WTO Member Group Circulates Transparency Proposal, Eyeing Improved Notification Compliance
A group of WTO members has circulated a communication proposing that the General Council adopt a set of “procedures to enhance transparency and strengthen notification requirements under WTO agreements.” The proposal lays out a series of “administrative measures” that could apply to members that fall behind on submitting their notifications to the global trade club.
The document was submitted on behalf of Argentina, Costa Rica, the European Union, Japan, and the United States. US Ambassador to the WTO Dennis Shea and EU Ambassador to the EU Marc Vanheukelen had previewed their intentions of crafting this proposal at last month’s WTO Public Forum, naming it as one aspect of their efforts to support the modernisation of the global trade club. (See Bridges Weekly, 11 October 2018)
WTO members are due to discuss the communication, along with other topics, during a meeting of the organisation’s Goods Council, which is scheduled for 12-13 November. The US submitted a communication on the same subject one year ago, which was discussed in the same forum. (See Bridges Weekly, 9 November 2017)
Delays in notifications have long been raised by WTO members as posing systemic risks to the organisation, complicating members’ abilities to negotiate new disciplines that accurately account for current trade realities, along with having implications for trade monitoring exercises and dispute settlement. For example, the issue has come up repeatedly in the WTO’s agriculture negotiations, given the challenges in assessing members’ actual support levels, along with what types of support they provide.
Notification requirements are also one of the topics under discussion in the WTO’s negotiations on disciplines for harmful fisheries subsidies, and the communication refers to those talks and suggests that the “rules negotiating group” working on this issue “develop enhanced notification procedures.”
Compliance processes and reviews
The communication outlines a multi-pronged process that proponents say could help improve WTO members’ compliance with their notification obligations. These include, for example, giving specific directions to the Working Group on Notification Obligations and Procedures on updating the relevant WTO bodies on members’ compliance, as well as tasking that group with providing recommendations for improvements.
This includes, for example, working with the WTO Institute for Training and Technical Cooperation (ITTC) to see where members may need technical assistance on this front, along with updating the Goods Council regularly on their work.
Other provisions focused on improving compliance include making changes to the WTO’s system for trade policy reviews, which all members must undergo at regular intervals. Namely, the communication calls for “[instructing] the Trade Policy Review Body to ensure that beginning in 2019 all trade policy reviews include a specific, standardised focus on the member’s compliance with its notification obligations.”
The communication also refers to the practice of counter-notifications, a practice already allowed under WTO rules where a member can submit a notification that challenges the data that another member has provided. The US, in a notable first, submitted in May a counter-notification under the WTO’s Agreement on Agriculture regarding India’s domestic agricultural support for the marketing years 2010-2011 to 2013-2014. (See Bridges Weekly, 21 June 2018)
Under the proposal’s terms, members who fall behind on their notification obligations would be “encouraged to submit to the relevant committee by [x date] and by [x date] of each subsequent year an explanation for the delay, the anticipated timeframe for its notification, and any elements of a partial notification that a member can produce to limit any delay in transparency.”
The communication also makes a distinction between notifications under the WTO’s Agreement on Agriculture and the various other WTO agreements which feature notification requirements, crediting this to “the particular importance members attach to the WTO’s work to reform agriculture,” and provides additional suggestions on how the organisation’s dedicated committee on farm trade can modify its own requirements in this area.
Developing country considerations
The communication makes particular reference to the challenges that developing country members may face when trying to keep pace with the demands of their notification obligations, and sets out a series of provisions involving possible assistance and capacity-building support.
Specifically, the communication envisions this process as a discussion between the member involved and the WTO secretariat, which would look into issues such as what type of support can be offered. Those countries would also be urged to update both the above-mentioned working group and the “relevant committee” should they fall behind on notifications due to needing additional support.
Penalties for non-compliance
Continued non-compliance with notification obligations would come with penalties, which would increase over time. The communication describes these as “administrative measures,” though exceptions would be made for members “that have submitted information on the assistance and support for capacity building that the member requires.”
For example, after the first year from when a notification deadline has lapsed, the WTO member in question would lose the right for their representatives to “preside over WTO bodies,” along with receiving answers to questions posed in WTO Trade Policy Reviews, as well as facing additional requirements for their budgetary contributions to the organisation. There would also be additional reporting specific to that member at both the Goods Council and General Council.
After two years have passed, these penalties would evolve, with the member in question being designated as an “inactive member” and acknowledged as such in WTO meetings. It would place the member’s speaking rights after that of regular members but before that of observers.