, these countries have to establish a means by which applications of patents for these products can be filed. (An additional requirement says they must also put in place a system for granting “exclusive marketing rights” for the products whose patent applications have been filed.)

MEA Multilateral environmental agreement.

MFA Multifibre Arrangement (1974-94), under which countries whose markets are disrupted by increased imports of textiles and clothing from another country were able to negotiate quota restrictions.

MFN Most-favoured-nation treatment (GATT Article 1, GATS Article 2 and TRIPS Article 4), the principle of not discriminating between trading partners.

mixed tariff A tariff expressed as a conditional combination of an “ad valorem” duty and a “specific” duty, one applying below a limit, the other applying above it.

modality A way to proceed. In WTO negotiations, modalities set broad outlines — such as formulas or approaches for tariff reductions — for final commitments.

modes of delivery How international trade in services is supplied and consumed. Mode 1: cross border supply; mode 2: consumption abroad; mode 3: foreign commercial presence; and mode 4: movement of natural persons.

Montreal Protocol A multilateral environmental agreement dealing with the depletion of the earth’s ozone layer.

multifunctionality Idea that agriculture has many functions in addition to producing food and fibre, e.g. environmental protection, landscape preservation, rural employment, food security, etc. See non-trade concerns.

multi-modal Transportation using more than one mode. In the GATS negotiations, essentially door-to-door services that include international shipping.

national schedules In services, the equivalent of tariff schedules in GATT, laying down the commitments accepted — voluntarily or through negotiation — by WTO members.

national treatment The principle of giving others the same treatment as one’s own nationals. GATT Article 3 requires that imports be treated no less favourably than the same or similar domestically-produced goods once they have passed customs. GATS Article 17 and TRIPS Article 3 also deal with national treatment for services and intellectual property protection.

natural persons People, as distinct from juridical persons such as companies and organizations.

non-ad-valorem tariff A tariff that is not expressed as a percentage of the price or value. Can be “specific”, “compound”, “mixed” or some other form. These other forms can be determined by complex technical factors; for example, the duty can be based on the percentage content of the agricultural component (sugar, milk, alcohol content, etc.) or its strength (e.g. the degree of sweetness).

non-agricultural products In the non-agricultural market access negotiations, products not covered by Annex 1 of the Agriculture Agreement. Fish and forestry products are therefore non-agricultural, along with industrial products in general.

non-linear formula For tariff reductions (or subsidy cuts), a formula in the form of a mathematical function that is non-linear, usually designed so that higher tariffs have proportionately steeper cuts. The “Swiss formula” is a particular kind of non-linear formula.

non-trade concerns Similar to multifunctionality. The preamble of the Agriculture Agreement specifies food security and environmental protection as examples. Also cited by members are rural development and employment, and poverty alleviation.

NTBs Non-tariff barriers, such as quotas, import licensing systems, sanitary regulations, prohibitions, etc. Same as “non-tariff measures”.

NTMs Non-tariff measures, such as quotas, import licensing systems, sanitary regulations, prohibitions, etc. Same as “non-tariff barriers”.

nuisance tariff Tariff so low that it costs the government more to collect it than the revenue it generates.

nullification and impairment Damage to a country’s benefits and expectations from its WTO membership through another country’s change in its trade regime or failure to carry out its WTO obligations.

offer In a negotiation, a country’s proposal for its own further liberalization, usually an offer to improve access to its markets.

panel In the WTO dispute settlement procedure, an independent body established by the Dispute Settlement Body, usually consisting of three experts, to examine and issue recommendations on a particular dispute in the light of WTO provisions.

parallel imports When a product made legally (i.e. not pirated) abroad is imported without the permission of the intellectual property right-holder (e.g. the trademark or patent owner). Some countries allow this, others do not.

Paris Convention Treaty, administered by the World Intellectual Property Organization (WIPO), for the protection of industrial intellectual property, i.e. patents, utility models, industrial designs, etc.

peace clause Provision in Article 13 of the Agriculture Agreement saying agricultural subsidies committed under the agreement cannot be challenged under other WTO agreements, in particular the Subsidies Agreement and GATT. Expired at the end of 2003.

piracy Unauthorized copying of materials protected by intellectual property rights (such as copyright, trademarks, patents, geographical indications, etc) for commercial purposes and unauthorized commercial dealing in copied materials.

PPM Process and production method.

price undertaking Undertaking by an exporter to raise the export price of the product to avoid the possibility of an anti-dumping duty.

product-mandating Requirement that the investor export to certain countries or region.

protocols Additional agreements attached to the GATS. The Second Protocol deals with the 1995 commitments on financial services. The Third Protocol deals with movement of natural persons.

prudence, prudential In financial services, terms used to describe an objective of market regulation by authorities to protect investors and depositors, to avoid instability or crises.

PSI Preshipment inspection — the practice of employing specialized private companies to check shipment details of goods ordered overseas — i.e. price, quantity, quality, etc.

QRs Quantitative restrictions — specific limits on the quantity or value of goods that can be imported (or exported) during a specific time period.

reform process/programme The Uruguay Round Agriculture Agreement starts a reform process. It sets out a first step, in the process, i.e. a programme for reducing subsidies and protection and other reforms. Current negotiations launched under Article 20 are for continuing the reform process.

Rome Convention Treaty, administered by the World Intellectual Property Organization (WIPO), United Nations Educational, Scientific and Cultural Organization (UNESCO) and International Labour Organization (ILO), for the protection of the works of performers, broadcasting organizations and producers of phonograms.

rules of origin Laws, regulations and administrative procedures which determine a product’s country of origin. A decision by a customs authority on origin can determine whether a shipment falls within a quota limitation, qualifies for a tariff preference or is affected by an anti-dumping duty. These rules can vary from country to country.

