OVERVIEW OF DEVELOPMENTS

IN THE INTERNATIONAL TRADING ENVIRONMENT

Annual Report by the DIRECTOR-GENERAL^[1]

 

(Mid-October 2014 to mid-October 2015)

Table of contents

 

KEY FINDINGS. 3

EXECUTIVE SUMMARY. 6

1   INTRODUCTION.. 7

2   RECENT ECONOMIC AND TRADE DEVELOPMENTS. 9

2.1   Overview.. 9

2.2   Economic Developments. 9

2.3   Merchandise Trade. 11

2.4   Trade in Commercial Services. 14

2.5   Trade Forecast and Economic Outlook. 14

3   TRADE AND TRADE-RELATED POLICY DEVELOPMENTS. 19

3.1   Overview.. 19

3.2   Trade-Remedy Trends. 22

3.3   Sanitary and Phytosanitary Measures (SPS) 33

3.4   Technical Barriers to Trade (TBT) 39

3.5   Trade Concerns Raised in Other WTO Bodies. 44

3.6   Policy Developments in Agriculture. 48

3.7   General Economic Support 53

3.8   An Overview of Trade Policy Reviews. 54

3.9   Regional Trade Agreements. 65

3.10   Trade Facilitation. 67

3.11   ITA Expansion. 68

3.12   Aid for Trade. 68

3.13   Trade Financing. 69

3.14   Government Procurement 70

3.15   Dispute Settlement 70

4   POLICY DEVELOPMENTS IN TRADE IN SERVICES. 70

5   transparency of trade policies. 84

5.1   Notifications and Surveillance in WTO Councils and Committees. 84

5.2   Agriculture. 84

5.3   Quantitative Restrictions (QRs) 88

5.4   Import Licensing. 89

5.5   Rules of Origin. 90

5.6   Customs Valuation. 91

5.7   Preshipment Inspection. 92

5.8   Integrated Database. 92

5.9   Anti-Dumping. 94

5.10   Subsidies and Countervailing Measures. 95

5.11   State-Trading Enterprises. 95

5.12   Balance-of-Payments Restrictions. 96

5.13   Regional Trade Agreements. 96

5.14   Preferential Trade Arrangements. 97

5.15   Government Procurement 98

5.16   TRIPS. 98

5.17   Services. 99

ANNEX 1. 101

Measures facilitating trade. 101

ANNEX 2. 122

Trade remedies. 122

ANNEX 3. 152

Other trade-related measures. 152

ANNEX 4. 173

GENERAL ECONOMIC SUPPORT MEASURES. 173

APPENDIX. 189

 

KEY FINDINGS

·                In the reporting period between mid-October 2014 and mid-October 2015, WTO Members applied 178 new trade-restrictive measures. This equates to a monthly average of just under 15 new measures per month which is stable and comparable to the previous reporting period.  

 

·                The overall stockpile of restrictive measures introduced by WTO Members nevertheless continues to grow. Of the 2,557 trade-restrictive measures, including trade remedies, introduced by WTO Members since 2008 and recorded by this exercise, only 642 had been removed by mid-October 2015.

 

·                The total number of those restrictive measures still in place now stands at 1,915 – up by 17% compared to the last annual report. 75% of trade-restrictive measures implemented since 2008 remain in place.

 

·                Although WTO Members are eliminating some of their trade-restrictive measures, the rate at which this is done remains insufficient to seriously dent the stockpile.

 

·                More encouragingly the report finds that a total of 222 measures aimed at facilitating trade were taken, – a monthly average of almost 19 measures – the second highest number since the beginning of the monitoring exercise.

 

·                The number of trade remedy investigations by WTO Members has fallen during this reporting period.  This decline is primarily because of a drop in the number of anti-dumping initiations and confirms a trend identified in the last monitoring report.

 

·                During this review period, global economic growth remained modest, and continued to be unevenly distributed across countries and regions. The downturn in world trade observed at the time of the last monitoring report continued in the second quarter of the year.   

 

·                The WTO Secretariat recently (30 September 2015) lowered its forecast for world merchandise trade volume growth in 2015 from 3.3% to 2.8% and reduced its estimate for 2016 from 4.0% to 3.9%.

 

·                Looking towards the 10^th Ministerial Conference in Nairobi in December, WTO Members should reflect on the central role of the multilateral trading system as a predictable and transparent framework helping Members resist protectionist pressures and as a stable and inclusive platform for pursuing further multilateral trade liberalization.

 

Trade-restrictive measures, excluding trade remedies (average per month)

Note:       Values are rounded.

Source:   WTO Secretariat.

 

Trade-restrictive measures, mid-October 2014 to mid-October 2015

 

Source:   WTO Secretariat.

Trade-facilitating measures, excluding trade remedies (average per month)

Note:       Values are rounded.

Source:   WTO Secretariat.

Trade-facilitating measures, mid-October 2014 to mid-October 2015

 

 

Source:   WTO Secretariat.

Stockpile of trade-restrictive measures

Note:       Totals include measures listed in Annex 3 and initiations of trade remedy actions.

Source:   WTO Secretariat.

EXECUTIVE SUMMARY

This trade-monitoring report reviews trade-related developments during the period from 16 October 2014 to 15 October 2015.

The report confirms that WTO Members continue to show some restraint in taking new trade‑restrictive measures with the introduction of such measures remaining relatively stable since 2012. During the period under review, 178 new trade-restrictive measures were put in place – an average of just under 15 new measures per month.

More encouragingly, WTO Members continued to adopt measures aimed at facilitating trade, both temporary and permanent in nature. Members implemented 222 new trade-facilitating measures during the period under review – an average of almost 19 measures per month, the second highest number since the beginning of the monitoring exercise.

Nevertheless, the slow pace of removal of previous restrictions means that the overall stock of restrictive measures is continuing to increase. Of the 2,557 restrictions (including trade remedies) recorded by the monitoring exercise since October 2008, only 642 have been removed. In other words, the total number of those restrictive measures still in place currently stands at 1,915 – up by almost 17% compared to the last annual overview. The addition of new restrictive measures, combined with a slow removal rate, remains a persistent concern with 75% of all restrictions measures implemented since 2008 still in place. The longer‑term trend in the number of trade‑restrictive measures is an area where continued vigilance remains imperative.

The downturn in world trade observed in the last monitoring report continued in the second quarter of 2015. Global economic growth was modest during the review period and continues to be unevenly distributed across countries and regions. Prices for primary commodities including oil are down sharply from last year, squeezing a number of important exporters. Exchange rates have undergone important shifts since the last report and speculation surrounding monetary policy alongside recurring bouts of volatility in financial markets has stoked uncertainty. In light of these developments, the Secretariat recently (30 September 2015) lowered its forecast for world merchandise trade volume growth in 2015 to 2.8%, and reduced its estimate for 2016 to 3.9%.

In the area of trade remedies, the decelerating trend observed in the previous report continued. This owes particularly to the decline in the number of initiations of anti-dumping investigations. Concerning anti-dumping and countervailing measures applied on the basis of investigations initiated in 2008 and 2009 (coinciding with the onset of the financial crisis), the data on extensions of measures pursuant to sunset reviews versus expired measures show no discernible change from the pattern observed in prior periods.    

 

During the review period, the WTO's TBT and SPS Committees saw significant developments. The SPS Committee has witnessed a persistent growth in notifications from developing countries leading to the highest number of notifications to date. An increase in the number of notifications does not, however, automatically imply greater use of measures taken for protectionist purposes. Another noteworthy development was the significant increase in the number of specific trade concerns (STCs) raised in the TBT Committee.

This report shows that WTO Members introduced 128 new general economic support measures – an average of almost 11 new measures per month, and a significant increase from the previous report. The main beneficiaries were selected industries in the agricultural sector, oil and gas industries, the automotive sector and assistance schemes for exports and for SMEs.

In the area of services the period under review witnessed several important policy developments in such diverse sectors as financial services, telecommunications and ICT, audio-visual services, construction services, energy and transport services, services supplied through the movement of natural persons and a number of other sectors. The large majority of the policies adopted during the period under review reflect trade-liberalizing measures.

Several other important trade-related developments also took place during 2015. These include the adoption of the Trade Facilitation Agreement, the expansion of the Information Technology Agreement, the Global Review of Aid for Trade and new initiatives in the area of Regional Trade Agreements.

The overall assessment of this monitoring report is that the uncertain global economic outlook continues to weigh on international trade flows. It shows that the continuing increase in the stock of trade-restrictive measures recorded since 2008 remains of concern. Looking towards the 10th Ministerial Conference in Nairobi in December, WTO Members should reflect on the central role of the multilateral trading system as a predictable and transparent framework helping Members resist protectionist pressures and as a stable and inclusive platform for pursuing further multilateral trade liberalization.

1  INTRODUCTION

1.1.  This report is submitted to the Trade Policy Review Body (TPRB) pursuant to Paragraph G of the trade policy review mandate in Annex 3 to the WTO Agreement, which provides for an annual report by the Director-General to assist the TPRB in undertaking its annual overview of developments in the international trading environment that are having an impact on the multilateral trading system. It builds on the Director-General's report to the TPRB on trade-related developments circulated to Members on 3 July 2015.^[2] Unless otherwise indicated, the report covers the period 16 October 2014 to 15 October 2015. As in the past, measures implemented outside the reviewed period are not included in the Annexes.

1.2.   This report is intended to be purely factual and is issued under the sole responsibility of the Director-General. It has no legal effect on the rights and obligations of Members, nor does it have any legal implication with respect to the conformity of any measure noted in the report with any WTO Agreement or any provision thereof. This report is without prejudice to Members' negotiating positions in the Doha Round.

1.3.  At the WTO Ministerial Conference in December 2011, Ministers recognized the regular work undertaken by the TPRB on the monitoring exercise of trade and trade-related measures, took note of the work initially done in the context of the global financial and economic crisis, and directed it to be continued and strengthened. Ministers invited the Director-General to continue presenting his trade‑monitoring reports on a regular basis, and asked the TPRB to consider these monitoring reports in addition to its meeting to undertake the Annual Overview of Developments in the International Trading Environment. Ministers committed to duly comply with the existing transparency obligations and reporting requirements needed for the preparation of these monitoring reports, and to continue to support and cooperate with the WTO Secretariat in a constructive fashion.^[3]

1.4.  Section 2 of the overview provides a review of recent economic and trade trends. Section 3 presents an account of selected trade and trade-related developments during the period under review. Section 4 reviews policy developments in trade in services. Finally, Section 5 provides an overview of compliance and timeliness of Members' notifications to the WTO. Annexes to the report list specific new trade policy measures of individual Members taken during the period under review in four categories: trade-facilitating measures (Annex 1); trade‑remedy actions (Annex 2); other trade and trade-related measures (Annex 3); and general economic support measures (Annex 4). Specific developments related to Sanitary and Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT) are covered separately in Section 3. Specific measures of individual Members and Observers in the area of trade in services are described in Section 4. 

1.5.  Information on the measures included in the Annexes to this report and, with respect to services in Section 4, has been collected from inputs submitted by WTO Members and Observers, as well as from other official and public sources.  Replies to the request of the Director-General for information on measures taken during the period under review were received from 76 Members (counting the European Union (EU) and its member States separately) (Box 1), which represents 47% of the membership. This is an increase of 10% compared to the participation in the 2014 annual report.^[4]  One Observer also replied to the request for information. The WTO Secretariat has drawn on these replies, as well as on a variety of other sources, to prepare this report. All country‑specific information collected was sent for verification to the relevant delegation. As in the past, participation in the verification process was uneven, and in several instances the Secretariat received only partial responses and often after the indicated deadline. Where it has not been possible to confirm the information, this is noted in the Annexes.^[5]

Box 1 Replies to the Director-General's request for information^[6]

Albania Argentina Australia Azerbaijan* Barbados Brazil Cabo Verde Canada Chile China, Republic of Colombia Costa Rica Cuba Dominican Republic Egypt European Union The Gambia

Georgia Guatemala Hong Kong, China India Indonesia Japan Korea, Republic of Macao, China Malaysia Mauritius Mexico Moldova, Republic of Montenegro New Zealand Norway Paraguay Peru

Philippines Russian Federation Saudi Arabia, Kingdom of Serbia Seychelles Singapore South Africa St. Vincent and the Grenadines Switzerland Chinese Taipei Thailand Tunisia Turkey Ukraine United States of America Uruguay

^{* Observer}

 

WTO Members and Observers Participating in the WTO Monitoring Exercise

 

2  RECENT ECONOMIC AND TRADE DEVELOPMENTS

2.1  Overview

2.1.  The WTO downgraded, on 30 September, its forecast for world trade after declines in the first two quarters of 2015 reduced the potential expansion for the year and clouded the outlook for 2016. The Secretariat now expects merchandise trade to grow 2.8% in volume terms in 2015 (down from 3.3% in April) and 3.9% in 2016 (down from 4.0% previously).

2.2.  These downward revisions reflect a number of factors that have weighed on world trade and output recently, including the rebalancing of the Chinese economy away from investment and towards consumption, declines in primary commodity prices that have hit export revenues and imports of resource-based economies, as well as strong exchange rate fluctuations and volatility in financial markets. Uncertainty over the timing and pace of expected interest rate rises in the United States has also raised the prospect of capital flow reversals in developing countries and clouded the outlook for the global economy going forward.

2.2  Economic Developments

2.3.  If the September forecast holds, 2015 will be the fourth consecutive year with merchandise trade growth of less than 3%, and the fourth year where world trade has grown at approximately the same rate as world GDP, rather than twice as fast, as in the 1990s and early 2000s. The current forecast indicates faster trade growth of 3.9% in 2016, but this rate of increase is still well below the average of 5% since 1990.

2.4.  The distribution of economic activity across countries and regions continues to be uneven, and economic data remain mixed. After a slow start with 0.6% annualized GDP growth in the first quarter, the United States saw output growth rebound to 3.9% in the second quarter before dropping to 1.8% in the third quarter. Recent U.S. employment reports also indicate weaker labour market conditions in Q3, which could presage slower growth in the second half of the year. U.S. output in the first three quarters of 2015 was up 2.5% over 2014, roughly in line with the IMF forecast for the year overall.  The EU has also shown signs of resilience recently, particularly in formerly distressed economies such as Spain and Ireland.  Annualized GDP growth of EU member States averaged 2.2% in Q1 and 1.8% in Q2, but unemployment remains high. EU output was up 1.8% year-on-year in the first half of 2015, also in line with IMF predictions. Meanwhile, Japan's growth has been highly variable, rising from 1.3% in the fourth quarter of last year to 4.5% in Q1, then falling back to -1.2% in Q2.  Japan's year-over-year output growth in the first half of 2015 was flat at 0.0%, below IMF projections.

2.5.  Quarter-on-quarter GDP growth in China picked up from 1.4% in Q1 (equivalent to an annual rate of 5.7%) to 1.7% in Q2 (equal to 7.0% annually) and 1.8% in Q3 (equal to 7.3% annually). Growth rates of this magnitude are consistent with government targets of near 7% growth for the year, but other forward looking measures of economic activity, including the composite leading indicators (CLIs) of the Organisation for Economic Cooperation and Development (OECD), point to below trend growth in coming quarters.  Meanwhile, India recorded strong growth of 8.2% in Q1 and 6.5% in Q2 according to data from the OECD.  Natural resource exporters had the weakest performances among major economies in Q2, including Brazil (-7.2%), the Russian Federation (‑7.8%) and Canada (-0.5%). 

2.6.  Large exchange rate fluctuations since the middle of 2014 reflect changes in economic prospects and policy expectations in major economies, and have exerted a strong influence on nominal dollar denominated trade statistics. These exchange rate movements are illustrated in Chart 2.1, which shows nominal effective exchange rate indices for selected economies through August 2015 from the Bank for International Settlements (BIS). 

Chart 2.1 Exchange rate indices for selected economies,

January 2012 – September 2015^a

(Index, January 2012 = 100)

 

 

a                         Nominal effective exchange rate indices against a broad basket of currencies.

Source:   Bank for International Settlements (BIS).

2.7.  The strongest appreciations over the past year were recorded by the U.S. dollar and the Chinese yuan.  The dollar was up 15% year-on-year in September against the currencies of its trading partners, while the yuan was up 9%. The loosening of the yuan's link to the dollar in September initially produced a month-on-month bilateral depreciation of around 3% against the U.S. currency, but against a broader basket of currencies the yuan was only down 0.2% for the month.  On the other hand, values of commodity-based currencies have plunged, including the Russian rouble (down 36% year-on-year in August) and the Brazilian real (down 34% over the same period).

2.8.  Dollar appreciation can cause trade denominated in other currencies (e.g. intra-EU trade) to be undervalued when measured in dollars, thereby distorting growth rates and other calculations.  As a result, trade statistics in nominal dollar terms must be interpreted with caution under current circumstances.

2.9.  Primary commodity prices, including oil prices, have not recovered since the last monitoring report and have in fact continued to decline.  Recent trends are illustrated in Chart 2.2, which shows International Monetary Fund (IMF) commodity price indices through September. Lower prices for fuels (down 50% year-on-year in the latest month) are partly explained by new sources of supply.  Investment in oil production from unconventional sources has fallen in North America as prices have declined, but output from existing capacity remains strong. Another contributor to falling prices is the appreciation of the dollar, which now commands more goods and services than it did a year ago. There has traditionally been an inverse relationship between dollar denominated commodity prices and the exchange value of the U.S. currency, with appreciations causing commodity prices in dollars to fall.

Chart 2.2 Prices of primary commodities, January 2012 - September 2015

(Indices, January 2012 = 100)

 

Source:   IMF Primary Commodity Prices.

2.10.  The IMF released its latest World Economic Outlook (WEO) on 6 October with projections for world GDP and trade in 2015 and 2016. GDP estimates received modest downward revisions but the organization's trade numbers were reduced sharply, bringing them more in line with WTO forecasts. The IMF expects world GDP at purchasing power parity to grow 3.1% in 2015 and 3.6% in 2016. Risks are tilted to the downside and include financial shocks stemming from exchange rate movements and commodity price declines.

2.3  Merchandise Trade

2.11.  Chart 2.3 shows year-on-year growth in the dollar value of merchandise trade (red line), as well as relative contributions to this growth from developed and developing economies (stacked bars). The dollar value of world trade was down sharply in the first and second quarters of 2015, around 13% in both periods compared to 2014. These drops were entirely attributable to changes in export and import prices since quarterly trade volume indices jointly prepared by the WTO and the United Nations Conference on Trade and Development (UNCTAD) show positive year-on-year growth over the same period (+3.1% in Q1 and +1.4% in Q2 on the export side). Very little useful information can be discerned from the contributions of developed and developing countries to trade growth in dollar terms in the current circumstance of strong dollar appreciation. However, the fact that these contributions are of similar magnitude suggests that both groups of countries are equally affected by the appreciation of the dollar.

2.12.  Trade statistics in volume terms frequently provide a more accurate picture of trade developments since they are adjusted to account for fluctuations in prices and exchange rates. These data are illustrated by Chart 2.4, which shows seasonally-adjusted quarterly merchandise trade volume indices for Brazil, developing Asia (including China and India), the EU, Japan and the United States from 2010Q1 to 2015Q2. These data present a rather negative trend of trade in the first half of 2015, especially with regards to exports of developing Asia and imports of South America.

Chart 2.3 Contributions to year-on-year growth in world merchandise trade,

2012Q1-2015Q2

(Percentage change in US$ values)

a                         Includes significant re-exports. Also includes the Commonwealth of Independent States (CIS).

Note:       Due to scarce data availability, Africa and the Middle East are under-represented in world totals.

Source:   WTO Secretariat estimates, based on data compiled from IMF International Financial Statistics; Eurostat Comext Database; Global Trade Atlas; and national statistics.

Chart 2.4 Volume of exports and imports of selected economies, 2010Q1 – 2015Q2

(Seasonally adjusted volume indices, 2010Q1 = 100)

 

Note:       Data for the EU, Japan and the United States were obtained from national statistical sources, while figures for Brazil and developing Asia are seasonally‑adjusted Secretariat estimates.

Source:   WTO and UNCTAD Secretariats.

2.13.  Exports of the United States were flat in Q2 (up 1.0%, not annualized) after registering a large drop in Q1 (-3.9%). U.S. exports in Q2 also hardly changed compared to the same quarter in the previous year (up just 0.3%). The reverse was the case on the import side, with a modest quarter-on-quarter decline in Q2 (-1.0%) and a stronger increase in Q1 (+2.3%). Year-on-year import growth was very strong at 6.3% in Q2, which would have helped cushion the recent declines in imports of developing countries.

2.14.  Extra-EU exports were up 0.8% quarter-on-quarter in Q2 while extra-EU imports were down 3.1% quarter-on-quarter. Meanwhile, trade between EU member States (i.e. intra-EU trade) was up slightly, 0.9% as measured by exports. Year-on-year growth in intra-EU trade was strong at 3.7% as measured by exports.

2.15.  Brazil's exports surged in the first half of 2015, rising 11.5% since the final quarter of 2014. In contrast, the country's imports were down 9.6% over the same period, and down 17% since 2014Q1. Exports and imports of developing Asia were also unusually weak in the first half of the year, with declines of 3.4% on the export side and 1.9% on the import side in Q2 since the last quarter of 2014.

2.16.  Monthly merchandise trade statistics in current U.S. dollar terms are more timely than quarterly statistics in volume terms and are available for a larger set of countries (Chart 2.5). However, these data are also subject to price distortions and should therefore be interpreted with caution. Export and import values are down in most countries in the first half of 2015, but this may simply be due to the fact that they are measured in U.S. dollars. For example, Germany's exports and imports were both down 14% year-on-year in July when measured in dollar terms, but they were up 6% when measured in euros.

2.4  Trade in Commercial Services

2.17.  Chart 2.6 shows year-on-year growth in the dollar value of commercial services trade for selected economies from 2014Q2 to 2015Q2. These data are also affected by the recent appreciation of the U.S. dollar in much the same way that merchandise trade values are. As a result, they must also be interpreted with caution. Countries whose currencies experienced significant depreciations against the U.S. dollar by 2015Q1 (e.g. Brazil, the EU, India, Japan, and the Russian Federation) all recorded sharp slowdowns in services trade in 2015Q1 and 2015Q2, on both the export and import sides, while other countries (China and the United States) did not register similar declines. In most cases, declines in services trade in percentage terms were smaller than the percentage declines in currency values, which suggests that the volume of commercial services trade has continued to rise.  However, it remains difficult to draw useful conclusions from nominal trade statistics in the presence of strong exchange rate movements.

2.5  Trade Forecast and Economic Outlook

2.18.  Table 2.1 shows the latest WTO trade forecasts for 2015 and 2016, updated on 30 September 2015. These estimates depend upon consensus estimates of real GDP growth at market exchange rates, which are largely compatible with the IMF outlook. As noted previously, the WTO expects world merchandise trade volume as measured by the average of exports and imports to grow 2.8% in 2015 and to expand by 3.9% in 2016. Exports from developed economies should increase by 3.0% this year and by 3.9% next year, while exports of developing economies are projected to grow more slowly at 2.4% in 2015 and 3.8% in 2016. Developed economies' imports should grow by 3.1% in 2015 and 3.2% 2016, while those of developing economies should expand 2.5% this year and 5.2% next year.

 

 

Chart 2.5 Merchandise exports and imports of selected economies,

January 2010-August 2015

(US$ billion)

 

Source:   IMF International Financial Statistics, Global Trade Information Services GTA database, national statistics.

 

Chart 2.6 Commercial services exports and imports of selected economies, 2014Q2‑2015Q2

(Year-on-year % change in current US$ values)

 

Note:       Figures for China are preliminary.

Source:   WTO and UNCTAD Secretariats.

2.19.  Exports of developing Asia received a strong downward revision for 2015, to 3.1% from 5.0% previously. This is mostly due to falling intra-regional trade as China's demand for imported goods has eased. The downward revision to Asia on the import side was even stronger, to 2.6% from 5.1% previously. The product composition of China's merchandise imports suggests that some of the slowdown may be related to the country's ongoing transition from investment to consumption led growth. Large year-on-year declines in quantities of imported machinery (-9%) and metals (iron ore -10%, copper -6%) were recorded in customs statistics for August, while strong increases were seen in agricultural goods, including cereal grains (+130%) and oilseeds (+33%).

2.20.  Another noteworthy revision was applied to imports of South and Central America in 2015, as the regional estimate was lowered to -5.6% from -0.5% previously.  Much of this was due to a sharp decline in Brazil's import demand, which in turn affected exports of neighbouring countries.  A rebound in imports of South and Central America is expected in 2016 as Brazil's GDP growth stabilizes and its imports begin to recover from a low base.

Table 2.1 Merchandise trade volume and real GDP, 2011-2016

(Annual percentage change)

	2011	2012	2013	2014	2015a	2016a
Volume of world merchandise trade	5.3	2.2	2.5	2.5	2.8	3.9
Exports
Developed economies	5.1	1.1	2.2	2.0	3.0	3.9
Developing economies	5.9	3.7	3.8	3.1	2.4	3.8
North America	6.6	4.4	2.7	4.2	4.4	3.9
South and Central America	6.4	0.9	1.9	-1.3	0.5	3.1
Europe	5.5	0.8	2.4	1.6	2.8	3.7
Asia	6.4	2.7	5.0	4.7	3.1	5.4
Other regionsb	2.3	3.9	0.7	-0.4	0.5	0.5
Imports
Developed economies	3.4	0.0	-0.1	2.9	3.1	3.2
Developing economies	7.7	4.9	5.2	1.8	2.5	5.2
North America	4.3	3.2	1.2	4.6	6.4	5.2
South and Central America	12.1	2.3	3.4	-2.4	-5.6	5.7
Europe	3.2	-1.8	-0.2	2.3	3.2	3.4
Asia	6.5	3.7	4.8	3.4	2.6	4.3
Other regionsb	7.8	9.9	4.1	-1.4	-1.5	0.5
Real GDP at market exchange rates (2005)	2.8	2.3	2.3	2.5	2.5	2.8
Developed economies	1.5	1.1	1.3	1.6	1.9	2.1
Developing economies	5.9	4.6	4.5	4.2	3.5	4.2
North America	1.9	2.4	2.1	2.4	2.5	2.7
South and Central America	5.1	2.8	3.3	1.0	-1.1	0.4
Europe	2.0	-0.2	0.4	1.3	1.8	1.9
Asia	4.2	4.4	4.5	4.0	4.0	4.2
Other regionsb	4.1	3.7	2.6	2.6	1.4	2.9

a             Figures for 2015 and 2016 are projections.

b             Other regions comprise Africa, the Commonwealth of Independent States (CIS) and the Middle East.

Source:   WTO Secretariat for trade, consensus estimates for GDP.

3  TRADE AND TRADE-RELATED POLICY DEVELOPMENTS

3.1  Overview

3.1.  The following sections provide a more in-depth analysis of selected trade and trade-related policy developments, including some areas which saw especially noteworthy events during the period under review.

3.2.  The trade measures compiled for this report are presented in three categories: (i) measures that clearly facilitate trade (Annex 1); (ii) trade‑remedy measures (Annex 2); and (iii) other trade and trade-related measures (Annex 3). The total number of measures in these three categories recorded over the period mid-October 2014 to mid‑October 2015 is 697. This comprises 222 trade‑facilitating measures, 297 trade‑remedy measures and 178 other trade and trade‑related measures.

3.3.  The 222 trade‑facilitating measures (Table 3.1) recorded during the twelve-month period covered by this report represent an absolute increase over the previous period^[7], but more importantly is the highest monthly average of such measures recorded over the last four monitoring reports. Over 72% of these trade‑facilitating measures consist of measures that provide for tariff reductions, sometimes applied on a temporary basis. The trade‑facilitating measures recorded by this monitoring report cover 0.91% of world merchandise imports (US$170.3 billion) compared to 6.4% (US$1,183.4 billion) reported in the last annual overview.^[8]

Table 3.1 Measures facilitating trade (Annex 1)

Type of measure	Mid-October 2011 to mid-October 2012	Mid-October 2012 to mid-November 2013	Mid-November 2013 to mid‑October 2014	Mid-October 2014 to mid‑October 2015
Import	136	101	168	192
- Tariff	120	82	145	160
- Customs procedures	13	15	18	24
- Tax	2	3	1	4
- Quantitative restrictions	1	1	4	4
Export	18	6	9	26
- Duties	7	3	4	13
- Quantitative restrictions	11	3	3	1
- Other	0	0	2	12
Other	8	0	0	4
Total	162	107	177	222
Average per month	13.5	8.2	16.1	18.5

Source:   WTO Secretariat.

