OVERVIEW OF DEVELOPMENTS
IN THE INTERNATIONAL TRADING ENVIRONMENT
Annual
Report by the DIRECTOR-GENERAL[1]
Table of Contents
KEY FINDINGS. 3
executive
summary. 5
1
introduction.. 6
2
Recent Economic and trade trends. 7
2.1 GDP and employment 8
2.2 Merchandise
trade. 9
2.3 Trade in commercial services. 15
2.4 Trade
forecast and economic outlook. 17
3
trade and trade-related policy developments. 18
3.1 Overview.. 18
3.2 Trade-remedy trends. 24
3.3 Sanitary and phytosanitary measures
(SPS) 35
3.4 Technical barriers to trade (TBT) 41
3.5 SPS and TBT issues raised in other
bodies. 49
3.6 Developments in agricultural policy. 50
3.7 Policy developments in trade in
services. 54
3.7.1 Measures affecting various service
sectors. 54
3.7.2 Audio-visual and telecommunications
services. 58
3.7.3 Energy services. 61
3.7.4 Financial services. 61
3.7.5 Distribution, postal and transport
services. 67
3.7.6 Services supplied through the
movement of natural persons. 67
3.8 Government support measures. 69
3.9 Trade policy reviews from mid-November
2013 to end-October 2014. 70
3.10 Regional trade agreements. 79
3.11 Government procurement 84
3.11.1 Entry into force of the revised
Agreement on Government Procurement (GPA) 84
3.11.2 Continuing expansion of the
Agreement's Membership. 85
3.11.3 New automated GPA market access
information tool (the "e-GPA portal") 86
3.11.4 Capacity building and cooperation
with other IGOs. 86
4
transparency of trade policies. 86
4.1 Notifications and surveillance in WTO
Councils and Committees. 86
4.1.1 Agriculture. 86
4.1.2 Quantitative
restrictions. 91
4.1.3 Import
licensing. 91
4.1.4 Rules of origin. 92
4.1.5 Customs valuation. 93
4.1.6 Subsidies and countervailing measures. 94
4.1.7 Anti-dumping. 95
4.1.8 State-trading enterprises. 95
4.1.9 Regional trade agreements. 96
4.2 WTO databases. 96
4.2.1 Integrated database. 96
5
other trade-related developments. 99
5.1 Trade financing. 99
5.2 Dispute settlement 100
5.3 Aid for trade. 100
Annex 1. 102
measures
FACILITATING TRADE. 102
Annex 2. 120
TRADE-remedy
MEASURES. 120
Annex 3. 150
OTHER
TRADE AND TRADE-RELATED MEASURES. 150
Annex 4. 167
GENERAL
ECONOMIC SUPPORT MEASURES. 167
APPENDIX. 176
·
This report shows
that the stock of trade restrictions introduced by WTO Members since 2008
continues to rise. Remaining uncertainties in the global economy underline the
need for Members to show restraint in the imposition of new measures and to
effectively eliminate existing ones.
·
Of the 2,146
trade‑restrictive measures introduced by Members since October 2008, only 508
(24% of the total measures) have been removed. The total number of restrictive
measures still in place now stands at 1,638 (76% of the total measures).
·
Members applied
168 new trade-restrictive measures during the period between mid‑November 2013
and mid-October 2014. This equates to over 15 new measures per month, compared
with 14.6 in the previous period.
•
Members
introduced 177 trade-liberalizing measures during the period under review.
Measured per month this figure is 16, compared with 8.2 in the previous period.
•
Greater
transparency is needed from Members in order to improve the understanding of
the operation and effects of non-tariff barriers to trade. These
behind-the-border measures include regulatory measures and subsidies.
•
While this report
shows that the stock of new trade-restrictive measures has continued to rise,
it also supports the conclusion that the overall trade policy response to the
2008 crisis has been significantly more muted than expected based on previous
crises. The multilateral trading system has acted as an effective backstop
against protectionism.
Trade‑facilitating
and restrictive measures, including trade‑remedies
(average per month)
Source: WTO Secretariat.
Trade-facilitating
and restrictive measures, not including trade‑remedies
(average per month)
Source: WTO Secretariat.
Stockpile
of trade‑restrictive measures
Source: WTO Secretariat.
Against the backdrop of
continuing global economic uncertainty and sluggish trade growth, recent
developments in trade policy actions of Members are a cause for concern.
First, although the pace of
introduction of new trade‑restrictive measures during the current reporting
period (mid-November 2013 to mid-October 2014) slightly decreased compared to
the period between October 2012 and November 2013, the number of new trade‑restrictive
measures still remains high at 168. If
trade‑remedy actions are added to this category of measures, WTO Members
applied 339 trade‑restrictive measures in the period under review, compared
with 407 in the previous annual reporting period. These 339 measures taken in
the current period account for 1.4% of world merchandise imports. This amounts
to US$257.5 billion.
Particularly, the average number
of trade‑restrictive measures taken per month in the current reporting period
is higher than that taken during the two years after the onset of the global
economic and financial crisis in 2008. If trade‑remedy actions are also
included, the average number of trade‑restrictive measures per month is higher
than in any other period since October 2008. Thus, viewed in the context
of developments since 2008, the level of trade restrictions imposed by Members
in the period under review remains very significant.
Second, the stock of restrictive
trade measures introduced by Members since 2008 has continued to increase
during the period between mid-November 2013 and mid-October 2014. Of the 2,146 trade‑restrictive measures
introduced since October 2008, only 508 (24% of the total measures) have been
removed. The total number of restrictive measures still in place now stands at
1,638 (76% of the total measures).
On a positive note, the number
of trade‑liberalizing measures significantly increased from 107 in the previous
annual reporting period to 177 in the current reporting period. These trade‑liberalizing
measures account for 6.4% of world merchandise imports. This amounts to
US$1,183.4 billion. Combined with
trade‑liberalizing measures on trade‑remedy actions, the total number of trade‑liberalizing
measures increased from 251 in the previous period to 350 in the current
period.
The relatively positive
development in the area of trade-liberalizing measures should not distract from
the concerns about the accumulation of trade restrictions. Although the removal
rate of trade‑restrictive measures was significantly higher in 2014 compared to
2010, the stockpile of trade‑restrictive measures had also grown almost
four-fold. Members must take decisive action to reduce this stock of trade
restrictions by showing restraint in the imposition of new measures and by
effectively eliminating existing ones.
In addition, adequate
information on behind-the-border measures, including regulatory measures and
subsidies, is still lacking. In addition to discussions in the specialized
Committees, various types of non-tariff measures have increasingly been the
subject of debate in general bodies such as the Council for Trade in Goods and
the General Council. Some consider that these types of measures have become
more prominent in recent years, compared to conventional border measures, and
therefore the need to increase the quality of the information available is
paramount. To deliver on this and enhance understanding of the operation and
effects of non-tariff barriers to trade, Members should look to provide greater
transparency in this area.
In this context, it is important
to recall that the WTO trade‑monitoring exercise contains a unique verification
process which provides Members with the opportunity to update and correct
information in the report submitted to the Trade Policy Review Body. The
ability of these reports to provide information on overall trends in trade
policy measures depends on the participation and cooperation of all Members.
Although the increase in the number of Members that have participated in the
preparation of this report is encouraging, there remains a very large number of
Members that have not actively participated in this exercise and thus are
encouraged to do so for future exercises.
Overall, this report supports
the conclusion that despite the continuing increase in the stock of new
trade-restrictive measures recorded since 2008, the trade policy reaction to
the 2008 global economic and financial crisis has been more muted than might
have been expected based on the experience with previous crises. This shows
that the multilateral trading system has acted as an effective backstop against
protectionism.
World trade has grown more
slowly than expected since the June 2014 report, due largely to slow and uneven
economic growth in both developed and developing economies. On current
forecasts trade growth will remain below average in 2014 and 2015.
The growth in the number of
regional trade agreements and their changing scope underline the need for
continuing work by Members to understand the systemic implications of
regionalism and to ensure that regional trade agreements are consistent with
and supportive of the multilateral trading system.
It is clear that the
multilateral trading system can do more to drive economic growth, sustainable
recovery and development. To this end Members have been working to implement
the Bali package this year. We reached an impasse in these efforts during the
summer which has had a freezing effect on many areas of work. Members have
recently redoubled their efforts to resolve this situation and move forward. It
is essential that we do so, both to ensure the swift implementation of all Bali
Decisions and to complete a work programme on the remaining issues of the Doha
Development Agenda which would set the stage for further multilateral trade
liberalization. Expansion of the Information Technology Agreement would also
have a positive economic effect. Thus those Members who are signatories should
seek to build on the recent positive news to conclude talks on an expanded
agreement, the benefits of which would be open to all Members. The removal of
remaining trade-restrictive measures combined with further multilateral trade
liberalization would be a powerful policy response.
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 27 June 2014.[2] Unless otherwise indicated, the report covers
the period mid-November 2013 to mid-October 2014.
1.2. 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]
1.3. Following
a review, in chapter 2, of recent economic and trade trends, chapter 3 of this
report provides information on developments regarding measures affecting trade
in goods, measures affecting trade in services, government support measures,
trade policy reviews conducted during the period under review, regional trade
agreements and government procurement.
Chapter 4 reviews developments with regard to transparency of trade
policy measures, notably in the context of notifications and surveillance in
WTO councils and committees. Finally,
Chapter 5 discusses developments regarding trade-finance, dispute settlement
and aid for trade. Annexes to the report
list specific trade policy measures of individual Members in the area of trade
in goods 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 measures of individual
Members in the area of trade in services are described in chapter 3.7.
1.4. Information on the measures
included in the annexes to this report and, with respect to services, in
chapter 3.7, has been collected from inputs submitted by Members and Observer
Governments, 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 59 Members (counting the European
Union and its Member States separately) (Box 1), which represents 37% of the membership,
compared with 35% for the 2013 annual report.[4]
One Observer Government also replied to the request for information. The
WTO Secretariat has drawn on these replies, as well as on a variety of other
public and official sources, to prepare this report. All country-specific
information collected was sent for verification to the delegation
concerned. Requests for
verification of information were sent to 70 delegations (counting the European
Union and its Member States as one). Forty-two of these provided replies in
time for the preparation of this report, which represents 60% of the membership
compared with 47% for the 2013 annual report. Where it has not been
possible to confirm the information, this is noted in the annexes. The
country‑specific measures listed in the annexes are new measures
implemented by governments during the period under review. A positive
development in the context of the preparation of this report saw a number of
WTO Members participate actively in the monitoring exercise for the first time.
Box 1 Members that replied to the
Director-General's request for information
|
Albania
Argentina
Australia
Azerbaijan*
Brazil
Canada
Chile
China
Colombia
Costa Rica
Dominican Republic
|
European Union
Hong Kong, China
India
Indonesia
Japan
Korea, Republic
of
Macao, China
Malaysia
Mexico
New Zealand
Norway
|
Pakistan
Peru
Philippines
Russian
Federation
Singapore
South Africa
Switzerland
Chinese Taipei
Thailand
Tunisia
United States
|
|
* Observer
1.5. The inclusion of any measure in this report or in its annexes
implies no judgement by the WTO Secretariat on whether or not such measure, or
its intent, is protectionist in nature.
Moreover, nothing in this report implies any judgement, either direct or
indirect, as to the consistency of any measure referred to in the report with
the provisions of any WTO Agreement.
2.1. World trade grew more
slowly than expected since the last monitoring report, as an uneven economic
recovery proceeded in both developed and developing economies. GDP growth
rebounded in the United States in the second quarter after an unexpected
decline in the first quarter. Meanwhile, output stagnated in the euro‑area and
fell sharply in Japan in the latest period. Developing economies' economic
performances also diverged markedly, as economic activity strengthened in China
while Brazil's recession deepened in the second quarter. Third quarter GDP
figures were only available for a handful of countries at the time of writing,
but other economic data continue to point to a multi-speed recovery.
Specifically, the weakness of recent data on industrial production in Germany
has raised the prospect of slower growth in the European Union, where a
prolonged recession and lacklustre recovery have weighed on international trade
for more than two years. With global output growth unsteady in the first half
of 2014, trade growth has been equally tentative, particularly in developing
economies.
2.2. Several factors have contributed to the uncertain outlook for trade
and output. A cooling property market reduced first quarter GDP growth in
China, although policy measures succeeded in lifting output in the second
quarter and, to a lesser extent, in the third quarter (quarter-on-quarter
growth in Q3 was less than in Q2 but stronger than Q1). Ongoing geopolitical
tensions over the conflict in the Ukraine have hit investment and economic
growth in the Russian Federation and have had a negative impact on EU exports
at the margin. Falling primary commodity prices (down 9% year‑on‑year in
September) have cut into export revenues in natural resource exporters in
Africa, the Middle East and Latin America. Finally, the legacy of the financial
crisis continues to weigh heavily on European economies. On a more positive
note, growth in the United States and the United Kingdom remained firmly
positive in the third quarter despite some moderation in the pace of expansion
in both countries.
2.3. The recent instability has prompted
downgrades in economic forecasts from international organisations, including
the World Trade Organization. The WTO Secretariat now estimates that world
merchandise trade volume will grow 3.1% in 2014 and 4.0% in 2015. In their
latest World Economic Outlook, the International Monetary Fund also reduced its
forecast for real world GDP growth at purchasing power parity to 3.3% in 2014
(2.6% at market exchange rates) and to 3.8% in 2015 (3.2% at market rates).
Despite the downward revisions, forecasters expect the global economic recovery
to continue, while recognizing that downside risks have increased.
2.4. Some of these risks are extremely difficult to gauge, including the
spread of the Ebola virus and unforeseen consequences from the changing stance
of monetary policy in developed countries. The former seems likely to have a
negative impact on West African economies, including Nigeria, but costs could
rise rapidly if the disease spreads beyond currently affected areas. The U.S.
Federal Reserve is widely expected to begin raising interest rates in 2015
after its programme of quantitative easing (i.e. bond purchases) is wound down,
but unexpectedly strong or weak economic data could change the timing of policy
shifts and stoke financial instability. These steps, together with measures
that the European Central Bank may or may not take to head off deflation, could
also produce strong movements in exchange rates that could have real effects on
global trade flows. The dollar has already appreciated roughly 8% against major
currencies since 1 July according to the Federal Reserve's trade-weighted
dollar index.
2.5. Despite the prominence of downside risks, some limited upside
potential exists. Stronger GDP growth in North America could increase import
demand and boost exports from trading partners in other regions, providing much
needed support for trade. On the other hand, falling energy prices have
ambiguous global effects, hurting some countries (e.g. net oil exporters) while
benefitting others (net oil importers). Overall, the global economic recovery
looks set to continue, but with more turbulence than was expected earlier in
the year.
2.6. Quarterly data on world GDP growth
are not readily available, but given the 85% share of G‑20 economies in world
output, aggregate figures for these countries are reasonably representative of world
totals. According to statistics from the Organization for Economic Cooperation
and Development (OECD), output of G-20 economies as measured by GDP grew at an
annualized rate of 3.2% in Q2, faster than the 2.7% pace in Q1 but slower than
the 3.5% rate from Q4 of last year. These results appear to have been driven by
the fall and rise of output in the United States in the first and second
quarters. OECD countries grew more slowly than G-20 countries overall - 1.0% in
Q1 and 1.7% in Q2 - indicating slower average growth in developed economies
than in developing ones
2.7. The United States recorded a 2.1%
(annualized) drop in its GDP in Q1 followed by a 4.6% rise in Q2 and a 3.5%
increase in Q3. The first quarter slump was attributed to a combination of
harsh winter weather and inventory draw-downs, both of which were seen as
transitory. This turned out to be the case, but it still managed to hold down
average growth in the first three quarters to just 2.0%. Relatively slow growth
did not prevent the U.S. unemployment rate from falling to 5.8% in October, its
lowest level since August 2009. Whether the unemployment rate provides an
accurate measure of labour market slack in the United States at the moment is a
much debated question, since the participation rate (i.e. the fraction of the
population in the labour force) has fallen in the aftermath of the financial
crisis to levels not seen since the early 1980s.
2.8. The 0.6% annualized increase in the
European Union's GDP in Q2 was less than the 1.3% rise in the previous quarter,
and output for the euro‑area was weaker still (0.9% in Q1 and 0.1% in Q2).
EU-wide unemployment only registered a small improvement between July and
August (from 10.2% to 10.1%) while there was no change in the euro‑area rate
(11.1% in both periods). The slow Q2 growth in the euro‑area included
declines of 0.1%, 0.6% and 0.7% in France, Germany and Italy, respectively (all
annualized rates). In contrast, the 3.7% growth that the United Kingdom
recorded in Q2 was the largest such increase since the second quarter of 2010.
Although UK growth moderated slightly to 2.8% in Q3, its recovery remained on
track.
2.9. Japan's
GDP plunged 7.1% (annualized) in Q2 after rising 6.0% in Q1. Both the rise and
fall of output seem to have been related to changes in Japanese sales taxes.
Such strong swings make it difficult to gauge underlying growth, but the
average for the first two quarters was ‑1.5%. The country's jobless rate has
remained more or less steady since the beginning of the year, falling just 0.2
percentage points (from 3.7% to 3.5%) between January and August.
2.10. Several large developing economies
decelerated sharply in 2014, with some of the biggest declines occurring in
Argentina (-3.2% annualized in Q1) and Brazil (-2.3% in Q2). Other natural
resource exporters also saw economic activity reduced, including South Africa
where growth in the first two quarters averaged 0%, down from 2% in 2013.
Output continued to grow slowly in the Russian Federation in Q1 (0.3%) and Q2
(1.0%) as geopolitical tensions took a toll, although average growth in the
first two quarters was only slightly less than in 2013. By comparison, India
has actually seen faster growth in the first half of 2014 than in 2013.
2.11. China's economy has continued to
grow faster than other large economies, with quarter-on-quarter increases of
1.5% (approximately 6.1% annualized) in Q1, 2.0% (8.2%) in Q2, and 1.9% (7.3%)
in Q3. The country's first quarter performance was actually weaker than India's
but growth for the first half was stronger in China. However, there are signs
that Chinese domestic demand has moderated recently, including negative
year-on-year growth in merchandise imports in five out of seven months between
March and September. Furthermore, cumulative growth for the first three
quarters was up 7.4% over last year, making 2014 the weakest year for Chinese
output since at least 1999, when growth for the year was 7.6%. Composite
leading indicators from the OECD show China's growth slightly below trend but
starting to turn around.
2.12. A growth
slowdown in developing economies and a simultaneous (uneven) recovery in
developed countries have produced a notable change in global import demand.
Since the fourth quarter of 2013, the contribution of developed economies to
nominal growth in world merchandise imports has been greater than that of
developing countries for the first time since 2011. This is illustrated by Chart
2.1, which shows the contributions of both developed and developing economies
to year-on-year growth in the dollar value of world merchandise exports and
imports from 2012Q1 to 2014Q2.
2.13. Equally
striking is the fact that developing economies have been subtracting from world
import growth in the first two quarters of 2014 (-0.2% in both periods), while
developed countries have been adding to it (+2.2% in Q1 and +2.6% in Q2). This
is partly due to the low level of developed countries' imports in the first
half of 2013 and partly the result of faltering imports in developing countries
this year. On the export side, the contribution of developing economies turned
from negative (-0.4%) in Q1 to positive (+1.0%) in Q2, while that of developed
countries shrank. This suggests that rising import demand in developed
countries is increasingly being supplied by exports from developing countries.
Chart
2.1 Contributions to year-on-year growth in world merchandise exports
and imports, 2012 Q1‑2014
Q2
(%
change in U.S. dollar 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.
2.14. Trade statistics in volume terms
frequently provide a more accurate picture of recent trends since they are
adjusted to account for changes in prices and exchange rates. Chart 2.2 shows
seasonally-adjusted quarterly merchandise trade volume indices for the United
States, the European Union, Japan and developing Asia[5]
(including China) from 2010Q1 to 2014Q2.
2.15. U.S. exports increased by 2.5% in
the second quarter of 2014 after falling 3.2% in the previous quarter. Trade
within the European Union (i.e EU-intra trade) rose 0.9% in Q2, but the European
Union's exports to the rest of the world (i.e. EU-extra trade) continued to
trend downward, falling 1.2% in the second quarter. Japanese exports also fell
in two consecutive quarters, dropping 1.0% in Q1 and 1.1% in Q2.
2.16. The United States' imports were up
roughly the same amount as its exports in the second quarter (+2.4%), and European
Union imports from non-EU partners also increased (+1.8%). However, Japan's
imports fell sharply (-7.1%) in Q2, erasing a 4.1% gain in Q1.
2.17. Developing Asia's exports continued
to advance steadily, growing by 1.6% in Q1 and 1.2% in Q2. However, the
region's imports have turned negative, falling 1.4% in Q2 after a meagre 0.6%
increase in Q1. Figures for Brazil are not shown in Chart 2.2, but these were
down around 1% on the export side and almost 6% on the import side.
2.18. Merchandise trade statistics in
current U.S. dollar terms are timelier than those in volume terms, and are
available for a larger set of countries. These data are illustrated by Chart 2.3,
which shows year-on-year growth in U.S. dollar‑denominated trade values for
selected economies through September (or October in the case of Brazil),
depending on availability.
2.19. These data present a mixed picture
of trade in the third quarter. Export and import growth in the United States
has been consistently positive for several months, but equivalent figures for
the European Union and Japan turned negative in August. Extra-EU (28) exports
fell 8% year-on-year in August after rising 1% in the previous month.
Meanwhile, extra-EU imports dropped 3% in the latest month after increasing 7%
in July. September trade data for the European
Union were not available at the time of writing, but improved German trade
figures for the month suggests that the European Union may be set for a
rebound. Germany's export growth
increased to 5% in September from -1% in August, while its import growth accelerated
to 5% from -2%. Japan's exports and imports contracted by 1% and 2% in
September, but these declines were less negative than the 6% drops in both
exports and imports that were recorded in August. Whether these figures presage
a further weakening of world trade is difficult to say, but they certainly cast
doubt on the strength of the trade expansion in developed countries.
2.20. China recorded solid growth in its
trade flows in September, as exports were 15% higher than in the same month of
the previous year and imports were up 7% year-on-year. Imports of India and
Brazil also rose sharply in September (26% and 9%, respectively), but their
export growth was less impressive. On the other hand, the Russian Federation
registered a sharp 12% decline in imports and a 4% drop in exports in August,
the latest month for which Russian data are available. Brazil is the only country in Chart 2.3 that
has already reported its trade statistics for October. These show exports and imports dropping
sharply (-20% and 16%, respectively) in the latest month. Such sharp declines
are worrying, but they may be partly explained by currency fluctuations, since
nominal trade statistics in dollar terms can be strongly influenced by exchange
rates.
2.21. There has been some speculation that
trade friction with the Russian Federation has been a primary cause of the European
Union's export slowdown, but this seems unlikely. Exports to the Russian
Federation only account for around 6.5% of extra-EU goods exports and 3.6% of
total goods exports in normal times, and these shipments are only down around
13% for the year-to-date. This equates to a loss of 0.8% of extra-EU trade, or
an even smaller share of total EU trade (less than half a percent). Political
tensions could contribute to a European Union slowdown in several other ways
(e.g. greater uncertainty could penalize FDI inflows), but it is less likely to
occur only through the trade channel.
Chart
2.2 Volume of exports and imports of selected economies, 2010 Q1‑2014 Q2
(Seasonally adjusted volume indices, 2010 Q1
= 100)
Note: Data for the United States, Japan and the
European Union were obtained from national statistical sources while figures
for developing Asia are seasonally adjusted Secretariat estimates that should
be interpreted with caution.
Source: WTO and UNCTAD Secretariats.
Chart
2.3 Merchandise exports and imports of selected economies, January 2013‑September
2014
(Year-on-year percentage change in current
US$ values)
a January and February averaged to
minimize distortions due to lunar new year.
Source: IMF, International Financial Statistics;
Global Trade Information Services GTA database; national statistics.
2.22. Statistics on commercial services
trade are less widely available than statistics on merchandise trade. These are
illustrated by Chart 2.4, which shows year-on-year growth in the dollar value
of commercial services exports and imports for selected economies, from 2013Q2
to 2014Q2. These quarterly statistics are jointly compiled by the WTO and
UNCTAD and can be downloaded from the WTO's statistics gateway at www.wto.org/statistics.
2.23. Both merchandise and commercial
services data tend to display similar trends, but there are some important
differences between Chart 2.4 on
services and earlier charts on
merchandise trade. For example, while the quarterly merchandise trade volume statistics in Chart 2.3 show Japanese and Chinese
imports falling in Q2, the
services data in Chart 2.4 record solid increases in imports
in that period. Growth in services exports in 2014 is also stronger for the European Union than for the
United States in Chart 2.4, but this is
not the case for merchandise trade in Charts
2.2 and 2.3. The
services data do show a sharp slowdown in exports and imports of the
Russian Federation, which is in line with prior expectations. Information
is unavailable on India's services trade in the second quarter.
2.24. Fluctuations in services trade are
generally not as strong as fluctuations in goods trade. This may be due to the
fact that services trade frequently involves long-term contractual arrangements
between suppliers and customers in different countries, making this trade less
pro‑cyclical than merchandise trade.
Chart 2.4 Commercial services exports and imports of selected economies,
2013 Q2‑ 2014 Q2
(Year-on-year
percentage change in current US$ values)
Source: WTO and UNCTAD Secretariats.
2.25. In the WTO's annual spring press
release in April, the Secretariat forecast world merchandise trade growth of
4.7% in volume terms for 2014, and 5.3% growth for 2015. These estimates were
higher than the subdued rates seen in 2012 and 2013, but they were still below
the 20-year average of 5.3%, and also well below the 6.0% average for the 20
years leading up to the financial crisis.
2.26. Disappointing trade growth in the
first and second quarters of 2014 made these projections difficult to attain.
Imports of developed economies held up reasonably well in the first half of
2014, rising 2.6% over the same period in 2013, but those of developing
economies stalled with an increase of just 0.5%. Weaker import demand also
dampened exports, which rose 1.6% in developed countries and 2.1% in developing
economies in the first half of the year. These figures implied global trade
growth of 1.8% in the first half of the year.
2.27. In response to the weaker than
expected trade results, the WTO Secretariat downgraded its forecast for 2014 in
September to 3.1%, with most of the reduction coming in exports and imports of
developing countries, particularly natural resource exporting regions such as
South America but also developing Asia (see Table 2.1). The Secretariat's
estimate for 2015 was also lowered to 4.0% in an effort to correct for past
overestimation of medium‑term trade trends. The WTO's trade forecast is
predicated on GDP forecasts that are in line with the IMF projections at market
exchange rates.
2.28. Even after the downgrade, risks to
the forecast are mostly on the downside. Unexpected changes in monetary policy
in developed economies could produce strong fluctuations in exchange rates and
stoke financial instability in some countries in the coming months. Ebola
spreading to other countries and regions could produce panic that would damage
national economies and burden health care systems. GDP growth in developing and
emerging economies could slow even further, thereby reducing demand for exports
of both developing and developed economies. Finally, weak data on trade and industrial
production for August have raised concerns about the health of the German
economy, and by extension the European Union economy as well.
2.29. On balance, the most likely outcome
is a continued recovery in trade and output, but a slower and more volatile one
than previously thought.
