TWN Info Service on WTO and Trade Issues (Nov16/10)
11 November 2016
Third World Network

India opposes re-writing notification requirements
Published in SUNS #8351 dated 9 November 2016

Geneva, 8 Nov (D. Ravi Kanth) -- India has rejected a single template prepared by the World Trade Organization Secretariat for complying with the notification requirements in the Import Licensing Agreement on grounds that it would amount to changing the balance of rights and obligations, according to people familiar with the development.

Major industrialized countries, particularly the United States, endorsed the single template drawn-up by the Secretariat under the pretext of avoiding duplication and overlapping notifications.

During separate informal meetings of the WTO's Committee on Import Licensing held on 17 October and 3 November, major developed countries such as the United States, Australia, and Canada among others made a sustained pitch for agreeing to a single template prepared by the WTO Secretariat in which notification requirements were merged without adhering to the specific requirements in the existing provisions of the Agreement on Import Licensing Procedures.

In a restricted 13-page unofficial room document circulated on 10 October (RD/LIC/9) titled "Some ideas on how to address the issue of overlapping notification requirements in the Agreement on Import Licensing Procedures," the Secretariat admitted that it has prepared a template "in response to some Members' request, asking the Secretariat to elaborate further on overlapping notification requirements under the Agreement, as well as on problems regarding the existing notification templates."

The Secretariat, however, did not mention the names of the countries that pressed for such a document. It maintained that there are overlapping notification requirements in Articles 1.4 (a), Articles 5 and Article 8.2 (b) of the Agreement on Import Licensing Procedures.

Further, the Secretariat maintained that there are duplications in existing templates, suggesting that notification requirements must be specific and different to be effective.

"After years of practice, we have observed that due to the fact that Article 1.4 (a), Article 5 and Article 8.2 (b) contain similar notification requirements", which result in duplications.

It said "members are often puzzled by the question of which form to use for notifications, in particular when they would like to notify a change in the legislation/procedure, in which case either Article 5 or Article 8.2 apply."

The Secretariat said it "has prepared some ideas on a combined notification form for Article 1.4 (a), Article 5 and Article 8.2 (b)" which addresses the legal requirements of the agreement.

The two annexes under the Secretariat-created template include notification under Articles 5, 1.4 (a) and/or 8.2 (b) of the agreement dealing with "notifications on newly introduced measures or any procedure/legislation in force but which have not been notified to the committee" and "changes to the existing legislation/procedure which has been notified to the committee."

The US, Australia, Canada, and Hong Kong-China among others endorsed the Secretariat's new template during an informal meeting on 17 October on grounds that it would enhance transparency and avoid duplication in notifying the changes in import licensing measures by members, according to people who took part in the meeting.

During the meeting, India asked those members who found the "notification process repetitive" to share the "precise difficulties they faced in the existing formats" in order to resolve the problems in those formats.

India said "some Members seem to reject the existing formats as those may not provide an ideal solution to their proposed database."

"However, the proposed database should not add to Members' prevailing obligations," India argued, according to people who took part in the meeting.

India said categorically that it "does not agree with the idea of merging the three notification obligations into one single template, because the three Articles operate at different levels - Article 1.4 (notification of source of publications which contain general rules and procedures), Article 5 (notification of listed information at product level), and Article 8.2 (notification of change in laws and regulations)", and it would upset the rights and obligations of members in the agreement.

Further, India pointed out that "notification of information under one Article need not simultaneously trigger notifications in the other two. For example, a minor change in law, say a change in the designation of a licensing authority, would trigger a notification under Article 8.2, but would not require any notification under Articles 1.4 or 5."

"The current architecture in the import licensing provisions provide sufficient flexibility for Members to decide under which Article a situation is to be notified," India argued.

Besides, detailed information such as "list of products subject to licensing" is required to be notified only under Article 5, while the other Articles, i. e. 1.4 and 8, do not ask this notification information.

The Secretariat's merged format, according to India, "clubs together all the information prescribed in three different Articles into one template."

"Hence merging would lead to notifying something extra under each Article that would actually qualify for notification in the other Articles ... this would enhance notification obligations substantially," India maintained.

Despite India's disapproval of the merged format into a single template, the developed countries led by the US made another bid at the informal meeting on 3 November by raising the same issue in agenda item ten under the title "Improving transparency in notification procedures of the agreement - report of the chairperson on the informal consultations held on 2 June, 17 October, and 3 November."

Prior to the formal meeting on 3 November, members held an informal meeting in which the US made a strong case that the Secretariat's template is merely aimed at rearranging notification requirements but not changing the rights and obligations.

