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1 Workshop on WTO Accession UNDP/UNCTAD Goods Commitments Belarus, October 2008 United Nations Conference on Trade and Development Ralf Peters Trade Negotiations.

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Presentation on theme: "1 Workshop on WTO Accession UNDP/UNCTAD Goods Commitments Belarus, October 2008 United Nations Conference on Trade and Development Ralf Peters Trade Negotiations."— Presentation transcript:

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2 1 Workshop on WTO Accession UNDP/UNCTAD Goods Commitments Belarus, October 2008 United Nations Conference on Trade and Development Ralf Peters Trade Negotiations and Commercial Diplomacy Branch, DITC UNCTAD, Geneva

3 WTO and GATT Source: WTO

4 3 GATT Basic principles: Trade without discrimination MFN-clause (Most-Favoured-Nation): Art. I Countries cannot (normally) discriminate between their trading partners. E.g. give the same tariff to all trading partners (between foreign suppliers) National treatment: Art. III Once goods have cleared customs, imported goods must be treated equally to domestically-produced goods (between domestic and foreign supplier)

5 4 Other important GATT Provisions Article 2: Schedule of Concessions (Bound rates: maximum ceiling level, mentions exceptions such as anti-dumping, normally Article VI) 11: Elimination of quantitative restrictions (Export restrictions allowed for food security) 19: Special Safeguard (emergency action on imports if quantity increased AND causes or threatens to cause serious injury; right to prevent injury) 20: General exceptions (protect human, animal or plant life or health) 24: Free-trade Agreements (only under conditions) 28: Modification of schedules (negotiate change but pay compensation)

6 5 Outline of the Agreement on Agriculture Three Pillars Domestic Support AMS reduction Green Box de minimis Market Access Tariffication Tariff reduction Minimum access Special Safeguard Export Subsidies Reduction Prohibition of new subsidies Special and Differential (S&D) Treatment for DCs and LDCs Related Agreements, e.g. Marrakesh Decision Establishment of a Committee on Agriculture Continuation of the reform process

7 6 Tariff Schedule Saudi Arabia

8 7 Market Access: Current Tariffs Source: UNCTAD TRAINS and UNCTAD calculations based on WTO CTS Specific Problems: Tariff escalation Tariff peaks

9 8 MARKET ACCESS COMMITMENTS Agriculture Accession negotiations

10 9 Accession negotiations

11 10 CHINACHINESE TAIPEISaudi Arabia Entry date Dec 2001Jan 2002Dec 2005 Tariffs Average 16 %13 %12 % Max 65 % (cereal)500 % (deer velvet) 340 % (chicken offal) 200 % (tobacco) Specific tariffs Mostly in 0 – 25 % % TRQs Wheat, corn, rice, soybean oil, palm oil, rapeseed oil, sugar, wool, cotton Pork, chicken, milk, peanuts, red bean, garlic, sugar, fresh fruits, sugar, dried mashroom None e.g Rice In-quota:1 % MFN: 65 % Quantity:9,636,000 mt Staging:4 years Sugar In-quota:12.5 % MFN: 143 % Quantity:205,000 mt Staging:4 years Accession negotiations

12 11 CHINACHINESE TAIPEISaudi Arabia SSG None77 tariff linesNone Pork, poultry, milk, garlic, red beans, fresh fruits (pears, persimmons), peanuts, sugar Special treatment None Rice: import prohibition Quantity:205,000 mt Some alcohol, pork: import prohibited Accession negotiations

13 12 Domestic Support In WTO terminology, domestic support is classified by boxes according to their effect on production and trade Amber box: trade distorting support, to be reduced Blue box: production limiting support Green box: not or minimal distorting support

14 13 De minimis Development Blue Box Research Training Extension Infrastructure Pest & disease control Public stockholding Domestic food aid Decoupled income support Support to structural adjustment etc. Amber Box Green Box Product specific support Market price support Payment on output Input subsidies Investment subsidies Non-product specific support Amber Box To be reduced & bound Domestic Support

15 14 Domestic Support COMMITMENTS Accession negotiations

16 15 ISSUES FOR AGRICULTURAL NEGOTIATIONS Market access Tariffs Bind & evtl. reduce Non-tariff barriers Eliminate Tariff rate quotas ? Safeguard ? Agri policies Farm subsidies (Amber) Bind & Reduce (Blue) ? (Green) Provide information Export subsidies Bind & eliminate or reduce Other trade policies State trading enterprises Article XVII of the GATT Taxation regime Article III of the GATT Product quality standard Agreements on SPS, TBT Accession negotiations

