COUNCIL FOR TRADE IN GOODS

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Noting members' low compliance with obligations to submit information about their trade regimes and acknowledging feedback from previous meetings, the United States introduced a revised proposal to enhance transparency, which it co-sponsors with Argentina, Australia, Canada, Costa Rica, the European Union, Japan, New Zealand and Chinese Taipei.

While proponents continue to believe that there must be consequences for members who fail to meet notification requirements, revisions in the proposal have been made to give members more time to come into compliance and access technical assistance before penalties would kick in, the United States said. Other co-sponsors took the floor to elaborate on this and other revisions, noting that they plan to continue consultations with members.

Members also discussed a submission from Cuba, India, Mauritius, Nigeria, South Africa, Tunisia, Uganda and Zimbabwe, which calls for an "inclusive approach" to transparency as developing and least developed countries are constrained in their capacity to fulfil notification obligations. South Africa, introducing the document, said a more cooperative approach was needed instead of punitive measures and authorizations to submit counter-notifications on other members' trade regimes.  

South Africa said the paper discussed constructive approaches, which include simplifying formats for notifications and prolonging time frames for submissions in certain cases. The approach to transparency should also extend to other areas of the WTO beyond trade in goods. The paper also highlights areas for which developed countries are remiss at providing transparency and calls for efforts to enhance transparency in the meetings and negotiations of the WTO.

Members differed in their views on the two documents but nevertheless agreed that improving transparency was an important endeavour to strengthen the WTO. The chair of the Council, Ambassador José Luis Cancela Gomez (Uruguay), said the discussion indicated that all delegations attach great importance to this matter of transparency which is a cornerstone of the multilateral trading system. He encouraged members to continue talks and not let up in their efforts.

EU regulation of pesticide levels

Thirty-one WTO members from developed and developing countries in Africa, North and South America, and the Asia Pacific called on the European Union to reconsider its stricter approach to regulating pesticides and other "safe tools and technologies" farmers use on crops to manage pests and diseases. This follows the circulation last 4 July of a communication by 16 WTO members complaining that the EU was diverging from international standards and science-based risk assessments.

Bananas, wheat, coffee, papaya, grapes, tree nuts, coconut, sweet potatoes, mangoes and palm oil were among the products members said are being affected by the EU's lowering of pesticide residue tolerances and divergence from science-based standards. Members were also concerned that the EU was not providing sufficient transitional periods for producers to adapt to the new regulations.

The United States said it expects "severe impacts" on agricultural production and trade, with South and Central America as well as Sub Saharan Africa expected to face disproportionate harm. The African, Carribean and Pacific (ACP) Group said the EU's arbitrary adoption of measures negatively affects developing and least-developed countries and goes against the principle of facilitating development through trade. China, echoing others, said they have raised the issue repeatedly in the Sanitary and Phytosanitary (SPS) Committee for years.
 
The European Union said the list of hazards for which it requires zero exposure is limited and that risks posed by any such exposure would be unacceptable. Even for those substances, however, the EU said that requests for import tolerances would be handled through a process which includes a full risk assessment. The EU said it appreciated the concerns of WTO members and acknowledges the potential trade impact of some of the EU measures but it insists that the EU level of health protection cannot be compromised.

EU regulations on medical devices

The United States, Canada and the Republic of Korea expressed concerns over the implementation of the European Union's new Medical Device Regulation (MDR) and the In Vitro Diagnostic Medical Devices Regulation (IVDR).

The EU risks disrupting its US$ 125-billion medical device market and harming patients' access to medical technologies amid the backlogs and uncertainty arising from the implementation of new regulations, the members said. There are not enough testing facilities and implementing acts that provide details for compliance.

Acknowledging members' concerns, the EU said there are plans for transition mechanisms such as the possibility for manufacturers to use old certificates under previous regulations until May 2024.

Japan's export controls

Under the agenda item of "Other Business," the Republic of Korea expressed concern over Japan's measures that restrict exports of Japanese materials to Korea that are vital for manufacturing semiconductors and displays.

Korea said Japan has only been citing "damage of trust" as the reason behind its actions without elaborating on what basis they have in WTO rules. Korea recalled that under the measure issued on 1 July and effective since 4 July, Japanese exporters have been required to apply for licences each time they ship to Korea. In addition, Japan is also reviewing whether to change Korea's "white list status",  which will result in even more tightening of trade measures, Korea said.

