LIBERALIZATION OF TRADE (WTO AGREEMENTS)

CONTENTS 1- Introduction 2- WTO agreement 3- Trade in services (GATS) 4- Dispute settlement 5- Review of maritime transport 6- Issues of GATS in maritime services trade

1- INTRODUCTION

INTRODUCTION Liberalization of trade Liberalization of trade was the objective of Multilateral Trade Negotiations (MTN) in successive ROUNDS since 1947 within the framework of GATT that led in 1995 to the establishment of WTO

INTRODUCTION GATT General Agreement on Tariffs and Trade Is not a single agreement It’s a compendium of agreements

INTRODUCTION GATT rounds Geneva1947 Annecy1948 Torquay1950 Geneva1956 Dillon Kennedy Tokyo Uruguay (GATT1994)

INTRODUCTION Future rounds Objective: more liberalization through progressive rounds First such round within five years of WTO agreements entering into force

INTRODUCTION WTO :The Organization Established in 1995 in a meeting in Marakesh Headquarters in Geneva It’s a forum in which Member countries meet to negotiate and implement their MLT agreements Latest set of such agreements concluded in GATT rounds are referred to as WTO agreements

INTRODUCTION WTO :The Agreements Are grouped in 4 groups: Trade in goodsGATT 1994 Trade in servicesGATS Trade-Related Intellectual Property Rights TRIPS Other agreements

2- WTO AGREEMENTS

WTO AGREEMENTS Underlying doctrines 1-Most Favoured Nation (MFN) 2-National Treatment (NT)

WTO AGREEMENTS MFN Principle No discrimination between one trading partner (WTO Member) and another Deviations from MFN principle are possible through EXEMPTIONS in the members’ schedule Exemptions are possible only at the beginning Exemptions after WTO comes into force will be through a WAIVER process Waiver process is very difficult as it requires 3/4 votes of the council

WTO AGREEMENTS National treatment Treatment of (service) suppliers of a trading partner must not be less favourable than what is accorded to national (service) suppliers

WTO AGREEMENTS Obligations A contracting Member to WTO accepts to undertake: several obligations Obligations are either GENERAL or SPECIFIC Obligations concluded in Uruguay round are called initial commitments Initial commitments are supposed to increase in successive future rounds

WTO AGREEMENTS General obligations MFN Transparency Notification Flexibility for developing countries Regional integration Domestic legislation Monopolies and business practices Balance of payment provisions (BOP) Payments and transfers Exceptions etc

WTO AGREEMENTS Specific obligations A member is bound to give treatment to other Members in accordance with the commitments undertaken Commitments are inscribed in tables called SCHEDULES Schedules are annexed to the respective WTOagreement Commitments are enforceable through a dispute settlement process

3- TRADE IN SERVICES The General Agreement on Trade in Services (GATS)

GENERAL AGREEMENT ON TRADE IN SERVICES GATS A contracting member to GATS: Accepts the general obligations on all its service sectors e.g.. MFN obligation Identifies its service sectors to be liberalized by introducing them in the member’s SCHEDULE Entries to a member’s schedule determines the SPECIFIC COMMITMENTS of the member vis a vis a particular sector A sector not included in a member’s schedule means the country has taken no liberalization obligations vis a vis this sector

GATS Obligations Therefore GATS agreement is made up of: General obligations, basically MFN Specific commitments in particular sectors of services

GATS Schedules Schedule of a certain member is reached through a series of bilateral and plurilateral negotiations with trading partners It evolves through a pragmatic approach

GATS commitments Commitments express the degree of limitations on liberalization. They may be: Extending to all sectors in the schedule(horizontal commitments) Applicable to all services of a specific sector (specific commitments) A sector entered in the schedule without commitments means that the member accepted full liberalization of this sector

GATS Schedules Specific commitments are grouped in a members schedule to indicate limitations on: Market access National treatment Additional commitments The objective is balanced costs and benefits as well as reciprocity

GATS schedules Schedules are in the form of a table as follows: First column(pillar): name of service Second column: limitations on market access Third column: limitations on national treatment Additional commitments

GATS market access General rule is free market access( full liberalization) Exceptions: limitations ascribed in the schedule Examples of limitations 1. Number of service suppliers 2. Total assets of service transactions 3. Total quantity of service outputs 4. Total number of natural persons...

