decision making in wto era

7/28/2019 Decision Making in WTO Era

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Decision Making in WTO Era



WTO GENESIS

The General Agreement on Trade and Tariff (GATT) came

into existence in 1947

It sought substantial reduction in tariff and other barriers to

trade and to eliminate discriminatory treatment ininternational commerce.

India signatory to GATT 1947 along with twenty two other

countries

Eight rounds of negotiations had taken place during five

decades of its existence



Geneva Round 1947

Annecy Round 1949

Torquay Round 1951

Geneva Round 1956

Dhillon1960-61

Kennedy

1964-67

Tokyo

1973-79

UR

1986-93

•WTO establishment.

•Agriculture

•Textiles and Clothing•TRIPS

•Services

•Dispute Settlement body



1. Australia 13 Lebanon

2.

Belgium 14 Luxembourg 3. Brazil 15 The Netherlands

4. Burma (now Myanmar) 16 New Zealand

5. Canada 17 Norway

6.

Ceylon (now Sri Lanka) 18 Pakistan7. Chile, 19 Zimbabwe

8. China

9. Cuba 20 Syria

10.

Czechoslovakia 21 South Africa11. France 22 United Kingdom

12. India 23 United States



Observer Status

1. Afghanistan2. Algeria

3. Belarus

4. Bhutan

5. Bosnia

6. Ethipoia

7. Iran

8. Iraq

9. Kazakastan

10. Lao PDR11. Libya

12. Russian Federation13. Saudi Arabia

14. Serbia

15. Seychelles

16. Sudan

17. Tazakistan18. Tonga

19. Ukraine

20. Uzbekistan

21. Yemen

“Apart from Vatican, observer nations must start the process of becoming

members within five years of becoming observers.”



Application Working PartyEstablished

Number of Working PartyMeetings *

DraftWorkingPartyReport **

Afghanistan Nov 2004 Dec 2004

Algeria Jun 1987 Jun 1987 9 Jun 2006

Andorra Jul 1997 Oct 1997 1

Azerbaijan Jun 1997 Jul 1997 4

Bahamas May 2001 Jul 2001

Belarus Sep 1993 Oct 1993 7 Apr 2005

(FS) Bhutan Sep 1999 Oct 1999 3 Aug 2005 (FS)

Bosnia and Herzegovina May 1999 Jul 1999 2

Cape Verde Nov 1999 Jul 2000 3 Nov 2005

Ethiopia Jan 2003 Feb 2003

Iran Jul 1996 May 2005

Iraq Sep 2004 Dec 2004

Kazakhstan Jan 1996 Feb 1996 9 Sep 2006

Lao People's DemocraticRepublic

Jul 1997 Feb 1998 2

Lebanese Republic Jan 1999 Apr 1999 4 Dec 2005 (FS)

Libyan Arab Jamahiriya Jun 2004 Jul 2004

http://www.wto.org/english/thewto_e/acc_e/status_e.htm


http://www.wto.org/english/thewto_e/acc_e/a1_afghanistan_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_algerie_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_andorre_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_azerbaidjan_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_bahamas_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_belarus_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_bhoutan_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_bosnie_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_capvert_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_ethiopia_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_iran_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_iraq_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_kazakhstan_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_laos_e.htm


http://www.wto.org/english/thewto_e/acc_e/a1_liban_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_libyan_arab_jamahiriya_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_libyan_arab_jamahiriya_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_liban_e.htm



http://www.wto.org/english/thewto_e/acc_e/a1_kazakhstan_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_iraq_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_iran_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_ethiopia_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_capvert_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_bosnie_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_bhoutan_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_belarus_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_bahamas_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_azerbaidjan_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_andorre_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_algerie_e.htm

http://www.wto.org/english/thewto_e/acc_e/a1_afghanistan_e.htm





WTO Objectives

WTO Came into existence for the purpose of :

Transparent, free and rule-based trading system

Provide common institutional framework for conduct of

trade relations among members

Facilitate the implementation, administration andoperation of Multilateral Trade Agreements

Rules and Procedures Governing Dispute Settlement

Trade Policy Review Mechanism

Concern for LDCs and NFIDCs

Concern on Non-trade issues such as Food Security,

environment, health, etc.



