LIBERALIZATION OF TRADE(WTO AGREEMENTS)

CONTENTS

1- Introduction

2- WTO agreement

3- Trade in services (GATS)

4- Dispute settlement

5- Review of maritime transport

6- Issues of GATS in maritime services

trade

1- INTRODUCTION

INTRODUCTIONLiberalization of trade

Liberalization of trade was the objective of Multilateral Trade Negotiations (MTN) in

successive ROUNDS since 1947 within the framework of GATT that led in 1995 to the

establishment of WTO

INTRODUCTIONGATT

• General Agreement on Tariffs and Trade

• Is not a single agreement

• It’s a compendium of agreements

INTRODUCTIONGATT rounds

• Geneva 1947• Annecy 1948• Torquay 1950• Geneva 1956• Dillon 1960-1961• Kennedy 1964-1967• Tokyo 1973-1979• Uruguay 1986-1994 (GATT1994)

INTRODUCTIONFuture rounds

• Objective: more liberalization through progressive rounds

• First such round within five years of WTO agreements entering into force

INTRODUCTIONWTO :The Organization

• Established in 1995 in a meeting in Marakesh• Headquarters in Geneva• It’s a forum in which Member countries meet to

negotiate and implement their MLT agreements• Latest set of such agreements concluded in GATT

rounds are referred to as WTO agreements

INTRODUCTIONWTO :The Agreements

Are grouped in 4 groups:• Trade in goods GATT 1994• Trade in services GATS• Trade-Related Intellectual

Property Rights TRIPS

• Other agreements

2- WTO AGREEMENTS

WTO AGREEMENTSUnderlying doctrines

1-Most Favoured Nation (MFN)

2-National Treatment (NT)

WTO AGREEMENTSMFN Principle

No discrimination between one trading partner (WTO Member) and another

• Deviations from MFN principle are possible through EXEMPTIONS in the members’ schedule

• Exemptions are possible only at the beginning• Exemptions after WTO comes into force will be through

a WAIVER process• Waiver process is very difficult as it requires 3/4 votes

of the council

WTO AGREEMENTSNational treatment

Treatment of (service) suppliers of a trading partner must not be less favourable than what is accorded to national (service) suppliers

WTO AGREEMENTSObligations

A contracting Member to WTO accepts to undertake:

• several obligations• Obligations are either GENERAL or SPECIFIC• Obligations concluded in Uruguay round are

called initial commitments• Initial commitments are supposed to increase in

successive future rounds

WTO AGREEMENTSGeneral obligations

• MFN

• Transparency

• Notification

• Flexibility for developing countries

• Regional integration

• Domestic legislation

• Monopolies and business practices

• Balance of payment provisions (BOP)

• Payments and transfers

• Exceptions

• etc

WTO AGREEMENTSSpecific obligations

• A member is bound to give treatment to other Members in accordance with the commitments undertaken

• Commitments are inscribed in tables called SCHEDULES

• Schedules are annexed to the respective WTOagreement

• Commitments are enforceable through a dispute settlement process

3- TRADE IN SERVICESThe General Agreement on Trade in

Services(GATS)

GENERAL AGREEMENT ON TRADE IN SERVICES

GATSA contracting member to GATS:• Accepts the general obligations on all its service sectors e.g.. MFN

obligation

• Identifies its service sectors to be liberalized by introducing them in the member’s SCHEDULE

• Entries to a member’s schedule determines the SPECIFIC COMMITMENTS of the member vis a vis a particular sector

• A sector not included in a member’s schedule means the country has taken no liberalization obligations vis a vis this sector

GATSObligations

Therefore GATS agreement is made up of:

• General obligations , basically MFN

• Specific commitments in particular sectors of services

GATSSchedules

• Schedule of a certain member is reached through a series of bilateral and plurilateral negotiations with trading partners

• It evolves through a pragmatic approach

GATScommitments

Commitments express the degree of limitations on liberalization. They may be:

• Extending to all sectors in the schedule(horizontal commitments)

• Applicable to all services of a specific sector (specific commitments)

• A sector entered in the schedule without commitments means that the member accepted full liberalization of this sector

GATSSchedules

Specific commitments are grouped in a members schedule to indicate limitations on:

• Market access

• National treatment

• Additional commitments

• The objective is balanced costs and benefits as well as reciprocity

GATSschedules

Schedules are in the form of a table as follows:

• First column(pillar): name of service

• Second column: limitations on market access

• Third column: limitations on national treatment

• Additional commitments

GATSmarket access

• General rule is free market access( full liberalization)• Exceptions: limitations ascribed in the schedule • Examples of limitations

1. Number of service suppliers

2. Total assets of service transactions

3. Total quantity of service outputs

4. Total number of natural persons ...

GATSSchedules

Commitments are expressed in the schedule in relation to four modes of service supply, namely:

• Cross border

• Consumption abroad

• Commercial presence

• Presence of natural persons

GATSSchedules

In the schedule, commitments as regards:

• Certain aspect(e.g. taxation)

• Of a specific sector

• And a certain mode of supply

Is inscribed as either:

• Non or,

• Unbound

GATSSchedules

• An unbound commitment means limitations are unbound i.e. no obligation as to liberalization

• A non commitment means no limitations exist i.e. full obligation for liberalization

GATSschedule modification

• Only after three years of its application• Notice of intention to be submitted three months in

advance for the council for trade and services• Council may request for negotiations for a

compensatory adjustment• If negotiations fail, affected member may refer to

arbitration

3- GATSmaritime services commitments

Twenty nine deputy members have commitments related to maritime services:

• Twenty one both freight and passengers

• Five only freight

• Three only passengers

3- GATSmaritime services commitments

profile

• Twenty six commitments in auxiliary services

• Seventeen commitments in port services

• Ten commitments in maintenance and repair

3- GATSClassification of services

Most frequently used classifications are:

• Central Product Classification(CPC)Provisional as appears in CPC and CPC rev. 1(GNS/w/120)

• Draft Schedule Classification

4- DISPUTE SETTLEMENT

DISPUTE SETTLEMENTPROCEDURE

• Consultation

• Panel

• Appeal

DISPUTE SETTLEMENT(DS)

Legislative authority: DSU

DS organs:

• Dispute settlement body(DSB)

• Panel

• Appellate body

• Concern councils

• Concern committees

DISPUTE SETTLEMENTAPPLICABILITY

• All WTO agreements

• In exceptions:1. Textile and clothing

2. Anti-dumping

3. Customs valuation

• Modifications:1. Services

2. Trips

• Additional provisions1. Some agreements on goods

DISPUTE SETTLEMENTCONSULTATION

• Addressee has to respond within ten days

• Consultation should start within thirty days

• Dispute has to be settled within sixty days

Otherwise, the aggrieved member has to resort to a panel

DISPUTE SETTLEMENTPANEL

DSB:

• Establish the panel of 3 or 5 qualified persons from a list

• Decides on its TOR

• Adapts the panel report within a period not less than 20 days and more than 60 days

Report:

• Inception (descriptive)

• Interim (findings and conclusions)

• Final

Duration

• 6 months (3 in case of emergency)

DISPUTE SETTLEMENTAPPEAL

• A decision should be reached within 60 days

• Appellate body made up of 7 members

• Its report to be adopted by DSB

• Duration 12 months from the establishment of the panel

DISPUTE SETTLEMENTIMPLEMENTATION OF RECOMMENDATIONS

• Member should inform DSB of its intention of implementation within 30 days

• Member should give a time table for implementation• Arbitration is resorted to if no agreement is reached

within 90 days• Implementation should not take more than 15 months

6- ISSUES OF GATS IN MARITIME SERVICES TRADE

MFN EXEMPTIONS

• MFN is a general obligation

• However, exemptions are allowed

• There are twenty six exemption lists in maritime transport services

• Exemptions are suspended till the next round of services negotiations

• Only fourteen MFN exemptions not suspended are those of members maintained specific commitments in the sector

• Four of the above cover measures under the UN code of conduct on liner conferences

MARITIME SERVICES

• Commitments as regards the first group of maritime services are related to market access

• Commitments as regards the second group are related to national treatment

• Commitments as regards the thirds group are scheduled under additional commitments

ISSUES FOR FUTURE NEGOTIATIONS

• Changes between CPC and CPC rev.1

• Need for a composite classification

• Commitments of other modes of transport

• Inclusion of other services

5- REVIEW OF MARITIME TRANSPORT