Explanatory Memorandum to COM(2010)694 - EU position in the WTO General Council with regard to a decision on a Transparency Mechanism for Preferential Trade Arrangements

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dossier	COM(2010)694 - EU position in the WTO General Council with regard to a decision on a Transparency Mechanism for Preferential Trade ...
source	COM(2010)694
date	24-11-2010

1. At its meeting of 14-15 December 2006 the General Council of the World Trade Organisation (WTO) adopted a decision establishing the Transparency Mechanism for Regional Trade Agreements (RTAs)¹.

2. At the same meeting the WTO General Council adopted a Decision with regard to Transparency for Preferential Trade Arrangements (PTA)², under which the Committee on Trade and Development had been asked to consider transparency for preferential arrangements under paragraph 2 of the Enabling Clause – other than RTAs – and to report back within six months for appropriate action by the General Council. The Decision had been adopted without prejudice to the results of the deliberations of the CTD. Subsequently, on the basis of reports from the Chairman of the CTD, the General Council had agreed to extend by successive six-month periods the deadline for the CTD to consider this matter and to report back for appropriate action. The latest extension, agreed by the Council in July 2010, runs until December 2010.

3. Following extensive negotiations in the CTD and informal consultations, the CTD concluded its consideration of the matter at its 80th Regular Session on 4 October 2010³ and agreed on a Transparency mechanism for Preferential Trade Arrangements, to be forwarded to the General Council for adoption.

4. With respect to PTA transparency, our objectives and position in the negotiations reflected the importance the EU attaches to inter alia: ⁴ increasing awareness of PTA developments around the globe; ⁵ being able to monitor and assess the ways other members’ PTAs may influence our trade and investments also having regard to the fact that both developed and developing WTO members grant preferences; ⁶ ensuring better functioning of WTO in the oversight and review of PTAs; and ⁷ a better understanding of the impact of PTAs and their interaction with the multilateral trading system. The agreed draft is considered to meet these objectives. It complements the already provisionally adopted WTO Transparency Mechanism on Regional Trade Agreement, which addresses reciprocal preferential agreements

5. Although the PTA Transparency mechanism will require the EU to split data between different preferential schemes, in the main, the data required by the WTO Secretariat are already publicly available from different sources and databases. The guide and the factual presentation to be provided by the WTO secretariat would provide a more uniform, consistent and comprehensive presentation of PTAs overall.

6. The Transparency Mechanism deals exclusively with procedural matters on how PTAs are notified and factually presented and considered in the WTO and as such it do not prejudge the substance of the relevant provisions of the Enabling clause or other instruments mentioned in Paragraph 1(a), (b) or (c) of the Transparency Mechanism nor affect Members' rights and obligations under the WTO Agreements in any way.

7. To ensure that developing country Members can make full use of this mechanism, the draft text envisages the provision by the WTO Secretariat of technical support to developing country Members, and especially least-developed countries, in the implementation of the Transparency Mechanism.

8. The PTA Transparency Mechanism is expected to be formally adopted by the General Council of the WTO at its meeting of [14-15 December 2010]. This Transparency Mechanism would then apply on a provisional basis until WTO Members approve its permanent application. Pursuant to its provisions Members would review the Mechanism after three years, and if necessary modify the Mechanism in light of the experience gained from its provisional operation.

9. At the time of the adoption in the General Council of the WTO all four co-sponsors and the EU would make a statement to the effect that during the negotiations it was considered that a decision on the mechanisms permanent application would take into account the status of the RTA-TM.

1.
WTO Decision WT/L/671.
2.
The Decision was circulated as WT/L/672.
3.
WT/COMTD/71 of 11 October 2010.
4.
WTO Decision WT/L/671.
5.
The Decision was circulated as WT/L/672.
6.
WT/COMTD/71 of 11 October 2010.
7.
For greater clarity, since it has been notified to the GATT/WTO under paragraph 2(c) of the Enabling Clause, the Global System of Trade Preferences (GSTP) is not covered by this Mechanism, but instead, is covered by the General Council Decision of 14 December 2006 (Transparency Mechanism for Regional Trade Agreements).
8.
'Electronically exploitable format' means that entire data sets of a Member's annual data can be downloaded without undue restrictions (i.e. no limitations on the number of tariff lines or records that could be downloaded) and in formats that lend themselves to processing into data base format by the WTO Secretariat.
9.
For greater clarity, since it has been notified to the GATT/WTO under paragraph 2(c) of the Enabling Clause, the Global System of Trade Preferences (GSTP) is not covered by this Mechanism, but instead, is covered by the General Council Decision of 14 December 2006 (Transparency Mechanism for Regional Trade Agreements).
10.
The Notifying Member is the Member granting the non-reciprocal preferences.
11.
If the Notifying Member has already submitted the corresponding data to the UNCTAD, the provision of a copy of such data to the WTO would be acceptable, provided that it fulfils the notification requirements set forth in paragraph 16.
12.
'Electronically exploitable format' means that entire data sets of a Member's annual data can be downloaded without undue restrictions (i.e. no limitations on the number of tariff lines or records that could be downloaded) and in formats that lend themselves to processing into data base format by the WTO Secretariat.
13.
See template on Annex 3.
14.
Including, but not limited to, (a) criteria and restrictions for eligibility, modification of beneficiaries list; (b) tariff treatment, different preferential treatment, exceptions to the preferential treatment; (c) list of beneficiaries, number of beneficiaries, history of countries excluded from the preferential treatment; (d) handbooks from UNCTAD (for example www.unctad.org/en/docs/itcdtsbmisc42rev3_en.pdf and www.unctad.org/en/docs/itcdtsbmisc25rev2_en.pdf); and (e) from Members governments (www.ustr.gov/assets/Trade_Development ).