BASIC PRINCIPLES

1. NON-DISCRIMINATION

MFN (Most Favored Nation)

Members are bound to grant to the products of other

members treatment not less favorable than that

accorded to the products of any other country.

National Treatment

Once goods have cleared customs, imported goods mustbe treated no less favorably than the equivalent

domestically produced goods.



2. PREDICTABLE AND GROWING ACCESS TO THE MARKETS

Prohibition of Quantitative Restrictions

Binding of Tariffs

Bound Tariffs cannot be increased

Progressive reduction in the protection. Exceptions: Safeguards, BOP.

3. FAIR COMPETITION

4. TRANSPARENCY

5. ENCOURAGE DEVELOPMENT



Annex 1-A: Agreement on Trade in Goods

1. Agreement on Agriculture

2. Agreement on SPS Measures

3. Agreement on Textiles & Clothing

4. Agreement on Technical Barriers to Trade

5. Agreement on Trade related Investment Measures

6. Agreement on Pre Shipment Inspection

7. Agreement on Rules of Origin

8. Agreement on Import Licensing procedure

9. Agreement on SCM

10. Agreement on Safeguards



http://window.opener.immdownload%28%27j0285410%27%2C%2713%27%2Cescape%28window.opener.content.location.href%29%2C%271%27%29/



• WTO has defined services into 12 sector further divided into155 sectors.

1. Business (professional and computer)

2. Communication

3. Construction and Engineering services

4. Distribution services5. Educational services

6. Environmental services

7. Financial services

8. Health services

9. Tourism services

10. Recreational, cultural and sporting services11. Transport services.

12. Other services.

Service Sectors



Modes of Services

• GATS applies to four modes:

• (a) Cross border movement of service suppliers

• (b) Establishment of commercial presence in the

• country where service is provided.• (c) Temporary movement of natural persons to

• another country to provide services there.

• (d) Movement of consumers to the country of

•

importation.



Forms of IPR

Trademarks or Brands

Copyright

Trade Secrets

Patents

Designs

Geographical Indications

Plant Varieties



Developed Developing

Bands Reduction Bands Reduction

0-20 50%

Minimum avg

cut: 54%*

0-30 33.33%

Maximum avg cut:

less than 36%*

20-50 57% 30-80 38.00 %

50-75 64% 80-130 42.67 %

> 75 66-73% >130 44-48 %

Selection of Market on the basis ofTariff Reduction Schedule



Members will have the flexibility to Self-designate an Appropriate number of tariff lines asSpecial Products guided by indicators based onthe criteria of food security, livelihood securityand rural development. Product designated as SPswould be eligible for more flexible treatment, theexact nature of which would be decided duringthe on going negotiations.…….

Special Product: Hnkg declaration



10,000 tons

Import duty rates Tariff Rate Quota

4%

< 10,000 tons

400%



37 Countries who have TRQs

• Australia (2)

• Barbados (36)• Brazil (2)

• Bulgaria (73)

• Canada (21)

• Colombia (67)

• Costa Rica (27)

• Czech Republic (24)

• Ecuador (14)

• El Salvador (11)

• EU (87)

• Guatemala (22)

• Hungary (70)

• Iceland (90)

• Indonesia (2)

• Israel (12)

• Japan (20)

• Korea (67)

• Latvia (4)• Malaysia (19)

• Mexico (11)

• Morocco (16)

• New Zealand (3)

• Nicaragua (9)• Norway (232)

• Panama (19)• Philippines (14)

• Poland (109)

• Romania (12)

• Slovak Republic (24)• Slovenia (20)

• South Africa (53)

• Switzerland (28)

• Thailand (23)

• Tunisia (13)

• United States (54)

• Venezuela (61)



Tariff Escalation

Sl no. Country

Product Tariff (percent)

Product Tariff (percent)

1 EU Milk 113 Cheese 120

Grapes 18 Grape Juice 215

Apples 11 Apple Juice 63

2 Japan Milk 280 Yoghurt 370

Pineapple 17 Pineapple Juice 30


Apples 17 Apple Juice 34

3 USA Milk 66 Milk in powder 179

Cheese 133

Oranges 4 Orange Juice 31

Pineapple 3 Pineapple Juice 12


Basic Product Processed Product



Tariff Escalation

• Tariff escalation occurs when the tariff applied

on a product “chain” rises as goods undergofurther processing.