Table
2.1 World merchandise trade and GDP, 2010-15
(Annual
percentage change)
|
|
2010
|
2011
|
2012
|
2013
|
2014a
|
2015a
|
|
Volume of world merchandise trade
|
13.9
|
5.4
|
2.3
|
2.2
|
3.1
|
4.0
|
|
Exports
|
|
|
|
|
|
|
|
Developed economies
|
13.4
|
5.2
|
1.1
|
1.5
|
2.5
|
3.8
|
|
Developing economies
|
15.0
|
5.5
|
4.1
|
3.9
|
4.0
|
4.5
|
|
North America
|
15.0
|
6.6
|
4.4
|
2.8
|
3.7
|
3.9
|
|
South and Central America
|
4.7
|
6.8
|
0.7
|
1.4
|
0.4
|
3.2
|
|
Europe
|
11.6
|
5.6
|
0.8
|
1.5
|
2.3
|
3.5
|
|
Asia
|
22.6
|
6.4
|
2.8
|
4.7
|
5.0
|
4.8
|
|
Other regionsb
|
6.0
|
1.9
|
4.2
|
0.6
|
-0.1
|
4.2
|
|
Imports
|
|
|
|
|
|
|
|
Developed economies
|
10.9
|
3.4
|
0.0
|
-0.3
|
3.4
|
3.7
|
|
Developing economies
|
18.2
|
7.7
|
5.4
|
5.3
|
2.6
|
4.5
|
|
North America
|
15.7
|
4.4
|
3.1
|
1.2
|
3.9
|
4.2
|
|
South and Central America
|
22.4
|
13.0
|
2.3
|
3.1
|
-0.7
|
4.8
|
|
Europe
|
9.8
|
3.2
|
-1.8
|
-0.5
|
2.5
|
3.5
|
|
Asia
|
18.1
|
6.6
|
3.7
|
4.5
|
4.0
|
4.3
|
|
Other regionsb
|
11.4
|
8.3
|
10.1
|
3.3
|
1.3
|
3.5
|
a Figures for 2014 and 2015 are
projections.
b Other regions comprise Africa, CIS
and the Middle East.
Source: WTO Secretariat.
3.1. As indicated in the 2012 annual report for the Overview of
Developments in the International Trading Environment, 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).[6] The total number of
measures in these three categories recorded over the period mid-November 2013
to mid‑October 2014 is 689. This comprises 177 trade‑facilitating
measures, 337 trade‑remedy measures and 168 other trade and trade-related
measures.
3.2. During the period under review, mid-November 2013 to mid-October
2014, 177 trade‑facilitating measures were recorded (Annex 1), compared to 107
in the period mid‑October 2012 to mid-November 2013 and 162 in the period
mid-October 2011 to mid‑October 2012 (Table 3.1). These trade‑facilitating
measures cover 6.4% of world merchandise imports (US$1,183.4 billion). More
than 80% of the trade‑facilitating measures recorded for the current review
period consist of measures that provide for tariff reductions, sometimes
applied on a temporary basis.
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
|
|
Import
|
136
|
101
|
168
|
|
- Tariff
|
120
|
82
|
145
|
|
- Customs procedures
|
13
|
15
|
18
|
|
- Tax
|
2
|
3
|
1
|
|
- Quantitative
restrictions
|
1
|
1
|
4
|
|
Export
|
18
|
6
|
9
|
|
- Duties
|
7
|
3
|
4
|
|
- Quantitative
restrictions
|
11
|
3
|
3
|
|
- Other
|
|
|
2
|
|
Other
|
8
|
0
|
0
|
|
Total
|
162
|
107
|
177
|
Source: WTO Secretariat.
3.3. The main sectors benefiting from facilitating measures over this
period were machinery and mechanical appliances; organic chemicals; iron and
steel; articles of iron and steel; plastics; and animal or vegetable fats and
oils. The products that benefited most from facilitating measures differ from
those noted in the previous monitoring report.
3.4. Trade‑remedy measures taken between
mid-November 2013 and mid-October 2014 are listed in Annex 2.[7]
During this period, 337 measures were recorded (Table 3.2), out of which the
vast majority (267) were anti-dumping actions, followed by countervail actions.
As was the case last year, more initiations were recorded than terminations:
out of the total number of trade‑remedy measures, 171 were initiations of new
trade-remedy investigations covering around 0.2% of world merchandise imports
(close to US$43.7 billion), and 166 measures were terminations of either
investigations or of existing duties covering around 0.3% of world imports
(US$46.1 billion). Anti‑dumping actions accounted for 78% of all
initiations of trade-remedy actions and for 80% of all terminations.
Table
3.2 Trade-remedy actions (Annex 2)[8]
|
Type of measure
|
Mid-October 2012
to mid-November 2013
|
Mid-November 2013 to mid-October 2014
|
|
|
Initiations
|
Terminations
|
Total
|
Initiations
|
Terminations
|
Total
|
|
Trade-remedy
|
|
|
|
|
|
|
|
Anti-dumping
|
156
|
112
|
268
|
134
|
133
|
267
|
|
Countervailing
|
24
|
9
|
33
|
21
|
15
|
36
|
|
Safeguard
|
37
|
17
|
54
|
16
|
18
|
34
|
|
Total
|
217
|
138
|
355
|
171
|
166
|
337
|
Source: WTO Secretariat.
3.5. The number of other trade and
trade‑related measures taken during the period under review (Annex 3) was
168, compared to 190 in the previous period. Out of this, 119 measures were applied to
imports. (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
|
|
Import
|
118
|
153
|
119
|
|
- Tariff
|
54
|
106
|
74
|
|
- Customs procedures
|
38
|
25
|
26
|
|
- Tax
|
6
|
6
|
7
|
|
- Quantitative restrictions
|
20
|
15
|
11
|
|
- Other
|
0
|
1
|
1
|
|
Export
|
32
|
27
|
36
|
|
- Duties
|
8
|
4
|
12
|
|
- Quantitative restrictions
|
24
|
11
|
12
|
|
- Other
|
0
|
12
|
12
|
|
Other
|
14
|
10
|
13
|
|
Total
|
164
|
190
|
168
|
Source: WTO Secretariat.
3.6. The import‑restrictive measures
applied by Members over the review period cover a wide range of products. In
terms of numbers of specific measures, the main sectors targeted were: iron and
steel; organic
chemicals; electrical
machinery and
mechanical appliances; certain vehicles and
parts; articles of apparel and clothing accessories; as well as ores, slag and
ash.
3.7. A comparison of Tables 3.1 and 3.3 show that whereas in the previous
review period, mid‑October 2012 to mid-November 2013, the number of other trade
and trade-related measures (190) far exceeded the number of trade‑facilitating
measures (107), in the current period the number of trade‑facilitating measures
is slightly higher than the number of other trade and trade‑related
measures.
3.8. Until mid-May 2012, the reports by the Director-General to the TPRB
on trade policy developments used a methodology that treated all recorded
measures (including trade‑remedy actions) as either restricting or facilitating
trade. If this approach is applied to
the measures identified in Annexes 1-3 to this report, 339 or 49% of the 689
measures recorded for the period under review would be considered as trade‑restrictive
measures. These 339 measures include 171
trade‑remedy actions, 119 restrictive import measures, 36 restrictive export
measures and 13 other types of restrictive measures. The 171 trade-remedy actions and 119 other
import‑restrictive measures account for 1.4% of world merchandise imports
(US$257.5 billion).
3.9. Table 3.4 and Charts 3.1
and 3.2 show the evolution since October 2008
of the number of measures that under the previous methodology would be considered
trade‑restrictive or trade‑facilitating.
The number of trade‑restrictive measures during the period reviewed in
this report (339) is slightly higher than in the period October 2008-October
2009 (324) but has fluctuated significantly since October 2008. Thus, from 324 in the period
October 2008‑October 2009, the number of trade‑restrictive measures
declined to 222 in the period November 2009-October 2010, increased to 339 in
the period October 2010-October 2011, declined to 308 in October 2011-October
2012, increased to 407 in the period October 2012-November 2013 and declined to
339 in the period mid-November 2013-mid-October 2014. Interestingly, the average number of trade‑restrictive
measures per month in the two most recent review periods i.e. the periods
covered by this report and the previous report, is 31.3 and 30.8, respectively,
higher than in any of the other review periods since October 2008.
3.10. Table 3.4 and Charts 3.1 and 3.2 also demonstrate that not including
trade‑remedy actions in the category of trade‑restrictive measures changes the
numbers quite dramatically as trade‑remedy measures typically account for more
than 50% of the measures in question. If
trade‑remedy measures are not included, the number of trade‑restrictive
measures was 140 in the period October 2008-October 2009, 100 in the period
November 2009-October 2010, 210 in the period October 2010-October 2011, 150 in
the period mid-October 2011 to mid‑October 2012, 190 in the period
mid-October 2012 to mid-November 2013 and 168 in the period mid‑November 2013
to mid-October 2014. The average number
of trade‑restrictive measures per month, if trade‑remedy measures are excluded,
is 14.6 and 15.3, respectively, in the two most recent review periods.
3.11. Regarding the evolution of the number of trade‑liberalizing or trade‑facilitating
measures since October 2008, Table 3.4 and Charts 3.1 and 3.2 show that the number of trade‑liberalizing measures during
the period under review (350) is significantly higher than in the two previous
review periods, October 2011-October 2012 and October 2012-November 2013 (312
and 251, respectively). It is also noteworthy
that the number of trade‑facilitating measures in the current review period
exceeds the number of trade‑restrictive measures. The average number of trade‑liberalizing
measures per month increased from 19.3 in the period October
2012-November 2013 to 31.8 in the period November 2013-October 2014. If trade‑remedy measures are not included,
the average number of trade‑facilitating measures per month increased from 8.7
in the previous period to 16.7 in the current period. Overall, regardless of whether or not trade‑remedy
measures are included, the increase in the average monthly number of trade‑facilitating
measures since October 2008 has been far more pronounced than the increase in the
average monthly number of trade‑restrictive measures.
Table
3.4 Trade‑restrictive and trade‑facilitating measures since October
2008
|
|
OV/12
(Oct. 08 – Oct. 09)
(12 months)
|
OV/13 (Nov. 09 -Oct. 10)
(11 months)
|
OV/14
(Oct. 10 -Oct. 11)
(12 months)
|
OV/15
(Oct. 11 -Oct. 12)
(12 months)
|
OV/16
(Oct. 12 - Nov. 13)
(13 months)
|
OV/17
(Nov. 13 - Oct. 14)
(11 months)
|
|
Restrictive
|
324
|
222
|
339
|
308
|
407
|
339
|
|
Trade remedies
|
184
|
122
|
129
|
158
|
217
|
171
|
|
Import
|
105
|
62
|
126
|
109
|
153
|
119
|
|
Export
|
20
|
25
|
64
|
29
|
27
|
36
|
|
Other
|
15
|
13
|
20
|
12
|
10
|
13
|
|
Average per month
|
27.0
|
20.2
|
28.3
|
25.7
|
31.3
|
30.8
|
|
Average per month (not
including trade remedies)
|
11.7
|
9.1
|
17.5
|
12.5
|
14.6
|
15.3
|
|
Facilitating
|
169
|
250
|
346
|
312
|
251
|
350
|
|
Trade remedies
|
84
|
94
|
140
|
136
|
138
|
166
|
|
Import
|
75
|
131
|
170
|
145
|
103
|
172
|
|
Export
|
7
|
17
|
25
|
21
|
9
|
11
|
|
Other
|
3
|
8
|
11
|
10
|
1
|
1
|
|
Average per month
|
14.1
|
22.7
|
28.8
|
26
|
19.3
|
31.8
|
|
Average per month (not including
trade remedies)
|
7.1
|
14.2
|
17.2
|
14.7
|
8.7
|
16.7
|
Source: WTO trade-monitoring database.
Chart 3.1 Trade‑facilitating and restrictive measures, including trade‑remedies
(average per month)
Source: WTO Secretariat.
Chart 3.2 Trade-facilitating and restrictive measures, not including trade‑remedies
(average per month)
Source: WTO Secretariat.
3.12. The total number of trade‑restrictive measures introduced by WTO
Members since October 2008, as recorded in the periodic reports to the
TPRB, is 2,146. As of mid-October 2014, nearly a quarter of these
measures (508 or 24%) had been removed and somewhat over three‑quarters (1,638
or 76%) remained in effect. As shown by Chart 3.3 the same calculation from
mid-October 2010 shows that out of a total number trade‑restrictive measures
introduced by WTO Members since October 2008 (546) 15% had been effectively
eliminated.
Chart
3.3 Stockpile of trade‑restrictive measures
Source: WTO Secretariat.
3.13. This analysis provides an
assessment of trends in trade-remedy measures adopted during the period from
mid-November 2011 to end-September 2012 ("first period") in
comparison with mid‑November 2012 to end-September 2013 ("second period") and
mid-November 2013 to end‑September 2014 ("current period").[9] Concerning anti-dumping, data for the current
period indicate a slight decrease in the number of new investigations
initiated.[10]
The number of safeguard investigations initiated also decreased. The number of
countervail investigations initiated, in contrast, almost doubled between the
second and current periods. The total number of initiations for the two latter
types of trade-remedy investigations remained considerably lower than for anti‑dumping.
3.14. Global anti-dumping initiations
decreased by 6%, from 223 during the second period to 210 during the current
period. (Table 3.5) Initiations in the second period represented a 17% increase
from the total number of initiations reported in the first period.
Table
3.5 Initiations of anti-dumping
investigations
(Counted
on the basis of exporting country affected)
|
Reporting Member
|
15 November 2011
- 30 September 2012
|
15 November 2012
- 30 September 2013
|
15 November 2013
- 30 September 2014
|
|
Argentina
|
10
|
17
|
7
|
|
Australia
|
12
|
15
|
14
|
|
Brazil
|
42
|
29
|
51
|
|
Canada
|
11
|
17
|
12
|
|
Chile
|
0
|
5
|
0
|
|
China
|
11
|
11
|
7
|
|
Colombia
|
2
|
11
|
5
|
|
Dominican Republic
|
0
|
0
|
2
|
|
Egypt
|
2
|
0
|
10
|
|
European Union
|
15
|
3
|
10
|
|
Guatemala
|
0
|
0
|
1
|
|
India
|
12
|
30
|
16
|
|
Indonesia
|
7
|
14
|
6
|
|
Israel
|
1
|
2
|
0
|
|
Japan
|
1
|
0
|
1
|
|
Korea, Republic of
|
1
|
3
|
10
|
|
Malaysia
|
11
|
8
|
8
|
|
Mexico
|
2
|
7
|
8
|
|
Morocco
|
1
|
4
|
1
|
|
New Zealand
|
0
|
1
|
0
|
|
Pakistan
|
4
|
5
|
2
|
|
Peru
|
1
|
0
|
0
|
|
Philippines
|
0
|
1
|
0
|
|
Russian Federation
|
6
|
0
|
6
|
|
South Africa
|
1
|
5
|
4
|
|
Chinese Taipei
|
9
|
2
|
1
|
|
Thailand
|
4
|
1
|
0
|
|
Trinidad and Tobago
|
0
|
0
|
1
|
|
Turkey
|
9
|
5
|
4
|
|
Ukraine
|
2
|
1
|
2
|
|
United States
|
14
|
22
|
22
|
|
Viet Nam
|
0
|
4
|
0
|
|
Total
|
191
|
223
|
211
|
Source: WTO Secretariat.
3.15. The trend in the three periods
examined confirms the trend in annual figures, shown in Chart 3.4, of
anti-dumping initiations remaining above the mark of 150. In fact, the number
of initiations through 30 September 2014 rose to levels reported in the first
trade‑monitoring report circulated in 2009.[11]
However, the total number of new initiations in 2013 (288), the highest in any
of the three periods examined, is still well short of the peak of 366
initiations observed in 2001.
Chart 3.4 Total anti-dumping investigation initiations (2008-14a)
a Data for 2014 only
through September; data for July through September 2014 is partly unverified and collected from various
unofficial sources.
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 3.5 shows that Brazil initiated the most investigations in all
but one of the three periods examined, with a total of 122 initiations reported
in these periods. Brazil's initiations, which account for almost 20% of all
initiations reported over the three periods examined, nearly doubled between
the second and current periods, from 29 to 51. India and the United States were
the second most active Members during the three periods examined, each
accounting for an aggregate of 58 new investigations over the course of these
periods. That said, India's initiations fell by almost 50% between the second
and current periods, from 30 to 16. Australia, which maintained initiations in
the double digits throughout the three reporting periods, ranked third overall,
with a total of 41 initiations. Argentina, with a total of 34 new
investigations launched over the three reporting periods, ranked fourth. Argentina
more than halved its initiations between the second and current periods, from
17 to seven. In addition, the slowdown in initiations reported by India and
Argentina in the current period more than offset the increase in Brazil's
initiations, and contributed to the overall decline in initiations observed
between the second and current periods.
3.18. Chart 3.5 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,
chemicals, and machinery sectors.
3.19. Metals products were subject to the
most initiations in each period, accounting for 42% of all initiations in the
first period, 31% in the second period and 36% in the current period. In each
period, at least 71 initiations targeted metals, of which half on average focused
on steel products. Over the three periods combined, the United States (41),
Canada (36), and Brazil and Australia (26 apiece) accounted for most of
the aggregate of 226 initiations on metals. These initiations targeted mostly
metal products from China (63 of which 36 involved steel products), the
Republic of Korea (24 of which 16 involved steel), Chinese Taipei (22 of which
16 involved steel), and India (11).
3.20. Plastic and rubber products
accounted for the second largest share of initiations over the three reporting
periods, with a 20% share of initiations in the first period, a 12% share in
the second period and a 24% share in the current period. Brazil accounted for
58 of the 118 new investigations on products in this sector over the three
reporting periods. These initiations targeted mostly plastic and rubber
products from the European Union (11), the Republic of Korea (seven),
China (six), and Chinese Taipei (five).
3.21. Chemical products ranked third over
the three periods examined, accounting for 16% of all initiations in the first
period, 11% in the second period, and 20% in the current period. India reported
the largest number of new investigations of products in this sector, accounting
for 32 of the 98 total initiations. Twelve of these initiations focused on
chemical products from China. The latter, with 16 total initiations over the
three periods examined, and Brazil, with 15 total initiations, were also active
in respect of products in this sector. Machinery, which accounted for at least 7%
of all initiations in each of the periods reviewed, ranked fourth. Ten of the
49 total initiations in this sector targeted renewable energy products, of
which five related to solar panels and three related to photovoltaic products.
Chart 3.5 Anti-dumping initiations by product
Source: WTO Secretariat.
3.22. In terms of countries affected by
new anti-dumping investigations, 34 exporting Members were affected during the
first period while 45 were affected during the second period and 43 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 9% of the total initiations during these
periods, followed by Chinese Taipei, at 7%.
3.23. Table 3.6 shows that global
initiations of countervailing duty investigations increased considerably in the
current period – with 42 new investigations reported, compared to 23 in the
first period and 24 in the second period.
Table
3.6 Initiations of countervailing duty investigations
(Counted on the basis of
exporting country affected)
|
Reporting Member
|
15 November 2011
to 30 September 2012
|
15 November 2012
to 30 September 2013
|
15 November 2013 to 30 September 2014
|
|
Australia
|
0
|
3
|
2
|
|
Brazil
|
0
|
3
|
0
|
|
Canada
|
6
|
4
|
11
|
|
China
|
1
|
1
|
6
|
|
European Union
|
4
|
1
|
6
|
|
India
|
0
|
0
|
1
|
|
Mexico
|
0
|
1
|
0
|
|
Pakistan
|
2
|
0
|
0
|
|
Peru
|
1
|
0
|
1
|
|
United States
|
9
|
11
|
15
|
|
Total
|
23
|
24
|
42
|
Source: WTO Secretariat.
3.24. Chart 3.6, reflecting annual
figures, shows an upward trend in countervail initiations since 2010,
notwithstanding some fluctuation in 2012. In fact, the number of 37 initiations
recorded in January ‑ September 2014, is close to the peak of 41
initiations observed in 1999.[12]
Chart
3.6 Countervailing investigation initiations by WTO Members, (2008‑2014a)
a Data available only through
September 2014; data for July through September 2014 is partly unverified and collected from various
unofficial sources.
Source: WTO Secretariat.
3.25. Among the ten Members using
countervail during the three periods examined, the United States,
which accounted for just under 40% of all initiations in these periods, initiated the most new
investigations. Canada, the second largest user, accounted for 24% of all new
investigations launched in the reporting periods. It also is worth noting that
China and the European Union, with one initiation each in the second period,
each launched six new investigations in the current period. Increased
countervail activity by these four Members accounts for the notable increase in
initiations reported in the current period.
3.26. Concerning the types of products
affected by countervail investigations, Chart 3.7 shows that metals accounted
for most of the initiations reported over the three reporting periods,
occupying a 57% share of all initiations in the first period, a 38% share in
the second period and a 51% share in the current period. In total, 43 of the 89
total initiations recorded over the three reporting periods covered metals, and
27 of these focused on steel products. The United States initiated 15 of the 27
investigations of steel products. Ten of the 27 steel-related initiations
targeted products from China and five targeted products from India.
3.27. Prepared foodstuffs, which did not
feature at all in the first period, tied chemicals for the second most‑targeted
sector over the three periods combined, each accounting nine initiations. The United
States, with eight initiations into food products and three initiations into
chemical products, launched the most new investigations on products in these
sectors.
Chart 3.7 Countervailing duty initiations by product
Source: WTO Secretariat.
3.28. In terms of countries affected by
new countervail investigations, ten exporting Members were affected during the
first and second periods, while 16 were affected 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 13% of all initiations during
these periods, followed by Viet Nam, which accounted for 7%.
3.29. Initiations of safeguard
investigations declined from 27 initiations in the second period to 19
initiations in the current period – bringing the level of activity in the
current period close to the 14 initiations reported in the first period (Table
3.7).
Table
3.7 Initiations of safeguard investigations
(number of new investigations)
|
Reporting Member
|
15 November 2011
to 30 September 2012
|
15 November 2012
to 30 September 2013
|
15 November 2013
to 30 September 2014
|
|
Australia
|
0
|
2
|
0
|
|
Brazil
|
1
|
0
|
0
|
|
Chile
|
1
|
2
|
0
|
|
Colombia
|
0
|
4
|
0
|
|
Costa Rica
|
1
|
0
|
1
|
|
Ecuador
|
0
|
0
|
1
|
|
Egypt
|
3
|
2
|
0
|
|
India
|
1
|
3
|
6
|
|
Indonesia
|
3
|
4
|
3
|
|
Kyrgyz Republic
|
0
|
1
|
0
|
|
Jordan
|
1
|
0
|
1
|
|
Malaysia
|
0
|
0
|
1
|
|
Morocco
|
1
|
0
|
1
|
|
Philippines
|
0
|
2
|
0
|
|
Russian Federation
|
2
|
0
|
0
|
|
South Africa
|
0
|
2
|
0
|
|
Thailand
|
0
|
2
|
1
|
|
Tunisia
|
0
|
0
|
2
|
|
Turkey
|
0
|
1
|
1
|
|
Ukraine
|
0
|
1
|
0
|
|
Viet Nam
|
0
|
1
|
0
|
|
Total
|
14
|
27
|
19
|
Source: WTO Secretariat.
3.30. Chart 3.8 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.[13]
Chart 3.8 Safeguard investigation initiations by WTO Members (2008-2014a)
a Data available only through
September 2014; data for July through September 2014 is partly unverified and
collected from various unofficial sources.
Source: WTO Secretariat.
3.31. Table 3.7 shows that India and
Indonesia were the most active Members throughout the reporting periods,
accounting respectively for 11 and 10 of the aggregate 60 new investigations.
Egypt, with a total of five investigations, and Colombia, with a total of four
investigations, were also active in the periods examined. With the exception of
Chile and Thailand (each of which accounted for three investigations), no
Member initiated more than two investigations throughout the periods examined.
The overall decrease in initiations reported in the current period can be
attributed to a decline in the initiation of new investigations by these other
Members.
3.32. In terms of product coverage, Chart
3.9 shows that safeguard investigations focused on a diverse range of sectors. Metals,
chemicals, textiles, and vegetables featured in each of the periods examined.
3.33. As with anti-dumping and
countervail initiations, metals products were the most affected by safeguard
initiations. Metals accounted for 22% of all initiations in the first period,
36% of initiations in the second period and 37% of initiations in the current
period. Indonesia and Colombia, with four initiations apiece, accounted for
just under half of the aggregate of 19 new investigations into metals.
3.34. Chemicals ranked as the second most‑targeted
sector overall, accounting for 14% of all initiations in the first period, 15%
in the second period and 16% in the current period. India initiated six of the
aggregate of nine new investigations into this sector.
3.35. Prepared foodstuffs ranked a
distant third, accounting for 7% of all initiations in the first period and 14%
in the second period. No Member initiated a safeguard investigation into food
stuffs in the current period.
Chart
3.9 Safeguard initiations by product
Source: WTO Secretariat.
3.36. Under
the SPS Agreement, WTO Members are obliged to provide an advance notice of
intention to introduce new or modified SPS measures[15],
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.
3.37. In
the period from October 2013 through September 2014, 1,479 SPS notifications
(regular and emergency, including addenda) were submitted[16]
to the WTO, resulting in an increase of 17% in total notified measures compared
to the previous period (1 October 2012 to 30 September 2013). Notifications
from developing-country Members accounted for 61% of the total number. In
the previous year, the total number of notifications was lower but with a
similar proportion of measures notified by developing-country Members: from
October 2012 through September 2013, a total of 1,260 notifications (regular
and emergency, including addenda) were submitted, of which 63% were from developing-country
Members.
3.38. From
October 2013 through September 2014, WTO Members submitted 1,337 regular SPS
notifications (including addenda), 58% of which were submitted by
developing-country Members. Compared with the previous period (2012-2013),
there was a 14% increase in the total number of regular notifications and a 9%
increase in regular notifications by developing-country Members.
3.39. The
number of notifications of emergency measures (including addenda) considerably
increased compared to the previous period (Chart 3.10), as did the share of
emergency notifications submitted by developing-country Members. Compared to
the previous period (2012‑2013), there was a 58% increase in the total number
of emergency notifications (including addenda) and a 61% increase in emergency
notifications by developing-country Members.[17]
The share of emergency notifications submitted by developing-country
Members was similar to that of the previous period. From October 2013 through
September 2014, 91% of the 142 notifications of emergency measures were
submitted by developing-country Members. For
the previous period (2012-2013), 89% of the 90 emergency notifications had been
submitted by developing-country Members. This high proportion of emergency
measures notified by developing-country Members 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
3.10 Number of SPS notifications
Source: WTO Secretariat.
3.40. 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 981 regular notifications
(excluding addenda) submitted from October 2013 through September 2014, 514 (around
52% of the total) indicated that at least one international standard, guideline or
recommendation was applicable to the notified measure (Chart 3.11).
Of these, around 81% indicated that the proposed measure was in conformity with
the existing international standard.
Chart
3.11 Regular SPS notifications and international standards
Source: WTO Secretariat.
