WTO: 2015 NEWS ITEMS

MINISTERIAL CONFERENCE, 10TH, NAIROBI


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The Nairobi Package contains a series of six Ministerial Decisions on agriculture, cotton and issues related to least-developed countries. These include a commitment to abolish export subsidies for farm exports, which Director-General Roberto Azevêdo hailed as the “most significant outcome on agriculture” in the organization’s 20-year history.

The other agricultural decisions cover public stockholding for food security purposes, a special safeguard mechanism for developing countries, and measures related to cotton. Decisions were also made regarding preferential treatment for least developed countries (LDCs) in the area of services and the criteria for determining whether exports from LDCs may benefit from trade preferences.

“Two years ago in Bali we did something that the WTO had never done before — we delivered major, multilaterally-negotiated outcomes,” DG Azevêdo declared. “This week, here in Nairobi, we saw those same qualities at work. And today, once again, we delivered.”

The WTO's Tenth Ministerial Conference was held in Nairobi, Kenya, from 15 to 19 December 2015, the first such meeting hosted by an African nation. The Conference was chaired by Kenya's Cabinet Secretary for Foreign Affairs and International Trade, Amina Mohamed.

Ms Mohamed admitted that ministers “faced challenging moments,” in concluding the Nairobi Package, which required an extra day of intensive negotiations to conclude. “Tough calls had to be made but we did bite the bullet.”

“We have reaffirmed the central role of the WTO in international trade governance,” she added.

The Conference was opened on 15 December by Kenya's President, Uhuru Kenyatta. During the opening session, the Conference was also addressed by Ms Mohamed, DG Azevêdo and the Chair of the WTO’s General Council, Fernando de Mateo. They were joined at the Opening Ceremony by President Ellen Johnson Sirleaf of Liberia, whose country concluded its WTO membership negotiations on 16 December.

 

Agreements on agriculture

A centrepiece of the Nairobi Package is a Ministerial Decision on Export Competition (WT/MIN(15)/45), including a commitment to eliminate subsidies for farm exports. DG Azevedo described it as the “most significant outcome on agriculture” in the organization’s 20-year history.

“WTO members — especially developing countries — have consistently demanded action on this issue due to the enormous distorting potential of these subsidies for domestic production and trade,” he declared. “Today's decision tackles the issue once and for all.”

A number of countries are currently using export subsidies to support agriculture exports. The legally-binding decision would eliminate these subsidies and prevent governments from reverting to trade-distorting export support in the future.

Under the decision, developed members have committed to remove export subsidies immediately, except for a handful of agriculture products, and developing countries will do so by 2018. Developing members will keep the flexibility to cover marketing and transport costs for agriculture exports until the end of 2023, and the poorest and food-importing countries would enjoy additional time to cut export subsidies.

The decision contains disciplines to ensure that other export policies are not used as a disguised form of subsidies. These disciplines include terms to limit the benefits of financing support to agriculture exporters, rules on state enterprises engaging in agriculture trade, and disciplines to ensure that food aid does not negatively affect domestic production. Developing countries are given longer time to implement these rules.

Ministers also adopted a Ministerial Decision on Public Stockholding for Food Security Purposes (WT/MIN(15)/44). The decision commits members to engage constructively in finding a permanent solution to this issue. Under the Bali Ministerial Decision of 2013, developing countries are allowed to continue food stockpile programmes, which are otherwise in risk of breaching the WTO's domestic subsidy cap, until a permanent solution is found by the 11th Ministerial Conference in 2017.

A Ministerial Decision on a Special Safeguard Mechanism (SSM) for Developing Countries (WT/MIN(15)/43) recognizes that developing members will have the right to temporarily increase tariffs in face of import surges by using an SSM. Members will continue to negotiate the mechanism in dedicated sessions of the Agriculture Committee.

In addition, a Ministerial Decision on Cotton (WT/MIN(15)/46) stresses the vital importance of the cotton sector to LDCs. The decision includes three agriculture elements: market access, domestic support and export competition.

On market access, the decision calls for cotton from LDCs to be given duty-free and quota-free access to the markets of developed countries — and to those of developing countries declaring that they are able to do so — from 1 January 2016. The domesticsupportpart of the cotton decision acknowledges members' reforms in their domestic cotton policies and stresses that more efforts remain to be made. On export competition for cotton, the decision mandates that developed countries prohibit cotton export subsidies immediately and developing countries do so at a later date.  

Decisions of benefit to LDCs

The Nairobi Package also contains decisions of specific benefit to LDCs, including enhanced preferential rules of origin for LDCs and preferential treatment for LDC services providers.

Preferential rules of origin for LDCs

The Ministerial Conference adopted a decision that will facilitate opportunities for least-developed countries' export of goods to both developed and developing countries under unilateral preferential trade arrangements in favour of LDCs.

The decision in Nairobi builds on the 2013 Bali Ministerial Decision on preferential rules of origin for LDCs. The Bali Decision set out, for the first time, a set of multilaterally agreed guidelines to help make it easier for LDC exports to qualify for preferential market access.

The Nairobi Decision expands upon this by providing more detailed directions on specific issues such as methods for determining when a product qualifies as “made in an LDC,” and when inputs from other sources can be “cumulated” — or combined together — into the consideration of origin.  It calls on preference-granting members to consider allowing the use of non-originating materials up to 75% of the final value of the product.