• This results in a higher effective protection forthe processing industry that otherwise would

be the case.

• In agricultural sector these levels will reach onan average 17% in EU, 27% in Japan and 9% in

US.



Special Agricultural Safeguard

•

Removal of Quantitative restrictions may result into sudden surge inimport causing injury to the domestic industry.

SSG allows imposition of additional tariff in case of :

• Volume Trigger : specified rapid surge in imports.Higher duty is appliedonly till the end of the specific year.

• Price Trigger : import price below specified reference price.Additionalduties can be imposed only on shipment concerned and on the products towhich tariffied rates apply.

• The right to make use of the SSG provision has been reserved by 38 WTOMembers, and for a limited number of products in each case. As many of

the developing countries did not tariffy, offering “ceiling bindings”instead, few of them have access to this provision.



WTO Members eligible to use the Special Agricultural Safeguard

Percenta e of a riculturaltariff lines covered b SSG*

Developed

Canada 10Czech 13EC (12) 31Hun ar 60

Iceland 40a an 12

Norwa 49Poland 66

Romania 7Slovak 13Switzerland 59

United States 9Developing

Colombia 27

Costa Rica 13El Salvador 10Mexico 29

Namibia 39

Phili ines 13South Africa 39

Swaziland 39

Thailand 11Venezuela 31

Member

Source: WTO document, G/AG/NG/S/9, 6 June 2000, Table 1.* Number of agricultural tariff lines covered by the SSG as a pro



Price elasticity of demand

http://en.wikipedia.org/wiki/File:Price_elasticity_of_demand.svg



any increase in the price, no matter how small,

will cause demand for the good to drop to zero.

changes in the price do not affect the

quantity demanded for the good.



• Amber Box:Must be reducedover time.

• Blue Box:Allowed for thetime being.

• Green Box:Allowed.

Domestic Support policies ….



Green Box Policies

•Research, including research in connection with environmental

programmes, and research programmes relating to particularproducts

•Extension and advisory services, including the provision ofmeans to facilitate the transfer of information and the results ofresearch to producers and consumers,

•Food security stocks (and targeted food security),•Disaster payments

Green Box policies are assumed to affect trade minimally, and

include support such as :



Blue Box Policies

Direct payments to farmers are exempt from thereduction commitments if:

•Such payments are decoupled

•such payments are based on fixed area and yield;or•such payments are made on 85 percent or less ofthe base level of production; or•livestock payments are made on a fixed number ofhead.

•These are called the „BLUE BOX‟ Subsidies.



Amber Box Policies

Total AMS has two components

• Product Specific AMS: Total level of support

provided for each basic agricultural product.

• Non Product Specific AMS: Total level of supportdirected at the agricultural sector as a whole.



• Market price support for a product = (administered price at the farm gate - fixedexternal reference price) x eligible production

– Where fixed external reference price = c.i.f. unit value for 1986-88

eligible production = quantity of production receiving the administered price.

• Product-specific AMS = sum of all positive support to a basic product (market price

support + other types of support not dependent on price gap)

• Product-specific AMS should be included in Total AMS only if it exceeds the de minimis level (5% for developed countries or 10% for developing countries), i.e. if (product-specific AMS/market value of total output of the product)

x 100 is greater than 5 (or 10 in the case of developing countries)

• Non-product-specific AMS = sum of all positive non-product specific AMS

• Non-product specific AMS should be included in Total AMS only if it exceeds the de minimis level (5% for developed countries or 10% for developing countries), i.e. if (non-product specific AMS/market value of total output of the

product) x 100 is greater than 5 or 10 respectively.

• Total AMS = (product-specific AMS exceeding de minimis + non-product specificAMS exceeding de minimis)

Calculation of AMS……..

