Bridges Weekly Trade News Digest • Volume 7 • Number 7 • 27th February 2003
WTO Goods Council Approves Kimberley Process Waiver
On 26 February, the WTO Council for Trade in Goods approved a request of eleven Members — Australia, Brazil, Canada, Israel, Japan, Korea, Philippines, Sierra Leone, Thailand, the UAE and US — for a waiver from WTO rules for the Kimberley Process rough diamonds certification scheme. The Kimberley Process is an international initiative established to sever the link between illicit international trade in rough diamonds and armed conflict — a link that has been particularly prevalent in Angola, Sierra Leone and the Democratic Republic of Congo. Launched in May 2000 and endorsed by the UN General Assembly, the Kimberly Process was initiated by several southern African countries to stop the flow of conflict diamonds to the markets, while at the same time protecting the legitimate diamond industry. The Kimberley Process includes approximately 44 countries that produce, process, import and export rough diamonds, accounting for 98% of global trade and production.
The parties to the process — meeting at the ministerial level in Interlaken, Switzerland on 5 November 2002 — committed to simultaneously implement the Certification Scheme at national levels, and at a 22 November meeting of the Council for Trade in Goods, Canada put forth a proposal for a WTO waiver relating to the Kimberley Process (see BRIDGES Weekly, 28 November 2002). Specifically, the request sought to institute "a waiver from the provisions of Article I: 1 (Most Favoured Nation Treatment), Article XI: 1 (Elimination of Quantitative Restrictions) and Article XIII: 1 (Non-Discriminatory Administration of Quantitative Restrictions) of the GATT 1994" between 1 January 2003 and 31 December 2006. Members requested time to examine the details of the proposed waiver for domestic measures to implement the Certification Scheme, and informal consultations conducted by Canada took place in January and February this year to iron out Members’ differences (see BRIDGES Weekly, 29 January 2002). The main disagreement stemmed from the fact that some countries did not see the need for a waiver, as they considered GATT Article XXI (Security Exemptions) to cover issues such as the Kimberly Process.
The decision arrived at for the waiver states that "the trade in conflict diamonds is a matter of serious international concern, which can be directly linked to the fuelling of armed conflict, the activities of rebel movements aimed at undermining or overthrowing legitimate governments, and the illicit traffic in, and proliferation of, armaments, especially small arms and light weapons". In order to accommodate all Members’ concerns, a new paragraph was added to the original draft decision text, noting that "this Decision does not prejudge the consistency of domestic measures taken consistent with the Kimberley Process Certification Scheme with provisions of the WTO Agreement, including any relevant WTO exceptions, and that the waiver is granted for reasons of legal certainty". Further, a new paragraph was added noting a recent UN Security Council resolution supporting the Kimberley Process Certification Scheme.
The General Council will formally approve the waiver at its next meeting. At the Goods Council meeting, the US noted that the process under the waiver is open for WTO members to join also in the future if they haven’t done so yet, and Chinese Taipei stressed that the waiver does not preclude the right of affected members to have recourse to WTO dispute settlement. The WTO decision, G/C/W/432/Rev.1, and the waiver request G/C/W/431, are available at http://docsonline.wto.org.
ICTSD Reporting.