The decision also calls on preference-granting members to consider simplifying documentary and procedural requirements related to origin.

Key beneficiaries will be sub-Saharan African countries, which make up the majority of the LDC Group, the proponent for the Nairobi Decision on Preferential Rules of Origin for LDCs. More information on rules of origin is available here; a briefing note on the negotiations for a Nairobi Decision is available here.

LDC trade in services

The Ministerial Decision on Implementation of Preferential Treatment in Favour of Services and Service Suppliers of Least Developed Countries and Increasing LDC Participation in Services Trade (WT/MIN(15)/48) extends the current waiver period under which non-LDC WTO members may grant preferential treatment to LDC services and service suppliers. The waiver, adopted in December 2011, runs 15 years.  The Ministerial Decision extends this an additional four years, or until 31 December 2030.

The waiver allows WTO members to deviate from their most-favoured nation obligation under the General Agreement on Trade in Services (GATS). To date, 21 members have submitted notifications granting preferences to LDC services and service suppliers. For a regularly updated list of notifications, click here. The decision also instructs the WTO's Trade in Services Council to encourage discussions among members on technical assistance aimed at increasing the capacity of LDCs to participate in services trade. It also sets up a review to monitor the operation of the notified preferences.

 

Ministers reaffirm central role of WTO in global trade talks, acknowledge divide on future of Doha Round

In their Nairobi Declaration, ministers cited the “pre-eminence of the WTO as the global forum for trade rules setting and governance” and recognized the contribution the rules-based multilateral trading system has made to the strength and stability of the global economy.

“We reaffirm the need to ensure that Regional Trade Agreements (RTAs) remain complementary to, not a substitute for, the multilateral trading system,” ministers declared, adding that the WTO’s Committee on Regional Trade Agreements (CRTA) would discuss the systemic implications of RTAs for the multilateral trading system and their relationship with WTO rules.

Ministers acknowledged that members “have different views” on how to address the future of the Doha Round negotiations but noted the “strong commitment of all Members to advance negotiations on the remaining Doha issues.”

“This work shall maintain development at its centre and we reaffirm that provisions for special and differential treatment shall remain integral,” ministers declared.

  • Ministers also stated that, while negotiators should prioritize work where results have not yet been achieved, “some wish to identify and discuss other issues for negotiation; others do not. Any decision to launch negotiations multilaterally on such issues would need to be agreed by all Members."

DG Azevêdo acknowledged “persistent and fundamental divisions on our negotiating agenda” and said WTO members “have to face up to this problem.”

“Members must decide — the world must decide — about the future of the Doha Round,” he declared.  “This impasse is already harming the prospects of all those who rely on trade today — and it will disadvantage all those who would benefit from a reformed, modernized global trading system in future.” His full speech is available here.

Ministers also welcomed the adoption of Decisions covering a Work Programme on Small Economies; TRIPS Non-violation and Situation Complaints (; and a continued Work Programme on Electronic Commerce .

WTO members secure landmark $1.3 trillion IT trade deal

In another significant outcome from the Nairobi Ministerial, WTO members representing major exporters of IT products agreed on 16 December on the timetable for implementing a landmark deal to eliminate tariffs on 201 information technology products valued at over $1.3 trillion per year.

Negotiations on the expanded Information Technology Agreement (ITA) were conducted by 53 WTO members, including both developed and developing countries, which account for approximately 90 per cent of world trade in these products. However, all WTO members will benefit from the agreement, as they will all enjoy duty-free market access to the markets of the members eliminating tariffs on these products.

The list of 201 products was originally agreed by the ITA participants in July 2015.

This breakthrough followed months of intensive negotiations among the ITA participants. Their review of “draft schedules” involved a process whereby each of them indicated over what timeframe and how they intended to implement the elimination of duties on these products.  

For every product on the list, ITA participants have negotiated the level of reductions and over how many years it will fully eliminate the tariffs. As a result of these negotiations, approximately 65% of tariff lines will be fully eliminated by 1 July 2016. Most of the remaining tariff lines will be completely phased out in four stages over three years. This means that by 2019 almost all imports of the relevant products will be duty free.

More details on the Agreement are available here.

Accessions

Trade ministers on 16 December welcomed the conclusion of negotiations on the accessions of Liberia and Afghanistan at the Tenth Ministerial Conference. Liberia’s President, Ellen Johnson Sirleaf, was present at the ceremony marking the formal conclusion of the negotiations, eight years after it applied for WTO membership. President Sirleaf said the country’s “accession to the WTO marks another turning point in our history” and an important step towards meeting Liberia’s “aspirations for the growth and development of our people.”

Liberia will formally become a member of the WTO 30 days after notifying the organization that it has ratified its accession terms. More information on Liberia’s accession is available here.

Trade ministers also welcomed the conclusion of Afghanistan’s WTO accession negotiations on 17 December. Afghanistan’s First Deputy Chief Executive Mohammad Khan Rahmani said Afghanistan’s WTO accession “is a clear sign for all the world to see that the country is building a business-friendly environment.”

Afghanistan applied for WTO membership in 2004 and will formally take its seat at the WTO 30 days after its ratification instrument is received.  More information on Afghanistan’s WTO accession is available here.

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