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The World Trade Organization To Scrutinize Regional Trade Agreements

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WTO Members renew attempts to deepen scrutiny of regional trade agreements

WTO members revived this week long-standing talks to deepen the WTO’s scrutiny of regional trade agreements (RTAs) in line with instructions laid out by ministers last December. Provisions in the recent Nairobi Ministerial Declaration, said the new committee chair, could pave the way for a more constructive review of how these deals affect the wider multilateral trading system.

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“One question everyone agrees on is the need to discuss RTAs in the WTO. It is confusing that we haven’t managed to do that in a constructive way for quite some time,” the new chair of the Committee on Regional Trade Agreements, Ambassador Daniel Blockert (Sweden), said at the committee meeting held on 5 and 6 April.

Paragraph 28 from Nairobi may change that situation,” Ambassador Blockert said.

This paragraph contains ministers’ instructions to the committee to discuss the systemic implication of RTAs for the multilateral trading system and their relationship to WTO rules. It also lays down members’ agreement to work towards the transformation of the provisional Transparency Mechanism, which is used to review RTAs, into a permanent one on the condition that current issues surrounding notification procedures are resolved.

The WTO acknowledges that RTAs encourage closer economic integration among participating members; however, WTO Director-General Roberto Azevêdo has also said RTAs cannot be a substitute for the multilateral trading system. WTO rules allow members to enter into RTAs on certain conditions but assessing whether these conditions are being met has been challenging as interpretation of the rules remains open to debate.

Brazil said at the meeting it was time for members to see how to implement the Ministerial Declaration as the recent proliferation of RTAs deserves careful attention. The WTO, Brazil said, must analyse trends and how they influence the shape of the multilateral trading system. Brazil also pointed out that there is guidance from ministers for members to work towards transforming the Transparency Mechanism for RTAs into a permanent one. Uruguay, Paraguay, Australia, Chile, Russia, the European Union, Japan and Hong Kong China welcomed the initiative.

The United States, however, said a more productive use of time would be to iron out notification delays as 73 RTAs have yet to be notified WT/REG/W/103. The United States had circulated a document which showed the gaps in transparency of RTAs, including a lack of notifications and delays in the provision of data and comments on factual presentations. The chair similarly reported that implementation reports were due for 129 RTAs WT/REG/W/101 and Corr.1. If WTO members want a realistic discussion on the impact of RTAs on the multilateral system, these non-notified agreements must be accounted for, the US said. Australia, Japan, the EU and Canada similarly urged members’ compliance with notification commitments.

Nevertheless, the US said it shared the aspirations of the chair and other members to reinvigorate work in the committee.

Ambassador Blockert said he is holding bilateral consultations to hear members’ views on three issues: how to move forward with a dialogue on the impact of RTAs, whether making the current Transparency Mechanism permanent is a priority, and how to improve notifications and transparency.

“I know there are a lot of difficult issues to be solved. I know there are connections with other committees. I know there are difficulties with notifications and the Transparency Mechanism. It’s going to be tough,” Ambassador Blockert said. “But I won’t be doing my job as a chair if I don’t attempt to implement what our ministers told us to do and it is clearly laid out in the Ministerial Declaration,” he added.

He replaces departing committee chair Ambassador Amr Ramadan (Egypt).

Consideration of five RTAs

Members discussed five RTAs as part of the regular work of the committee. They concluded their consideration of:

  • Free Trade Agreement between Canada and Republic of Korea, goods and services WT/REG362/1
  • Economic Partnership Agreement between Japan and Australia, goods and services WT/REG361/1
  • Free Trade Agreement between the EFTA (European Free Trade Association) states and the Central American States (Costa Rica and Panama), goods and services WT/REG357/1
  • Free Trade Agreement between the EFTA states and Colombia, goods and services WT/REG299/1
  • Free Trade Agreement between EFTA states and Bosnia and Herzegovina, goods WT/REG360/1
    The US and EU commended the parties to the Canada-Korea and Japan-Australia deals for the comprehensive scope of their RTAs. The US lamented the low level of liberalization of agricultural products in EFTA’s RTAs. In addition, the services commitments negotiated by the EFTA states in these RTAs were said not to be significantly different from their General Agreement on Trade in Services (GATS) commitments.

Consideration of such agreements is based on a factual presentation prepared by the WTO Secretariat as well as written questions and responses exchanged among WTO members in advance of the meeting.

About WTO

The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.

{Source: World Trade Organization – Media Relations}

[Photo credits-featured image:  By World Trade Organization from Switzerland – Geneva Ministerial Conference 18-20 May 1998, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=27475930]

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