3.4.  The principal product sectors (HS chapters) benefiting from the trade-facilitating measures were: mineral fuels and oils; precious metals (gold); machinery and mechanical appliances; electrical machinery and equipment; and vehicles and parts thereof (mainly of motorcycles).^[9]

3.5.  Trade‑remedy measures taken between mid-October 2014 and mid-October 2015 are listed in Annex 2.^[10] As a share of all trade and trade-related measures recorded for the review period, trade remedies make up almost 43%, down from 49% in the previous annual report. Out of the 297 trade remedy measures recorded (Table 3.2), 241, or around 81%, were anti-dumping actions. In line with the trend identified in recent monitoring reports, more initiations were recorded than terminations. However, the monthly average of trade remedy actions recorded for this exercise was down compared to previous reports.

Table 3.2 Trade remedy measures (Annex 2)^[11]

Type of measure	Mid-October 2012 to mid-November 2013			Mid-November 2013 to mid-October 2014			Mid-October 2014 to mid-October 2015
	Initiations	Terminations	Total	Initiations	Terminations	Total	Initiations	Terminations	Total
Trade-remedy
Anti-dumping	156	112	268	134	133	267	130	111	241
Countervailing	24	9	33	21	15	36	21	14	35
Safeguard	37	17	54	16	18	34	14	7	21
Total	217	138	355	171	166	337	165	132	297
Average per month	16.7	10.6	27.3	15.5	15.1	30.6	13.8	11.0	24.8

Source:   WTO Secretariat.

3.6.  Out of the total number of trade-remedy measures, 165 were initiations of new trade‑remedy investigations covering 0.17% of world merchandise imports (US$32.2 billion), and 132 measures were terminations of either investigations or existing duties covering less than 0.1% of world imports (US$12 billion).^[12]

3.7.  The number of other trade and trade-related measures recorded during the review period (Annex 3) was 178, compared to 168 recorded for the year-end monitoring report in 2014. However, the monthly average of the introduction of such measures has declined slightly in the current period, and remains below the monthly average of trade-facilitating measures (Table 3.1). Out of the 178 measures listed in Annex 3, some 136 measures were applied to imports. As has been the case in the past, the most prevalent import measure remains tariffs, accounting for almost 65% of import measures in Annex 3 (Table 3.3).

Table 3.3 Other trade and trade-related measures (Annex 3)

Type of measure	Mid-October 2011 to mid‑October 2012	Mid-October 2012 to mid‑November  2013	Mid-November 2013 to mid‑October 2014	Mid-October 2014 to mid‑October 2015
Import	118	153	119	136
- Tariff	54	106	74	88
- Customs procedures	38	25	26	20
- Tax	6	6	7	11
- Quantitative restrictions	20	15	11	11
- Other	0	1	1	6
Export	32	27	36	31
- Duties	8	4	12	13
- Quantitative restrictions	24	11	12	5
- Other	0	12	12	13
Other	14	10	13	11
Total	164	190	168	178
Average per month	13.7	14.6	15.3	14.8

Source:   WTO Secretariat.

3.8.  Other trade and trade-related measures recorded over the review period cover a wide range of products. The main product sectors (HS chapters) targeted were: mineral fuels and oils; iron and steel; vegetable fats and oils; electrical machinery and equipment; machinery and mechanical appliances; and vehicles and parts thereof, accounting for 1.23% of world merchandise imports (US$228.3 billion).^[13]

3.9.  In the previous annual overview, the product sectors most heavily affected were: iron and steel; organic chemicals; electrical machinery and mechanical appliances; certain vehicles and parts thereof; and articles of apparel and clothing accessories (accounting for 1.17% of world merchandise imports (US$214.5 billion)).

3.10.  Continuing a positive trend identified in the 2014 annual overview, the number of trade‑facilitating measures remains higher than the number of other trade and trade‑related measures. In other words, as can be seen from a comparison of Table 3.1 and Table 3.3, according to the number of measures recorded by the monitoring exercise since the end of 2013, WTO Members have introduced more trade‑facilitating measures than other trade and trade‑related measures, although the value of merchandise imports covered by trade-facilitating measures is lower.

3.11.  The total number of what can be considered as trade‑restrictive measures (including trade remedy measures) introduced by WTO Members since October 2008, and recorded by the periodic monitoring reports is 2,557.^[14] According to information recorded for this exercise, as of mid-October 2015, 642, or around a quarter, of these measures had been removed leaving the stockpile of measures still in place at 1,915 – an increase of almost 17% since October 2014.^[15] Chart 3.1 compares the stockpile of restrictive measures at mid-October 2010 with that of mid-October 2015.

Chart 3.1 Stockpile of trade-restrictive measures

 

 

Note:       Totals include measures listed in Annex 3 and initiations of trade remedy actions.

Source:   WTO Secretariat.

3.12.  Overall, and despite the introduction of more trade-facilitating than trade-restrictive measures, existing trade restrictions are not being eliminated at a rate which significantly dents the stockpile of trade-restrictive measures. This remains an area of concern for global trade – systemically as well as for the day‑to-day trade flows.

3.2  Trade-Remedy Trends

3.13.  This analysis provides an assessment of trends in trade-remedy actions during the period from July 2012 – June 2013 ("first period") in comparison with July 2013 – June 2014 ("second period") and July 2014 – June 2015 ("current period").^[16] Concerning anti-dumping, data for the current period indicate a slight decrease in the number of new investigations initiated.^[17] The number of safeguard investigations initiated also decreased. The number of countervail investigations initiated, however, remained steady between the second and current periods. The total number of initiations for the latter two types of trade-remedy investigations remained considerably lower than for anti‑dumping.

3.14.  Global anti-dumping initiations decreased by 12%, from 266 during the second period to 234 during the current period. (Table 3.4). However, initiations in the current period (233) were still more numerous than those reported in the first period (220). 

Table 3.4 Initiations of anti-dumping investigations

(Counted on the basis of exporting countries affected)

Reporting Member	July 2012 - June 2013	July 2013 - June 2014	July 2014 - June 2015
Argentina	14	11	6
Australia	11	26	14
Brazil	38	66	18
Canada	11	10	12
Chile	5	0	0
China	13	7	6
Colombia	10	6	7
Dominican Republic	0	2	0
Egypt	0	2	10
European Union	9	4	14
Guatemala	0	1	0
India	31	25	37
Indonesia	0	14	16
Israel	3	0	0
Japan	0	1	2
Korea, Republic of	4	9	2
Malaysia	13	7	13
Mexico	6	5	17
Morocco	5	1	2
New Zealand	1	0	0
Pakistan	4	6	3
Peru	0	1	0
Philippines	1	0	0
Russian Federation	0	4	5
South Africa	6	6	1
Chinese Taipei	2	1	0
Thailand	5	0	1
Trinidad and Tobago	0	0	1
Turkey	12	4	22
Ukraine	1	2	3
United States	11	45	21
Viet Nam	4	0	0
Total	220	266	233

Source:   WTO Secretariat.

3.15.  Chart 3.2 shows that the number of anti-dumping investigations initiated increased from 2011 until it peaked in 2013 with 287 measures. The number of investigations has declined since then, a decline which has continued into the first half of 2015. However, early indications show a notable increase in the number of investigations launched in the second half of 2015, suggesting that this decline may be reversed.

Chart 3.2 Total anti-dumping investigation initiations by reporting Member (2008-15^a)

a             Data for 2015 relate to the January to June period.

Source:   WTO Secretariat.

3.16.  While anti-dumping investigations do not necessarily lead to the imposition of measures, a rise in the number of investigations initiated is an early indicator suggesting a likely rise in the number of measures imposed.

3.17.  Regarding the Members taking actions, Table 3.4 shows that Brazil initiated the most investigations (122) over the three periods and accounted for approximately 20% of investigations. However, Brazil's actions peaked in the second period at 66 investigations, before falling to 18 in the current period. India was the second most active Member in relation to anti‑dumping, initiating 93 investigations, approximately 15% of the total. After a decline in the number of investigations that it initiated in the second period, from 31 to 25 investigations, India increased its activity in the current period, initiating 37 cases. The United States was the third largest user of anti-dumping accounting for 77 investigations, or approximately 10% of initiations. The United States significantly increased its anti-dumping activity in the second period before halving the number of investigations it initiated in the current period. Australia was the fourth largest user of anti-dumping over the three 12-month periods but initiated only 51 investigations, less than half the number initiated by Brazil, the largest user of this trade remedy. Significant increases in the use of anti-dumping in the current period were seen from Egypt (with 10 initiations), the EU (with 14 initiations), Mexico (with 17 initiations), and Turkey (with 22 initiations).

3.18.  Chart 3.3 shows that there was little change in terms of the breakdown of products affected by anti-dumping investigations initiated during the three periods examined, with the majority of initiations focused on products in the metals, plastics and rubber, and chemicals sectors.

3.19.  Metal products were subject to the most initiations in each period, accounting for 28% of all initiations in the first period, 34% in the second period and 37% in the current period. In each period, at least 60 initiations targeted metals, of which 75% on average focused on steel products. Over the three periods combined, the United States (51), Australia (34) and Brazil (30) accounted for more than half of the 238 initiations on metals. These initiations targeted mostly metal products from China (66, of which 47 involved steel products), the Republic of Korea (25, of which 18 involved steel) and Chinese Taipei (20, of which 18 involved steel). In many instances, investigations were launched on the same product from several exporting countries. For instance, there were 19 investigations into cold rolled stainless steel, 18 investigations into oil country tubular goods and 12 into grain oriented electrical steel.   

3.20.  Chemical products accounted for the second largest share of initiations over the three reporting periods, with a 17% share of initiations in the first period, an 18% share in the second period and a 24% share in the current period. India accounted for 55 of the 142 new investigations on products in this sector over the three reporting periods, with 25 conducted by Brazil and 11 conducted by China. These initiations targeted mostly chemical products from China (37), the United States (17), the Republic of Korea (10) and the EU (9). Similarly to metals sector investigations, investigations into chemicals frequently targeted the same product from different countries – 35 products accounted for 117 of the investigations in this area.

3.21.  Plastics and rubber ranked third over the three periods examined, accounting for 20% of all initiations in the first period, 16% in the second period, and 15% in the current period. Half of the 121 plastics and rubber investigations were initiated by Brazil (60), and the next largest user in this sector was India with 10 investigations. China was once again the main target of investigations in this sector (23), followed by India (11), the Republic of Korea (9) and Chinese Taipei (8).

3.22.  Machinery, which accounted for 7% of all initiations on average over the three periods, ranked fourth and textiles ranked fifth, accounting for 6%. 

3.23.  In terms of countries affected by new anti-dumping investigations, 44 exporting Members were affected during the first period, while 50 were affected during the second period and 42 in the current period. China remained, by far, the Member most affected by anti-dumping initiations during the three reporting periods – investigations into Chinese products accounted for 28% of all investigations during these periods. The second most affected Member during the three reporting periods – the Republic of Korea – accounted for 8% of the total initiations during these periods, followed by Chinese Taipei, at 6%.

3.24.  Table 3.5 shows that global initiations of countervailing duty investigations has remained constant in the second and current periods, with 39 new investigations reported, compared to 38 in the second period and 26 in the first period. The main users of countervailing measures over the three periods were Canada and the United States.

Table 3.5 Initiations of countervailing duty investigations

(Counted on the basis of exporting countries affected)

Reporting Member	July 2012 - June 2013	July 2013 - June 2014	July 2014 - June 2015
Australia	3	2	0
Brazil	3	0	1
Canada	5	3	11
China	2	1	0
Egypt	0	1	5
European Union	5	5	1
India	0	1	0
Mexico	0	1	0
Peru	0	0	1
Russian Federation	0	0	1
Turkey	0	0	1
Ukraine	0	0	1
United States	8	24	17
Total	26	38	39

Source:   WTO Secretariat.

 

 

Chart 3.3 Anti-dumping initiations by product

 

 

Source:   WTO Secretariat.

3.25.  Chart 3.4, reflecting annual figures, shows an upward trend in countervail initiations since 2010, notwithstanding some fluctuation in 2012. In fact, the number of initiations recorded in 2014 (45) exceeds the previous peak of 41 initiations observed in 1999.^[18]

Chart 3.4 Countervailing investigation initiations by WTO Members, (2008 2015^a)

a             Data for 2015 relate to the January to June period.

Source:   WTO Secretariat.

3.26.  Among the thirteen Members using countervail during the three periods examined, the United States, which accounted for approximately 50% of all initiations in these periods, initiated the most new investigations. Canada, the second largest user, accounted for approximately 20%, while the EU accounted for 10%. The remaining 20% of investigations were conducted by ten different countries, including notably Egypt, which initiated five investigations in the current period. Over the three periods examined, 80% of countervail investigations were conducted concurrently with an anti-dumping investigation. 

3.27.  Concerning the types of products affected by countervail investigations, Chart 3.5 shows that metals accounted for most of the initiations reported over the three reporting periods, occupying a 31% share of all initiations in the first period, a 53% share in the second period and a 51% share in the current period. For the three periods combined, 48 of the 103 total initiations recorded covered metals, and 29 of these focused on steel products. The United States initiated 19 of the 29 investigations of steel products. Eleven of the 29 steel-related initiations targeted products from China and five targeted products from India.

3.28.  Chemicals were the second most-targeted sector with 13 initiations, followed closely by plastics with 12 initiations. The United States initiated the largest number of investigations against the chemical sector, with seven initiations. Egypt, however, had the largest number of initiations in the plastics sector (five) as it investigated imports of polyethylene terephthalate (PET) from multiple sources.

Chart 3.5 Countervailing duty initiations by product

 

Source:   WTO Secretariat.

3.29.  In terms of countries affected by new countervail investigations, 11 exporting Members were affected during the first, 12 during the second and 18 during the current period. Similarly to anti-dumping, China was the most affected Member throughout the periods reviewed. Investigations into Chinese products accounted for 36% of all investigations during these periods. India, the second most affected Member during the three reporting periods, accounted for 14% of all initiations during these periods, followed by Turkey, which accounted for 7%.

3.30.  Initiations of safeguard investigations declined across all three periods, from 25 in the first period, to 21 in the second, and finally to 13 in the current period (Table 3.6).

Table 3.6 Initiations of safeguard investigations

(Number of new investigations)

Reporting Member	July 2012 - June 2013	July 2013 - June 2014	July 2014 - June 2015
Australia	2	0	0
Chile	2	0	0
Colombia	0	4	0
Costa Rica	0	1	0
Ecuador	0	0	1
Egypt	2	0	3
India	3	6	1
Indonesia	5	3	0
Jordan	0	0	1
Kyrgyz Rep.	0	1	0
Malaysia	0	0	1
Morocco	1	1	1
Philippines	0	2	0
Russian Federation	3	0	0
South Africa	2	0	0
Chinese Taipei	0	1	0
Thailand	2	1	0
Tunisia	0	0	2
Turkey	1	1	3
Ukraine	1	0	0
Viet Nam	1	0	0
Total	25	21	13

Source:   WTO Secretariat.

3.31.  Chart 3.6 shows a downward trend in safeguard initiations since 2013. It is noteworthy that the figures for 2009 and 2012, of 25 and 24, respectively, fall short of the peak of 34 initiations observed in 2002.^[19] Based on the small number of initiations in the first half of 2015, it appears that the downward trend in the number of safeguard investigations initiated is continuing.

3.32.  Table 3.6 shows that India and Indonesia were the most active Members throughout the reporting periods, accounting respectively for 10 and 8 of the aggregate 59 new investigations. Egypt and Turkey, with a total of five investigations each, were also active in the periods examined. In the first six months of 2015, only Egypt, Morocco and Turkey initiated an investigation.

3.33.  In terms of product coverage, Chart 3.7 shows that safeguard investigations focused on a diverse range of sectors. As with anti-dumping and countervail initiations, metal products were the most affected by safeguard initiations and were the target of investigations in each of the three periods. Metals accounted for 20% of all safeguard initiations in the first period, 48% of initiations in the second period and 23% of initiations in the current period. Colombia (4 investigations), India (3 investigations) and Indonesia (3 investigations) accounted for over half the aggregate of 19 new investigations into metals.

3.34.  Chemicals ranked as the second most‑targeted sector overall, accounting for 16% of all initiations in the first period and 14% in the second period. However, no Member initiated a safeguard investigation into chemicals in the current period. India initiated five of the aggregate of seven new investigations into this sector.

3.35.  Prepared foodstuffs and paper products were equally the third most targeted sectors, accounting for seven investigations each across the three periods.

Chart 3.6 Safeguard investigation initiations by WTO Members (2008-2015^a)

a             Data for 2015 relate to the January to June period.

Source:   WTO Secretariat.

Chart 3.7 Safeguard initiations by product

Source:   WTO Secretariat.

Sunset Reviews

3.36.  This section examines the effect the global financial crisis may have had on anti-dumping and countervailing actions, by analysing the extent to which measures imposed following the financial crisis have been extended or have expired (or have otherwise been terminated) – the latter possibly suggesting that the financial crisis could have been a factor that contributed to the imposition of the measure. This section, therefore, examines measures imposed as a result of investigations initiated in 2008, before the financial crisis, as well as 2009 and 2010, when the full effects of the financial crisis were being felt.^[20]

3.37.  The relevant WTO Agreements stipulate that anti-dumping and countervailing measures can remain in force only for as long as necessary to counteract injury caused by dumped or subsidised imports, and must expire no later than five years after their imposition unless it is determined, through a review, that removal of a measure would likely lead to a continuation or recurrence of dumping or subsidisation and injury. In such a case, the measure can be extended for up to a further five years. This review process is often referred to as a sunset review. Investigating authorities generally invite applications for a sunset review before a measure expires, and in the absence of a review, they allow the measure to lapse.

3.38.  As of 30 June 2015, measures imposed as a result of investigations initiated in 2008-2010 are in various stages of their lifecycle. Some measures are still within the initial five-year imposition period, some are under review^[21], some have been extended and some have expired.

3.39.  Chart 3.8 shows the status of AD and CVD measures resulting from investigations initiated in 2008, 2009 and 2010 by as at 30 June 2015.

Chart 3.8 Status of measures resulting from AD and CVD investigations initiated in 2008, 2009 and 2010 as at 30 June 2015

Source:   WTO Secretariat.

3.40.  Of the investigations initiated in 2008, only two of the resulting 167 measures have not yet been subject to expiry action (either a sunset review or termination), as opposed to 63 of the 164 measures for 2009. The vast majority of measures resulting from investigations initiated in 2010 (89 out of 111) have not yet been subject to any expiry action.

Table 3.7 Proportion of expiring measures that were subject to a sunset review for all WTO Members (based on the year the investigation was initiated)

Expiring measures	Investigation initiated in
	2008	2009	2010a
Not reviewed	39%	37%	32%
Reviewed	61%	63%	68%

a             Only 22 measures resulting from investigations initiated in 2010 have so far expired or been subject to review.

Source:   WTO Secretariat.

3.41.  Table 3.7 shows the proportion of measures that were due to expire for which a sunset review has been conducted; noting that measures not reviewed will automatically expire. For measures resulting from investigations initiated in 2009 ("the 2009 measures"), 63% were reviewed, similar to the 61% found for 2008 ("the 2008 measures"). Thus, a similar proportion of the 2008 measures (investigations started before the financial crisis) and 2009 measures (investigations started after the financial crisis had begun) expired without review. It is still too early to draw conclusions in relation to the measures based on investigations initiated in 2010.

3.42.  As at 30 June 2015, 44 sunset reviews had been completed for measures resulting from investigations initiated in 2008, nine for 2009 and seven for 2010, as shown in Table 3.8 below. For 2008 and 2009 measures which were reviewed, the relevant Member found that the expiry of the measure would lead to a continuation or recurrence of dumping/subsidisation and injury and extended the measures in 89% of cases – showing no change in relation to the financial crisis.

3.43.  Based on the data currently available, there is no discernible change in extension versus expiry of measures coinciding with the financial crisis. As further time passes and additional data become available, other trends may reveal themselves.

Table 3.8 Results from completed reviews (based on the year the investigation was initiated)

	Investigation initiated in
	2008	2009	2010
Number of completed reviews	44	9	7
Measure extended	89%	89%	71%
Expiry of measure	11%	11%	29%

Source:   WTO Secretariat.

3.3  Sanitary and Phytosanitary Measures (SPS)^[22]

3.44.  Under the SPS Agreement, WTO Members are obliged to provide an advance notice of intention to introduce new or modified SPS measures^[23], or to notify immediately when emergency measures are imposed. The main objective of complying with the SPS notification obligations is to inform other Members about new or changed regulations that may significantly affect trade. Therefore, an increased number of notifications does not automatically imply greater use of protectionist measures, but rather enhanced transparency regarding food safety, animal and plant health measures, many or most of which are presumable legitimate health-protection measures.

3.45.  In the period from October 2014 through September 2015, 1,758 SPS notifications (regular and emergency, including addenda) were submitted^[24] to the WTO, resulting in an increase of 19% in total notified measures compared to the previous period (1 October 2013 to 30 September 2014). Notifications from developing-country Members accounted for 69% of the total number. In the previous year, the total number of notifications and the proportion of measures notified by developing-country Members were lower: from October 2013 through September 2014, a total of 1,479 notifications (regular and emergency, including addenda) were submitted, of which 61% were notified by developing-country Members.

3.46.  From October 2014 through September 2015, WTO Members submitted 1,596 regular SPS notifications (including addenda), 68% of which were submitted by developing-country Members. Compared to the previous period (2013-2014), there was a 19% increase in the total number of regular notifications and a 40% increase in regular notifications by developing-country Members.

3.47.  The number of notifications of emergency measures (including addenda) also increased compared to the previous period (Chart 3.9), representing a 14% increase in the total number of emergency notifications (including addenda). The number of emergency notifications made by developing countries stayed roughly the same, and consequently their proportion decreased from 91% to 84%. These high percentage figures are consistent with the general trend of the majority of emergency measures being notified by developing-country Members. This might stem from the fact that they do not have as extensive SPS regulatory systems as developed-country Members do, and consequently, when facing emergency challenges, they are more likely to have to introduce new regulations or change existing ones.

Chart 3.9 Number of SPS notifications

Source:   WTO Secretariat.

3.48.  Many Members are following the recommendation to notify SPS measures even when these are based on a relevant international standard, as this substantially increases transparency regarding SPS measures. Of the 1,189 regular notifications (excluding addenda) submitted from October 2014 through September 2015, 636 (about 53% of the total) indicated that at least one international standard, guideline or recommendation was applicable to the notified measure (Chart 3.10). Of these, around 69% indicated that the proposed measure was in conformity with the existing international standard.

3.49.  International standards often provide useful guidance regarding measures to address disease outbreaks and other emergency situations. Indeed, about 92% (121 in total) of the 131 emergency notifications (excluding addenda) submitted from October 2014 through September 2015 indicated that an international standard, guideline or recommendation was applicable to the notified measure (Chart 3.11). Of these, all but one indicated that the measure was in conformity with the existing international standard.

 

Chart 3.10 Regular SPS notifications and international standards

 

Note:       Codex Alimentarius (Codex), World Organisation for Animal Health (OIE) and International Plant Protection Convention (IPPC).

Source:   WTO Secretariat.

Chart 3.11 Emergency SPS notifications and international standards

 

Note:      Codex Alimentarius (Codex), World Organisation for Animal Health (OIE) and International Plant Protection Convention (IPPC).

Source:   WTO Secretariat.

3.50.  Of the 1,189 regular notifications (excluding addenda) submitted from October 2014 through September 2015, the majority were related to food safety and plant protection.^[25] The remaining notifications related to the protection of humans from animal diseases or plant pests, the protection of the Member's territory from other damage from pests, and animal health. Most of the regular notifications identified more than one objective per measure.

3.51.  Of the 131 emergency measures (excluding addenda) notified in the same period, the majority related to animal health, followed by measures related to the protection of humans from animal diseases or plant pests, food safety, plant protection and the protection of the Member's territory from other damage from pests. Similarly, the majority of emergency notifications during this period identified more than one objective per measure.

3.52.  While no formal provision for "counter notification" exists, concerns regarding the failure to notify an SPS measure, or regarding a notified measure, can be raised as a specific trade concern (STCs) at any of the three regular meetings of the SPS Committee each year. In the two Committee meetings of March and July 2015, 14 new STCs were raised. Five of these new STCs related to food safety, another five to animal health, two to plant health and another two were related to other concerns (Table 3.9). Furthermore, at the March 2015 meeting, one STC was reported as resolved.^[26]

Table 3.9 SPS specific trade concerns raised between March and July 2015

STC	Document Title	Members maintaining the measure	Members raising the concern	Members supporting the concern	Date raised	Primary objective
383	China's measures on bovine meat	China	India		26/03/2015	Animal health
384	General import restrictions due to African swine fever	Certain Members	European Union		26/03/2015	Animal health
385	General import restrictions due to highly pathogenic avian influenza	Certain Members	European Union		26/03/2015	Animal health
386	Mexico's measures on imports of hibiscus flowers	Mexico	Nigeria	Burkina Faso, Senegal	26/03/2015	Plant health
387	Chinese Taipei's strengthened import restrictions on food with regard to radionuclides	Chinese Taipei	Japan		26/03/2015	Food safety
388	United States proposed rule for user fees for agricultural quarantine and inspection services	United States	Mexico		26/03/2015	Other concerns
389	Chinese import regime, including quarantine and testing procedures for fish	China	Norway		15/07/2015	Food safety
390	The Russian Federation's import restrictions on processed fishery products from Estonia and Latvia	Russian Federation	European Union		15/07/2015	Food safety
391	Malaysia's import restrictions related to approval of poultry meat plants	Malaysia	Brazil		15/07/2015	Other concerns
392	China's import restrictions due to African swine fever	China	European Union		15/07/2015	Animal health
393	The Republic of Korea's import restrictions due to African swine fever	Korea, Rep. of	European Union		15/07/2015	Animal health
394	Costa Rica's temporary suspension of the issuing of phytosanitary import certificates for avocados	Costa Rica	Guatemala, Mexico	South Africa, United States	15/07/2015	Plant health
395	China's proposed amendments to the implementation regulations on safety assessment of agricultural GMOs	China	Paraguay, United States		15/07/2015	Food safety
396	EU proposal to amend regulation (EC) No. 1829/2003 to allow EU member States to restrict or prohibit the use of genetically modified food and feed	European Union	Argentina, Paraguay, United States	Brazil, Canada, Uruguay	15/07/2015	Food safety

 Source:  WTO Secretariat.

3.53.  Nineteen previously raised STCs were discussed at the March and July 2015 SPS Committee meetings. Of these previously raised STCs, four addressed persistent problems that have been discussed seven times or more. In particular, two STCs have been discussed on 18 or more occasions (Table 3.10). In addition, three STCs raised for the first time in March 2015 were discussed again in July 2015.^[27]

Table 3.10 Previously-raised SPS specific trade concerns discussed in March and July 2015

STC	Document title	Members maintaining the measure	Members raising the concern	Members supporting the concern	First date raised	Times raised
193	General import restrictions due to bovine spongiform encephalopathy (BSE)	Certain Members	European Union, United States	Canada, Switzerland, Uruguay	01/06/2001	24
238	Application and modification of the EU Regulation on Novel Foods	European Union	Colombia, Ecuador, Peru	Argentina, Benin, Bolivia-Plurinational State of, Brazil, Chile, China, Costa Rica, Cuba, El Salvador, Guatemala, Honduras, India, Indonesia, Mexico, Nicaragua, Paraguay, Philippines, Uruguay, Bolivarian Rep. of Venezuela	01/03/2006	18
289	Measures on catfish	United States	China		28/10/2009	4
330	Indonesia's port closures	Indonesia	Chile	Argentina, Australia, Canada, Chile, Chinese Taipei, Japan, Rep. of Korea, South Africa, Thailand, Uruguay	27/03/2012	7
340	Requirements for importation of sheep meat	Turkey	Australia	United States	18/10/2012	7
346	Ban on Bisphenol A (BPA)	European Union, France	United States	Brazil	21/03/2013	2
354	Import restrictions in response to the nuclear power plant accident	China; Chinese Taipei; Hong Kong, China; certain Members	Japan		27/06/2013	5
356	Phytosanitary measures on citrus black spot	European Union	South Africa	Argentina	27/06/2013	4
358	Import conditions for pork and pork products	India	European Union	Canada	16/10/2013	5
359	Strengthened import restrictions on food and feeds with regard to radionuclides	Korea, Rep. of	Japan		16/10/2013	4
373	United States high cost of certification for mango exports	United States	India	Dominican Republic	09/07/2014	3
374	EU ban on certain vegetables from India	European Union	India	Nigeria	09/07/2014	3
375	United States non‑acceptance of OIE categorization for BSE	United States	India		09/07/2014	3
376	Australia's non-acceptance of OIE categorization for BSE	Australia	India		09/07/2014	3
378	EU withdrawal of equivalence for processed organic products	European Union	India		09/07/2014	3
382	EU revised proposal for categorization of compounds as endocrine disruptors	European Union	United States	Argentina, Brazil, Canada, China, Colombia, Costa Rica, Guatemala, India, Kenya, Madagascar, Malaysia, Mexico, Nigeria, Pakistan, South Africa, Uruguay	25/03/2014	2
383	China's measures on bovine meat	China	India		26/03/2015	1
387	Chinese Taipei's import restrictions on Japanese foods in response to the nuclear plant accident	Chinese Taipei	Japan		26/03/2015	1
388	United States' proposed rule for user fees for agricultural quarantine and inspection	United States	Mexico		26/03/2015	1

 Source: WTO Secretariat.

