COUNCIL FOR TRADE IN GOODS

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Several members pointed to the benefits and opportunities e-commerce could provide to developing countries, least developed countries (LDCs), and small and medium enterprises. E-commerce would make it easier for them to participate in global trade, these members said, with a number calling for pragmatic outcomes in negotiations to be made in time for the 11th Ministerial Conference to be held in December in Buenos Aires.

Some reiterated that trade facilitation and transparency in e-commerce regulations could be a good start for negotiations. E-signatures and paperless trade were another negotiation issue commonly cited by many members. An agreement on e-commerce, these members added, was necessary to signal the WTO's continued relevance.

Other members, meanwhile, spoke of the digital divide or the stark differences in the capacities and supporting infrastructure among various members, which they said could lead to uneven participation in e-commerce. These members sought an increased focused on bridging this gap if talks on e-commerce are to be deepened.

South Africa, speaking on behalf of the African Group, said it would like the Goods Council to take up issues that place the needs of developing countries and least-developing countries (LDCs) at the centre. Uganda, on behalf of the LDC Group, said many of the e-commerce proposals so far go beyond the development agenda of the work program on e-commerce. It noted that insufficient infrastructure hindered LDCs from taking advantage of e-commerce opportunities in the first place. Some delegations further said it was premature to discuss multilateral rule-making in e-commerce while many poorer members are not able to participate in digital trade.
 
China, which had circulated a joint e-commerce paper with Pakistan back in November, said it was "delighted" the development dimension was strongly echoed in the interventions. It went on to request the next chair to organize information sharing and informal discussions to "ignite" discussions.

The interim chair, Ambassador Dacio Castillo (Honduras), said the discussion demonstrated members' interest in e-commerce. He advised members to continue discussions and experience sharing, always keeping in mind the development dimension, and proposed to revert to this subject again in the next meeting of the Council.

Overcapacity and trade defence measures

The United States raised a concern over what it described as trade distorting measures implemented by China, which the US said was leading to overcapacity in steel, aluminium and other industrial sectors. The US cited Chinese government intervention in these sectors and the lack of timely and complete notifications on subsidies and activities of state trading enterprises. China responded that some capacity in steel and aluminium sectors had already been reduced and that efforts had been made to comply with WTO notification obligations.

In a separate item under "Other Business," China raised the issue of what it described as trade restrictive practices in the US and US use of trade remedy measures. China said the US President's Trade Policy Agenda submitted to the US Congress sent troubling signals. China added that members would also do well to reconsider their use of trade defence measures and resist protectionist pressures. China went on to reiterate its claim that the US and other WTO members are no longer allowed to use third party prices or costs in calculating anti-dumping margins as of 11 December 2016, in reference to a provision in its 2001 Protocol of Accession. This was a legal issue that should not be politicized and it is an international issue that should not be circumvented by domestic laws, China said.

The US replied that the expiration of the provision in the accession protocol does not require members to grant China market-economy status. The US said WTO agreements permit members to treat China as a non-market economy for as long as facts on the ground show this to be so. Japan was also of the view that WTO members are allowed to continue disregarding Chinese prices as basis for anti-dumping calculations.

China is currently involved in a dispute settlement case with the EU over the same issue.

Trade concerns

Afghanistan drew members' attention to Pakistan's nearly month-long closure of the Durand Line. Afghanistan said Pakistan unilaterally closed entry points for all trade and transit from 17 February to 21 March, resulting in a USD 6 million loss for Afghan exporters and carriers. Afghanistan, noting that its rationale for joining the WTO was to secure freedom of transit and access to international markets as a landlocked and least developed country, said it hopes Pakistan will honour its WTO obligations. Pakistan, in response, noted that trade between Afghanistan and Pakistan is now open. Pakistan added that it will check further with its capital and revert to Afghanistan bilaterally to address all concerns.

Five members (US, EU, Ukraine, Turkey, Switzerland) complained about Egypt's requirement for trademark registration for manufactured goods under Decree No. 43 of 2016. The US said the policy affected the import of apparel, toys, chocolate, cosmetics, milk and dairy products, motorcycles, and washing machines, and questioned whether the same was applied to locally-made goods. The US also raised issue with the lack of transparency on the measure. Egypt said it respects its WTO commitments and did not think the registration requirements were more trade restrictive than necessary.

The US, Japan, EU and Canada urged African Union members to ensure the WTO-consistency of their application of import levies to finance its activities in line with the Kigali Decision of July 2016. Waivers could be applied for if necessary, the US said. Rwanda said it will consult with individual members of the African Union.

Ecuador called on Brazil to provide scientific risk assessments to justify its restrictions on shrimp imported from Ecuador implemented since 1999. Brazil said the risk analysis was in its final stages and will be conveyed shortly.

Several trade concerns previously brought to the Goods Council’s attention were raised again at the meeting.

  • The EU, Ukraine and the US raised their concerns over trade-restricting practices in Russia affecting products like cement, pharmaceuticals, and skins and hides. Russia said its measures at issue were not discriminatory.
  • The Russian Federation again complained that Croatia's fuel import restrictions were disproportionately burdensome to Russia. The European Union informed the Russian Federation that Croatia was planning to revise its regulations concerning fuel import regulations and that the new measures would be consistent with WTO rules.
  • The Russian Federation and China reiterated their concern over US' measures affecting fish and seafood imports. Russia raised issue with the traceability requirement and also said the criteria for listing certain fish species in the US monitoring program were not transparent and lacked justification. The US responded that the measure, which is meant to address illegal, unreported, and unregulated fishing, was developed in a transparent process and did not favour domestic producers.
  • Nine WTO members (US, EU, Norway, Uruguay, Thailand, Chile, Australia, Japan, and Argentina) reiterated their concerns over import restrictions, local content requirements, and import bans in Nigeria. Nigeria said its government is in the process of continuing consultations amid a need to diversify its economy and recover from high inflation and recession.
  • Eleven members (Japan, US, EU, Norway, Canada, Australia, Korea, Brazil, Switzerland, New Zealand and Chinese Taipei) reiterated their complaints against import and export restrictions in Indonesia, which included export restrictions on nickel ore, local content requirements for mobile phones, import restrictions on milk and more. Indonesia said these measures were justified for reasons of health, safety, environmental protection, and public morals. Indonesia said it has tried to revoke or amend some measures and that members should be assured that such efforts will continue.
  • Japan and Chinese Taipei reiterated their concern over Turkey's customs valuations for imported tires. Turkey said it requirement for surveillance certificates was not an import restriction and did not increase customs values or duties, and was therefore in compliance with WTO rules.
  • Twelve members (US, EU, Japan, Norway, Australia, Thailand, Chinese Taipei, Canada, China, Korea, Singapore and New Zealand) renewed their calls for India to address complaints on import restricting measures. These included alleged violations of India's bound tariffs for certain information technology products. India responded that it had not made any commitments for such new IT products. India also noted it had eliminated minimum import prices for steel products.

A discussion on transparency also took place where 13 members emphasized the importance of members' compliance with their notification obligations as WTO transparency was an important pillar of the system.

Members received updates on tariff adjustment re-negotiations following the Kyrgyz Republic's and Armenia's accession to the Eurasian Economic Union (EAEU) and the European Union's enlargement after Croatia's accession. Members were also apprised on Jordan's efforts to reform its export subsidy program.

As for the election of the Council chair and the appointment of officers to the subsidiary bodies, members will reconvene to adopt a slate of names after the selection process has been finalized.

Next meeting

The next regular meeting of the Goods Council is tentatively scheduled for 4-5 July 2017.

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