WTO Highlights January August 2000
Since the beginning of the year 2000, work has started on activities which had already been mandated, and to address issues which had contributed to the temporary setback at Seattle. These areas of work are the main focus of this note, which contains selected highlights of developments in the first eight months of the year (1).
At the General Council's meeting of 7 February, WTO Members confirmed that the mandated negotiations on agriculture and services had started as scheduled on 1 January 2000. This is an achievement which must not be under-rated; together agriculture and services account for over 60% of world output, and they span the whole range of human economic activity from the most traditional to the leading edge of the new high-tech economy. They cover the most widespread form of employment and also the sectors of fastest growth in job creation.
Members also agreed on organizational aspects of these negotiations, and noted other elements of the mandated work programme, such as the negotiations on geographical indications under the TRIPS Agreement and reviews of various other agreements.
At the first negotiating session in March, governments reached agreement on a programme for the first phase of the negotiations for continuing the reform process for trade in agriculture. This includes the tabling of negotiating proposals in the course of this year, with scope for the tabling of further or more detailed proposals in the run up to a stock-taking exercise which is to be undertaken at the meeting in March 2001.
In fact, by the time of the second negotiating session in June, a large number of participants, half of whom are developing country Members, had already submitted proposals well ahead of the end-year deadline. In total forty-five governments (i.e. almost one third of the WTOs entire membership) had submitted proposals. The June meeting, which was attended by many high level, capital-based officials, turned into a surprisingly intense initial examination of these proposals. This examination is to be completed at the next negotiating session.
Many more proposals can be expected over the coming months, including additional or more comprehensive proposals from governments which tabled proposals at the June negotiating session. Further negotiating sessions are scheduled in September and November 2000, plus an additional session envisaged prior to the March 2001 stock-taking exercise.
(The mandate for the current agriculture negotiations comes from Article 20 of the Agreement, and was part of the deal for reforming agricultural trade that was struck in the Uruguay Round, which ended in 1994. Details, including the current proposals and statements in response, can be found on the WTO website www.wto.org. Click on trade topics and agriculture.)
There has been a positive and encouraging start to the services negotiations with a full commitment by all members to a heavy and demanding work programme.
This year's work concentrates on rule-making, in areas like safeguards and domestic regulation. Negotiations for new commitments the market access element will start next year. Three 10-day periods of negotiation, including meetings of the relevant WTO bodies and bilaterals have been held in April, May and July, and there will be further sessions in October and December. Agreement has been reached on a roadmap for the organisation of work until March of next year, and guidelines and procedures for the negotiations are being developed.
Proposals are being tabled by delegations, notably a proposal on tourism, proposals by the EC and Australia on cluster approaches and a proposal by the United States on a framework and objectives for the negotiations.
WTO Member Governments have carried out the prescribed review of MFN exemptions over two meetings, the first in May and the second in July. The purpose of this review was to examine whether the conditions that had created the need for exemptions continued to prevail. These meetings provided more information on governments' exemptions and are distinct from the future expected negotiations on the termination of existing exemptions. A significant amount of information was provided as a result of this session.
The four subsidiary bodies of the Council for Trade in Services are all working on subjects that feed into the negotiations. Noteworthy are activities in the Committee on Specific Commitments. In April 2000, the Committee adopted the text of the procedures for the certification of rectifications or improvements to schedules of specific commitments. These are designed for the submission of technical changes or autonomous improvements by governments of their services schedules. For example they will allow a government who undertakes autonomous liberalisation to convert it into a GATS commitment. The procedures were adopted by the Council on 14 April. The committee also approved, ad referendum, the draft format of the electronic schedules and the procedures for their verification and circulation. The electronic schedules, in CD and later in internet form, will constitute essential practical negotiating tools for the negotiations as they will be the only place where the totality of existing commitments of governments will be recorded and compiled.
At its meeting on 26 May 2000, the Council adopted Decisions to reopen the Fourth Protocol (relating to telecommunications) for acceptance by Dominica, and the Fifth Protocol (relating to financial services) for acceptance by Ghana.
A two-day seminar took place at the Secretariat on 10 and 11 May to help delegations prepare for the negotiations by providing a detailed briefing on the GATS and negotiating issues that might arise.
Work has begun on the review of the GATS Annex on Air Transport Services, which is to consider the possible further application of the Agreement in this sector. The first expert meeting on the subject will take place on 28-29 September.