S&D (Sometimes “SDT”.) “Special and differential treatment” provisions for developing countries. Contained in several WTO agreements.

safeguard measures Action taken to protect a specific industry from an unexpected build-up of imports — generally governed by Article 19 of GATT. The Agriculture Agreement and Textiles and Clothing Agreement have different specific types of safeguards: “special safeguards” in agriculture, and “transitional safeguards” in textiles and clothing. See also SSM.

schedule In general, a WTO member’s list of commitments on market access (bound tariff rates, access to services markets). Goods schedules can include commitments on agricultural subsidies and domestic support. Services commitments include bindings on national treatment. Also: “schedule of concessions”, “schedule of specific commitments”.

schedule of concessions List of bound tariff rates.

sensitive products In the agriculture negotiations, all countries will be allowed extra flexibility in market access for these products.

Singapore issues Four issues introduced to the WTO agenda at the December 1996 Ministerial Conference in Singapore: trade and investment, trade and competition policy, transparency in government procurement, and trade facilitation. Currently only trade facilitation is part of the negotiations.

SP Special products: products for which developing countries are to be given extra flexibility in market access for food and livelihood security and rural development. Agreed in the 1 August 2004 agriculture framework.

specific commitments See “schedule”.

specific tariff A tariff rate charged as fixed amount per quantity such as $100 per ton. See “ad valorem tariff”.

SPS Sanitary and phytosanitary measures or regulations — implemented by governments to protect human, animal and plant life and health, and to help ensure that food is safe for consumption.

SSM Special safeguard mechanism: in the agriculture negotiations, a safeguard that developing countries will be able to use to deal with import surges, price falls or both.

subsidy There are two general types of subsidies: export and domestic. An export subsidy is a benefit conferred on a firm by the government that is contingent on exports. A domestic subsidy is a benefit not directly linked to exports. See also “domestic support”.

swing In textiles and clothing, when an exporting country transfers part of a quota from one product to another restrained product.

Swiss formula A kind of “non-linear” tariff reduction formula — i.e. one that has proportionately steeper cuts on higher tariffs — whose coefficient also sets the maximum possible final tariff.

tariff binding Commitment not to increase a rate of duty beyond an agreed level. Once a rate of duty is bound, it may not be raised without compensating the affected parties.

tariff escalation Higher import duties on semi-processed products than on raw materials, and higher still on finished products. This practice protects domestic processing industries and discourages the development of processing activity in the countries where raw materials originate.

tariff peaks Relatively high tariffs, usually on “sensitive” products, amidst generally low tariff levels. For industrialized countries, tariffs of 15% and above are generally recognized as “tariff peaks”.

tariffication Procedures relating to the agricultural market-access provision in which all non-tariff measures are converted into tariffs.

tariffs Customs duties on merchandise imports. Levied either on an ad valorem basis (percentage of value) or on a specific basis (e.g. $7 per 100 kgs.). Tariffs give price advantage to similar locally-produced goods and raise revenues for the government.

TBT The WTO Agreement on Technical Barriers to Trade.

Tiered formula Approach to tariff reductions that sets higher cuts for higher tariffs by grouping products into tiers according to the height of their tariffs. Agreed in the 1 August 2004 framework for agriculture, which also prescribes a tiered approach for reducing trade-distorting domestic supports.

TMB The Textiles Monitoring Body, consisting of a chairman plus 10 members acting in a personal capacity, oversaw the implementation of commitments under the Agreement on Textiles and Clothing.

TPRB, TPRM The Trade Policy Review Body is the General Council operating under special procedures to review trade policies and practices of individual WTO members under the Trade Policy Review Mechanism.

trade facilitation Removing obstacles to the movement of goods across borders (e.g. simplification of customs procedures).

trade-balancing measure Requirement that the investor use earnings from exports to pay for imports.

transitional safeguard mechanism In textiles and clothing, allows members to impose restrictions against individual exporting countries if the importing country can show that both overall imports of a product and imports from the individual countries are entering the country in such increased quantities as to cause — or threaten — serious damage to the relevant domestic industry.

transparency Degree to which trade policies and practices, and the process by which they are established, are open and predictable.

TRIMs Trade-related investment measures (note small “s”).

TRIPS Trade-Related Aspects of Intellectual Property Rights (note capital “S”).

UNCITRAL United Nations Centre for International Trade Law, drafts model laws such as the one on government procurement.

UNCTAD The UN Conference on Trade and Development.

UPOV International Union for the Protection of New Varieties of Plants (Union internationale pour la protection des obtentions végétales)

Uruguay Round Multilateral trade negotiations launched at Punta del Este, Uruguay in September 1986 and concluded in Geneva in December 1993. Signed by Ministers in Marrakesh, Morocco, in April 1994.

Uruguay Round approach For tariff reductions, a flexible formula that specifies average percentage reductions, allowing variations around the average subject to a minimum percentage cut.

variable levy Customs duty rate which varies in response to domestic price criterion.

VRA, VER, OMA Voluntary restraint arrangement, voluntary export restraint, orderly marketing arrangement. Bilateral arrangements whereby an exporting country (government or industry) agrees to reduce or restrict exports without the importing country having to make use of quotas, tariffs or other import controls.

waiver Permission granted by WTO members allowing a WTO member not to comply with normal commitments. Waivers have time limits and extensions have to be justified.

Washington Treaty Treaty for the protection of intellectual property in respect of lay-out designs of integrated circuits.

WCO World Customs Organization, a multilateral body located in Brussels through which participating countries seek to simplify and rationalize customs procedures.

WIPO World Intellectual Property Organization.

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