3.54.  Analysing the March 2015 and July 2015 SPS Committee meetings, 36% of all STCs raised for the first time concerned food safety, 36% concerned measures covering animal health, 14% covered plant health and 14% related to other types of concerns.^[28] Regarding previously-raised STCs in the reviewed period, 32% concerned animal health, 32% concerned measures covering food safety, 21% covered plant health and 16% related to other types of concerns.^[29] Of the total raised or discussed STCs in the reviewed period, 33% concerned measures covering animal health, 33% covered food safety, 18% concerned plant health and 15% of total STCs related to other types of concerns.

3.4  Technical Barriers to Trade (TBT)

3.55.  Under the TBT Agreement, WTO Members are obliged to notify their intention to introduce new or modified TBT measures, or to notify immediately after adopted emergency measures are imposed. The main objective of complying with the TBT notification obligations is to inform other Members about new or changed regulations that may significantly affect trade.^[30] Therefore, an increased number of notifications does not necessarily imply greater use of protectionist or unnecessarily trade-restrictive measures. TBT notification obligations are meant to promote enhanced transparency regarding measures taken to address legitimate policy objectives, such as the protection of human, animal or plant life or health, or the environment.

3.56.  During the period from 1 January to 25 September 2015 ("review period"), WTO Members submitted 1,039 regular notifications of TBT measures^[31], of which around 84% were submitted by developing-country Members.^[32] This overall number of 1,039 notifications is markedly lower than in the period January 2014 – September 2014, although the proportion from developing countries is only slightly higher.^[33] The United States submitted the highest number of notifications during the review period (218), followed by Brazil (89) and the Republic of Korea (65). The main objectives^[34] indicated in these notifications were: "protection of human health or safety" (47%); "prevention of deceptive practices and consumer protection" (18%); and "protection of the environment" (13%).

3.57.  Any Member may raise Specific Trade Concerns (STCs) with respect to TBT measures taken or proposed by other Members.^[35] These STCs are frequently discussed in the regular meetings of the TBT Committee, with between 40 to 50 STCs discussed per meeting in recent years (Chart 3.12). Depending on the extent of the trade disruption and importance of the issue to the Members raising the STC, the same measure may come up at one or more meetings of the TBT Committee. For example, a STC may be discussed at only one meeting (as a new STC), and subsequently a resolution may be found; on the other hand, an STC may be discussed at subsequent meetings to the one in which it was first raised (previously raised STC), usually reserved for long standing and more serious concerns. Trends with respect to such "persistently raised STCs" are briefly discussed below.

 

3.58.  Since 1995 and up to 25 September 2015, Members have raised 473 new STCs. In 2014, a record of 47 new STCs were raised, the most in any given year since 1995. An upward trend in STCs has been observed since 2005 (see Chart 3.12). 2014 was also the second highest year in the overall number of STCs (new and previously-raised) discussed (85).^[36] So far in 2015, fewer new STCs have been raised as compared to recent years, but the number of previous STCs is higher than in any year after 2012, and already the second peak in the history of the TBT Committee, with one TBT Committee meeting still to come in November 2015. While Members are flagging fewer new TBT issues in the Committee, issues from past years that have become entrenched in legislation are the focus of persistent concerns.

3.59.  As illustrated by Chart 3.13, there is a marked correlation between the number of new notifications and new STCs raised each year. On average, since 1995, 66% of STCs discussed in TBT Committee meetings relate to notified measures.^[37]

3.60.  Members raised 20 new STCs during the Committee meetings that fell within the reviewed period (March and June 2015). Overall, 73 new and previously-raised STCs were discussed, keeping with the trend of a greater number of STCs being discussed per meeting as well as per year. The list of all new concerns raised in the March and June 2015 meetings is provided in Table 3.11.

3.61.  Chart 3.14 illustrates that the number of STCs discussed in the TBT Committee annually has grown significantly between 2005 and 2014 (from 33 to 148). This upward trend, which is likely to be maintained in 2015, shows that the Committee has spent more time discussing STCs than any other item on the agenda (only an average of around 11 STCs were discussed per meeting in 2005 while that figure was 49 in 2014).

Chart 3.12 Number of STCs raised with respect to Members' TBT measures per year

Note:       This chart counts the number of TBT measures discussed as STCs per year. Data for 2015 do not include STCs raised at the November 2015 TBT Committee meeting. Previously raised concerns are counted only once even if they are raised in subsequent meetings.

Source:   WTO Secretariat.

Chart 3.13 Number of notifications versus number of new STCs

Note:       STCs raised in November 2015 are not included.

Source:   WTO Secretariat. WTO document G/TBT/36, 23 February 2015.

Chart 3.14 STCs discussed per committee meeting, 2005 – 2015

Note:       This chart counts the number of STCs on the agenda of the TBT Committee per meeting. Note that the same STC can be raised at all three meetings in a year and, in this chart, is counted under all three meetings. Data for 2015 do not include STCs raised at the November 2015 TBT Committee meeting.

Source:   WTO Secretariat. WTO document G/TBT/36, 23 February 2015.

3.62.  Around 26% of the 73 STCs (new and previous) raised during the review period concern measures regulating alcohol (6), cosmetics (6), tobacco (5) and nutrition (2). Besides these areas, STCs from the review period addressed a range of issues, including two that are becoming more frequently discussed in the Committee: IT and environment. Trade concerns related to toy safety also featured on the agenda, with a total of five trade concerns among which two were new. Regulations by the EU and Chinese Taipei on Genetically Modified Organisms (GMOs) in food and crops were the subject of two new specific trade concerns.

Table 3.11 New STCs raised during the March and June 2015 TBT Committee meetings

Member maintaining the measure (in alphabetical order)	STC title	Stated objective	Product coverage	Member(s) raising the concern
Canada	Tobacco Reduction (Flavored Tobacco Products) Amendment Act, 2013 – Bill 206 (ID 463)	Protection of human health and safety	Flavoured tobacco products	Indonesia
Brazil	Draft Ordinance Act Nº. 374, 27 November 2014 (Portaria SDA/MAPA 374/2014) establishes quality requirements for wine and derivatives of grape and wine, G/TBT/N/BRA/613	Prevention of deceptive practices and consumer protection; Quality requirements	Wine; Grape juice, sweetened or not; Vinegar. Wine of fresh grapes, including fortified wines; grape other than that of heading 20.09. (HS: 2204), Vinegar and substitutes for vinegar obtained from acetic acid.	European Union
China	Administrative Measure on Cosmetics Labelling (AMCL) (ID 456)	Integrating, summarizing and adjusting the relevant existing regulations and standards to promote the norm, healthy development of the industry.	Cosmetics	Canada; Japan; Republic of Korea; United States; European Union
China	Banking IT Equipment Security Regulation (ID 457)	To strengthen the security of the information network	IT banking system	Canada; Japan; United States; European Union
China	Registration Fees for Drugs and Medical Device Products	N/A	Medical Devices	Canada; United States; Republic of Korea
China	Technical Specification for Natural Rubber	N/A	Natural Rubber	Indonesia; Malaysia
Ecuador	Emergency Technical Regulation (RTE) No. 088: "Surface tension agents", of the Ecuadorian Standardization Institute (INEN) G/TBT/N/ECU/117 (ID 458)	Protection of human health and safety; protection of the environment; prevention of deceptive practices	Surface tension agents	Mexico
European Union	Proposed modification of Regulation (EC) 1829/2003 referring to genetically modified organisms, G/TBT/N/EU/284	Allow Member States to take into account other considerations than those assessed under the EU procedure of authorisation	Genetically modified food and feed	Argentina; Paraguay; United States; Canada; Brazil
France	Ban on BPA in toys		Toys	United States
Indonesia	Regulation of the Minister of Agriculture No. 39/Permentan/PD.4, 10 December 2014, concerning Importation of Carcass, Meat and/or Processed Meat Products into the Territory of the Republic of Indonesia, and Regulation of the Minister of Agriculture No. 02/Permentan/PD.4, 10 January 2015, concerning the Amendment of the Regulation of the Minister for Agriculture No. 39/Permentan/PD.4, 10 December 2014 (ID 461)	Protection of human health and safety; protection of the environment	Meat	Australia; Canada; European Union
Indonesia	MOI 69/2014 Article 3: LCR Requirements for LTE Devices - Requirement that Domestic Component Level (TKDN) of LTE TDD & FDD broadband services equipment	N/A	Telecommunication devices-LTE Products	United States; Canada; Japan; Australia; European Union
Japan	Wood Use Points Programme (ID 459)	Protection of the environment; development in rural areas	Wood	Russian Federation
Mexico	Standard on non-alcoholic and soft drinks (ID 462)	N/A	Juices and non-alcoholic drinks	El Salvador
Norway	Draft amendments to the Tobacco Control Act and the Tobacco Labelling Regulations relating to Standardised Tobacco Products	Protection of human health and safety	Tobacco	Indonesia; Dominican Republic; Zimbabwe; Cuba
Russian Federation	Technical Regulations on Safety of Railway Transport (TR CU No. 002/2011 and No. 003/2011) (ID 460)	Protection of human health and safety	Railway transport	Ukraine
Russian Federation	Measure affecting import of Ukrainian food salt	Consumer Protection	Food salt	Ukraine
Sweden	Chemical Taxation for Certain Electronics	N/A	Electronics	Republic of Korea
Chinese Taipei	GMO Labelling	Protection of consumer rights	Pre-packaged food, unpackaged food and food additives	Canada; United States; New Zealand
Chinese Taipei	Additional labelling standard of prefecture of origin for foods from Japan	Validation of area of production	Food	Japan
Turkey	Toy Communique 01/2015	Protection of human health and safety	Toys	United States

Source:   WTO Secretariat.

3.63.  Eight of the 53 previously-raised STCs (Table 3.12) during the review period addressed persistent concerns that have been discussed in the Committee for a number of years (10 or more times). The majority (62%) of the persistently raised STCs relate to the objective of the protection of human health and safety. Overall, cosmetics and IT products constitute the most frequently raised product categories.

Table 3.12 Persistently raised STCs

	Persistently raised STCs (March and June 2015 TBT Committee meetings)	Frequency
1	India - Pneumatic tyres and tubes for automotive vehicles.	27 times
2	India - Drugs and Cosmetics Rules 2007.	20 times
3	China - Provisions for the Administration of Cosmetics Application.	15 times
4	India - New Telecommunications related Rules (Department of Telecommunications, No. 842-725/2005-VAS/Vol.III (3 December 2009); No. 10-15/2009-AS-III/193 (18 March 2010); and Nos. 10-15/2009-AS.III/Vol.II/(Pt.)/(25-29) (28 July 2010); Department of Telecommunications, No. 10-15/2009-AS.III/Vol.II/(Pt.)/(30) (28 July 2010) and accompanying template, "Security and Business Continuity Agreement").	15 times
5	China – Requirements for information security products, including, inter alia, the Office of State Commercial Cryptography Administration (OSCCA) 1999 Regulation on commercial encryption products and its on-going revision and the Multi-Level Protection Scheme (MLPS).	14 times
6	Russian Federation – Draft on Technical Regulation of Alcohol Drinks Safety (published on 24 October 2011).	11 times
7	Republic of Korea – Regulation on Registration and Evaluation of Chemical Material.	11 times
8	Indonesia - Technical Guidelines for the Implementation of the Adoption and Supervision of Indonesian National Standards for Obligatory Toy Safety.	11 times

Source:   WTO Secretariat.

3.5  Trade Concerns Raised in Other WTO Bodies

3.64.  During the period covered by this report a number of other trade concerns were raised by Members in formal meetings of various WTO bodies.^[38] With a view to increasing transparency, this section aims to provide a brief and factual overview of such concerns raised between mid‑October 2014 and mid-October 2015.^[39] As this section does not seek to reproduce the full substantive description of the trade concerns described by Members, a specific reference is made to the relevant formal meeting where a particular issue was raised. For the full account and context of the concerns, Members are invited to consult the records of the respective WTO bodies. The list of concerns and issues mentioned in this section is not exhaustive.

3.65.  At the meeting of Council for Trade in Goods (CTG) on 26 March 2015^[40] new concerns were raised on (i) the restrictive measures on automobiles adopted by Ecuador (Japan) and (ii) Ecuador's Resolution 11-2015 establishing a temporary import surcharge for balance‑of‑payments (BOPs) reasons (Japan). The latest measure has been also raised in the Committee on Balance‑of‑Payments.

3.66.  The above-mentioned concerns were reiterated at the CTG meeting of 26 June 2015^[41] together with other concerns which had been previously raised on (i) Nigeria's restrictions/ban on imports of sea products (Iceland and Norway); (ii) Nigeria's local‑content measures in the energy sector, which had also been raised in 2011, 2014 and in the April 2015 TRIMs Committee (EU and the United States); (iii) the Russian Federation's measures particularly affecting the automotive sector where local content requirements are imposed to obtain preferential treatment in the assembly process, and the subsidies provided to domestic producers in the areas of energy consumption; production of ecologically‑friendly vehicles; employment and; development (Australia, Canada, EU, Japan, New Zealand, Ukraine and the United States); (iv) Indonesia's trade and investment restrictions, including import licensing requirements, unique technical regulations and conformity assessment procedures, pre‑shipment inspection requirements, export restrictions, and local content and domestic manufacturing requirements (Australia, Brazil, Canada, EU, Japan, New Zealand, Chinese Taipei and the United States). At the same meeting new concerns were expressed on (i) Pakistan's discriminatory taxes implemented with Regulatory Order No. 1125 (Canada, EU, Norway, Switzerland, Chinese Taipei and the United States) also raised at the Committee of Market Access and during Pakistan's recent Trade Policy Review and; (ii) the EU's low pace in compensation negotiations following the accession of Croatia (Brazil).

3.67.  At the meeting, of the Committee on Market Access on 4 June 2015^[42], Switzerland raised the issue of the discrepancy between bound and applied duties on cigarettes implemented by the Kingdom of Bahrain. At the same meeting the EU expressed its concerns on Pakistan's discriminatory taxation between imported products and like domestic products, an issue which had been previously raised in Pakistan's recent Trade Policy Review. At the 29 September 2015 meeting^[43], concerns were reiterated on customs duties on cigarettes implemented by the Kingdom of Bahrain (Switzerland) and Pakistan's discriminatory taxes (EU). New concerns were raised on (i) Colombia's excise taxes on alcoholic beverages (EU); (ii) Argentina's tax discrimination against imported vehicles (EU); (iii) certain import restrictions imposed by Haiti (Dominican Republic); and (iv) on Nigeria's import restrictions (Chile).

3.68.  In the Committee on Agriculture (CoA)^[44] a number of questions and concerns were raised with respect to Members' individual notifications and on implementation-related issues under Article 18.6. During the period concerned, a total of 401 questions were discussed, including on individual notifications (303 questions) and under Article 18.6 (91 questions), as well as on overdue notifications (7 questions). Additional details regarding these questions and concerns can be found in Section 3.6 of the report.

3.69.  At the meeting of the Committee on Customs Valuation^[45] concerns were reiterated on issues previously raised on (i) the alleged use by Armenia of reference prices (the United States); and (ii) Indonesia's lack of notifications on Pre-Shipment Inspection measures (the United States).

3.70.  A number of concerns were raised at the meeting of the Committee on Import Licensing^[46] on (i) Angola's Joint Executive Decree 22/15 regulating the importation, distribution and sale of food/non-food products (EU); (ii) India's import licensing system on marble and marble products (EU); (iii) Nigeria's licensing procedures on importation of maritime pelagic fish (EU); (iv) Turkey's surveillance licensing regime on import authorisation of old, second‑hand and renovated goods, and its import regime for non-fuel petroleum products (EU); (v) Mexico's automatic licensing procedures on certain steel products (the United States); (vi) issues related to the product coverage and implementation of the import licensing regime of Viet Nam (the United States); (vii) Brazil's non‑automatic licensing measures on the importation of nitrocellulose (the United States); (viii) Indonesia's import licensing regime on cellular phones, handheld computers and tablets (the United States); (ix) India's import licensing requirements on boric acid (the United States); (x) Bangladesh's import licensing procedures and in particular with respect to the importation of medicines (the United States); and (xi) Indonesia's import licensing regulations on carcasses and processed meat products (Australia).

3.71.  In the upcoming meeting of the Committee scheduled for the 20 October^[47], a number of trade concerns have been included in the agenda. Some of them are issues which have been raised in previous meetings as for example, India's import procedures on marble and marble products (EU) and Brazil's regulatory requirements for imports of nitrocellulose (EU). The United States will make statements on Indonesia's import licensing regime for cell phones, handheld computers and tablets, India's import licensing requirements on boric acid, Mexico's steel import licensing program, Bangladesh's import licensing procedures as well as Viet Nam's imports of distilled spirits. New trade concerns will be raised on (i) Indonesia's new regulation on tyre imports (EU) and (ii) India's amendments in the import policy conditions applicable to apples (EU and the United States).

3.72.  A number of new concerns were expressed at the 16 April 2015 meeting of Trade-Related Investment Measures (TRIMs) Committee^[48] on (i) China's local content requirements for purchases of technology by the banking sector (the United States and Japan); (ii) Indonesia's local content requirement for 4G LTE mobile devices (the United States); (iii) India's local content requirement in solar power generation projects (EU); (iv) Turkey's local content requirements in the electricity generation (EU); (v) the support measures by the Russian Federation for the automotive sector (EU and Japan) and; (vi) the Russian Federation's local content requirements for purchases by state-owned enterprises (EU and the United States). Other concerns expressed at the meeting include issues previously raised on (i) certain preferences granted by India to domestically manufactured electronic goods and telecommunication products (EU); (ii) measures by Indonesia addressing local content in investment in the telecommunications sector (Japan); (iii) Indonesia's local content provisions in the energy sector (EU, Japan and the United States); (iv) local content measures taken by Nigeria in the energy sector (EU); (v) local content requirements in some U.S. renewable energy programmes (India); (vi) the Russian Federation's local content requirements for agricultural equipment (EU); (vii) Indonesia's minimum local product requirements for modern retail sector (EU, Japan and the United States) and; (viii) restrictions of Indonesia's newly adopted Industry Law and Trade Law (EU, Japan and the United States).

3.73.  One new concern was expressed at the TRIMs Committee of 5 October 2015^[49] relating to the Republic of Korea's assistance measures for agricultural machinery (Japan). Other concerns expressed at the meeting included issues previously raised on: (i) India's local content requirement in solar power generation projects (EU); (ii) Indonesia's local content requirement for 4G LTE mobile devices (the United States); (iii) Indonesia's local content provisions in the energy sector (EU, Japan and the United States); (iv) measures by Indonesia addressing local content in investment in the telecommunications sector (Japan and the United States); (v) Indonesia's minimum local product requirements for modern retail sector (EU, Japan and the United States) and; (vi) restrictions of Indonesia's newly adopted Industry Law and Trade Law (EU, Japan and the United States); (vii) local content measures taken by Nigeria in the energy sector (EU and the United States); (viii) support measures by the Russian Federation for the automotive sector (EU, Japan); (ix) the Russian Federation's local content requirements for purchases by state-owned enterprises (EU and the United States); (x) the Russian Federation's local content requirements for agricultural equipment (EU and the United States) and; (xi) local content requirements in some U.S. renewable energy programmes (India).

3.74.  In the Committee on Safeguards^[50], concerns were raised at the 27 October 2014 meeting and the 27 April 2015 meeting regarding (i) Colombia's bars and rods of low-carbon steel; (ii) Ecuador's wood and bamboo flooring and accessories thereof; (iii) Egypt's steel rebar; white sugar and; automotive batteries; (iv) India's seamless pipes, tubes and hollow profiles of iron or non-alloy steel; saturated fatty alcohols; flexible slabstock polyol and; not-alloyed ingots of unwrought aluminium; (v) Indonesia's coated paper and paperboard, not including banknotes; cotton yarn other than sewing; wheat flour; flat-rolled product of iron or non-alloy and; I and H sections of other alloy steel; (vi) Malaysia's hot-rolled steel plate; (vii) Morocco's cold-rolled sheets and plated or coated sheets and; wire rods and reinforcing bars; (viii) Philippines' steel angle bars and; newsprint; (ix) South Africa's frozen potato chips; (x) Thailand's non-alloy hot rolled steel flat products; (xi) Tunisia's fibreboard of wood and; glass bottles; (xii) Turkey's polyethylene terephthalate; printing, writing and copying paper; terephthalic acid; wallpaper and similar wallcoverings and; transmission apparatus incorporating reception apparatus (cellular) portable telephone and; (xiii) Ukraine's tableware and kitchenware of porcelain and; casing and pump‑compressor seamless steel pipes.

3.75.  Members also discussed the Russian Federation's alleged non-notification of certain safeguard actions initiated before its accession to the WTO and the Kingdom of Bahrain's alleged delay in notifying its safeguard legislation.

3.76.  In the Committee on Subsidies and Countervailing Measures^[51] concerns were raised at the 28 October 2014 and 28 April 2015 meetings in respect of countervailing duty actions on (i) India's investigation on imports of casting for wind operated electricity generators (China); (ii) U.S.' investigation on imports of certain crystalline silicon photovoltaic products (China); U.S. measures on Turkish iron and steel products (Turkey) and; (iv) Ukraine's investigation on imports of light motor vehicles (the Russian Federation). With respect to notifications, concerns were raised about the non‑notification of alleged subsidies by India and China, and requests were made to China for more information on certain alleged subsidy programmes (the United States). On subsidies, concerns were raised on (i) certain local content requirements in renewable energy sector subsidy schemes in the United States (Russian Federation and India); (ii) Japan's support for the Mitsubishi Regional Jet project in the aircraft sector (Brazil); (iii) India's sugar subsidies provided under its Sugar Development Fund (Australia); (iv) support provided by Canada for the development of a new cement facility in Quebec (the United States) and; (v) India's export subsidies in the textile and apparel sector (the United States).

3.77.  At the 29 October 2014 and 29 April 2015 meetings of the Committee on Anti-Dumping Practices^[52] concerns were raised on (i) Argentina's investigation on imports of copper-based fungicides (Chile); review of the anti-dumping measure on air-conditioning products (Thailand) and; the sunset review and change of circumstances review on locks and chains (Peru); (ii) Australia's investigation into rod in coils (Turkey); on imports of quenched and tempered steel plate (Japan) and; on steel reinforcing bar (Turkey); (iii) Brazil's investigation on biaxially-oriented polypropylene (Peru, Chile and Colombia) and; on bus and truck tyres (Korea, Rep. of); (iv) China's investigation on optical fibre preform (Japan); on methyl methacrylate (Japan) and; sunset review on polyvinyl chloride (Japan); (v) the Dominican Republic's imposition of definitive measures on steel rods and bars for concrete reinforcement (Turkey); (vi) the EU's simultaneous anti-dumping and countervailing investigation on imports of stainless steel cold rolled flat products (China); the measures on ammonium nitrate, seamless pipes and tubes, welded tubes and pipes (Russian Federation) and; the investigations on aluminium foils and grain oriented flat rolled products of silicon electrical steel (Russian Federation); (vii) India's investigation on flexible slab stock polyol (Australia); on ethyl hexanol and butanol (EU); on acetone, purified terephthalic acid and phenol (Korea, Rep. of); on investigation and measures on sodium nitrate (Ukraine); (viii) Indonesia's initiation of an investigation against wheat flour (Turkey) and; the sunset review on hot rolled coil (Korea, Rep. of and the Russian Federation) and; (ix) the Republic of Korea's investigation on valves for pneumatic transmissions (Japan).

3.78.  Concerns were also raised on (x) Mexico's measures on certain steel products, thick hot rolled coils, thin hot rolled coils, thick hot rolled plate and cold rolled coils (Russian Federation) and; preliminary determination in the investigation on ammonium sulphate (the United States); (xi) Morocco's final determination regarding the investigation on imports of hot rolled steel sheets (Turkey); (xii) Philippines' provisional anti-dumping measures on wheat flour (Turkey); (xiii) South Africa's investigation on frozen chicken (EU); (xiv) Turkey's investigation on cotton (the United States); (xv) Ukraine's interim review of anti-dumping measures on nitrate ammonium (Russian Federation); partial interim review of measures on float glass (Russian Federation); measures on point works (Russian Federation); (xvi) the U.S. investigation on imports of grain‑oriented electrical steel (Russian Federation); the great length of U.S. anti-dumping measures against certain Japanese products (Japan); the investigation on non-oriented electrical steel (Japan); (xvii) the preliminary and final determinations made by Viet Nam on exports of cold rolled stainless steel (Malaysia) and; (xviii) the expiry review of the measure imposed by the EU on imports of ammonium nitrate (Russian Federation). Other trade concerns were raised in relation to certain practices of Members on product scope determinations in anti-dumping investigations by the Russian Federation. Finally, Mexico raised concerns over Colombia's investigation on DOP plasticizers, while Peru voiced concerns over Argentina's sunset review on fasteners.

3.79.  In the meetings of the Committee on Balance-of-Payments (BOPs) Restrictions consultations were held with Ukraine^[53] and Ecuador^[54] and trade concerns were raised by a number of Members on the introduction of an import surcharge for BOP purposes.

3.80.  At the Council for Trade in Services (CTS) meeting of 28 November 2014^[55] concerns were raised on Ukraine's reforms of its Unified Gas Transportation System (Russian Federation). These concerns were reiterated at the meetings of 18 March, 3 June 2015 and 15 October 2015.^[56]

3.81.  Concerns previously raised at the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS)^[57] with respect to Australia's measures related to plain packaging of tobacco products and their compatibility with the TRIPS Agreement (Cuba, Dominican Republic, Honduras, Indonesia, Nicaragua, Ukraine and Zimbabwe) were reiterated in the first meeting in 2015^[58] (Cuba, Dominican Republic, Honduras, Indonesia, Nicaragua, Nigeria and Zimbabwe).

3.82.  In the Committee on Trade and Development (CTD), several least-developed countries (LDCs) raised concerns with the lack of progress in the implementation of the duty-free and quota-free (DFQF) market access decision for LDCs. A request was made for the Secretariat to assist in an assessment of the implementation of the DFQF decision.^[59] In the CTD's Dedicated Session on Small Economies, a predominant trade concern, in the period under review, was how small and vulnerable economies could better integrate into global value chains in goods and services trade. A Secretariat report on this subject was discussed by Members.^[60]

3.83.  In the Committee on Government Procurement^[61] concerns were raised regarding a number of "Buy American" or similar legislative initiatives (Canada) and were reiterated in its first meeting of 2015^[62] (Canada).

3.6  Policy Developments in Agriculture

3.84.  The Committee on Agriculture (CoA) provides a forum for Members to discuss matters related to agriculture trade and to consult on matters relating to the Members' implementation of commitments under the AoA, including rules-based commitments. The review work by the CoA is based on notifications Members make on their commitments. There is also a provision in Article 18.6 that allows Members to raise any matter relevant to the implementation of the commitments under the AoA.

3.85.  In the framework of the CoA meetings in November 2014, March 2015, June 2015 and September 2015, Members posed a total of 401 questions, including both questions on individual notifications and under Article 18.6, with more than half of those questions (246) directed at issues related to domestic support notifications or implementation of domestic support commitments.

3.86.  In total, nine Members raised 92 questions on 41 implementation-related issues (Article 18.6) in the above‑mentioned meetings. As can be seen in Chart 3.15, 2014 is the year which has had the largest number of questions raised under Article 18.6.

Chart 3.15 Number of questions raised under Article 18.6 (1995-2015^a)

 

a                         Until 15 October 2015.

Source:   WTO Secretariat.

3.87.  Out of the 41 implementation‑related issues raised in the CoA in the review period, 24 issues were discussed for the first time, whereas the remaining issues had been discussed one or more times in previous years under matters raised under Article 18.6. Table 3.13 indicates the specific issues relating to implementation commitments that were discussed for the first time in the CoA during these three CoA meetings.

