WTO In Brief

20 December 2006

MEMBERS APPROVE TRANSPARENCY MECHANISM FOR FTAs

In a rare instance of consensus in the troubled Doha Round negotiations, WTO Members voted on 14 December to endorse a new transparency mechanism for scrutinising each other's bilateral and regional free-trade agreements. They will now be required to notify the WTO whenever they launch FTA negotiations or conclude accords.

The text of the agreement (TN/RL/18) had been finalised in July, in the Negotiating Group on Rules (see BRIDGES Weekly, 5 July 2006). At the General Council meeting, Members decided to adopt it on a 'provisional basis.' This means that they will implement the decision, see how it functions, and determine whether they want any modifications. In theory, it should be replaced by a permanent mechanism as part of an eventual Doha Round agreement.

Under the mechanism, as soon as countries ratify an FTA, they will have to submit to the WTO Secretariat the full text of the agreement along with the schedules detailing the specific liberalisation commitments made therein. The Secretariat will use this to prepare a "factual presentation" on each accord to be made public and discussed by Members in the Committee on Regional Trade Agreements. FTAs exclusively among developing countries will be looked at in the Committee on Trade and Development.

At a press conference the following day, WTO Director-General Pascal Lamy pointed to the complex and growing array of bilateral trade accords, and said that with the adoption of the transparency mechanism, "this hazy situation... will now be considerably clearer." He described the agreement as a sign that "even if we have quite a bit of turbulence on the overall negotiation we can still move forward step-by-step on issues of very important systemic consequences."

At the same meeting, Members also agreed to a proposal from Brazil and India (WT/GC/W/574) to consider whether to develop a comparable transparency mechanism for examining unilateral trade preference schemes. They instructed the Committee on Trade and Development to look into the matter and report back to the General Council within six months.

ICTSD reporting; "General Council establishes transparency mechanism for regional trade agreements," WTO NEWS, 15 December 2006.

ENVIRONMENT NEGOTIATIONS LOW ON PRIORITY LIST OF WTO MEMBERS

Doha Round environment Chair Ambassador Toufiq Ali (Bangladesh) expressed concern about the slow progress of the talks at a 19 December informal meeting, after Members used the first gathering of the negotiating group since the July suspension largely to restate their positions.

With regard to the Doha mandate to expedite trade liberalisation for 'environmental goods and services', some countries such as India, Egypt, Thailand, Brazil and Chile proposed that Members should work on a compromise between two main approaches proposed for doing so. The so-called 'list' approach would identify specific goods and earmark them for liberalisation; the 'project' approach would temporarily liberalise trade in environmental goods and services used in approved environmental projects. These countries, which favour the latter approach, added that they would elaborate on how to operationalise it within the WTO system (see BRIDGES Weekly, 14 July 2006).

On the other side, countries, such as Canada, Korea and Japan, which favour the 'list' approach, proposed to shorten the potential environmental goods lists put forward by nine Members (and compiled into an informal document by the WTO Secretariat in November 2005, TN/TE/W/63), which they suggested could enable negotiators to reach agreement.

To help move the negotiations forward, the chair suggested holding informal consultations to discuss technical issues related to environmental goods, such as special & differential treatment and non-tariff barriers. He also proposed informal talks on other aspects of the trade and environment mandate, including information exchange between the WTO and secretariats of multilateral environmental agreements (MEAs) and criteria for observer status.

In a related development, EU Trade Commissioner Peter Mandelson on 18 December called for eliminating tariffs on climate-change related goods such as renewable energy technology, saying that this would help combat global warming and encourage investment in further innovation.

ICTSD reporting.

CONSULTATIONS LAUNCHED IN EU-ECUADOR BANANA DISPUTE

The EU and Ecuador on 14 December started WTO consultations in an attempt to resolve their decade-long dispute over trade in bananas. During these discussions, the first step in WTO dispute settlement procedures, They will examine Ecuador's claim that the EU's banana import regime is discriminatory, and in violation of past WTO rulings.

Sources report that the first consultation was attended by high-level officials, and conducted in a friendly manner. Both sides said that they wished to resolve the matter swiftly and amicably, and without having to go to formal adjudication.

The banana import rules in question are the EU's 176 euro per tonne duty on bananas, along with a 750,000 tonne duty-free quota for bananas from African, Caribbean, and Pacific (ACP) countries, mostly former colonies (see BRIDGES Weekly, 22 November, 2006).

Several banana producing countries have now filed to join the consultations, following Colombia's 30 November request to do so (see BRIDGES Weekly, 6 December 2006). To date, they include Jamaica, Cameroon, Dominica, Cote d'Ivoire, St. Lucia, Saint Vincent and the Grenadines, Suriname, Belize, Panama and Dominican Republic. The US, home to major banana companies, has also joined the case.

On the other hand, some other banana producers have not sought to join the consultations, notably Costa Rica, a past participant in the dispute with the EU. Trade observers speculate that its reluctance could be linked to the fact that it has seen a significant increase in its share of the EU banana market since Brussels introduced the new import regime at the start of 2006.

The next meeting between the parties is expected to be convened early next year.

ICTSD reporting.  

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20 December 2006
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