Presentation Outline (1) Negotiating Traditional Issues: Industrial - - PowerPoint PPT Presentation

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Session 2: FROM TRADITIONAL TO “NEW” TRADE ISSUES: HOW TO SELECT THEM FOR TRADE NEGOTIATION POSITION PAPERS?

Jakarta, Indonesia 27-28 February 2018 Wenguo Cai Director, International Programs The Conference Board of Canada

Presentation Outline

(1) Negotiating Traditional Issues: Industrial goods, Agriculture, Services and Trade Rules (2) New Negotiating Issues: Investment, Competition Policy, Government Procurement, SOEs, Gender Equality, etc. (3) How to select and prioritize the traditional and new trade issues and to prepare trade negotiation position papers?

Identify Identifying T ing Traditio aditional Issues nal Issues for FT

• r FTA Ne

A Negotia gotiations tions

• Seeking WTO + Commitments/Concessions

➢ Industrial Goods (tariff and NTBs) ➢ Agriculture (MA, subsidies and TRQs) ➢ Services (including E-Commerce and

Movement of Natural Persons)

➢ Trade Rules and Regulations

Traditional aditional Issue Issues s – Indus Industrial G trial Goods

• ods
• Possible Areas for Improvement

❖ Reduction of bound rates (reduce “water”)

❖ Non-tariff barriers – reduction & elimination ❖ Rules of Origin (RoO) – simplification and

harmonization – cross cumulation

❖ Sectoral liberalization (e.g. chemicals) ❖ Duty-free and Quota-free for LDCs ❖ Plurilateral Agreements:

▪ Information Technology Agreement 2 (ITA 2) ▪ Environmental Goods Agreement (EGA)

Traditional aditional Issues Issues – Ag Agricult ricultur ure

• Agricultural Trade Negotiations

❖ Agriculture is more sensitive than industrial goods ❖ Agricultural market access negotiations are linked

with food security issues

❖ Agricultural negotiations are also linked with

poverty reductions (farmers) and gender equality (many women and girls are working in the agricultural sector)

❖ Agriculture is closely linked with SPS issues ❖ Agriculture is also linked with environment and

sustainable development.

Traditional aditional Issues Issues – Ag Agricult ricultur ure

• Possible Areas for Agricultural Negotiations

❖ Elimination of export subsidies ❖ Reduction of domestic support/subsidies ❖ Administration reform of “tariff-rate quotas” (TRQ) ❖ Permission for developing countries to stockpile

food for food security purposes

❖ Intellectual property rights – geographical

indications

❖ Expanding the list of “Green Box”?

Traditio aditional Issues nal Issues – Ser Services vices

• Services Negotiations in FTAs

❖ General Agreement on Trade in Services (GATS) ❖ Seeking GATS plus commitments/concessions ❖ Revisit to the GATS delivery modes:

➢ Mode 1: Cross-border supply ➢ Mode 2: consumption abroad ➢ Mode 3: Commercial presence ➢ Mode 4: Movement of natural persons

Mode 5: ??? – still under research

❖ Services Sectors/Sub-Sectors: CPC

Traditio aditional Issues nal Issues – Ser Services vices

• Services Schedules – Positive Listing

❖ GATS-type Services Schedule: only services included in

the schedule enjoy preferential treatment

❖ Advantage: (1) Developing countries are familiar with the

GATS-type approach; (2) more predictable

❖ Disadvantages: (1) need to amend it each time FTA

partners want to liberalize a service; (2) UNCPC does not cover all services – classification is a problem

❖ Horizontal versus sectoral specific commitments ❖ Three columns: (1) MA limitations, (2) NT limitations & (3)

Additional Commitments

❖ Specific commitments: None, Unbound and something in

between (to be specified)

Traditio aditional Issues nal Issues – Ser Services vices

• Services Schedule – Negative Listing

❖ All services except those listed in the schedule are

subject to foreign competition

❖ Advantages: (1) new services are automatically

covered; (2) normally leading to deeper liberalization

❖ Disadvantages: (1) may risk committing something

unknown; (2) many developing country negotiators are not familiar with the negative listing approach.

❖ FTA partners have the right to regulate – in the end,

all the services are subject to the regulatory framework – do not worry too much about being

• ver-committed.

Traditio aditional Issues nal Issues – Ser Services vices

• Services Scheduling – Negative Listing

❖ Non-conforming measures (inconsistent measures)

to be listed in the schedule

❖ Standstill – Previous liberalizations cannot be made

more restrictive now or later

❖ Ratchet – Future liberalizations will be locked in

without a turning back – cannot challenge decisions and choices made by previous governments

❖ With standstill and ratchet, no reversal of services

liberalizations

❖ A few sectors could be reserved: for example, social

services – but most sectors are open.