Intellectual property (TRIPS)
The expression mandated negotiations does not refer only to agriculture and services. One negotiation and several reviews, some of which might lead to negotiations, are currently underway in the TRIPS Council. These discussions will continue over the coming months.
The TRIPS Agreements mandated negotiations are for a notification and registration system for geographical indications (which relate to place names or words associated with places, used to describe the type, characteristics and quality of products). The agreement does not specify when the talks should start, but the negotiations are already underway, with two proposals on the table.
Under separate provisions of the agreement, the application of the agreements section on geographical indications is being reviewed. Some governments have called for more products to be given the higher level of intellectual property protection that is currently given only to geographical indications for wines and spirits. They argue that the TRIPS Agreement provides a mandate to negotiate this, although there is some disagreement over this view.
The TRIPS Council has also been reviewing provisions dealing with the protection of biotechnology inventions and new plant varieties(Article 27.3(b)). The discussions have ranged from a number of specific issues relating to the way in which these provisions are being implemented and the meaning of the specific terms contained in them, to broader policy issues relating to such matters as the relationship with the preservation and sustainable use of biodiversity and the protection of traditional knowledge.
Other issues are also being reviewed, including the provisions on non-violation cases. And the entire TRIPS Agreement is also under review this year.back to top
On 7 February, the General Council gave its Chairman and the Director-General a mandate to consult on a number of issues where early progress is important to building confidence after the Seattle setback. These were:
- Measures in favour of least-developed countries
- Capacity-building through technical co-operation
- Implementation issues and concerns, including transition periods
- Internal transparency and fuller participation of Members
On all these points the Chairman and the Director-General reported significant progress to the 3 and 8 May General Council meeting.
Implementation issues and concerns, including transition periods
aFollowing the Director-General's report in May, the General Council decided to establish an Implementation Review Mechanism, to address the wider range of concerns related to the implementation of existing WTO agreements. This is being done in Special Sessions of the General Council, the first of which took place on 22 June and 3 July. At this first session, the Council discussed proposals from a number of developing countries relating to implementation issues, which had been presented in the preparatory process for the Third Ministerial Conference. As a result of this debate, consultations will be held from mid-September to find adequate solutions to the concerns expressed. Further Special Sessions are scheduled for October and December.
The establishment of this Implementation Review Mechanism, with a mandate to seek solutions and take decisions for appropriate action, is a very important step towards reaching agreement on a set of issues which became a major difficulty before the Third Ministerial Conference. It potentially touches upon a broad range of areas in the WTO's work. Members have committed themselves to engage in it constructively.
Regarding transition period issues -- the WTO provisions that lapsed and the deadlines that expired on 31 December 1999 -- the General Council also took a decision in May setting out a framework for the consideration of transition period problems in the TRIMs (trade-related investment measures) area. Extensions of the five-year transition period have been requested by Argentina, Chile, Colombia, Malaysia, Mexico, Pakistan, Philippines, Romania and Thailand. Pursuant to this decision and to Article 5.3 of the TRIMs Agreement, a number of requests for extension of the TRIMs transition period are currently being considered by the Council for Trade in Goods.
In the customs valuation area, the Director-General noted that the process of examination and approval of requests for extensions of the transition period by developing countries had, in general, been proceeding well in the Committee on Customs Valuation. Much emphasis has been placed in the Committee during the year on implementation by developing countries which had invoked the five-year delay period. Of the 45 Members which were due to implement from 1 January to August 2000, the Committee has agreed to 13 requests for extensions of the delay period and four additional requests are pending consideration. In addition, the Committee is actively discussing the question of how technical assistance can be better formulated to address the growing demand for assistance in meeting implementation needs in this area.
During the preparatory process for the Seattle Ministerial Conference as well as at the conference itself, a number of delegations, especially smaller ones, expressed certain misgivings about the nature of the consultative processes. Although similar concerns had been voiced at the Singapore Ministerial Conference in 1996 it was clear that the Seattle experience required the WTO to look closer at its working methods. As a result, the General Council, at its meeting of 7 - 8 February 2000 identified the issue of internal transparency and effective participation of Members as one of the priority issues to be addressed in the first six months of the year.
