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WTO GENESIS The General Agreement on Trade and Tariff (GATT) came into existence in 1947
It sought substantial reduction in tariff and other barriers to trade and to eliminate discriminatory treatment in international commerce. India signatory to GATT 1947 along with twenty two other countries
Eight rounds of negotiations had taken place during five decades of its existence
UR 1986-93 Tokyo 1973-79 Kennedy 1964-67 Dhillon 1960-61 Geneva Round 1956 Torquay Round 1951 Annecy Round 1949 Geneva Round 1947
•WTO establishment. •Agriculture •Textiles and Clothing •TRIPS •Services •Dispute Settlement body
4. 2.1. 9. 3. Australia Belgium Brazil Burma (now Myanmar) Canada Ceylon (now Sri Lanka) Chile. 10. 7. 8. China Cuba Czechoslovakia France India 13 Lebanon 14 Luxembourg 15 The Netherlands 16 New Zealand 17 Norway 18 Pakistan 19 Zimbabwe 20 21 22 23 Syria South Africa United Kingdom United States . 12. 11. 5. 6.
Russian Federation 13. Tonga 19. Yemen “Apart from Vatican. Bhutan 5.Observer Status 1.” . Ukraine 20. Ethipoia 7. Seychelles 16. Tazakistan 18. Libya 12. Lao PDR 11. Sudan 17. observer nations must start the process of becoming members within five years of becoming observers. Iran 8. Kazakastan 10. Algeria 3. Bosnia 6. Serbia 15. Afghanistan 2. Belarus 4. Uzbekistan 21. Iraq 9. Saudi Arabia 14.
Working Party Established
Number of Working Party Meetings *
Draft Working Party Report ** Jun 2006
Afghanistan Algeria Andorra Azerbaijan Bahamas Belarus Bhutan Bosnia and Herzegovina Cape Verde Ethiopia Iran Iraq Kazakhstan Lao People's Democratic Republic Lebanese Republic Libyan Arab Jamahiriya
Nov 2004 Jun 1987 Jul 1997 Jun 1997 May 2001 Sep 1993 Sep 1999 May 1999 Nov 1999 Jan 2003 Jul 1996 Sep 2004 Jan 1996 Jul 1997 Jan 1999 Jun 2004
Dec 2004 Jun 1987 Oct 1997 Jul 1997 Jul 2001 Oct 1993 Oct 1999 Jul 1999 Jul 2000 Feb 2003 May 2005 Dec 2004 Feb 1996 Feb 1998 Apr 1999 Jul 2004 9 2 4 Dec 2005 (FS) Sep 2006 7 3 2 3 Nov 2005 Apr 2005 (FS) Aug 2005 (FS) 9 1 4
WTO Came into existence for the purpose of :
Transparent, free and rule-based trading system Provide common institutional framework for conduct of trade relations among members Facilitate the implementation, administration and operation of Multilateral Trade Agreements Rules and Procedures Governing Dispute Settlement Trade Policy Review Mechanism Concern for LDCs and NFIDCs Concern on Non-trade issues such as Food Security, environment, health, etc.
MFN (Most Favored Nation) Members are bound to grant to the products of other members treatment not less favorable than that accorded to the products of any other country. National Treatment Once goods have cleared customs, imported goods must be treated no less favorably than the equivalent domestically produced goods.
ENCOURAGE DEVELOPMENT . PREDICTABLE AND GROWING ACCESS TO THE MARKETS Prohibition of Quantitative Restrictions Binding of Tariffs Bound Tariffs cannot be increased Progressive reduction in the protection. FAIR COMPETITION 4.2. BOP. TRANSPARENCY 5. 3. Exceptions: Safeguards.
6. 9. 5. 4. Agreement Agreement Agreement Agreement Agreement Agreement Agreement Agreement Agreement Agreement on on on on on on on on on on Agriculture SPS Measures Textiles & Clothing Technical Barriers to Trade Trade related Investment Measures Pre Shipment Inspection Rules of Origin Import Licensing procedure SCM Safeguards . 10. 3.Annex 1-A: Agreement on Trade in Goods 1. 7. 2. 8.
cultural and sporting services Transport services. 6. 11. 8. WTO has defined services into 12 sector further divided into 155 sectors. . 5. 3. 10. Business (professional and computer) Communication Construction and Engineering services Distribution services Educational services Environmental services Financial services Health services Tourism services Recreational. 2. 12.Service Sectors • 1. 4. Other services. 9. 7.