Korea said it worries this matter might end up jeopardizing the spirit of free and fair trade which WTO members endeavour to protect and which Japan had committed to uphold along with other countries attending the recent G20 Summit in Osaka. Korea further warned that the measure will disrupt the global value chain for electronic products, affecting companies worldwide and in Japan. Korea requested Japan to withdraw its measures.

Japan meanwhile said the measure is not a trade embargo but an operational review necessary for the proper implementation of Japan's export control system based on its security concerns. The measure taken by Japan simply reverts its treatment of Korea back to "usual procedures" instead of the previous "simplified procedures", Japan said. The measure is fully consistent with WTO agreements, Japan said.

United States measures on ICT products

China expressed concern over a US Executive Order issued on 15 May which bans US companies from tapping telecommunications suppliers considered to pose a potential security threat. China also raised issue with an announcement by the US Commerce Department on 16 May that Huawei and its 168 affiliates will be included in the "Entity List" subject to US export controls due to national security concerns. The US replied in both cases that the Goods Council was not the appropriate forum to discuss issues relating to national security.

Import restrictions in Angola and Tunisia

Five WTO members (United States, European Union, Brazil, Canada and the Russian Federation) raised issue with Angola's Presidential Decree 23/19 issued on 14 January. The US said the decree aims to restrict Angola's imports and targets 54 products. Already, there are reports of import bans on pork, maize flour and diapers, members heard. Such restrictions would hurt trade and investment ties and discourage businesses from operating in Angola, they said.

Angola replied that the decree imposes non-automatic licensing for imports of "selected national products". The country is of the view that it was not correct that consumers and retailers had authorization to import in addition to producers and manufacturers. It added that quantitative restrictions would only be in place by 2022 after investigations and other procedures in line with WTO rules.

Two WTO members (European Union and China), meanwhile, expressed concern over Tunisia's measures requiring import licences for many consumer products. The EU said the list of affected products - which include agricultural products, textiles and clothing, cosmetics, leather products, shoes, toys and electrical goods - represent roughly 4% of total EU exports to Tunisia. China expressed concern that the measures could create additional burdens for businesses.

Tunisia responded that after eight months of implementation, the measure may be repealed as authorities are studying the possibility of doing so.

UK withdrawal from the EU

Several WTO members again questioned the European Union and the United Kingdom over their plans to apportion tariff rate quotas (TRQs) on imports from non-EU economies after  the United Kingdom's withdrawal from the European Union. TRQs are valued by traders as imports falling within the TRQ volume for certain goods enjoy lower tariffs than those outside the quotas.

Several members complained at the meeting that their concerns against the EU and the UK's proposal to split up the current TRQ volumes remain unaddressed and that it would be unacceptable to have their suggested arrangement kick in on 1 November if Brexit goes ahead.

The EU said it remained committed to achieve an orderly withdrawal of the UK, including through free trade arrangements in the future. Continued free trade, the EU said, is the best way to ensure access without having the UK use import quotas meant for third countries.

Other matters

Members discussed a request from Chile, China, India and Thailand to extend a waiver allowing developing countries to extend preferential tariffs to least-developed countries after the current waiver lapsed on 30 June 2019. They also discussed the extension of the waiver request for the United States to grant preferential tariff treatment to eligible Caribbean countries under the Caribbean Basic Economic Recovery Act.

As for discussions on the work programme on electronic commerce, China drew members' attention to its submission of cases where e-commerce had demonstrated industrial development and enhanced trade in goods. Mali meanwhile was of the view that it was important to take stock of the varying capacities of WTO members and complete other work important to developing countries and LDCs before taking on e-commerce negotiations. New Zealand highlighted the importance of continuing discussions so that the WTO can respond to contemporary trading realities.

The Council also considered suggestions from members on how to improve the functioning of this WTO body and its 14 subsidiary committees to make discussions more interactive and more efficient, with some members noting the 37-item agenda and time spent to go through this most recent meeting.

Trade concerns raised in previous meetings of the Council were likewise taken up in addition to other issues on the agenda. A copy is available here.

Next meeting

The next Goods Council meeting is scheduled for 14-15 November.

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