Goods Council Discusses US Proposal to Enhance Transparency

The WTO Goods Council on 10 November considered the United States’ proposal to enhance transparency and strengthen notification requirements through a decision intended for the upcoming 11th Ministerial Conference (MC11) in Buenos Aires. The Council also took up e-commerce proposals and specific trade concerns.

The US, introducing its proposal first circulated on 30 October, noted that a large number of members fail to comply with notification requirements under the various WTO Goods Agreements. This leads to a lack of transparency, undermines the proper functioning and operation of the agreements, and makes difficult the conduct of negotiations, the US said.

The US then explained the key elements of its proposal, which includes "administrative measures" for WTO members that fail to provide a required notification after a certain time, an extension in the period for submitting notifications related to agriculture, and an obligation to notify additional information on fishery subsidy programs.

All members who took the floor were in agreement that enhancing transparency and improving members' compliance with notification requirements were important objectives. A number of members took issue with the administrative measures in the US proposal and said that punishing members would hurt those who were genuinely struggling to meet the requirements. Some of the notification requirements under the WTO Agreements were too technical, they said, and were not fully understood by the different authorities designated to produce the submissions. Some members remarked that there may not be enough time to build consensus on the proposal ahead of MC11. Several members said that, with regard to proposed notifications on fisheries subsidies, the issue would be best addressed at MC11 as part of a possible broader agreement on disciplining fisheries subsidies. A number of members indicated that they needed to study the document further.

The US thanked members for their responses and said it gave them useful material for their continued reflection. The US added that if members could not come to an agreement by MC11, it would like members to continue working on the proposal afterwards.

E-commerce proposals for MC11

China and Chinese Taipei introduced their submissions respectively about e-commerce elements for consideration at MC11 and for the WTO's existing e-commerce work program. A number of members expressed their views at the meeting on whether to establish a working party for future negotiations on e-commerce, whether to limit e-commerce discussions to the 1998 work program, and whether to continue for two years, or make permanent, the practice of not imposing customs duties on electronic transmissions.

Specific trade concerns

· Australia, Canada, the EU, Russia, New Zealand and Brazil expressed concern over the quantitative restrictions on imported beans which India was allegedly imposing. India said it will notify details about the measure at an appropriate time.

· The Kyrgyz Republic complained about border restrictions in neighbouring Kazakhstan. The Kyrgyz Republic said that from 10 October Kazakhstan had restricted, without prior notification, the transit of goods to and from the Kyrgyz Republic. It said that thousands of lorries and trucks were stuck at the border in a 10km queue and that the average time to release and clear the goods was five days. Kazakhstan responded that the measures were aimed at ensuring full compliance with the legislation of its country and the Eurasian Economic Union (EAEU), of which both countries were members. Kazakhstan further said its measures were in conformity with WTO rules.

· Russia raised issue with Mexico's calculation of anti-dumping duties. Russia said Mexico was still using a method that classifies Russia as a non-market economy, which it had in place before Russia even joined the WTO. As a result, Russia claims that Mexico uses "surrogate country" data for calculating anti-dumping duties instead of recognizing prices submitted by Russian exporters. Mexico, in response, said that under a joint declaration signed by both parties in June 2011, the two countries had agreed that Mexican authorities would determine on a case-by-cases basis whether a certain sector or industry had operated in conformity with market economy principles and laws.

· The EU, US, Chinese Taipei, Japan, Kore, Singapore and Thailand raised their concern over the increase in tariffs on integrated circuits imported into China. Tariffs on certain circuits had increased to 3.4% in 2017 from 0% in 2016 even though they were meant to be duty-free under the WTO's Information Technology Agreement. China, in response, explained that the tariff increase was due to the transposition of its tariff schedule to an updated version. This resulted in a reclassification of certain products under new tariff lines. China maintained that their method of transposition was fully consistent with WTO rules.

· Norway lauded improvements in Nigeria's treatment of imported seafood. Norway thanked Nigeria for changing its practice of using currency restrictions and replacing these with import duties instead. Nigeria reiterated its commitment to the WTO.

· Members also took up trade concerns that had already been brought up in previous Council meetings such as India's customs duties on information communication technology products; the US' Section 232 investigations on steel and aluminium products; the US Seafood Import Monitoring Programme; Indonesia's import and export restricting policies and practices, including those affecting fish products from Latvia and Estonia; Russia's trade restricting practices affecting cement, pharmaceuticals, hides and skins; Egypt's manufacturer registration system; and Brazil's measures on banana imports. The full meeting agenda is available here.

The Council approved 12-month extensions requested by Armenia and the Kyrgyz Republic to preserve members' rights to withdraw concessions until 2 January 2019 and 12 February 2019, respectively, following changes to the two countries' tariff schedules as a result of their application of the EAEU Common External Tariff. Members are continuing to negotiate compensation packages.

The Council also agreed to extend the time period to preserve member's rights to withdraw concessions to the EU for changes in schedules of commitments stemming from Croatia's accession to the EU. The time-period has been extended to 1 July 2019 pending the entry into force of a compensation agreement the EU struck with New Zealand.

Furthermore, the Council approved four collective waiver requests received from the Committee on Market Access in connection with the introduction of changes in certain members' schedules of tariff concessions following the introduction of Harmonized System (HS) for tariff codes of 2002, 2007, 2012, and 2017. The Council also took note of four regional and free trade agreements and approved the derestriction of historical negotiating materials.