archives: WTO InfoNew issues/trade facilitation: U.S. against exemptions for developing countries
U.S. Rejects Facilitation Exemptions For Developing Countries from WTO PactsGENEVA--The United States has rejected the notion of granting all developing countries broad exemptions from any future WTO agreement on trade facilitation, according to a U.S. paper circulated to WTO members March 11.
The United States reaffirmed its support for the launch of WTO negotiations on trade facilitation, one of the four so-called "Singapore issues" whose fate is to be determined at the organization's upcoming ministerial conference in Cancun, Mexico, next September. The U.S. paper stressed that an agreement could be sealed "in a timely fashion" and that the negotiations "should not be foreseen as a complex undertaking."
Trade facilitation is often defined as the simplification and harmonization of procedures and formalities required for the movement of goods in international trade, including import and export procedures (e.g. customs or licensing procedures), transport formalities, and payments, insurance, and other financial requirements. With tariff barriers falling since the conclusion of the Uruguay Round in 1994, trade facilitation has become a key issue in reducing losses to business resulting from border delays and complicated or unnecessary documentation.
Recognizing that any trade facilitation agreement will need provisions on special and differential treatment for developing countries, the United States nevertheless said any additional time granted to developing countries to implement an agreement should be given on a country-by-country basis in accordance with established criteria.
"Rather than treating the matter of transitional periods as involving a blanket 'one-size-fits-all', more comprehensive and detailed transitional periods should be utilized, and integrated into the matter of technical assistance efforts," the United States argued.
U.S. Backs Diagnostics, Benchmarked Programs
Transition periods "could be established for various discrete commitments within an agreement on trade facilitation, with a clear potential for varying lengths of transition established in terms that are linked to the individual Member's situation," the United States continued. "These divergent situations could be reflected in the development of individual detailed packages that not only include transitional periods developed as part of the negotiations, but are also integrated into a technical assistance process that includes diagnostics and the development of benchmarked programs leading to implementation of the results of the negotiations."
The idea of differentiating between developing countries according to their level of development has been strongly resisted in other negotiating sectors. In the recent WTO talks on how to improve access to essential medicines in poor countries through more flexible rules on compulsory licensing, developing countries rejected a proposal from the Quad group (the United States, European Union, Japan, and Canada) which would have included a "graduation" scheme excluding better-off developing countries from the scope of the agreement.
Negotiations on trade facilitation received broad support in the run-up to the WTO's ministerial conference in Doha, Qatar, last November. However, the issue got caught up in the debate between the Quad group--led by the EU--and a number of developing countries over whether to launch separate negotiations on the issues of investment and competition policy. The EU championed the launch of negotiations in these two sectors, with India and the African Group of countries leading the opposition.
Singapore Issues to Be Studied
In the end, trade ministers agreed on a compromise under which all four of the Singapore issues--investment, competition, trade facilitation and transparency in government procurement--would undergo an initial study phase, with a decision to be made at Cancun on whether to launch negotiations. The four are referred to as the Singapore issues because WTO members agreed at their first ministerial conference in Singapore in 1996 to carry out analytical work on these sectors with an eye towards possibly formulating new WTO rules.
In a proposal submitted to WTO members last year, the United States said an agreement on trade facilitation could focus on "improvements and clarifications to Article VIII of the General Agreement on Tariffs and Trade." Article VIII sets out the principle that fees and formalities associated with importation and exportation "shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes."
The United States said that in some cases, improvements to Article VIII could be achieved through greater specificity on issues such as the use and applicability of import/export fees. The U.S. submission also highlighted the specific needs of the express freight shipment industry, which Article VIII does not address.
By Daniel Pruzin
WTO Reporter, Thursday, March 13, 2003 ISSN 1529-4153, Copyright © 2003 by The Bureau of National Affairs, Inc., Washington D.C.
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