3.41. International standards often
provide useful guidance regarding measures to address disease outbreaks and
other emergency situations. Indeed, around 88% (87 in total) of the 99
emergency notifications (excluding addenda) submitted from October 2013 through
September 2014 indicated that an international standard, guideline or
recommendation was applicable to the notified measure (Chart 3.12). Of these, around
94% indicated that the measure was in conformity with the existing
international standard.
Chart
3.12 Emergency SPS notifications and international standards
Source: WTO Secretariat.
3.42. Of the 981 regular notifications
(excluding addenda) submitted from October 2013 through September 2014, the
majority were related to food safety and the protection of humans from animal
diseases or plant pests.[18]
The remaining notifications related to plant protection, animal health and to
the protection of the Member's territory from other damage from pests. Most of
the regular notifications identified more than one objective per measure.
3.43. Of the 99 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, the protection of the Member's territory
from other damage from pests and plant protection. Similarly, the majority of
emergency notifications during this period identified more than one objective
per measure.
3.44. While there is no formal provision
for "counter notification", concerns regarding the failure to notify
an SPS measure, or regarding a notified measure, can be raised as a specific
trade concern (STC) at any of the three regular meetings of the SPS Committee
each year. In the two Committee meetings of July and October 2014, 11 new
specific trade concerns were raised. Ten of these new STCs related to food
safety and one to animal health (Table 3.8). One new STC, which had been included
on the proposed agenda for the July 2014 meeting, was withdrawn following
bilateral consultations.[19]
Furthermore, at the October 2014 meeting, two STCs were reported as resolved.[20]
Table
3.8 SPS specific trade concerns raised between July and October 2014
|
STC
|
Document
title
|
Members maintaining the measure
|
Members raising the concern
|
Members supporting the concern
|
Date raised
|
Primary objective
|
|
371
|
India's import requirement for blueberries and avocados
|
India
|
Chile
|
|
09/07/2014
|
Plant health
|
|
372
|
Russian restriction on imports of certain types of plant
products
|
Russian Federation
|
European Union
|
|
09/07/2014
|
Plant health
|
|
373
|
United States' high cost of certification for mango exports
|
United States
|
India
|
|
09/07/2014
|
Plant health
|
|
374
|
European Union ban on mangoes and certain vegetables from India
|
European Union
|
India
|
|
09/07/2014
|
Plant health
|
|
375
|
United States' non‑acceptance of OIE categorization
for BSE
|
United States
|
India
|
|
09/07/2014
|
Animal health
|
|
376
|
Australia's non‑acceptance of OIE categorization for BSE
|
Australia
|
India
|
|
09/07/2014
|
Animal health
|
|
377
|
Brazil's regulation on international certificates for fish and
fishery products
|
Brazil
|
China
|
|
09/07/2014
|
Food safety
|
|
378
|
European Union withdrawal of equivalence for processed organic
products
|
European Union
|
India
|
|
09/07/2014
|
Other concerns
|
|
379
|
Russian Federation's market access requirements for bovine meat
in compliance with OIE requirements
|
Russian Federation
|
India
|
|
15/10/2014
|
Animal health
|
|
380
|
Russian Federation's restrictions on imports of fruits and
vegetables from Poland
|
Russian Federation
|
European Union
|
|
15/10/2014
|
Plant health
|
|
381
|
Russian Federation's unilateral introduction of new requirements
for veterinary certificates
|
Russian Federation
|
Ukraine
|
|
15/10/2014
|
Animal health
|
Source: WTO
Secretariat.
3.45. Seventeen previously raised STCs were
discussed at the July or October 2014 SPS Committee meetings. Of those
previously‑raised STCs, four addressed persistent problems that have been
discussed seven or more times. In particular, two STCs have been discussed on
17 or more occasions (Table 3.9). In addition, five STCs raised for the first
time in July 2014 were discussed again in October 2014.[21]
Table 3.9 Previously-raised SPS specific trade concerns discussed in July and
October 2014
|
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 BSE
|
Certain Members,
specifically China; Japan; Korea Rep. of; Australia
|
European Union; United
States
|
Canada, Switzerland,
Uruguay
|
01/06/04
|
23
|
|
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;
Paraguay;
Philippines;
Uruguay;
Venezuela,
Bolivarian Republic of
|
01/03/06
|
17
|
|
330
|
Indonesia's port
closures
|
Indonesia
|
China; European Union;
New Zealand; United States
|
Argentina; Australia; Canada;
Chile; Japan; Korea, Rep. of; South Africa; Chinese Taipei, Thailand; Uruguay
|
27/03/12
|
7
|
|
340
|
Requirements for
importation of sheep meat
|
Turkey
|
Australia
|
|
18/10/12
|
7
|
|
354
|
Import restrictions in
response to the Japanese nuclear power plant accident
|
China;
Chinese Taipei; Hong
Kong, China; Certain Members
|
Japan
|
|
27/06/13
|
4
|
|
358
|
Import conditions for
pork and pork products
|
India
|
European Union
|
Canada
|
16/10/13
|
4
|
|
359
|
Strengthened import restrictions on food and feeds products with
regard to radionuclides
|
Korea, Rep. of
|
Japan
|
|
16/10/13
|
4
|
|
289
|
Measures on catfish
|
United States
|
China
|
|
28/10/09
|
3
|
|
351
|
EU temperature
treatment requirements for imports of processed meat products
|
European Union
|
Russian Federation
|
|
27/06/13
|
3
|
|
356
|
Phytosanitary measures
on citrus black spot
|
European Union
|
South Africa
|
Argentina
|
27/06/2013
|
3
|
Source: WTO
Secretariat.
3.46. Analysing the July
2014 and October 2014 SPS Committee meetings, 45% of all STCs raised for the first time concerned plant health, 36% concerned measures
covering animal health, 9% covered food safety, and one STC related to other
types of concerns.[22]
Regarding previously‑raised STCs in the reviewed period, 40% concerned animal health, 30% concerned measures
covering food safety, 20% covered plant health, and one STC related to other
types of concerns. Of the total raised or discussed STCs in the reviewed
period, 38% concerned measures covering animal health, 33% covered plant
health, 19% concerned food safety, and 10% of total STCs related to other types
of concerns.
3.47. If WTO Members in a dispute
cannot resolve their issues bilaterally or after raising it as an STC, the SPS
Chair's good offices are available for parties to hold consultations. At its
July meeting, the Committee adopted a procedure to facilitate the use of the
Chair's good offices for ad hoc consultations, thus concluding more than
five years of negotiations within the SPS Committee.[23] This procedure aims to help
Members wishing to use the good offices of the Chairperson or another
facilitator to resolve specific trade concerns.
3.48. During
the period from 1 January to 7 November 2014
("reviewed period") WTO Members submitted 1,400
regular notifications of TBT measures[24],
of which around 83% were submitted by developing-country Members.[25]
This overall number of 1,400 notifications is slightly lower than in the same
period in 2013, although the proportion from developing countries has grown.[26]
Ecuador made the highest number of notifications during
the reviewed period (154), followed by the Kingdom of Saudi
Arabia (82), Israel (81), the Republic of Korea (76), and the European Union (73).
The main objectives[27]
indicated in the notifications submitted during the reviewed period were:
"protection of human health or safety" (63%);
"prevention of deceptive practices and consumer
protection" (20%); and "protection of the
environment" (17%).
3.49. Any Member may raise specific trade
concerns (STCs) with respect to TBT measures taken or proposed by other
Members. These STCs are frequently discussed in the regular meetings of the
TBT Committee.[28] Since 1995 and up to 7 November
2014, Members have raised 453 STCs, only taking into account the first
time a given STC has been raised. STCs are, however, frequently discussed in
subsequent meetings to the one in which they were first raised. An upward trend
in STCs has been observed since 2005 (see Chart 3.13).
Chart 3.13 Number of TBT specific trade concerns raised per year
Note: Data for the year 2014 covers January –
end‑October.
Source: WTO Secretariat.
3.50. 47 new STCs were raised during the
three Committee meetings that fell within the reviewed period.[29]
This is the highest number of new STCs to have been raised per year since 1995,
thus confirming the upward trend since 2005. 2014 was also the second highest
year in the overall number of STCs discussed (85). The list of all new concerns
raised in 2014 is provided in Table 3.10.
3.51. During the review period, most new STCs centred on a variety of
specific concerns, including the trade-restrictiveness of the measures at issue;
their rationale; the fact that they were not based on relevant existing international
standards; and the need to suspend their entry into effect so as to provide
exporters more time to adapt to new requirements. Concerns in the form of a
simple request for further clarification were also common. Further,
transparency-related STCs, both of a specific and systemic nature, featured
prominently on the Committee's agenda.[30] Developing country Members in general, and Latin American country Members
in particular, were very active participants in STC discussions during the
reviewed period, both in raising concerns (36 out of 47 new STCs) and in
maintaining measures (35 out of 47). In total, developing country Members,
including some LDCs[31], were involved (both as
concerned or maintaining Members) in 46 of the 47 new STCs raised in 2014. With respect to Members from
Latin America, 2014 confirmed a general upward trend, since 2006, in terms of STCs
involving measures maintained by these countries, as shown in Chart 3.14.[32]
Chart 3.14 Number of TBT specific trade concerns raised per year, involving
measures maintained by Latin American member countries
Note: Data for the year 2014 covers January –
end-October.
Source: WTO Secretariat.
3.52. The vast majority of all new STCs discussed during the reviewed
period (45 out of 47) were either raised by, or involved measures from, G-20
Members. Among the most active in raising concerns are the European Union (16),
the United States (12), Mexico (10) and Canada (9). Thirty out of 47
STCs raised (i.e. 64%) targeted measures maintained by G-20 Members, a
significant decrease compared to the overall trend since 1995.[33]
3.53. Tobacco and alcohol products
continue to figure prominently among the measures discussed in the reviewed
period, making up around 20% of all STCs.[34] On tobacco, for example, since 2011 the Committee has been discussing concerns expressed by various
Members with tobacco plain packaging measures from Australia, New Zealand,
Ireland, the United Kingdom and France (the last two were first raised in
2014).[35] On alcohol, one example is Thailand's draft measure on the labelling
of alcoholic products which, for health reasons, prohibits the use of images of
athletes or other public figures on the labels of these products. Beyond
alcohol and tobacco, in recent years measures relating to nutrition labelling
(food) have become more prominent. Six new nutrition labelling STCs were tabled
during the reviewed period, confirming the growing engagement of Members
on this issue since 2007, when the first nutrition labelling concern was raised.[36] Finally, also noteworthy
in the reviewed period is a significant number of new STCs (5) raised by
Ukraine with respect to measures maintained by the Russian Federation, most of
them concerning recent import restrictions, as well as a high number of new STCs
(11) with respect to various Ecuadorian measures[37] (see Table 3.10, below).
Table
3.10 New STCs raised between January and November 2014
|
Member maintaining the measure (in alphabetical order)
|
STC title
|
Stated objective
|
Product coverage
|
Members raising the concern
|
|
Brazil
|
Brazil - Higher Risk
Medical Devices Good Manufacturing Practice (GMP) Certification (ID415)
|
Protection of human
health or safety
|
Higher risk medical devices
|
India
|
|
Brazil
|
Brazil – draft Technical Resolution nº 69, 9 September 14,
Regarding the Requirement of Describing the Chemical Composition, in
Portuguese, in the Label of Personal Hygiene Products, Cosmetics and Perfumes
|
Protection of human
health or safety
|
Personal hygiene products, cosmetics and perfumes
|
Mexico; European Union; Brazil
|
|
China
|
China – China Food and
Drug Administration (CFDA) Notice 191 of 16 December 13 – Free
Sales Certificate for Imported Cosmetics (ID 415)
|
Protection of human
health or safety
|
Cosmetics
|
Canada;
United States; European Union
|
|
China
|
China - Safety
Requirement for Lithium Ion Cells and Batteries used in Portable Electronic
Equipment (ID 425)
|
Protection of human
health or safety
|
Lithium ion cells and batteries
used in portable electronic equipment
|
Japan; Korea, Rep.
of
|
|
China
|
China – Regulations for
the Supervision and Administration of Medical Devices (Order No. 650 of the
State Council) (ID 428)
|
Protection of human
health or safety
|
Medical devices
|
Canada; European Union;
United States
|
|
China
|
China - National Standard of the P.R.C., Safety Technical
Specifications for Children's Footwear
|
Protection of human
health or safety;
protection of the
environment
|
Children's
footwear
|
European Union
|
|
Colombia
|
Colombia – Steel (ID
422)
|
Prevention of deceptive
practices and consumer protection
|
Plain and deformed
steel wire and electrically welded mesh
|
Turkey
|
|
Colombia
|
Colombia - draft
Ministry of Commerce, Industry and Tourism Decree "Restructuring the
National Quality Subsystem and amending Decree No. 2269 of 1993" (ID
432)
|
Protection of human
health or safety;
protection of animal or
plant life or health;
protection of the
environment;
national security
requirements;
prevention of deceptive
practices and consumer protection
|
n/a
|
Japan; Mexico
|
|
Ecuador
|
Ecuador – Proposed Motor Vehicle Safety Regulatory
Requirements (RTE INEN 034) (ID 409)
|
Prevention of deceptive practices and consumer
protection;
protection of human health and safety
|
Motor vehicles
|
Brazil; Japan; Mexico
|
|
Ecuador
|
Ecuador – Resolution
No. 116 of the Foreign Trade Committee of Ecuador of
19 November 13 and Technical Regulation of the Ecuadorian
Standardization Institute RTE INEN 022 on the labelling of processed and
packaged food products (ID 411)
|
Protection of human
health or safety;
prevention of deceptive
practices and consumer protection
|
Processed food products
for human consumption
|
Brazil;
Canada; Chile;
Costa
Rica; Guatemala;
Mexico; Peru;
Switzerland; United States, European Union
|
|
Ecuador
|
Ecuador – systematic
failure to publish notices at an early appropriate stage (ID 414)
|
n/a
|
n/a
|
Brazil; Canada; Chile; Costa Rica; United States; European Union
|
|
Ecuador
|
Ecuador – Ministry of
Public Health Executive Decree (Agreement) No. 00004522 amending the Sanitary
Regulations for the Labelling of Processed Foods for Human Consumption (ID
416)
|
Protection of human
health or safety;
consumer information;
labelling
|
Processed food products
for human consumption
|
Brazil; Canada; United
States;
European Union
|
|
Ecuador
|
Ecuador – cosmetic
products (ID 417)
|
Protection of human
health or safety;
prevention of deceptive
practices and consumer protection;
protection of the
environment
|
Cosmetic products
|
Brazil; Chile;
Korea, Rep. of; European Union
|
|
Ecuador
|
Ecuador – Certification
of Ceramic Tiles II (ID 419)
|
Protection of human
health or safety;
prevention of deceptive
practices and consumer protection;
protection of the
environment
|
Ceramic tiles
|
Brazil;
European Union
|
|
Ecuador
|
Ecuador – draft technical
regulation of the Ecuadorian Standardization Institute (PRTE INEN) No. 103:
"Sugar confectionery" (ID 423)
|
Protection of human
health or safety;
prevention of deceptive
practices and consumer protection
|
Sugar confectionery
|
Panama
|
|
Ecuador
|
Ecuador - draft
technical regulation of the Ecuadorian Standardization Institute (PRTE INEN) No. 189:
"Labelling of alcoholic beverages" (ID 433)
|
Protection of human
health or safety;
prevention of deceptive
practices and consumer protection
|
Alcoholic beverages
|
United States; Canada; Mexico
|
|
Ecuador
|
Ecuador - draft technical regulation of the Ecuadorian
Standardization Institute (RTE INEN) No. 047: "Metal cable tray, electrical conduit
and trunking systems")
|
Protection of human health or safety;
protection of animal life and safety;
protection of the environment
|
Metal cable tray, electrical conduit and trunking
systems
|
Mexico
|
|
Ecuador
|
Ecuador - Equivalence
Agreement N° 14 241 with the European Union regulations
|
n/a
|
n/a
|
Mexico
|
|
Ecuador
|
Ecuador
- (PRTE INEN) No. 111: energy efficiency, clothes dryers, labelling
|
Protection of human
health or safety;
protection of the
environment;
prevention of deceptive
practices and consumer protection
|
Clothes dryers
|
Mexico
|
|
Egypt
|
Egypt – Bottled water
(ID 421)
|
Food safety
|
Bottled water
|
Turkey
|
|
European Union
|
European Union -
Regulation (EU) No. 1169/2011 of the European Parliament and of the
Council of 25 October 11 on the provision of food information to
consumers establishes the general principles, requirements and
responsibilities governing food information, and in particular food labelling
(ID 431)
|
Consumer information;
labelling
|
All foods
|
Indonesia; Malaysia
|
|
European Union
|
European Union – proposal
for a Directive of the European Parliament and of the Council amending
Directive 96/53/EC of 25 July 96 laying down for certain road vehicles
circulating within the Community the maximum authorised dimensions in
national and international traffic and the maximum authorised weights in
international traffic (COM(2013) 195 final) (ID 434)
|
Protection of the
environment
|
Heavy goods vehicles,
long distance coaches and urban buses
|
United States
|
|
European Union
|
European Union – Common Criteria for Information Technology Security
Evaluation (Common Criteria) certification in the European Union
|
n/a
|
n/a
|
China
|
|
European Union
|
European Union – limits for hexavalent chromium in toys (2009/48/EC)
|
n/a
|
Toys
|
China
|
|
European Union
|
European Union – Standard on safety of household and similar
electrical appliances (EN60335-1:2012)
|
n/a
|
Household and similar electrical appliances
|
China
|
|
European Union
|
European Union – Regulation (EU) No. 1169/2011 of the European
Parliament and of the Council on the provision of food information to
consumers, amending Regulations (EC) No. 1924/2006 and (EC) No. 1925/2006,
and repealing Commission Directive 87/250/EEC, Council Directive 90/496/EEC,
Commission Directive 1999/10/EC. 2002/67/EC and 2008/5/EC and Commission
Regulation (EC) No. 608/2004
|
Consumer information;
labelling
|
Foods containing spelt and khorasan; foods
and food ingredients with added phytosterol, phytosterol esters, phytostanols
and/or phytostanol esters
|
Indonesia
|
France
|
France – Recycling
Triman Mark: "Draft Decree on a common set of symbols informing the
consumer about recyclable products subject to a system of extended producer
responsibility associated with waste sorting instructions" (ID 420)
|
Protection of the
environment
|
Recyclable products
|
Canada; Mexico;
New Zealand; United
States
|
|
France
|
France – proposal to introduce plain packaging of tobacco products
|
n/a
|
Tobacco products
|
Malawi;
Ukraine; Indonesia; Dominican Republic;
Honduras,
Nigeria; Cuba; Nicaragua;
Zimbabwe.
|
|
India
|
India – labelling
regulations for canola oil (ID 413)
|
Consumer information,
labelling
|
Canola oil
|
Canada
|
|
Indonesia
|
Indonesia – Regulation
of Minister of Trade
No. 10/M-DAG/PER/1/2014
concerning Amendment of Regulation of Minister of Trade
No. 67/M-AG/PER/11/2013
concerning Affixed Mandatory Label in Indonesian Language for Goods (ID 436)
|
Consumer information;
labelling
|
n/a
|
Japan; Korea, Rep. of;
United States; European Union
|
|
Israel
|
Israel – resistance to ignition of mattresses, mattress pads, divans
and bed bases
|
Protection of human
health or safety
|
Mattresses
|
European Union
|
|
Kingdom of Saudi Arabia
|
Kingdom of Saudi Arabia
- Certificate of Conformity (not notified) and GSO marking requirements for
toys (ID 435)
|
Protection of human
health and safety
|
Toys
|
United States; European
Union
|
|
Kingdom of Saudi Arabia
|
Kingdom of Saudi Arabia – Decree of the Saudi Arabian Ministerial
Council on the sale and marketing of energy drinks of 4 March 14
|
Food safety
|
Energy drinks
|
Switzerland;
European Union
|
|
Mexico
|
Mexico – Draft Mexican
Official Standard PROY NOM 142 SSA1/SCFI 2013: Alcoholic beverages. Health
specifications. Health and commercial labelling
|
Protection of human health or safety
|
Alcoholic beverages
|
European Union; Chile;
United States
|
|
Republic of Moldova
|
Republic of Moldova –
Tobacco (IMS ID 437)
|
Protection of human
health and safety;
consumer information;
labelling
|
Tobacco products and
boxes, cases, covers and any other device that is intended to fully or
partially conceal or disguise the health warnings.
|
Ukraine
|
|
Russian Federation
|
Russian Federation –
Federal Service for Market Regulation (FSR) - New Provisions for the
Mandatory Notification of Liquor Products (ID 412)
|
Simplified notification
requirements
|
Liquor products
(alcohol)
|
Canada
|
|
Russian Federation
|
Russian Federation – safety
of products for children and adolescents (ID 418)
|
Protection of human
health and safety;
prevention of deceptive
practices and consumer protection
|
Products for children
and adolescents
|
Norway; Ukraine; European Union
|
|
Russian Federation
|
Russian Federation –
Measure affecting import of Ukrainian dairy products (ID 426)
|
Prevention of deceptive
practices and consumer protection
|
Dairy products
|
Ukraine
|
|
Russian Federation
|
Russian Federation – Measure affecting imports of Ukrainian juice
products
|
n/a
|
Juice products
|
Ukraine
|
|
Russian Federation
|
Russian Federation – Measure affecting imports of Ukrainian beer
products
|
n/a
|
Beer products
(alcohol)
|
Ukraine
|
|
Russian Federation
|
Russian Federation – draft of the Eurasian Economic Commission
Collegium decision on amendments to Common sanitary-epidemiological and
hygienic requirements for products, subjected to sanitary-epidemiological
supervision (control)
|
Food Safety
|
Meat, palm oil,
pesticides.
|
Indonesia; Ukraine
|
|
South Africa
|
South Africa – labelling and advertising of pre-packaged foodstuff
|
Protection of human
health or safety;
consumer information;
labelling
|
Pre-packaged foodstuff
|
European Union;
New Zealand
|
Thailand
|
Thailand – draft
Notification of the Alcoholic Beverages Control, re: Rules, Procedure and
condition for Labels of Alcoholic Beverages, issued under B.E. (ID 427)
|
Consumer information,
labelling;
protection of human
health and safety
|
Alcoholic beverages
|
Canada; Mexico;
New Zealand; European Union;
United States
|
|
United Kingdom
|
United Kingdom – proposal to introduce plain
packaging of tobacco products (ID 424)
|
Protection of human health and safety
|
Tobacco products
|
Cuba; Dominican Republic;
Guatemala; Honduras; Malawi; Nicaragua;
Nigeria
|
|
United States
|
United States – Energy
Conservation Program: Test Procedure for Commercial Refrigeration Equipment
|
Protection of the
environment
|
Commercial
refrigeration equipment
|
China
|
|
United States
|
United States -
Formaldehyde; Emissions Standards for Composite Wood Products; Third-Party
Certification Framework for the Formaldehyde Standards for Composite Wood
Products (ID 430)
|
Protection of the
environment;
protection of human
health or safety
|
Composite wood products
|
Indonesia
|
|
United States
|
United States – tire identification and record‑keeping
|
Prevention of deceptive
practices and consumer protection
|
Motor vehicle tires
|
Thailand;
Korea, Rep. of
|
Source: WTO Secretariat.
3.54. During the period covered by this
report a number of non-tariff measures, including SPS and TBT issues, were
raised in WTO bodies other than those in which they are normally discussed.
This section is a non-exhaustive attempt to reflect such issues as they have
been brought to the attention of the WTO Secretariat.[38]
3.55. During the period under review a
number of SPS issues were raised at the Committee level as well as at the
meeting of the Council for Trade in Goods (CTG) which took place on
19 June 2014. These included concerns with the consistency of certain
SPS measures taken by the Customs Union between the Russian Federation, Belarus
and Kazakhstan with international standards. Concerns were also raised about
the Russian Federation's import ban on pork from all EU Member States (European
Union) and the Russian Federation's application of certain SPS measures for
potatoes, meat, live animals, and dairy products (European Union).[39] A TBT concern was mentioned with
respect to the EU Renewable Energy Directive (RED), under which products were
labelled free of palm oil (Indonesia). Some delegations
made reference to the minutes of the 9 April CTG meeting[40]
in which concerns about the Russian Federation's compliance with the
transparency obligations of the TBT Agreement were raised (European Union; United
States).
3.56. Over the past few years, there have been instances in which proposed
or adopted TBT measures discussed in the TBT Committee have also been raised at
the Council for TRIPS. During the period under review this was the case for tobacco
plain packaging measures adopted by Australia and proposed in a number of other
countries, including New Zealand, Ireland and the United
Kingdom.
3.57. A number of other issues were
raised by delegations at the June CTG meeting. These included concerns about
the proliferation of import and export measures applied by Indonesia (raised by
the European Union, the United States, Japan, Canada, Australia, New Zealand,
the Republic of Korea, Thailand and Chinese Taipei). Questions were similarly
raised with respect to Japan's Woods Points Programme (Canada,
the European Union, Indonesia, New Zealand, Norway and the United
States). Finally, as in the April CTG a concern over the sustainability criteria of the EU
Renewable Energy Directive was raised (Indonesia).
3.58. In the July 2014 General Council
meeting several delegations raised non-tariff measures in general as an
increasing problem facing their exporters.[41]
3.59. Article 17 of the Agreement on
Agriculture (AoA) established a Committee on Agriculture (CoA). The Committee
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.
3.60. In the framework of the CoA
meetings in January, March and June 2014, Members posed a total of 200
questions, including both questions on individual notifications and under Art. 18.6,
with more than half of those questions (110) directed at issues related to
domestic support notifications or implementation of domestic support
commitments.
3.61. In total, 11 Members raised 61
questions on 30 implementation-related issues (Article 18.6) in the above‑mentioned
meetings. As can be seen in Chart 3.15, 2014 has been the year with the largest
number of questions raised under Article 18.6.
Chart 3.15 Number of questions raised under Article 18.6 (1995-2014a)
a Until 15 October 2014.
Source: WTO Secretariat.
3.62. Out of the 61 implementation‑related
questions, 11 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 3.11 indicates the specific measures relating
to implementation commitments that were discussed for the first time in the CoA
during these three CoA meetings.
Table
3.11 New Article 18.6 issues
|
CoA
meeting number
|
CoA
meeting date
|
Question
raised by
|
Answered
by
|
Question
summary
|
Products
|
|
72
|
29/01/2014
|
United States
|
Egypt
|
Export restriction on rice
|
Rice
|
|
72
|
29/01/2014
|
Canada
|
European Union
|
Levy on fruits and vegetables
|
Fruit and vegetables,
|
|
72
|
29/01/2014
|
Pakistan
|
India
|
Rice exports
|
Rice
|
|
72
|
29/01/2014
|
Canada
|
Japan
|
New agricultural policy
|
|
|
73
|
21/03/2014
|
United States
|
Canada
|
Proposed changes to tariff schedule
|
|
|
73
|
21/03/2014
|
Pakistan
|
India
|
Market support price for rice
|
Rice
|
|
73
|
21/03/2014
|
Australia; Brazil; Colombia; European Union
|
India
|
Sugar export subsidies
|
Sugar
|
|
73
|
21/03/2014
|
European Union
|
Turkey
|
Domestic support and export subsidies
|
Fruit
|
|
73
|
21/03/2014
|
Indonesia
|
United States
|
Farm Bill
|
|
|
74
|
05/06/2014
|
European Union
|
Brazil
|
Brazil's 2014-15 Harvest Plan
|
|
|
74
|
05/06/2014
|
United States
|
Honduras
|
Honduras' tax exemptions
|
|
Source: WTO Secretariat.
