POLICY FOR THE TEAM OF NEGOTIATORS FOR Project funded by the - - PowerPoint PPT Presentation

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RESEARCH & CONSULTING Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

SHORT TRAINING IN TRADE POLICY FOR THE TEAM OF NEGOTIATORS FOR ETHIOPIA’S WTO ACCESSION

Derk Bienen

Module 3: Preparation of offers for non-agricultural products

28 - 31 March 2011

Day1/Session 4: What do schedules not cover and (how) can they be changed? Exceptions and

• ptions for later rescheduling

Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

Overview – Session 4

1. Exceptions to market access commitments

 General exceptions  Security exceptions  Balance of payments (BOP) exceptions  Regional integration  Waivers  Trade remedies

• 2. Modification of the schedules of concessions

 Modification vs. rectification  Renegotiation and modification of schedules under

• Art. XXVIII of GATT 1994

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

Exceptions to market access commitments

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

Meaning of exceptions

• Concessions made on NAMA can be lifted,

temporarily or permanently, in exceptional cases, e.g.:

 Bound tariffs can be exceeded  Quantitative restrictions can be applied  Other trade barriers can be erected

• Situations which justify exceptions are provided in

different articles of the GATT

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 1. General exceptions
• Legal base: Article XX of the GATT 1994
• Variety of justifications, e.g.:

 Protection of public morals  Protection of human, animal or plant life or health  Trade in gold or silver  Protection of national treasures  Conservation of exhaustible natural resources

• Condition: measures should not be applied in a

manner that could constitute:

 a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or  a disguised restriction on international trade

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 2. Security exceptions
• Article XXI of the GATT allows a WTO Member to

take any action, which it considers necessary

 for the protection of its essential security interests or  in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 3. Balance of payments (BOP) exceptions
• Article XII GATT 1994 (applies to all Members)

 Safeguard Member's external financial position and its BOP  Measures shall not exceed those necessary to forestall the imminent threat of, or to stop, a serious decline in its monetary reserves or in, the case of a Contracting Party with very low monetary reserves, to achieve a reasonable rate of increase in its reserves

• Article XVIII:B GATT 1994 (developing country Members only)

 Safeguard Member’s external financial position and to ensure a level of reserves adequate for the implementation of its programme

• f economic development

 Deletes “imminent” and replaces “very low” by “inadequate”

• General

 Measures temporary and to be relaxed as BOP situation improves  Application to general level of imports (not specific sectors)

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 4. Regional integration
• Legal base: Article XXIV of the GATT 1994
• Exception from MFN rule: preferential tariffs for

partners in an RTA

• RTAs must comply with conditions:

 Coverage of “substantially all trade”  Purpose: facilitate trade between members, not to raise barriers to the trade of other WTO Members => tariffs

• n imports from other WTO Members not to be raised

 RTA to be notified to WTO

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 5. Waivers
• Legal base: Article IX:3 of the Agreement Establishing

the WTO

• WTO Member may, under “exceptional

circumstances” seek and get authorization from the

• ther Members to derogate, for a specific time and

under certain conditions, from a provision contained in any WTO Agreement

 No compensation required  Temporary application

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 6. Trade Remedies
• Trade remedies:

 Anti-dumping  Countervailing measures against subsidised imports  Safeguards in case of sudden import surges

• Trade remedies may exceed bound tariffs

 But are subject to procedural and substantive requirements laid out in WTO Agreements

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

Modification of the schedules of concessions

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 1. Modification vs. rectification
• Rectfication: amendments or rearrangements which

are of a purely formal character and which do not alter the scope of the concessions

 1980 Procedures for Modification and Rectification of Schedules of Tariff Concessions apply:

• Member proposes rectification to WTO Sec
• If no objection by other Member within 3 months,

certification by Director-General

• Modification: renegotiation of any concession

recorded in the Schedules (usually: increase in bound rates

 Requires compensations  Legal base: Art. XXVIII GATT 1994

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 2. Modification of schedules under
• Art. XXVIII of GATT 1994 - overview
• When can renegotiation of schedules take place?

 before the initiation of a three-year period starting from 1 January 1958 (Article XXVIII:1) – current: 01.01.2009-31.12.2011;  in special circumstances, if authorized by the Members (Article XXVIII:4); and,  following a reservation made by a Member before the initiation of the triennial period (Article XXVIII:5).

• Procedure:

 Member submits notification/request to WTO  WTO distributes notification among all Members  Claim of rights  Members “primarily concerned” (with “substantial interest”) enter into negotiations (consultations)  Bilateral agreements are multilateralised

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Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 2. Modification of schedules under
• Art. XXVIII of GATT 1994 - compensations

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• Members primarily concerned => negotiations

 Members with Initial Negotiating Rights (INR)

• Those that have originally concluded bilateral agreements
• Are usually listed in the schedules

 Members with Principal Supplying Interest (PSI)

• Based on import share: Member which had, over a

reasonable period of time prior to the negotiations (usually three years), the largest share in the market of the requesting Member, or would have had it in the absence of discriminatory quantitative restrictions

• Based on export share: Member with the highest ratio of

exports affected by the concession

Project funded by the European Union under its Trade Capacity Building Programme for Ethiopia under the 9th EDF

• 2. Modification of schedules under
• Art. XXVIII of GATT 1994 - compensations

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• Members with Substantial interest => consultations

 Substantial interest (SI)

• Covers those Members which have, or in the absence of

discriminatory quantitative restrictions affecting their exports could reasonably be expected to have, a "significant share" in the market of the Member requesting to modify or withdraw the concession

• practice: SI has normally been granted to those Members

who accounted at least 10% of imports (over the reference period)

 Consultations and negotiations compared

• In practice, no major difference