TRADE FACILITATION TALKS CONTINUING DESPITE IMPASSE ELSEWHERE

The WTO negotiations on trade facilitation continue to be a "bright spot" in the stricken Doha Round talks, said the chair of the negotiating group after informal meetings on 10-11 July. Sources say that in spite of the deadlock on farm and manufactureds trade, it was 'business as usual' as Members actively discussed the potential contents of a future agreement on simplifying customs procedures and cutting trade-related red tape. Delegates report that they are working with each other to combine similar proposals into draft articles, a sign of constructive cooperation.

In the trade facilitation talks, Members are supposed to clarify three articles of the General Agreement on Tariffs and Trade (GATT) 1994: freedom of transit for goods from other Member states (Article V), trade-related fees and formalities (Article VIII), and transparency in the regulation and administration of trade regulations (Article X). Notably, the mandate specifies that developing and least-developed countries will not be obliged to implement future trade facilitation obligations unless they receive the technical assistance necessary to do so.

Multi-stage implementation process discussed

How to go about identifying such needs and providing technical assistance have emerged as a significant issue in the negotiations, and were the focus of much of the discussions during the recent meeting.

Canada, Chile, China, the EU, Guatemala, Japan, Mexico, Pakistan, Paraguay, and Switzerland tabled an informal paper (JOB(06)/221) proposing draft text for a multi-stage process through which developing countries would identify obligations that would be difficult to implement, develop plans for any necessary technical assistance and capacity-building, receive such support, and finally become responsible for following those disciplines.

Based in part on a June submission, the paper would have developing countries notify the WTO of any trade facilitation obligations that they would need additional time or technical assistance to implement, after carrying out a 'capacity self-assessment' (see BRIDGES Weekly, 14 June 2006). Developing countries would not have to implement obligations requiring additional time until the end of the period specified in their notification.

For measures requiring technical assistance, the proposal would have each developing country formulate a 'capacity-building plan' in cooperation with donors and international organisations, and notify it along with specific implementation periods. At the end of the implementation period for such a plan, it would have to verify whether it had indeed acquired the capacity to implement a particular obligation, and, if so, notify its newly-acquired ability to the WTO. Following this, it would become subject to legal challenge on the basis of the commitments in question. Obligations would also become applicable if Members fail to notify capacity acquisition the six months following the deadline for doing so.

If a Member feels that it has not entirely acquired the capacity, both it and donor countries involved will have to report to the future WTO Committee on Trade Facilitation along with recommendations. The committee will determine how to proceed "on a case-by-case basis."

The paper also set out a series of draft articles containing guidelines for technical assistance and capacity-building activities. These include following international best practices for the delivery of development assistance set out in the 2005 Paris Declaration on Aid Effectiveness, which covers issues such as ownership, results, and mutual accountability. Donor and recipient countries would have to designate 'focal points' to coordinate implementation, and create "structures such as round tables and consultative groups to coordinate and monitor implementation activities." Members were also encouraged to consider supporting South-South technical assistance and capacity building.

Notably, the proposal called on Members to "operate, without the creation of a new body outside the WTO, a joint platform on technical assistance and capacity building" as part of the work of the Committee on Trade Facilitation. This 'platform' would liaise with existing coordination mechanisms for trade-related technical assistance, as well as with the private sector, to support the implementation of the trade facilitation agreement. The 'platform' would also help developing countries interact with donors to put together their capacity building plans.

Sources report that the paper was largely well received. A 'core group' of some Southeast Asian, African, and Caribbean countries that have been particularly wary of taking on new, difficult-to-implement commitments did, however, express some wariness about the approach.

One trade diplomat said that in spite of the generally warm reception for the paper, several issues need to be resolved for Members to agree on specific commitments for technical assistance and capacity building.

Chair asks Members what they want for end-July

Several other papers were also tabled during the recent session, often refining already-proposed reforms to all three of the GATT articles that need to be clarified. Among them was a submission from Barbados, Fiji, Papua New Guinea, and the Solomon Islands (TN/TF/W/129) that called for allowing developing countries belonging to customs unions or free trade agreements to set up regional -- as opposed to national -- 'enquiry points' to provide information on trade-related procedures. They suggested that this could lower the costs of setting up such offices. Other proposals dealt with issues including the standardisation of documentation requirements and trade-related fees.

Generally, the main difference among Members is that some would like to see even stronger obligations, while others complain that existing proposals are already too burdensome to implement. The least-developed country (LDC) group is particularly concerned about the costs entailed by the different commitments that have been proposed.

At the end of the meeting, Chair Tony Miller (Hong Kong) asked delegates to reflect on what they would like him to submit to the General Council at the end of July. In principle, Members had been aiming to come up with a first comprehensive draft agreement by that time.

One trade diplomat suggested that the WTO Secretariat's compilation of all of the trade facilitation proposals made thus far could serve as the basis for developing an eventual draft agreement. Another cautioned that Members are still ironing out the details of some concepts that have been put forward in the talks, as a result of which draft text for related provisions remains a step away.

The next meeting of the Negotiating Group on Trade Facilitation is scheduled for 24-26 July. The General Council is set to meet on 27-28 July.

ICTSD reporting.