3.63. Some of these issues relate to the
specific policy interventions by WTO Members such as Egypt's export restriction
on rice[42],
the European Union's levy on sales of fresh fruit and vegetables[43],
Canada's proposed changes to their tariff schedule[44],
and India's sugar export subsidies.[45]
In other cases, Members queried what they saw as lack of transparency with
respect to particular agricultural policies, as in the case of questions posed
to Turkey on domestic support and export subsidies.[46]
Some questions highlighted concerns related to observed changes in trading
patterns, as in the case of India's rice and wheat exports and market price
support for rice.[47]
A number of the new questions highlighted systemic changes in national
agricultural policies: Japan's new agricultural policy[48]
and the U.S. farm bill[49],
described briefly below. The two new issues raised at the June CoA meeting concerned
Members' request for additional information regarding new agriculture-related
policies in Brazil and Honduras. The European Union requested Brazil to
elaborate on the operation of its 2014-15 harvest plan and an indication of the
recipients eligible for support under this plan[50];
and the United States requested Honduras to provide additional information on
how its sales tax exemption policy would be implemented.[51]
3.64. Other measures that were discussed
related to follow-up questions on persistent areas of concern. Table 3.12
indicates the issues that were discussed in January, March and June 2014.
Table
3.12 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
|
|
72
|
29/01/2014
|
Canada
|
European Union
|
Sugar production levies
|
Sugar
|
6
|
|
73
|
21/03/2014
|
United States
|
China
|
Cotton domestic support
|
Cotton
|
3
|
|
73
|
21/03/2014
|
United States
|
Ecuador
|
Import licensing of certain agricultural products
|
|
6
|
|
73
|
21/03/2014
|
United States
|
India
|
National food security bill
|
|
2
|
|
73
|
21/03/2014
|
United States
|
Turkey
|
Destination of wheat flour sale
|
Wheat
|
3
|
|
74
|
05/06/14
|
Argentina; India; and Indonesia
|
United States
|
U.S. Farm Bill
|
|
4
|
|
74
|
05/06/14
|
Australia and Brazil
|
India
|
Sugar export subsidies
|
Sugar, cane or beet sugar, other
|
7
|
|
74
|
05/06/14
|
Canada and the United States
|
India
|
Wheat stocks and exports
|
Wheat
|
6
|
|
74
|
05/06/14
|
European Union
|
Turkey
|
Domestic support
and export subsidies
|
|
2
|
|
74
|
05/06/14
|
Canada; India; Pakistan and the United States
|
Thailand
|
Paddy pledging scheme
|
Rice
|
14
|
|
74
|
05/06/14
|
New Zealand and the United States
|
Canada
|
Dairy policies
|
Dairy, milk, milk powders, butter, cheese, other
|
8
|
|
74
|
05/06/14
|
Pakistan
|
India
|
Subsidization policy
|
Wheat, rice
|
1
|
|
74
|
05/06/14
|
United States
|
India
|
National agricultural insurance scheme
|
|
1
|
|
74
|
05/06/14
|
United States
|
India
|
Landholding laws
|
|
1
|
|
74
|
05/06/14
|
United States
|
Ecuador
|
Domestic purchase requirements
|
|
2
|
|
74
|
05/06/14
|
United States
|
Canada
|
Proposed changes to tariff schedule
|
|
3
|
|
74
|
05/06/14
|
United States
|
Saint Lucia
|
Domestic purchase requirements for poultry and pork
|
Swine, poultry
|
4
|
|
74
|
05/06/14
|
United States
|
Brazil
|
Domestic support programmes
|
|
7
|
|
74
|
05/06/14
|
Canada and the United States
|
Costa Rica
|
Compliance with AMS commitments
|
Rice
|
14
|
Source: WTO Secretariat.
3.65. During the period relevant to this report
several developed country Members - Japan, the United States and the European
Union - introduced substantial changes to their agricultural support policies.
On 5 December 2013, Japan enacted a bill to establish a farmland re‑distribution
scheme. The goal of the policy is to promote agricultural structural reform and
cost reduction through consolidation of farmland to motivated entities. In
Japan's scheme, intermediary institutions will rent a considerable part of
farmland in a region, including small plots of farmland, and lease the farmland
to motivated entities, such as corporate farmers and large scale family
farmers.
3.66. The United States enacted the
Agricultural Act of 2014 (2014 Farm Bill) introducing major changes to
U.S. food and farm policy. The United States presented the details of this
legislation to the Committee on Agriculture during the March 2014 meeting,
giving other WTO Members the opportunity to ask questions in an informal
setting. Questions were also posed in the formal meetings of the March and June
CoA. The United States reported that the 2014 Farm Bill ends in particular the
direct and countercyclical payment programmes and the Average Crop Revenue
Election programme. The 2014 Farm Bill introduced two new risk‑management
programmes: the Price Loss Coverage (PLC) programme, a new counter-cyclical
type programme, and the Agriculture Risk Coverage (ARC) programme, a
revenue-loss programme. Among other changes, the 2014 Farm Bill also eliminated
the Dairy Product Price Support Program (a price support program), the Dairy
Export Incentive Program and the Milk Income Loss Contract, and replaced them
by the Dairy Margin Protection Program (MPP).
3.67. The European Union's new Common
Agricultural Policy (CAP) will fully enter into force on 1 January 2015.
In the margins of the June 2014 CoA meeting, the European Union provided a
presentation to the WTO Members on the new CAP to facilitate an exchange of
views on this topic. The European Union specifically referred to the rationale
and the process leading to the CAP reform, and provided detailed information on
the key changes introduced in the fields of direct payments, market measures
and rural development. The European Union noted that the pillar with the
biggest changes in the new CAP was direct payments with a more targeted
distribution of support and more flexibility granted to the EU Member States.
The European Union also noted that changes in market measures were oriented
towards the reinforcement of its safety-net function and the changes on the
rural development pillar were oriented towards sustainability.
3.68. Two developing country Members, the
Philippines and the Republic of Korea, faced the expiration of waivers allowing
special treatment for rice imports under Annex 5 of the AoA. On 18 August 2014,
the Philippines circulated a request to extend its waiver under Annex 5 of
Agreement on Agriculture. If there are no objections by Members, the
Philippines will continue to be exempted from the implementation of article 4.2
of the AoA for rice until 30 June 2017. The Philippines is allowed to implement
non-ordinary custom duties under the condition that a minimum market access
(MMA) is permitted in the form of a tariff quota. The extension of the waiver
will require the Philippines to further increase its MMA commitments to 805,200
MT. The Republic of Korea's waiver under Annex 5 of the AoA will expire at the
end of 2014. Korea, unlike the Philippines, decided not to pursue an extension
to the waiver and opted for the elimination of its rice quota regime and
proposed instead the establishment of a tariff-based system for trade in rice
commencing January 2015. The proposed scheduled tariff will be adopted in
December 2014 should there be no objections by Members.
3.69. During the review process conducted
under the CoA Members highlighted concerns regarding patterns of agricultural
support in some developing countries. Thailand rice support programmes,
including the "paddy pledging scheme", had been under scrutiny in the
CoA since 2006. Under the paddy pledging scheme Thailand set intervention
prices above market prices causing a significant increase in budgetary outlays
for rice support during the period that this measure was in force. The paddy
pledging scheme was officially terminated in February 2014 and a new rice
policy announced in September 2014. Thailand has not notified the details of
the new measure to the CoA.
3.70. Members in the CoA also drew
attention to trends in India's agricultural support. During the past year
Members expressed sustained interest in the implementation of India's support
and trade policies related to wheat, sugar and rice. Public stockholding
programmes for wheat and rice received particular attention given that these
programmes include market price support for farmers producing these crops.
India's recent notification on domestic support was circulated on 10 September
2014 and includes six years of data up to 2011 on the allocation of support
across the agricultural sector.[52]
Over that six year period notified green box expenditures increased more than
four times, driven in part by a significant expenditure on public stockholding.
3.71. Several measures adopted by China in the
period under review are noteworthy. First, amendments introduced to China's
Company Law will affect foreign‑invested enterprises (FIEs).[54]
Effective 1 March 2014, China's law‑making body and the State Council
amended the People's Republic of China Company Law (the "Company
Law"), the Implementing Rules for the Laws of the People's Republic of
China on Wholly Foreign-owned Enterprises (WFOEs), the Implementing Rules for
the Laws of the People's Republic of China on Cooperative Sino-Foreign Joint
Ventures (CJVs) and the Implementing Rules for the Laws of the People's
Republic of China on Equity Sino-Foreign Joint Ventures (EJVs). The main
changes are the replacement of "paid-in registered capital" by
"subscribed registered capital"; the removal of the minimum
registered capital requirement; and the removal of the ratio requirement
between cash and in-kind contribution.
3.72. The change from "paid-in registered capital" to
"subscribed registered capital" is one of the most significant
changes in the Amendments. Before the Amendments, FIEs were required to pay‑in
a fixed amount of registered capital within two years, 15% of which was
required to be paid-in within 90 days after the issuance of the business
licence. The Amendments abolish the paid-in registered capital requirement and
allow shareholder(s) of an FIE to determine the amount of registered capital
and the timing of the capital contributions, which may be necessary to carry
out the company's business plan. This change does not apply however to 27 types
of companies, namely companies limited by shares established by public offer;
commercial banks; foreign‑invested banks; financial asset management companies;
trust companies; financial companies; financial leasing companies; auto finance
companies; consumer finance companies; currency brokerage companies; village
banks; loan companies; rural credit cooperatives; rural mutual cooperatives;
securities companies; futures companies; fund management companies; insurance
companies; special insurance agencies and insurance brokers; foreign-invested
insurance companies; direct selling enterprises; foreign labour service
cooperation enterprises; financing guarantee companies; labour dispatch
enterprises; pawnshops; insurance assets management companies; and small loan
companies. The Amendments also abolish the minimum registered capital
requirement for domestic companies, and eliminate the requirement that
"the registered capital of a WFOE matches the scale of its business
operation".
3.73. In addition, the Amendments remove the requirement that
shareholders' cash contributions for a company be no less than 30% of the
registered capital, as well as the requirement (contained in the Implementing
Rules on WFOEs) that the capitalized value of industrial property rights or
proprietary technology invested by foreign investors do not exceed 20% of a
WFOE's registered capital. The abolishment of these provisions, in practice,
means that the ratio requirement on cash and in-kind contribution is no longer
applicable, and foreign investors may have industrial technology, equipment, or
other types of in-kind capital constitute their entire capital contribution to
the FIE.
3.74. In addition to the changes in its Company Law, as part of the
implementation of the 12th five‑year plan, China has embarked on important tax
reforms that will affect various service sectors. One aspect of the reforms is
to progressively replace the business tax with a value-added tax (VAT). In
general, VAT reform is aimed at reducing the tax burden for services
enterprises and promoting the services industry. The VAT pilot programme
applicable to the transport sector and other services started in Shanghai on 1
January 2012 and has been implemented nationwide since 1 August 2013. It is
expected that by the end of 2015, the VAT reform will be expanded to all sectors
currently subject to the business tax. In this context, on 12 December 2013,
the Ministry of Finance (MOF) and the State Administration of Taxation (SAT)
jointly issued Circular [2013] No. 106 which incorporated the railway
transportation and postal industries into the VAT pilot programme as of 1
January 2014. On 29 April 2014, MOF and SAT jointly issued Circular [2014]
No. 143 which incorporated the telecommunications sector into the VAT pilot
programme as of 1 June 2014. As a result of these successive measures, a
wide range of services sectors are now covered by this programme, including
transportation (land, water, air and pipeline), postal, R&D, information
technology, culture, logistics (cargo handling, freight forwarding, customs
clearance, warehousing, courier services, etc.), tangible movable property
leasing, authentication and consulting, broadcasting, film and television
services. Service providers in China can now claim input VAT credits for the
purchase of goods, fixed assets and services used in their business.
Enterprises including those in sectors other than services would also be more
willing to contract with services providers as they can now recover VAT
incurred on costs, as business tax is not deductible.
3.75. Circular [2013] No. 106 provides various tax incentives. Postal and
courier services provided for exporting merchandises, as well as international
freight forwarding services, are exempted from VAT. In addition, exports of the
following services are also exempted from VAT: offshore outsourced services,
including ITO, BPO and KPO (from 1 January 2014 to 31 December 2018)[55]; consulting
services; computer and related services; intellectual property‑rights‑related
services; broadcasting, film and TV programme services; and services of leasing
tangible movable assets. Finally, the following services are subject to a
zero-rate VAT: international transport services and R&D design services
rendered to overseas clients.
3.76. Since the establishment of the
Shanghai Pilot Free Trade Zone (PFTZ) in September 2013, China has introduced a
number of measures to adjust existing laws and regulations so as to ensure that
the operation of the PFTZ would not entail a conflict of laws. In late 2013,
China's State Council adopted two decisions introducing temporary adjustments
to administrative approval provisions in relevant laws and administrative
regulations, which shall be applied to the Shanghai PFTZ. In accordance with
the two State Council Decisions, on 25 July 2014 the Shanghai Municipal
Congress adopted the Regulations of PFTZ. In line with the so-called
"negative-list" approach to foreign investment administration, the
Shanghai PFTZ Regulations stipulate that the sectors/industries not on the list
are subject to a filing system rather than administrative approval (Article
13). The Shanghai PFTZ Regulations also require further opening up in a number
of services sectors including financial, shipping, professional, cultural,
social and manufacturing services. Measures to be taken to this effect include
the suspension, cancellation or relaxation of qualification requirements for
investors, of ceilings on foreign capital participation and of restrictions on
the business scope of foreign investors (Article 12). The PFTZ Regulations also
contain a chapter on financial services, which provides for specific measures
to further facilitate financial liberalization.
3.77. On 28 September 2014, China's State
Council issued another decision which sets out temporary adjustments to access
measures in administrative regulations and department rules, which shall be
applied to the Shanghai PFTZ. According to this Decision, foreign investors are
allowed to hold up to 51% shares in a joint venture of public international
shipping agency in Shanghai PFTZ. The current ceiling in the national
regulation is 49%. Fully foreign-owned enterprises are allowed to undertake
business in Shanghai PFTZ in a number of service activities where joint venture
is currently the only legal form for foreign investment in China. These service
activities include: international cargo‑handling and management of container
yards; research and development in new technologies related to oil exploration
and development; design of yachts and luxury liners; design, manufacturing and
maintenance of parts of civil airplane engines; research, design and some
manufacturing of rail transport equipment and facilities, rail freight
transport, air transport agency, etc. Restrictions on foreign investment in a
number of important services sectors have also been removed in the Shanghai
PFTZ, such as sale through mail and the Internet, wholesale and retail of
processed oil, sugar and fertilizer, and real estate services on a fee or
contract basis, etc. The negative list of foreign investment has been reduced
from 190 items to 139.
3.78. On May 14, 2014, the French Ministry of Economy extended the coverage of the
existing review mechanism for inward foreign investment to include: (i) energy
supply (electricity, gas, hydrocarbons or other sources of energy); (ii) water
supply; (iii) transport networks and services; (iv) electronic communications,
and networks and services; (v) operations of buildings and installations for
defence reasons; and (vi) protection of public health. Under the new rules,
foreign investments in these sectors would be subject to review and prior
authorisation to safeguard national interests in the areas of public order,
public security and national defence. The new Decree, "Décret n° 2014-479 du 14 mai 2014 relatif aux investissements étrangers
soumis à authorisation", provides that the French Government
may impose conditions on the proposed investment or, if no condition would be
sufficient to safeguard the above-mentioned interests, veto the proposed
investment.[56]
3.79. In April 2014, the Indonesian Government announced a significant revision of
the country's Negative Investment List (Daftar Negatif Investasi).[57]
The revision, which is not fully published yet, is based on Presidential Decree
No 39 - 2014 on the List of Open and Closed Sectors for Investments (Perpres 39
- 2014 tentang Daftar Bidang Usaha Tertutup dan Bidang Usaha Terbuka dengan
Persyaratan di Bidang Penanaman Modal). The Negative Investment List of
Indonesia stipulates which sectors within the Indonesian economy are open to
foreign investment as well as the percentage shares of foreign ownership that
are permitted. As per the new List, foreign investment is further liberalized
in some service sectors, but curbed in others. In several sectors, the
Indonesian Government permits higher foreign ownership if investors engage in
public-private partnerships (PPPs) with the Government. Table 3.13 summarizes
the announced revisions for services:[58]
Table
3.13 Indonesia – revised Negative Investment List
|
Expanded foreign ownership
|
|
|
Previous
|
New
|
|
Energy and Mineral Resources
Electricity
Generation > 10MW
|
Maximum
95%
|
Maximum
100% through PPPs during concession period; without PPP, maximum 95%
|
|
Transportation
i. Provision of Port Facilities
|
Maximum 49%
|
Maximum 95% through PPPs; without PPP, 49%
|
|
ii. Organization
of periodic testing of motor vehicles,
Terminals Development
|
Closed to FDI
|
Maximum 45% (recommendation
from the Transportation Ministry
required)
|
|
Creative Economy
Production of films
|
Closed to FDI
|
Maximum 51% for investors
from ASEAN
|
|
Finance
Venture Capital
|
Maximum 80%
|
Maximum 85%
|
|
Foreign ownership reduced
|
|
|
Previous
|
New
|
|
Energy and Mineral
Resources
i. Electricity generation 1‑10MW
|
Maximum 100%
through PPP
|
Maximum 49%
|
|
ii. Drilling services on land
|
Maximum 95%
|
Closed to FDI
|
|
iii.
Drilling services in sea
|
Maximum 95%
|
Maximum 75%
|
|
iv.
Oil and gas support services
|
Maximum 95%
|
Closed to FDI
|
|
v.
Installation of electric power utilization
|
Maximum 95%
|
Closed to FDI
|
|
Communication and Information
i. Operation of Telecommunications Services
|
Maximum 100%
|
Maximum 49%
|
|
ii. Data Communications Systems Services
|
Maximum 95%
|
Maximum 49%
|
|
iii. Internet
Services
|
Maximum 65%
|
Maximum 49%
|
Source: Indonesia-investments.com
(Indonesia Revises Negative Investment List to Boost Foreign Investments, 7 May
2014. Available at http://www.indonesia-investments.com/news/todays-headlines/indonesia-revises-negative-investment-list-to-boost-foreign-investments/item1966
3.80. The Russian Federation amended the Federal Law of 9 July,
1999 Nr. 160-FZ "On Foreign Investments in the Russian Federation".[59]
These amendments, which are contained in the Federal Law of 5 May, 2014 Nr.
106-FZ "On Amendments to Certain Legislative Acts of the Russian
Federation", modify the rules on the creation of branches and opening of
representative offices of foreign legal entities in Russia, and their accreditation.
Commencing
1 January, 2015, new regulations regarding the accreditation of branch and
representative offices of foreign companies will be applied to both newly‑formed
and previously‑accredited offices. With the amendments, the legal status of
representative offices will now be covered by the Federal Law Nr 160-FZ.
Previously, the Federal Law regulated only the status of branches of foreign
legal entities. The new law establishes new procedures for the formation and termination of branches and
representative offices of foreign legal entities.
3.81. In June
2014, the Saudi Arabian General Investment
Authority established a foreign investment licence Fast Track Service.[60]
Amongst the enterprises
to be served through the Fast Track Service are: multinational companies; publicly‑listed
companies, in the capital market of their countries or in international stock
exchanges; companies manufacturing products that are classified and approved by
independent agencies and which employ certified process technology; small- and
medium‑size enterprises which will be operating in the area of the IPRs
registered in their names, or which are classified as innovative enterprises;
international companies which have set up regional centres in Saudi Arabia;
construction companies classified under the first class in their countries, or
which have implemented a project with a value of not less than SR 500,000,000
and have a manpower of not less than 2,000 employees and total assets of not
less than SR 50 million; and companies which have entered into
partnership with other companies qualified by a government agency, or by a
state-owned entity or an entity in which the Government has a shareholding, or
with a company listed in the Saudi Capital Market.
3.82. On 1 September 2014, Argentina's Audiovisual
Communications Services Federal Agency launched its advertising registry
(Registro de Publicidad de AFSCA), in which domestic companies can register
their advertisements. Argentina's Audiovisual and Media Services
Law (26.522) requires that at least 60% of all advertising content be
produced domestically. However, it allows for a foreign government to request
an exemption to this quota if Argentine companies are not subject to a similar
quota in that country.
3.83. Azerbaijan's Ministry
of Communications and High Technologies (MCHT) has announced that work is under
way to set up a telecommunications regulatory body that is independent from the
Ministry. Currently, MCHT is responsible for all telecoms regulation as well as
for the state's shareholdings in the telecommunications sector, which is often
considered a conflict of interest. The country's "e-Azerbaijan"
programme signed by the President in 2010 had called for the establishment of
an independent national telecommunications regulator.[61]
3.84. The Bangladesh
Telecommunication Regulatory Commission (BTRC) in February 2014 ordered mobile
service providers GrameenPhone and Airtel Bangladesh to cease providing
BlackBerry services because the country's security/law agencies are unable to
monitor communications on the encrypted system. As per licensing terms and
conditions, the government reserves the right to gain access to telecom service
providers' networks when deemed necessary.[62]
3.85. On 23 April
2014, Brazil's Government signed into law a
bill previously passed by Congress and intended to guarantee equal access to
the Internet and protect privacy of users. On equal access, the bill bars
telecommunications companies from charging higher prices for different content.
On privacy, the bill sets limits to the gathering and use of metadata about
Internet users, while a provision was dropped that would have required Internet
companies to store data on Brazilian servers inside the country. Instead, the
bill makes Internet service suppliers subject to Brazilian laws and courts in
cases involving information on Brazilians, even when the data is on servers
outside Brazil.
3.86. The Canadian
Radio-television and Telecommunications Commission (CRTC), on 31 July 2014,
after concluding in its Telecom Decision CRTC 2014-398, "that there were
clear instances of unjust discrimination and undue preference by Rogers
Communications Partnership with respect to the imposition of exclusivity
clauses in its wholesale mobile wireless roaming agreements with certain new
entrants, and the wholesale mobile wireless roaming rates it charged certain
new entrants", announced the prohibition of exclusivity provisions in
wholesale mobile wireless roaming agreements between Canadian carriers for
service in Canada.[63]
3.87. The Chilean telecoms watchdog Subtel ordered that, by 1 June
2014, internet service providers offering free access to social networking
websites and apps such as Facebook, Twitter and WhatsApp, should stop providing
these kinds of services as it violates net neutrality laws. According to
Subtel, by providing free connection
to internet only accessible to specific social networks, companies give an arbitrary advantage to the use of these services over the web to other services. Chile's Net
Neutrality Act enables providers to employ network and traffic management on
the condition that it is not discriminatory or a threat to competition. Likewise, traffic management cannot be used to block or interfere with the access to content and applications on the Internet.[64]
3.88. China's Ministry of Industry and
Information Technology (MIIT) and the National Development and Reform
Commission (NDCR) on 9 May announced their decision to stop regulating the
tariffs of telecoms services.[65] The tariffs
of all telecommunications companies will be regulated by the market, and
companies may independently draw up specific tariff structures, standards and
billing methods according to market conditions and customer needs.
3.89. On 13 March
2014, the European Parliament approved a Network
& Information Security (NIS) Directive which calls for greater
preparedness, collaboration, and transparency by Member States to address cyber
security matters. The scope of the measures was designed to ensure added
protection in a new environment in which activities may take place by means of
so-called cloud services. Member States will have to implement the Directive
within 18 months of its adoption.[66]
Apart from that Directive, on 27 March 2014, the European Court of Justice
(ECJ) ruled that an Internet Service Provider (ISP) may be ordered to block
customers' access to a website where material that infringes copyright may be
available. The ECJ had been asked to interpret EU copyright law by Austria's
Supreme Court.[67]
The ECJ ruled that a person who makes protected subject-matter available
to the public on a website without the agreement of the rights holder is using
the services of the business which provides internet access to those accessing
that material. Thus, an ISP which allows such access is an intermediary whose services
are used to infringe a copyright.[68]
3.90. The Communications
Minister of Israel announced on 8 July 2014 a decision to allow
companies not already active in the country as mobile network operators to take
part in the forthcoming 4G tender. According to the Minister's communication it will permit a
high level of competition, while also promoting broadband infrastructure.[69]
3.91. As part of the Constitutional
reforms aimed at modernizing Mexico's
telecommunication and broadcasting sectors, which became effective on 12 June
2013[70],
the new Federal Telecommunications and Broadcasting Law, as well as the new
Public Broadcasting System Law were published in the Mexican Official Gazette
on 14 July 2014. The new Law establishes a new regulatory framework in the
telecommunications and broadcasting sector in Mexico, with the objective of
promoting competition, improving coverage and service quality, and lowering
costs and prices. The reform paved the way for 100% foreign ownership of
companies engaged in telecommunications services, including satellite
communications (compared to 49% previously), and up to 49% foreign ownership of
radio and television broadcasters (compared to zero previously), albeit subject
to reciprocity.
3.92. On 27 March 2014, the Republic of Moldova adopted
Law No. 40, which amends the Electronic Communications Law No. 241-XVI of 15
November 2007. The amendments seek to make an efficient use of radio spectrum
by prohibiting 'spectrum hoarding' in accordance with the provisions of article
9, paragraph (7), of the EU Directive 2009/140/EC.[71]
3.93. The
Telecommunications Regulatory Authority (TRA) of Oman will
introduce a consumption limit (in the form of a roaming cap) for mobile
subscribers making calls and using data abroad. The limit of OMR100 (USD259) is being
introduced due to a large number of complaints from customers of roaming 'bill
shock'. The roaming cap is due to enter into force later this year.[72]
3.94. On 21 July 21 2014, Federal Law No. 242-FZ, "On Amendments to Certain Legislative Acts of the Russian Federation with regard to the Clarification of the
Processing of Personal Data in Informational-Telecommunications Networks"
was signed by the President of the Russian Federation. The Law requires
Personal Data Processors which collect personal data, including via internet,
to use databases located in the territory of the Russian Federation for
recording, systematization, accumulation, storage and extraction of the
personal data of the citizens of the Russian Federation. The Law will apply from 1 September 2016.[73]
3.95. Senegal's telecoms
regulator, the Agence de Regulation des Telecoms et Postes (ARTP), has
implemented two new decisions to modify the scope of interconnection in the
country, as it looks to promote competition in the local market. According to
Agence Ecofin, the watchdog's first decision is designed to identify operators
with significant market power (SMP), and as such it has designated Sonatel,
Tigo Senegal (Sentel) and Sudatel-owned Expresso as having SMP. The trio will
now be required to approve a draft interconnection tariff plan within 30 days
of the issuance of the decision. In the second amendment, ARTP has identified
and ruled on a list of relevant markets in which the three operators are said
to enjoy a dominant market position.[74]
3.96. The Official Gazette of the
Republic of South Africa published on 7 April
2014 the Electronic Communications Amendment Act (Act No. 1 of 2014) which amends the Electronic Communications Act of 2005.[75] The Amendment[76], amongst other things, modifies
provisions of the Act to align them with broad-based black economic empowerment
initiatives, to improve the governance provisions of the Universal Service and
Access Agency of South Africa[77] and to enhance the provisions
related to licensing procedure and frequencies allocation.