Table 3.13 New Article 18.6 issues

CoA meeting number	COA meeting date	Question raised by	Answered by	Question summary	Products
78, 77, 76	24/09/2015 04/06/2015 04/03/2015	United States	India	Cotton policies	Cotton
78, 77	24/09/2015 04/06/2015	European Union	China	Maize subsidies	Corn
78, 77	25/09/2015 04/06/2015	Australia, New Zealand	Switzerland	Switzerland's export subsidy budget
78, 76	13/11/2014 04/03/2015	European Union, United States	Russian Federation	Agricultural support for 2015
78, 76	13/11/2014 04/03/2015	New Zealand, United States	Canada	Tariff-rate quota for cheese	Cheese
77, 76	04/06/2015 04/03/2015	Australia, European Union	Pakistan	Pakistan's wheat export subsidies	Wheat
77, 76	04/06/2015 04/03/2015	Australia, Brazil, European Union	Thailand	Thailand's sugar policies	Sugar, cane or beet sugar
77, 73	04/06/2015 04/03/2015	Australia	Indonesia	Regulation on importation of meat	Bovine
78	24/09/2015	Australia	European Union	Dairy policies	Dairy, milk, milk powders, butter, cheese
78	24/09/2015	United States	India	Export assistance programmes	Meat, bovine, swine, sheep and goat, poultry, horses, milk, sugar, cane or beet sugar
78	24/09/2015	European Union, New Zealand, United States, Chile	India	Importation of apples	Fruit
78	24/09/2015	Australia	India	Minimum indicative export quotas for sugar	Sugar, cane or beet sugar
78	24/09/2015	Australia	Indonesia	Restrictions on importation of sugar	Sugar, cane or beet sugar
78	24/09/2015	Australia, Thailand	Korea, Rep. of	Rice imports	Rice
78	24/09/2015	European Union	Russian Federation	Wheat export tax	Wheat
77	04/06/2015	European Union	Egypt	Egypt's domestic support notifications
76	04/03/2015	Australia	United States	Export Credit Guarantee Program
76	04/03/2015	European Union	Russian Federation	Grain exports	Cereals, wheat, corn, rice, malt, coarse grains
76	04/03/2015	European Union	Angola	Angola's Joint Executive Decree on import regulation
75	13/11/2014	European Union	Brazil	Tax credit programmes
75	13/11/2014	Canada	Turkey	Agricultural credit and investment subsidies	Bovine, swine
75	13/11/2014	European Union	Egypt	Egypt's domestic support and export subsidies
75	13/11/2014	Canada	Jordan	Jordan's inflation adjustments on the fixed external reference price
75	13/11/2014	Canada	Thailand	Thailand's Rice Farmer Assistance Programme	Rice

Source:   WTO Secretariat.

3.88.  A large number of the new issues related to the area of export competition, such as the request for confirmation and clarification on the use of export subsidies (i.e. China's maize subsidies^[63], EU dairy policies^[64] and India's export assistance programmes^[65]), export credits and export credit guarantees (i.e. Brazil's tax credit programme^[66] and the U.S. Export Credit Guarantee Programme^[67]). Other questions fell under the sphere of market access where Members requested an explanation of measures that restricted, or had the potential to restrict, the importation of a particular product (i.e., India's importation of apples^[68] and Indonesia's restrictions on the importation of sugar^[69] and its regulation on importation of meat^[70]). Issues were also raised in relation to policies falling in the area of domestic support (i.e. India's cotton policies^[71], Turkey's agricultural credit and investment subsidies^[72]). There were two issues raised in relation to specific policy interventions in the area of export restrictions (i.e. the Russian Federation's grain exports^[73] and its wheat export tax^[74]).

3.89.  Other measures that were discussed related to follow-up questions on persistent areas of concern. Table 3.14 indicates the issues that were discussed in November 2014 and March, June and September 2015.

Table 3.14 Questions previously raised under Article 18.6

CoA meeting number	COA meeting date	Question raised by	Answered by	Question summary	Products	Times raised in the CoA (1995-2015)
78, 77, 76, 75	24/09/2015 04/06/2015 04/03/2015 13/11/2014	Canada, United States	Costa Rica	Compliance with AMS commitments	Rice	18
76, 75	04/03/2015 13/11/2014	United States	Thailand	Paddy pledging scheme	Rice	16
78, 77, 76, 75	24/09/2015 04/06/2015 04/03/2015 13/11/2014	United States	Brazil	Domestic support programmes		13
76, 75	04/03/2015 13/11/2014	New Zealand, United States	Canada	Dairy policies	Dairy, milk, milk powders, butter, cheese	11
78, 77, 76, 75	24/09/2015 04/06/2015 04/03/2015 13/11/2014	Australia, Colombia, European Union	India	Sugar export subsidies	Sugar, cane or beet sugar	11
78, 77, 76, 75	24/09/2015 04/06/2015 04/03/2015 13/11/2014	United States	Turkey	Destination of wheat flour sale	Wheat	7
75	13/11/2014	United States	Saint Lucia	Domestic purchase requirements for poultry and pork	Swine, poultry	5
78, 77, 75	24/09/2015 04/06/2015 13/11/2014	European Union	Turkey	Domestic support and export subsidies	Fruit	5
75	13/11/2014	United States	Canada	Proposed changes to tariff schedule	Dairy, milk, milk powders, butter, cheese	4
76	04/03/2015	United States	China	Cotton domestic support	Cotton	4
78	25/09/2015	Australia, New Zealand	Sri Lanka	Sri Lanka's increase in milk powder tariffs	Milk powders	4
78, 77	24/09/2015 04/06/2015	United States	China	TRQ underfill	Wheat, corn, rice	1a
76	04/03/2015	European Union	India	Exports of cereals and rice	Cereals, wheat, corn, rice, malt, coarse grains	1a
77	04/06/2015	European Union	Argentina	Domestic support notifications		1a
78	24/09/2015	European Union	India	Support price for wheat	Wheat	1a
77, 75	04/06/2015 13/11/2014	Australia	Turkey	Export subsidy programmes		1a
78, 77	24/09/2015 04/06/2015	United States	China	Cotton policies	Cotton	1*

a             This is the first time the question has been raised as such under Article 18.6 although questions have been raised in the past under individual notifications or as part of a broader Article 18.6 question.

Source:   WTO Secretariat.

3.90.  During the review process conducted under the CoA Members requested clarification on a number of systemic concerns. China's notified low tariff-rate quota (TRQ) fill rates had been the subject of numerous questions in the past. At the June and September 2015 meetings, China's TRQ underfill for wheat, corn and rice was questioned again, this time under Article 18.6, with Members arguing that despite domestic prices being high and international prices low, the TRQ fill rates continued to be low. China was requested to clarify whether there was a requirement for non-STE end users to purchase domestic stocks in order to receive a TRQ allocation. India's export subsidies on sugar were once again the subject of questioning by a number of Members during the four committee meetings covered by this report. Members cited concerns regarding the WTO-consistency of this measure applied by India. Turkey's domestic support and export subsidies were also the subject of concern by Members. Turkey was requested to confirm that the exports subsidies provided since 2001 had been within its WTO commitments and to provide its domestic support notifications due from 2002 onwards. Brazil faced persistent requests for data on domestic and international shipments of particular products made under two of their domestic support programmes.

3.7  General Economic Support

3.91.  Based on information provided to the Secretariat or obtained through other sources, Members implemented 128 new general economic support measures during the period under review, at an average of almost 11 new measures per month. This represents a significant increase from the preceding period, where the monthly average indicated slightly more than 6 new measures implemented.^[75] Of the 128 new measures recorded for the current period, 33 were not confirmed or verified by the Members concerned.

3.92.  Annex 4 covers measures that provide economic assistance and financial support targeted at specific sectors, including miscellaneous financial aid schemes for specific industries, insurance support and export credit. The main beneficiaries of the measures recorded in the period under review were the agricultural sector, the oil and gas industries, the automotive sector and assistance schemes for exports and for SMEs.^[76] Among the agriculture-related measures listed in Annex 4, many appear to grant temporary support to producers of dairy, cereals, rice, pig meat and perishable fruits and vegetables. Measures targeting the automotive sector mainly consist of research and development projects, restructuring aid, compensation schemes and support schemes for locally manufactured vehicles and auto-parts.

3.93.  The 128 measures were put in place by 56 WTO Members^[77], with the EU and its member States accounting for nearly 40% of the total measures recorded. As has been noted previously, this reflects the availability of information regarding subsidies of this WTO Member.

3.94.  As a transparency exercise, the monitoring exercise relies, to a significant degree, on the participation of Members – either through voluntary contributions or as part of the verification exercise. The latest monitoring reports have confirmed that the definition of what constitutes general economic support varies greatly among Members. As noted by a few delegations at the TPRB meeting in July 2015, the format and coverage of Annex 4 measures would benefit from a discussion regarding the nature of such measures and ways to make the monitoring of general economic support more meaningful.  At this juncture, it bears emphasizing that the monitoring reports have no legal effects and imply no judgement with respect to any of the measures or information contained therein.

3.95.  It should also be highlighted that measures included in Annex 4 are not limited to measures linked to the financial crisis. Although initial monitoring reports included a substantial number of measures which, in spirit as well as in words, were directly related to the crisis, other measures were clearly not. Yet, their trade-related effects were potentially important. It is also clear that even when subsidies are duly notified to the WTO this alone does not mean that they should not feature as general economic support in Annex 4. Similarly, Annex 4 is not intended to only capture when general economic support is granted, but also when it is reduced or eliminated. A case in point are measures reflecting reductions in gasoline support price schemes featured in this report's Annex 4. 

3.8  An Overview of Trade Policy Reviews

3.96.  During the period under review, 18 Trade Policy Reviews (TPRs) were undertaken.^[78] All of these TPRs provided the WTO membership with a better understanding of trade and economic developments in each of the Members reviewed. The EU, Japan and the United States had their twelfth TPR, whilst Canada completed its tenth review. For Australia and Hong Kong, China it was their seventh TPR, the sixth for India, and the fifth for Chile and New Zealand. The Dominican Republic and Pakistan completed their fourth TPR, while Barbados, Brunei Darussalam, Guyana and Madagascar had their third TPR. Angola had its second review; Cabo Verde and the Republic of Moldova completed their first reviews. All of these meetings enjoyed constructive and insightful discussions among participants.

3.97.  Delegations analysed ways in which the Members under review had dealt with the effects of the economic crisis and noted that most economies had not resorted to outright protectionist measures. Many credited the multilateral trading system with acting as an effective backdrop against such tendencies. At the same time, delegations also outlined a number of issues where improvements could be made. In particular, several Members were encouraged to address their outstanding WTO notifications, improve the transparency of their SPS and TBT regimes, eliminate tariff peaks in key sectors of their economies and reduce the gap between applied and bound tariff rates. In the area of trade remedies, it was noted that some Members had taken recourse to such measures more frequently than others. A number of delegations emphasized the lack of transparency of government procurement regimes in certain Members. Regarding the Doha Development Agenda (DDA), delegations highlighted the active participation of most WTO Members towards a successful conclusion of the negotiations and congratulated the efforts of those Members that had ratified the Trade Facilitation Agreement.

3.98.  Table 3.15 shows a few key summary tariff indicators from WTO Members reviewed over the period.

Table 3.15 Trade Policy Reviews from mid-November 2014 to end-October 2015 - summary tariff indicators

	Simple applied average (%)			Duty freea	Non-ad valorema
	Total	WTO agriculture	WTO non-agriculture
Hong Kong, China (2014)	0.0	0.0	0.0	100.0	0.0
United States (2014)	4.8	9.0	4.0	36.8	10.9
Barbados (2014)	15.9	33.9	12.3	5.4	0.7
Brunei Darussalam (2014)	1.7	0.0	2.0	76.9	0.6
Japan (FY2014/15)	5.8	14.9	3.7	40.4	6.7
Pakistan (FY2014/15)	14.3	14.6	14.3	0.0	0.7
Australia (2014)	3.0	1.4	3.3	47.6	0.3
India (FY2014/15)	13.0	36.4	9.5	2.7	6.1
Canada (2014)	6.0	22.5	2.4	67.0	3.9
Chile (2014)	6.0	6.0	6.0	0.5	0.5
New Zealand (2014)	2.4	1.7	2.5	58.3	0.1
European Union (2014)	6.4	14.4	4.3	25.1	10.6
Madagascar (2014)	12.2	14.4	11.8	5.5	0.3
Dominican Republic (2014)	7.8	14.2	6.5	53.6	0.0
Guyana (2014)	12.1	22.7	10.0	9.5	0.0
Angola (2015)	10.9	23.3	9.1	0.0b	0.0
Cabo Verde (2015)	10.3	12.0	10.0	44.1	0.0
Moldova, Republic of (2015)	6.3	13.5	4.4	35.4	4.5

a             % of total tariff lines.

b             56.1% of all tariff lines show a nuisance rate (>0%=<2%).

Note:       Calculations are based on national tariff line levels; including AVEs as available, in case of unavailability the ad valorem part of alternate and compound rates is included;  excluding in-quota rates. Figure in brackets refer to the year of the tariff schedule applied.

Source:   WTO calculations, based on data received by the authorities.

 

19 and 21 November 2014: Hong Kong, China

 

3.99.  Hong Kong, China was commended for being one of the most liberal and market-friendly economies, characterized by a sound legal system and transparent regulatory settings. Particular mention was made of Hong Kong, China's high levels of economic freedom and competitiveness, which are reflected in the continued economic growth it has experienced, despite external influences. During the period under review, Hong Kong, China also consolidated its position as a major exporter and international centre for high-value added services such as finance, transport, trade and logistics. In addition to this, it was commended for having a strong commitment to the multilateral trading system, not only in its support for the implementation of the Bali package, but also in its proactive stance in the DDA negotiations and in plurilateral trade initiatives (e.g. the revised Government Procurement Agreement (GPA), the expansion of the Information Technology Agreement (ITA), and the Trade in Services Agreement (TiSA). Hong Kong, China was also praised for being the first WTO Member to notify the organization that it will implement all provisions of the Trade Facilitation Agreement (TFA) upon its entry into force without recourse to flexibility arrangements. Members also referred to Hong Kong, China's active engagement in bilateral and regional trade agreements, its financial integration with mainland China, its efforts to reach full liberalization of services under the Closer Economic Partnership Arrangement (CEPA), as well as its role as an offshore renminbi trading hub and platform for doing business with China. Moreover, Members commended Hong Kong, China for its efficient and speedy customs clearance procedures, its implementation of new trade facilitation measures and the cessation of textiles import and export licensing requirements. Mention was also made of recent legislative developments, including new comprehensive competition legislation, a new Companies Ordinance and the recent modernization of IP laws.

3.100.  Despite these various achievements, delegations underlined some challenges that Hong Kong, China should address. Among these were social inequalities, affordable housing, and the need to preserve fiscal sustainability in the face of an ageing population. With regards to trade matters, Members encouraged Hong Kong, China to expand the coverage of its WTO tariff bindings, to broaden the scope of the Competition Ordinance to include sectors other than telecommunications, and to share the particulars of the newly enacted IP legislation. In the context of TBT and SPS measures, Members sought further clarification on SPS measures relating to imports of dairy products, meat and high-risk food items, as well as to a proposed ban on marketing of infant formula. In the context of services, some Members called for a widening of GATS commitments, namely in the accounting, legal services and veterinary sectors, but also regarding the temporary entry for business visitors, contractual services suppliers and independent professionals.

16 and 18 December 2014: United States

 

3.101.  Members commended the United States for its open and transparent trade and investment regimes, its economic recovery and the expected spillover effects through increased cross-border investment flows. Some delegations, however, expressed concerns regarding the potential systemic effect of the U.S. Quantitative Easing policy. As one of the world's largest economies and a key player in the multilateral trading system, the U.S. has assumed a pivotal role in the Doha Round and the post-Bali agenda, e.g. in concluding the Trade Facilitation negotiations. Its leadership role is also patent in the regular work of the Organization more broadly. LDCs in particular expressed appreciation for preferences provided by the United States and for supporting bilateral aid and capacity building initiatives. It was also recognized that the United States is pursuing trade liberalization on many fronts, including bilaterally, plurilaterally and multilaterally, although the majority of U.S. trade still took place under the MFN regime. Members noted that in the review period there had been few policy changes which, on the one hand, indicated that the United States had refrained from introducing protectionist measures following the global financial crisis. However, on the other hand, several delegations said that this also meant that long-standing barriers in certain sectors still remained in place.

3.102.  Members made reference to a number of systemic issues, including the existence of tariff peaks especially in sectors of interest to developing countries, notably agriculture, textiles and apparel, and tobacco; the need to strike the right balance between enforcement and security, and thus to re-examine the Secure Freight Initiative and Container Security Initiative; the need to refrain from subsidizing the fishing industry; the fact that some sectors, such as domestic maritime and air transport remained virtually closed to foreign competition; and reforms in visas for foreign professionals, in healthcare and health insurance, in the financial sector, and in the liquefied natural gas (LNG) transport regime. LDCs noted the expiry of the generalized system of preferences (GSP) and African Growth and Opportunity Act (AGOA) programmes, urging the United States to renew them, and inquired about the status of the U.S. Duty Free Quota Free (DSQF) commitment and details on its implementation and relation to other preference programmes. On SPS measures, Members sought clarification concerning the revised BSE regime and the additional requirements under the new Food Safety Modernization Act. IP rights matters were raised by a number of Members, who called for a reform of the judicial process for patents, as well as to the Section 337 investigative process. Finally, regarding government procurement, some Members pointed out the potential trade-diverting impact of programmes such as "Make it in America" and "Select USA", as well as the "Buy America Provision" in many federal and sub-federal tendering processes. Some delegations also noted that the lack of timely implementation of DSB panel decisions was problematic and that some improvements could be made with respect to notifications. Several Members made reference to the adoption of the new Farm Bill. While welcoming the elimination of price support and export subsidies for dairy products, Members expressed concern over the transition from direct payments to farmers towards programmes of domestic support, the classification of the new programmes and the effect they would have on the U.S. position in the DDA negotiations on agriculture. Still in the context of agricultural issues, Members also sought clarification on the changes in export credit, cotton and dairy regimes, and the reasons behind low Tariff Rate Quota (TRQ) fill rates for some products.

27 and 29 January 2015: Barbados

 

3.103.  At its third trade policy review, Barbados was commended for its resilience and prudent macroeconomic policies in the aftermath of the global economic crisis, including the implementation of a fiscal consolidation programme. Members acknowledged that Barbados had put in place a medium-term Growth and Development Strategy centred on Adjustment, Reform, Recovery and Stability in an effort to address some shortcomings of its economy.  Barbados' open economy and liberal trade and investment regimes were also praised. With regards to the latter, Barbados was encouraged to adopt an Investment Code to lock in investment guarantees and to improve its ease of doing business indexes in order to attract foreign investment. Members also praised Barbados' strong support for the multilateral trading system and the role it has played in the DDA negotiations and, in particular, its leadership role for small island developing states and small vulnerable economies. Barbados' efforts towards liberalization at the regional and bilateral level were also noted, including agreements reached through its participation in CARICOM and the CARIFORUM-EU Economic Partnership Agreement (EPA), signed in October 2008, and ratified in July 2014. Several Members welcomed Barbados' adoption of trade facilitation measures, such as the introduction of electronic customs clearance, mechanisms for advance ruling, and risk assessment. Members enquired when Barbados would ratify the Trade Facilitation Agreement and notify its commitments. Barbados was commended for its competition policy legislation and enforcement, deemed to be of particular importance for a small market. Members also welcomed Barbados' initiative to consolidate its SPS regulatory functions under a single government agency and to bring its plant and animal health and food safety systems in line with international standards.

3.104.  At the same time, it was also noted that Barbados' economy is especially vulnerable to exogenous shocks due to its a narrow economic base, over-reliance on imports and tourism services and susceptibility to the vagaries of the environment. These factors help explain how the country was severely affected by the global economic crisis, registering a sharp decline in tourism revenue and a weak GDP growth. Members expressed concern regarding the precarious fiscal position and consequent rise in the debt ratio to 126% of GDP. Furthermore, some Members expressed concern regarding the dual licensing regime for imports. Other matters of concern to Members included the maintenance of tariff peaks, encouraging Barbados to narrow the gap between applied and bound tariff rates, and the prevalence of high tariffs on certain fish and textile and clothing products. Members also noted the large number of tariff and fiscal concessions granted by Barbados to promote exports. Certain Members sought clarification with regards to the licensing regime in the tourism services sector. Some Members noted the absence of AD and CVD legislation. Delegations noted that, during the period under review, Barbados had continued to implement a number of incentive programmes targeted solely or partly at the promotion of exports. Some of these programmes had been identified by Barbados as export subsidies and notified to the WTO. Barbados had also notified to the WTO the internal steps to be undertaken to bring these subsidies into conformity with the SCM Agreement by 31 December 2015. Members requested information on the steps taken since the last notification to ensure the timely dismantlement of the measures.

3.105.  Finally, some Members noted that some outstanding issues identified in the previous TPR exercise had not been fully addressed. In the context of IP, Members encouraged Barbados to align its legislation with WIPO treaties.

10 and 12 February 2015: Brunei Darussalam

 

3.106.  Brunei Darussalam was commended for having further simplified and liberalized its trade regime, notably by reducing its average MFN applied tariff from 4.8% in 2007 to 1.7% in 2014. In fact, the country was able to counter the effects of the global economic crisis with its macroeconomic indicators remaining sound during the period under review, low inflation rate, strong fiscal position and current account surplus. Members also praised Brunei Darussalam for its strong support for the multilateral trading system, having notified its Category A commitments under the TFA, and for its active use of regional and bilateral trade agreements to deepen its integration into the global economy. Members also noted that it has never made use of trade remedy measures, and were pleased with the ongoing reforms in the area of customs procedures, especially with the introduction of both e-Customs and the National Single Window. Brunei Darussalam was equally commended for significant legislative and regulatory reforms, which includes the strengthening of the legal framework in areas such as business environment, financial services, fisheries, IP, and TBT. In the area of energy, Members took note of the plans to further strengthen upstream and downstream activities, ensure a reliable and efficient supply and maximise economic spin-offs from the energy industry. Members also welcomed the announcement that Brunei Darussalam will establish government-linked companies to serve as a catalyst in areas where the private sector has been constrained by lack of access to technology and resources.

3.107.  Members also identified a number of points where improvements could be made. In particular, Members encouraged Brunei Darussalam to diversify its economy away from hydrocarbon resources, reduce existing restrictions and barriers to FDI, promote a more business‑friendly environment, increase the participation of the private sector in the economy and address its outstanding WTO notifications. Members also encouraged Brunei Darussalam to complete additional legislation on competition, while promoting greater transparency in government decision-making on trade policy matters. Furthermore, delegations noted the significant gap between Brunei Darussalam's bound and applied rates and the effects this had on the predictability of the system. Some inquiries were voiced regarding the increased coverage of excise duties. In the area of SPS and TBT measures, clarifications were sought on specific issues such as the Halal Certificate and the establishment of the National Standards Council. Members also encouraged Brunei Darussalam to enhance transparency and notifications in the elaboration and implementation of these kinds of measures. Some delegations asked Brunei Darussalam to notify its state-trading enterprises and to join or become an observer to the GPA. With regards to IP rights, Members called on Brunei Darussalam to strengthen its institutional framework and sought clarification regarding the new Patent Law. Members encouraged Brunei Darussalam to promote foreign investment in the agriculture sector in order to help the country achieve its food security and self-sufficiency objectives. Energy reform was mentioned as a way to reduce the distortions affecting Brunei Darussalam's efforts at diversifying its economy. In services, many delegations encouraged Brunei Darussalam to increase its GATS commitments given the potential for growth and diversification of the economy that the services sector represents for this country.

9 and 11 March 2015: Japan

 

3.108.  Members commended Japan's efforts to overcome protracted deflation, revitalize the economy and continue reconstruction following the devastating earthquake in 2011. Japan conducted a three-pronged economic policy through the so-called "three arrows" of monetary measures, fiscal flexibility and structural reform known as "Abenomics". The third arrow of structural reform was launched under the Japan Revitalization Strategy of 2013 (revised in 2014) and encompasses plans and programmes to increase investment, improve productivity and enhance trade. Members encouraged Japan to pursue structural reforms, including trade and investment liberalization measures, so as to achieve strong economic growth, encourage private investment, increase productivity and enhance competitiveness. This would help Japan address long-standing structural problems including an ageing population, labour shortages, and relatively low FDI inflows. Members commended Japan's active role in the WTO and its constructive participation in the negotiations leading to the Trade Facilitation Agreement, as well as negotiations on services, environmental goods, and expanding the scope of the Information Technology Agreement. Members also appreciated its limited use of contingency trade remedies, as well as its support for a wide range of technical cooperation activities. Finally, Members commended its active participation in regional trade agreements.

3.109.  Some concerns were raised on the following matters: customs procedures for some agricultural products; the alignment of TBT and SPS measures to international standards; barriers to foreign enterprises in public tenders, the number of exemptions to the Anti-Monopoly Act of 2013 and its implementation; visa requirements for, inter alia, business travellers, IT professionals, trainees and health care workers; high levels of support and protection for agriculture through high tariffs and policies linked to prices, production or both; and programmes and subsidy levels for fisheries. Members urged the opening up of the services sector, and some inquiries were made regarding Japan Post and its privatization, as well as the need for a level playing field in insurance.

24 and 26 March 2015: Pakistan

 

3.110.  Members praised Pakistan for a resilient economy and the registered positive growth, which is expected to expand further, as well as several of its recent policies which demonstrate Pakistan's commitment to moving towards more transparency and predictability. Several delegations welcomed the reform agenda pursued under Vision 2025 and the Strategic Trade Policy Framework. Members acknowledged Pakistan's successful democratic transition of power and its 18^th constitutional amendment. Pakistan was also commended for its constructive approach to the DDA negotiations and its positive role in the formulation of the Bali package and on the continuing post-Bali work programme. Delegations also expressed appreciation for the submission of its Category A commitments under the TFA and welcomed Pakistan as an observer to the GPA. Recent reforms were deemed positive development, including the further liberalization of the foreign investment regime, development of Special Economic Zones, enhanced competition policy, upgraded port infrastructure, and the setting up of a national single window.

3.111.  Members also delineated a number of areas that could be improved. Concerns were voiced regarding the large difference between applied and bound rates, the abolition of duty-free tariff lines, the high degree of overall tariff protection which favoured import substitution, the continued use of ad-hoc trade policy instruments, such as special regulatory orders, which undermined the predictability of the trade regime, as well as the high degree of protection afforded to the automobile industry. Concerns were articulated regarding subsidies promoting exports, building processing plants, providing selected industries with preferential access to certain utilities and applying mark-up rates for export finance schemes to promote certain products. Other issues included the support price for wheat, pricing in the pharmaceutical industry, import licensing procedures, safeguard mechanisms, the number of anti-dumping investigations, the ban on the import of bovine products, livestock and poultry and the lack of notifications (especially those pertaining to agriculture and domestic support). More generally, Members encouraged Pakistan to improve its business climate, further liberalize the trade regime and ensure its predictability. Others mentioned the need to reduce state intervention in the economy, provide adequate infrastructure facilities especially those related to the power sector and improve the fiscal situation by broadening the tax base.

21 and 23 April 2015: Australia

 

3.112.  Members commended Australia's open and transparent trade regime and a steady economy which has experienced long-term uninterrupted real GDP growth. Several Members noted Australia's strong commitment not only in the context of the WTO, but also plurilateral and bilaterally. Delegations also welcomed Australia's latest unilateral lowering of tariffs on apparel and certain finished textile articles and footwear, tariff binding coverage, minimal documentation requirements, changes made to the anti-dumping framework and the computerized customs clearance. Members also expressed appreciation for Australia's intention to ratify the WTO's Trade Facilitation Agreement.

3.113.  Notwithstanding the dynamism, resilience and impressive performance of its economy, delegations noted that Australia faces a number of challenges posed, among others, by the effects of the terms of trade, the relatively appreciated Australian dollar, the ageing population, and high reliance on the mining sector. Members also delineated some areas for improvement. It was noted by some that restrictions on foreign investment in Australia's most sensitive sectors represented additional regulatory burdens. Furthermore, Members called for improvements to the tariff structure and to the anti-dumping framework. On SPS, concerns were raised on Australia's BSE import requirements' delayed compliance with internationally recognized standards. Despite welcoming reforms aimed at developing a biosecurity system, Members noted that the regime could benefit from further clarity and transparency with regards to its import risk analysis process, as well as from a cost-benefit analysis and simplification at the legislative level. Regarding government procurement, Australia was encouraged to accede to the revised GPA, as well as to open up its regime, particularly at the sub-federal level. Finally, some Members urged Australia to reconsider taxes such as the luxury car tax and to liberalize the maritime cabotage system, allowing foreign vessels registration in the Australian General Register or in the International Shipping Register.

2 and 4 June 2015: India

 

3.114.  India was commended for its accelerating economic growth and milder inflation in recent years. Members also recognized the important role that India plays in the global economy as one of the largest developing countries. India's active participation in the multilateral trading system and the key role it plays in the DDA negotiations were also acknowledged. Members welcomed India's various economic and trade policy reforms, namely its efforts to introduce a nationwide Goods and Services Tax, the removal of some subsidies and price controls on fossil fuels, its measures to improve business and investment environment, including "make in India" initiatives, and the establishment of an e-business portal. Members equally noted India's increased involvement in regional trade agreements and its recent initiatives to improve transparency and predictability of its trade and related policies, such as inviting public comments on new legislation. Members also appreciated that India has been providing duty free and quota free access for LDC exports and the trade facilitation measures undertaken, such as the adoption of self-assessment in customs procedures.

