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Ukraine took the floor to highlight its concerns about Russia’s transit barriers, declaring that these “non-transparent, non-justified and overly burdensome restrictions” were continuing unabated. According to Ukraine, the restrictions enacted on 1 January 2016 ban all international transit of cargo by road and rail transport from Ukraine to Kazakhstan through Russian territory. Goods must now cross Belarus, adding up to 900km to shipments and adding 30% in transit costs.
Ukraine said its exports to Kazakhstan fell by 49% in the first quarter of this year while exports to Turkmenistan, Uzbekistan, Azerbaijan, Georgia, Armenia, Kyrgyzstan and Tajikistan fell by 48% over the same period. It said the issue was not just a Ukrainian concern and deserved the attention of all WTO members.
The European Union, Turkey, Canada, Australia, Japan, the United States and Switzerland joined Ukraine in voicing concerns about the Russian measures and their compatibility with WTO rules on freedom of transit (GATT Article V). Turkey said that since the beginning of the year Russia has banned the import of 20 categories of products of Turkish origin.
Russia responded that it takes a very serious approach to its commitments under the WTO, including in its relations with Ukraine.
India’s trade measures
Japan was joined by a number of WTO members in outlining concerns about a new Indian measure notified on 5 February imposing minimum import prices (MIPs) on more than 170 iron and steel products. Japan said the MIPs were having a significant adverse impact on exports from Japan and were inconsistent with Article XI of the General Agreement on Tariffs and Trade (GATT). Japan also said it had serious concerns about India’s determination leading to a new safeguard on imports of hot-rolled flat steel products that was notified to the WTO in December.
Chinese Taipei, Canada, Australia, the EU and Korea echoed Japan’s concerns on the MIPs and steel safeguard. The US cited concerns about India’s recently announced budget which would increase tariffs on 96 product lines falling under capital goods, tariff increases on silica (used in fibre optics), industrial solar water heaters and solar tempered glass and others across the high-tech sector.
The US said India recently increased the basic customs duty on medical devices and withdrew a duty exemption on approximately 70 lifesaving drugs. The US also cited India’s “Compulsory Registration Order” (CRO) for certain electronic products, which requires foreign products be re-tested in an Indian laboratory to demonstrate their compliance with Indian standards even though these norms are identical to existing international standards. The list of products subjected to the CRO continues to be expanded and updated through a website rather than through a formal regulatory process involving stakeholder notice and comments, the US said.
Chile, New Zealand and China welcomed India’s decision to reopen several ports that were closed to apple imports but asked India to provide further explanation with regard to the treatment applied to the imports in the different ports concerned.
India said that no WTO commitment had been violated and that it was premature to raise concerns about the MIPs when the measure had not yet been implemented, and especially when it had not been discussed first in the WTO’s market access and safeguards committees.
Jordan’s export subsidies
Jordan provided WTO members with an update on efforts to replace its current export subsidy programme for domestic small and medium-size enterprises with one that is WTO-compliant. Jordan noted that a national committee was set up at the start of the year to carry out the work, and that the government was committed to bringing an end to the programme, which it said would otherwise terminate automatically by the end of 2018. In 2014, Jordan submitted a request for a waiver from WTO rules that would allow it to continue the programme up to the end of 2018, the text of which is available here.
Saudi Arabia, Qatar, Egypt, Oman (for the Arab Group), Turkey, Pakistan, China and Guatemala voiced support for Jordan, including its waiver request. Australia, the US, Japan, Chinese Taipei and New Zealand praised Jordan for its transparency, acknowledged difficult economic circumstances it was facing, and said they looked forward to progress on the adoption of a WTO-consistent programme.
Specific trade concerns
Ten delegations – the US, the EU, Japan, Canada, Australia, New Zealand, Brazil, Chinese Taipei, Switzerland and Korea — took the floor to once again express concerns about policies restricting imports and exports in Indonesia. Several members said they were encouraged by recent statements from Indonesia’s president recognizing the need for reforming and liberalizing Indonesia’s trade practices and the recent announcement of a package of reforms revising investment and labelling rules, but said that important restrictions remain on imports of agricultural, horticultural and fisheries products, among others.
Indonesia said the measures in question were intended to address safety, health, environmental, cultural and other concerns and were not meant to be trade-restrictive. It said 11 economic policy packages recently unveiled by the Indonesian government covering 180 regulations aim to harmonize various requirements, simplify licensing and the issuance of business permits, and eliminate some inspection requirements.
