Presentation Outline WTO Plus Commitments & Standards Four Key - - PowerPoint PPT Presentation
Session 5 : KEY PILLARS OF FTA NEGOTIATIONS: TRADITIONAL NEGOTIATING ISSUES Jakarta, Indonesia 5-7 September 2017 Wenguo Cai Director, International Programs Partner: The Conference Board of Canada Project Executed by: Presentation Outline
Project Executed by: Partner:
Jakarta, Indonesia 5-7 September 2017 Wenguo Cai Director, International Programs The Conference Board of Canada
❖ Preferential market access (WTO+ concessions) ❖ Tariff lines established for tariff elimination ❖ Phase-out schedule for tariff elimination ❖ A system of rules of origin to be established ❖ Customs procedures for FTAs ❖ Approach to the use of trade remedies
❖ GATT Article XXIV requires the elimination of tariffs
❖ The Harmonized System (HS) – starting point ❖ How to identify tariffs for elimination (to start with
❖
❖There are more than 9,000 six-digit HS tariff
❖ The focus of tariff negotiations will be always on the
❖ all applied tariff rates of 5% or less should be
❖ Phasing-out arrangements for tariff negotiations -
❖ Category A: eliminated on entry into force ❖ Category B: by 1 Jan. 1998 in 5 equal stages ❖ Category C: by 1 Jan. 2003 in 10 equal stages ❖ Category C+: by 1 Jan. 1998 in 15 equal stages ❖ Category D: remained duty-free on 1 Jan. 1994
❖ Every FTA needs a mechanism to identify the goods
❖ Non-preferential rules of origin vs. preferential
❖ Preferential rules of origin: reciprocal rules
❖ Increased complexity of RoOs - spaghetti-bowl
❖Wholly obtained and produced, or substantially
❖ What goods are wholly obtained/produced? ❖ Substantial transformation – double transformation
❖ three methods to determine substantial transformation:
❖ Certificate of origin – through self-certification or other
❖ Cumulation and cross-cumulation rules
❖ Many negotiating issues for industrial goods also
❖ Agriculture is more sensitive than industrial goods ❖ Agricultural MA negotiations are linked with food
❖ Agricultural negotiations are also linked with
❖ Agriculture is closely linked with SPS issues.
❖ Tariff rate quotas – how do they work? ❖ Export competition (subsidies) ❖ Intellectual property rights – geographical
❖ Services and investment relating to agricultural/food
❖ Impact of FTA agricultural negotiations and
❖ Eliminated over 95% of EU ag tariffs and 92%
❖ Immediate duty-free treatment for many ag products
❖ Tariff elimination over 7 years for: wheat, barley,
❖ EU’s TRQs: beef: duty-free TRQs: 50,000 tonnes;
❖ Canada’s TRQs: cheese; 16,000 tonnes ❖ Geographical indications
❖ General Agreement on Trade in Services (GATS) ❖ Seeking GATS plus commitments/concessions ❖ Revisit of GATS delivery modes:
➢ Mode 1: Cross-border supply ➢ Mode 2: consumption abroad ➢ Mode 3: Commercial presence ➢ Mode 4: Movement of natural persons
❖ Services Sectors/Sub-Sectors: CPC
❖ GATS-type Services Schedule: only services included in
❖ Advantage: (1) Developing countries are familiar with the
❖ Disadvantages: (1) need to amend it each time FTA
❖ Horizontal versus sectoral specific commitments ❖ Three columns: (1) MA limitations, (2) NT limitations & (3)
❖ Specific commitments: None, Unbound and something in
Source: Japan – Singapore FTA
❖ All services except those listed in the schedule are
❖ Advantages: (1) new services are automatically
❖ Disadvantages: (1) may risk committing something
❖ FTA partners have the right to regulate – in the end,
Source: Australia – New Zealand FTA
Negative Listings Example (continued)
Box 7.5: Negative listings: an example The Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) uses negative listings for its commitments on services. Services providers from New Zealand and their services are treated in the same way as Australian providers in all services except the following: Air Services State governments hold powers to regulate intrastate aviation on economic and public interest grounds. Scheduled passenger and freight services within and between Australia and New Zealand are governed by an air services agreement which has treaty status and by the Australia-New Zealand Single Aviation Market Arrangements of 1996.
❖ Non-conforming measures (inconsistent measures) ❖ Standstill – Previous liberalizations cannot be made
❖ Ratchet – Future liberalizations will be locked in
❖ With standstill and ratchet, no reversal of
❖ A few sectors could be reserved: for example,
❖ trade remedies (antidumping, countervailing duties
❖ rules of origin ❖ customs procedures/trade facilitation ❖ technical barriers to trade ❖ sanitary and phytosantory measures ❖ intellectual property rights ❖ transparency in administration of trade rules ❖ consultations of dispute settlements, etc. ❖ labour and environment for some FTAs too
❖ Most of the FTA parties simply reaffirm their rights
❖ A few FTA parties agreed to renounce their right to
❖ Global safeguards - Some FTAs do not permit
❖ transitional safeguards and special safeguards ❖ subsidies and countervailing measures in FTAs
❖ WTO Trade Facilitation Agreement (TFA) – become
❖ Further to reduce the cost of doing business while
❖ Rules of origin and certification of origin ❖ Customs procedures and standards – advance
❖ Compliance with health, safety and other
❖ E-commerce and business mobility ❖ Documentation and transparency
❖ Many FTAs simply reaffirm their rights and
❖ More transparency requirement – if a party rejects
❖ mutual recognition, harmonization and equivalence ❖ Normally a working party or a committee formed for
❖ intellectual property rights (geographical
❖ dispute settlements between/among the parties ❖ labour cooperation provisions in FTAs ❖ environmental protection and FTAs ❖ gender equality and trade
❖ Many negotiators acknowledge that they do not
❖ Do your homework first – consulting business &
❖ Conduct good studies on your FTA partners –
❖ Obtain national negotiating mandate and
❖ Estimate the potential zone for a FTA agreement
❖ Many negotiators acknowledge that they do not
❖ Do your homework first – consulting business &
❖ Conduct good studies on your FTA partners –
❖ Obtain national negotiating mandate and
❖ Estimate the potential zone for a FTA agreement
❖ Setting the negotiating aims and strategy ❖ Prepared to make tradeoffs between different
❖ Keep stakeholders informed on a regular basis ❖ There are no standardized rules to conduct FTA
➢ important initial positioning ➢ requests and offers – a “take and give” exercise ➢ all negotiating issues are linked ➢ the importance of listening ➢ respect the process ➢ try to hold the pen and control/manage the process