(d) Movement of consumers to the country of importation. . (c) Temporary movement of natural persons to another country to provide services there.Modes of Services • GATS applies to four modes: • • • • • • • (a) Cross border movement of service suppliers (b) Establishment of commercial presence in the country where service is provided.
Forms of IPR Patents Designs Copyright Plant Varieties Trade Secrets Trademarks or Brands Geographical Indications .
33% 20-50 57% Minimum avg cut: 54%* 30-80 38.67 % > 75 66-73% >130 44-48 % .Selection of Market on the basis of Tariff Reduction Schedule Developed Bands Reduction Bands Developing Reduction 0-20 50% 0-30 33.00 % Maximum avg cut: less than 36%* 50-75 64% 80-130 42.
the exact nature of which would be decided during the on going negotiations.…….Special Product: Hnkg declaration Members will have the flexibility to Selfdesignate an Appropriate number of tariff lines as Special Products guided by indicators based on the criteria of food security. Product designated as SPs would be eligible for more flexible treatment. . livelihood security and rural development.
Import duty rates Tariff Rate Quota 400% 4% 10.000 tons .000 tons < 10.
37 Countries who have TRQs • • • • • • • • • • • • Australia (2) Barbados (36) Brazil (2) Bulgaria (73) Canada (21) Colombia (67) Costa Rica (27) Czech Republic (24) Ecuador (14) El Salvador (11) EU (87) Guatemala (22) • • • • • • • • • • • • • Hungary (70) Iceland (90) Indonesia (2) Israel (12) Japan (20) Korea (67) Latvia (4) Malaysia (19) Mexico (11) Morocco (16) New Zealand (3) Nicaragua (9) Norway (232) • • • • • • • • • • • • Panama (19) Philippines (14) Poland (109) Romania (12) Slovak Republic (24) Slovenia (20) South Africa (53) Switzerland (28) Thailand (23) Tunisia (13) United States (54) Venezuela (61) .
Tariff Escalation Sl no. Country Basic Product Product Tariff (percent) 1 EU Milk 113 Grapes 18 Apples 11 2 Japan Milk 280 Pineapple 17 Grapes 3 USA Apples Milk Oranges Pineapple Grapes Processed Product Product Tariff (percent) Cheese 120 Grape Juice 215 Apple Juice 63 Yoghurt 370 Pineapple Juice 30 30 34 179 133 31 12 14 12 Grape Juice 17 Apple Juice 66 Milk in powder Cheese 4 Orange Juice 3 Pineapple Juice 1 Grape Juice .
Tariff Escalation • Tariff escalation occurs when the tariff applied on a product “chain” rises as goods undergo further processing. • In agricultural sector these levels will reach on an average 17% in EU. • This results in a higher effective protection for the processing industry that otherwise would be the case. . 27% in Japan and 9% in US.
and for a limited number of products in each case. The right to make use of the SSG provision has been reserved by 38 WTO Members. few of them have access to this provision. • • • . offering “ceiling bindings” instead.Special Agricultural Safeguard • Removal of Quantitative restrictions may result into sudden surge in import causing injury to the domestic industry. As many of the developing countries did not tariffy.Higher duty is applied only till the end of the specific year. SSG allows imposition of additional tariff in case of : Volume Trigger: specified rapid surge in imports. Price Trigger: import price below specified reference price.Additional duties can be imposed only on shipment concerned and on the products to which tariffied rates apply.
6 June 2000. T able 1. G/AG/NG/S/9.WTO Members eligible to use the Special Agricultural Safeguard Member Dev elop ed Percentage of agricultural tariff lines covered by SSG* 10 13 31 60 40 12 49 66 7 13 59 9 27 13 10 29 39 13 39 39 11 31 Canada Czech EC (12) Hungary Iceland Japan Norway Poland Romania Slovak Switzerland United States Dev elop ing Colombia Costa Rica El Salvador Mexico Namibia Philippines South Africa Swaziland Thailand Venezuela Source: WT O document . * Number of ag ricult ural t ariff lines covered by t he SSG as a p rop ort .
Price elasticity of demand .
changes in the price do not affect the quantity demanded for the good. any increase in the price. . no matter how small. will cause demand for the good to drop to zero.
• Green Box: Allowed. • Blue Box: Allowed for the time being. . • Amber Box: Must be reduced over time.Domestic Support policies ….
including the provision of means to facilitate the transfer of information and the results of research to producers and consumers.Green Box Policies Green Box policies are assumed to affect trade minimally. and include support such as : •Research. •Disaster payments . •Food security stocks (and targeted food security). including research in connection with environmental programmes. and research programmes relating to particular products •Extension and advisory services.
or •livestock payments are made on a fixed number of head. •These are called the „BLUE BOX‟ Subsidies.Blue Box Policies Direct payments to farmers are exempt from the reduction commitments if: •Such payments are decoupled •such payments are based on fixed area and yield. or •such payments are made on 85 percent or less of the base level of production. .