17 16 Multilateral Track Working Party (WP) meetings (negotiations on rules) 1.Memorandum of Trade Regime 2.Questions & replies 3.Working Party Report Negotiating Process Accession negotiations

18 17 Doha: Negotiating Mandate Single undertaking –Impl. Issues and SDT review –Agriculture –Services Market access (reduction of trade barriers) –NAMA –Rules (AD, SCM & RTAs) –TRIPS –Trade and Environment Singapore issues –Trade Facilitation (part of single undertaking) Non single undertaking –DSU Review AD = Anti Dumping SCM = Subsidies Countervailing Measures RTA = Regional Trade agreements TRIPS = Trade Related Interlectual Property DSU = Dispute Settlement Understanding

19 18 Market Access: Agriculture Formula:line-by-line increasing cuts Level of ambition, S&D? Exporter – importer Deved – deving Preferences Flexibilities: Exempt some lines, SP & SeP Special Products (SP) Products essential to achieve food security, livelihood security and rural development Sensitive Products (SeP): Selected number of tariff lines will receive flexibility in tariff cuts (but access is improved) Initial tariffs: Bound rates Result: Meaningful better access? Protect vulnerable farmers Start

20 19 Draft Modalities Text July 2008: Recently acceded members Market Access Moderate cuts under the tiered formula by 8 ad valorem percentage points in each band Exempt their final bound tariffs at or below 10 per cent VRAMS and SLI_RAM_EIT completely exempted from cuts Overlapping commitments? Start of implementation for such tariff lines one year after the end of implementation of accession commitment Implementation period for RAMs prolonged by up to two years after the end of the developing countries implementation period VRAMs: Very recently acceded members (Saudi Arabia, Macedonia, Vietnam, Tonga, Ukraine); SLI_RAM_EIT: Small low income RAMs with economies in transition

21 20 Draft Modalities Text July 2008: Recently acceded members Domestic Support OTDS and AMS cuts: VRAMs and SLI_RAM_EIT exempted; other RAMs 2/3 of cuts De minimis: VRAMS and SLI_RAM_EIT exempted; other RAMs with 5% de minimis 1/3 of cuts + five years longer implementation period For RAMs, the maximum permitted value of support shall be 5 per cent of the average total value of agricultural production in the period VRAMs: Very recently acceded members (Saudi Arabia, Macedonia, Vietnam, Tonga, Ukraine); SLI_RAM_EIT: Small low income RAMs with economies in transition

22 21 Merchandise Trade: Important factors for Acceding Countries Development strategy Advantages of being a WTO member, e.g. - market access (tariffs, NTBs) - attracting investments - dispute settlement - rule-making - national lobby groups - domestic reforms, … Low tariffs: good for consumers and imported inputs Offensive interests Accession negotiations

23 22 Merchandise Trade: Important factors for Acceding Countries Protect some sensitive industries (infant industries) Maintain tariff revenue Recognition for unilateral liberalisation => Starting negotiations from applied rates (no rule) Formula does not apply BUT Members take impact on their tariffs into account Sectorials: Acceding C. may be asked to participate New rules will apply New commitments reduce gap Defensive Interests Defensive Interests Doha Round Challenges in addition to advantages of WTO Link

24 Importance of Agricultural Sector Value added of agricultural sector in developing countries: 9 per cent Employment: 38 per cent Rural population even higher 10 per cent of world trade

25 24 European Union: bound and applied tariff rates Note: New AVEs (Paris), Five products with tariffs above 500% not plotted. Olive oil, refined Sugar, raw Tea

26 25 Developing countries: bound and applied tariff rates Number of tariff lines Tariffs in per cent Bound at ceiling level Lower applied rates

27 26 Related WTO Agreements All WTO agreements and understandings on trade in goods apply to agriculture (e.g. customs valuation, emergency safeguard measures) Where there is a conflict: AoA prevails Agreement on Agriculture Sanitary and Phytosanitary Measures (SPS) Technical Barriers to Trade (TBT) Trade –Related Aspects of Intellectual Property Rights (TRIPs) Marrakesh Decision for LDC and NFIDC

28 27 MARKET ACCESS COMMITMENTS non-agriculture Accession negotiations


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