Since then the Chairman of the General Council has conducted an intensive series of open-ended consultations on how to improve internal transparency. This process was initiated by an invitation to Members for specific suggestions on how to make the consultative processes in the WTO more transparent and inclusive. In total some 19 contributions from individual or groups of countries were received and these, as well as a Secretariat compilation of the main points raised by delegations, have served as the basis for discussions at six meetings of the full membership. In addition, the Chairman presented a short discussion paper in which he highlighted a number of issues where he saw a convergence of opinion. In his paper the Chairman focused on the fact that Members in general do not see anything fundamentally wrong with the multilateral trading system and that informal consultations continue to be a useful tool, provided that certain improvements in transparency were applied.
On 17 July the Chairman provided Members with a progress report which emphasized the general view that significant improvements in the consultative processes have taken place over the past six months. He emphasized that while such progress was important much work remained to be done, in particular in the area of preparation and organization of Ministerial Conferences. The Chairman will pursue further consultations in the autumn.
Least-Developed countries (LDCs)
At the 3 May General Council meeting, WTO Members took note of the Director-General's report that 13 Members including developing and transition economies had taken, or planned to take, measures to improve access to their markets for products of least-developed countries.
The Director-General also reported that he would continue working to improve the functioning of the Integrated Framework for Trade-Related Technical Assistance for Least-Developed Countries (IF) to ensure that it became an effective instrument of support for the trade-related aspects of the development and poverty reduction strategies of LDCs. This is an initiative to coordinate the provision of technical assistance and capacity-building to LDCs through six core agencies: WTO, IMF, ITC, UNCTAD, UNDP and World Bank. As a result of a meeting of the heads of these agencies in July, agreement was reached on a number of concrete ways to proceed, including:
(a) that trade policy, and trade-related technical assistance and capacity-building efforts should be an integral part of the broader development efforts of the least-developed countries, and that the IF should be a vehicle to help achieve this objective;
(b) new arrangements to enhance transparency, accountability and a heightened sense of ownership by stakeholders in the IF;
(c) that different tasks under the IF should be apportioned to the agencies according to their different skills and kinds of specialisation; and,
(d) that the agencies should seek donor support for and voluntary contributions to an Integrated Framework Trust Fund.
Capacity-building through technical cooperation
The Director-General reported that technical cooperation and capacity-building is rightly seen as central to the interests of least-developed countries. However, the developing-country membership as a whole and the economies in transition all have a strong interest in seeing these activities conducted in an effective and productive way. In fact this is an interest of the whole membership, and one which the Director-General fully shares.
Capacity-building is an essential requirement to enable many Members to take full advantage of trade opportunities, and this had been underlined by LDCs in the course of his consultations and endorsed by other Members. To increase confidence in the WTO's ability to provide technical assistance to Members in meeting their obligations under WTO Agreements it is essential that adequate technical assistance funds are made available in a timely manner permitting appropriate forward planning of technical assistance activities.back to top
Investment, competition policy and government procurement (working groups)
In three working groups, the WTO has continued to study actively the issues of the relationship between trade and investment, the interaction between trade and competition policy and transparency in government procurement, with important new papers presented by Members, and to consider alternatives for future WTO work in these areas.back to top
Trade-related investment measures (TRIMS)
A review of the TRIMS Agreement is currently underway in the Council for Trade in Goods, as mandated in Article 9 of that Agreement.back to top
Sanitary and phytosanitary (SPS) measures
The first half of 2000 saw agreement on one difficult SPS issue and the start of discussions on two topics of considerable importance to a number of Members.
At its 19-20 June meeting, the SPS Committee agreed on guidelines to help governments achieve some consistency in the levels of health risks they apply. Consistency is required under the SPS agreement, in order to reduce the temptation to be particularly strict on the safety of some food products, or on some animal or plant health risks, for trade protectionist reasons. The new guidelines are non-binding. They are designed to help governments adopt and implement SPS measures that are consistent with the agreement.
The Committee also examined the issue of special and differential treatment for developing countries, and has started discussions on equivalence.
Developing countries are concerned about the implementation of provisions in the Agreement that more generally allow them special treatment, including being allowed more time to adapt to new measures in their export markets. Proposals on this issue were submitted before the December 1999 Seattle Ministerial Conference. The issue is now being discussed in the SPS Committee and will continue to be on the agenda over the coming months.
