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Workshop on WTO Accession UNDP/UNCTAD
Goods Commitments
Belarus, October 2008
United Nations Conference on Trade and DevelopmentUnited Nations Conference on Trade and Development
Ralf PetersTrade Negotiations and Commercial Diplomacy Branch, DITC
UNCTAD, Geneva
WTO and GATT
Umbrella AGREEMENT ESTABLISHING WTO Goods Services Intellectual property Basic principles GATT GATS TRIPS Additional details Other goods
agreements and annexes
Services annexes
Market access commitments
Countries’ schedules of commitments
Countries’ schedules of commitments(and MFN exemptions)
Dispute settlement DISPUTE SETTLEMENT Transparency TRADE POLICY REVIEWS
Source: WTO
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GATT Basic principles: Trade without discrimination
• MFN-clause (Most-Favoured-Nation): Art. ICountries cannot (normally) discriminate between their trading partners. E.g. give the same tariff to all trading partners (between foreign suppliers)
• National treatment: Art. IIIOnce goods have cleared customs, imported goods must be treated equally to domestically-produced goods (between domestic and foreign supplier)
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Other important GATT Provisions
Article • 2: Schedule of Concessions (Bound rates: maximum ceiling level,
mentions exceptions such as anti-dumping, normally Article VI)• 11: Elimination of quantitative restrictions (Export restrictions allowed
for food security)• 19: Special Safeguard (emergency action on imports if quantity increased
AND causes or threatens to cause serious injury; right to prevent injury)• 20: General exceptions (protect human, animal or plant life or health)• 24: Free-trade Agreements (only under conditions) • 28: Modification of schedules (negotiate change but pay compensation)
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Outline of the Agreement on Agriculture
“Three Pillars”
Domestic Support• AMS reduction• Green Box• de minimis
Market Access• Tariffication• Tariff reduction• Minimum access• Special Safeguard
Export Subsidies
• Reduction• Prohibition of
new subsidies
• Special and Differential (S&D) Treatment for DCs and LDCs• Related Agreements, e.g. Marrakesh Decision• Establishment of a Committee on Agriculture • Continuation of the reform process
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Tariff ScheduleID HSCODE2002 DESC Bound Final boundImplementationInterim INRs ODCs
1 0101Live horses, asses, mules and hinnies.
2 010110-Pure-bred breeding animals
3 01011010 --Of Arab breed 5 CE25,US 04 01011020 --Other 5 US 05 010190 -Other6 01019010 --Horses for sport 5 07 01019020 --Ponies 5 08 01019030 --Asses 15 09 01019040 --Mules 15 0
10 01019050 --Hinnies 15 011 01019090 --Other 5 0
Saudi Arabia
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Market Access: Current Tariffs
Bound AppliedDeveloped countries 38 34
Developed countries 4 3Developing countries 20 13
25Agriculture
Non-Agriculture
Developing countries 61
Source: UNCTAD TRAINS and UNCTAD calculations based on WTO CTS
Specific Problems:• Tariff escalation• Tariff peaks
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MARKET ACCESS COMMITMENTSMARKET ACCESS COMMITMENTSAgricultureAgriculture
Accession
negotiations
EntryDate
Average Bound (%)
Staging(years) TRQ SSG
EntryDate
Average Bound (%)
Staging(years) TRQ SSG
Ecuador 01/96 25.8 5 YES YES Moldova 07/01 12.4 4 - - Bulgaria 12/96 34.9 5 – 6 YES YES China 12/01 15.7 9 YES - Mongolia 01/97 18.4 0 - - C. Taipei 01/02 13.1 5 YES YES Panama 09/97 26.1 14 YES YES Armenia 02/03 14.8 0 - - Kyrgyzstan 12/98 11.7 0 - - Macedonia 04/03 15 4 YES - Latvia 02/99 33.6 8 YES - Nepal 04/04 41.4 2 - -Estonia 11/99 17.7 4 - - Cambodia 10/04 28.1 7 - -Jordan 04/00 25 10 - Saudi Arabia12/05 12.1 5 - -Georgia 06/00 12.1 5 - - Viet Nam 01/07 20.9 7 YES -Albania 09/00 10.6 7 - - Tonga 07/07 19.2 0 - -Croatia 11/00 10.4 5 YES - Ukraine 05/08 10.6 5 YES - Oman 11/00 30.5 4 - - Cape Verde 07/08 19.3 5 - - Lithuania 05/01 15.6 7 YES -
90 10 20 30 40 50 60
WTO averageMoldovaLithuaniaOmanCroatiaAlbaniaGeorgiaJordanEstoniaLatviaKyrgyzstanPanamaMongoliaBulgariaEcuador
Accession
negotiations
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CHINA CHINESE TAIPEI Saudi ArabiaEntry date Dec 2001 Jan 2002 Dec 2005
TariffsAverage 16 % 13 % 12 %
Max 65 % (cereal) 500 % (deer velvet)340 % (chicken offal)
200 % (tobacco)Specific tariffs
Mostly in 0 – 25 % 0 – 25 % 5 - 15 %
TRQs Wheat, corn, rice, soybean oil, palm oil, rapeseed oil, sugar, wool, cotton
Pork, chicken, milk, peanuts, red bean, garlic, sugar, fresh fruits, sugar, dried mashroom
None
e.g RiceIn-quota: 1 %MFN: 65 %Quantity: 9,636,000 mtStaging: 4 years
SugarIn-quota: 12.5 %MFN: 143 %Quantity: 205,000 mtStaging: 4 years
Accession
negotiations
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CHINA CHINESE TAIPEI Saudi ArabiaSSG None 77 tariff lines None
Pork, poultry, milk, garlic, red beans, fresh fruits (pears, persimmons), peanuts, sugar
Special treatment None
Rice: import prohibitionQuantity: 205,000 mt
Some alcohol, pork:import prohibited
Accession
negotiations
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Domestic Support
• In WTO terminology, domestic support is classified by “boxes” according to their effect on production and trade
Amber box: trade distorting support, to be reduced
Blue box: production limiting supportGreen box: not or minimal distorting support
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De minimisDe minimis DevelopmentDevelopmentBlue BoxBlue Box
• Research• Training • Extension• Infrastructure• Pest & disease control• Public stockholding• Domestic food aid • Decoupled income
support• Support to structural
adjustment
etc.
