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TWN Info Service on WTO and Trade Issues (Nov17/07)
7 November 2017
Third World Network

       
Stiff opposition to proposed MC11 decision on regulatory transparency
Published in SUNS #8568 dated 6 November 2017

Geneva, 3 Nov (Kanaga Raja) - A proposed ministerial decision on transparency of regulatory measures for trade in goods in relation to small and medium-sized enterprises (SMEs) tabled by the European Union and several other countries has been strongly opposed by many developing and least-developed countries.

According to trade officials, this came out at a meeting of the WTO Negotiating Group on Market Access for Non-Agricultural Products (NAMA) on 1 November.

Following the discussion, the Chair of the NAMA negotiating group concluded that the debate on the proposal remains "very polarized", and that he would report back to the Trade Negotiations Committee on the views that were expressed by members on this proposal.

PROPOSAL ON REGULATORY TRANSPARENCY

The revised proposal (TN/MA/W/144/Rev.3) for a ministerial decision on facilitating SME trade at the WTO's eleventh ministerial conference (MC11) in Buenos Aires this December was tabled by Australia; Canada; the European Union; Hong Kong (China); Japan; the Republic of Korea; Singapore; and Chinese Taipei.

For the purposes of this decision, the proponents have defined regulatory measures (in Article 1 of the proposed ministerial decision) to mean "mandatory measures of general application in the field of trade in goods as defined in each of the WTO Agreements falling within the scope of this Decision, which are developed or applied by a Member."

The Ministerial Decision (in Article 2 on scope, first paragraph) applies "to all regulatory measures falling within the scope of the Agreement on the Application of Sanitary and Phytosanitary Measures and the Agreement on Technical Barriers to Trade."

In the second paragraph of Article 2 on the scope, the proponents state: "This Ministerial Decision applies to regulatory measures of central government bodies. Each Member shall take such reasonable measures as may be available to it to ensure observance of the provisions of the Decision by the local governments and authorities on the level directly below that of a central government within its territories".

In their proposed Article 3 on publication and information available through the internet, the proponents have set out the following:

1. Each Member shall promptly publish its regulatory measures in an official journal electronically, or otherwise made publicly available on the Internet, in a manner that enables governments, manufacturers, traders and other interested persons to become acquainted with them.

2. When regulatory measures are published pursuant to paragraph 1 [on scope], each Member shall:

(a) provide access to the regulatory measure on an official website free of charge;

(b) if appropriate, also publish an explanation of the purpose of and rationale for the regulatory measure.

3. Whenever practicable, a description of the regulatory measure referred to in paragraph 2 [on scope] shall also be made available on the same official website in one of the official languages of the WTO.

4. Each Member is encouraged to make available on the Internet further information related to the development or implementation of the major regulatory measures, including on relevant trade related aspects.

[A footnote states that Each Member may determine what constitutes major regulatory measures.]

5. Each Member shall encourage the distribution of and information on such regulatory measures through additional channels of publication.

In the proposed Article 4 (of the ministerial decision) on notification of regulatory measures, the proponents state:

"Recognizing the potential of the recent web services on notifications provided by the WTO for the general public, where a Member is obliged to notify a draft regulatory measure to the other Members of the WTO under an existing WTO Agreement falling within the scope of this Decision, the Member shall:

"(a) include a copy of the developed or proposed draft regulatory measure or indicate an Internet address at which such measure may be viewed;

"(b) provide a copy of the final text of the regulatory measure or an Internet address at which such measure may be viewed, at the time the text is adopted or published, as an addendum to the original notification."

In the proposed Article 5 on public internet portal of regulatory measures, the proponents state that in order to facilitate trade, in particular for small and medium sized enterprises, an electronic version of the regulatory measures applicable in Members shall be made available through a repository.

"Such a repository shall be publicly accessible and be easily searchable. To that effect, the WTO Secretariat shall coordinate with other international organizations that have built regulatory repositories."

In the proposed Article 6 on public consultation of interested persons, the proponents state:

1. When preparing major regulatory measures, each Member shall, to the extent practicable and in accordance with its respective rules and procedures in view of outreaching to the widest possible public, including small and medium sized enterprises:

(a) publish in advance regulatory measures that it proposes to adopt, or publish in advance documents that provide sufficient details about a possible new regulatory measure to allow interested persons to assess whether and how their interests might be significantly affected;

(b) provide a reasonable opportunity to interested persons to provide input on such developed or proposed regulatory measures or documents referred to in sub-paragraph (a), taking into account its priorities and resource constraints; and,

(c) consider input received.