3.97. On 21 March
2014, the Turkish Information Technologies and
Communications Authority (ICTA) restricted access to Twitter for failure to
remove illegal content form certain accounts. The decision was taken in
accordance with the decisions of judicial authorities and Article 8 of the 5661
numbered Law on "Regulation of Publications on the Internet and Combating
Crime Committed via These Publications". ICTA later issued a statement
that the site was blocked "in line with court decisions to avoid the
possible future victimisation of citizens", and observing that the company
had previously failed to remove content when it had been asked to do so. The
blockage of access to Twitter was removed by decision of the Turkish
Constitutional Court dated 2 April 2014.
3.98. The U.S. Federal Communications Commission (FCC) has clarified
its Policy for Foreign Investment in Broadcast Licensees regarding policies and
procedures for reviewing transactions that would result in foreign ownership
exceeding 25%. Section 310(b)(4) of the Communications Act of 1934 limits
foreign ownership of U.S.-organized entities that control broadcast licensees
to 25% when the Commission finds the limitation to be in the public interest.
The ruling clarifies the FCC's intent to review applications and petitions for
declaratory rulings proposing such ownership on a case-by-case basis. It also
specifies the filing procedures for applicants and petitioners seeking approval
for foreign ownership above 25%. According to the FCC, the clarification does
not alter its obligations to protect the public interest, including national
security, localism and media diversity.[78]
3.99. A new Vietnamese regulation
on the management of pay television, which came into effect on 15 May 2013,
requires that all content on film channels, reportage and documentary
programmes on general channels, general entertainment channels, sports channels
and music channels be translated in Vietnamese in advance of airing.[79]
Foreign channels are required to work with a government-sanctioned local
partner who will subtitle and edit their content for a local audience.[80]
3.100. In December 2013, a constitutional
amendment to modernize the energy sector was approved by the Mexican Congress. On 11 August 2014, nine secondary laws
related to oil and gas as well as to electricity sectors were published in the
Mexican Official Gazette and twelve other regulations were amended by the
Mexican Government. The objective of all these new regulations is to strengthen
the legal framework in order to implement the energy reform.
3.101. Ukrainian Law No. 1645-VII "On Bringing Amendments to Some
Laws of Ukraine with Respect to Reforming the System of Management of the
Unified Gas Transportation System of Ukraine" dated August 14, 2014 entered into force on September 10, 2014 allowing
access of foreign companies to the Ukrainian service
market of gas transportation and storage. Companies that are owned and controlled by residents of EU countries, the
United States or the European Energy Community can establish and own entities
to act as operators of the Ukrainian gas pipeline system and underground gas
storage facilities.[81]
3.102. A number of positive developments have taken place during the period
under review, as part of Members' efforts to further liberalize financial
services or to reshape their regulatory frameworks.
3.103. The China Insurance Regulatory Commission (CIRC) has issued the
new Insurance Company Mergers and Acquisitions Regulations, which will allow
insurers with competing businesses in China to acquire and merge with each
other, effective 1 June 2014.[82]
Under current regulations, M&A in the insurance industry has been
restricted, as insurance firms controlled by the same controlling shareholder
are banned from selling products which compete with each other. Subject to
conditions, the new regulation will allow an acquirer to control two insurers
which operate in the same field of business. While the new regulation presents
opportunities for foreign investors, foreign investors who will hold more than
25% of the equity or shares in a target insurance company following an
acquisition or merger will still need to comply with the existing qualification
requirements under the Administrative Regulations of Foreign-Invested Insurance
Companies, which requires that (1) the foreign investor has been operating in
the insurance business for at least 30 years, (2) the foreign investor has
established a representative office within China for at least 2 years, (3) the
total assets of the foreign investor as at the end of the previous year are not
less than US$5 billion, (4) the country or region from which the foreign
investor originates has a sound insurance regulatory system and the investor is
subject to effective regulation under relevant competent authorities, (5) the
foreign investor meets the solvency standards of its country or region of
origin, (6) the competent authorities of the country or region from where the
foreign investor originates has consented to the filing of the M&A
transaction in China, and (7) the foreign investor satisfies any other
prudential requirements prescribed by CIRC. In addition, foreign investors will
need to comply with all relevant foreign investment rules, including the
current limitation against owning more than 50% of a domestic life insurer.
3.104. On 13 March
2014, the China Banking Regulatory Commission (CBRC) released the newly amended
Administrative Measures for Financial Leasing Companies (Order of China Banking
Regulatory Commission [2014] No. 3), which modifies provisions on market-entry
requirements, business scope, operation rules, supervision and administration
of financial leasing companies. The New Measures came into effect as of the
date of promulgation while the old measures ceased to be effective on the same
day. The New Measures lower the entry barriers for setting up a financial
leasing company, by abolishing the distinction between "chief
investor" and "ordinary investor" and providing that anyone that
falls within five specific types of institutions (i.e. domestic and overseas
commercial banks, domestic large manufacturers, overseas financial leasing
companies, other domestic institutions and other overseas finance institutions)
can apply to establish a financial leasing company as an initiator. Moreover,
the New Measures require at least one eligible commercial bank, domestic large
manufacturer or overseas financial leasing company among the initiators having
an investment proportion of no less than 30%. The New Measures broaden the
permissible business scope of financial leasing companies to include purchasing
and transferring financial leasing assets (and not only to commercial banks as
required under the previous measures), accepting deposits (term no less than
three months) from non-bank shareholders, and investing in fixed income
securities. The New Measures also allow financial leasing companies to
establish branches and subsidiaries with CBRC's approval.
3.105. On 11 September 2014, the China Banking Regulatory
Commission (CBRC) promulgated
the Implementation Measures on Administrative Licensing
Items for Foreign Funded Banks. The new measures abolished the
restriction that a foreign‑funded bank may only apply for the establishment of
one sub-branch in the same city at a time, and removed the minimum operating
capital requirement for sub-branches of foreign‑funded banks. Relevant rules
concerning conditions and procedures for the issuance of debt instruments and
capital supplement instruments by foreign‑funded banks are incorporated into
the New Measures in order to help these banks boost their capital.
3.106. In May 2014, the European Union
approved the new regulatory framework for financial markets. The first rule is
in the form of a new "Markets in Financial Instruments Directive"
(MiFID II), while the second is in the form of a regulation (Markets in
Financial Instruments Regulation or MiFIR), which amends the European Market
Infrastructure Regulation (EMIR).[83] Together,
these regulations represent the EU's new legal framework for trading and
investment services in the European Union, whether such services relate to
traditional financial instruments, derivatives, foreign exchange, certain
structured investments or other types of contracts. EU Member States have two
years to transpose the new rules, which will be applicable as of January 2017. MiFID
II introduces a harmonized regime for granting non-EU firms access to the EU
market, on the basis of an equivalence assessment of third country
jurisdictions by the Commission. Similarly, MiFIR establishes new rules for the
access of non-EU central counterparties (CCPs) and trading venues to the EU
market, provided the Commission considers the non-EU country framework as
equivalent.
3.107. In addition, the recently adopted Central Securities Depositories
(CSD) Regulation aims to harmonize both the timing and conduct of securities
settlement in Europe and the rules governing Central Securities Depositories
(CSDs) which operate the infrastructures enabling the settlement of
transactions.[84]
The CSD Regulation creates, for the first time at European level, a common
authorisation, supervision and regulatory framework for CSDs. Under the new
rules, a CSD from a third country can provide its services in the European Union.
For certain core services and branches in the European Union, a third country
CSD will need to seek recognition from the European Securities and Markets
Authority (ESMA).
3.108. On 27 December 2013, Hong Kong, China published the Inland Revenue (Amendment)
(No.3) Bill 2013 (the "Bill") to effect, inter alia, certain tax concession measure to attract
offshore insurance companies to set up their captive insurance business in Hong
Kong, China, and reinforce the status
of Hong Kong, China as a regional insurance hub through the development of
other related businesses, including reinsurance, legal and actuarial services.
The Bill was passed on 19 March
2014 and the tax concession measures
took effect from the year of assessment 2013-14 onwards. Qualifying
captive insurance companies will enjoy the same concessions as those of a
qualifying reinsurance business. Thus, profits tax will be assessed at one-half
of the standard rate of profits tax in respect of a corporation. In order to
qualify for the profits tax break, the captive insurance company must be an
authorized captive insurer as defined under the Insurance Companies Ordinance
and authorized by the Insurance Authority."
3.109. On 6
November 2013, the Reserve Bank of India (RBI)
released the "Scheme for Setting up of Wholly-Owned Subsidiaries (WOS) by
foreign banks in India".[85]
The policy is guided by two principles: reciprocity and single mode of
presence. As a locally incorporated bank, the WOSs will be given "near
national treatment" which will enable them to open branches anywhere in
the country at par with Indian banks (except in certain sensitive areas where
the Reserve Bank's prior approval would be required). The policy provides
incentives to the existing foreign bank branches which operate within the
framework of India's commitment to the WTO to convert into WOS.
3.110. The key
features of the framework are the following:
a. Foreign banks with complex
structures, banks which do not provide adequate disclosure in their home
jurisdiction, banks which are not widely held, banks from jurisdictions having
legislation giving a preferential claim to depositors of the home country in
winding‑up proceedings, etc., can only enter India through a WOS.
b. Foreign banks in whose case the
above conditions do not apply can opt for a branch or a WOS form of presence.
c. A foreign bank opting for the
branch form of presence shall convert into a WOS as and when the above
conditions become applicable to it or it becomes systemically important on
account of its balance sheet size in India.
d. Foreign banks which commenced
banking business in India before August 2010 shall have the option to continue
their banking business through the branch mode. However, they will be
incentivised to convert into a WOS because of the attractiveness of the
"near national treatment" afforded to WOSs.
e. To prevent domination by foreign
banks, restrictions would be placed on further entry of new WOSs of foreign
banks or further capital infusion of WOSs of foreign banks, when the capital
and reserves of the WOSs and foreign bank branches in India exceed 20% of the
capital and reserves of the banking system.
f. The initial minimum paid-up voting
equity capital for a WOS shall be Rs 5 billion for new entrants. Existing
branches of foreign banks desiring to convert into WOS shall have a minimum net
worth of Rs 5 billion.
g. The parent of the WOS would be
required to issue a letter of comfort to the RBI for meeting the liabilities of
the WOS.
h. Corporate Governance – (i) not less
than two-thirds of the directors should be non‑executive directors; (ii) a
minimum of one-third of the directors should be independent of the management
of the subsidiary in India, its parent or associates; (iii) not less than
fifty per cent of the directors should be Indian nationals, subject to the
condition that not less than one-third of the directors are Indian nationals
resident in India.
i.
The branch expansion guidelines as applicable to domestic scheduled
commercial banks would generally be applicable to WOSs of foreign banks, except
that they will require prior approval of RBI for opening branches at certain
locations that are sensitive from the perspective of national security.
j. The "priority sector lending
requirement" would be 40% for WOS, like domestic‑scheduled commercial
banks, with an adequate transition period provided for existing foreign bank
branches converting into WOS.
k. On an arm's length basis, WOSs
would be permitted to use parental guarantee/credit rating only for the purpose
of providing custodial services and for their international operations.
However, WOSs should not provide counter guarantee to its parent for such
support.
l.
WOSs may, at their option, dilute their stake to 74% or less in
accordance with the existing FDI policy. In the event of dilution, they will
have to list themselves.
3.111. The issue
of permitting WOS to enter into M&A transactions with any private sector
bank in India subject to the overall investment limit of 74% would be
considered after a review is made with regard to the extent of penetration of
foreign investment in Indian banks and functioning of foreign banks (branch
mode and WOS).
3.112. In a circular issued on 3 September
2014[86],
the Reserve Bank of India (RBI) allowed non‑resident foreign banks to extend
loans to local companies in Indian rupees. RBI said foreign banks can extend
external commercial borrowings (ECBs) in the Indian currency but only if they
mobilise rupees through swaps with a local bank. In order to execute those
swaps, recognised ECB lenders may set up representative offices in India.
3.113. On 25 March 2014, the Governor of
the Central Bank of Kuwait (CBK)
announced that the CBK's Board of Directors has approved the principles, rules
and regulation for the licensing and operations of foreign banks' branches, and
the regulations for opening a foreign banks' representative offices in Kuwait,
the State of ("Kuwait").[87]
Foreign banks will be allowed to open multiple branches in the country.
Previously, each foreign bank was limited to opening one branch in Kuwait; that
restriction will now be removed, though the Central Bank will still approve new
branches on a case-by-case basis. The new rules also allow foreign lenders to open
representative offices in Kuwait.[88]
3.114. Moldova's new
Capital Market Law (Law No. 171 of 11 July 2012) entered into force on 14
September 2013. This law, which was further amended in April 2014, replaced the
Securities Market Law
of 1998, and seeks to adopt the acquis communautaire, by
transposing 11 EU Directives related to capital
markets, including MiFID, the Directive on Takeover Bids, the Investor
Compensation Scheme Directive, the Market Abuse Directive, the Capital Adequacy
Directive and the UCITS Directive.
3.115. To be authorized as an investment
firm, the applicant must be a joint stock company, and have an operation plan
as well as duly certified managers. Initial minimum capital requirements have
been set in accordance with the business scope. Thus, a minimum initial capital
of 8,000 EUR allows market operators to provide basic types of investment
services and activities, e.g. orders reception, transmission and execution on
behalf of the clients, while an initial capital of 100,000 EUR allows investment
firms to provide all types of investment services and activities. These
thresholds must increase, respectively, to 50,000 and 300,000 in 10 years.
Investment firms authorised by an EU regulator may open branches and provide
services without the Moldovan regulator's authorisation. However, those
investment firms are entitled to supply only the investment services and
activities set out in the authorization issued by the competent EU regulator.
3.116. Effective 1
July 2014, the Central Bank of the Philippines
(Bangko Sentral ng Pilipinas, BSP) lifted the bank branching restriction in
eight areas in Metro Manila, including Makati, Mandaluyong, Manila, Parañaque,
Pasay, Pasig, Quezon, and San Juan. This is in line with a June 2011 BSP
circular that provided for the phased lifting of branching restrictions.[89]
Putting up a branch would entail a P20million license fee.
3.117. On 15 July 2014, the Philippine
Congress enacted Republic Act No. 10641 (R.A. 10641), amending Republic Act No.
7721 – An Act Liberalizing the Entry and Scope of Operations of Foreign Banks
in the Philippines and for Other Purposes.[90]
In effect, R.A. 10641 allows up to 100 percent foreign ownership in existing
banks and new banking subsidiaries, as well as the establishment of branches
with full banking authority. It also ceases the limitation on the number of
foreign bank entrants in the Philippines. Moreover, foreign banks may open up
to five (5) sub-branches as may be approved by the Monetary Board (MB), and
locally incorporated subsidiaries of foreign banks shall have the same banking
privileges as domestic banks of the same category. It may be noted that the MB
is authorized to 'adopt measures as may be necessary to ensure that the control
of at least 60 percent of the resources or assets of the entire banking system
is held by domestic banks which are majority-owned by Filipinos.
3.118. On 5 September 2014, the United Kingdom Prudential Regulation Authority (PRA)
finalized its revised policy approach to the supervision of foreign banks
operating branches in the UK.[91]
Under the new policy, international banks operating in the UK without a
subsidiary based either locally or in a member country of the European Economic
Area will be allowed to branch directly in the UK provided (i) PRA is assured
that home country supervision and resolution are sufficiently equivalent to
PRA's, (ii) the deposit-taking foreign bank has less than £100 million of
retail/small‑ and medium-sized enterprises (SMEs) in account balances and fewer
than 5,000 customers, and (iii) the foreign bank can show an adequate
resolution plan for the UK branch.
3.119. The Ministry for the Economy,
Finance and Public Sector Banking of Venezuela
published a measure in the Gaceta Oficial
No. 40,457 dated 18 July 2014 which authorized 34 stockbrokerage firms to act
as foreign exchange operators on a permanent basis in the Alternative Foreign
Currency System (SICAD II).[92]
Up until now, the National Securities Superintendency had only granted
temporary permits to 24 stockbrokerage firms to act as foreign exchange
operators. These temporary permits were annulled upon the publication of this
resolution.
3.120. On 3 January 2014 the Vietnamese Government issued Decree 01/2014/ND-CP (Decree
01) regulating foreign investment in Vietnamese credit institutions, which took
effect on 20 February 2014.[93]
The new decree sets out the following foreign ownership caps in a Vietnamese
credit institution (percentages in brackets are those previously in force): (i)
any foreign individual, 5% (same); (ii) any foreign organization, 15% (10%);
(iii) any foreign strategic investor, 20% (15%, except that "in special
cases" the Prime Minister was already authorized to raise it up to 20%);
(iv) any foreign organisation and its related parties, 20% (same as for items
(ii) and (iii), as the case may be); (v) total foreign ownership in a
Vietnamese bank, 30 % (same); and (vi) total foreign ownership in a Vietnamese
non-bank credit institution, 49% (not covered in the previous decree). Under
the new regulation, there is no minimum total asset base requirement for
foreign investors wishing to acquire less than 10% of the capital in a
Vietnamese credit institution. However, foreign investors who wish to acquire
10% or more of a Vietnamese credit institution must have minimum total assets
of US$10 billion (if they are foreign banks, foreign financial institutions or
foreign financial leasing institutions) or US$1 billion (if they are other
types of organisations). Those who wish to become a foreign strategic investor
are required to have minimum total assets of at least US$20 billion.
3.121. On 18
February 2014, the Board of Governors of the United
States Federal Reserve System issued the "Final Rule"
implementing the "Enhanced Prudential Standards for Bank Holding Companies
and Foreign Banking Organizations."[94]
The rule, which was required by section 165 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, establishes a number of enhanced prudential
standards for large U.S. bank holding companies and foreign banking
organizations, including on liquidity, risk management, and capital. It also
requires a FBO with a significant presence in the U.S. to establish an
intermediate holding company over its US subsidiaries.[95]
The Final Rule contains requirements that are applicable primarily to two
types of banking organizations: 1) U.S. top-tier bank holding companies (U.S.
BHCs) with total consolidated assets of US$50 billion or more; and 2) foreign
banking organizations (FBOs) with total consolidated assets of US$50 billion or
more.
3.122. For U.S.
BHCs with total consolidated assets of US$50 billion or more, the final rule
incorporates the previously issued capital planning and stress testing
requirements as an enhanced prudential standard. It also requires such a U.S.
BHC to comply with enhanced risk-management and liquidity risk-management
standards, conduct liquidity stress tests, and hold a buffer of highly liquid
assets based on projected funding needs during a 30-day stress event. The Final
Rules further require a U.S. BHC with total consolidated assets of US$50
billion or more to establish an enterprise wide risk committee chaired by an
independent director and to have at least one member with experience in
identifying, assessing, and managing risk exposures of large, complex financial
firms. A BHC with total consolidated assets of US$50 billion or more must also
appoint a chief risk officer. In addition, publicly traded BHCs with total
consolidated assets of US$10 billion or more but less than US$50 billion are
also required to establish a risk committee chaired by an independent director
that includes at least one member having experience in identifying, assessing,
and managing risk exposures of large, complex firms.
3.123. FBOs with
U.S. non-branch assets of US$50 billion or more will be required to establish a
U.S. intermediate holding company (IHC) over their U.S. subsidiaries. The
foreign-owned U.S. IHC generally will be subject to the same risk-based and
leverage capital standards applicable to U.S. BHCs. The IHCs also will be
subject to the Federal Reserve's rules requiring regular capital plans and
stress tests. Like U.S. BHCs with assets of US$50 billion or more, a FBO with
combined U.S. assets of US$50 billion or more will be required to establish a
U.S. risk committee and employ a U.S. chief risk officer to help ensure that
the foreign bank understands and manages the risks of its combined U.S.
operations. In addition, these FBOs will be required to meet enhanced liquidity
risk-management standards, conduct liquidity stress tests, and hold a buffer of
highly liquid assets based on projected funding needs during a 30-day stress
event. FBOs with total consolidated assets of US$50 billion or more, but
combined US assets of less than US$50 billion, are subject to enhanced
prudential standards. However, the capital, liquidity, risk-management, and
stress testing requirements applicable to these FBOs are substantially less
than those applicable to FBOs with a larger U.S. presence. In addition, the
final rule implements stress testing requirements for foreign banking
organizations with total consolidated assets of more than US$10 billion and
risk committee requirements for foreign banking organizations that meet the
asset threshold and are publicly traded.
3.124. Under
section 165 of the Dodd-Frank Act, upon a determination by the Financial
Stability Oversight Council that a company poses a grave threat to U.S.
financial stability and that the imposition of the requirement is necessary to
mitigate that risk, the Federal Reserve must require a U.S. bank holding
company and an FBO with US$50 billion or more in total consolidated assets, as
well as a nonbank financial company supervised by the Federal Reserve, to
maintain a debt‑to‑equity ratio of no more than 15-to-1. Consistent with the
Dodd-Frank Act, the Final Rules define the 15-to-1 debt-to-equity limitation
and adopt procedures for its implementation.
3.125. U.S. BHCs
subject to the rule will need to comply by 1 January 2015, while the deadline
for compliance by FBO is 1 July 2016. The final rule also generally defers
application of the leverage ratio to foreign-owned U.S. IHCs until 2018. The
Federal Reserve Board estimates that 24 U.S. BHCs and approximately 100 FBOs
will be affected by the final rule, and as many as 20 FBOs will meet the IHC
requirement.[96]
3.126. In January
2104, Argentina's Federal Administration of
Public Revenue (Administración Federal de Ingresos Públicos/AFIP, in Spanish)
issued General Resolutions 3579 and 3582, establishing a procedure for the
submission of affidavit in order to optimize the traceability of transactions.
The new procedure requires individuals purchasing goods from overseas suppliers
and delivered through the official postal service (including door-to-door
delivery) or by courier companies to complete a specific form online (AFIP Form
4450 - Purchases from overseas suppliers), containing the details of the
acquisition, and to present the affidavit when claiming the goods. Consumers
are allowed to use the procedure twice a year, subject to the annual franchise
of US$25 established by Article 80 of Decree 1001/82, as amended. Purchases
above the franchise value are subject to a 50% ad valorem
tariff. When payment of the 50% ad valorem
tariff is due, the purchaser must present the affidavit at the appropriate
Customs or Official Post Office, together with evidence of payment made.
3.127. In December
2013, Indonesia's Ministry of Trade released
Regulation No. 70/M-DAG/PER/12/2013 ("Regulation 70") on Traditional
Markets, Shopping Centres and Modern Stores, which is set to enter into force
on 12 June 2014. The regulation limits the total number of modern retail
store outlets to 150. To increase the number of stores, a modern store operator
must enter into cooperation with micro-, small- and medium‑sized businesses.
Those suppliers that already have more than 150 outlets must bring themselves
into conformity with the new regulation within five years of entry into force.
The Regulation also requires that a minimum of 80% of the total amount and
types of goods sold in modern stores be domestic products. Exemptions may be
granted. It also limits to 15% the sale of private label products. As regards
limits on private label products and foreign products, suppliers have two years
to comply. Further, modern stores in the form of minimarkets are prohibited
from selling fresh products in bulk. Modern stores include minimarkets,
supermarkets, department stores, hypermarkets or wholesale outlets.
3.128. Since 23 November 2013, employers
seeking access to Australia's
subclass 457 visa programme to employ foreign workers in certain professions
are required to conduct a Labour Market Test (LMT). LMT does not apply to
nominations if the requirement would be inconsistent with an international
treaty trade commitment.
3.129. Effective 1
June 2014, study permit holders in Canada who are
enrolled in academic, vocational or professional training programmes of at
least six months will be automatically authorised to work, up to 20 hours per
week.[97]
Previously, study permit holders had
to obtain a relevant work permit to accept employment.
3.130. On 20 June 2014, Canada announced
comprehensive reforms to its Temporary Foreign Worker Programme. The Programme
has been reorganized into two streams: the Temporary Foreign Worker Programme
(TFWP) and a new International Mobility Program (IMP).[98]
3.131. The restructured TFWP refers only
to streams under which foreign workers enter Canada at the request of employers
to fill temporary labour and skill shortages following approval through a Labour
Market Impact Assessment (LMIA). The LMIA replaces the previous Labour Market
Opinion, and is a more rigorous and comprehensive labour market test. Employers
are required to provide additional information, including the number of
Canadians that applied and interviewed for the available job, and explain why
they were not hired. The fee for the LMIA has been increased, from C$257 to
C$1,000. Additionally, the TFWP will phase-in a cap on the proportion of
low-wage temporary foreign workers that a business can employ per worksite, and
reduces the duration of work permits for these workers to a maximum of one
year, rather than the 2 year duration that existed previously.
3.132. The newly created International
Mobility Program (IMP) incorporates those streams in which foreign nationals
are not subject to an LMIA, and whose primary objective is to advance Canada's
broader economic and cultural national interests, rather than filling
particular jobs. Intra-corporate transferees and persons authorized to work in
Canada temporarily pursuant to Free Trade Agreements are amongst the categories
of entry included under the IMP. The renamed International Mobility Program
will include a new fee for work permits through IMP, a new employer compliance
system on par with the system being put in place for the TFWP, and additional
changes to specific IMP streams.
3.133. These changes come on top of an
earlier development, whereby, from 1 June 2014, study permit holders in Canada
who are enrolled in academic, vocational or professional training programmes of
at least six months are automatically authorised to work, up to 20 hours per
week. Previously, study permit holders had to obtain a relevant work permit to
accept employment.
3.134. On 15 May 2014, the European Union
adopted a "Directive on the conditions of entry and residence of
third-country nationals in the framework of an intra-company transfer".[99]
The Directive entered into force on 28 May 2014, and it is now for individual
EU Member States to transpose it into their national laws. The deadline for
doing so is 29 November 2016. The new rules harmonize and simplify the
conditions for admission, residence and intra-EU mobility of foreign
intra-corporate transferees and their families. They concern managers,
specialists and graduate trainees posted by a foreign enterprise in an entity
of the same group established in the European Union. The Directive brings about
improvements in four main areas. First, in terms of intra-EU mobility, the new
scheme offers non-EU nationals the right to stay and work in another EU Member
State without the need for a new visa or a new application. As such, it enables
transferees to continue working without interruptions. Working conditions are
similar to those applicable to EU‑posted workers, but with slightly higher salary
requirements. Member States are required to make information on the scheme
easily available to increase transparency for users.
3.135. Second, with regard to family reunification, the Directive provides
that family members may join the transferee, work in the initial Member State
of posting and in any subsequent Member State where the transferee stays more
than three months and are not subject to labour market tests. Applications for
permits for family members are processed in parallel with those of the transferee,
thus avoiding any delay in family reunification.