Amber Box
Green BoxGreen BoxProduct specific support• Market price support• Payment on output• Input subsidies• Investment subsidies
Non-product specific support
Amber BoxAmber Box
To be reduced & bound Domestic Support
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Domestic Support COMMITMENTSDomestic Support COMMITMENTSAccession
negotiations
AMSStaging(years)
de minimis
Exp.Sub. AMS
Staging(years)
de minimis
Exp.Sub.
Ecuador - - 10 0 Moldova 20% cut 4 5 0Bulgaria 79% cut 2 5 Yes China - - 8.5 0Mongolia - - 10 0 C. Taipei 20% cut 8 10 0Panama - - 10 Yes Armenia - - 5 (10 until 2008) 0Kyrgyzstan - - 5 0 Macedonia 20% cut 4 5 0Latvia - - 5 (8 until 2003) 0 Nepal - - 10 -Estonia - - 5 0 Cambodia - - 10 -Jordan 13% cut 7 10 0 Saudi Arabia 13% cut 10 10 0Georgia - - 10 0 Viet Nam Yes, no cut - 10 0Albania - - 10 0 Tonga - - 10 0Croatia 20% cut 5 5 0 Ukraine Yes, no cut - 5 0Oman - - 10 0 Cape Verde - - 10 - Lithuania 15% cut 5 5 0
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ISSUES FOR AGRICULTURAL NEGOTIATIONSISSUES FOR AGRICULTURAL NEGOTIATIONSMarket access
Tariffs Bind & evtl. reduceNon-tariff barriers EliminateTariff rate quotas ?
Safeguard ?Agri policies
Farm subsidies(Amber) Bind & Reduce
(Blue) ?(Green) Provide information
Export subsidies Bind & eliminate or reduceOther trade policies
State trading enterprises Article XVII of the GATTTaxation regime Article III of the GATT
Product quality standard Agreements on SPS, TBT
Accession
negotiations
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Multilateral TrackMultilateral TrackWorking Party (WP) Working Party (WP)
meetingsmeetings(negotiations on rules)(negotiations on rules)
1.1. Memorandum of Trade RegimeMemorandum of Trade Regime2.2. Questions & repliesQuestions & replies3.3. Working Party ReportWorking Party Report
Negotiating ProcessNegotiating ProcessAccession
negotiations
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Doha: Negotiating Mandate
• Single undertaking– Impl. Issues and SDT review– Agriculture– Services Market access (reduction of trade barriers)– NAMA– Rules (AD, SCM & RTAs)– TRIPS– Trade and Environment
• Singapore issues– Trade Facilitation (part of single undertaking)
• Non single undertaking– DSU Review
AD = Anti DumpingSCM = Subsidies Countervailing MeasuresRTA = Regional Trade agreementsTRIPS = Trade Related Interlectual PropertyDSU = Dispute Settlement Understanding
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Market Access: Agriculture
Formula:Formula:line-by-lineline-by-line
increasing cutsincreasing cuts
•Level of ambition, S&D?•Exporter – importer•Dev’ed – dev’ing•Preferences
Flexibilities:Flexibilities:Exempt some Exempt some
lines, SP & SePlines, SP & SeP
Special Products (SP) Products essential to achieve food security, livelihood security and rural development Sensitive Products (SeP):Selected number of tariff lines will receive flexibility in tariff cuts (but access is improved)
Initial tariffs:Initial tariffs:Bound ratesBound rates
Result:Meaningful better access?Protect vulnerable farmersStart
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Draft Modalities Text July 2008:
Recently acceded membersMarket Access
• Moderate cuts under the tiered formula by 8 ad valorem percentage points in each band
• Exempt their final bound tariffs at or below 10 per cent• VRAMS and SLI_RAM_EIT completely exempted from cuts• Overlapping commitments? Start of implementation for such
tariff lines one year after the end of implementation of accession commitment
• Implementation period for RAMs prolonged by up to two years after the end of the developing countries’ implementation period
VRAMs: Very recently acceded members (Saudi Arabia, Macedonia, Vietnam, Tonga, Ukraine); SLI_RAM_EIT: Small low income RAMs with economies in transition
