【News】 “Plurilateral” approach possible under WTO, European think tank says (Oct. 30, 2014)


Satoko Adachi – Geneva

Many countries which support the agreement on trade facilitation under the World Trade Organization should go ahead with its implementation without the consent of the entire membership, a European research institute said in a recently released policy proposal.

The European Centre for International Political Economy, an independent trade policy think tank based in Brussels, suggested that the agreement can follow the approach taken for the Information Technology Agreement (ITA), which was originally settled by a relatively few countries but its benefits were later made available to all WTO members under the principle of most-favored-nation treatment.

If the idea is adopted, it is likely to draw huge attention as an alternative way to revive the WTO’s function as a negotiation body.

Stuart Harbinson, senior fellow at ECIPE who made the proposal, was Hong Kong’s ambassador to the WTO in 2001 when the Doha Round of trade negotiations began. As a member of the WTO’s General Council and also chairman of the committee on agriculture, Harbinson compiled earlier drafts of the chairperson’s texts of modalities for agriculture. He then served as Chief of Staff to former WTO Director-General Supachai Panitchpakdi and as Special Advisor to former Director-General Pascal Lamy.

The ITA, which Harbinson cited as a precedent for the trade facilitation agreement, is a deal aimed at eliminating tariffs on digital devices and is one of the WTO’s plurilateral agreements. In order to minimize the problem of “free riding” – countries which are not parties to the agreement exporting digital devices under zero-tariff while maintaining their own tariffs – the modalities for the ITA provide that implementation would be subject to participation reaching a “critical mass” threshold of 90 percent of global trade of such products in terms of value. Since a very large number of countries want to implement the trade facilitation agreement, “no doubt a potential ‘critical mass’ exists” for the agreement, Harbinson pointed out.

On the other hand, he noted the Agreement on Government Procurement, another plurilateral deal under the WTO which sets market liberalization rules for public works projects, is discriminatory and “does not seem workable” in the case of trade facilitation, because members that are not party to the agreement cannot directly claim its benefits.

Noting that some developing nations, most notably India, are opposed to the implementation of the trade facilitation agreement, Harbinson wrote: “Why would those countries currently blocking a multilateral Protocol agree to a potentially discriminatory plurilateral agreement becoming part of the WTO legal system?”

At the same time, he said there are “technical and legal questions” in implementing the agreement, adding that it “is not immediately obvious” how all the complex rules and categories of commitments in the agreement could be reflected in member countries’ individual schedules.

Still, Harbinson stressed that such non-discriminatory plurilateral approach can be adopted in negotiations for agreements under the WTO which are not discussed in the Doha round, such as those for eliminating tariffs on environment-friendly products, trade in services and a pending updating of the information technology agreement.

To increase the chances of attracting more participants to such plurilateral agreements to make them multilateral, the original participants “should leave adequate room, within limits, for negotiation with potential new adherents,” he added.

(Oct. 30, 2014)

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