WTO Goods Council Starts On Trade Facilitation Mandate; Textiles Coming Up Short

The WTO's Council for Trade in Goods (CTG) met on 23 and 24 May, where it discussed, inter alia, the work programme on trade facilitation (specifically Article X of GATT 1994), the implementation- related items on the textiles agreement, and the relevant preparations, in connection with paragraph 18 of China's Protocol of Accession, for the review of China's trade policies.

Trade facilitation

Paragraph 27 of the Doha Ministerial Declaration tasked the CTG to "review and as appropriate, clarify and improve relevant aspects of Articles V, VIII, and X of the GATT 1994 and identify the trade facilitation needs and priorities of Members [...]". It further noted that this review was to be undertaken in preparation for negotiations, to take place after the Fifth Ministerial (September 2003), "on the basis of a decision to be taken by explicit consensus" on modalities. The transparency issue of 'publication and administration of trade regulations', i.e. Article X of GATT 1994, was previously agreed to be the focus of the 23/24 May meeting, the first to deal with the substantive matters of the mandate.

Five papers have been submitted to date on Article X -- including ones from the EU (G/C/W/363), Japan (G/C/W/376), Canada, Korea, and the US (searchable at http://docsonline.wto.org). The first four papers generally called for a widening of the scope of information to be published, a consultation mechanism for affected parties prior to the finalisation of customs regulations, the legal right of appeal against customs decisions, a single inquiry point for trade-related information and expanded technical assistance to developing countries on the issue of trade facilitation. Small and medium enterprises (SMEs) were often pointed to as the main beneficiaries from the actions being proposed -- citing a decreased capacity to dedicate resources to finding such information (relative to larger multinationals). The US paper was an overview of its transparency mechanisms -- the Federal Register.

Brazil, in its intervention, commented that refraining from the abusive and protectionist use of trade instruments as well as completing the WTO harmonisation work programme on rules of origin (i.e. harmonising the diverging methodologies in use for calculating the origin of a good) could also be included in trade facilitation. It added that the best way to facilitate trade for developing countries was to eliminate trade barriers to their products. Speaking specifically to the EU paper, they noted that a sufficient case had not been made of Article X's inadequacy to warrant amending the provision.

Uruguay, Pakistan, Malaysia, India, Indonesia and Cuba stressed that this exercise was merely a review and not in fact negotiations -- which would only start after the 5th Ministerial "on the basis of a decision to be taken by explicit consensus" on modalities of negotiations (i.e. the framework for how negotiations will proceed).

Textile discussions moving slowly

On the item of implementation-related issues, Ambassador Supperamaniam, the Chair from Malaysia, noted that the exchange of views at the 13 May informal meeting was constructive. Furthermore, he pointed to his hope that greater detail could be had at the next informal, scheduled for 28 May.

A source close to the textile industry indicated his belief that the discussions, "at this time", were not moving very well. He noted that the US, the EU and Canada were showing little flexibility, based on the claim that they were implementing the textile agreement faithfully. While admitting that no light was currently shining at the end of the proverbial tunnel, the source nevertheless stressed that movement was still possible at upcoming informal meetings on the issue.

These informal meetings are being held to consider the proposals under para. 4.4 and 4.5 of the Decision on Implementation (see BRIDGES Weekly, 15 May 2002). The paragraphs deal with the use of the most favourable methodology for calculating the expansion of textile quotas for small suppliers and least-developed countries; and the advance expansion of quotas for developing countries. The Goods Council is to make recommendations to the General Council by 31 July for on how to proceed with the proposals.

China adamant not to expand paragraph 18 obligations

In the lead-up to the review of China's compliance with its WTO obligations -- mandated annually for the next 8 years under paragraph 18 of China's Protocol of Accession -- the US requested a timetable to allow sufficient time, prior to the review, for China to submit information and for written questions to be tabled. In response, China reiterated statements made most recently at the 3 May Subsidies Committee (see BRIDGES Weekly, 7 May 2002), that it could not assume obligations in addition to what is provided for under para. 18 and that they would reject any attempts to increase the scope. They added, however, that Members were welcome to raise questions well in advance of the review meeting.

Under paragraph 18 of China's Protocol of Accession, the CTG is to conduct a review of items relating to non-discrimination, export restrictions, state trading entities, and government procurement.

The next regular meeting of the Council for Trade in Goods is scheduled for 13 June, 2002.

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