3.136. Third, in terms of intra-corporate transferees' rights, the
Directive stipulates equal treatment between transferees and EU nationals with
regard to social security, freedom of association, recognition of
qualifications and pensions. Some limited exceptions exist, such as instances
where the right to family benefits could be constrained in the first Member
State if the transferee's stay is short.
3.137. Fourth, in terms of procedures, facilitation and fees, the Directive
provides for the non-application of labour market tests, the adoption of
decisions on admission within a 90-day maximum limit, and the possible adoption
of simplified procedures for trusted undertakings (including exemptions from
documentary requirements, fast-track admission procedures, facilitated and/or
accelerated visa procedures). Fees are required not to be disproportionate or
excessive.
3.138. Amendments
to the Russian Federation's Federal Law
"On the Legal Status of Foreign Citizens" (Law No. 115-FZ) came into
force on 1 January 2014. Foreign citizens may obtain invitations for entry and
work permits notwithstanding the annual quota, provided a number of conditions
are met. Specifically, they must be assigned to representative offices, branches
or subsidiaries of foreign business entities incorporated in a WTO Member which
operate in the service sector; they must have been employed by the foreign
entity for at least a year prior to their Russian assignment; they must not
exceed a total number of five persons in each representative office, and only
two if they are employed in representative offices of banking institutions;
they must receive a prescribed minimum salary if they are employed in a branch
or subsidiary; they are permitted a duration of stay of three years.
3.139. From 1 August 2014, firms in Singapore are required to advertise their job vacancies on a
new jobs bank administered by the Singapore Workforce Development Agency before
submitting the relevant applications for Employment Passes (EP). This
advertising requirement will, however, not apply to jobs to be filled by
intra-corporate transferees (ICTs), if the EP applicant meets the definition of
ICTs in Singapore's commitments under the General Agreement on Trade in
Services or any applicable free trade agreements to which Singapore is a party.
3.140. The quota limits on long-term work
permit ('B' permits) for EU nationals that Switzerland had
introduced in 2013 expired at the end of May 2014 for most EU nationals.[100]
The quota restrictions had been put in place following the invocation of a
safeguard clause contained in the Agreement on the free movement of persons
between the Swiss Confederation, the European Union and its Member States.
3.141. Turkey's new Law
on Foreigners and International Protection (Law No. 6458) took effect on 12
April 2014. The Law gradually introduces several changes to residence
permit eligibility and procedure, as well as in visa and immigration
processing, as follows. First, business visitors will be limited to a maximum
cumulative period of stay of 90 days, during any 180-day period. Second,
residence permits will no longer be required unless an individual remains in
Turkey 90 days or more, whereas previously a permit was required after 30
days. Both the work permit and the exemption certificate for work permit
can be used instead of a residence permit. In other words, there is no
requirement to obtain a residence permit separately, if a work
permit issued by the Ministry of Labour and Social Security already exists.
Residence permits are still required if issued for other reasons. Third,
"sticker visas" obtained upon arrival will be replaced by an
electronic visa system for eligible visitors.[101]
3.142. The United Arab Emirates
has introduced an immigration reform measure that restructures the country's
short‑term visa programmes by amending existing categories and visa duration
periods. Once implemented, the measure will result in three types of short-term
visas for business-related purposes. First, a multiple-entry visa, which will
allow stays of up to 30 days within an overall visa validity period of 180
days. Such visas are granted for the purpose of conducting business relations
with a public or private establishment licensed in accordance with the business
law of the State. Second, a short-term business visit visa for an urgent
mission can be obtained at the port of entry, which will permit a non-renewable
single‑entry stay of maximum 14 days, but prohibit the holder from working for
third‑parties with or without wages. Third, a long term multiple‑entry
business visit visa, which will require prior approval from the Ministry of
Labour and, unlike the existing corresponding visa, will not be renewable
beyond the initial 90-day maximum period of stay.
3.143. The request for information on specific general economic support
measures generated a disappointing rate of response broadly similar to that of
previous reports. Only three WTO Members volunteered information relating to
economic support measures, down from five at the occasion of the last annual
overview and four at the mid-year report. According to normal practice, the WTO
Secretariat requested confirmation of several such measures, including a large
number obtained from other official sources, from a larger group WTO Members,
but mostly without success and often generating a request not to include those
measures in the Report.
3.144. Hence, according to information provided to the Secretariat or
obtained through other sources 69 new general economic support measures were
put in place by WTO Members during the review period. Slightly under one-third
of these measures were not confirmed or verified by the Member concerned.
Similarly, one-third of the confirmed information on general economic support
measures covers the European Union or its Member States and reflects the
availability of information regarding subsidies of this WTO Member. Although
such transparency is a prerequisite for providing a balanced account of the
overall number of new general economic support measures introduced during the
period under review, the fact remains that the current overview in Annex 4 to a
significant extent reflect measures taken by one Member despite the fact that
many others apply such measures.
3.145. Annex 4 covers measures that provide economic assistance and
financial support targeted at certain sectors, including miscellaneous
financial aid schemes for specific industries. Consistent with previous
reports, agricultural producers and selected industries in the manufacturing
sector were indicated to be main beneficiary sectors of government subsidy
programmes. Among the agriculture related measures listed in annex 4, several
appear to offer specific tax exemptions, rebates on energy or seed inputs,
minimum guaranteed price for some products and some temporary support for
producers of perishable fruits and vegetables. As for the manufacturing sector,
measures include a number of tax rebates and exemptions, various hybrids of
loan guarantees and aid for export promotion. In a new development, Annex 4
contains a significant number of support measures targeting the transport
sector more broadly or manufacturing industries within that sector. Among the
latter, various measures featuring assistance to the automotive sector are
listed in Annex 4.
3.146. Despite the fact that a number of support measures specifically
target SMEs, this category is not as prominent in this review compared to
previous reports. While general regional aid programmes continue to feature in
this report, Members have provided no information on general economic support
related to infrastructure during the period under review. Finally, it is
noteworthy that a number of financial aid schemes targeting, inter alia, the energy sector, food products and export
subsidies, although still operational, appear to have been reduced.
3.147. As highlighted in previous reports, monitoring and reporting of
general economic support measures remain a big challenge. Making up for the
lack of active participation of governments in providing relevant information
would require significant additional Secretariat resources which, at present,
are not available. In addition, given that the verification process, more often
than not, results in the request by Members to remove information, even when
identified in official government sources, any assessment of overall trends may
not only be partial, but possibly inaccurate.
3.148. Finally, it is important to reiterate that Annex 4 of this report
never was limited to general economic support measures linked to the financial
crisis. Although the initial reports saw a significant number of measures
which, in spirit as well as words, were directly related to the crisis, others
were not. Yet, their trade-related effects were potentially important.
3.149. During the period under review 16
Trade Policy Reviews (TPRs) were undertaken.[102]
All of these TPRs provided the WTO membership with a better understanding of
trade and economic developments in each of the Members reviewed. For China this
was the fifth TPR while for Antigua and Barbuda, Dominica, Grenada, St. Kitts
and Nevis, St. Lucia, and St. Vincent and the Grenadines it was their third TPR
as the Organization of Eastern Caribbean States (OECS). For Djibouti and
Mauritius this was their first joint Review. These TPRs were all characterized
by a full and candid discussion among delegations at the TPRB meetings and the
constructive and insightful participation of discussants.
3.150. Although all of the TPRs during the
review period took place in a post-economic-crisis environment, persistent high
levels of unemployment in several countries were a pertinent reminder that
exiting the crisis was a prolonged process for some. As a result, Members'
discussions of the TPRs often touched upon the manner each country or entity
had weathered the crisis, including through the introduction of new policy
measures. There was a general sense that most Members had dealt with the global
economic crisis without resorting to outright protectionist measures. However,
transparency issues surrounding a number of government support measures
nevertheless received some scrutiny.
3.151. Consistent with the last report,
compliance with WTO notification obligations drew many comments and several
Members were urged to improve their compliance so as to ensure the transparency
and predictability upon which the multilateral trading system relies. In most
TPRs it was noted that SPS and TBT regimes remained overly restrictive or
lacked transparency. The importance of introducing and maintaining predictable
investment policies received considerable attention in several of the reviews.
Finally, in a pattern reminiscent of the last report, a number of Reviews
highlighted the continued importance of reducing the gap between bound and
applied tariffs as well as simplifying complex tariff regimes.
3.152. Table 3.14 at the end of this
section shows a few key summary tariff indicators from WTO Members reviewed
over the period as well as a few select others.
11 &
13 February 2014: Tonga
3.153. During the review of Tonga, Members
acknowledged the significant challenges faced by the country as a small island
developing country in the Pacific, including its occasional exposure to severe
natural disasters. They underlined the need to take such vulnerabilities
properly into account in the various activities of the WTO. Despite a solid
performance during the period under review, the very limited size of the
domestic economy and the distance to overseas markets make Tonga an importer
for much of its needs, and an exporter of a narrow range of goods and services.
3.154. Although remittances, earnings of
seasonal workers abroad and donor support remain crucial to the Tongan economy,
they are also represent sources of insecurity for the country's economic
trajectory. Recognizing the capacity issues faced by Tonga, Members commended
it for maintaining an open and liberal trade regime, implementing its ambitious
accession package, respecting its WTO commitments and providing notifications
to this effect. Members welcomed the important strides made by the country to
improve the ease of doing business, including a review of foreign investment
legislation as part of its four-year Strategic Development Framework. In this
vein it was noted that the Ministry of Public Enterprises had been created in
2002 to strengthen the management of state-owned businesses and facilitate
privatizations.
3.155. A number of areas where
improvements could be made were also raised by Members, including strengthening
the regulatory and institutional framework, promulgating a formal bankruptcy
law and ensuring the effective enforcement of intellectual property rights.
More specifically, in the area of tariff and non-tariff measures, several
Members urged Tonga to ensure that all applied tariff rates be kept within
bound levels, and to treat all imported and domestic like goods equally under
its excise tax regime, in line with its WTO commitments. With respect to its
SPS regime delegations took note of the ongoing consideration of a National
Food Bill and the possible establishment of a National Food Authority and
sought further details about changes made to Tonga's SPS processes and their
conformity with the WTO SPS Agreement. In the context of trade agreements and
arrangements, Members noted Tonga's commitment to the completion ACP-EU EEPA
and PACER Plus negotiations, as well as its efforts to implement the Pacific
Island Countries Trade Agreement (PICTA). A series of questions and comments
were also made with respect to the importance of Tonga achieving greater
returns from its agricultural export trade and from fisheries licences sold to
other nations as well as the importance of pursuing policies which contributed
to Tonga's connectivity to the rest of the world.
3 and 5
March 2014: Malaysia
3.156. In its review, Malaysia received
praise for its solid economic performance and resilience, including its growth
rates, low levels of unemployment and low inflation rates, despite unfavourable
global economic conditions during the period of review. The rebalancing of the
Malaysian economy with domestic demand offsetting weak external demand, the
envisaged fiscal consolidation and tax reform plans, the overall improvement of
the business environment and the country's successful integration in global
value-chains were mentioned by several delegations. Members acknowledged
Malaysia's continued pursuit of trade liberalization in a multilateral as well
as regional and bilateral context, noting that seven new agreements had entered
into force over the review period. Reference was also made to Malaysia's
participation in major ongoing RTA negotiations. Several delegations also
acknowledged Malaysia's efforts in connection with the trade facilitation
negotiations and the updating of the ITA.
3.157. A number of specific areas in which
many delegations felt that possible improvements could take place were also
highlighted. In terms of macroeconomic challenges, certain Members expressed
concern over Malaysia's financial dependence on oil revenues, and emphasized
the importance of tax reform and subsidy rationalization. With respect to
transparency of the regulatory and institutional framework, it was noted that
Malaysia could improve the predictability of its administrative procedures and
ensure timely WTO notification of its trade and related measures. Some Members
encouraged further steps in the area of governance, including strengthening
anti-corruption enforcement. In the area of tariffs, several Members expressed
concern over the complexity of Malaysia's tariff structure, tariff escalation,
the persistence of non‑ad valorem
tariffs and tariff-rate quotas, especially in agriculture, the prevalence of
export taxes, the relatively large number of unbound tariff lines and the
growing gap between bound and applied rates. With respect to non-tariff
barriers and regulatory measures Malaysia's progress in anti-dumping,
intellectual property rights, and competition policy were noted. However, many
Members also expressed concern over the continued extensive use of
non-automatic import licences and posed questions in relation to, inter alia, customs valuation, export and import
restrictions/prohibitions, export subsidies, excise duties, taxes and
incentives, local content conditions and halal certification. Several Members
additionally called on Malaysia to join the WTO Agreement on Government
Procurement. On subsidies and state involvement, several delegations expressed
concern that the country's economy continues to be heavily subsidized and that
state involvement in the economy, including through government-linked
companies, remains high. On sectoral matters, Members commended and encouraged
Malaysia's autonomous trade liberalization efforts in the area of services and
encouraged further opening. With respect to goods, notwithstanding Malaysia's
low average duties, concerns were expressed over the continued protection and
support to the automotive sector and to some agricultural products, as well as
high duties in mining.
11 and 13
March 2014: Myanmar
3.158. In Myanmar's first review since
joining the WTO, Members welcomed the political and economic re-orientation
which had allowed the country to seriously begin the path of re-integrating
into the global economy. Delegations praised Myanmar for its macroeconomic
reforms, including the exchange rate regime, the adoption and revision of a
number of trade‑related legislation, such as the 2012 foreign investment law and its
steps towards trade liberalization such as the removal of various non-automatic
import licensing requirements and export taxes. Members recognised that Myanmar
still had a long way to go and welcomed reforms envisaged in areas such as
competition policy and consumer protection laws, intellectual property
legislation and a revision of the foreign investment law. Members urged Myanmar
to continue opening-up, streamlining and simplifying trade and related policies
and procedures thereby providing the kind of transparency and accountability
which are central to a healthy business environment and for connecting to
global supply chains. Members appreciated Myanmar's expressed commitment to the
multilateral trading system and also noted that the country had actively
participated in regional integration and cooperation initiatives, including
ASEAN.
3.159. Attention was drawn to a number of
substantive areas where Members felt progress could be made. With respect to
customs procedures, customs valuation and trade facilitation, Members welcomed
Myanmar's initiatives to improve trade facilitation, including efforts to adopt
a national single window. A number of delegations urged it to implement the
Customs Valuation Agreement and others emphasized the need for further reforms
to the import and export licensing regime. Concerning tariffs and other taxes,
many Members, while recognizing the relatively low average applied MFN tariff,
remained concerned about the significant difference between the average applied
and the average bound rates, the low share of bound tariff lines and the large
number of nuisance duties. Several delegations called for further transparency of
the tax regime. In the context of state involvement in the economy, Members
encouraged Myanmar to further proceed with privatizing state-owned enterprises
and to submit notifications regarding its state trading activities to ensure
transparency. In the area of services, Members acknowledged Myanmar's move to
open up a number of its services sectors, including the recent issuing of
telecommunication licences to foreign companies, promoting public-private
partnership in transport, allowing 100% foreign equity participation in hotel
and related businesses, and the central bank's efforts to develop a master plan
for the financial sector. In the context of foreign investment and the business
environment, Members encouraged Myanmar to further open up its investment
regime by reducing the number of prohibited or restricted sectors, and to make
further progress in areas such as investor protection, contract enforcement,
and facilitation of business start-ups. Members also stressed that proper
dissemination of information regarding various new draft legislation and trade-
and investment-related laws and regulations on-line, and appropriate
consultation with stakeholders before introducing new policies and measures,
are essential for predictability for investors, as well as traders. Among other
things, some Members sought more information about Myanmar's plans to establish
Special Economic Zones and the details of any investment incentives and
privileges for investors. Finally, Members acknowledged Myanmar's capacity constraints
as a least developed country and expressed their readiness to provide capacity
building, including in intellectual property, transparency and notifications,
electricity (hydropower) etc.
22 and 24
April 2014: Bahrain, Oman, and Qatar
3.160. At the review of Qatar, Bahrain and
Oman, Members commended the three countries for their high GDP growth rates,
low inflation rates, generally balanced fiscal positions and current account
surpluses during the period under review. There was general appreciation for
the programmes undertaken in education, healthcare and sustainable development
as well as the initiatives to promote business-friendly environments. Despite
their many similarities, including as members of the GCC, it was recognized
that the three countries have unique characteristics that set them apart.
Nevertheless, many delegations recalled that common challenges also exist for
the countries' longer term resilience, including diversifying their economies
away from hydrocarbons, broadening the economic, export and fiscal base of
their economies and managing a large expatriate work force. Several delegations
expressed interest in current and future policy instruments to address the
latter. With respect to the countries' trade and investment policies, Members
commended Qatar, Bahrain and Oman on their generally low tariffs, few
non-tariff barriers to trade and relatively open investment regimes. It was
noted that reforms in the area of customs procedures, including the
introduction of single windows in Qatar and Bahrain, would see the three
countries well ahead of their upcoming trade facilitation implementation
requirements. The three Members were praised for never having resorted to using
anti-dumping, countervailing or safeguard measures and it was noted that none
had used the WTO Dispute Settlement Mechanism. As signatories to the ITA, the
three countries were to participate in the extended ITA, currently under
negotiation. As members of the GCC Customs Union, Qatar, Bahrain and Oman apply
a common external tariff, and common legislation on customs procedures,
valuation, as well as contingency measures. However, each maintains its
internal customs posts, lists of restricted and prohibited goods, as well as
some exceptions to the common external tariff. Similarly, it was acknowledged
that the GCC Customs Union did not yet integrate its parties' trade and related
policies in other areas, such as services, IPRs and public procurement, and
divergences remain on the application of certain standards or technical regulations.
In this respect, Members enquired as to how Qatar, Bahrain and Oman were
planning to further harmonize their trade-related legislation within the GCC
framework and the intentions of the GCC with respect to new or stalled
bilateral free trade agreements.
3.161. Members also touched upon a number
of substantive areas where possible improvements could be achieved. In the area
of customs procedures and tariffs, delegations noted bound rates were
significantly higher than applied rates in most cases, thereby significantly
limiting the predictability of the tariff regimes. In addition, several
delegations encouraged Bahrain to increase its level of bindings and Qatar to
publish its tariff schedule. Members also requested more information about
plans to reform or abolish consularization requirements by Bahrain and Oman. As
to intellectual property rights, delegations encouraged Qatar, Bahrain and Oman
to improve protection of IPRs by, inter alia,
strengthening their institutional frameworks. In the areas of services and
investment Members inquired about plans to reduce restrictions and barriers to
FDI, which in the three countries exist at different degrees, for example on
foreign ownership restrictions. Some raised the issue of the important role of
state-owned enterprises in the three countries' economies and enquired as to
plans for future privatization of these. Several Members noted that the three
countries had varying levels of GATS commitments, and encouraged them to
further liberalize services as this particular sector, especially tourism,
telecommunications, construction, finance and transportation, held potential
for growth and economic diversification. Regarding notifications and
transparency, it was noted that the three delegations had already committed to
updating their notifications to the WTO thereby enhancing the transparency of
their trade policy regimes. On government procurement, interest was expressed
concerning the intentions of the three countries to join or become observers to
the GPA. Several Members enquired about the import ban on bovine and ovine meat
and the main food safety law in Qatar and Bahrain and how it aligned with food
standards within the Codex Alimentarius, ISO, and other bodies. Finally,
Members expressed satisfaction with the strategies that were under way in each
country as outlined in Qatar Vision 2030, Bahrain Vision 2030, and Oman Vision
2040, as well as the manner open trade and investment regimes formed part of
these strategies.
26 and 28 May 2014: Ghana
3.162. At the review of Ghana, Members commended the country for its
political stability, strong democratic foundations and the strengthening of
legal protection, including through the recent creation of specialized
commercial courts. All of these have improved the business environment and
contributed to attracting foreign direct investment. It was noted that Ghana
had experienced impressive economic growth and social development in recent
years which had, in turn, halved the level of extreme poverty placing Ghana in
the group of medium-income developing countries. However, Members expressed
concern over recent serious macroeconomic imbalances and enquired about Ghana's
plans for macroeconomic stabilisation. In particular, clarification was sought
about recent foreign exchange restrictions, plans for the diversification of
the economy and for better governance in the oil sector. Several Members urged
Ghana to adopt a competition policy and also expressed concern about the
increase in the number of restricted services sectors and in the minimum
capital amounts to levels that exceed GATS commitments. Others enquired about
the general increase in local participation provisions in Ghana's recent
statutes in the shipping and energy sectors, including petroleum. A number of
delegations encouraged the country to improve the transparency of its legal
system and to better meet its WTO notification obligations. Overall, Ghana's
commitment to the multilateral trading system was welcomed and it was noted
that Ghana had actively participated both in ECOWAS negotiations towards a
common external tariff (CET), and in an Economic Partnership Agreement with the
European Union
3.163. A number of specific subjects where
Members saw room for improvement were also raised. In the area of trade
facilitation, Members called for rapid and far-reaching reforms of border
procedures, in particular inspection, scanning, and port clearance, urging
Ghana to reduce the numerous entities which intervene at the border and collect
fees. With respect to tariffs and other taxes, the very low level of tariff
binding commitments by Ghana received attention as did the large gap between
applied and bound rate. It was also noted that Ghana maintains several other
duties and charges, despite their binding at zero under the GATT, and that
numerous exemptions from border taxes further complicate the tax regime. More
information was sought about Ghana's incentive schemes, including under the
Free Zone regime. A number of delegations made reference to the importance of
new legislation that would clarify certain TBT issues and noted the 2012
modernization of Ghana's SPS framework. Concerns were raised about the
enforcement of IPR legislation. Members generally applauded the good
performance of Ghana's agriculture sector, but invited the authorities to
notify the Cocoa Marketing Company to the WTO Committee on State Trading
Enterprises. Finally, Members commended Ghana's efforts to accelerate the
modernisation of its services sectors, in particular information and
communication technology, including the issuing of licences to foreign
telecommunication companies. In financial services, Members acknowledged the
steps taken through new laws to facilitate access to credit by small operators.
17 and 19
June 2014: The Organization of Eastern Caribbean States (OECS)[103]
3.164. In the review of the OECS, the
third of its kind, Members recognized that OECS-WTO Members have a narrow
economic base, are highly reliant on imports and are frequently affected by
natural disasters, especially hurricanes. They commended the OECS-WTO Members
on their prudent macroeconomic policies in the aftermath of the global
financial crisis, including their fiscal consolidation and debt restructuring
programmes, the streamlining of their taxation systems, and the introduction of
Value Added Tax. Delegations commended the OECS-WTO Members' strong support for
the multilateral trading system and their participation in the negotiations on
trade facilitation in particular was highly appreciated. There was broad
recognition of the ECS-WTO Members' open investment regime although more was
needed in terms of ease of doing business to attract foreign investment.
Members welcomed the signing of the revised Treaty of Basseterre and the
subsequent establishment of the OECS Economic Union, which allows for the free
movement of people, goods and capital across the OECS region. This would serve
as a model for economic and financial integration, which could result in
sustained economic growth. Some delegations noted that full implementation of
the CARIFORUM-EU Economic Partnership Agreement would require legislative
changes that could facilitate the implementation by OECS-WTO Members of WTO
commitments in areas where they are lagging.
3.165. A number of specific substantive
issues were raised where Members considered improvements could be undertaken.
For example, although the OECS-WTO Members were generally commended for the
openness of their economies, most of them still applied customs service charges
and other taxes on imports. Another area of concern was the continued use of
import licences as these can be trade-restrictive. OECS-WTO Members were also
encouraged to harmonize their tariff schedules. Delegations were appreciative
of the fact that the OECS-WTO Members had started dismantling their export subsidy
schemes and expressed their hope that these would be abolished by end 2015, as
required by WTO rules. Some Members noted that a number of issues which had
been identified during the previous review remained outstanding, including the
adoption of legislation regarding competition policy and contingency measures,
and compliance with notification requirements, particularly those pertaining to
SPS, and urged OECS-WTO Members to address these. Given the constraints faced
by the OECS-WTO Members, the collaboration and technical assistance of other
WTO Members in this matter would be most helpful.
1 and 3
July 2014: China
3.166. In the fifth review of China,
Members commended its determination to carry out challenging reforms and
emphasized that the current review came at a particularly opportune time
following the announcement of an ambitious and comprehensive reform agenda.
They also remarked that as the major global merchandise trader China needed to
recognize the increased responsibility that comes with becoming a lead player
in the multilateral trading system. It was noted that China had already taken
some steps to rebalance economic growth through policies to promote consumption
and there was general recognition that further liberalization of the domestic
market could play an important role in this endeavour.
3.167. A number of systemic and
substantive areas in which improvements could be achieved were outlined at the
meeting. With respect to transparency, several delegations stated that as the
world's largest trader China bore great responsibility for supporting a
predictable and transparent global trading system. This included ensuring
notification obligations were fulfilled in a timely way. It was noted that
although China had committed to publish regulations and other measures related
to or affecting trade in goods, services, IPR or foreign exchange in a single
official journal of all laws, including in a WTO language, this had yet to be
accomplished. Although several Members expressed their appreciation for China's
difficulties in ensuring the consistent implementation of laws, regulations and
policies across the country, they also highlighted issues which remained
crucial for an improved business environment and to limit the risk of
discretionary treatment. Concerning the role of the State, some Members pointed
out that China continued to pursue policies to support domestic industries,
including those controlled by state-owned enterprises. Given China's size and
importance, this had on occasion led to overcapacity and excessive credit
expansion. On TBT, a number of Members expressed concern with respect to the
use of technical requirements that deviated from international standards and
the insufficient involvement of interested stakeholders in the standardization
process. Regarding SPS measures, Members questioned their scientific
justification in certain instances, and requested China to make further efforts
to increase transparency and predictability in this area. Other substantive
concerns raised by Members included China's support policies, the use of export
restraints and export taxes, restrictions on services market access, the
retaliatory use of trade remedies, enforcement of IPRs, the protection of trade
secrets and restrictions to foreign investors in certain areas. Some Members requested further information on the
functioning of the China (Shanghai) Pilot Free Trade Zone. China was commended
for its leadership in submitting its notification of Category A provisions
under the new Trade Facilitation Agreement and in opening its market to
products from LDCs. Some Members urged China to make further efforts to
conclude the negotiations to expand the Information Technology Agreement and to
become a member of the GPA.
23 and 25
July 2014: Panama
3.168. In the review of Panama, Members
praised the country for achieving outstanding economic growth, greater
integration in world trade and high levels of foreign direct investment. These
owed much to open trade and investment policies which had enabled Panama to
become a major exporter of international services. Panama was encouraged to
strengthen the linkages between buoyant sectors and the rest of the economy,
reduce social disparities and allocate more resources to social programmes,
including education. Panama's overall sound and stable macroeconomic policies
were recognized, but several delegations cautioned about the challenges of a
rising fiscal deficit and encouraged Panama to consolidate its public finances.
Panama's strong commitment to the multilateral trading system was welcomed and
it was noted that the country's active use of regional and bilateral trade
agreements had allowed it to deepen its integration into the global economy.
Panama was commended for moving ahead with significant legislative and
regulatory reforms, including strengthening the legal frameworks for
competition and government procurement, overhauling the IPR regime to meet
international obligations, amending the Free Zones Regime and liberalizing
mobile telephony. Members also welcomed Panama's measures to facilitate trade,
including the modernization of customs procedures, the introduction of a Single
Window for exports and an authorized economic operator scheme. In this context,
Panama was encouraged to establish a Single Window for imports.