GATS Schedules Commitments are expressed in the schedule in relation to four modes of service supply, namely: Cross border Consumption abroad Commercial presence Presence of natural persons

GATS Schedules In the schedule, commitments as regards: Certain aspect(e.g. taxation) Of a specific sector And a certain mode of supply Is inscribed as either: Non or, Unbound

GATS Schedules An unbound commitment means limitations are unbound i.e. no obligation as to liberalization A non commitment means no limitations exist i.e. full obligation for liberalization

GATS schedule modification Only after three years of its application Notice of intention to be submitted three months in advance for the council for trade and services Council may request for negotiations for a compensatory adjustment If negotiations fail, affected member may refer to arbitration

3- GATS maritime services commitments Twenty nine deputy members have commitments related to maritime services: Twenty one both freight and passengers Five only freight Three only passengers

3- GATS maritime services commitments profile Twenty six commitments in auxiliary services Seventeen commitments in port services Ten commitments in maintenance and repair

3- GATS Classification of services Most frequently used classifications are: Central Product Classification(CPC)Provisional as appears in CPC and CPC rev. 1(GNS/w/120) Draft Schedule Classification

4- DISPUTE SETTLEMENT

DISPUTE SETTLEMENT PROCEDURE Consultation Panel Appeal

DISPUTE SETTLEMENT (DS) Legislative authority: DSU DS organs: Dispute settlement body(DSB) Panel Appellate body Concern councils Concern committees

DISPUTE SETTLEMENT APPLICABILITY All WTO agreements In exceptions: 1. Textile and clothing 2. Anti-dumping 3. Customs valuation Modifications: 1. Services 2. Trips Additional provisions 1. Some agreements on goods

DISPUTE SETTLEMENT CONSULTATION Addressee has to respond within ten days Consultation should start within thirty days Dispute has to be settled within sixty days Otherwise, the aggrieved member has to resort to a panel

DISPUTE SETTLEMENT PANEL DSB: Establish the panel of 3 or 5 qualified persons from a list Decides on its TOR Adapts the panel report within a period not less than 20 days and more than 60 days Report: Inception (descriptive) Interim (findings and conclusions) Final Duration 6 months (3 in case of emergency)

DISPUTE SETTLEMENT APPEAL A decision should be reached within 60 days Appellate body made up of 7 members Its report to be adopted by DSB Duration 12 months from the establishment of the panel

DISPUTE SETTLEMENT IMPLEMENTATION OF RECOMMENDATIONS Member should inform DSB of its intention of implementation within 30 days Member should give a time table for implementation Arbitration is resorted to if no agreement is reached within 90 days Implementation should not take more than 15 months

6- ISSUES OF GATS IN MARITIME SERVICES TRADE

MFN EXEMPTIONS MFN is a general obligation However, exemptions are allowed There are twenty six exemption lists in maritime transport services Exemptions are suspended till the next round of services negotiations Only fourteen MFN exemptions not suspended are those of members maintained specific commitments in the sector Four of the above cover measures under the UN code of conduct on liner conferences

MARITIME SERVICES Commitments as regards the first group of maritime services are related to market access Commitments as regards the second group are related to national treatment Commitments as regards the thirds group are scheduled under additional commitments

ISSUES FOR FUTURE NEGOTIATIONS Changes between CPC and CPC rev.1 Need for a composite classification Commitments of other modes of transport Inclusion of other services

5- REVIEW OF MARITIME TRANSPORT