3.115.  At the same time, delegations noted some areas for improvement, e.g. in addressing structural bottlenecks, including fiscal deficits, shortfalls in infrastructure such as education, health care, transportation, power supply, delays in project approvals, difficulties in land acquisition, low manufacturing base and agricultural productivity and cumbersome labour market regulations. Furthermore, Members encouraged India to pursue tax reforms, which could increase government revenues and investment in infrastructure. In the context of the DDA negotiations, Members urged India to submit its Category A notification under the Agreement on Trade Facilitation, to expedite the ratification process, as well as to implement the Information Technology Agreement. Members also encouraged India to provide timely public consultations on draft regulations, submit notifications on a regular basis to the WTO, and provide a reasonable period between the announcement of new regulations and their entering into force. India was also encouraged to simplify its rules of origin requirements. Given the weight of the services sector in India's economy, Members urged further liberalization in this area, particularly concerning distribution and e-commerce. Other areas of concern included tariff increases, the complexity and uncertainty in tariffs (including an additional duty and a special additional duty), the large difference between applied and bound rates, customs valuation, import licensing requirements, the frequent use of contingency measures, TBT and SPS measures and their relation to international standards and India's recourse to export restrictions and minimum export prices. Concerns were also voiced by some Members regarding subsidies on agriculture, food and fertilizers, as well as local content requirements and India's IP laws, in particular regarding the protection of trade secrets and test data. Delegations also voiced concerns over high agricultural tariffs and domestic supply conditions for agricultural products, calling for a balance between food security and a predictable trade regime, as well as the liberalization of the agricultural sector through the lowering and simplification of tariffs.

15 and 17 June 2015: Canada

 

3.116.  At Canada's tenth TPR, Members highlighted the transparency and openness of Canadian trade and investment policies, as well as the resilience of its economy. Members congratulated Canada for its general resistance to impose protectionist measures since its last review. Canada was equally commended for its active role in many trade policy areas, within and outside the WTO and at plurilateral and regional levels. In particular, Members praised the leadership role Canada has assumed in the context of the DDA and the post-Bali process. Many developing countries, LDCs and SVEs expressed appreciation for Canada's support in terms of Aid-for-Trade, S&D treatment, preferences, financial aid and assistance, and LDC services waiver. In addition to this, Canada was praised for its role in the trade facilitation negotiations and for its commitment to accept and implement the TFA expeditiously. With regards to its trade policies, Members welcomed Canada's autonomous tariff liberalization and tariff simplification efforts, the programmes aimed at reducing the time and procedures for customs clearance and its commitment to extend procurement opportunities to the provinces and territories, including several crown corporations.

3.117.  A number of areas for improvement were identified. Firstly, Members highlighted Canada's need to diversify its economy, due to its over-reliance on the United States as the major destination for its exports, as well as its narrow product base, which predominantly encompasses energy and mineral products. Some Members also wondered if Canada would revise its investment legislation or remove barriers in certain sectors in order to counter the slowdown of FDI. Some clarifications were sought concerning the deregulation of services trade. In light of the country's unique system of government, some Members inquired if there were plans to revise Canada's agreement governing internal trade (AIT) or otherwise put in place mechanisms to ensure compliance with its international obligations. Many Members also questioned Canada's alcoholic beverage distribution and tax regime, in particular compliance with national treatment provisions. Members noted the increased use of trade remedies and encouraged Canada to resort to these types of measures with restraint. Other issues raised included the continued use of export restrictions in certain sectors, the large number of targeted programmes that provide support and incentives to Canadian businesses, pharmaceutical patent approvals and regulations on pirated and counterfeited goods. On agriculture, Members voiced concern over high tariffs, high subsidies and domestic support and supply management channels, in particular for dairy and poultry products. Clothing, apparel and footwear were also identified as sectors subject to high tariffs. Members encouraged Canada to step up its liberalization efforts in these areas.

23 and 25 June 2015: Chile

 

3.118.  Members commended Chile's overall open, transparent and predictable trade and investment regimes and praised it for quickly recovering from the global economic crisis due to, inter alia, the prudent management of economic policies. Delegations also noted Chile's constructive engagement in the multilateral trading system (and in particular its active participation in the "Friends of Fish Group"), its accession to the OECD and its implementation of its DFQF Scheme for LDCs. Other noteworthy developments included the implementation of trade facilitation measures, the standardization of customs procedures, the implementation of a single window for exports, the creation of Tax and Customs Courts and Chile's unilateral tariff reduction, which resulted in an almost flat tariff structure, consisting of two rates of 0% and 6%. Members noted with interest that Chile is in the process of drafting new foreign investment legislation and sought more information on this initiative. Some delegations mentioned the programme implemented to promote the registration of geographical indications and the country's scant use of contingency measures. The drafting of a new competition law was welcomed by Members. Delegations praised the performance of Chile's financial sector, and noted with appreciation the efforts already undertaken by Chile to implement the Basel II and III capital adequacy rules.

3.119.  At the same time, Members felt that in a few specific areas Chile could improve its trade regime. Despite the government's extensive reform agenda encompassing taxation, the labour market and education and the steps taken to improve the quality and access to the latter, income inequality remains a problem. Notwithstanding Chile's active engagement in RTAs, being one of the WTO Members with the largest number of trade agreements, Members expressed concern over the complexity of the rules of origin provisions in these. Members urged Chile to ratify the TFA and to reconsider the requirement to use customs agents for inward clearance. Some delegations also expressed concern regarding Chile's price band system, which they felt to be a source of uncertainty. Moreover, although under Chilean law anti-dumping and countervailing measures can only be applied for one year with no possibility of renewal, Members expressed concern over the extension of the possible application and renewal period for safeguard measures from one to two years.

3.120.  In the area of government procurement, some encouraged the simplification of administrative procedures, and urged Chile to become a party to the GPA. Others expressed concern and sought more information regarding specific support programmes to assist sectors such as mining and renewable energy and noted that some of them had not been notified to the WTO. Some concerns were also voiced concerning Chile's heavy reliance on a few markets for its exports and on a product base heavily dependent on mining and agricultural products. Other specific issues mentioned included export support measures, programmes implemented by the Chilean Economic Development Agency, the compliance of Chile's new food labelling requirements with the SPS Agreement, copyright and the protection of encrypted programmes, the control of material provided via the Internet, the protection of pharmaceuticals and agro-chemicals, the improved protection of plants and the ratification of the International Union for the Protection of New Varieties of Plants (UPOV) Convention.

29 June and 1 July 2015: New Zealand

 

3.121.  New Zealand was praised for its liberal economic policies and good economic performance during review period. Members praised New Zealand for sound macroeconomic policies that underpinned GDP growth. Delegations also acknowledged New Zealand's strong commitment to the multilateral trading system, as well as its active engagement in RTAs. Other developments welcomed by Members included: the improvement of customs procedures; the expected ratification of the TFA in advance of MC10; its accession to the GPA. Also raised were: the modernization of its trade remedies legislation, namely through the introduction of a public interest test and the modernization of its IP legislation, including its plans to amend and bring into effect legislation on the registration of geographical indications for wines and spirits; the country's liberal agricultural regime, reflected in the fact that New Zealand has the lowest producer support level among OECD economies; and the reforms undertaken in the financial and telecommunications sector.

3.122.  At the same time, Members also identified some areas for improvement including high foreign debt, weak external demand, low labour productivity, volatile international commodity prices, diversification of the economy and export base and participation in global value chains. More specifically, Members encouraged New Zealand to reduce the existing gap between applied and bound MFN rates, and to lower high tariffs in textiles and tariff escalation in other product lines. On trade remedies, New Zealand was encouraged to provide more transparency throughout the various stages of antidumping investigations. In the area of SPS, Members expressed concern over New Zealand's biosecurity system. Members encouraged New Zealand to reform its procedures for introducing Import Health Standards and to develop such standards for products of plant origin. New Zealand was also urged to harmonize its national standards with international standards in order to facilitate the free flow of goods. Many delegations encouraged New Zealand to provide more information with regards to its accession to the GPA. In the field of IP, New Zealand was urged to extend its plans on registration of geographical indicators (GIs) for wine and spirits to foodstuffs. In agriculture, some Members called for increased transparency and competition in the dairy sector and enquired about the quasi-monopoly of kiwifruit exports by a state-trading company. Some urged New Zealand to continue liberalizing its transport and telecommunications sectors by removing restrictions to foreign investment and promoting competition in several services markets. New Zealand was also encouraged to reconsider restrictions to foreign investment in sensitive sectors and to improve its FDI screening process. Some Members sought clarification on procedures, requirements, and time-frames for foreign investment applications, urging New Zealand to assess the impact of these measures on current and future foreign investments.

6 and 8 July 2015: European Union

 

3.123.  In its 12th trade policy review, Members highlighted the importance of the EU in the multilateral trading system as the biggest trading entity in the world and as the first or second biggest trading partner for the majority of WTO Members. The EU was commended for showing encouraging signs of recovery in the aftermath of the financial crisis with growth in 2015 expected to be stronger than previous estimates had indicated. This was said to be in part attributable to the policy of the European Central Bank and lower oil prices. Members welcomed the initiatives for strengthening the Economic and Monetary Union, the Investment Plan for Europe, the Digital Single Market and other measures. Nevertheless, some delegations expressed concern regarding the economic performance of one Member of the EU and the effects that such performance may have on the euro area. In the WTO context, the EU was praised for its active participation in the monitoring and negotiating pillars of the organization and for its support for Aid for Trade and the progress made on the TFA. Several delegations applauded the openness and transparency of the EU economy, the unprecedented level of integration achieved among its member States, the low number of trade restrictions, the expansion of the network of trade agreements and reforms carried out in the financial sector aimed at improving the stability of the sector and at building a banking union and a capital market union. Others referred to the important reforms in the telecoms sector.

3.124.  Some areas for improvement were highlighted by various delegations. Firstly, several delegations felt that some sectors such as agriculture and fisheries and some fibre products remained protected by relatively high tariffs. Tariff peaks, tariff escalation, tariff quotas and non‑ad valorem tariffs in this area were also said to further add to the complexity of the EU's tariff system. In the realm of trade remedies, delegations expressed concern about the investigative procedures and the application of existing measures. Concerns was also voiced regarding several aspects related to the development, adoption and application of TBT and SPS measures, in particular those SPS measures which are not based on a scientific assessment of risk. With regards to government procurement, Members remained concerned about the ability of third suppliers, particularly SMEs from outside the EU, to access its government procurement market. Despite welcoming the expansion the network of trade agreements, Members expressed some apprehension that such agreements could reduce the benefits of existing trade arrangements. Finally, concerning the EU's agriculture and fisheries policies, delegations remained concerned about the level of subsidies and the level of border protection applied in these two sectors.

14 and 16 July 2015: Madagascar

 

3.125.  Members noted Madagascar's weak economic growth and slow recovery from a six-year socio-political crisis with rising poverty levels and sluggish economic development. Nevertheless, delegations commended Madagascar for its efforts in trade facilitation, including introduction of the Electronic Single Window, progress made towards paperless customs clearance procedures and the possibility of border control institutions to transmit their respective authorizations electronically to customs. Members praised Madagascar for renouncing the use of minimum import values for customs valuation purposes and noted that tariff reductions, mainly on agricultural inputs, have lowered Madagascar's average applied MFN rates from 13% in 2008 to 12.2% in 2015. Several delegations welcomed Madagascar's new mining policy and sought information about opportunities for foreign operators. Others welcomed Madagascar's plan to broaden its GATS commitments in professional, communication, financial and tourism services.

3.126.  At the same time, delegations also highlighted several aspects where there was room for improvement. These included rebuilding infrastructure in the energy and transportation sectors to accelerate the recovery of the economy. Members also encouraged improvements to the investment approval process and the overall business environment, including law enforcement, access to credit, construction permits and to property ownership. Members also sought information on measures to effectively boost the country's weak agricultural production as well as actions envisaged to halt the illegal logging, poaching and export of wild animals and their subsequent exports. Over-fishing in Madagascar's continental waters by unregulated foreign fleets was mentioned by some delegations. Despite the improvements made in customs procedures, the number of border control institutions remained excessive and Madagascar was encouraged to restructure its border control, ratify the TFA and take steps toward notification of its TFA commitment categories. Delegations also sought clarification on the impact of cargo tracking and urged Madagascar to make customs fees reflect the cost of services rendered. Furthermore, some expressed concern that applied rates exceed the corresponding bound levels on 52 lines and urged Madagascar to address this inconsistency. Clarifications were sought on the progress towards the conclusion of the Tripartite Free Trade negotiations between Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern African Development Community (SADC) and also on the effects of the implementation of the EPA with the EU. Several delegations also called for an upgrade of the TBT and SPS regimes, particularly to boost exports, and for the establishment of the appropriate national committees and coordination mechanisms. Other areas where further clarification was sought included the continued non-reimbursement of VAT credits to exporters, prospects for reform of the Export Free Zone scheme, the numerous levies on exports, the implementation of the WIPO Internet Treaties, the possible extension of the term of protection for software and the protection of trademarks and geographical indications. Members urged Madagascar to pursue an agenda of continued liberalization and structural reforms.

22 and 24 July 2015: Dominican Republic

 

3.127.  Members praised the Dominican Republic's open and transparent trade regime. Members also noted that trade in goods and services, investment flows and remittances, as well as strong activity in mining, construction, tourism and other services were important factors supporting the GDP growth at an average annual rate of 4.4% in real terms. Members expressed interest in the Dominican Republic's three pronged National Development Strategy, which focuses on the key areas of education, electricity and fiscal reform, and encouraged the country to continue to focus on policies to promote growth and social inclusion. Delegations welcomed the economic reform agenda, including the 2012 tax reform process and TBT-related initiatives. On trade facilitation, Members commended the implementation of a computerized customs clearance system, the improvement of the risk management process and the elimination of certain authorization requirements. Several delegations praised the Dominican Republic's commitment to and active participation in the WTO and welcomed the notification of its Category A commitments under the Trade Facilitation Agreement. The Dominican Republic's participation in various free trade agreements and in the Central American Integration System was also noted. Delegations welcomed the introduction of measures to facilitate investment and attract more FDI, such as the one-stop investment facility established in 2012. Members also praised the government procurement regime for its transparency, although the 20% set-aside in government procurement for SMEs was considered a preference by some. The recently adopted procedures for the drafting and administration of technical regulations in line with international standards was equally noted as a positive development. Members acknowledged the Dominican Republic's relatively low average tariff and the fact that about 54% of tariff lines were zero-rated.

3.128.  Members expressed concern over high tariffs on agricultural goods and the lack of transparency and delays in the issuance of import permits, in particular for the importation of animals and agricultural products. Mention was also made of the obsolete SPS legislation. On IP, delegations inquired about limiting simplified registration procedures to pharmaceutical products and the practice and enforcement of IP rights. Members also noted the delays in patent application reviews and marketing approval for pharmaceuticals and the availability of pirated and counterfeit goods. On competition, concerns included the fact that the competition authority is not operational and that competition legislation remains pending. Some highlighted the persistent problems in the electricity sector which they considered to be a hindrance to the country's competitiveness and growth prospects. Delegations encouraged further reforms to the investment regime through an increase of legal security for FDI and addressing existing FDI restrictions and impediments for foreign companies, including in distribution services.

15 and 17 September 2015: Guyana

 

3.129.  Delegations praised Guyana's open trade and investment regimes. Its robust economic growth over the past six years, with GDP growing at an average annual rate of 4.7%, was due in large part to foreign direct investment and private sector credit. Guyana's commitment to the multilateral trading system and to a successful conclusion of the DDA was highlighted. Members commended Guyana's active participation in regional trade agreements which they hoped would strengthen the multilateral trading system. Delegations welcomed Guyana's adoption of a number of trade facilitation measures, such as risk management and encouraged the country to submit its Category A notifications and to ratify the Trade Facilitation Agreement. Members acknowledged several measures undertaken for the improvement of its business and investment environment. These include the reduction of the corporation tax rates and establishment of a credit reporting system. Members also welcomed the simplification of Guyana's SPS legislation and inquired into the Guyanese government's priorities concerning government procurement, competition policy and the management of state-owned enterprises. The adoption of the Anti-Money Laundering Act was also deemed to be a positive development. Regarding IP, Members noted that a new Copyright Bill was being prepared and urged Guyana to effectively implement the TRIPS Agreement and endorse other IP-related international conventions. On agriculture, Members probed the country's agriculture diversification strategies. Some delegations sought clarification on the details of the Guyana's support for its sugar sector.

3.130.  At the same time, delegations urged Guyana to diversify its exports and economic structure, as well as to address its persistent account deficit. Guyana was also encouraged to pursue further structural reforms, prudent macroeconomic policies, good governance and effective management of debt profiles. Delegations encouraged Guyana to further liberalize its services sectors, particularly telecommunications, and to enhance competition. Members invited Guyana to submit its outstanding notifications to the WTO and improve transparency whilst taking advantage of WTO technical assistance.  In addition to this, some delegations asserted that Guyana grants non-national treatment to foreign products and investors, for instance, regarding VAT and the environmental tax for beverages. Finally, Members urged Guyana to close the gap between applied and bound tariff rates in order to enhance the predictability of trade and to rectify the situation where some applied tariff rates exceed their respective bound rates.

22 and 24 September 2015: Angola

 

3.131.  Members praised Angola's impressive recovery from its civil war and its economic performance that allowed for its graduation from LDC status. Such economic growth – supported by heavy public investment in infrastructure and by high world prices for its main exports – has, however, slowed down since 2009 as a consequence of the broader international context. Angola was also commended for its active involvement in the WTO. Members inquired into the country's participation in bilateral and regional trade agreements.  Delegations welcomed a number of trade facilitation measures recently enacted, including the elimination of pre-shipment inspection. Angola was encouraged to submit its Category A notification and ratify the TFA. Members also noted that Angola has yet to submit other notifications on, among others, SPS, TBT, subsidies and state-trading enterprises and suggested that Angola make use of technical assistance in order to address these outstanding issues and better implement the WTO Agreements.

3.132.  Members encouraged Angola to diversify its economy and move away from its overdependence on oil resources. A number of delegations also expressed their concerns over the outdated nature of Angola's IP regime, advocating for an effective implementation of the TRIPS Agreement and the broadening of Angola's participation in international conventions on IP. Members also voiced their concerns over Angola's restrictions on payment transfers, its visa issuance system and its regulatory and investment procedures. Some delegations also sought further information on Angola's plans to establish a one-stop shop for administrative procedures. Mention was also made of a number of measures aimed at import substitution, as well as the significant increase of applied tariff rates. Some Members were of the view that Angola should move away from import substitution measures to lower import tariffs on inputs and further trade facilitation measures which they believed would reduce production costs and thus enhance competitiveness. Delegations also encouraged Angola to address the instances where applied tariff rates exceed their bound levels. Members sought further clarification on Angola's agricultural policy aimed at food security, the sustainability of its fisheries sector, the country's plans to broaden its GATS commitments, the Government's priorities on a number of issues (including competition policy, SPS and TBT regimes and state-trading and state-owned enterprises), the recently enacted Decree on import quotas, as well as opportunities for foreign operators in the mining sector.

6 and 8 October 2015: Cabo Verde

 

3.133.  Members praised Cabo Verde's political stability, economic reform and market liberalization, crediting much of its success to the involvement of all domestic stakeholders. Cabo Verde was commended for graduating from Least Developed Country status. Delegations acknowledged the challenges Cabo Verde faces related to its relatively small population and its exposure to natural disasters. Members noted the enactment of a new Customs Code, a new investment law, a Code of Fiscal Benefits, and a new framework law on sanitary and phytosanitary measures. Members encouraged Cabo Verde to accompany these new legislative developments with an effective implementation policy. The modernized fiscal regime was noted as a significant achievement, as was the policy directed at increased investment which encompasses a number of measures such as the establishment of online business registration procedures, a single window for investment, paperless customs clearance, efforts to create a unified platform for customs, port and trade information systems.

3.134.  Some Members also underlined the creation of a National Trade Council as a permanent structure for formulating and coordinating Cabo Verde's trade policies, in addition to the setting up of a Trade Facilitation Committee. Delegations urged Cabo Verde to notify its Category A commitments and complete the internal process for ratification of the Trade Facilitation Agreement. Delegations supported the efforts made to increase competitiveness and productivity and to diversify its economic base away from the tourism sector. Inquiries were made into the links between fiscal incentives and tariff exemptions and Cabo Verde's plans to increase its exports, as well as customs user chargers and their relation with WTO rules. Some encouraged Cabo Verde to improve the performance of public enterprises and privatize the most commercially-oriented. Some delegations sought clarifications on Cabo Verde's implementation of the Economic Community of Western African States (ECOWAS) Common External Tariff which might entail adjustments of Cabo Verde's tariff commitments in the WTO.  Delegations noted that current applied MFN tariffs are low, even though a few tariff lines exceeded their bound rates.

19 and 21 October: Republic of Moldova

 

3.135.  The Republic of Moldova was praised for its good economic performance and sound macroeconomic policies, which had allowed for GDP growth despite various external shocks. The Republic of Moldova was also commended for its strong commitment to the multilateral trading system. Delegations welcomed the Republic of Moldova's submission of its Category A commitments in trade facilitation, its efforts to reduce the number of outstanding WTO notifications more broadly and the steps taken to improve customs procedures, including the introduction of an Authorized Economic Operator programme. Members noted the Republic of Moldova's engagement in RTAs and in particular its ambition to accede to the EU. This had led the country to bring its legislative framework in line with international best practices in areas such as SPS, TBT, competition, state aid, government procurement, IP, energy, telecommunications and civil aviation. Delegations praised the efforts undertaken to transform a previously centrally-planned economy into a fully functioning market-driven economy.

3.136.  At the same time, Members expressed concern over persistent budget and trade deficits and over-reliance on imported energy resources and remittances. Delegations encouraged the Republic of Moldova to improve its business environment, address governance issues and increase transparency and predictability, persevering in the implementation of structural reforms. Members urged the Republic of Moldova to ratify the Trade Facilitation Agreement and the WTO Agreement on Government Procurement. Enquiries were also made into import licensing, the regulatory framework for animal health control, the privatization programme, enforcement of IP rights, agricultural policy and the strengthening of the domestic banking system. Other issues of concern included increases in the applied MFN tariff rate and the application of tariffs in excess of their bound rates.

3.9  Regional Trade Agreements

3.137.  During the period 15 October 2014 to 15 October 2015, WTO Members notified 11 RTAs to the WTO (24 notifications) as compared to 9 RTAs (16 notifications) during the previous period (15 November 2013 - 15 October 2014). As of 15 October 2015, the total number of RTAs notified to the WTO and to the GATT before it, amounted to 265 (127 covering goods and services, 137 goods only and one services only). The WTO Secretariat has also identified and verified, through the respective parties, 75 RTAs that are in force, but not yet notified to the WTO.^[79]

3.138.  Judging from overall notifications, RTA activity is strongest in Europe (21% of RTAs in force), with successive EU enlargements and agreements with countries in Eastern Europe and around the Mediterranean basin as well as RTAs notified by the European Free Trade Area (EFTA); this is followed by East Asia (16%) and South America and the CIS (Commonwealth of Independent States) region (11% each) (Chart 3.17).^[80] These regions also continue to be active in RTA negotiations.

 

Chart 3.16 Number of physical RTAs that have entered into force since 2005

Source:   WTO Secretariat.

Chart 3.17 Regional Trade Agreements in force by Region

 

 

Source:   WTO Secretariat.

3.139.  In addition to their existing RTAs, most WTO Members are actively negotiating new RTAs. While most negotiations are bilateral, a few have elicited recent interest because they are between a number of members. These include the Trans-Pacific Partnership (TPP) Agreement, the Regional Closer Economic Partnership (RCEP) Agreement, the Pacific Alliance involving parties in the Asia‑Pacific, the Trans-Atlantic Trade and Investment Partnership (TTIP) Agreement across the Atlantic and the Tripartite Agreement on the African Continent. They are of interest for a number of reasons, including the number of parties they involve (26 for the Tripartite Agreement, although Libya and Eritrea have not yet signed the Declaration, 16 for RCEP, 12 for the TPP and 4 currently for the Pacific Alliance), but also the share of global trade they represent (around 44% for TTIP, 26% for TPP, 24% for RCEP, and 2.7% and 1.5% respectively for the Pacific Alliance and the Tripartite Agreement). Of interest also is that if these negotiations are brought to fruition, will they consolidate the existing bilateral preferential relationships that already exist among several parties. If at the very least they are able to do that, the new generation of plurilateral agreements will contribute to a reduction of the confusion created by the plethora of RTAs in existence today. The TPP Agreement, for instance, which was concluded on 5 October 2015, appears to allow cumulation of origin among all 12 parties which will benefit their producers and exporters.

3.140.  Although the text of the TPP is not yet available, a summary of the chapters of the Agreement has been released. It indicates that the TPP covers market access in goods and services, and related issues such as SPS and TBT, trade facilitation, and trade defence. The Agreement takes a "negative list" approach for services and investment which assumes that unless scheduled in a list of non-conforming measures, the sector or subsector is liberalized; in addition, there are separate chapters on telecommunications, and financial services. Other issues that are covered include IP rights, government procurement, competition, state-owned enterprises, and labour and environment. Of considerable interest will also be chapters on regulatory coherence, which will allow for interagency consultation and coordination and will encourage widely-accepted good regulatory practices; small and medium-sized enterprises (SMEs), which establishes a SME Committee to review how well the TPP is serving SMEs, consider ways to enhance its benefits and oversee cooperation or capacity building activities to support SMEs; and competitiveness and business facilitation which creates formal mechanisms to review the impact of the Agreement on competitiveness through dialogues among governments and between governments, business and civil society, focusing on deepening regional supply chains. Finally, there is also a dispute settlement chapter as well as provisions for investor-state dispute settlement in the Agreement.

3.141.  The Agreement is expected to enter into force 60 days after internal ratification procedures are complete in all 12 parties. If these are not completed within two years, the Agreement will enter into force 60 days following the end of the two years provided at least six of the 12 signatories, and who account for 85% of the combined GDP of the original signatories, has ratified the Agreement.

3.10  Trade Facilitation

3.142.  On 27 November 2014, Members adopted an amendment protocol to insert the TFA into the existing WTO legal framework.^[81] This opened the door for domestic ratification processes to commence. Many delegations quickly initiated their procedures and several were already able to deposit their acceptance instruments. As at 15 October 2015, 49 Members had successfully completed the process, bringing the Agreement closer to the two‑thirds ratification threshold required for it to take legal effect.^[82]

3.143.  Delegations also continued to notify the commitments they will immediately implement upon the TFA's entry into force (frequently referred to as "category A commitments"). The Preparatory Committee received 24 additional notifications since the beginning of October 2014, coming not only from developing countries but also from the least-developed world.^[83] This brought the overall number of submitted category A notifications to 72 as at 15 October 2015.

3.144.  Work also continued with respect to technical assistance and capacity-building initiatives.

3.145.  In 2014 the Director-General launched a new WTO Trade Facilitation Facility (the Facility) to assist developing and LDC Members in implementing the TFA. It became operational on 27 November 2014.

3.146.  The Facility works closely with individual Members to ensure they are receiving the information and support needed. It also provides information on assistance programmes and, where needed, it can conduct match-making between donors and recipients. The Facility supports Members' efforts to implement the Agreement by acting as a repository for training materials, case studies and best practices on implementation of the measures. It provides training programmes and support materials to assist Members to fully understand their obligations.  

3.147.  The Facility has conducted a number of activities aimed at raising awareness and encouraging support for ratification and the entry into force of the TFA. These activities are directed at many levels of decision-makers and stake-holders including: Parliamentarians, Ministries, Geneva-based delegates, capital-based trade officials and a broader range of interested stake-holders. The Facility worked to expand an existing WTO technical assistance programme for Parliamentarians to have a greater focus on trade facilitation. Trade facilitation workshops for Parliamentarians have been conducted for African countries (in cooperation with Morocco), the Eastern African Community, ASEAN (in cooperation with Singapore), all Latin American countries, and the Pacific Islands (in cooperation with the World Bank Group and the Pacific Islands Forum). Future workshops will be conducted in other regions as needed.^[84]  

3.11  ITA Expansion

3.148.  The Information Technology Agreement (ITA) continues to be an area of significant ongoing activity and progress in the WTO. A new Agreement to expand the ITA product coverage was finalised during the review period. Following 17 rounds of negotiations, the ITA expansion deal was reached on 24 July 2015 with participants agreeing to add an additional list of 201 products for tariff elimination. Annual trade in these 201 products is valued in excess of US$1.3 trillion per year and accounts for approximately 7% of total global trade. The new Agreement covers new generation semi‑conductors, semi-conductor manufacturing equipment, optical lenses, GPS navigation equipment and medical equipment such as magnetic resonance imaging products and ultra-sonic scanning apparatus.

