Progress of WTO Services Negotiations on Maritime Transportation Hiroyuki Nishida Director, International Negotiations Office, International Shipping Division, Maritime Bureau, Ministry of Land, Infrastructure, Transport and Tourism (MLIT) 10 June 2010

Uruguay Round (1986 ～ 1994) 1986: Commenced negotiation 1994: Agreement reached at the ministerial meeting -Agreement Establishing the WTO, GATS adopted (put into effect in 1995) -For the three sectors, maritime transport, finance and basic telecommunications services, agreement was not reached, and negotiation to be continued. Negotiation continued for the three sectors (1994 ～ 1996) 1994: Commenced negotiation 1996: For finance and basic telecommunications services, agreement reached. Only for the maritime transport, negotiation interrupted. For this sector alone, agreement was not reached. Doha Round (2001 ～ ) Jan. 2001: Commenced negotiation at the ministerial meeting (Doha) Dec. 2005: Agreed upon holding multilateral conferences in addition to bilateral negotiations, at the ministerial meeting (Hong Kong) Jul. 2006: Negotiation interrupted at the G6 ministerial meeting Jan. 2007: Negotiation resumed at the annual meeting of the World Economic Forum. Jul 2008: At the ministerial-level meeting (Geneva), discussion developed for broad agreement on negotiations in 2008, but no agreement was reached, with a large difference in opinion between developed and developing countries for the agricultural sector. *It is stipulated that, at the Doha Round, discussions should be comprehensively made on the agricultural sector, NAMA (non-agricultural market access) sector and services (including maritime transpor) sector, and agreement should be reached on comprehensive commission. *The maritime transport is one of the six important negotiations subject sectors of the Japanese services area (maritime transport, computer, telecommunications, distribution, construction and finance). 1 History of WTO Services Negotiations (Liberalization of maritime transport)

2 World Trade Organization (WTO) Most favored nation (MFN) Treatment: Every member state shall equally give the same treatment to any other member state. Market Access (MA): Every member state shall not take any limitations listed on access to national market. National treatment (NT): Every member state shall give the same treatment to individuals and businesses from any other member state as it gives to its domestic individuals and businesses. Set up in January 1995, the WTO is an international organization aimed at accelerating deregulation on trade of goods and services among multiple countries. Headquartered in Geneva, it had 153 member states (districts) and areas as of October Overview Basic Principles of the GATS Structure of WTO and GATS

Challenges Approach ○MFN treatment requirement of the GATS isl not enter into force in the Maritime transport sector only. No secure fair competition conditions. ○Many members have not made substantial commitments. No way to prevent the introduction of protectionist measures Maritime Friends Group promotes free and fair competitive conditions on oceangoing shipping through actions shown below. ○In February 2006, 13 co-sponsor members presented “the Model Schedule on Maritime Transport Services” as model commitment along which they requested 26 recipient members to make their offer. China has changed from recipient to co-sponsor later. (a) Maritime Transport Services (b) Maritime Auxiliary Services (c) Additional Commitment ex ） Commitment of use of port services *Target members ： USA, Argentina, Brazil, ASEAN etc.(25members) Target for Request *Maritime Friends Group ： Australia, Canada, China, EC, Hong Kong, Iceland, Japan, Mexico, NZ, Norway, Panama, The Republic of Korea, Switzerland and Chinese Taipei (14members) 3 Promotion of Free and Fair Shipping Market through WTO

・ Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) entered into force on January 1, 1995 and consists of 16 articles and 4 annexes. WTO has 153 members as of September MFN (Most- Favoured-Nation Treatment ) (GATS Article II ) Market Access （ GATS Article XVI ） National Treatment (GATS Article XVII) Modes of supply （ GATS Articles I 2. ） Cross-border supply （ Mode 1 ） ex ： International freight transport to the own country by foreign companies Elimination of MFN exemption Note: 1. MFN has been applied to all sectors on GATS (except the lists of MFN exemption). 2. MFN has not been applied to any specific commitment on Marine Transport Services, and will enter into force at the same time as the conclusion of the negotiations （ Decision by the Council for Trade in Services on June 1996 ） (a) ： None (b) ： Unbound(4/6), None(2/6) the same as left Consumption abroad （ Mode 2 ） ex ： Repair of national flag vessels abroad (a) ： None (b) ： None the same as left Commercial presence （ Mode3 ） ex ： Commercial presence by foreign companies (a) ： Establishment of registered company for the purpose of operating a fleet under the national flag of the State of establishment ： Unbound Other forms of commercial presence ： None (b) ： None the same as left Presence of natural persons （ Mode 4 ） ex ： Board national flag vessels by foreign crews (a) ： Ships’ crews ： Unbound Key personnel employed in relation to a commercial presence as defined under mode 3b) ： Unbound, except as indicated in the horizontal section (b) ： Unbound, except as indicated in the horizontal section the same as left Additional Commitme nt(GATS Articles XVIII) 1. Access to and use of Port Services ※ 2. Access to and use of necessary services of Multimodal Transport ※※ －－ ※ 1. A maritime transport provider shall have the ability to use port services on reasonable and non-discriminatory terms and conditions. ※※ 2. A multimodal transport operator shall have the ability to rent, hire or charter trucks, railway carriages, ships and related equipment on reasonable and non-discriminatory terms and conditions. Negotiations of Maritime Transport Services on WTO ・ Annex 1B: General Agreement on Trade in Services （ GATS ） （ consists of 29 articles, 8 annexes and Schedules of the members) - applies to measures by Members affecting trade in services. (Article I 1.) Target for Maritime Transport liberalization ： (a)Maritime Transport Services and (b) Maritime Auxiliary Services ※ ※ (b) Maritime Auxiliary Services: Maritime cargo handling, Storage and Warehousing, Customs Clearance, Container Station and Depot, Maritime Agency and Freight Forwarding Services  In March 2006, 13 co-sponsor members * presented “the Model Schedule on Maritime Transport Services” shown below as model commitment along which they requested 26 recipient members to make their offer. (*14 members at present)  As of March 2010, 10 recipients (including U.S.A)have not made commitments/ offers in International Freight Transport. Furthermore, 8 recipients have not made commitments/ offers at all in maritime transport services).

State of play of the Liberalization of Maritime Transport Services ・ Model Schedule on Maritime Transport Services is to promote the liberalization of Maritime Transport. ・ The most important service is ”Maritime Transport Services” of Mode 1 （ Cross-border supply ）. ・ At present many members have few commitments/offers in Maritime Transport Services. ・ Model Schedule on Maritime Transport Services is to promote the liberalization of Maritime Transport. ・ The most important service is ”Maritime Transport Services” of Mode 1 （ Cross-border supply ）. ・ At present many members have few commitments/offers in Maritime Transport Services. Image of member’s commitments/offers Co-sponsors （ 14 members ） Recipients which have made commitments/offers in Maritime Transport Services （ 17 members ） Scope of Commitment Maritime Transport Services Ex) Commitment of international transport (freight and passengers) Maritime Auxiliary Services Ex ） Commitment of access to cargo handling service, maritime agency service, etc. Maritime Auxiliary Services Ex ） Commitment of access to cargo handling service, maritime agency service, etc. Additional Commitment Ex ） Commitment of use of port services such as pilotage, towing and tug assistance, etc. Additional Commitment Ex ） Commitment of use of port services such as pilotage, towing and tug assistance, etc. Additional Commitment Ex ） Commitment of use of port services such as pilotage, towing and tug assistance, etc. Additional Commitment Ex ） Commitment of use of port services such as pilotage, towing and tug assistance, etc. Maritime Transport Services Ex) Commitment of international transport (freight and passengers) Maritime Transport Services Ex) Commitment of international transport (freight and passengers) Maritime Auxiliary Services Ex ） Commitment of access to cargo handling service, maritime agency service, etc. Maritime Auxiliary Services Ex ） Commitment of access to cargo handling service, maritime agency service, etc. Recipients which have not made commitments/offers at all in Maritime Transport Services （ 8 members ） Possibility to take protectionist measures It is important to expand commitments/offers in order to limit the possibility to take protectionist measures. 5