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Draft Modalities Text July 2008:
Recently acceded membersDomestic Support
• OTDS and AMS cuts: VRAMs and SLI_RAM_EIT exempted; other RAMs 2/3 of cuts
• De minimis: VRAMS and SLI_RAM_EIT exempted; other RAMs with 5% de minimis 1/3 of cuts + five years longer implementation period
• For RAMs, the maximum permitted value of support shall be 5 per cent of the average total value of agricultural production in the 1995-2000 period
VRAMs: Very recently acceded members (Saudi Arabia, Macedonia, Vietnam, Tonga, Ukraine); SLI_RAM_EIT: Small low income RAMs with economies in transition
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Merchandise Trade: Important factors for Acceding Countries
• Development strategy
• Advantages of being a WTO member, e.g. - market access (tariffs, NTBs)- attracting investments- dispute settlement - rule-making - national lobby groups- domestic reforms, …
• Low tariffs: good for consumers and imported inputs
Offensive interestsAccessi
on
negotiations
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Merchandise Trade:Important factors for Acceding Countries
• Protect some sensitive industries (infant industries)• Maintain tariff revenue• Recognition for unilateral liberalisation
=> Starting negotiations from applied rates (no rule)• Formula does not apply BUT• Members take impact on their tariffs into account• Sectorials: Acceding C. may be asked to participate• New rules will apply• New commitments reduce gap
Defensive Interests
Defensive Interests
Doha Round
Challenges in addition to advantages of WTO
Link
Importance of Agricultural Sector
• Value added of agricultural sector in developing countries:9 per cent
• Employment: 38 per cent
• Rural population even higher
Countries Value added in agriculture (% of GDP)
Employment in agriculture (% of total)
High income 2 3Midle income 9 38Least-developed 32 71World 5 38
10 per cent of
world trade
24
European Union: bound and applied tariff rates
Note: New AVEs (Paris), Five products with tariffs above 500% not plotted.
0
50
100
150
200
250
300
350
400
450
1 159 317 475 633 791 949 1107 1265 1423 1581 1739 1897 2055
Olive oil, refinedSugar, raw
Tea
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Developing countries: bound and applied tariff rates
Kenya bound and applied tariffs
0
20
40
60
80
100
120
0 200 400 600 800
bound
applied
Number of tariff lines
Tarif
fs in
per
cen
t
Bound at ceiling level
Lower applied rates
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Related WTO Agreements
• All WTO agreements and understandings on trade in goods apply to agriculture (e.g. customs valuation, emergency safeguard measures)
• Where there is a conflict: AoA prevails
Agreement on Agriculture
Sanitary and Phytosanitary Measures (SPS)
Technical Barriers to Trade (TBT)
Trade –Related Aspects of Intellectual Property
Rights (TRIPs)Marrakesh Decision for LDC and NFIDC
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MARKET ACCESS COMMITMENTSMARKET ACCESS COMMITMENTSnon-agriculturenon-agriculture
Accession
negotiations
EntryDate
Average Bound (%)
Max ad valorem
Average Applied
EntryDate
Average Bound (%)
Max ad valorem
Average Applied
Ecuador 01/96 21.1 40 Moldova 07/01 6 20 4.1Bulgaria 12/96 23.6 40 8.8 China 12/01 9.1 50 9.6Mongolia 01/97 17.3 30 C. Taipei 01/02 4.8 90Panama 09/97 22.9 81 7 Armenia 02/03 7.5 15 2.3Kyrgyzstan 12/98 6.7 20 4.8 Macedonia 04/03 6.2 25.5 8.7Latvia 02/99 9.4 55 2.2 Nepal 04/04 23.7 60 13.7Estonia 11/99 7.3 30 0.1 Cambodia 10/04 17.7 42.5 15.9Jordan 04/00 15.2 30 12.2 Saudi Arabia12/05 10.5 20 6Georgia 06/00 6.5 20 6.9 Viet Nam 01/07 12.4 100 15.7Albania 09/00 6.6 20 5.6 Tonga 07/07 17.4 20Croatia 11/00 5.5 25 4 Ukraine 05/08 4.8 25Oman 11/00 11.6 20 7.2 Cape Verde 07/08 15.3 55Lithuania 05/01 8.4 30 2.4
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