Developing countries in particular have also expressed concern that the health and safety measures they apply are not being recognized as equivalent in their export markets. The SPS Agreement provides that importing countries should not always require exporting countries to adopt exactly the same food safety and animal and plant health measures that apply to domestic producers in the importing countries, provided they can be satisfied that the level of health protection they deem to be appropriate is achieved. In other words, the importing countries governments should try to recognize different methods or criteria adopted in exporting countries, if the health result is equivalent to the importing countries own measures.back to top
procurement (plurilateral agreement)
Work on the plurilateral agreement on Government Procurement is also being actively pursued. A number of Members have made proposals for a major overhaul of the text of the Agreement to make it more simple and user-friendly. There are also discussions on the expansion of the scope of coverage of the agreement and the elimination of discriminatory aspects. Negotiations on the accession to this Agreement of six additional governments are taking place.back to top
Work on trade facilitation originates in the 1996 mandate of the Singapore Ministerial Conference to undertake exploratory and analytical work, drawing on the work of other relevant organizations, on the simplification of trade procedures in order to assess the scope for WTO rules in this area. Work in this area is important as excessive information requirements for import and export, as well as administrative inefficiencies have created obstacles that are estimated to cost on average 3-5% of the value of goods trade - a considerable amount in the light of evermore shrinking tariff levels. What is more, the losses through inefficiencies are dead-weight losses, which unlike duties, do not contribute to government revenue.
Since Seattle, the Council for Trade in Goods has resumed work on trade facilitation in two informal meetings. All delegations have shown a very constructive attitude at these meetings and appear committed to fully engage in the coming exploratory and analytical work on the simplification of trade procedures.back to top
At its last meeting before the summer break, the General Council agreed to reinvigorate the work in the WTO on electronic commerce on a practical basis and invited four subsidiary bodies, i.e., the Goods, Services and TRIPS Councils and the Committee on Trade and Development, to pick up where they left off in their work in this area and report back to the General Council in December. The original mandate of the work programme as adopted by the General Council on 25 September 1998 was to examine all trade-related issues relating to global electronic commerce. The work programme is also to include consideration of issues relating to the development of the infrastructure for electronic commerce.back to top
There has been a considerable amount of activity on the accessions front in the course of this year. Two countries (Jordan and Georgia) have become full WTO Members in the first part of the year. Albania will also become a full member on 8 September 2000, bringing the current membership to 138. These countries have now extended the WTO system to some 12 million people across the world.
Two further countries, Croatia and Oman, have also concluded their accession negotiations and are expected to become full members before the end of the year. Negotiations are in advanced stages for the accession of Lithuania and Vanuatu and are progressing towards the final phase in the cases of China and Chinese Taipei.
There are currently another twenty nine governments in the process of negotiating their accession to the WTO. All of these are transitional or developing economies, including nine least-developed countries. They are seeking membership of the WTO not just to secure economic gains in terms of better access to international markets, but mostly to ensure greater stability and predictability in their trading relations, leading to better prospects for foreign investment and economic development.back to top
Between 1st January and 31 July 2000, eighteen new cases were filed with the WTO. This has brought the number of disputes taken to the WTO to 203 since its creation in January 1995. It is testimony to the value of the WTO that so many Members use the dispute settlement mechanism to seek solutions to difficult problems.
Indeed, in most cases, the disputes are resolved by negotiation without recourse to the panel process. The dispute settlement system has provided a forum for disagreements about the implementation of the obligations contained in the WTO Agreements. It has proved to be an effective, efficient and essential aspect of the rules-based international trading system where legal rights are more important than economic size. Without an objective dispute settlement system, disagreements between Member governments would have no forum for resolution and could drag on unresolved for an indeterminate period. This system helps prevent unresolved economic disputes from aggravating broader international relations between Members.
On 25 May, the WTO Dispute Settlement Body (DSB) completed new appointments to the Appellate Body by selecting Mr. Y. Taniguchi of Japan who joins Mr. G. M. Abi-Saab of Egypt and Mr. A. V. Ganesan of India who were appointed by the DSB in April this year. The new Appellate Body Members replaced Messrs. S. El-Naggar of Egypt and Mr. Matsushita of Japan whose terms of office expired on 31 March, and Mr. C. Beeby of New Zealand who passed away on 19 March.back to top
Cooperation with other agencies
In addition to the Integrated Framework initiative mentioned above, there have been a number of advances in cooperation between the WTO and other international agencies so far this year. Of these, a notable example was an information session held by the Committee on Trade and Environment (CTE) in July with representatives from the Secretariats of a number of multilateral environmental agreements (MEAs). The aim of this session was to help facilitate CTE Members' understanding of the linkages between the multilateral environment and trade agendas, and to build awareness of the use of trade-related measure in MEAs. A two-day workshop was also held in June on how to analyse risk for food safety measures. Throughout the workshop, experts from Member governments and observer organisations presented case studies of actual risk assessments made by countries and how these had, in the real world, resulted in specific health-related measures aimed at ensuring food safety, or the protection of animal or plant health.