3.169. In a number of areas Members
expressed the hope that further improvements could be made. With respect to
tariffs, while acknowledging Panama's efforts to simplify its tariff structure,
Members expressed concern that applied tariffs on a number of products exceed
bound rates. Some delegations enquired about Panama's rationale for applying
different taxes on national and imported fuels mixed with ethanol, and urged
Panama to remove discriminatory taxes. In the areas of TBT and SPS measures,
Members flagged a number of issues regarding the elaboration and implementation
of technical regulations and sanitary and phytosanitary measures, in particular
with respect to the importation of food products and live animals, and
requested Panama to make further efforts to enhance transparency and
notifications in these areas. A number of delegations welcomed Panama's
amendments to its free trade zones legislation and the removal of export
subsidies, to meet its obligations under the Agreement on Subsidies and
Countervailing Measures. Some requested more information on customs controls to
monitor the entry, transit and exit of goods through the Colon Free Zone and
about incentives granted in this area. Although Members generally acknowledged
Panama's open trade and investment regime in the services sector, questions
were raised regarding foreign investment restrictions on maritime auxiliary
services. Finally, some delegations sought clarification on Panama's
restrictions with regard to retail trade and encouraged it to further
liberalize this sector.
16 and 18
September: The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
(Chinese Taipei)
3.170. At the review of Chinese Taipei,
Members praised it for the continued progress towards trade and investment
liberalization, further integration into the global economy and economic
diversification which had characterized its recovery after 2009. Delegations
welcomed Chinese Taipei's unilateral liberalization efforts through the setting
up of Free Economic Pilot Zones, further reductions of foreign investment
limitations and measures to facilitate trade, including implementation of a
single window system to accelerate customs clearance. Chinese Taipei's efforts
in implementing, important legal reforms to improve its IPR protection were also
welcomed by several delegations. Some noted the need to continue identifying
services sectors as key areas for further development and diversification.
Members noted Chinese Taipei's commitment and constructive engagement in
multilateral and plurilateral trade liberalization initiatives and acknowledged
its active engagement in bilateral and regional economic integration, e.g.
signing RTAs with China, New Zealand and Singapore during the period under
review. Noting that the economy of Chinese Taipei has become increasingly
linked with China, through negotiations under the Economic Cooperation
Framework Agreement (ECFA), several Members requested further detailed
information on the status of the follow-up agreements of the ECFA. Members
expressed their appreciation of Chinese Taipei's work and support in the areas
of aid for trade and trade related technical assistance.
3.171. Members also noted a number of
issues and areas where improvements could be made. With respect to Free
Economic Pilot Zones some encouraged Chinese Taipei to expand the benefits of
the FEPZs across the territory. Concerning the foreign investment regime
Members welcomed Chinese Taipei's progressive reduction of limitations on
foreign investors under the Negative List for Investment by Foreign Nationals.
Some delegations called for continued progress by Chinese Taipei in improving
the transparency and predictability of the investment review process. In the
area of tariffs, it was noted that the tariff structure continues to be
complex, involving a multiplicity of rates. Members encouraged Chinese Taipei
to simplify the tariff so as to enhance the predictability and greater
transparency for traders. On TBT and SPS measures, Members urged Chinese Taipei
to improve the alignment of its standards and technical requirements with
international standards, to simplify certification and testing requirements and
streamline conformity assessment procedures. Members urged Chinese Taipei to
improve its notification procedures to ensure that TBT and SPS measures were
notified to the WTO at the draft stage, thereby leaving sufficient time for
other Members to comment and for these comments to be taken into consideration.
Agriculture continues to be a major recipient of government assistance,
including domestic support and border protection. Several delegations noted
that the tariff schedule has barely changed since the last review and that the
average tariff for agriculture is much higher than that for non-agricultural
products. A number of Members requested information on fuel subsidies for
agriculture and fishing. Members also commented on the fact that tariff quotas
on some agricultural products have remained consistently under-filled, and
encouraged Chinese Taipei to review the necessity of maintaining these restrictions.
Chinese Taipei was encouraged to improve the scientific basis for measures
governing its trade in agricultural products and the testing and inspection
regime at the border. Finally on services, while recognizing the importance of
the sector to Chinese Taipei, several delegations urged it to continue opening
up its services sector and remove trade barriers, including market access
conditions, which are still in place.
24 &
26 September: Mongolia
3.172. At its review, Members noted that
Mongolia faced a number of bottlenecks and barriers to trade and investment
after several years of rapid economic growth, rising incomes, and greater
prosperity. The economic expansion over the past few years has been based on
investments in mining and exports of minerals and it was generally noted that
growth should continue in this sector given adequate new investment. Several
delegations noted that while exploitation of minerals is an opportunity for
Mongolia it also makes the economy vulnerable to sudden swings in prices and
demand. In this context, the importance of economic diversification was
emphasized by some. Several delegations noted recent programmes to improve
productivity in agriculture. Although Mongolia does not have any regional trade
agreements it does qualify under a number of Members' GSP schemes. It was
negotiating with Japan on an Economic Partnership Agreement and intends to
accede to the Asia-Pacific Trade Agreement. Furthermore, several delegations
insisted they have had high-level meetings and concluded agreements related to
trade and investment with Mongolia. Several delegations recognized the
importance the country attaches to the multilateral trading system, which was
highlighted by its notification of its Category A commitments on trade facilitation
in July 2014. Members also noted the infrastructure challenges, and as a result
the cost of transportation, faced by Mongolia as a large landlocked country.
Several delegations acknowledged that Mongolia has demonstrated a commitment to
make progress towards allowing more competition, reducing trade barriers, and
introducing measures to encourage diversification of its economy.
3.173. Several areas in which Mongolia was
encouraged to consider further improvement were also raised by Members. In the
area of investment, it was widely recognised that the new Investment Law of
2013 and the simplified investment procedures have improved the investment
climate. However, concerns remained about the new legislation and its
implementation, including the differentiation between foreign and domestic
investors through minimum paid-in capital requirements and narrowing of the
range of stabilized fees and taxes. In the area of government, several
delegations suggested that tendering procedures and transparency in the selection
process could be improved and that Mongolia would benefit from acceding to the
GPA. Some concern was expressed that the development of a new minerals law had
led to delays in issuing exploration and mining licences which had a knock-on
effect on investment in the sector. It was noted that some bound tariffs of
zero still had applied tariffs of 5%, excise duties on some domestically
produced products were lower than on imports and import prohibitions remained
in place on some products. Some delegations emphasized that many technical
regulations, standards, and SPS measures in place in Mongolia are not aligned
with international standards. On a more institutional note, it was highlighted
by some delegations that, in many areas, including import licensing, investment
approval, and even technical assistance, considerable time and cost was
involved while waiting for approval and urged further improvements in this
area.
22 & 24 October: Djibouti and Mauritius
3.174. At their joint Review, Members
recognized that Djibouti and Mauritius are both small countries highly exposed
to exogenous shocks, including fluctuating international market and climatic
conditions. Both countries have recorded relatively good GDP growth in spite of
the global economic crisis. Development strategies are being implemented to
further stimulate long term growth and improve living standards. Members
commended both Djibouti and Mauritius on their ongoing reform efforts to
facilitate trade and further improve their business environments including through
the dismantling of their remaining restrictions to investment and through
investment in relevant infrastructure. They urged Mauritius to ensure that its
import permit system is not used to protect domestic producers, and Djibouti to
fully implement the WTO Customs Valuation Agreement. Some Members encouraged
both countries to ensure the sustainability of their ongoing reforms with a
view to further diversifying their economies, particularly in the case of
Djibouti.
3.175. Members commended Djibouti and
Mauritius for their support to the multilateral trading system and
congratulated Mauritius for having already submitted its trade facilitation
Category A commitments. Djibouti and Mauritius were encouraged to meet their
notification obligations and to further align their procedures for developing
and implementing standards and technical regulations with international norms.
Several delegations indicated the importance of technical assistance in this
context. Members also sought further information about progress made in the
implementation of COMESA whilst others questioned the effectiveness and
consistency of tax policies and practices in Djibouti and Mauritius. Attention
was drawn to Mauritius' low level of tariff bindings and some delegations asked
the country to comply with its national treatment commitments when imposing
excise taxes on spirits. There was general appreciation for the steps taken by
Djibouti and Mauritius to improve their regulatory frameworks and it was
recognized that both countries had undertaken initiatives towards strengthening
their respective IP regimes. Some Members also raised the large-scale State
intervention in both economies and sought further clarifications on state-owned
enterprises in Mauritius and the halt to privatization processes in Djibouti.
Some Members sought information about foreign participation in government
procurement, in particular existing mechanisms to ensure internationally
competitive bidding processes. Finally, agricultural reforms in Mauritius as
well as energy and services reforms in both countries were widely welcomed as
important steps towards attracting additional investment.
Table 3.14 Trade Policy Reviews from mid-November 2013 to end-October 2014 -
summary tariff indicators
|
|
Simple applied average (%)
|
Duty freea
|
Non-ad valorema
|
|
Total
|
WTO agriculture
|
WTO
non-agriculture
|
|
Tonga
|
11.5
|
10.7
|
11.7
|
15.0
|
0.0b
|
|
Malaysia
|
5.6
|
2.9
|
6.0
|
64.6
|
0.9
|
|
Myanmar
|
6.1
|
8.9
|
5.7
|
4.0c
|
0.0
|
|
Bahrain, Kingdom of
|
5.1
|
7.5
|
4.6
|
11.1
|
0.4
|
|
Oman
|
5.5
|
10.1
|
4.6
|
11.1
|
0.3
|
|
Qatar
|
5.0
|
7.1
|
4.6
|
11.1
|
0.3
|
|
Ghana
|
12.8
|
17.3
|
12.0
|
12.2
|
0.0
|
|
Antigua and Barbuda
|
11.3
|
18.1
|
9.9
|
9.5
|
0.0
|
|
Dominica
|
12.3
|
26.9
|
9.5
|
22.4
|
0.0
|
|
Grenada
|
11.4
|
19.2
|
9.9
|
5.4
|
0.0b
|
|
St. Kitts and Nevis
|
10.3
|
16.1
|
9.2
|
24.0
|
0.3
|
|
St. Lucia
|
9.7
|
17.8
|
8.0
|
39.6
|
0.1
|
|
St. Vincent and the Grenadines
|
10.9
|
17.6
|
9.6
|
8.8
|
0.2
|
|
China
|
9.4
|
14.8
|
8.6
|
9.8
|
0.5
|
|
Panama
|
7.6
|
13.7
|
6.4
|
34.5
|
0.3
|
|
Chinese Taipei
|
7.8
|
23.0
|
5.2
|
30.2
|
1.8
|
|
Djibouti
|
21.0
|
15.0
|
21.9
|
0.1
|
0.0
|
|
Mauritius
|
2.3
|
1.8
|
2.3
|
88.8
|
4.8
|
|
|
|
|
|
|
|
|
Selected others:
|
|
|
|
|
|
|
European Union
|
6.5
|
14.8
|
4.4
|
24.7
|
10.7
|
|
Japan
|
6.3
|
17.5
|
3.7
|
40.5
|
6.7
|
|
United States
|
4.7
|
8.5
|
4.0
|
37.0
|
10.9
|
a Per cent of total tariff lines.
b Non-ad valorem duty applies to one
line.
c 46.9% 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. All calculations are based on 2013 figures, except
Oman and Mauritius (2014), Japan (FY2012) and United States (FY2012).
Source: WTO Secretariat calculations, based on data received by the
authorities.
3.176. During the period 15 November 2013
to 15 October 2014, WTO Members notified 9 RTAs to the WTO (16 notifications)
as compared to 23 RTAs (36 notifications) during 15 October 2012 to 15 November
2013. As of 15 October 2014, the total number of RTAs notified to the WTO and
to the GATT before it, amounted to 253 (117 covering goods and services, 135
goods only and one services only). The WTO Secretariat has also identified and
verified, through the respective parties, 63 RTA s that are in force but not
yet notified to the WTO.[104]
While the number of RTAs notified during the current period is lower than in the
previous period, there are a number of negotiations that are ongoing or have
been completed but where the agreements are not yet in force. Thus it is likely
that the number of RTAs will continue to grow.
Chart
3.16 Number of physical RTAs that entered into force since 2004
Source: WTO Secretariat.
3.177. Most WTO Members continue to
negotiate new RTAs. Judging from overall notifications, RTA activity is
strongest in Europe (22% 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 (15%) and South America and the CIS region (11%
each) (Chart 3.17).[105]
These regions also continue to be active in RTA negotiations.
Chart
3.17 Regional Trade Agreements in force by region
Source: WTO Secretariat.
3.178. Among current RTA negotiations,
there is considerable interest especially in the Trans‑Pacific Partnership
(TPP) negotiations, currently between 12 partners, the Regional Comprehensive
Economic Partners (RCEP) between 16 partners and the Trans-Atlantic Trade and
Investment Partnership (TTIP) between the European Union and the United States.[106]
Other key negotiations being watched with interest, include the Tripartite
Agreement in Africa, the Pacific Alliance in Latin America, as well as the
Customs Union between Belarus, Kazakhstan and the Russian Federation, which is
evolving into the Eurasian Economic Union and planning to enlarge further to
other CIS members. Some of the negotiations involving a number of parties in
particular have been ongoing for several years and it is not clear when they
are likely to be completed or what additional liberalization they will achieve,
given especially that they intend to tackle complex behind the border issues.
Negotiations between Canada and the European Union for instance appear to have
been protracted and may be a precursor of difficulties in other ongoing
negotiations.
RTAs and
the multilateral trading system
3.179. While the upward trend in RTAs has
clearly been established, and negotiations for new RTAs continue, less is known
about the scope and depth of coverage of the agreements themselves and their
potential impact on international trade relations. In particular, do they only
liberalize a few tariff lines or all of their tariffs? Do they make additional
services commitments, or add new provisions for which there are no WTO rules,
such as in investment, competition? And also if they do add new elements, how
significant are they?
3.180. Of the agreements that have been
notified to the WTO and for which information is contained in the WTO's RTA
database, over 55% notified since 2000 contain provisions on both goods and
services. The figure rises to almost 65% if notifications over the last five
years (since 2009) are taken into account, thus showing a tendency among newer
RTAs to include both goods and services and other provisions. Moreover, these
are not just agreements involving developed Members of the WTO. The vast
majority of these agreements involve at least one developing partner, while
around 45% of the agreements notified since 2000 containing services provisions
are RTAs between developing Members only. Similarly, the number of RTAs
containing investment provisions or chapters has been rising and since 2000
around half of RTAs notified to the WTO contain provisions on investment. Other
provisions commonly included in RTAs today include trade defence measures
(anti-dumping, countervailing and safeguards), SPS and TBT, intellectual
property rights, and dispute settlement but also issues for which there are no
WTO provisions such as competition policy, government procurement, electronic
commerce, environment and labour
3.181. Thus, and as confirmed by the
literature that has emerged on RTAs, RTAs are not only increasing rapidly but
are also changing in terms of their scope and ability to tackle border, and
behind the border, measures. However, one cannot necessarily conclude from this
observation that they are moving significantly beyond the multilateral rules on
all provisions. Ongoing research by the WTO Secretariat and others, including
the OECD, appears to confirm that while on certain issues RTAs are breaking new
ground, for others, they tend to simply reaffirm the WTO commitments of the
parties.
3.182. Almost all RTAs tend to increase
preferences for the parties, whether in goods or services; by definition, this
is what they are supposed to do. With regard to preferences in goods, a large
number tend to liberalize between 80-90% of intra-RTA trade at the end of the
implementation period. Nevertheless, tariff peaks in sensitive products (such
as agricultural products, textiles and clothing) tend largely to not be
liberalized in RTAs as well, showing perhaps the limits of preferential tariff
liberalization.[107]
3.183. In services, in some cases, the
additional market access provided especially vis a vis commitments in the GATS,
is limited. Even if significant improvements are made in RTAs compared to GATS
commitments, in many cases, the applied regime is much more liberal, thus no
additional market access gains are made. Nevertheless, there is a commitment to
bind at a more liberal level than in the GATS.
The use of templates and the creation of families
of RTAs
3.184. While tariff and services market
access liberalization reflects the sensitivities of countries vis a vis their
RTA partners, for some other provisions, there is a remarkable similarity in
the architecture and language used between certain RTAs. The
"template" approach results in similar "families of RTA
provisions". Thus, in services, the two most frequent approaches to
schedule commitments are a GATS-based positive list approach or a NAFTA-based
negative list approach. RTA negotiators tend to have a preference for one or
the other bearing in mind historical and geographical considerations, with
countries in the Americas tending to use the NAFTA-based approach, while Africa
and Asia tend to use the positive list approach. The EU agreements, in part
because of the nature of the European Union, often use a hybrid approach.
Recent research by the WTO Secretariat has shown that with regard to services
rules, a similar negative or positive list approach is taken, with the EU
agreements taking a hybrid approach.[108]
3.185. Such similarities are also found
for other provisions. For instance, agreements that have provisions in
competition policy tend to have a similar preference for rules based around
agreements negotiated by the United States, or the European Union. Depending on
which format is chosen, the architecture of the competition chapter can be
considerably different. In dispute settlement as well, there appears to be a
strong preference for the ad hoc adjudicative model which provides right of
access to third party adjudication through the establishment of an adjudicator,
in agreements involving countries in the Americas and Western Europe (except
Turkey). The political model which is based more on consultations and political
settlement of disputes is preferred by the CIS agreements and in Asia, while
African plurilateral RTAs tend to use a standing tribunal approach. Even for
rules of origin, where one would expect (and does in many cases find) the most
divergent rules, almost half of the agreements notified to the WTO (71 out of
192) use either the EU or NAFTA rules of origin.[109]
A preference for WTO rules for some issues
3.186. There are some provisions for which
divergence between RTA rules and MFN rules appears to be less marked and there
is a preference for the multilateral standard even in RTAs. For instance,
recent work by the WTO Secretariat shows a strong preference for reaffirming
WTO rights and obligations of the RTA parties on anti-dumping.[110]
Out of 192 RTAs examined, 68% reaffirm or substantially replicate the language
of the WTO Agreements, while a further 21% do not explicitly refer to
anti-dumping measures, thereby maintaining the parties' WTO rights and
obligations. Most RTAs also tend not to move beyond existing WTO rules on SPS
and TBT measures. Rather, it is probably easier to concentrate on memoranda of
understanding on conformity assessment. In intellectual property rights (IPRs),
out of 174 RTAs containing IPR commitments, 76% contained references to IPR
protection and 61% of the 174 RTAs simply reaffirm the rights and obligations
of the parties under the TRIPS Agreement.[111]
3.187. Finally, some issues such as
subsidies, with the exception of export subsidies, are notably absent from RTA
texts. Thus, while a number of RTAs explicitly forbid the parties from using
export subsidies, the same RTAs are silent on tackling the issue of subsidies
or domestic support.
But also for new issues for which there are no WTO
rules
3.188. There are some provisions that are
increasingly being included in RTAs, especially those that have been negotiated
in more recent years, for which there are no equivalent WTO rules. While some
issues such as commitments with regard to the environment and labour standards
are found in a smaller number of RTAs, others such as investment provisions
(going beyond services) and to a lesser extent, competition, are increasingly
becoming a standard feature of modern RTAs. In competition, there are certain
common features that are found across many RTAs such as recognition of
anti-competitive behaviour and recognition that competition policy should be
used to combat such behaviour. Most agreements with competition principles also
tend to agree that State monopolies should not discriminate or behave in an
anti-competitive manner.
3.189. Labour and environment provisions
tend to be restricted to cooperation between the parties, agreement to abide by
international treaties and to not use their laws to restrict trade. However,
the use of these provisions has evolved over time, moving from general policy
objectives in the preamble, to more detailed sections, chapters or side letters
on these issues. Provisions on electronic commerce are also increasingly
finding their way into RTAs although at present they are largely limited to
agreements involving the OECD countries.
3.190. While these new issues address new
realities in international trade, with perhaps the exception of investment,
commitments made in the RTAs on these issues are still relatively limited
compared to issues for which WTO provisions exist. In addition, several of
these issues tend to be carved out of dispute settlement mechanisms of RTAs and
are thus not really enforceable. WTO work on dispute settlement in RTAs for
instance showed that out of 147 agreements that use the ad hoc tribunal model
19% and 12% excluded matters relating to the environment and labour,
respectively from the dispute settlement provisions of the agreement, while
exclusions of competition provisions were found in around 46% of cases.[112]
Implementation remains a
significant gap
3.191. While the WTO's Transparency
Mechanism for RTAs has allowed us to understand RTAs better, this understanding
is based on the texts of agreements and the commitments made by the parties. Little
information is available on how the agreements are implemented and although
there is a provision for such information to be provided by Members in the
Transparency Mechanism, the Secretariat has yet to receive such end of
implementation reports. Even where the commitments are clearly measurable such
as the elimination of tariffs, there is only anecdotal information on the
extent to which these provisions are utilized; in some cases, low utilization
of preferences may indicate that the rules of origin may be too stringent. If
there are disputes between parties to RTAs, it is difficult to get this
information and finally, although a number of mechanisms to implement,
negotiate and monitor RTA provisions are included in the RTAs, little
information exists on whether they function as envisaged by the agreement or
what their evaluation of the agreement is.
3.192. Government procurement continues to be an area of very significant
ongoing activity and progress in the WTO. A revised and improved Agreement on
Government Procurement (GPA) entered into force during the review period. In
addition, negotiations were concluded on two accessions to the Agreement –
those of Montenegro and New Zealand - and good progress was made on other
pending accessions. An integrated Government Procurement Information Resource
(the "e-GPA portal") was created to serve as a market access
information tool for businesses and governments, and a new cooperation
arrangement has been established to facilitate capacity building related to GPA
accessions in Central and Eastern Europe and neighbouring countries.
3.193. The revised WTO Agreement on Government Procurement (GPA) entered
into force on 6 April 2014, after two-thirds of its Parties accepted the
Protocol Amending the Agreement. Subsequently, two additional Parties also
provided their instruments of acceptance. The Parties for which the revised
Agreement is now in force are: Canada; the European Union, including its
twenty-eight member States; Hong Kong, China; Iceland; Israel; Japan;
Liechtenstein; the Netherlands with respect to Aruba; Norway; Singapore;
Chinese Taipei; and the United States.[113]
3.194. As reported in the 2013 Annual Overview, the revised Agreement
comprises:
· a streamlined and
modernized legal text, to facilitate the use of electronic procurement tools
and provide additional flexibilities for all Parties. Improved transitional measures (special and
differential treatment) have been provided for developing WTO Members that join
the Agreement. The revised Agreement also reinforces the scope provided by the
original Agreement to promote the conservation of natural resources and protect
the environment; and incorporates new anti-corruption measures relating to
procurements covered by the Agreement.
· a significant expansion of
the Parties' market access commitments under the Agreement, estimated as being
worth in the range of $80-100 billion annually. This includes:
(i) coverage of, at a minimum, 400-500 additional procuring entities by
the participating governments; (ii) coverage by three major Parties of
Build-Operate-Transfer arrangements (BOTs); (iii) additional coverage of
services procurement by the majority of Parties, particularly in the area of
telecommunications services; and (iv) miscellaneous other additions to the
Agreement's coverage.
3.195. Concurrently with the revisions to the GPA itself, agreement was
also reached on a set of work programmes to be conducted by the Committee in
Government Procurement to promote transparency and improve the implementation
of the Agreement.[114]
Work related to the programmes formally commenced in 2014 and is expected to
gather momentum in 2015.
3.196. With the coming into force of the revised Agreement, the GPA
Parties' attention has also shifted to ongoing work on accessions to the
Agreement by additional WTO Members, including a good number of developing
and/or transition economies. As reported in last year's Annual Overview, on 1
July 2013, Croatia became the 43rd WTO Member to be covered by the
GPA, as a consequence of its having joined the European Union.
3.197. Subsequently, on 29 October 2014, negotiations were concluded with
respect to Montenegro's and New Zealand's accessions to the Agreement. In
Montenegro's case, this fulfilled a commitment made at the time of its WTO
accession in April 2012. For Montenegro,
the negotiations were concluded essentially in one year; in New Zealand's case,
it was a two-year process. Much
satisfaction was expressed with the overall result by Montenegro and New
Zealand and by the existing Parties to the Agreement, who also shared hopes
that the two WTO Members' successful experience would encourage other WTO
Members to come forward to join.
3.198. The foregoing developments build on the call issued by the GPA
Parties' Ministers in their December 2013 meeting at Bali, in which the
Ministers stated as follows: "We
invite and encourage all WTO Members that are not yet Parties to the Agreement
to consider the possibility of accession, noting that developing and least
developed Members can, subject to negotiations, benefit from the improved
transitional measures incorporated in the revised Agreement…. Equally, we
invite all interested WTO Members to become Observers to the Committee on
Government Procurement ("the Committee"), in order to gain
familiarity with the opportunities that accession to the Agreement can
provide".[115]
3.199. A total of eight other WTO Members — Albania, China, Georgia, Jordan,
the Kyrgyz Republic, Moldova, Oman and Ukraine — have applied to join the GPA
(see Box 2). A further five WTO Members have provisions regarding accession to
the Agreement in their respective Protocols of Accession to the WTO: the Former
Yugoslav Republic of Macedonia, Mongolia, the Russian Federation, Saudi Arabia
and Tajikistan.
Box 2 The expanding membership of the GPA
(updated from last year's Annual Overview)
|
The forty-three WTO Members currently covered by
the Agreement:
|
|
Armenia
Canada
the European Union and its 28 Member States
Hong Kong, China
Iceland
Israel
Japan
Korea, Republic of
Liechtenstein
the Kingdom of the Netherlands with respect to Aruba
Norway
Singapore
Switzerland
Chinese Taipei
United States
|
|
The two additional accessions approved by the
Committee in 2014:
|
|
Montenegro
New Zealand
|
|
The eight other WTO Members that have formally
commenced their GPA accessions:
|
|
Albania
China
Georgia
Jordan
Kyrgyz Republic
Moldova
Oman
Ukraine
|
|
The five additional WTO Members with provisions
regarding GPA accessions in their respective WTO Accession Protocols:
|
|
the Former Yugoslav Republic of Macedonia
Mongolia
Russian Federation
Saudi Arabia, Kingdom of
Tajikistan
|
3.200. Other accessions to the Agreement that received focused attention
during the review period included those of China, Moldova and Ukraine. Both
Moldova and Ukraine have recently circulated new coverage offers and
information concerning relevant national legislation. Hopes have been expressed that the accessions
of both Members might be concluded in 2015.
China, for its part, has committed to provide a new and significantly
improved coverage offer before the end of 2014.
3.201. With the encouragement and support of the GPA Parties, the
Secretariat has developed a new automated GPA market access information tool
(the "e-GPA portal"). The
database provides a convenient single point of access to the market access
information under the revised GPA, together with related information that the
GPA Parties are committed to provide. An initial version of the tool will be
released in November 2014, offering significantly enhanced transparency of
relevant information for users.
