WTO IN BRIEF

Volume 5

Number 23

19 June 2001

SHRIMP-TURTLE: WTO PANEL ALLOWS US TO UPHOLD IMPORT BAN. A WTO compliance panel in the shrimp-turtle dispute between the US and Malaysia -- re-established under Article 21.5 of the Dispute Settlement Understanding (DSU) to assess whether the US had complied with the Dispute Settlement Body (DSB)'s 6 November 1998 recommendations -- made public its 16 May report last week. In the report, the panel held that the US' continuation of the import ban on shrimp and shrimp products was justified under Article XX(g) of the GATT (see BRIDGES Weekly, 22 May 2001). By doing so, the panel rebutted Malaysia's allegation that the US had failed to comply with the recommendations and rulings of the DSB. The pnel highlighted both the good faith effort the US had made in order to conclude a regional sea turtle protection agreement, and the increased flexibility of the US' revised guidelines for the approval of foreign turtle protection schemes. However, the panel stressed that "the obligation borne by the US [to seek the conclusion of a sea turtle protection agreement] is a continuing one", so that the US is only "provisionally entitled to apply the implementing measure, which may be subject to further control under Article 21.5 of the DSU." The complete panel report is available at: http://www.wto.org/english/tratop_e/dispu_e/58rw_e.pdf. For background information on this dispute, see ICTSD's Executive Summary at: http://www.ictsd.org/Englihs/ExeSumm1.pdf.

WTO INVESTMENT WORKING GROUP CONVENES ON M&As, TECH TRANSFER, INCENTIVES. Meeting from 13-14 June, the WTO Working Group on Trade and Investment continued its mandate to assess the relationship between trade and investment. On substance, the Working Group examined four general themes: a note from the WTO Secretariat on balance of payment implications of mergers and acquisitions (WT/WGTI/W/103 -- available on the WTO website); a new position piece from India on the relationship between foreign direct investment (FDI) and technology transfer; investment incentives; and a new submission from the EC on technical assistance and capacity building India's submission notes that the WTO Membership does not completely appreciate the complex relationship between FDI and technology transfer and should therefore assess this linkage more fully. On the question of investment incentives, several countries, including Singapore and the US, argued that the Working Group was an inappropriate forum for discussing the incentive issue. In contrast, Hong Kong-China, Norway and Mexico argued that due to the many problems associated with investment incentives, they remain a very important issue and should continue to be discussed inside the Working Group. Trade officials emphasised that work carried out under the Working Group's mandate is separate from the General Council's preparatory process for the Doha Ministerial in which the topic of investment is also being discussed. ICTSD Internal Files.

WTO LINKS E-COMMERCE TO DEVELOPMENT. In a report last week on the WTO programme on e-commerce, WTO Director-General Mike Moore highlighted the development dimension of e-commerce. While the relevant rules for e- commerce continue to be widely debated by WTO's Members, Moore's report says that e-commerce should be covered by the General Agreement on Trade in Services (GATS) as a channel for retailing and wholesaling goods and services, or as a means of delivery of services in the form of digitised information. According to Moore, the WTO's work programme seeks to ensure that developing countries are not marginalised by a digital divide, which requires the liberalisation of trade on technological hardware and telecoms services, together with governmental or private initiatives to train personnel. In the run-up to a WTO General Council Meeting on Electronic Commerce held on 15 June, General Council Chairman Stuart Harbinson urged WTO Members to clarify their positions on cross-cutting issues relevant to e-commerce, including development-related ones such as participation of developing countries in e-commerce, access to infrastructure and technology, and market access for developing countries. "Electronic Commerce and Development," "US Pressures in WTO on E-Commerce", WASHINGTON TRADE DAILY, 13 June 2001; ICTSD Internal Files.