C l l ti f th t t t l AMS



Calculation of the current total AMS

Member X (developed country), year Y

Wheat: • Intervention price for wheat = $255 per tonne • Fixed external reference price (world market

price) = $110 per tonne • Domestic production of wheat = 2,000,000 mt • Value of wheat production = $510,000,000 • Wheat AMS (AMS 1)• ($255–$110) x 2,000,000 tonnes =

$290,000,000 • (de minimis level=$25,500,000)

Barley• Deficiency payments for barley = $3,000,000 • Value of barley production = $100,000,000 •

Barley AMS (AMS 2) = $3,000,000 (de minimis level=$5,000,000)

Oilseeds:> Deficiency payments for oilseeds =$13,000,000

> Fertilizer subsidy = $1,000,000> Value of oilseeds production =

$250,000,000> Oilseeds AMS (AMS 3) = $14,000,000(de minimis level=$12,500,000)

Support not specific to products> Generally available interest rate subsidy = $

4,000,000Value of total agricultural production =

$860,000,000> Non-product-specific AMS (AMS 4) =

$4,000,000de minimis level=$43,000,000

Current total AMS (AMS 1 + AMS 3) =$304,000,000



%

20091947

?



Two Way Dilemma

How do you ensure that the country’s

consumers are being supplied

food safe to eat?

How can you ensure strict health &

safety regulations are not being used

as an excuse for protecting

domestic producers?

WTO Agreement on Sanitary and Phyto Sanitary MeasuresTO Agreement on Sanitary and Phyto Sanitary Measures



SPS or TBT ?

human or animal health from

food-borne risks

human health from animal- or

plant-carried diseases

animals and plants from pests

or diseases

examples:

pesticide residues

food additives

human disease control

(unless it’s food safety)

nutritional claims

food packaging and quality

examples:

labelling (unless related

to food safety)

pesticide handling

seat belts

SPS Measures TBT Measures



No unjustifiable discrimination

– between Members with similar conditions

–

between own territory and other Members

Non-discrimination Article 2.3

SPS permits Members to impose different sanitary andphytosanitary requirements on food, animal or plantproducts sources from different countries, provided that

they "do not arbitrarily or unjustifiably discriminate between countries where identical or similar conditionsprevail".

E i l



Equivalence

Members shall

Accept SPS measures of other Members as equivalent

If the exporting country objectively demonstrates

that its measures achieve the same ALOP as the

importing country



Disease free areas Article 6

• Adaptation of SPS measures to regional conditions, including pest- ordisease- free areas, differing climatic conditions & different pest or diseases or

food safety conditions so as to lead to the development/imposition of differentSPS requirements

• Exporter to demonstrate (reasonable access to be given for inspection/testing)



TransparencyArticle 7 & Annex B

Members shallestablish an Enquiry Point

AND

designate a Notification Authority

notify other Members of new or changedSPS regulations when

no international standard existsOR

the new regulation is different than the

international standard

regulation may

have significant

effect on trade

AND



Transparency timeline

1. Drafting of the regulation

2. Publication of a notice

3. Notification to other Members

4. Draft text upon request (or website)

5. Receive & discuss comments

7. Adoption of the regulation

8. Publication of the regulation

. . . T

i m e . . .

9. Entry into force of the regulation Min.6 months

Min.60 days

6. End of comment period



Understanding Technical regulations

Incidence of product withdrawals



Rapid Alert Notifications from EU FOR Indian Products



Traceability Requirements



Strict Packaging requirement

b l



Strict Labeling Requirements

• A large amount of information has to be provided on the labelin both English & Chinese.

• The establishment number should be printed on the inner poly

liner, poly bag, or vacuum bag.• In the case of Alcohol & Pre-packaged food

– Labeling should be in Chinese.

– Specific font sizes have to be maintained.

•

In the case of milk & milk products – Labeling should be in Chinese.

– Specific background colors have also been mentioned.



Few examples….



Let’s see what Pakistan has to ask for?



EU Directive on packaging

and packaging waste 94/62/EC

• Volume and weight of the packaging shall be limited to the

minimum amount to maintain the necessary level of safety,

hygiene and acceptance for the packed product and for the

consumer.

•

Packaging shall be designed, produced and commercialised insuch a way as to permit its re-use or recovery, including recycling,

and to minimise the environmental impact when packaging waste

is disposed of.

• Packaging shall be manufactured in such a way that the presence

of noxious and other hazardous substances and materials isminimised with regard to the presence in emissions, ash or

leachate, when packaging is incinerated or landfilled.