The US underscored the importance of transparency in notification requirements, arguing that the Secretariat's template addresses the concerns raised by members, according to people who took part in the meeting.

India sharply questioned the US statement, pointing out that the new template would result in changing the rights and obligations, as it would impose onerous/intrusive requirements that are not part of the provisions of the Agreement on Import Licensing Procedures, according to people who took part in the meeting.

At the formal meeting when the agenda item 10 came up for discussion, the developed countries, particularly the US, remained silent on approving the template. The US did not demand that the template must be approved at the formal meeting.

India, however, made a detailed statement at the formal meeting on why it did not support "merging of two notification formats" and how it would change/disturb "the fine balance of rights and obligations in the Import Licensing Agreement."

India said there is no change in its stand, emphasizing that it "does not endorse the idea of merging two formats N/1 and N/2."

It pointed out that "the three notification requirements provided under Articles 1.4 (a), 5 and 8.2 (b) are quite different from each other, and hence should not merge".

India provided detailed critique on why the merging of notification requirements under three articles is unsustainable.

India said that "the cause of action in the three requirements are different as is evident from the text of the Agreement:

* Article 1.4 (a) comes into play when rules on procedures for submission of licensing applications are framed or modified.

* Article 8.2 (b) is invoked when there are any changes in laws and regulations relevant to the Agreement.

* Article 5 is invoked when there is institution of import licensing procedures.

[Article 5 of the Agreement on Import Licensing Procedures states:

[1. Members which institute licensing procedures or changes in these procedures shall notify the Committee of such within 60 days of publication.

[2. Notifications of the institution of import licensing procedures shall include the following information: (a) list of products subject to licensing procedures; (b) contact point for information on eligibility; (c) administrative body(ies) for submission of applications; (d) date and name of publication where licensing procedures are published; (e) indication of whether the licensing procedure is automatic or non-automatic according to definitions contained in Articles 2 and 3; (f) in the case of automatic import licensing procedures, their administrative purpose; (g) in the case of non-automatic import licensing procedures, indication of the measure being implemented through the licensing procedure; and (h) expected duration of the licensing procedure if this can be estimated with some probability, and if not, reason why this information cannot be provided.

[3. Notifications of changes in import licensing procedures shall indicate the elements mentioned above, if changes in such occur.

[4. Members shall notify the Committee of the publication(s) in which the information required in paragraph 4 of Article 1 will be published.

[5. Any interested Member which considers that another Member has not notified the institution of a licensing procedure or changes therein in accordance with the provisions of paragraphs 1 through 3 may bring the matter to the attention of such other Member. If notification is not made promptly thereafter, such Member may itself notify the licensing procedure or changes therein, including all relevant and available information. - SUNS]

Therefore, India argued, "the trigger in the three requirements are quite different from each other, and the negotiators have used different terms in different Articles."

Further, the requirement in Article 1.4 (a) is basically a publication requirement and not a notification requirement while Article 8.2 (b) is not primarily a notification requirement, India argued.

India said Article 5 is the main notification requirement as it requires filing "comprehensive information starting with individual products subject to licensing, administrative bodies to be approached, contact points for information on eligibility, whether the licensing is automatic or non-automatic and so on."

"Thus, merging of the two forms is neither desirable, nor supported by the Agreement," India maintained, pointing out that if members "club all the information in one single form, a Member will have to provide all the listed information of Article 5 even when it seeks to notify say just a simple change in legislation under 8.2 (b)."

In short, merging leads to confusion, India said. "This is something my delegation will not agree to," it concluded.

The developments in the import licensing committee have not come a day too soon.

They need to be assessed against the backdrop of sustained pressure from the US and other major developed countries to ratchet up pressure on developing countries for notifying measures across all areas such as the sanitary and phyto-sanitary agreement, technical barriers to trade, agriculture, and market access for industrial goods - in an attempt to re-write rules without addressing the specific concerns raised in the Doha work program, trade envoys argued.

At a meeting on 17 October at the Graduate Institute in Geneva, the US Trade Representative Michael Froman said "the record of compliance with the WTO requirements for transparency and disclosure is nothing short of abysmal, as Members either take far too long to provide the required information or ignore the obligations altogether."

"We shouldn't underestimate the potential for this situation to seriously erode the credibility of the system as a whole - including the negotiating arm ... The United States will be looking to work with other Members to find solutions to this increasingly urgent problem," the USTR said.

Incidentally, the US has not notified its latest farm subsidy payments, according to a trade envoy from an industrialized country. +