2. Members are encouraged to publish the input received, electronically, such as on a publicly accessible website.

On special and differential treatment and technical assistance (Article 8), the proposed ministerial decision states:

1. This Decision shall enter into force two years after the date of adoption of this Decision. Developing country Members shall apply these provisions at the latest five years after the date of adoption of this Decision. The dedicated WTO Internet portal referred to in Article 5 shall be established within two years from entry into force of this Decision.

2. Developing country Members can apply Article 3 by providing the relevant information on regulatory measures to the WTO Secretariat which shall host it, on their behalf, and include it in the repositories referred to in Article 5.

The proponents also proposed a work programme (in Article 10): "Members agree to continue discussions relating to the transparency of regulatory measures falling within the scope of this Decision. Issues to be discussed in this context may include, inter alia, the publication of regulatory agendas, early information on regulatory measures, the conduct of regulatory impact assessments when developing major regulatory measures and the evaluation and review of existing regulatory measures."

DISCUSSION OF THE PROPOSAL

At the NAMA meeting on 1 November, the EU, speaking on behalf of the proponents, said the latest version of their proposal seeks to address earlier concerns that had been expressed by members.

The EU maintained that lack of transparency in the adoption and publication of regulatory measures concerning SPS and TBT remains a major obstacle for SME exporters. Hence improvements in this area would help these firms better integrate into the global trading system.

According to trade officials, the African Group as well as other developing and least-developed countries however voiced strong opposition to the revised proposal tabled by the proponents.

Egypt, speaking on behalf of the African Group, raised a number of concerns in this regard, pointing out amongst others that the issues related to transparency of SPS and TBT measures should be addressed in the respective WTO committees.

Egypt also said that the proposal makes mandatory certain items under the SPS and TBT agreements which are currently "best endeavour" recommendations.

In addition, the scope and application of the proposal is extremely broad. This in turn would impose an excessive burden and high compliance costs on developing countries and least developed countries (LDCs).

According to trade officials, Egypt said the proposal would infringe on existing rules and result in duplication of work.

Even if transparency would help SMEs, there are other issues of greater urgency to small firms in developing countries and LDCs that should be given more priority, Egypt underlined.

The African Group pointed out that there are no clear definitions for key terms such as "regulatory measures" and "interested persons".

Noting that the link between transparency and SMEs is very weak, Egypt suggested that the proposal is actually aimed at all firms and would, as a result, put more obstacles in front of SMEs.

The African Group also underlined that there is no mandate to enter into negotiations on SMEs in the WTO.

According to trade officials, Guatemala, Bolivia, South Africa, Ecuador, Uganda, Swaziland, and Cameroon echoed the concerns voiced by the African Group.

According to Thailand, the notification requirements proposed by the proponents overlap with those under the Trade Facilitation Agreement and could create burdensome requirements.

According to trade officials, South Africa said that it would oppose placing the proposal on the agenda of MC11.

China pointed out that the transparency issues that have been raised in the proposal are already being discussed in the WTO committees. The discussions should continue there, it added.

Brazil also voiced its reservations on the proposal.

According to trade officials, India pointed out that SMEs generally export through large trading houses which are already familiar with the necessary regulatory requirements.

Rwanda said the Chair should suspend the meeting and report to the Trade Negotiations Committee (TNC) that there is no convergence.

Switzerland, Korea, Canada, Norway, Hong Kong (China), Singapore, New Zealand, Chinese Taipei and Australia, however, spoke in favour of the proposal.

According to trade officials, they were of the view that the proposed requirements set out in the proposal are not burdensome, that SMEs would benefit the most, and that it would help level the playing field.

It would also not infringe on the policy space or sovereignty of members, they said.

Russia acknowledged concerns voiced by Brazil about ambiguity in some of the proposal's wording but said that this provided an important degree of flexibility for members.

According to trade officials, the United States said that it continued to have concerns about the proposal.

According to the US, it is clear that the proposal won't secure consensus in Buenos Aires and today's discussions underline that point.

To the extent that the proponents seek post-MC11 work on the issue, good work is already taking place in the relevant technical committees on transparency issues and that work should be bolstered, not sidetracked, the US maintained.

In response, the EU argued that the Negotiating Group on Market Access was the right forum to discuss these issues.

It maintained that the transparency requirements were not too burdensome, and that the proposal would not in any way infringe on the right of governments to regulate (as argued by Cameroon).

According to trade officials, the EU said that its representatives had a look at many members' official websites and found that those who took the floor today had an excellent repertoire of trade legislation posted already.

The EU said the proponents want a decision on this at MC11 in order to have a political push at the ministerial level on the importance of transparency.

According to trade officials, the Chair of the NAMA negotiating group, Ambassador Didier Chambovey of Switzerland, concluded that the debate on the proposal remains "very polarized."

He said that he would report back to the TNC on the views expressed today. He said no other decision could be made today.

 


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