The WTO is also represented in the Administrative Committee on Coordination, a body responsible for coordination and coherence between the bodies of the United Nations, World Bank, IMF and WTO. The Director-General was an active participant in its first regular session of 2000 in Rome on 6 and 7 April where he made a presentation on the Integrated Framework for LDCs.
Collaboration among the WTO, the World Bank and the IMF continues to intensify under the Coherence mandate, particularly as efforts are made to provide developing country Members with better trade-related technical assistance and capacity-building to support implementation of their WTO obligations and help them reap real, practical benefits from their trade reforms. Collaboration in the period since 1 January has included extensive Secretariat contacts with senior Bank and Fund staff, members of their executive boards, development and finance officials in capitals, and efforts at the political level by the WTO Director-General, in capitals and at Interim and Development Committee meetings.
One important result of these efforts has been the decision of the World Bank to mainstream trade issues in its development priorities and, in particular, in its country-based Poverty Reduction Strategies which are administered jointly with the IMF. The importance of the World Bank's support in this area is difficult to exaggerate not only because of the significant financing they can help mobilize, but also because of their country-level involvement and policy expertise. While the WTO will continue to take responsibility for assisting developing-country Members to implement their legal obligations, the World Bank will complement these efforts through assistance for related human, institutional and infrastructural capacity-building.back to top
Initiatives of the director-general
At the Director-General's initiative, nine internal Secretariat task forces were set up in March to consider matters of immediate concern relating both to the internal functioning of the Secretariat and ways in which the Secretariat could improve on its service to Members, and better reach out to the public and other organisations. The reports and recommendations that were the outcome of this process are currently under consideration by the Director-General.
to non-resident Members
First-step initiatives to help ensure the fuller participation of non-resident Members in the WTO have been put in place. These include the appointment of a member of the secretariat staff earlier this year to liase with non-residents and the organisation of a week-long seminar for non-residents in Geneva at the WTO. This includes a programme of lectures and other events designed to help trade officials familiarise themselves with WTO Agreements and how the organisation works. A Geneva Week 2000 is currently being organised for October, and it will be focused on implementation issues and on the built-in agenda negotiations in agriculture and services. In addition over 76 Reference centres have been installed in developing and least developed countries to keep governments and regional entities up-to-date on the activities of the WTO.
Members and the Secretariat are continuing to explore ways of building on these first steps. The key idea that has emerged is that any initiative should be focused on the specific needs of the intended beneficiaries, should be non-duplicative of existing efforts in this area, and should take on board the principle of ownership by the countries in favour of which such initiatives are targeted.back to top
Participation in international meetings and contacts in capitals
In the first half of the year, the Director-General and his Deputies have kept up a full programme of participation in international meetings with the public and private sectors and non-governmental organisations and contacts with WTO member governments in their respective capitals. These activities have been focussed on developing the WTO's outreach to Members and to civil society and on facilitating dialogue among Members on the future direction of the trade agenda. The Director-General's programme of activity outside Geneva so far this year has included active participation in meetings of the other international agencies including the United Nations, OECD, UNCTAD, the IMF, World Bank and the United Nations Administrative Committee on Coordination. The Director-General also took part in regional meetings including the APEC Ministerial Meeting, the 36th Summit of Heads of State and Government of the OAU, the 5th Summit of the COMESA Authority of the Heads of State and Government and the South Africa Economic Summit.
The Director-General's meetings both in Geneva and abroad have also included contacts with parliamentarians, representatives from transnational parliamentary groups, and meetings with representatives from NGOs, including industry and labour organisations.back to top
The WTO Secretariat published a Special Study on Trade, Income Disparity and Poverty in June 2000. This study showed the positive role that trade can play in poverty reduction. It can be downloaded here from the WTO website.
(1) An important part of the WTO's activities, conducted in the context of the regular work of the various WTO Councils and Committees directed towards monitoring and compliance, is not specifically reflected here (such as the conduct of nine Trade Policy Reviews, or the review of 70 developing countries' implementing legislation by the Council for Trade-related aspects of Intellectual Property Rights). Additional information on all the WTO's activities can be found on the WTO's website at www.wto.org. Information relating to activities carried out in 1999 can also be found in the WTO Annual Report 2000. Back to text