Ecolabelling

Aim: – To provide consumers with a choice in buying products which

have been designed, produced and packaged, and which can be

disposed of at the end of their useful life, in an environmentally

sound way.

Criteria: – ecolabelling schemes are generally based on the Life Cycle

Assessment. The environmental impact of the product is assessed

throughout the entire life cycle of the product.



Food Miles

Food transported across the world burns up a

lot of fossil fuel and contributes to globalwarming→ consumers are becomingconscious and need to know nr. of milesfrom food to plate→ shorter shippingdistance becomes a competitive advantage

• www.organiclinker.com/food-miles.cfm (food mile calculator)

http://www.organiclinker.com/food-miles.cfm






Fair Trade standard

Standard includes minimum requirements and progressiverequirements:

• Generic fair trade standards

– Social development chapter (incl. democracy, participation,

transparency) – Economic development chapter (incl. Fairtrade premium, export

ability, economic strengthening of the organisation)

– Environmental development chapter

– Standards on labour conditions (incl. Forced labour, child labour,freedom of association, occupational health and safety)

• Product specific standards – (e.g. varieties, quality grades)

• Trade standards

– (long term relationships, pre-financing, credit, pricing)



• Max Havelaar label operational in

14 European countries and 3

countries outside• Transfair label operational in

Austria, Germany, Italy, USA,

Canada, Japan

Different labels



Product safety

Manufactured products• CE Marking [compulsory to a range of

products and hazards, incl. e.g.

machinery, toys, protective wear,

electrical appliances, pressure vessels.Full list is mentioned under the New

Approach Directive] Indicates that the product conforms to the European

applicable and legal demands in terms of safety, health andconsumer protection



Product safety

CE marking• EU Directives (per product group) describe the essential

requirements (laid down in norms as defined by CEN,CENELEC or ETSI), which differ as per the safety riskinvolved

• From self-declaration by the manufacturer to testing andverification by testing institutes (notified bodies)

• http://www.newapproach.org/

– Product overview, directives with full legal texts andapplicable standards (EN norms)

– Safety of toys; Directive 88/378/EEC

http://www.newapproach.org/

http://www.newapproach.org/



Textile Labelling

• Directive 2008/121/EC

• All textile products must carry a labelwhich indicates the fibre content on theproduct

• A textile product consisting of two or morefibres must be marked + %

• Fibre marking in % order



Organic labeling

• Regulated through EU regulation2092/91 and 1788/2001

• To label a product as organic a

minimum of 95% of the ingredientshave to be produced by organicmethods

• Inspections of final product are notsufficient (inspections during

production process)• Conversion period of 2 year• Certification through accredited bodies

(e.g. Skal, IMO)

Tariff and Non Tariff barriers For Herbal

http://altnature.com/Herbs2003/pages/soy0803C.html

http://altnature.com/Herbs2003/pages/butterflyweed0449.html



MFNrange NTM% NTM Description

Switzerland 0-0 50% Labelling requirement

Japan 0-10 8.60%

Product ch.requirement to protecthuman health

USA 0-6 60% Authorization to protect plant health

exports

http://altnature.com/Herbs2003/pages/soy0803C.html

http://altnature.com/Herbs2003/pages/butterflyweed0449.html



Internet adresses

•www.eurep.org (EUREPGAP)

• www.globalgap.org (GLOBALGAP)

• www.brc.org.uk (BRC)

• www.codexalimentarius.net

• http://eur-lex.europa.eu (EU legislation)

• http://exporthelp.europa.eu (EU Export Helpdesk)• www.foodlaw.rdg.ac.uk/label (UK regulations guide)

• www.cbi.nl/accessguide

• www.sa-intl.org (Social Accountability International)

• www.iso.ch (International Standards Organisation

• www.flo-cert.net (FLO Fair Trade Label Certification)

• www.intracen.org/ep (ITC Packaging resource)

• http://ec.europa.eu/sanco_pesticides/public/index.cfm (Pesticide ResidueLevel Database)



Tamanna Chaturvedi

[email protected]

+91-11-26967558

mailto:[email protected]

mailto:[email protected]

decision making in wto era

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