Traditio aditional Issues nal Issues – Ser Services vices

• Possible Key Areas for Advancing Services

Negotiations under FTAs

❖ Market access (sectoral liberalization –

not much progress at WTO) – now TiSA

❖ Domestic regulatory policies ❖ Electronic commerce ❖ Movement of natural persons

Traditiona aditional l Issu Issues es – Rules ules

• What to Negotiate on Trade Rules?

❖ trade remedies (antidumping, countervailing duties

and safeguards)

❖ 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

“New” Negotiating Issues

• What are “new” trade negotiating issues?

❖ “Singapore Issues”

✓ Investment ✓Competition Policy ✓Government Procurement ✓Trade Facilitation (Agreement reached in Bali)

❖ Other “New” Issues

✓ Labour Cooperation (not so new) ✓ Environmental protection (not new) ✓ SOEs ✓ Gender Equality ✓ Other new issues

“New” Issues - In Investment estment

❖ There are three areas on investment of WTO

(working group on investment, TRIMs and GATS)

❖ FTA negotiations on investment have gone beyond: ❖ The right of governments to regulate ❖ More precise and minimum investment protection

standards (removing ambiguities of standards open to abuses or excessive interpretations)

❖ Create an independent investment court system (a

permanent tribunal and an appeal tribunal)

❖ Strengthen dispute settlement proceedings – more

transparent and impartial manner

❖ Investment facilitation proposed at the WTO

Ministerial Conference in Buenos Aires (MC11)

“New” Issues – Competition P Competition Polic

• licy

❖ Restrictive business practices in the Havana Charter ❖ WTO working group on competition after Singapore ❖ Doha Mandate: Exploring a Multilateral Competition

Framework

❖ The WG became inactive after the Cancun Ministerial -

no work on competition policy during the DDA

❖Key WTO discussions include transparency, non-

discrimination, procedural fairness, cooperation on competition, technical assistance and capacity building, and dispute settlement

❖ Many FTAs include the competition policy chapter ❖ Key provisions include transparency, adoption of

competition law, core principles of competition, procedural fairness, cartels and anti-competitive practices, designated monopiles, SOEs, and dispute settlement

“New” Issues – Go Gover ernment nment Pr Procu

• curement

ement

❖ Government procurement is a huge market ($17 trillion

for international competition)

❖ WTO GPA is a plurilateral agreement with 19 parties and

47 members/10 members are in the accession process

❖ Revised WTO GPA – covering goods, services and

construction services

❖ Indonesia is an observer to the WTO GPA. ❖ Market access – list of entities: central government, sub-

central and SOEs

❖ Regional FTAs include GPA: NAFTA Chapter 10; CETA

Chapter 19; TPP Chapter 15

❖ EU is currently studying the Indonesian GP market and

barriers to market access for IEU-CEPA

“New” Issues – SOE SOEs

❖ GATT Article 17 – State Trading Enterprises ❖ Definition – “any corporate entity recognized by national

law as an enterprise, and in which the state exercises

• wnership, should be considered as an SOE.”

❖ SOEs in Canada: very few - EUD, Canada Post,

CBC/Radio Canada; SOEs in Indonesia: quite many: Telkom, Bank Mandiri, PLN, Sarinah, Garuda, etc.

❖ New FTAs include the SOE chapter – more disciplines for

SOEs – ensuring fair competition between private sector enterprises and SOEs

❖ Key provisions include: more transparency; non

discrimination; commercial consideration only; no commercial assistance (subsidies for example), etc.

Other “New” Negotiating Issues

❖ Labour ❖ Environment ❖ Gender equality ❖ Indigenous people ❖ SMEs ❖ Others???

Selecting/Prioritizing Negotiating Issues in Your Position Papers

• Identify and Prioritize the Key Issues

❖ There are many traditional and new negotiating

issues in FTAs – Issues are also different - selecting the right ones

 Some comprehensive business associations may

wish to cover most traditional and new issues

 Other sectoral business associations may wish to

select a few more relevant ones for their positions

• Determine/Assess Your Offensive or

Defensive Positions

❖ Depending on the interest of your members,

your positions could be offensive or defensive or mixed – an impact study is the key

Selecting/Prioritizing Negotiating Issues in Your Position Papers

• Do your homework first before drafting

your position papers

❖ Identify problems and opportunities for your

country, your sectors and your members

❖ Gather information on these problems and

• pportunities

❖ Consult your members and other stakeholders ❖ Obtain the negotiating status of the key issues ❖ Conduct the impact studies – positive or negative ❖ Conduct studies on your FTA partners –

estimating their positions and demands/requests

❖ Determine the goals, purpose and scopes of the

position papers

Selecting/Prioritizing Negotiating Issues in Your Position Papers

• Drafting Your Position Papers

❖ Determine the structure of your position papers ❖ Facts-based, action-oriented with practical

recommendations

❖ Conduct good studies on your FTA partners –

what they will request and what they can offer

❖ Estimate the potential zone for an agreement ❖ Make good arguments on behalf of your

members/sectors and your country

❖ Make good and realistic recommendations for

your trade negotiators

Q&A and Discussion Thank you for your participation.