• Non Product Specific AMS: Total level of support directed at the agricultural sector as a whole. .Amber Box Policies Total AMS has two components • Product Specific AMS: Total level of support provided for each basic agricultural product.
i. • Product-specific AMS = sum of all positive support to a basic product (market price support + other types of support not dependent on price gap) Product-specific AMS should be included in Total AMS only if it exceeds the de minimis level (5% for developed countries or 10% for developing countries)..i. • Market price support for a product = (administered price at the farm gate .fixed external reference price) x eligible production – Where fixed external reference price = c. • Total AMS = (product-specific AMS exceeding de minimis + non-product specific AMS exceeding de minimis) . unit value for 1986-88 eligible production = quantity of production receiving the administered price.Calculation of AMS…….e. if (product-specific AMS/market value of total output of the product) x 100 is greater than 5 (or 10 in the case of developing countries) • • • Non-product-specific AMS = sum of all positive non-product specific AMS Non-product specific AMS should be included in Total AMS only if it exceeds the de minimis level (5% for developed countries or 10% for developing countries). i. if (non-product specific AMS/market value of total output of the product) x 100 is greater than 5 or 10 respectively.f.e.
000.000 • Barley AMS (AMS 2) = $3.000.000.000 mt • Value of wheat production = $510.000 > Fertilizer subsidy = $1.000.000.000 • Value of barley production = $100.000.000.000 > Value of oilseeds production = $250.000 (de minimis level=$12.000) Oilseeds: > Deficiency payments for oilseeds = $13.000 (de minimis level=$5. year Y Wheat: • Intervention price for wheat = $255 per tonne • Fixed external reference price (world market price) = $110 per tonne • Domestic production of wheat = 2.000 • Wheat AMS (AMS 1) • ($255–$110) x 2.500.000.000 Value of total agricultural production = $860.000.000 de minimis level=$43.000.000 tonnes = $290.000 • (de minimis level=$25.000.000.000.000) Barley • Deficiency payments for barley = $3.000.000.000 .Calculation of the current total AMS Member X (developed country).000 > Non-product-specific AMS (AMS 4) = $4.000.000 Current total AMS (AMS 1 + AMS 3) = $304.000 > Oilseeds AMS (AMS 3) = $14.000.000) Support not specific to products > Generally available interest rate subsidy = $ 4.500.
% ? 1947 2009 .
Two Way Dilemma How do you ensure that the country’s consumers are being supplied food safe to eat? How can you ensure strict health & safety regulations are not being used as an excuse for protecting domestic producers? WTO Agreement on Sanitary and Phyto Sanitary Measures WTO Agreement on Sanitary and Phyto Sanitary Measures .
SPS or TBT ? SPS Measures human or animal health from food-borne risks human health from animal.or plant-carried diseases animals and plants from pests TBT Measures human disease control (unless it’s food safety) nutritional claims food packaging and quality examples: labelling (unless related to food safety) or diseases examples: pesticide residues food additives pesticide handling seat belts .
animal or plant products sources from different countries. .3 No unjustifiable discrimination – between Members with similar conditions – between own territory and other Members SPS permits Members to impose different sanitary and phytosanitary requirements on food. provided that they "do not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail".Non-discrimination Article 2.
Equivalence If the exporting country objectively demonstrates that its measures achieve the same ALOP as the importing country Members shall Accept SPS measures of other Members as equivalent .
including pest.or disease. differing climatic conditions & different pest or diseases or food safety conditions so as to lead to the development/imposition of different SPS requirements • Exporter to demonstrate (reasonable access to be given for inspection/testing) .Disease free areas Article 6 • Adaptation of SPS measures to regional conditions.free areas.
Transparency Article 7 & Annex B Members shall establish an Enquiry Point AND designate a Notification Authority notify other Members of new or changed SPS regulations when no international standard exists OR the new regulation is different than the international standard AND regulation may have significant effect on trade .
. Adoption of the regulation 6. 60 days 5.. Drafting of the regulation . Publication of the regulation 7. .. Draft text upon request (or website) 3.Time. Receive & discuss comments 4. Publication of a notice 1.. Notification to other Members 2. Entry into force of the regulation 8. 6 months 9.Transparency timeline Min. End of comment period Min.
Understanding Technical regulations .
Incidence of product withdrawals .