3.202. An intensive programme of technical assistance related to the GPA
was carried out by the Secretariat during the year, reflecting not only growing
interest in GPA accession but also the relationship between the Agreement and
work on government procurement in the context of regional and bilateral trade
initiatives, and domestic policy reforms. In the course of the reporting
period, the WTO Secretariat and the European Bank for Reconstruction and
Development (EBRD) have implemented a new informal arrangement, based on an exchange
of letters, for the purpose of facilitating the two organizations' cooperation
in this area. The new arrangement has
already facilitated the organization/presentation of multiple joint national
seminars on the Agreement for the countries serviced by EBRD, and provided
assistance to Montenegro in the context of its successful application for
accession to the Agreement.
4.1. 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 twelve 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.
4.2. Timely
and complete notifications are fundamental for effective monitoring of the
implementation of commitments. Chart 4.1
presents an overview of Members' compliance with notification obligations for
the period 2009-2013 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.[116]
The distribution of outstanding notifications by group of countries is
presented in Chart 4.2.
4.3. 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).[117]
For example, for nearly all the five years reported, compliance with
notification obligations in the areas of domestic support and export subsidies
generally remains below the 50% level. For the most recent reporting year,
2013, the percentage of outstanding DS:1 and ES:1 notifications is 83% and 77%,
respectively, thus implying compliance rates for these categories of
notifications of 17% and 23%. Chart 4.1 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.
Chart
4.1 Current outstanding notifications in agriculture (%)
(%)
Source: WTO
Secretariat.
Chart
4.2 Outstanding notifications by country group
(%)
Source: WTO
Secretariat.
4.4. The different deadlines of
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 4.1 presents
information on the average reporting years per notification with respect to
notifications circulated during 2009-2014. 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.
Table
4.1 Number of agriculture notifications
|
Total
(MA:2,
MA:5, DS:1, ES:1, ES:2)
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
|
Number of notifications
(excluding Add., Corr. and Rev.)
|
154
|
128
|
134
|
156
|
109
|
155
|
|
Number of years reported
|
402
|
321
|
324
|
365
|
238
|
413
|
|
Average reporting years
per notification
|
2.61
|
2.51
|
2.42
|
2.34
|
2.18
|
2.66
|
Source: WTO
Secretariat.
4.5. The 185 notifications issued in the
period from mid-November 2013 to mid-October 2014, together reported
information on 447 years, with some notifications reporting as high as 17 years
in the same notification (Table 4.2). Nevertheless, the increase in the number
of notifications issued per year and in the number of years reported
demonstrate the increased effort Members have been making in recent years to
bring their notifications up to date.
Table
4.2 Notifications reporting more than one year (mid-November 2013 to
mid‑October 2014)
|
Member
|
Notification
|
Format
|
Issue date
|
Number of years reported
|
|
Bahrain, Kingdom of
|
G/AG/N/BHR/8
|
ES:1
|
24-Apr-2014
|
17
|
|
Congo
|
G/AG/N/COG/1
|
DS:1
|
24-Apr-2014
|
17
|
|
Congo
|
G/AG/N/COG/2
|
ES:1
|
25-Apr-2014
|
17
|
|
Sri Lanka
|
G/AG/N/LKA/3
|
DS:1
|
11-Jul-2014
|
15
|
|
Senegal
|
G/AG/N/SEN/3
|
DS:1
|
07-Aug-2014
|
14
|
|
Haiti
|
G/AG/N/HTI/4
|
ES:1
|
15-Sep-2014
|
14
|
|
Madagascar
|
G/AG/N/MDG/4
|
DS:1
|
07-Jul-2014
|
13
|
|
Guatemala
|
G/AG/N/GTM/45
|
DS:1
|
15-Jan-2014
|
11
|
|
Bahrain, Kingdom of
|
G/AG/N/BHR/7
|
DS:1
|
24-Apr-2014
|
9
|
|
Iceland
|
G/AG/N/ISL/33
|
DS:1
|
10-Sep-2014
|
9
|
|
The Gambia
|
G/AG/N/GMB/5
|
DS:1
|
10-Apr-2014
|
8
|
|
Philippines
|
G/AG/N/PHL/43
|
MA:2
|
21-May-2014
|
8
|
|
Peru
|
G/AG/N/PER/12
|
DS:1
|
20-Feb-2014
|
7
|
|
India
|
G/AG/N/IND/10
|
DS:1
|
10-Sep-2014
|
7
|
|
India
|
G/AG/N/IND/10/
CORR.1
|
DS:1
|
01-Oct-2014
|
7
|
|
Georgia
|
G/AG/N/GEO/12
|
ES:1
|
05-Nov-2013
|
6
|
|
Morocco
|
G/AG/N/MAR/38
|
MA:5
|
05-May-2014
|
6
|
|
Thailand
|
G/AG/N/THA/76
|
ES:1, ES:2
|
14-Apr-2014
|
5
|
|
Thailand
|
G/AG/N/THA/77
|
MA:5
|
14-Apr-2014
|
5
|
|
Jamaica
|
G/AG/N/JAM/12
|
ES:1
|
16-Jun-2014
|
5
|
|
Panama
|
G/AG/N/PAN/30
|
MA:5
|
27-Jun-2014
|
5
|
|
Mexico
|
G/AG/N/MEX/27
|
ES:1, ES:2
|
21-Jul-2014
|
5
|
|
Moldova, Republic of
|
G/AG/N/MDA/2
|
MA:2
|
09-Sep-2014
|
5
|
|
Iceland
|
G/AG/N/ISL/34
|
MA:5
|
16-Sep-2014
|
5
|
|
Iceland
|
G/AG/N/ISL/35
|
ES:1, ES:2
|
16-Sep-2014
|
5
|
|
South Africa
|
G/AG/N/ZAF/82
|
NF:1
|
08-Oct-2014
|
5
|
|
Dominican Republic
|
G/AG/N/DOM/22
|
MA:2
|
04-Feb-2014
|
4
|
|
Dominican Republic
|
G/AG/N/DOM/23
|
DS:1
|
05-Feb-2014
|
4
|
|
Morocco
|
G/AG/N/MAR/39
|
MA:2
|
06-May-2014
|
4
|
|
Morocco
|
G/AG/N/MAR/40
|
ES:1
|
06-May-2014
|
4
|
|
Honduras
|
G/AG/N/HND/36
|
ES:1, ES:2
|
15-May-2014
|
4
|
|
Malaysia
|
G/AG/N/MYS/32
|
DS:1
|
23-Jul-2014
|
4
|
|
Switzerland
|
G/AG/N/CHE/64
|
NF:1
|
17-Dec-2013
|
3
|
|
Argentina
|
G/AG/N/ARG/32
|
ES:1, ES:2
|
18-Feb-2014
|
3
|
|
Saudi Arabia, Kingdom of
|
G/AG/N/SAU/9
|
ES:1
|
26-Feb-2014
|
3
|
|
Japan
|
G/AG/N/JPN/191
|
DS:1
|
31-Mar-2014
|
3
|
|
Qatar
|
G/AG/N/QAT/11
|
DS:1
|
06-May-2014
|
3
|
|
Thailand
|
G/AG/N/THA/78
|
MA:2
|
19-May-2014
|
3
|
|
Cameroon
|
G/AG/N/CMR/4
|
ES:1
|
13-Aug-2014
|
3
|
|
Cameroon
|
G/AG/N/CMR/3
|
DS:1
|
13-Aug-2014
|
3
|
|
Australia
|
G/AG/N/AUS/93
|
NF:1
|
08-Oct-2014
|
3
|
|
South Africa
|
G/AG/N/ZAF/81
|
MA:2
|
08-Oct-2014
|
3
|
|
European Union
|
G/AG/N/EU/16
|
MA:2
|
14-Nov-2013
|
2
|
|
Viet Nam
|
G/AG/N/VNM/4
|
DS:1
|
05-Nov-2013
|
2
|
|
Brazil
|
G/AG/N/BRA/32
|
DS:1
|
03-Feb-2014
|
2
|
|
Brazil
|
G/AG/N/BRA/33
|
ES:1, ES:2, ES:3
|
03-Feb-2014
|
2
|
|
Malaysia
|
G/AG/N/MYS/30
|
ES:1, ES:2
|
14-Feb-2014
|
2
|
|
Russian Federation
|
G/AG/N/RUS/3
|
ES:1
|
18-Mar-2014
|
2
|
|
Croatia
|
G/AG/N/HRV/19
|
DS:1
|
09-May-2014
|
2
|
|
Jamaica
|
G/AG/N/JAM/11
|
DS:1
|
09-May-2014
|
2
|
|
Thailand
|
G/AG/N/THA/79
|
MA:1
|
19-May-2014
|
2
|
|
Brazil
|
G/AG/N/BRA/32/CORR.1
|
DS:1
|
22-May-2014
|
2
|
|
Mali
|
G/AG/N/MLI/5
|
DS:1
|
17-Jun-2014
|
2
|
|
Australia
|
G/AG/N/AUS/91
|
MA:2
|
01-Jul-2014
|
2
|
|
Honduras
|
G/AG/N/HND/37
|
DS:1
|
16-Jul-2014
|
2
|
|
Malaysia
|
G/AG/N/MYS/31
|
MA:5
|
16-Jul-2014
|
2
|
|
Mexico
|
G/AG/N/MEX/25
|
MA:2
|
21-Jul-2014
|
2
|
|
Mexico
|
G/AG/N/MEX/26
|
MA:5
|
21-Jul-2014
|
2
|
|
Burkina Faso
|
G/AG/N/BFA/12
|
ES:1
|
05-Aug-2014
|
2
|
|
Chile
|
G/AG/N/CHL/43
|
DS:1
|
06-Aug-2014
|
2
|
|
Australia
|
G/AG/N/AUS/92
|
ES:1, ES:2, ES:3
|
15-Aug-2014
|
2
|
|
Canada
|
G/AG/N/CAN/100
|
NF:1
|
22-Sep-2014
|
2
|
Source: WTO Secretariat.
4.6. The lack of timeliness in Member's
notification is particularly evident in the area of agricultural subsidization.
Chart 4.3 provides information on the average reporting years per notification
in domestic support notifications circulated during the years 2009-2014. In
some years, this average remains close to three (in 2014 it the average is
higher than three), implying that less than one-third of total domestic
notifications were submitted according to the prescribed submission deadlines.
Chart
4.3 Number of agriculture notifications - domestic support
Source: WTO
Secretariat.
4.7. The notification of quantitative restrictions is an obligation
established by the 2012 Decision on Notification Procedures for Quantitative
Restrictions (G/L/59/Rev.1) of the Market Access Committee. The Decision
requires Members to notify every two years the quantitative restrictions (QRs)
they maintain and to notify any changes in the interim. The decision also gives
Members the possibility of making reverse notification of QRs maintained by
another Member. 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 4.3 below).
Table
4.3 Notification procedures for QRs
|
No.
|
Notification requirement
|
Number of notifications as of 15 October 2014
|
|
1
|
Quantitative restrictions maintained (regular notification)
|
Notifications covering the biennial period 2012-2014 were received
from nineteen Members. Notifications covering the biennial period 2014-2016
were received from fifteen Members.
|
|
2
|
Changes to the quantitative restrictions
maintained
(ad hoc) or
introduction of new restrictions
|
Only two Members notified modifications in
relation to their 2012‑2014 notification.
|
|
3
|
Restrictions
maintained by other Members
(reverse
notification)
|
No
Member has notified.
|
|
4
|
Non-tariff
measures, maintained by other Members
(reverse
notification)
|
Only
one Member has notified.
|
Source: WTO
Secretariat.
4.8. 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 4.4.
Table
4.4 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.
4.9. 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.
4.10. 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.
4.11. As of 20
October 2014, 101 new notifications under the Agreement on Import Licensing
have been received and circulated by the Secretariat. Of these, 25 were N/1
notifications from the following 18 Members: Cameroon; Ecuador; Israel; Kyrgyz
Republic; Lao PDR; Madagascar; Mexico; Morocco; Paraguay; Peru; Philippines;
Russian Federation; Samoa; Separate Customs Territory of Taiwan, Penghu, Kinmen
and Matsu; Sri Lanka; Trinidad and Tobago; Turkey and Ukraine. The Committee
also reviewed 18 N/2 notifications, relating to the institution of new import
licensing procedures or changes in these procedures, from nine Members: Indonesia, Israel; Lao PDR; Malaysia; Mexico; Paraguay; Russian
Federation; Kingdom of Saudi Arabia and Ukraine. Finally, 58 N/3 notifications
have been received and reviewed from the following 46 Members: Albania; Australia;
Burkina Faso; Canada; Cameroon; China; Costa Rica; Côte d'Ivoire; Cuba;
European Union; The Gambia; Georgia; Haiti; Honduras; Hong Kong, China;
India; Indonesia; Israel; Jamaica; Japan; Kuwait, the State of; Lao PDR; Macao,
China; the former Yugoslav Republic of Macedonia; Malaysia; Mali; Mauritius;
Mexico; New Zealand; Nicaragua; Oman; Panama; Paraguay; Peru; Philippines;
Qatar; Russian Federation; Separate Customs Territory of Taiwan, Penghu, Kinmen
and Matsu; Sri Lanka; Switzerland; Tajikistan; Trinidad and Tobago; Turkey;
Ukraine; United States and Viet Nam.
4.12. The Agreement on Rules of
Origin contains two notification obligations, described in Table 4.5.
Recent notifications have improved the overall compliance with notification
obligations; about 70% of all Members have already submitted information about
their preferential or non-preferential rules of origin (or the absence
thereof).
Table
4.5 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.
4.13. To date, 42 Members have notified the Committee that they do
implement some type of non-preferential rules of origin; 49 Members have
notified that they do not implement rules of origin for non-preferential
purposes; whereas 37 Members have never submitted notifications to the Committee.
4.14. In the context of the Committee, there have not been any "trade
concerns" raised recently.
4.15. However, a new development in the area of rules of origin in the WTO
is a recent Ministerial Decision on Preferential Rules of Origin for Least
developed countries (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 CRO to monitor new developments in this
area and to report back to the General Council and to inform the Sub-Committee
on LDCs.
4.16. 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 4.6).
Table
4.6 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.
4.17. 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 European Union notifies
on behalf a group of Members, and that this number has changed several times
since the WTO entered into force.
4.18. Taking all these elements into account, the maximum number of
one-off notifications as of 10 October 2014 is 132 (counting the European Union
as one). This is denominator has been used to estimate the degree of compliance
for the following notifications: 1) submission of the complete texts of
national legislation; 2) responses to the checklist of issues; and 3) date of
implementation of the Decision on the treatment of interest charges in the
customs value of imported goods (Table 4.7).
4.19. 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: 1) Changes in laws and regulations on
customs valuation; and 2) application of paragraph 2 of the Decision on Carrier
Media (software).
Table
4.7 Compliance in customs valuation notifications
|
No.
|
Notification requirement
|
Compliance as of 15 October
2014
|
|
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 69.4%, as 40 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
28 Members have notified changes to their national legislation on customs
valuation 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 48.9%, as 67 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 42 of the Members have
submitted it. This means that 89 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 is valued as provided for in paragraph 2 of the Decision), it is
not possible to assess the level of compliance. To date, 40Members 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.
4.20. 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 1995‑2013
are shown in Table 4.8. The share of Members that have notified subsidies has
remained between 39% and 50% since 1995. The share of Members that made a
"nil" notification fell significantly, from 23% to 14%, over the same
period. With the exception of 1995, 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 4.8 Status of subsidy notifications
|
New and full subsidy notification
|
Per cent share of total
|
|
1995
|
1998
|
2001
|
2003
|
2005
|
2007
|
2009
|
2011
|
2013
|
|
Members that
notified subsidies
|
50
|
39
|
44
|
44
|
46
|
47
|
46
|
44
|
42
|
|
Members that
made a "nil" notification
|
23
|
15
|
15
|
12
|
11
|
10
|
15
|
16
|
14
|
|
Sub‑total
notifying Members
|
73
|
54
|
59
|
56
|
57
|
57
|
61
|
60
|
56
|
|
Members that did
not make any notification
|
27
|
46
|
41
|
44
|
43
|
43
|
39
|
40
|
44
|
Source: WTO
Secretariat.
4.21. 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. Approximately 45 Members (counting the European Union 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. Twenty-eight Members have submitted one-time nil
notifications. The remaining (approximately 60) Members generally fail to
submit semi-annual reports in respect of countervailing duty actions.
4.22. 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.
4.23. Approximately 45 Members (counting
the European Union 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.
4.24. 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 notifications. Thus, all WTO Members must notify their state
trading enterprises every two years, with no notifications in the intervening
years.
4.25. Table 4.9 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. The notifications data for 2014, showing a total
notifications figure of only 22%, is current up to 29 September 2014.
Accordingly, notifications data for 2014 may increase in the remainder of the
year.
Table 4.9 Status of STE notifications
|
New and full STE notification
|
Per cent share of total
|
|
1995
|
1998
|
2001
|
2003
|
2006
|
2008
|
2010
|
2012
|
2014
|
|
Members that
notified STEs
|
40
|
27
|
21
|
14
|
15
|
19
|
18
|
15
|
11
|
|
Members that
made a "nil"
Notification
|
23
|
23
|
29
|
24
|
24
|
25
|
24
|
19
|
11
|
|
Subtotal
notifying Members
|
63
|
50
|
50
|
38
|
39
|
44
|
42
|
34
|
22
|
|
Members that did
not make any notification
|
37
|
50
|
50
|
62
|
61
|
56
|
58
|
66
|
78
|
Source: WTO Secretariat.
4.26. The improvements made in the
notifications of RTAs noted in last year's
Overview continued through 2014. 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 about 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 2014 contained 63 such agreements (of which 31 are agreements under
the Latin American Integration Association, LAIA).[118]
The response by Members has been positive with some 43 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 50 other agreements that continue to be in force and are not yet notified
to the WTO.
4.27. 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).[119]
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.
4.28. The IDB is the only case 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.
4.29. The IDB notifications currently cover on average 77% of the
membership with tariff notifications being generally more complete than the
import notifications. Overall, 28% of the IDB information is collected by the
Secretariat mainly through governmental websites, regional secretariats and international
organizations. As concerns timeliness, on average only
30% of the notification requirements are received within the prescribed
deadlines.
4.30. Charts 4.4 and 4.5 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
on the number of Members' schedules and not on the number of WTO Members (i.e.
European Union Member States all fall under the European Union schedule and
Lichtenstein reports with Switzerland).
4.31. 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. Overall on
average, the completeness of IDB notifications amounts to 80% for the tariff
information and 75% for the import statistics, with a maximum completeness of
98% and of 94% attained for tariff notifications in 2011 and for import notifications
in 2006. For now, about 17 Members have complete submissions, 12 of which are
developing-country Members.
Chart 4.4 Completeness of IDB tariff notifications
(%)
Source: WTO Secretariat.
4.32. As shown in Chart 4.4, the IDB tariff coverage has been fairly good
in recent years with more than 90% coverage of the Membership since 2006. About
40% of the 2006-2014 tariff information has been collected by the Secretariat
mainly through the
Internet as most of the countries make available their customs duties to the
public. For 2012 more than half of the notifications were collected by the
Secretariat.
4.33. The completeness of import
statistics' notifications is slightly lower compared to the tariff
notifications (Chart 4.5) mainly because few countries publish detailed import
statistics on the Internet and it is difficult for the Secretariat to find
reliable sources to collect the missing information.
However, for 2010 and 2011 more than 40% of the imports statistics were
collected by the Secretariat.
Chart 4.5
Completeness of IDB import notifications
(%)
Source: WTO Secretariat.
4.34. Tables 4.10 and 4.11 show the number of submissions received by the
Secretariat within the years of the deadlines. The timeliness of notifications
is calculated, as in the previous section, on the number of schedules. Since
the establishment of the IDB notification requirement, relatively few Members
have complied with the specific deadlines. On average, for the period
1996-2012, about 37 Members have reported within the year of the deadlines
representing roughly 30% of the membership.
4.35. For both tariff information and import statistics, the timeliness of
IDB notifications is respected by 30% of Members. The timeliness has peaked in
most recent years - especially for the tariff information - and this since the
adoption of the IDB framework decision in 2009.
Table 4.10 Timeliness of IDB notifications - tariff information
Source: IDB, 22 May 2014.
Table 4.11 Timeliness of IDB notifications - import information
Source: IDB, 22 May 2014.
4.36. I-TIP Services[120],
i.e. integrated database for trade in services, was launched in 2013 under the
umbrella of the Integrated Trade Intelligence Portal (I-TIP). This database,
which is a joint initiative with the World Bank, consists of linked databases
that provide information on (i) specific commitments and MFN exemptions
under the GATS; (ii) services commitments in RTAs; (iii) applied measures in
services; (iv) and services trade statistics. Its main objective is to make it
easier for WTO Members and other stakeholders to access the various types of
information relevant for services trade policy making. Easy access to these
data is valuable to Members, the private sector and other stakeholders in terms
of monitoring and analysis of trade policies, as well as to facilitate trade
negotiations.
4.37. In the four modules (GATS, RTA Commitments, Applied Regimes, and
Statistics), the integrated database permits searches according to such
criteria as Member, sector, agreement, or source of information. Over the
course of the last year, the coverage of the database was expanded (e.g., commitments
from additional RTAs were added) and a number of new features have been put in
place, such as access to summary reports on GATS commitments and MFN
exemptions, and services statistics. By
centralizing and organizing information coming from various WTO sources, I-TIP
Services allows, for example, to obtain all relevant information on policy
changes mentioned in the Director-General's trade monitoring reports and
therefore also serves as a trade monitoring database for trade in services. A
new reporting function also now allows summary information on changes in applied
policies, by sector, by Member, as well as over time, to be generated.
5.1. At the meeting of the
Director-General's Expert Group on Trade Finance on 25 April, it was noted that
although trade finance market conditions had eased somewhat in North America
and Asia, the situation in dynamic markets for trade, such as Africa, remained
difficult. The demand for trade finance programmes through multilateral
institutions which was an indicator of a trade finance gap for the poorest
countries had never been higher. This situation could be explained partly by
the deleveraging of international financial institutions and the increased
concentration of the banking sector which had led to a renewed bias towards
lending to larger customers at the expense of SMEs and to a reduction of the
exposure to cross-border lending to low-income countries.
5.2. Following the request by WTO
Members at the June 13 meeting of the Working Group on Trade, Debt and Finance,
a study on the trade‑financing gap entitled "Improving the availability of
trade finance in developing countries: an assessment of remaining gaps"
was prepared.[121]
This report confirms that structural difficulties of poor countries in
accessing trade finance have not disappeared – and might have further
deteriorated during and after the financial crisis. There is consistent
evidence to suggest that trade‑finance markets remain characterized by a
greater selectivity in risk-taking and flight to so-called "quality"
customers. According to the Bank for International Settlements, the
International Chamber of Commerce and the World Economic Forum, the trade‑finance
gap is particularly large in Africa.
5.3. According to one estimate by the
EU/ACP Secretariat, the trade‑finance gap may be as high as US$225 billion.[122]
With interest rates for a one-year private trade loan ranging from 13% above
inflation in Zambia, 25% in Tanzania and 74% in Ghana there is considerable
evidence that lack of trade‑finance is a key obstacle to trade and
participation in international supply chains. Although Africa appears to be the
region most severely affected by this situation, Latin American and Asian
countries also face significant challenges. The integration of many of these
countries into global production networks and value chains remained problematic
as production networks were moving faster than the ability of the local
financial sectors to support new trade and production.
5.4. 2014 was one of the most active years for dispute settlement
activity since the inception of the WTO. Over the period January to
mid-November 2014, there were 12 requests for consultations, 12 panels
established by the DSB, 3 panel requests pending before the DSB, 24 active
ongoing panels, 6 appeals, 5 compliance panel proceedings under Article 21.5
(including the on-going aircraft disputes), and 1 arbitration pursuant to
Article 22.6. As in previous years, the subject-matter of WTO dispute settlement
continues to touch on many of the covered agreements: the 9 panel reports and 3
Appellate Body Reports circulated over this period address a range of
provisions in the Marrakesh Agreement, the GATT 1994, the SCM Agreement, the
Anti-Dumping Agreement, the TBT Agreement, the SPS Agreement, the TRIMs
Agreement, China's Accession Protocol, the Import Licensing Agreement, and the
DSU. Ongoing dispute settlement proceedings involve claims under other covered
agreements, including but not limited to the GATS, the TRIPS Agreement, and the
Safeguards Agreement. Another trend that continued in 2014 was the
participation of both developed and developing countries in the WTO dispute
settlement system: each of the 9 panel reports circulated over this period
involved at least one developing country party, either as a complainant (five
cases) or the respondent (four cases).
5.5. A new biennium Aid-for-Trade Work Programme covering the period
2014-2015, which the General Council took note of at its meeting in May 2014,
provided the framework for WTO's Aid-for-Trade related work and activities in
2014. With its theme "Reducing Trade Costs for Inclusive, Sustainable
Growth", the Work Programme reflects the Decision on Aid for Trade adopted
by Ministers at MC9, speaks to implementation of the Bali Package (together
with existing WTO agreements), on-going work on connecting developing countries
– and in particular least developed countries – to regional and global value
chains, and is framed by the emerging post-2015 development agenda and
associated goals. The Work Programme lays the groundwork for the Fifth Global
Review of Aid for Trade that will take place from 30 June-2 July
2015.
5.6. The WTO, the OECD, and other partners continue to collaborate on all
aspects of the monitoring and evaluation (M&E) of Aid for Trade. As part of
the M&E exercise that will inform the Fifth Global Review, a series of
self-assessment questionnaires – addressed to partner countries, donors,
regional economic communities and transport corridors, and South-South partners
– and a call for case stories has been launched. A call for case stories has
also been addressed to the private sector, academia and non-governmental
organizations. An analysis of the responses will feature in a joint WTO-OECD
"Aid for Trade at a Glance" publication to be prepared for the Fifth
Global Review. In line with the 2014-2015 Aid-for-Trade Work Programme, the
theme of the Global Review is "Reducing Trade Costs for Inclusive,
Sustainable Growth". Discussions will examine how trade costs affect
developing countries' competitiveness and ability to connect to regional and
global value chains, what is being done to address this issue, and how Aid for
Trade can help reduce trade costs and associated impacts to deliver inclusive,
sustainable growth.
5.7. Despite on-going fiscal and economic difficulties, the mobilization
of Aid-for-Trade funding has continued. Overall Aid-for-Trade commitments in
2012 amounted to US$54 billion, an increase of US$9 billion or 21% since
2011. Significant progress has been made in respect to regional approaches to
Aid for Trade. In 2012 approximately US$7 billion was spent on
multi-country and regional programmes, a more than triple increase from the
2002-2005 average of US$2.3 billion. While commitments and disbursements
have increased, and are likely to continue to do so, middle-income countries
are the recipients of most of the Aid-for-Trade flows and concern over the
allocation of Aid for Trade to least developed countries has been highlighted.
As part of their Multiyear Action Plan on Development, G-20 Leaders committed
to at least maintain, beyond 2011, levels of Aid-for-Trade expenditure that
reflect the average of the 2006-2008 expenditure, and agreed, at their Brisbane
Summit on 15-16 November 2014, to continue to provide Aid for Trade to
developing countries in need of assistance.