3.149.  Fifty-four WTO Members took part in the negotiations on expanded coverage of the ITA, accounting for approximately 90% of world trade in the products proposed for inclusion in the product expansion. On 12 October 2015, 25 Members have already accepted to adhere to the agreement (WT/L/956). The Agreement also contains a commitment to work to tackle non-tariff barriers in the IT sector, to keep the list of products covered under review and to determine whether further expansion may be needed to reflect future technological developments. The ITA Expansion Agreement is open to any other Members wishing to join.

3.150.  Beyond the monetary gains for the IT industry resulting from the elimination of import duties, investors and traders would also gain from significantly improved market access, predictability and certainty. This is because a number of these products are either currently unbound or are bound at high tariff levels. With the ITA product expansion, the participating Members would have the legal obligation not to impose import duties on covered products. The majority of tariffs under the terms of the Agreement will be eliminated on the 201 products within three years, with reductions beginning in 2016. The ITA tariff elimination concessions by the participants to the Expansion Agreement are implemented on a most-favoured nation (MFN) basis and will benefit even countries that have not joined the ITA Expansion Agreement.

3.12  Aid for Trade

3.151.  The Fifth Global Review of Aid for Trade held from 30 June to 2 July 2015 focused on the theme "Reducing Trade Costs for Inclusive, Sustainable Growth". It provided an opportunity to discuss how the economic growth and development prospects of developing countries and LDCs are constrained by high trade costs – which hamper their regional integration and access to global markets – and how Aid for Trade can assist in tackling the issue of reducing trade costs. The Fifth Global Review was underpinned by an extensive monitoring and evaluation (M&E) exercise which sought to examine the actions that are being taken to reduce trade costs and their associated impacts. A total of 112 governments and ten regional economic communities and transport corridors worldwide responded to the self-assessment questionnaire element of the monitoring exercise. In addition, 116 case stories were submitted, including from the private sector and academia, describing on-the-ground experiences.

3.152.  The information collected from the M&E exercise provided the narrative for the joint OECD‑WTO report on "Aid-for-Trade at a Glance 2015:  Reducing Trade Costs for Inclusive, Sustainable Growth" presented at the Fifth Global Review. For the first time, the report also benefitted from contributions by the World Bank Group, the Executive Secretariat for the Enhanced Integrated Framework, the International Trade Centre, UNCTAD, and the World Economic Forum. The report confirmed that high trade costs prevent many developing countries and LDCs from realizing their full potential in global trade. LDCs, landlocked economies and the poorest and most vulnerable in particular, face a comparative disadvantage when it comes to exporting goods to global markets. The joint report also confirmed that Aid for Trade is broadly correlated with increases in trade and that well‑designed Aid-for-Trade interventions can be effective in reducing trade costs.

3.153.  Key messages that emerged from the Review and monitoring exercise included the expected benefits from implementation of the Trade Facilitation Agreement, the economic opportunity of e-commerce and the negative impact of non-tariff measures on raising trade costs. The importance of delivering development outcomes at MC10 was also highlighted. Since the Aid‑for-Trade Initiative was launched in 2006, a total of US$264.5 billion has been disbursed for financing Aid-for-Trade programmes and projects, with disbursements to LDCs amounting to US$64.9 billion. In 2013, the share of Aid for Trade in sector-allocable aid increased from 31% to 38%. More than three-quarters of total Aid for Trade has financed projects in four sectors closely related to reducing trade costs: transport and storage (29%), energy generation and supply (21%), agriculture (18%), and banking (10%).

3.13  Trade Financing

3.154.  Over the past 12 months, the WTO has been reviewing and discussing the difficulties faced by SMEs in developing countries to access trade finance after the 2008 financial crisis. Surveys by the African and Asian Development Banks revealed that almost US$1 trillion in financing had been requested by SMEs, but had been rejected with no alternative financing. The Director-General's Expert Group on Trade Finance noted in March 2015 that, although liquidity was sufficient in trade finance markets for the main trading nations, many developing countries lacked both the capacity in the financial sector to support trade and access to the international financial system. The situation was aggravated after the onset of the financial crisis as global private financial institutions withdrew from LDCs.

3.155.  At the WTO special meeting of the Working Group on Trade, Debt and Finance on 26‑27 March 2015, the Director-General acknowledged that lack of trade finance could be the equivalent of a strong non‑tariff barrier to trade. He insisted that, despite the comprehensive cooperation between the WTO and multilateral development banks to foster the expansion of trade finance facilitation programmes, much remained to be done. Discussions between Members generally reflected that there was no quick fix for developing countries to immediately benefit from efficient and cost-effective financial services for traders. Efficiency gains depended on improved knowledge and skills in this area. While trade flows were moving quickly in new directions (south‑south trade), the financial networks in low-income countries – many of which dated from the post-colonial period – had not yet fully caught up. Specific support by multilateral development agencies was still needed. Several delegations urged the WTO to become more involved in trade finance because of its centrality in building overall trade infrastructures.

3.156.  The Director-General noted that opportunities for growth and development would be lost if large financing gaps were left unfilled. In his keynote speech to the Third International Conference on Financing for Development (July 2015), he called for a "broader and more systemic approach" to the above-mentioned challenges in trade finance, with a view to reducing the trade financing gaps around the world. He indicated that the WTO would soon "be launching a new initiative with this goal in mind", and would revert to Members and partner institutions as to the specifics of such an initiative. Consultations at the technical level are currently taking place to assess the feasibility of particular options and solutions.

3.14  Government Procurement

3.157.  The membership of the Agreement on Government Procurement (GPA) continues to grow. Following the deposit by Montenegro and New Zealand of their instruments of accession, the Agreement came into force for these two Members on 15 July 2015 and 12 August 2015, respectively. This brings the total number of WTO Members covered by the Agreement to 45. The number of WTO Members participating in the GPA Committee as observers has also grown to 30 as a result of the grant of observer status to Pakistan (11 February 2015), Costa Rica (3 June 2015), Thailand (3 June 2015), and Seychelles (16 September 2015).

3.158.  Further additions to the membership of the Agreement are expected in the short to medium term. In September 2015, negotiations were concluded with respect to the Republic of Moldova's accession to the Agreement. Negotiations on Ukraine's accession are also progressing well. Negotiations on Tajikistan's and Australia's accessions have been initiated. Further discussions were held on China's accession based on its fifth revised market access offer circulated on 5 January 2015. Five other WTO Members — Albania, Georgia, Jordan, the Kyrgyz Republic and Oman have applied to join the GPA. Another five WTO Members have provisions regarding accession to the Agreement in their respective Protocols of Accession to the WTO: Mongolia, the Russian Federation, the Kingdom of Saudi Arabia, Seychelles and the former Yugoslav Republic of Macedonia.

3.15  Dispute Settlement

3.159.  2015 has witnessed the highest level of dispute settlement activity since the inception of the WTO. Over the period January to the end of September 2015, there were 10 new requests for consultations, 15 new panels established by the DSB, 6 Appellate Body proceedings, and 1 Article 21.3(c) award. As of the end of September, there were 19 active ongoing panels, 5 compliance panel proceedings under Article 21.5 (including the ongoing aircraft disputes), 3 panel requests pending before the DSB, and 1 arbitration under Article 22.6. As in previous years, the subject-matter of WTO dispute settlement continues to touch on many of the covered agreements: the 7 panel reports and 5 Appellate Body Reports circulated over this nine-month period address a range of provisions in the GATT 1994, the SCM Agreement, the Anti-Dumping Agreement, the TBT Agreement, the SPS Agreement, the Agreement on Agriculture, the GATS, and the DSU. Ongoing dispute settlement proceedings also involve claims under many of these agreements, as well as a range of other covered agreements, including but not limited to the Marrakesh Agreement, the TRIMs Agreement, the Import Licensing Agreement, and the TRIPS Agreement. Nine of the 15 panels established in this period concern trade remedies or subsidies. Several ongoing disputes involve an exceptionally large number of complex issues. While this shows that the Membership has great confidence in the system, it also means that, with current staffing levels, the dispute settlement system is having trouble coping with the workload. There have been delays at the panel stage as a result. Another trend that continued in 2015 was the participation of both developed and developing countries in the WTO dispute settlement system: almost all of the 5 Appellate Body reports and 7 panel reports circulated over this period involved at least one developing country Member as a party, either as the complainant or the respondent. 

4  POLICY DEVELOPMENTS IN TRADE IN SERVICES^[85]

4.1.  In the area of services the period under review witnessed several important policy developments in such diverse sectors as financial services, telecommunications and ICT, audio‑visual services, construction services, energy and transport services, services supplied through the movement of natural persons and a number of other sectors. The large majority of the policies adopted during the period under review reflect liberalizing measures.

Various Service Sectors

4.2.  The Angolan new Private Investment Law (Law 14/15) entered into force on 11 August 2015. The new law (Article 2) applies to foreign investments, regardless of their amount, and to national investments of an amount equal to or higher than Kz 50 million (approx. US$399,000). Article 3 provides that foreign investors may benefit from the incentives provided by the law (e.g. tax incentives) when investments are equal to or higher than US$1 million, while Angolan investors will receive those benefits if investments are equal to or higher than US$500,000. In case of investment in prioritized sectors (Article 9), the law requires the participation of Angolan citizens, state-owned companies or private Angolan companies by at least 35%. Those sectors are energy and water, hospitality and tourism, transport and logistics, civil construction, telecommunications and information technologies, and mass media.^[86]

4.3.  In January 2015, China lifted the country's overseas online single transaction limit from US$10,000 to US$50,000. This, together with other measures such as the pilot cross-border foreign exchange payments programme implemented in Shanghai, Beijing, Chongqing, Zhejiang and Shenzhen in 2013, explains, according to the State Administration of Foreign Exchange, the significant growth of China's cross-border e-commerce trade flows, which have reached US$3.32 billion since 2013.^[87]

4.4.  On 13 March 2015, China issued a new Industry Catalogue for Foreign Investment, which entered into force on 10 April 2015, replacing the 2011 Catalogue. Similar to past versions, the 2015 Catalogue lists a number of industries and classifies them according to whether foreign investment is encouraged, restricted or prohibited. An industry which is not explicitly listed is deemed to be one in which foreign investment is permitted. Compared to the 2011 Catalogue, the 2015 Catalogue has substantially reduced the number of restricted industries from 79 to 38. However, certain service industries have been added to the restricted and prohibited categories. The following are the main changes in services-related industries.

Distribution services	- The wholesale and retail of tobacco, cigarettes and other tobacco products are newly added to the prohibited category. - The direct selling, mail order, online sale, distribution of audiovisual products, and the wholesale, retail and delivery of vegetable oil, sugar, crude oil, pesticides and fertilizers are reclassified from the restricted to the permitted category.
Education services	- Higher educational institutions and childcare institutions have been included in the restricted category, with the investment method limited to the formation of cooperative joint ventures controlled by the Chinese party. The same requirement for Chinese controlling shareholding applies to ordinary high school education. - Foreign investment in compulsory education remains prohibited.
Entertainment services	- Operation of entertainment places is moved from the restricted category into the encouraged category with the requirement on joint venture removed. - Brokering and agency of stage performances remains restricted with the additional requirement that the Chinese partner shall hold the majority of shares.
Financial services	- Foreign investment in finance companies, trust companies, currency brokerage companies and insurance brokerage companies has been moved from restricted to permitted. - The business scope of securities companies has been expanded to include the underwriting and sponsoring of yuan common shares, foreign shares, government bonds and corporate bonds, the brokerage of foreign shares and the brokerage and proprietary trading of government bonds and corporate bonds. - A foreign-invested securities company may further apply to extend its business scope after two years of establishment provided certain requirements are fulfilled. - The foreign shareholding ratio allowed in securities companies has been increased from 33.3% to 49%, which is consistent with the amended Rules on the Establishment of Foreign-Invested Securities Companies issued by the China Securities Regulatory Commission in 2012.
Health services	- Foreign investment in medical institutions is reclassified into the restricted category and is limited to the formation of equity or cooperative joint venture.
Legal services	- Consulting services on Chinese legal matters are added to the prohibited category.
Telecommunications and internet related services	- Even though value-added telecommunications industries are still listed in the restricted category, the foreign shareholding restriction on e-commerce has been removed. - Network publishing services are added to the prohibited category.
Transport services	- Railway freight transport is removed from the restricted category.

Source:   WTO Secretariat.

4.5.  In May 2015, China's State Council approved the three-year pilot programme of the city of Beijing to further open up a number of services sectors, including financial services, R&D, ICT, culture and entertainment, education, health, tourism and business services.^[88] The programme includes the following measures:

·             air transport: the requirement for the controlling share to be held by the Chinese partner is removed in foreign invested aircraft maintenance services;

·             business services: foreign investors can own up to 70% in joint-venture employment agencies in Zhongguancun (the IT business area), with the minimum registered capital reduced to US$125,000 from US$300,000;

·             cultural and entertainment services: fully-owned foreign companies can set up brokerage agencies for stage performances in certain areas of the capital;

·             engineering services: foreign engineering design companies no longer need to provide proof of a portfolio of work outside China to apply for authorization to work in Beijing;

·             financial services: foreign financial institutions will be allowed to establish fully-owned banks or set up joint-venture banks with Chinese private capital; and foreign investors will also be allowed to set up credit investment companies as well as specialized medical insurance institutions;

·          health services: approval procedures for the establishment of foreign invested medical institutions will be simplified; and

·          tourism: Sino-foreign joint-venture travel agencies will be allowed to provide outbound travel services (except to Chinese Taipei).

4.6.  Earlier this year, India simplified rules for foreign investment in different sectors by abolishing the various sub-limits (or caps) on different categories of investment (e.g. foreign portfolio investment, foreign direct investment) and the creation of an overall cap for foreign investment for each sector.^[89]

4.7.  The Russian Federation's amended Law on Foreign Investment in Strategic Companies^[90]  now also covers acquisitions of assets in "strategic" companies if the value of these assets exceeds 25% of the total value of the company's assets. Such transactions now require prior approval by the Governmental Commission. In addition, the list of strategic activities has been amended to include services rendered in ports in the territory of the Russian Federation (a specific list of such services is to be drawn up by the Government).

4.8.  On 9 April 2015, the Bolivarian Republic of Venezuela published a measure (Providencia 011, in Official Gazette 40,636) that restricts the supply of foreign exchange for travelling purposes or for credit card payments of goods and services purchased from foreign suppliers through electronic commerce transactions. The new regulations divide travel destinations into three groups, and limit the maximum amount of dollars that travellers can spend on any given trip, with, for example, dollar allocations for trips to the United States dropping to US$700 from US$2,500. Only state-owned banks are allowed to operate as foreign exchange brokers. The measure limits the amount of foreign exchange available for credit card payments of goods and services purchased from foreign suppliers to US$300 a year.^[91]

Audio-visual and telecommunications services

4.9.  As of 1 September 2015, the Authority of Electronic and Postal Communications (AKEP) of Albania has approved the abolition of restrictions governing the use of 900 MHz, 1800 MHz and 2.1 GHz spectrum by the country’s cellular telecom companies^[92], and issued the individual authorizations based on open bid for free remained frequencies in 900/1800 MHZ as well as in 2.1 GHz and 2.6G Hz. Under the new rules, operators will be allowed to choose whether to deploy their spectrum for 2G GSM, 3G UMTS, 4G LTE or WiMAX platforms. In parallel, a decision by AKEP will permit operators to refarm spectrum in the 900 MHz and 1800 MHz bands, with a view to maximizing the benefits of using of frequencies based on technology neutrality.^[93]

4.10.  On 7 September 2015, Algeria's Regulatory Authority for Post and Telecommunications (Autorité de Régulation de la Poste et des Télécommunications, ARPT) approved the interconnection offers submitted by domestic mobile operators Ooredoo Algeria (Wataniya), Mobilis and Optimum Telecom Algeria (OTA, Djezzy), and fixed line provider Algerie Telecom (AT) for the period 1 July 2015 to 30 June 2016.^[94]

4.11.  On 18 December 2014, Argentina enacted the "Digital Argentina" Law (Law 27078, Ley Argentina Digital), a new telecommunications law replacing the existing legislation from 1972. The new law declares Information Technology and Communications (ICT) services an "essential and strategic public service" and guarantees "equal access" of citizens across the country. The measure allows operators to provide bundled telephone, internet and cable television services, in practice opening the supply of telephony safeguarding small and medium enterprises and cooperatives. The law also establishes the Federal Authority for Information Technology and Communications (Autoridad de Aplicación de las Tecnologías de la Información y las Comunicaciones), the new converged regulatory body responsible for of all ICT-related matters.^[95]

4.12.  The Australian Competition and Consumer Commission (ACCC) published a final decision on 24 August 2015 on mobile termination rates for the period 1 January 2016 to 30 June 2019.^[96] Under the decision, the wholesale price of terminating calls on an Australian mobile network will be $A 0.017 (US$0.012) per minute, less than half the current rate. For text messaging, operators will be required to charge $A 0.03 per SMS to receive messages; a rate below current commercial rates for SMS termination. The ACCC does not regulate retail charges, either for mobile calls or SMS, but expects the savings to be passed onto consumers.

4.13.  On 24 September 2014, the Belgian Institute for Postal Services and Telecommunications (BIPT), through a Council's decision, confirmed the deregulation of fixed telephony services for residential and business customers. The watchdog also decided to lift the price control and transparency obligations imposed on fixed line incumbent, Belgacom, at the retail level, as the market was increasingly facing competition.^[97] This decision follows the EU's "recommendation on relevant markets" which defines the telecom markets subject to regulation within the EU in order to ensure sufficient competition between the operators, but also allows national regulators to remove limits on wholesale prices of a particular market if it is no longer dominated by a single operator.^[98]

4.14.  Belgium’s Court of Appeal upheld a ruling by the regulator which will require regional cable TV, telephony and broadband operators Numericable, Tecteo and Brutele to open their networks to rivals. In November 2014 the appeal court ruled that Telenet should open its own infrastructure on a wholesale basis.^{[99], [100]}

4.15.  In Brazil, a law establishing new standards on telecommunication infrastructure deployment and sharing, referred to as the "Antenna Law", was published and entered into force on 22 April 2015.^[101]  The Law makes it compulsory to share the excess capacity on existing mobile network sections with a view to fostering the emergence of new players as well as establishes new environmental standards. 

4.16.  In Decision No. 399 of 12 May 2015, Bulgaria's Commission on Protection of Competition imposed a fine of Lev 3.75 million on Bulgarian Telecommunications Company (BTC) for abuse of dominance. The antitrust body found in favour of the complaint by Eastern Telecommunications Company (ETC) that BTC had abused its dominant position by terminating an interconnection agreement with ETC and imposing a contractual clause to amend the relationship with ETC, putting ETC at a disadvantage to its competitors.^[102]

4.17.  In May 2015, Canada's Radio-television and Telecommunications Commission (CRTC) issued its final decisions on wholesale wireless roaming.^[103] The regulator found that, under current market conditions, competition in the wireless market is "likely not sustainable".  It will therefore regulate the wholesale roaming rates charged by the national cellular network companies. The CRTC says the action will reduce barriers faced by mobile virtual network operators (MVNOs).^[104]

4.18.  In July 2015, the Canadian CRTC announced new measures in the wholesale fixed broadband market, including a ruling requiring the largest internet providers to open up their high speed fibre-based access networks to smaller companies.^[105] In its review, the CRTC found that the large incumbents continue to possess market power in the provision of wholesale high speed access services, leading it to require that they make their services, such as fibre-to-the-premises (FTTP), available to competitors. The CRTC’s decision also ends the currently mandated aggregated wholesale high speed access and requires them to transition this access to a disaggregated architecture over a three-year period.^[106]

4.19.  The Croatian Regulatory Authority for Network Industries (HAKOM) issued a decision on the terms for internet provider (IP) interconnection. The decision will ensure interoperability for the country’s IP‑based services providers.^[107]

4.20.  The Finnish Communications Regulatory Authority (FICORA) announced four decisions regarding companies determined to have significant market power in mobile voice call termination. The decisions represent a tightening of the regulation of mobile termination rates (MTRs) for all four operators concerned, involving for the first time a cost-oriented maximum levy for MTRs.^[108]

4.21.  French telecom regulator Autorité de Régulation des Communications Electroniques et des Postes (ARCEP) has adopted a decision on the technical and operational processes of sharing fibre‑to-the-home (FTTH) networks.^[109] The decision regulates the terms defined by operators for the provision of fibre-optic access to alternative providers and includes various recommendations to promote improved interoperability between operators on a non-discriminatory basis.^[110]

4.22.  The Italian regulator, AGCOM, has announced that four of the country’s dominant mobile virtual network operators (MVNOs) must apply the same mobile termination rate (MTR) as network operators.^[111] AGCOM completed an analysis of the market for voice call termination on individual mobile networks, and says that these mobile resellers are subject to an MTR of €0.0098 per minute, covering the period 2014-2017. Although they do not own wireless spectrum, these MVNOs provide voice termination to other operators over their own infrastructure.^[112]

4.23.  The Liberia Telecommunications Authority (LTA) completed its transition to a new technology neutral Universal Licence Regime which will allow local operators to provide services based on a range of technologies without having to seek individual licenses for each technology employed.^[113]

4.24.  On 29 October 2014, the Ministry of Telecommunications and New Technologies of Madagascar announced the enactment of three decrees for the implementation of the law N° 2005‑023, passed nine years ago and aimed to reform the telecom sector.^[114] The implementing decrees focus on the total liberalization of the telecommunications market and establish minimum fees to obtain and renew licences. Furthermore, the rules will allow the operators to introduce and provide services using new technologies such as 4G. Finally, infrastructure sharing obligations are imposed, in order to decrease the amount of pylons and reduce their impact on the environment and on public health.

4.25.  On 31 October 2014, the Regulations to the Foreign Investment Law and to the National Foreign Investment Registry of Mexico were amended. Among other issues, the amendments outline the information and documents that are necessary to obtain a favourable opinion from the National Commission of Foreign Investments (required by the Federal Telecommunications Institute) to obtain the concession for broadcasting services involving the participation of foreign investment, according to the Federal Telecommunications and Broadcasting Law. In addition, the amendments simplify the registration requirements imposed by the National Foreign Investment Registry.

4.26.  On 26 June 2015, Mexico's Federal Telecommunications Institute (IFT) approved a resolution establishing the technical and operational conditions necessary for the effective unbundling of the local network of the country's dominant operator, so that other telecom suppliers have access to the dominant operator's local network infrastructure in order to provide telecommunication services. The establishment of conditions for this process will help ensure effective access to the local network of the dominant company in the telecommunications sector, in order to remove barriers to competition and market entry.^[115]

4.27.  On 6 May 2015, the Ministry of Communications and Information Technology (MCIT) of Myanmar published its latest list of licences issued.^[116] This covers licences to provide Network Facilities Services (Individual), which permit licensees to construct networks, lease access to service providers and offer any type of public or private telecom service and Network Facilities (Class) concessions that will permit licensees to deploy and maintain passive infrastructure and to lease access to service providers. Between February 2014 and March 2015, 26 licences have been awarded to different operators.^[117] In addition, for the first time, two international mobile operators will launch services within the territory.

4.28.  On 7 October 2014, the President of the Office of Electronic Communications of Poland issued a resolution on deregulation of broadband access market in 76 municipalities. This decision was the outcome of a previous analysis of the competitive situation in each of the 3,000 municipal areas in Poland. This decision regulates, for the first time since 2007, wholesale access to hi-speed internet in a more comprehensive manner.^[118]

4.29.  On 14 October 2014, the President of the Russian Federation enacted the Federal Law Amending the Law of the Russian Federation on Mass Media. According to this Law, except as otherwise provided by an international agreement to which the Russian Federation is a party, the ownership or control of the share capital of mass media companies by a foreign State, an international organisation, a citizen of the Russian Federation having the citizenship of another state, a Russian legal person having a foreign stake in its charter capital exceeding 20%, a foreign natural person, or a foreign legal person, is limited to 20%. The law will enter into force on 1 January 2016.

4.30.  The Russian Federation adopted a law on 21 July 2014 "on clarifying the processing of personal data in information and telecommunications networks".^[119] The law obliges all internet companies to store data about their Russian users only on servers located in the Russian territory. It took effect on 1 September 2015 (amendment adopted on 31 December 2014).

4.31.  The President of Senegal signed a decree in June 2015 that will give the country’s telecoms industry regulator, l’Autorité de Régulation des Télécommunications et des Postes (ARTP), full powers to order domestic telecommunications companies to divulge accurate information on topics such as communication traffic volumes. Under the decree, the ARTP will install and operate monitoring equipment for measuring the volume and quality of telephone communications exchanged on the networks of domestic operators.^[120]

4.32.  On 6 March 2015, the House of Parliament of Sierra Leone adopted the Telecommunications Amendment Act 2015. The amended bill repeals section 33 of the Telecommunications Act 2006, which entrusted a monopoly over the telecommunications international gateway to the incumbent operator, the Sierra Leone Telecommunications Company (SIERRATEL). Before the liberalization, SIERRATEL had the monopoly for a decade.^[121]

4.33.  In April 2014, South Africa passed the Electronic Communications Amendment Act (No. 1 of 2014), amending the Electronic Communications Act, 2005. Inter alia, the new Act refines provisions relating to licensing; makes further provision towards ensuring effective competition amongst persons licensed under the Act; and removes regulatory bottlenecks.

4.34.  The Spanish telecoms regulator (Comisión Nacional de Mercados y Competencia (CNMC)) announced on 21 July 2015 that it has imposed fines for both Telefónica España and Yoigo related to anti-competitive roaming agreement between them. The CNMC specified that the current agreement between the companies prevented Yoigo from reselling capacity on Telefónica’s network to third parties, thus hindering Yoigo’s ability to work with mobile virtual network operators (MVNOs), and constituted a restriction of competition.^{[122], [123]}

4.35.  The telecom committee of Thailand's National Broadcasting & Telecommunications (NBTC) approved in June 2015 new significant market player (SMP) definitions for five telecom service categories in total, divided into wholesale and retail segments, with operators classified as SMPs subject to stricter rules and price caps. Under new SMP determinations by the NBTC, all five of the country's mobile network operators are classified as SMPs in the wholesale cellular network call termination segment. Under previous market definitions, only the two largest cellular operators were classified as SMPs in the mobile market as a whole based on a 25% market share threshold.^[124]

4.36.  The President of Ukraine signed a Law on Electronic Commerce^[125] which was adopted by the Verkhovna Rada of Ukraine on 3 September 2015. The Law establishes legal requirements and mechanisms for remote conclusion and execution of transactions with the use of electronic information and communication tools and technologies that will make it possible to guarantee the legitimacy, transparency and reliability of such transactions and accelerate the integration process into the global information space.^[126]

4.37.  On 26 February 2015, the United States Federal Communications Commission (FCC) enacted the Open Internet Order containing new rules on net neutrality that would apply to fixed and mobile broadband service providers.^[127] The Order focusses on four points: no blocking, which means that internet service providers (ISP) may not restrict access to legal content, applications, services or non-harmful devises; no throttling, which means that no ISP should, intentionally, slow down the content or speed up others; and no paid prioritization, i.e. ISP would not be allowed to favour specific lawful internet traffic over other lawful traffic, in exchange for special consideration of any kind. The new rules also impose transparency requirements on broadband providers, forcing them to disclose such information as promotional rates, fees and surcharges and data caps. In order to apply these provisions, "broadband Internet Access service" is reclassified as a Telecommunication Services under the Title II of the Telecommunications Act.^[128]

Construction services

4.38.  India eased foreign direct investment rules for the construction sector.^[129] Under the new rules effective 17 April 2014^[130], 100% foreign investment, without prior approval, is now allowed in townships, housing, built-up infrastructure and construction-development projects with a minimum built area of 20,000 square metres (down from a previous 50,000 square-metre threshold). Minimum capitalization of US$10 million is required for wholly‑owned subsidiaries, while minimum capital for joint-ventures with Indian partners amount to US$5 million.

Energy services

4.39.  On 14 May 2015, Mexico's Energy Regulatory Commission issued Resolution RES/308/2015, which enables the Commission to issue general administrative provisions regarding licensing models for activities such as transport, storage, distribution and public sale of oil, natural gas and other derivatives, as well as management of integrated systems. According to the government, this resolution brings legal security to firms acting in the energy sector to the extent that it establishes final models for licenses for the activities concerned.

Financial services

4.40.  In July 2015, the Brazilian National Council of Private Insurance (CNSP) issued resolutions 322 and 325, which provide a five year timeframe for the gradual relaxation of the mandatory cession requirements and the restrictions on intra-group transfers. Mandatory cession to local reinsurers will be reduced from the current 40% to 30% from 1 January 2017, to 25% from 1 January 2018, to 20% from 1 January 2019, and to 15% from 1 January 2020. Those limits will no longer be mandatory but reinsurance companies established in Brazil will retain the right of first refusal up those limits. Under the revised rules on intra-group prohibition, the maximum limit for intra-group transfers (i.e. from an insurer or local reinsurer to a company belonging to the same financial conglomerate) is to be increased as follows: from the current 20% to 30% from 1 January 2017, to 45% from 1 January 2018, to 60% from 1 January 2019, and to 75% from 1 January 2020.

