WTO Rules Group Builds Understanding, but Gaps Remain

4 November 2009

The WTO's Negotiating Group on Rules held informal open-ended talks from Monday to Friday of last week. Under the direction of the chair, Ambassador Guillermo Valles Galmés of Uruguay, delegates delved into technical questions on anti-dumping, countervailing duties, and fisheries disciplines, in many cases tackling issues on which they have long been divided.

Two bracketed issues on anti-dumping

On the first two days of the talks, the group took up two ‘bracketed' - or unresolved - issues related to anti-dumping.

The first issue concerns how to define the scope of the products to be investigated in anti-dumping enquiries (Article 5 of the WTO's Anti-Dumping Agreement, or ADA). For instance, if Country A were to accuse Country B of ‘dumping' - or selling at unfairly low prices - its pencils in Country A's home market, Country A would need to define exactly which pencil imports (All size pencils? With an eraser or without? Are coloured pencils included?) it thinks are being dumped. Several delegations supported including a provision on this issue, but others disagreed on the grounds that it would be unnecessary and create more problems than it would solve.

The second bracketed issue (Article 6 of the ADA) is related to requests by investigating authorities for companies to guarantee that their affiliate branches cooperate and provide information in anti-dumping investigations. Some delegations argued that such a provision is necessary, as companies may not always be able to force their affiliates to produce the requested data. Others, however, said that such a clause would make companies less likely to cooperate in the first place.

Both of the anti-dumping issues discussed remained unresolved at the close of the meeting.

‘Transposition' of CVD, ADA

On Wednesday, the group considered how to streamline two WTO agreements - the Agreement on Subsidies and Countervailing Measures (CVD) and the Anti-Dumping Agreement (ADA) - that have a significant amount of overlap.

The two agreements have distinctly different domains: The CVD disciplines the use of subsidies and regulates the actions that countries can take to counter the trade-distorting effects of other countries' subsidies. Meanwhile, the ADA dictates how governments can and cannot legally react when another country ‘dumps' (sells at unfairly low prices) its exports into the complainant country's domestic market.

While the two agreements govern different realms, they do have some important similarities. In many countries, a single law regulates both types of measures, and a single authority is responsible for investigating both types of complaints.

To help streamline the implementation of the two agreements, the Rules Group is working to ‘transpose' the legal texts. The group successfully completed its first full reading of the agreements at last week's meeting, and identified several areas that will require further discussion, one delegate said.

Fisheries disciplines under scrutiny

The Rules delegates turned their attention to fisheries disciplines on the final two days of their week-long session.

Members largely agreed that developing countries will need to demonstrate that they have effective fisheries management systems in place before they can become exempt from any bans on subsidies that the agreement enacts, a source reported. Despite the two days of discussions, the group was still unable to develop an explicit definition of what it means by the term ‘fisheries management'. However, one delegate noted that the discussions on this front were productive insofar as they allowed members to better understand each other's positions.

Delegates continue to disagree over how broad of a ban should be imposed on various fisheries subsidies. Members of the ‘Friends of Fish' group - a loose coalition of countries that includes Australia, Chile, Ecuador, New Zealand and the United States - have long supported a blanket ban with a list of specific negotiated exceptions. But other countries, notably Japan and South Korea, say that subsidy disciplines should be more narrowly targeted.

A delegate from Japan noted that a recent Japanese scientific study found that subsidies have no negative impact on fish stocks if an effective fisheries management system is in place. A South Korean representative spoke up to say that the fisheries text from 2007 is ‘unbalanced', as it includes too broad of a ban on subsidies. Seoul will soon propose new language to ‘revise and rebalance' the text, the delegate added.

The group also discussed how WTO's dispute settlement system might be adapted to mediate fisheries-related disputes. The members considered the notion of inviting professionals from the UN Food and Agricultural Organization or from regional fisheries management groups to provide expert advice in cases that come before the WTO's Dispute Settlement Body. But how that advice might be incorporated into a final ruling has yet to be decided.

Wrapping up the fisheries discussions, chair Valles Galmés noted that the back-and-forth between countries was useful, even though the delegations continued to disagree. The discussions helped provide more clarity on countries' differences, as well as why those differences exist, he noted. The discussion on fisheries management, especially, will help delegates imagine how they might be able to bridge the remaining gaps in the talks, the chair said, adding that this kind of exercise will help the group move forward in future sessions.

The Rules Group will hold its next meeting the week of 7 December. A senior officials meeting has been scheduled for 25 November.

ICTSD reporting.

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