Bridges Weekly Trade News Digest • Volume 6 • Number 27 • 17th July 2002
WTO Members Set Parameters For RTA Negotiations
The WTO Negotiating Group on Rules resumed its session (see BRIDGES Weekly, 10 July 2002) on 10 July to discuss regional trade agreements (RTAs), with three new proposals tabled by the EC (TN/RL/W/14), Australia (TN/RL/W/15) and Chile (TN/RL/W/16) (searchable at http://docsonline.wto.org).
On the general question of whether or not to support RTAs, two camps emerged. On the one hand were those who are widely engaged in RTAs, such as the EC, Norway, Brazil and Hungary, and who thus promote regionalism. On the other are those Members, led by India and Pakistan, who have engaged very little in RTAs and who are thus concerned that a proliferation of regional agreements could weaken the multilateral trading system. A third group with increased interest in the RTA debate are the African, Caribbean and Pacific (ACP) countries which are currently gearing up for negotiations with the EU on WTO compatible — i.e. reciprocal — Economic Partnership Agreements (EPAs) to replace existing preferential schemes under the Lomé Convention (see BRIDGES Weekly, 10 July 2002). Sources commented, however, that in the meeting there had been an unexpectedly low degree of intervention by ACP states on the relationship between special and differential treatment provisions for developing country RTAs and GATT language on customs unions and free trade areas (Art. XXIV). ACP countries are meeting this week in Fiji to prepare for the next phase of EU-ACP negotiations.
Three proposals tabled
In terms of detail, the EC submitted a paper where it emphasized the positive role of RTAs in achieving open markets. Furthermore, the European trade bloc pointed to the "development dimension" of regional integration, saying that flexibilities could be granted to developing countries to adjust according to their "individual level of development". Moreover, the EC singled out several points for negotiation in the goods and services sector as well as some procedural aspects.
For its part, Australia made some suggestions on how to overcome difficulties encountered by WTO Members in defining the term "substantially all the trade", which forms part of the definition of what constitutes a ‘customs union’ and a ‘free trade area’ under GATT Article XXIV:8. Australia suggested defining the term by the extent to which an RTA covers a defined percentage of all six-digit tariff lines listed in the Harmonised Commodity Description and Coding System, or Harmonised System. The Harmonised System is a method of classifying goods traded internationally, and is managed by the World Customs Organisation.
Chile, supported by developing countries such as Brazil and the Association of Southeast Asian Nations (ASEAN) members, made a proposal on when, where and what to notify when a Member enters into a RTA. Inter alia, Chile argued that notification needed to be made to the Committee on Regional Trade Agreements (CRTA) as well as to the Council for Trade in Goods (CTG) and the Council for Trade in Services (CTS) respectively. ASEAN added in its intervention that RTA notifications also should be made to the Committee on Trade and Development (CTD).
The Rules Negotiating Group is scheduled to meet again on 16-18 October 2002.
ICTSD reporting.