4.41.  According to a circular released on 22 April 2015, starting 1 June, China's State Council will regulate the market access for bank card transaction clearing institutions.^[131] The circular lists the requirements that need to be fulfilled in order to apply to set up a bank card clearing institution and to conduct such business in China:

·          organizations will be able to engage in bank card clearing business after their applications are approved by the authorities and licences issued;

·          the application requirements, covering various aspects, include a minimum of yuan 1 billion (US$161 million) of registered capital;

·          the banking authorities should decide whether the applications are approved within 90 working days after receiving the applications. The applicants should complete preparatory work within one year after approval and no clearing business is allowed   during the period;

·          applicants are required to officially start bankcard clearing services within six months after receiving the business permits;

·          requirements are set on the organizations' business, including protecting the information they acquire from bankcard clearing services;

·          overseas institutions that provide bankcard clearing services for clients in China should establish foreign-invested enterprises in the country according to law; and

·          organizations that have already started business should submit applications for business permits or report their operations to authorities within a year after the new rule takes effect or they will be forbidden to continue the business.

 

4.42.  The China Banking Regulatory Commission (CBRC) issued the "Implementing Measures on Administrative Licensing of Foreign-funded Banks", which entered into force on 5 June 2015. These are complemented by the "Rules for the Implementation of the Administrative Regulations of the People's Republic of China on Foreign-invested Banks", which took effect on 1 September 2015. Together, these new measures lift a number of administrative licensing requirements applicable to foreign-funded banks in China. The following aspects of the Implementing Measures are worth noting:^[132]

·          some aspects of licensing, which are currently subject to the CBRC's jurisdiction, are delegated to local banking regulatory authorities;

·          the requirement of prior establishment of a representative office in China has been removed for (i) the controlling or sole shareholder of a wholly‑foreign-owned bank; (ii) the major or sole foreign shareholder of a Sino-foreign equity joint venture bank; and (iii) setting up a foreign bank's branch in China;

·          a foreign-funded bank wishing to set up a branch will no longer need to allocate an operation fund equivalent to no less than yuan 100 million to the branch;

·          the requirements for foreign-invested banks to operate yuan business have been loosened. For example, for an initial application, the bank only needs to have an operating history in China of more than one year (as opposed to the minimum three‑year track record currently required) and is no longer required to submit profit records for its two previous years; and

·          once one branch has been approved to conduct business in yuan, new branches can begin preparations to use yuan during their setup periods. After a branch has been examined and approved by the regional CBRC branch, the bank branch can apply to conduct business with yuan immediately after they open.

4.43.  The People's Bank of China (PBOC) has issued the "Circular on Engagement of Offshore RMB Clearing Banks and Offshore Participating Banks in Bond Repurchase Business in the Inter‑bank Bond Market" in order to further open up the domestic bond market. The Circular, which is part of China's efforts to encourage greater global use of yuan, provides, inter alia, that foreign banks allowed to engage in the bond repurchase business must be approved by the PBOC to enter the inter-bank bond market and fall into one of the following categories: (i) offshore authorised yuan clearing banks incorporated in a foreign country/region which has established an yuan clearing arrangement with China; or (ii) offshore banks participating in cross-border yuan settlement in accordance with relevant PBOC regulations. An inter-bank bond market settlement agency shall be appointed to handle the relevant trading and settlement matters.^[133]

4.44.  On 22 July 2015, the China Insurance Regulatory Commission (CIRC) released the "Interim Measures for Regulating the Internet Insurance Business", which took effect on 1 October 2015. The measures allow both domestic and foreign insurance companies to engage in internet insurance business. In addition, for selected insurance products (e.g. accident insurance, some life insurance policies, home property insurance, liability insurance, credit insurance, and property insurance) the measures allow insurers to expand their operations to provinces without the need to establish a licensed branch office.^[134]

4.45.  The State Council of China released a guideline in June 2015 that, among other things, will encourage domestic banks and institutions to launch cross-border electronic payment businesses and advance pilot overseas payments in foreign currencies. In addition, the government will seek to foster both public and private e-commerce platforms and support companies that provide comprehensive international trade services, while welcoming cooperation between domestic and foreign e-commerce enterprises.^{[135], [136]}

4.46.  In March 2015, India passed the Insurance Laws (Amendment) Act, 2015^[137], which increased foreign equity ownership in Indian insurance firms from 26% to 49%.^[138] Foreign investment of up to 26% will be allowed without prior government approval, while any investment above 26% and up to the cap of 49% will require prior government approval from the Foreign Investment Promotion Board (FIPB) of India. While the shareholding cap has been increased, "ownership" and "control" of the company must remain with Indian residents. Indian ownership is defined to mean more than 50% of the share equity capital in the hands of Indian residents. Control has been defined in line with the definition in the consolidated FDI Policy to include the "right to appoint majority of directors or to control management or policy decisions including by virtue of their shareholding or management rights or shareholders agreements or voting agreements." The Act also recognizes "health insurance" as an exclusive line of business, and carves it out from general insurance. The amended Law also enables foreign reinsurers to set up branches in India.

4.47.  In line with the reforms of the insurance sector, on 24 April 2015 India raised the limit of foreign direct investment in the pension sector also to 49%. According to the press note No. 4 (2015 Series), no government approval is required to acquire 26% of ownership. But the approval of the FIPB is needed for investments beyond 26% and up to the cap of 49%.

4.48.  On 23 April 2015, the Reserve Bank of India issued a notification (RBI/2014-15/573) requiring foreign banks that have more than 20 branches to achieve the 40% total priority sector lending target (to agriculture, SMEs and housing) by March 2019. Foreign banks with fewer than 20 branches, who were previously subject to a 32% total priority sector lending target, will now need to move to a 40% target, on a par with Indian banks, by 2020.

4.49.  In September 2014, Indonesia enacted the revised Insurance Law. The New Law, which replaces Law No. 2 of 1002 on Insurance Business, provides a more comprehensive regulatory framework for Indonesia's insurance industry under the supervision of the Financial Services Authority (Otoritas Jasa Keuangan or OJK). The Government has yet to issue the regulation dealing with foreign ownership of insurance companies and the legal forms of foreign insurance.

4.50.  As part of its initiatives aiming at developing its capital market, the Republic of Moldova enacted Law No. 117 "On taking provisional measures on the capital market", which entered into force on 28 May 2015. This amendment provides for the establishment of a Central Depository for public interest entities, which will have the exclusive right to carry out the following activities: financial instruments depositing, registry of securities holders of public interest entities, and clearing and settlement of financial instruments admitted to trading on regulated markets.

4.51.  In October 2014, the Central Bank of Myanmar granted provisional approval for nine foreign banks to commence limited operations, marking a resumption of such services for the first time since 1962. All nine were chosen from a pool of more than 40 lenders with representative offices in the country, more than half of which opened within the past three years. The banks, all from the Asia-Pacific region, have been given 12 months to launch operations. Under the terms set out in October, the new entrants into the market will only be able to offer wholesale banking products and services to foreign firms and local banks. They will therefore not be allowed to engage in normal retail banking. They will be allowed to provide kyat-denominated loans to domestic companies only through a partnership arrangement with a registered domestic lender, with interest rates set by the Central Bank.

4.52.  In November 2014, the Monetary Board (MB) of the Philippines released the implementing rules and regulations (IRR) of Republic Act (R.A.) No. 10641.^[139] The new law provides for the further entry of foreign banks into the Philippines and thus amends R.A. No. 7721, from 1994. With the approval of the IRR, additional foreign banks can now apply to operate in the Philippines either as a branch or as a wholly-owned subsidiary. In addition, the new law allows foreign banks to acquire up to 100% of the voting stock of an existing domestic bank. This is an increase from the 60% under the previous law (R.A. No. 7721). The R.A. No. 10641 allows foreign banks to control up to a combined 40% of the total assets of the banking system (up 10 percentage points from the previous 30% limit). The minimum capital requirements applicable to foreign bank branches have been aligned with that of domestic banks of the same category.

4.53.  In July 2015, the Russian Federation enacted Federal Law No. 222-FZ on the Operation of Credit Rating Agencies in the Russian Federation, which establishes a legal framework for the operation of credit rating agencies in the Russian Federation. According to the Law, rating activities on the territory of the Russian Federation can be performed by legal entities established in the form of a business entity and included in the register of credit rating agencies by the Bank of Russia. The minimum net worth (capital) of a rating agency is set at Rub 50 million. In addition, representative offices of foreign rating agencies are entitled to represent and protect their interests in the Russian Federation as of the date of their inclusion in the register of representative offices of foreign credit rating agencies, while branches of foreign rating agencies are allowed to perform certain aspects of rating activities in the Russian Federation as of the date of their inclusion in the register of branches of foreign credit rating agencies.^[140]

4.54.  On 22 April 2015, Chinese Taipei's Financial Supervisory Commission (FSC) agreed to allow branches of foreign financial institutions to raise and issue international corporate bonds on the professional board in its jurisdiction provided the following conditions are met: (i) a holding company of a foreign financial institution is listed on an approved overseas securities market; and (ii) the holding company's holds, directly or indirectly, a total of more than half the foreign financial institution's stock rights or voting rights and includes the institution in its consolidated financial statements. In the past, if a branch of a foreign financial institution wanted to raise and issue international corporate bonds, its stock had to be already listed and traded on an approved stock market, however, today international financial institutions have widely changed to listing on various international stock markets using a holding group method rather than have the institution itself listed.

4.55.  In addition, Chinese Taipei's FSC amended "The Regulations Governing Foreign Bank Branches and Representative Offices", effective as of 30 June 2015. Under the amendment, when a foreign bank branch with financial soundness extends credit for client’s M&A activities, the bridge‑loan part of the credit may not be subject to the NTD single lending limit to a same person, same related party or same affiliated entity.

4.56.  As part of the modernization of its securities legislation, in May 2015 Viet Nam issued Decree 42-2015-ND-CP, which came into force on 1 July 2015, and which establishes a new derivatives market. Both Vietnamese entities and foreign entities (including branches of foreign banks and branches of foreign insurance companies) are allowed to invest on the derivatives market. In order to invest in derivatives, any investor must have opened a derivatives trading account with the relevant trading member. Any transaction in derivatives on the stock exchange shall be conducted by trading members. Only Vietnamese entities can be trading members. Decree 42-2015-ND-CP distinguishes between a "derivatives securities trading member", which is a Vietnamese securities company permitted to conduct activities of derivatives self-trading, brokerage and consultancy, and a "special trading member", which is a Vietnamese commercial bank permitted to invest in derivatives whose underlying assets are bonds.^[141]

Health Services

4.57.  On 25 July 2014, China's National Health and Family Planning Commission issued the Notice on Establishing Wholly Foreign-Owned Hospitals, which allows foreign investors in wholly‑owned hospitals in Beijing, Tianjin and Shanghai and the provinces of Jiangsu, Fujian, Guangdong and Hainan as part of a pilot test.^[142] Foreign suppliers should have experience in medical and health investment and management, and meet one of the following requirements: (i) being capable of offering advanced hospital management ideas, and management and service models; (ii) being capable of offering advanced medical technology and equipment; and (iii) being capable of improving local medical service, technology, fund and facilities. The wholly‑foreign‑owned hospitals should meet basic national medical institute standards.

Transport services

4.58.  Australia has recently relaxed foreign ownership restrictions in the Qantas airline. On 8 August 2014, the Qantas Sale Amendment Act 2014 received Royal assent. According to the Act, ownership by a single foreign investor may now exceed 25% and aggregate ownership by foreign airlines may now exceed 35%. However, foreigners may, cumulatively, still not own more than 49% in Qantas.

4.59.  Effective 17 April 2014^[143], India permitted 100% foreign direct investment, without prior authorization, in several activities of the railway transportation sector, such as high speed train projects, railway electrification, signalling systems and freight and passenger terminals. However, FDI beyond 49% of the company in sensitive areas from a national security point of view will be authorized by the Cabinet Committee on Security on a case-by-case basis.

4.60.  In April 2015, Indonesia introduced new regulations for the freight forwarding business.^[144] The regulations are effective immediately, with a three-year transition period. The new regulations raised minimum capital requirements for foreign or joint venture companies to US$10 million (of which US$2 million of paid-up capital).

4.61.  Mexico recently amended its Navigation and Maritime Commerce Law. Effective on 4 April 2015, the new Regulation provides a clearer process to allow foreign entities to secure temporary permits to operate foreign-flagged vessels and naval artefacts, such as rigs and production platforms, in Mexican coastal waters. The new Regulation also adds specific provisions and standards for ship building, including the granting of authorizations for shipyards to operate in Mexico. In addition, the Regulation contains new regulations in the area of pollution prevention, which may impact maritime transport and port services.

4.62.  Law No. 150 of 17 July 2014 (Road Transport Code) of the Republic of Moldova requires mandatory licensing for the transport of goods in international and national traffic. Licences for international traffic are issued for a period of eight years (effective 1 January 2015), while licences for national traffic are valid for a period of five years (effective 1 January 2016).

Services supplied through the movement of natural persons

4.63.  On 1 March 2015, Chile introduced a new "Temporary Residence for Work Purposes" work visa category. The multiple-entry visa, which has an initial duration of one year, allows foreigners to enter the country with an employment contract and subsequently change employers, and perform unlimited work activities. It also exempts employers from paying repatriation costs once their employee leaves Chile.^[145]

4.64.  Egypt's Ministry of Manpower has announced that, starting from February 2015, new work permit applications are subject to labour market testing requirements.

4.65.  India further expanded its e-Tourist Visa (eTV) facility, which enables business visitors and those travelling to the country to sightsee, visit friends or relatives or seek short medical treatment to apply on-line for a 30-day visa.  As of mid-August 2015, the eTV covered applicants entering the country from a total of 113 countries at a total of 16 designated ports of arrival.^[146]

4.66.  Indonesia issued Regulation 16/2015 on Procedures for the Utilization of Foreign Employees on 29 June 2015. The Regulation sets out, inter alia, a requirement that companies employing expatriates maintain a new local-to-foreign workers ratio of 10 Indonesian nationals for each expatriate. The ratio will not apply to foreign employees entering the country as directors or administrators, for emergency or urgent work, for entertainment services or for temporary work. Several measures aimed at streamlining visa or work permit application processes were also introduced over the reporting period. 

4.67.  Ireland's new Trusted Partner Initiative allows entitled employers to benefit, inter alia, from a faster turnaround time for applications and from having to submit fewer documents and details.[147]

4.68.  Kenya introduced on 1 July 2015 an online platform for visa applicants (eVisa), to replace visas on arrival and thus streamline the application process.^[148] 

4.69.  On 15 July 2015, Malaysia introduced a new Employment Pass category (EPIII). This Category III caters to workers with basic salaries between RM 2,500 and RM 4,999, whose employment period do not exceed 12 months and who are employed in specific industries (including, for instance, business, education, financial, healthcare, tourism and retail services). EPIII can be renewed, subject to review, up to a maximum of two times.^[149]

4.70.  On 1 July 2015, New Zealand implemented an online student, work and visitor visa application system called "Immigration ONLINE" that should enable faster processing times compared to paper applications.^[150] The new platform allows foreign nationals and, in some instances, their agents to apply and pay for a visa online, as well as to upload supporting documentation.^[151]

4.71.  In May 2015, South Africa launched a premium processing service for eligible employers who register with the relevant Department of Home Affairs unit; the service should lead to a shorter processing time of four weeks for most visas and immigration applications.^[152]

4.72.  The Swiss Government has set the 2015 quotas for short-term work permits (L-permits) and for long-term work permits (B-permits) at 2,500 and 4,000, respectively, for non-EU/EFTA applicants, and at 250 and 2,000 for EU/EFTA applicants.^[153]

4.73.  Foreign business visitors to Thailand are allowed to perform a longer list of activities, including attending business meetings, seminars or conferences, as of 13 March 2015, without needing to obtain a work authorisation.

4.74.  Since 22 December 2014, intra-corporate transferees working in several services industries in Viet Nam may apply for an exemption from work permit requirements. The exemption is available to intra-corporate transferees that are managers, specialists or technicians who have been in the employment of the company for at least one year prior to their transfer to Viet Nam.

Box 2 Policy and regulatory trends in the telecommunications sector

Market opportunities for telecommunications and ICT services continue to grow as governments award new licenses and expand the scope of existing ones, particularly for mobile services. This, in turn, is spurring intense activity in the realm of spectrum allocation and assignment. Spectrum is increasingly being managed so as to hasten the transition to broadband mobile technologies (e.g. 4G, LTE, 5G) with higher quality capability for internet and other mobile applications. Examples of governments recently moving to expand the availability of these technologies include Albania; Cabo Verde; Chile; Macao, China; Mexico; the Republic of Moldova; Kenya; Paraguay; Poland; Romania; Chinese Taipei; Thailand; Ukraine and some EU member States, namely Austria; Bulgaria; France and Germany. The number of governments releasing new and refarmed spectrum, typically via auctions, is such that it could be described as universal.  In some cases, additional spectrum is being assigned to existing operators, but often it is awarded to new licensees benefitting from open markets. Many foreign service suppliers that have established or wish to establish a commercial presence (GATS mode 3) are benefitting from this trend.    The growth of the mobile sector has also lead to a shift in regulatory approaches aimed at fostering a pro‑competitive environment for all players, foreign and domestic, and for the ultimate benefit of consumers. For many years, governments steered clear of price regulation in the mobile sector as it evolved from a luxury service to a mass market phenomenon that, in most markets, now outstrips fixed telephony by significant margins.  More recently, governments have begun moving to remedy high mobile termination rates perceived as resulting from the market power of large mobile players. Recent examples include Australia, Belgium, Finland, Italy, the Kingdom of Saudi Arabia and Thailand. Others, including Canada and the EU, have started to address high mobile roaming rates that seemed to bear little or no relation to costs of termination.  Similarly, number portability for mobile telephony remains a key technique of better insuring competitive conditions among mobile operators and governments continue to adopt it, where they had not done so before, or to improve its application where it did exist. Recent examples of governments introducing number portability include El Salvador, Senegal, Tunisia and Ukraine. Others, including Switzerland, are adopting improvements to the process.   Another emerging trend involves the coming of age of mobile virtual network operators (MVNOs), i.e. resellers of mobile services that employ the networks of other mobile operators, thereby offering lower-cost options to consumers.  Although often permitted previously in industrialized countries, MVNOs are now more commonly being introduced around the world. Recent examples of governments issuing MVNO licenses include China and the Kingdom of Saudi Arabia. This trend has also lead governments to look more closely at regulating the wholesale pricing of mobile networks so as to ensure a level playing field for the MVNOs. In addition, as the market matures, MVNOs are also becoming subject of termination rate regulation, for example in Italy.   Other ongoing developments touch on a variety of issues that have arisen, in part, due to ICT convergence and technological change. Governments are increasingly including broadband access within the ambit their universal service strategies or setting up separate mechanisms for raising broadband penetration. Telecommunications regulators are frequently being transformed into ICT regulators with broader mandates. To facilitate operators' shifts toward new technologies, technology neutral licensing is also becoming increasingly common. In addition, high demand for access to and use of networks by a wider gamut of players have led more regulators to consider introducing "net neutrality" measures, i.e. measures requiring non-discriminatory access terms and conditions. Greater demand for facilities and the resources they may require is also ushering in a trend, encouraged and sometimes even mandated by governments, in infrastructure sharing arrangements among operators. Finally, merger and acquisition activity levels remain high, with sector regulators and/or competition authorities often assuming a role in approving or denying such moves based on their analysis of the potential market implications.

Source:   WTO Secretariat.

5  transparency of trade policies

5.1  Notifications and Surveillance in WTO Councils and Committees

5.1.  This section aims to provide an overview of the compliance and timeliness of Members' notifications to the WTO. Notifications are the primary instrument for ensuring transparency in the multilateral trading system; they are submitted by each Member and reviewed by the relevant bodies of the WTO. The importance attached by governments to this issue explains the very elaborate system of notifications and cross-notifications put in place under the terms of most Agreements. The section covers the compliance record of notification requirements in the different WTO Bodies.^[154]

5.2  Agriculture

5.2.  The Committee on Agriculture continued its review of the implementation of Members' commitments under the Agreement. Members' notifications remain the primary basis for the Committee to conduct the review process and the Committee provides detailed guidance for the notifying Members, including the common notification formats in various areas as well as the timelines to be respected in furnishing those notifications. There are 12 distinct notification requirements covering the following five areas: (i) market access; (ii) domestic support; (iii) export subsidies; (iv) export prohibitions or restrictions; and (v) follow-up to the Marrakesh Net Food-Importing Developing Countries Decision.

5.3.  Timely and complete notifications are fundamental for effective monitoring of the implementation of commitments. Chart 5.1 presents an overview of Members' compliance with notification obligations for the period 2009-14 in respect of five "regular" or "annual" notification requirements, i.e. Table MA:2 (imports under tariff quotas), Table MA:5 (special safeguard), Table DS:1 (domestic support), and Tables ES:1 and ES:2 (export subsidies). Annual notifications are required to be submitted soon after the end of the year in question.^[155] The distribution of outstanding notifications by group of countries is presented in Chart 5.2. The information concerning the 2014 implementation year is provided for information only and does not necessarily indicate that the notifications are now due.

5.4.  Notifications remain outstanding for the reporting period with respect to all five notification requirements. The lack of compliance with notification obligations is especially visible for notification requirements related to agricultural subsidization (i.e. DS:1 and ES:1).^[156] For example, for nearly all the years reported, compliance with notification obligations in the areas of domestic support and export subsidies were the lowest among the five notification requirements. For the most recent reporting year, 2014, the percentage of outstanding DS:1 and ES:1 notifications is 88% and 82%, respectively, thus implying compliance rates for these categories of notifications of 12% and 18%, respectively. At the time of this report, the percentage of outstanding notifications of imports under tariff quotas was 85%. However in previous years, this notification requirement has been among those with the highest rates of compliance compared to the other notification obligations. (Chart 5.2 also indicates that the number of outstanding notifications is typically higher for recent years because of the time lag between the end of the reporting period and the submission of notifications for many Members).

5.5.  The different deadlines for notifications in agriculture as well as the varying reporting years used by Members can make it difficult to compare the timeliness aspect of the notifications across the WTO membership. However, one indicator of timeliness of notifications is the "average reporting years per notification". For example, a notification which covers more than one reporting year implies that a Member has missed the prescribed timelines at least in respect of years other than the latest year covered in the notification. Table 5.1 presents information on the average reporting years per notification with respect to notifications circulated during 2010-15. This average remains slightly greater than two for all years in that period. In other words, on average, Members did not respect the prescribed timelines in respect of at least half of the reporting years.

 

Chart 5.1 Current outstanding notifications in agriculture (%)

Source:   WTO Secretariat.

Chart 5.2 Outstanding notifications by country group (%)

Source:   WTO Secretariat.

Table 5.1 Number of agriculture notifications

Total (MA:2, MA:5, DS:1, ES:1, ES:2)	2010	2011	2012	2013	2014	2015a
Number of notifications (excluding Add., Corr. and Rev.)	128	134	156	109	178	111
Total number of years reported	321	324	365	242	441	307
Average of years reported per notification	2.51	2.42	2.34	2.22	2.48	2.77

a             Until 15 October.

Source:   WTO Secretariat.

5.6.  The 162 notifications issued in the period from mid-October 2014 to mid-October 2015, together reported information on 385 years, with some notifications reporting as high as 18 years in the same notification (Table 5.2). Nevertheless, the increase in the number of notifications issued per year and in the number of years reported demonstrate the increased effort by Members in recent years to bring their notifications up-to-date.

Table 5.2 Notifications reporting more than one year (mid-October 2014 to mid‑October 2015)

Member	Notification	Format	Issue date	Number of years reported
Chad	G/AG/N/TCD/1	ES:1	20-May-2015	18
Chad	G/AG/N/TCD/2	DS:1	21-Sep-2015	18
Sri Lanka	G/AG/N/LKA/5	ES:1	26-Aug-2015	17
Malaysia	G/AG/N/MYS/34	MA:2	27-Mar-2015	16
Zimbabwe	G/AG/N/ZWE/6	ES:1	08-Sep-2015	15
Malaysia	G/AG/N/MYS/34/CORR.1	MA:2	28-Sep-2015	14
Moldova, Republic of	G/AG/N/MDA/4	ES:1	01-Jun-2015	13
United Arab Emirates	G/AG/N/ARE/6	ES:1	23-Jan-2015	12
United Arab Emirates	G/AG/N/ARE/7	DS:1	26-Mar-2015	12
Moldova, Republic of	G/AG/N/MDA/3	DS:1	15-Jan-2015	9
Barbados	G/AG/N/BRB/21	MA:5	03-Mar-2015	7
Zimbabwe	G/AG/N/ZWE/7	ES:2	09-Sep-2015	7
Trinidad and Tobago	G/AG/N/TTO/13	ES:1	12-Aug-2015	6
Trinidad and Tobago	G/AG/N/TTO/14	DS:1	13-Aug-2015	6
Guatemala	G/AG/N/GTM/50	MA:2	25-Sep-2015	6
Mexico	G/AG/N/MEX/27/CORR.1	ES:1, ES:2	05-Nov-2014	5
Pakistan	G/AG/N/PAK/16	DS:1	16-Mar-2015	5
Mexico	G/AG/N/MEX/28	DS:1	15-Sep-2015	5
Moldova, Republic of	G/AG/N/MOL/4/REV.1	DS:1	14-Jan-2015	4
Cambodia	G/AG/N/KHM/3	ES:1	02-Apr-2015	4
Cambodia	G/AG/N/KHM/4	DS:1	07-Apr-2015	4
Tunisia	G/AG/N/TUN/45	DS:1	24-Aug-2015	4
South Africa	G/AG/N/ZAF/84	MA:5	07-Sep-2015	4
Japan	G/AG/N/JPN/198	ES:3	16-Oct-2014	3
Korea, Republic of	G/AG/N/KOR/53	DS:1	20-Jan-2015	3
Brazil	G/AG/N/BRA/35	MA:2	26-Jan-2015	3
South Africa	G/AG/N/ZAF/83	DS:1	26-Feb-2015	3
South Africa	G/AG/N/ZAF/85	ES:2, ES:3	25-Sep-2015	3
European Union	G/AG/N/EU/21	NF:1	30-Oct-2014	2
United States	G/AG/N/USA/99	ES:1, ES:2	05-Nov-2014	2
Canada	G/AG/N/CAN/103	MA:2	18-Nov-2014	2
United States	G/AG/N/USA/99/CORR.1	ES:1, ES:2	20-Nov-2014	2
Samoa	G/AG/N/WSM/2	ES:1	24-Nov-2014	2
Samoa	G/AG/N/WSM/1	DS:1	25-Nov-2014	2
Korea, Republic of	G/AG/N/KOR/50	MA:2	09-Jan-2015	2
Switzerland	G/AG/N/CHE/59/CORR.1	ES:1, ES:2, ES:3	16-Jan-2015	2
Switzerland	G/AG/N/CHE/71	ES:1, ES:2, ES:3	21-Jan-2015	2
Australia	G/AG/N/AUS/95	MA:5	10-Feb-2015	2
Paraguay	G/AG/N/PRY/22	ES:1	10-Feb-2015	2
Paraguay	G/AG/N/PRY/22/CORR.1	ES:1	11-Feb-2015	2
Dominican Republic	G/AG/N/DOM/24	ES:1	03-Mar-2015	2
Paraguay	G/AG/N/PRY/23	DS:1	04-Mar-2015	2
Jordan	G/AG/N/JOR/17	DS:1	10-Mar-2015	2
Argentina	G/AG/N/ARG/33	ES:1, ES:2	11-Mar-2015	2
Oman	G/AG/N/OMN/14	ES:1	31-Mar-2015	2
Armenia	G/AG/N/ARM/23	DS:1	13-Apr-2015	2
Armenia	G/AG/N/ARM/25	ES:1	13-Apr-2015	2
Australia	G/AG/N/AUS/97	DS:1	20-Apr-2015	2
Canada	G/AG/N/CAN/106	MA:5	28-Apr-2015	2
Canada	G/AG/N/CAN/107	MA:2	28-Apr-2015	2
China	G/AG/N/CHN/28	DS:1	06-May-2015	2
European Union	G/AG/N/EU/24	MA:2	28-May-2015	2
Canada	G/AG/N/CAN/108	ES:1, ES:2, ES:3	01-Jul-2015	2

Source:   WTO Secretariat.

