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WTO Progress Report

Introduction

Mandated negotiations

Implementation issues

TRIMS transition period issues

Market acces for the least-developed countries (LDCs)

Integrated Framework (IF)

Institutional arrangements

Accessions

Technical cooperation and capacity building

I. Introduction


1. Our 17 February 2000 Background Note dealt with action taken to put the WTO work back on track. This note updates the situation following, in the particular, the General Council Meeting decisions on 3 and 8 May 2000.

II. Mandated negotiations

2. It had been decided that the mandated negotiations on agriculture and services would be held in the Committee on Agriculture and the Council for Trade in Services respectively. Meetings are to be held in special sessions scheduled back-to-back with the regular meetings, to emphasise their importance.

3. A major problem for the agriculture negotiations was the selection of a chairperson, it being important to certain developed country members, particularly those who would give primacy to the multifunctionality (note 1) of agriculture, to have someone not from the major negotiating blocks. In the event, Ambassador Jorge Voto-Bernales from Peru was appointed as the chairperson of the Committee on Agriculture with responsibility for the negotiations and Mr. Yoichi Suzuki from Japan as the vice-chairperson with responsibility for the on-going work of the Committee. Three special sessions of the Committee are planned for 2000.

4. Both the regular and the special sessions of the Council for Trade in Services will be chaired by Ambassador Sergio Marchi of Canada. Proposals for the modalities (structure) of the negotiations are to be considered this year with the expectation that substantive negotiations will start in March 2001. Some developing countries want further statistics from the Secretariat showing the impact of the liberalisation of trade in services on their trade.

III. Implementation issues

5. A key issue for the developing countries, and a significant element in the failure of the Seattle Ministerial, is that before the launch of further multilateral negotiations their concerns about the implementation and transition periods under the Uruguay Round Agreements should be addressed. Developing countries should have implemented obligations under the Agreements on TRIMS, customs valuation and TRIPS by 1 January 2000. Requests for extension are being reviewed in the Committee on Customs Valuation and, for TRIMS, see next section. The question of extensions under the TRIPS Agreement, given its sensitivity, has yet to be addressed.

6. In essence, developing countries wish to see tangible benefits from the existing agreements, e.g:

• the early phasing-in of the third stage of the growth-on-growth increase in textiles quotas;

• their requests which are being reviewed at this time in the Committee on Customs Valuation;

• a moratorium on nullification and impairment cases under TRIPS;

• increasing from three to seven percent the threshold for share of imports that would exempt an LDC from possible action under the Safeguards Agreement;

• changes in the Antidumping Agreement to ensure that special and differential treatment provisions are effective.

7. It was decided that the General Council, meeting in special sessions, will address these concerns, the first session to be no later than June 2000 with the process being completed no later than the Fourth Session of the Ministerial Conference, which is due to be held before the end of 2001. In this, the General Council may direct other WTO bodies to contribute and will assess the existing difficulties, identify ways to resolve them and take decisions for appropriate action. All this is without prejudice to any future decisions, including in respect of further multilateral negotiations.

8. This is clearly an important move on the part of all Members, but the interpretation of the General Council decision could be contentious, with LDCs wishing to discuss issues substantively whereas others will maintain that the demands are so significant that they should properly wait for a new round of negotiations.

IV. TRIMS transition period issues

9. There is provision in the TRIMS Agreement for Members to request an extension of the transition period for the implementation of new investment rules. It has been an issue whether these requests should be considered in the General Council - which would clearly emphasise the multilateral nature of this process - or in the Council for Trade in Goods - which would be more inclined to examine the extensions on a case-by-case basis. There is also concern that some Members have not notified their TRIMS or requested extensions.

10. It was decided that the Chairman of the Council for Trade in Goods should hold informal consultations to facilitate the process and to reinforce the multilateral character of the exercise and its rapid conclusion. In this he is to keep the General Council informed of progress and the Council for Trade in Goods is to give positive consideration to individual requests taking into account "the particular difficulties of any kind" for developing countries.

11. It is of course a concern of developing countries that they do not have to 'pay' for the extensions by making concessions elsewhere.

V. Market access for the least-developed countries (LDCs)

12. The members of the Quad (Canada, the EC, Japan and the United States) have agreed to implement tariff-free and quota-free treatment on essentially all goods, consistent with domestic requirements and international agreements, under their preferential schemes for essentially all products originating in LDCs. So far, Chile, the Czech Republic, Hungary, Iceland, Korea, Norway, New Zealand, Slovenia and Switzerland have supported the package. These are autonomous and voluntary measures and in addition to measures taken by Members since the 1997 High-Level Meeting for LDCs.

13. The devil, of course, is in the detail and such provisos as ‘consistent with international agreements' and 'essentially' all products are certain to result in the exclusion of such key LDC export sectors as agriculture, textiles and clothing. Many LDCs consider the package 'underwhelming' and not significant in terms of helping them accept a new round. Clearly, the "confidence-building effort" has been found wanting. On the other hand, the major players are clearly not enthusiastic about making too many (any ?) concessions at this early stage.

VI. Integrated Framework (IF)

14. As initially foreseen, a review of the IF was to take place two years after its launch. The World Bank recently conducted such independent review which will be considered by the six core agencies (WTO, World Bank, IMF, ITC, UNCTAD and UNDP) in early July 2000.

15. There is general dissatisfaction amongst LDCs that the IF has not so far met its stated aim of the better coordination of technical assistance. Though most LDCs have produced needs assessments, the six core agencies have not produced a meaningful list of what assistance has been, or is planned to be, provided. The round table programme is well behind schedule and the results of the five completed to date are disappointing. It is to be hoped that the current review will be genuinely independent and reinvigorate the process.

VII. Institutional arrangements

16. For LDCs, there has been some discussion among Members as to whether the existing Sub-Committee on LDCs should be converted to a new Committee on LDCs with enhanced Secretariat support. This is still under consideration.

17. The Chairman of the General Council has issued a discussion paper on internal transparency and the effective participation of all Members. The paper confines itself to a 'non-exhaustive' list of questions, e.g:

• can the consensus principle be refined ?
• could smaller representative consultative groups, including regional groupings, help ? (note 2)
• how can information be better distributed ?
• should the timing of Ministerial Conferences be altered ?

VIII. Accessions


18. The introduction of a formal fast-track system for LDCs seeking accession to the WTO has not found favour. However, it is recognised that such LDCs need enhanced technical assistance in that the pace of accession depends in part on the institutional capacity in the LDCs themselves. It has been suggested that the process for all LDCs currently seeking accession should be completed by the time of the Fourth Session of the Ministerial Conference, due before the end of 2001.

IX. Technical cooperation and capacity building


19. The WTO Director-General has been seeking to raise the Secretariat budget for technical assistance to SFr 10 million. The current thinking is that this will be phased-in over three years. There was disappointment that the Quad (and others) package for LDCs (see paragraph 12) did not make provision for immediate additional funding for technical cooperation. In addition the Secretariat is seeking voluntary contributions to the global trust fund. However, it is of interest that over 90% of technical assistance expenditure is funded through bilateral donations.

Note 1 : Multifunctionality is an argument used to give agriculture a special status. It would take into account such elements as reducing the risk of food shortages and the preservation of land, the environment and rural communities. (return to text)

Note 2 : For example, the well-established Cairns Group, ASEAN or other specific interest groups such as the Like-Minded Group which includes Pakistan, India, Egypt, Indonesia, Dominican Republic and Malaysia. (return to text)

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