Mc11 brief

Crucial issue of transparency raised in many WTO forums

Transparency in trade policy has been central to the workings of the World Trade Organization since it opened its doors for business in 1995.

In fact, promoting  greater clarity of trading partners' policies and intentions was seen as critical to a strong rules-based trading system since the creation of the multilateral trading system just after World War II. The lawyers, economists and diplomats who negotiated the General Agreement on Tariffs and Trade and later the WTO saw transparency, together with non-discrimination and national treatment, as one of the bedrock principles of the system.

Today, nearly every WTO agreement contains provisions on transparency and WTO members have called for enhanced transparency provisions in virtually every negotiation held in the run-up to the 11th Ministerial Conference (MC11).

The exchange of information on trade policies, inquiries on specific measures that have been applied and sophisticated means of monitoring government actions on trade are vital components in the work of the WTO.

In regular committees on agriculture, services or trade in goods, members often challenge newly implemented measures put in place by trade partners, including new or revised technical standards or trade remedies.

The Trade Policy Review mechanism mandates that the trade policies of all WTO members be regularly reviewed by the WTO Secretariat and subject to scrutiny in meetings of members in the Trade Policy Review Body. In negotiations to open markets more fully or to improve trade rules, members believe possession of all relevant information is essential to determine the scope and pace to  be covered in any agreement that may be struck.

Underpinning this notion of transparency is the faith that members place in each other to provide the information necessary to effectively monitor trade actions. Members provide this information through a process called notification. Many WTO agreements, including the Agreement on Agriculture, the Anti-Dumping Agreement, the Agreement on Technical Barriers to Trade (TBT) and the Sanitary and Phytosanitary (SPS) Measures Agreement require that measures taken within the scope of those texts must be notified to other WTO members.

Yet, according to a report from the WTO Secretariat, one-third of agriculture-related notifications from the period 1995-2015 remain outstanding. Less than half of WTO members have notified their subsidies or countervailing measures under the Subsidies and Countervailing Measures Agreement.
Many WTO members have in recent months proposed measures in various negotiating forums that would address this shortcoming. In negotiating groups on agriculture, industrial goods, fisheries subsidies and services, members have called for enhanced disciplines on notification requirements and for more expansive measures pertaining to information sharing.

In the negotiating group on non-agricultural market access, the European Union and several other WTO members have proposed new rules which they said would facilitate the participation of micro, small and medium-sized enterprises (MSMEs) in global trade by providing greater transparency and access to information pertaining to government regulations on food and product safety. Among the suggestions included in the proposal is the development of a common internet portal for sharing information, greater consultation with stakeholders, and notification of final changes to domestic regulations covered in the WTO's agreements on SPS and TBT measures. But opponents of these proposals said that implementing rules such as these could restrict their ability to regulate, would be expensive and would not bring benefits to their citizens.

In the negotiating group on agriculture, Singapore has put forward a proposal mandating that governments give 30 days' notice before putting an export restriction into force. The proposal has faced little opposition, although some members suggested that it would only be acceptable as part of a broader package of agriculture agreements.

The United States put forward a proposal on transparency and the need for greater diligence in notifications which covered WTO discussions being held on fisheries subsidies, agriculture, TBT and customs valuation. A proposed draft MC11 ministerial decision calls for punitive action to be imposed on those who are behind in their submission of notifications. Among the recommended sanctions were prohibiting representatives from delinquent members from chairing WTO committees, blocking access to the WTO members' website and denying access to training and technical assistance. Opponents of the US proposal said that Washington has not made a distinction between those who ignored their notification obligations and those who lacked the capacity to stay current with them. Others said that nearly half the membership could be affected and that, if implemented, these proposals could have unintended consequences.

In the "rules" negotiating group discussions on crafting disciplines for fisheries subsidies, nearly all proponents of an agreement have demanded enhanced transparency requirements not only regarding the subsidies extended to fishing fleets but also data on fish catch by species, the capacity of national fishing fleets and the status of fish stocks. Developing countries have generally been supportive of the need for greater disciplines on fisheries subsidies but have called for less onerous requirements and longer transition periods. Some have said that subsidies for fuel should not be covered by any new disciplines.

Also in the negotiating group on rules, China has called for greater transparency in the process governments use to determine the extent to which imports have been dumped or subsidized, particularly in investigations targeting small and medium size enterprises, while the European Union has sought to address the poor record on subsidy notifications by proposing three options, one of which would allow members to assume that subsidies not notified to the WTO are causing harm to their domestic industries. Both proposals, which are not up for decision at MC11, have met varying degrees of resistance from members concerned about the legal implications of the initiatives.