5.7.  The lack of timeliness in Member's notification is particularly evident in the area of agricultural subsidization. Chart 5.3 provides information on the average reporting years per notification in domestic support notifications circulated during the years 2009-14. In many of the years, this average remains close to three; in 2014 the average of years reported per notification was as high as 3.3, implying that less than one-third of total domestic notifications were submitted according to the prescribed submission deadlines.

Chart 5.3 Number of agriculture notifications - domestic support

 

*             Until 15 October 2015

Source:   WTO Secretariat.

5.3  Quantitative Restrictions (QRs)

5.8.  The notification of quantitative restrictions to the Market Access Committee is an obligation established by the 2012 Decision on Notification Procedures for Quantitative Restrictions (G/L/59/Rev.1). The Decision requires Members to notify every two years the QRs they have in force, as well as any changes in the interim. The Decision also gives Members the possibility of making reverse notification of QRs maintained by another Member. Since the last report, eight Members have submitted complete notifications to the Secretariat, and two notifications related to changes to existing QRs.

5.9.  The Decision on Reverse Notification of Non-Tariff Measures (G/L/60) gives Members the possibility of making reverse notifications of non-tariff measures imposed by another Member subject to certain conditions. Only one notification has been made since the adoption of the decision in 1995.

Table 5.3 Notification procedures for QRs

No.	Notification requirement	Number of notifications received since the last report (15 October 2014 – 12 October 2015)
1	Quantitative restrictions in force (regular notification)	Biennial period 2012-2014: one Member submitted complete notification. Biennial period 2014-2016: seven Members submitted complete notifications.
2	Changes to the quantitative restrictions maintained (ad hoc) or introduction of new restrictions	Two Members notified modifications in relation to their 2014-2016 notification.
3	Restrictions maintained by other Members (reverse notification)	No Member has notified.
4	Non-tariff measures, maintained by other Members (reverse notification)	No Member has notified.

Source:   WTO Secretariat.

5.4  Import Licensing

5.10.  Notification requirements in the area of import licensing procedures result from the WTO Agreement on Import Licensing Procedures and are complemented by the "Procedures for Notification and Review under the Agreement on Import Licensing Procedures" adopted by the Committee on Import Licensing in 1995 (G/LIC/3) and the "Understanding on Procedures for the Review of Notifications submitted under the Agreement on Import Licensing Procedures" adopted on 23 October 1996 (G/LIC/4). The notification requirements are described in Table 5.4.

Table 5.4 Notification procedures for import licensing

No.	Notification requirement	Established in:	Type	Notification Category
1	Submission of full texts of relevant laws and regulations and any changes thereto	Article 8.2(b) of the Agreement; G/LIC/3	One-off and ad hoc	N/1
2	Sources in which information concerning import licensing procedures are published	Article 1.4(a) of the Agreement; G/LIC/3	One-off and ad hoc	N/1
3	New import licensing procedures and changes to existing procedures	Article 5 of the Agreement	Ad hoc	N/2
4	Reply to the Questionnaire on Import Licensing Procedures	Article 7.3 of the Agreement; G/LIC/2	Annual, by 30 September each year	N/3

Source: WTO Secretariat.

5.11.  The N/1 notification requires a WTO Member to notify all relevant laws and regulations with regard to import licensing procedures as well as identify the source/publications containing such information. It contains both a one-off element (notification of existing laws and regulations and source/publications) and an ad hoc element (changes to laws and regulations thereafter). In theory, a WTO Member should have at least one N/1 submission, providing its laws and regulations on import licensing and indicating that its Government does not maintain any import licensing regime.

5.12.  The N/2 notification is an obligation for Members to notify new licensing procedures or changes being made to existing procedures. It is ad hoc in nature and only due when specific circumstances occur. The N/3 notification obliges each Member to reply to a Questionnaire describing all import licensing procedures in place by 30 September every year.

5.13.  As of 9 October 2015, 68 new notifications under the Agreement on Import Licensing have been received and circulated by the Secretariat. Of these, 16 were N/1 notifications from the following  members: Australia; Brazil; Cameroon; EU; Hong Kong, China; Mexico; Montenegro; Russian Federation; Macao, China; Paraguay; Peru; Philippines and Chinese Taipei. The Committee also reviewed 16 N/2 notifications, relating to the institution of new import licensing procedures or changes in these procedures, from the following members: Australia; Brazil; EU; Hong Kong, China; Indonesia; Malawi; Mexico; Paraguay; Sri Lanka and Viet Nam. Finally, 36 N/3 notifications have been received and reviewed from the following members: Australia; Brazil; Cameroon; Canada; Chile; China; Cuba; EU; Haiti; Hong Kong, China; Japan; Jordan; Liechtenstein; Macao, China; Malawi; Malaysia; Mauritius; the Republic of Moldova; Montenegro; Nepal; Nicaragua; Panama; Paraguay; Peru; Philippines; Qatar; Russian Federation; Saint Vincent and the Grenadines; Singapore; Chinese Taipei; Trinidad and Tobago; Turkey; Ukraine; the United States and Zimbabwe.

5.5  Rules of Origin

5.14.  The Agreement on Rules of Origin contains two notification obligations, described in Table 5.5. Recent notifications have improved the overall compliance with notification obligations; about 70% of Members have already submitted information about their preferential or non‑preferential rules of origin (or the absence thereof).

Table 5.5 Notification procedures for rules of origin

No.	Legal source	Notification requirement	Type
1	Article 5 of the Agreement	Non-Preferential Rules of Origin: All Members must submit a notification indicating: -        if they apply non-preferential rules of origin (informing what the rules are); -        or if they do not apply any non-preferential rules of origin Changes to the legislation must also be notified.	One-off
2	Paragraph 4 of Annex II of the Agreement	Preferential Rules of Origin: Members only notify if they adopt new preferential rules of origin or if they make changes to existing preferential rules (e.g. new Free Trade Agreements or other new trade preferences)	Ad hoc

Source:   WTO Secretariat.

5.15.  To date, 44 Members have notified the Committee that they do implement some type of non‑preferential rules of origin; 51 Members have notified that they do not implement rules of origin for non-preferential purposes; whereas 38 Members have never submitted notifications to the Committee.

5.16.  A new development in the area of rules of origin in the WTO is the recent Ministerial Decision on Preferential Rules of Origin for LDCs (WT/L/917). The Decision provides a number of best practices and guidelines regarding preferential rules of origin with a view to facilitating market access for LDCs provided under non-reciprocal preferential trade arrangements. It requires the Committee on Rules of Origin to monitor new developments in this area and to report back to the General Council and to inform the Sub-Committee on LDCs.

5.6  Customs Valuation

5.17.  Notifications in the area of customs valuation stem not only from the Agreement on Customs Valuation itself, but also from a number of Decisions that have been adopted by the Committee on Customs Valuation. There are five main notification requirements (Table 5.6).

Table 5.6 Notification procedures for customs valuation

No.	Notification requirement	Established in:	Type
1	Submission of complete texts of national legislation (laws, regulations, etc.)	Decision on the Notification and circulation of national legislation  in accordance with Article 22 of the Agreement (G/VAL/5, B.2, paragraph (i))	One-off
2	Changes in laws and regulations on customs valuation	Article 22.2 of the Agreement on Customs Valuation	Ad hoc
3	Responses to the checklist of issues	Decision on the Checklist of Issues (G/VAL/5, B.3)	One-off
4	Decision on interest charges - Date of implementation	Decision on the treatment of interest charges in the customs value of imported goods (G/VAL/5, A.3, last paragraph)	One-off
5	Decision on Carrier Media (software) - Application of paragraph 2	Decision on the valuation of carrier media bearing software for data processing equipment (G/VAL/5, A.4, paragraph 2)	Ad hoc

Source:   WTO Secretariat.

5.18.  The notification requirements in the area of customs valuation are either one-off or ad hoc, which means that different approaches are required to estimate their level of compliance. In addition, any estimate must take into account that the EU notifies on behalf a group of Members, and that this number has changed several times since the WTO entered into force.

5.19.  Taking all these elements into account, the maximum number of one-off notifications as of 10 October 2015 cover 132 members (counting the EU as one). This denominator has been used to estimate the degree of compliance for the following notifications (i) submission of the complete texts of national legislation; (ii) responses to the checklist of issues; and (iii) date of implementation of the Decision on the treatment of interest charges in the customs value of imported goods (Table 5.7).

5.20.  Because ad hoc notifications are, by definition, only due when specific circumstances occur, there is no maximum number of notifications that can be used to estimate the overall degree of compliance. This is the case of the: (i) changes in laws and regulations on customs valuation; and (ii) application of paragraph 2 of the Decision on Carrier Media (software).

Table 5.7 Compliance in customs valuation notifications

No	Notification requirement	Compliance as of 30 September 2015
1	Submission of complete texts of national legislation (laws, regulations, etc.)	The large bulk of these notifications were received before 2003 and not many notifications have been received since then.  The current compliance rate is approximately 73%, as 36 Members still need to fulfil this notification requirement.
2	Changes in laws and regulations on customs valuation	Since this is an ad hoc type of notification (i.e. a Member is only required to notify if there is a change in its national legislation), it is not possible to assess the level of compliance.  Only 37 notifications of changes to their national legislation on customs valuation have been notified by 28 Members since 1995.
3	Responses to the checklist of issues	The large bulk of these notifications were received before 2003 and progress has been very slow since then.  The current compliance level stands at approximately 52%, as 64 Members still need to fulfil this requirement.
4	Decision on interest charges - Date of implementation	The level of compliance of this notification is very low as 44 of the Members have submitted it.  This means that 87 Members still need to notify the date in which they implemented the Decision on interest charges.
5	Decision on Carrier Media (software) - Application of paragraph 2	Since this is an ad hoc notification (i.e. a Member is only required to notify if it imports of carrier media bearing data and software are valued as provided for in paragraph 2 of the Decision), it is not possible to assess the level of compliance.  To date, 43 Members have made this notification, but it is not possible to know whether there are Members applying the paragraph without having submitted the notification.

Source:   WTO Secretariat.

5.7  Preshipment Inspection

5.21.  Article 5 of the Agreement on Preshipment Inspection provides that Members shall submit to the Secretariat copies of the laws and regulations by which they put the Agreement into force, as well as copies of any other laws and regulations relating to preshipment inspection. Changes in such laws and regulations shall also be notified immediately after their publication. Since the last report, two Members have submitted notifications relating to PSI to the Committee on Customs Valuation, which is the body responsible for administering the implementation of the PSI agreement (see Table 5.8).

Table 5.8 Compliance with PSI notifications

No	Notification requirement	Notifications received in 2015 (up to 13 October)
1	Submission of copies of laws and regulations putting the Agreement into force	No Member
2	Other laws and regulations relating to PSI	One Member - Congo
3	Changes in laws and regulations relating to PSI	No Member
4	Absence of laws and regulations on PSI	One Member -  Malawi

Source:   WTO Secretariat.

5.8  Integrated Database

5.22.  The submission of tariff and trade information to the Integrated Database (IDB) is a notification requirement provided for in the General Council Decision of 16 July 1997 (WT/L/225).^[157] To overcome gaps in Members' notifications and delays in providing the information to users the Committee on Market Access adopted in July 2009 a framework to enhance the IDB notifications compliance and gave the WTO Secretariat flexibility to collect missing data from other official sources subject to Member's approval (G/MA/239). The information included in the IDB is therefore either directly notified to the Secretariat by Members or collected by the Secretariat and then subsequently approved by the Members concerned.

5.23.   The IDB is the only database where proactive data collection by the Secretariat has been established by Members to assist them in complying with their WTO notification requirements. Since the adoption of the IDB framework decision in 2009, completeness and timeliness have significantly improved. The IDB approach can serve as a "good-practice" example for other databases based on notifications with respect to the data collection policy and the establishment of a network of data providers and of reliable data sources. Much of the information, including the information that Members have to notify to the WTO, can now be found through the Internet for free.

5.24.  The IDB notifications currently cover, on average, 79% of the expected data series with tariff notifications being generally more complete than the import notifications. Overall, 77% of the available IDB data were notified by Members and the rest were collected by the Secretariat mainly through government websites, regional secretariats and international organizations. The timeliness of submissions has also improved in the recent years wherein around half of notifications are collected for integration to the database within the prescribed deadlines.

5.25.  Chart 5.4 and Chart 5.5 present the number of tariff and import notifications received by the IDB, the number of notifications directly submitted by Members and the number of notifications collected by the Secretariat. The completeness of notifications is calculated based on the number of Members' schedules and not on the number of WTO Members (i.e. EU member States all fall under the EU schedule and Lichtenstein reports with Switzerland).

5.26.  The IDB coverage has improved significantly in recent years as, in addition to the regular submissions by Members, a good number of data gaps have been filled in with relevant information collected by the Secretariat. As of end September 2015, the yearly average coverage of IDB notifications was 82% for tariffs and 76% for imports.  The most complete year in terms of data availability for tariff was in 2011 with 98% and 2006 for imports at 94%. As of the last IDB status of submission (G/MA/IDB/2/Rev.42 dated 22 September 2015), about 27 Members (of which 19 are developing) have complete tariff data up to the year 2014 and 23 Members (of which 15 are developing) have complete imports data up to 2013.  In fact, the same 23 Members have complete data for both tariff and imports.

Chart 5.4  Completeness of IDB tariff notifications

(%) Source: WTO Secretariat.

5.27.  As shown in Chart 5.5, the IDB tariff coverage has been at more than 90% since 2006 until 2013. Additional submissions and data collection are anticipated for the two most recent years and the coverage is expected to increase.  It should be noted that national submissions have priority over data collected from an alternative source and Members' notifications that are submitted at a later stage replace existing IDB data collected from an alternative or framework source. The completeness of import data is slightly lower compared to that for tariff (Chart 5.6) mainly because the data requirement is more demanding and the IDB tends to rely more on Member notification than from alternative sources. In fact, very few countries publish their import statistics at the tariff line level and by partner on their own governmental websites and it is a big challenge for the Secretariat to find reliable sources to collect the missing import information. Nonetheless, for 2009 to 2012 almost one-third of available import IDB data were collected by the Secretariat.

5.28.  Table 5.9 shows the number of submissions received by the Secretariat within the years of the deadlines for tariff information and for imports. The timeliness of notifications is calculated, as in the previous section, based on the number of expected schedules. Timeliness has improved across the years especially for tariff. In 2013, 73% of tariff data were submitted and/or collected on time. Hopefully this trend can be sustained by proactive data collection by the Secretariat and positive responses from Members to reminders about their outstanding submissions.

Chart 5.5 Completeness of IDB import notifications

(%)

Source:   WTO Secretariat.

Table 5.9 IDB notifications received within the year of the deadline^a

 

	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015
Tariff	1	3	16	24	26	28	34	25	26	26	24	22	28	41	53	66	70	73	52	43
Imports	11	30	26	26	30	32	26	28	24	24	29	28	37	30	54	48	47	44	18	n.a.

a             The numbers slightly differ from those reported in the past as the review of some submissions indicated that data were not suitable for inclusion in the IDB because of technical problems.

n.a.         Not applicable.

Source:   IDB, 30 September 2015.

5.29.  Another point worth mentioning is the increased notification of non-MFN regimes to the IDB, mostly the preferential tariffs resulting from FTAs and RTAs. In 2014, 59 Members out of the 106 notifiers included preferential tariff regimes in their notifications. This information is of great value and the next revision of the status of submissions document would reflect this additional information.

5.9  Anti-Dumping

5.30.  Pursuant to Article 16.4 of the Agreement on the Implementation of Article VI of GATT 1994 ("the Anti-Dumping Agreement"), all Members are required to submit to the Committee on Anti‑Dumping Practices, on a semi-annual basis, reports of any anti-dumping actions taken within the preceding six months, using an agreed standard form. Members that have not established an authority competent to conduct anti-dumping investigations have the option to make a one-time "nil" notification, valid unless and until they establish an investigating authority, in lieu of submitting nil notifications each six months.

5.31.  Approximately 45 Members (counting the EU as a single Member) regularly submit semi‑annual reports, either of anti-dumping actions taken, or of no actions having been taken, during the preceding six months. Thirty‑seven Members have submitted one-time nil notifications. The remaining (approximately 50) Members generally fail to submit semi-annual reports in respect of anti-dumping actions.

5.10  Subsidies and Countervailing Measures

5.32.  The trends in the status of compliance with the obligation to notify subsidies to the Committee on Subsidies and Countervailing Measures under Article 25.1 during the period 1995‑2015 are shown in Table 5.10. Subsidy notifications are required every two years and the most recent notifications were due on 30 June 2015. Further notifications for this period are expected to be received. The share of Members that have notified subsidies has remained between 39% and 50% between 1995 and 2013. The share of Members that made a "nil" notification fell significantly, from 23% to 14%, over the same period. Excluding 1995 and 2015, the share of Members making the required notifications has not exceeded 70%, and generally has hovered around 57%. Conversely, the share of Members not making any notification registered a substantial increase since 1995, from 27% to 44%, albeit with some intervening fluctuations.

Table 5.10 Status of subsidy notifications

New and full subsidy notification	% share of total
	1995	1998	2001	2003	2005	2007	2009	2011	2013	2015
Members that notified subsidies	50	39	44	44	46	47	46	44	43	14
Members that made a "nil" notification	23	15	15	12	11	10	15	17	14	3
Sub‑total notifying Members	73	54	59	56	57	57	61	61	57	17
Members that did not make any notification	27	46	41	44	43	43	39	39	43	83

Source:   WTO Secretariat.

5.33.  Pursuant to Article 25.11 of the Agreement on Subsidies and Countervailing Measures, all Members are required to submit to the Committee on Subsidies and Countervailing Measures, on a semi-annual basis, reports of any countervailing duty actions taken within the preceding six months using an agreed standard form. Members that have not established an authority competent to conduct countervailing duty investigations have the option to make a one-time "nil" notification, valid unless and until they establish an investigating authority, in lieu of submitting nil notifications each six months.

5.34.  Approximately 45 Members (counting the EU as a single Member) regularly submit semi‑annual reports, either of countervailing duty actions taken, or of no actions having been taken, during the preceding six months. Thirty-six Members have submitted one-time nil notifications. The remaining (approximately 55) Members generally fail to submit semi-annual reports in respect of countervailing duty actions.

5.11  State-Trading Enterprises

5.35.  Notifications related to state trading enterprises are reviewed by the Working Party on State Trading Enterprises on behalf of the Council for Trade in Goods. In July 2012, the Council for Trade in Goods agreed to extend indefinitely the new biannual frequency of new and full notifications. Thus, all WTO Members must notify their state trading enterprises every two years, with no updating notifications in the intervening years.

5.36.  Table 5.11 presents notifications received for the years in which a new and full notification was due. A "nil" notification means that the Member reported that it did not have any state trading enterprises, while an "STE" notification means that the Member reported information on one or more state trading enterprises. The table shows a declining trend in total notifications over the period examined. Indeed, notifications fell by a little less than half – from 63% in 1995 to 34% in 2012. However, a slight improvement has been seen in the current period as the number of Members who provided a notification has increased to 41%.

Table 5.11 Status of STE notifications

New and full STE notification	% share of total
	1995	1998	2001	2003	2006	2008	2010	2012	2014
Members that notified STEs	40	27	21	14	15	19	18	15	18
Members that made a "nil" Notification	23	23	29	24	24	25	24	19	22
Subtotal notifying Members	63	50	50	38	39	44	42	34	41
Members that did not make any notification	37	50	50	62	61	56	58	66	59

Source:   WTO Secretariat.

5.12  Balance-of-Payments Restrictions

5.37.  Notification obligations in relation to restrictions to safeguard a country's balance of payments stem from Articles XII and XVIII of the GATT 1994 and the Understanding on Balance‑of-Payments (BOP) Provisions (described in Table 5.12).

Table 5.12 Notification procedures for balance of payments restrictions

Legal source	Notification requirement	Type
GATT Article XII:4(a)	Any Member applying new restrictions or raising the general level of restrictions by a substantial intensification of the measures applied under this Article shall immediately after instituting or intensifying such restrictions (or, in circumstances in which prior consultation is practicable, before doing so) consult with Members as to the nature of its balance of payments difficulties, alternative corrective measures which may be available, and the possible effect of the restrictions on the economies of other Members.	Ad hoc, followed by annual consultations
GATT Article XVIII:12(a)		Ad hoc, followed by biennial consultations
Understanding on BOP Provisions, para. 9	A Member shall notify to the General Council the introduction of or any changes in the application of restrictive import measures taken for balance-of-payments purposes, as well as any modifications in time-schedules for the removal of such measures as announced under paragraph 1. Significant changes shall be notified to the General Council prior to or not later than 30 days after their announcement.	Ad hoc, followed by a yearly consolidated notification

Source:   WTO Secretariat.

5.38.  In 2015, the BOP Committee received notifications from two Members, Ukraine (WT/REG/N/78, WT/REG/N/78/Add.1) under GATT Article XII, and Ecuador (WT/REG/N/79, WT/REG/N/79/Add.1, WT/REG/N/79/Add.2) under GATT Article XVIII.

5.13  Regional Trade Agreements

5.39.  The improvements made in the notifications of RTAs noted in last year's overview continued through 2015. The improvements are due largely to a simplification of the various notification formats and active efforts by the Chairman of the CRTA and the WTO Secretariat in monitoring RTAs and reminding Members of their notification obligations. Following an announcement by the Chairman at the CRTA meeting of 28 and 29 June 2011, the Secretariat has continued to circulate a list of agreements that have been verified by their parties as being in force but not notified to the WTO as a working document in advance of all CRTA meetings. The most recent of these circulated on 17 September 2015 contained 75 such agreements (of which 34 are agreements under the Latin American Integration Association, LAIA).^[158] The response by Members has been positive with some 47 new RTAs being notified as a result. The Secretariat continues to make efforts to remind Members of their notification obligations by keeping track of dates of signature and entry into force of agreements and verifying these with Members. The notification tables included in each factual presentation prepared by the Secretariat and requests by Members to notify at each CRTA meeting have also been helpful in improving notifications. The Secretariat is aware of (but has not yet verified) some 40 other agreements that continue to be in force and are not yet notified to the WTO.

5.14  Preferential Trade Arrangements

5.40.  Under the Transparency Mechanism for Preferential Trade Arrangements (PTAs), which was established in December 2010^[159], newly notified PTAs are to be considered in dedicated sessions of the Committee on Trade and Development (CTD), on the basis of Secretariat-prepared factual presentations. Since the establishment of the Transparency Mechanism, seven PTAs have been notified to the WTO. Two of these have been considered by the CTD meeting in dedicated session. With regard to the others, the Secretariat has not received the full set of data required for the preparation of the factual presentations. The CTD Chairman provides an update at each CTD meeting on the PTAs that are to be considered in dedicated sessions, and urges the notifying Members to provide the data as soon as possible.

5.41.  The Transparency Mechanism for PTAs also stipulates that an electronic database on individual PTAs is to be maintained by the Secretariat. The Database on PTAs (http://ptadb.wto.org) currently contains information on 28 PTAs. Table 5.13 provides an overview of the PTAs included in the database, which is updated based on the information provided by the Members implementing PTAs. The CTD Chairman has urged Members to ensure that they are up to date with their notification and information requirements, and has invited them to remain in touch with the Secretariat on this matter.

Table 5.13 Preferential Trade Arrangements being implemented by WTO Members

WTO Member	Number of PTAs	Name or description of PTA
Australia	2	Generalized System of Preferences
		South Pacific Regional Trade and Economic Cooperation Agreementa
Canada	2	Generalized System of Preferences
		Commonwealth Caribbean Countries Tariff
Chile	1	Duty-free treatment for LDCs
China	1	Duty-free treatment for LDCs
European Union	4	Generalized System of Preferences
		Trade preferences for countries of the Western Balkans
		Trade preferences for Pakistanb
		Trade preferences for the Republic of Moldova
Iceland	1	Generalized System of Preferences
India	1	Duty-Free Tariff Preference Scheme for LDCs
Japan	1	Generalized System of Preferences
Republic of Korea	1	Preferential Tariff for LDCs
Kyrgyz Republic	1	Duty-free treatment for LDCs
Morocco	1	Duty-free treatment for African LDCs
New Zealand	2	Generalized System of Preferences
		South Pacific Regional Trade and Economic Cooperation Agreementa
Norway	1	Generalized System of Preferences
Russian Federation	1	Generalized System of Preferencesc
Switzerland	1	Generalized System of Preferences
Chinese Taipei	1	Duty-free treatment for LDCs
Thailand	1	Duty-free treatment for LDCs
Turkey	1	Generalized System of Preferences
United States	5	African Growth and Opportunity Act
		Andean Trade Preference Act
		Caribbean Basin Economic Recovery Act
		Former Trust Territory of the Pacific Islands
		Generalized System of Preferences

a                         Australia and New Zealand both provide preferences under this PTA.

b                         The preferences granted under this PTA expired on 31 December 2013.

c                          This PTA is being implemented in the context of a customs union.

 

Source:   Database on Preferential Trade Arrangements (http://ptadb.wto.org).

 

5.15  Government Procurement

5.42.  To ensure the transparency and predictability of its Parties' procurement regimes, the Government Procurement Agreement sets out notification obligations for its Parties in five areas:

·         national implementing legislation on government procurement;

·         procurement thresholds in national currencies;

·         statistics on procurement activities;

·         modifications to schedules of commitments; and

·         media for the publication of procurement-related information.

5.43.  Numerous notifications are made during the year pursuant to each of these requirements. Some of the foregoing obligations have been simplified in the revised version of the GPA, which came into effect in April 2014, to facilitate the use of electronic tools in providing relevant information. This is expected to facilitate more timely compliance with reporting responsibilities over time.

5.16  TRIPS

5.44.  The TRIPS Agreement requires WTO Members to notify to the Council for TRIPS their IP laws and regulations, establish and notify contact points in their administrations for the purposes of cooperation with each other aimed at the elimination of trade in infringing goods, and notify the Council in the event that they wish to avail themselves of certain possibilities provided for in the TRIPS Agreement that relate to the substantive obligations. Additionally, Members have undertaken to provide information on how they meet TRIPS obligations by responding to a Checklist of Issues on Enforcement. Developed country Members also agreed to provide certain information and make notifications which are not specifically provided for in the Agreement, including on technical cooperation and transfer of technology.

5.45.  The bulk of notifications are laws and regulations notified pursuant to Article 63.2 (distributed in the IP/N/1/- series of documents). Chart 5.6 below provides information on laws and regulations notified from 1995 to 2014. Notifications peaked in 1996 when developed country Members notified existing laws or amendments that implemented the TRIPS Agreement. Notifications of laws and regulations from 2000 onwards have been predominately from developing countries. As the chart shows, the cumulative total of laws and regulations notified as of 2014 was approximately 3,000 legal texts.

Chart 5.6 Number of notifications received by the Council for TRIPS from 1995 to 2014

Source:   WTO Secretariat.

5.46.  The Secretariat continues with its development of an information management system to enable streamlined and more efficient processing of notifications, among other types of TRIPS information.

5.17  Services

5.47.  While there are 14 GATS provisions containing notification requirements in various areas, they are all of ad hoc nature, i.e. notifications are only due when specific circumstances occur. Since the entry into force of the GATS in 1995, a number of notification provisions have never been invoked by Members, and most notifications that have been made in services concern transparency on regulatory changes (Article III:3), economic integration (Article V:7), and mutual recognition (Article VII:4).

5.48.  GATS Article III:3 requires each Member to notify to the Council for Trade in Services at least annually any regulatory changes that significantly affect trade in services covered by its specific commitments. However, compliance with this obligation has been de facto left to Members' discretion. The 20 years since the entry into force of the GATS has seen no substantive improvement in this regard. As at 15 October 2015, in total only 606 notifications have been submitted by 77 Members (counting the EU member states individually) pursuant to Article III:3. Of these notifications, 33 were submitted by seven Members from 1 January 2015 to 15 October 2015. Some Members continue to submit notifications under the caveat that "there is no common understanding among WTO Members on when a measure 'significantly affects trade in services' within the meaning of GATS Article III:3" and that "the notified measures may be relevant to trade in services without prejudice to the interpretation of the phrase 'significantly affect trade in services' in Article III:3". While GATS Article III:5 allows any Member to notify to the Council for Trade in Services any measure taken by any other Member, which it considers affects the operation of the Agreement, WTO Members rarely makes use of this provision. So far it has been invoked only once.

5.49.  Six notifications were made under GATS Article V:7 regarding economic integration from 1 January 2015 to 15 October 2015. They were subject to examination in the Committee on Regional Trade Agreements.

5.50.  With respect to the notification requirement under GATS Article VII:4 regarding mutual recognition, since the entry into force of the GATS in 1995 until 15 October 2015, there are in total 56 notifications submitted to the Council for Trade in Services by 39 Members (counting the EU member states individually), of which two were made in 2015 by one Member.  While all the notifications follow the prescribed format, their level of detail varies greatly concerning the main elements of the recognition measures or agreements notified.