Eleven WTO members — Norway, Chile, the EU, Iceland, Uruguay, Thailand, the US, Switzerland, Japan, Chinese Taipei and Australia — once again took the floor to express concerns about various measures in Nigeria which were restricting imports. These measures include restrictions on imports of fishery products, non-transparent import licensing requirements, local content requirements in the oil and gas sectors, and a decision by the country’s central bank in June 2015 to prohibit foreign exchange transactions for imports of more than 40 product categories. Nigeria said the government was engaged in consultations with stakeholders and reviewing policies as appropriate.
Japan, the US, Korea, Canada, the EU, Switzerland and Chile reiterated concerns they have with continued import restrictions in Ecuador, including on mobile phones and automobiles. Several delegations welcomed initial steps by Ecuador to remove import restrictions imposed for balance of payments purposes but said they were concerned about possible new restrictions, including a new monetary instrument which traders would use to pay customs duties. Ecuador responded that its quantitative restrictions on auto imports were not affecting demand and that all its measures were in line with WTO requirements. Claims regarding the adoption of a new monetary policy instrument were speculative, it added.
Norway once again raised concerns about Ukraine’s Resolution No. 724, which permits the use of indicative prices for customs valuation purposes, and on the basis of which Ukrainian customs systematically reject invoices submitted by importers for the purpose of determining transaction value. Norway also reiterated concerns about measures in China restricting Norway’s salmon exports.
The EU, Canada, Japan, Switzerland, Chinese Taipei and the US reiterated their concerns over Pakistan’s Regulatory Order No. 1125 on domestic sales taxes, which covered a large number of products destined for industrial use and retail sale, such as apparel, footwear, leather and sporting goods. Amendments to this Regulatory Order impose a 17% sales tax upon imported goods, while similar domestically produced goods are taxed at 5%. In their view, these discriminatory taxes run counter to the WTO principle of national treatment (GATT Article III).
Many of these items were raised at the previous Goods Council meeting.
The outgoing chair of the Goods Council, Ambassador Héctor Casanueva (Chile), drew attention to the WTO Secretariat’s latest updated listing of notification obligations and compliance therewith. WTO rules require members to submit regular and “one-time” notifications under 13 of the WTO’s agreements and understandings. The US said it was concerned there were still a number of countries that have not submitted any notifications or have submitted notifications that appear significantly incomplete. On agriculture in particular, the track record is “poor,” particularly for domestic support and export subsidies, the US said. Transparency is “more critical than ever” for implementation of commitments made in the Nairobi Declaration on Export Competition.
China once again reminded WTO members that a provision in its 2001 Protocol of Accession, Section 15(a)(ii), will expire on 11 December 2016. This section states that, in regards to anti-dumping proceedings, an importing WTO member may use a methodology that is not based on a strict comparison with domestic process and costs in China – such as a surrogate methodology — if the Chinese producer under investigation cannot clearly show that market economy conditions prevail in the relevant industry. Some WTO members continue to use these surrogate costs, China noted, which have negative results for Chinese producers. China urged members to end this methodology and faithfully implement their WTO obligations so as to avoid any possible disputes over the matter.
Russia expressed concerns about a proposed rule issued by the Department of Commerce in the United States on 5 February concerning the Seafood Import Monitoring Program. The US programme seeks to combat illegal, unreported and unregulated fishing and seafood fraud through recordkeeping procedures relating to the importation of certain fish and fish products. The new rule does not make clear what additional information or documentation will be required from importers, Russia said, which must be kept for five years, thus presenting a great challenge to exporters. Norway highlighted that the new rule appears to apply only to imports. The US responded that it hoped Russia took advantage of the public comment period for the proposed rule to voice its concerns but that it would nevertheless convey Russia’s concerns to the appropriate authority.
New chairman, appointment of subsidiary chairs
Members agreed to the appointment of Australian ambassador Hamish McCormick as the new Goods Council chair. However, members could not reach consensus on the appointment of chairs to the Goods Council’s 13 subsidiary bodies1. Consultations with members on the list will continue with the aim of reaching agreement as soon as possible.
The next regular meeting of the Goods Council is scheduled for 14 July.
1. Goods Council’s committees: Market access; Agriculture; Sanitary and phytosanitary measures; Technical barriers to trade; Trade-related investment measures; ; Anti-dumping; Subsidies and countervailing measures; Customs valuation; Rules of origin; Import licensing; Investment measures; Safeguards; State trading enterprises; Information Technology Agreement. back to text
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