Rapid Alert Notifications from EU FOR Indian Products .
Traceability Requirements .
Strict Packaging requirement .
• The establishment number should be printed on the inner poly liner. . poly bag. • In the case of milk & milk products – Labeling should be in Chinese. or vacuum bag.Strict Labeling Requirements • A large amount of information has to be provided on the label in both English & Chinese. – Specific font sizes have to be maintained. • In the case of Alcohol & Pre-packaged food – Labeling should be in Chinese. – Specific background colors have also been mentioned.
Let’s see what Pakistan has to ask for? .
hygiene and acceptance for the packed product and for the consumer. • Packaging shall be manufactured in such a way that the presence of noxious and other hazardous substances and materials is minimised with regard to the presence in emissions. including recycling. produced and commercialised in such a way as to permit its re-use or recovery. . • Packaging shall be designed. and to minimise the environmental impact when packaging waste is disposed of. when packaging is incinerated or landfilled. ash or leachate.EU Directive on packaging and packaging waste 94/62/EC • Volume and weight of the packaging shall be limited to the minimum amount to maintain the necessary level of safety.
. produced and packaged. in an environmentally sound way. and which can be disposed of at the end of their useful life. The environmental impact of the product is assessed throughout the entire life cycle of the product. Criteria: – ecolabelling schemes are generally based on the Life Cycle Assessment.Ecolabelling Aim: – To provide consumers with a choice in buying products which have been designed.
of miles from food to plate → shorter shipping distance becomes a competitive advantage • www.organiclinker.com/food-miles.Food Miles Food transported across the world burns up a lot of fossil fuel and contributes to global warming → consumers are becoming conscious and need to know nr.cfm (food mile calculator) .
economic strengthening of the organisation) – Environmental development chapter – Standards on labour conditions (incl. democracy. occupational health and safety) • Product specific standards – (e. participation. transparency) – Economic development chapter (incl.g. varieties. child labour. Fairtrade premium. credit. export ability. Forced labour. freedom of association. pre-financing. pricing) . quality grades) • Trade standards – (long term relationships.Fair Trade standard Standard includes minimum requirements and progressive requirements: • Generic fair trade standards – Social development chapter (incl.
USA.Different labels • Max Havelaar label operational in 14 European countries and 3 countries outside • Transfair label operational in Austria. Italy. Germany. Japan . Canada.
electrical appliances.g. toys. machinery.Product safety Manufactured products • CE Marking [compulsory to a range of products and hazards. pressure vessels. e. Full list is mentioned under the New Approach Directive] Indicates that the product conforms to the European applicable and legal demands in terms of safety. health and consumer protection . protective wear. incl.
Product safety CE marking • EU Directives (per product group) describe the essential requirements (laid down in norms as defined by CEN. directives with full legal texts and applicable standards (EN norms) – Safety of toys.newapproach. which differ as per the safety risk involved • From self-declaration by the manufacturer to testing and verification by testing institutes (notified bodies) • http://www.org/ – Product overview. Directive 88/378/EEC . CENELEC or ETSI).
Textile Labelling • Directive 2008/121/EC • All textile products must carry a label which indicates the fibre content on the product • A textile product consisting of two or more fibres must be marked + % • Fibre marking in % order .
Organic labeling • Regulated through EU regulation 2092/91 and 1788/2001 • To label a product as organic a minimum of 95% of the ingredients have to be produced by organic methods • Inspections of final product are not sufficient (inspections during production process) • Conversion period of 2 year • Certification through accredited bodies (e.g. IMO) . Skal.
Tariff and Non Tariff barriers For Herbal exports MFN range NTM% NTM Description Switzerland 0-0 50% Labelling requirement Product ch.requirement to protect 8.60% human health Japan 0-10 USA 0-6 60% Authorization to protect plant health .
europa.eurep.intracen.sa-intl.ch (International Standards Organisation www.org (EUREPGAP) www.uk (BRC) www.europa.ac.eu (EU legislation) http://exporthelp.cfm (Pesticide Residue Level Database) .uk/label (UK regulations guide) www.foodlaw.globalgap.rdg.flo-cert.net http://eur-lex.brc.cbi.nl/accessguide www.Internet adresses • • • • • • • • • • • • • www.org.org/ep (ITC Packaging resource) http://ec.eu/sanco_pesticides/public/index.org (Social Accountability International) www.eu (EU Export Helpdesk) www.codexalimentarius.org (GLOBALGAP) www.net (FLO Fair Trade Label Certification) www.europa.iso.
Tamanna Chaturvedi firstname.lastname@example.org +91-11-26967558 .