WTO & RTAs
The WTO is talking about its public enemy no. 1, RTAs, again. If TPP dies, then the WTO might still have some hope.
WTO: 2016 NEWS ITEMS
27 June 2016
REGIONAL TRADE AGREEMENTS
A discussion on the proliferation of regional trade agreements (RTAs) and their impact on the broader global trading system has drawn support from most WTO members, the chair of the Committee on RTAs said in a meeting on 27 June. He noted that some WTO members have suggested taking note of these deals’ provisions on e-commerce, rules of origin, technical barriers to trade, sanitary and phytosanitary standards, fisheries, and more.
Ministers had instructed the committee in the Nairobi ministerial declarationlast December to discuss the systemic implication of RTAs for the multilateral trading system and their relationship to WTO rules. Besides instructions for holding these discussions, the ministerial declaration also called on members to work towards the transformation of the provisional Transparency Mechanism, which is used to review RTAs, into a permanent one without prejudice to questions related to notification requirements.
Discussions on systemic implications of RTAs are more of a priority for most members than transforming the Transparency Mechanism into a permanent one, committee chair Ambassador Daniel Blockert (Sweden) said at the meeting, reporting on his previous consultations with around 25 members.
“This systemic discussion is high on the agenda for members with possibly one or two exceptions,” the chair said.
“In terms of substance, there are different suggestions with some based on specific themes: e-commerce, rules of origin, technical barriers to trade, and fisheries. The idea would be to exchange experiences,” Ambassador Blockert said. “One way is to have a few delegations provide information on their own free trade agreements and the Secretariat will supply background information,” he said.
The chair clarified that there are few concrete ideas on how to hold the discussions. He called for written proposals and encouraged members to discuss ideas in groups ahead of the next committee meeting on 27-28 September, where he plans to take the matter up again.
Several delegations then took the floor. Australia reiterated its long-standing support for a discussion of the effects of RTAs on the multilateral system, encouraging the chair to start a process for interested members to construct a framework for the discussion. The US said if members wanted to discuss RTAs’ systemic effects, it was necessary to have transparency on all RTAs, including non-notified RTAs. The US added that it could not agree to a standing item on systemic issues on the committee’s agenda; if members wanted to submit a paper on any issue dealing with RTAs, they could request an agenda item. Japan, Chinese Taipei, Canada, China, and the European Union were supportive of such a discussion, with some drawing attention to the need to address transparency issues too. The EU said it would support presentations by members on specific topics backed by input from the Secretariat. Brazil and India repeated their view that the committee did not have sole competence to discuss RTAs as the Committee on Trade & Development also had a role. South Africa supported a systemic discussion as long as it did not lead to new rules or benchmarks.
The chair said he will continue consultations with delegations before September.
Consideration of three RTAs
Members also discussed three RTAs as part of the regular work of the committee:
- Free Trade Agreement between the Republic of Korea and Australia, goods and services WT/REG359/1
- Free Trade Agreement between Canada and Honduras, goods and servicesWT/REG364/1
- Free Trade Agreement between the Russian Federation and Serbia, goodsWT/REG326/1
The EU said that the Korea-Australia FTA was one of the most comprehensive RTAs in Asia Pacific and contained several commitments beyond WTO agreements. Some questions were raised on all three RTAs and the parties agreed to provide responses in writing.
Consideration of such agreements is based on a factual presentation prepared by the WTO Secretariat as well as written questions and responses exchanged among WTO members in advance of the meeting.
Backlog in RTA notifications
Seventy-two RTAs that are currently in force have not been notified to the WTO, members were informed at the meeting WT/REG/W/104. Many of these RTAs involve members of the Latin American Integration Association (LAIA). LAIA members are of the view that the LAIA agreement itself has been notified to the WTO, and subsequent LAIA agreement notifications had been made in biennial/annual reports, thus such deals should thus be removed from the Secretariat’s list of non-notified RTAs. The US disagreed and reiterated that the LAIA as an entity was not a WTO member and that notification obligations rested with individual WTO members. The US also indicated it could not support the consensus to invite the LAIA to the next meeting of the committee as an ad hoc observer. Uruguay on behalf of LAIA had issued a communication ahead of the meeting, which the EU said was a good start to addressing the backlog and on which it requested a number of clarifications. The chair encouraged more consultations among members to find a way forward.
The Chairman also said he had continued consultations with those delegations for which the RTA factual consideration was delayed due to lack of comments from parties involved WT/REG/W/106. The chair further reported that end of implementation reports were due for 129 RTAs. A further 11 RTAs will see the end of their implementation this year, thus adding to the backlog. Only six implementation reports had been received to date.
The next committee meeting has been scheduled for September 27-28.