Bridges Trade BioRes • Volume 6 • Number 21 • 1st December 2006

WTO Members Agree in Principle to Extend Conflict Diamon Waiver

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WTO Members have agreed in principle to renew for six years a decision allowing countries to block trade in conflict diamonds.

At a meeting on 20 November, the Council for Trade in Goods accepted the text of a draft deal that would allow parties to the Kimberley Process Certification Scheme for Rough Diamonds to continue to waive WTO rules in order to restrict trade in uncertified diamonds. The draft must now be formally adopted by the General Council, the WTO’s top permanent decision-making body. The original waiver, approved in early 2003, was scheduled to expire on 31 December 2006 (see Bridges Weekly, 27 February 2003, http://www.ictsd.org/weekly/03-02-27/story3.htm).

The Kimberley Process excludes conflict diamonds from legal international markets through a series of certification requirements and trade restrictions. Participant countries must certify that diamonds produced on their territory do not finance rebel groups seeking to overthrow UN-recognised governments. Diamond trade with countries that are not members of the scheme is completely banned.

In order to comply with Kimberley Process requirements, Members resort to some measures that would ordinarily violate WTO obligations. Specifically, they need to be able to discriminate between diamonds based on their country of origin (which runs counter to the most-favoured nation principle). They also must have the ability to place outright bans on diamond exports and imports — and apply them selectively on only some WTO Members, which ordinarily would run counter to WTO rules. The original waiver was hailed as an example that WTO strictures were flexible enough to accommodate other international rules.

The process was the product of cooperation among governments, the diamond industry, and the advocacy groups that first drew public attention to the fact that diamonds were being used to fuel armed conflict. Kimberley Process members are believed to account for 98 percent of legal international trade in diamonds.

The waiver decision covers Australia, Botswana, Brazil, Canada, Croatia, India, Israel, Japan, Korea, Malaysia, Mauritius, Mexico, Norway, Philippines, Sierra Leone, Chinese Taipei, Thailand, United Arab Emirates, United States and Venezuela.

ICTSD reporting; “Goods Council considers new EC enlargement, extends Kimberley waiver,” WTO NEWS, 20 November 2006.