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Background Note

November 1999

Snapshot of the state of play on the preparations for the Third Session of the Ministerial Conference of the WTO (Seattle, 30 November to 3 December 1999)


Implementation Issues

Built-in agenda

"New" Issues


I. Introduction

1. This paper considers briefly some of the key issues discussed for possible inclusion in the Ministerial Declaration but, as at the time of its preparation the final content is still not clear.

2. Under the Marrakesh Agreement establishing the World Trade Organisation on 1 January, 1995, Ministers meet at least every two years as the organisation’s top decision-making body. This, the Third Session of the Ministerial Conference will consider the launch of a new Round of negotiations covering:

  • the implementation of the existing agreements and decisions;

  • the so called built-in agenda: negotiations mandated at Marrakesh;

  • ‘new’ issues.

3. By mid-September 1999, over 150 proposals for issues to be included in the Ministerial Declaration had been tabled by Member States. Many were contradictory and covered items for immediate action in Seattle, for a new round of negotiations and for future programmes of work. The final draft-Declaration is being negotiated in Geneva, which will then be the basis for decisions in Seattle by 3 December 1999.

4. There are some fundamental differences in approach to the draft Declaration. Many developing countries would prefer the implementation of the existing agreements to be settled before considering further issues; and there are differences between major developed countries on the scope of a new round. The final declaration will require trade-offs. The key elements are outlined below:

II. Implementation Issues

5. Developing countries often lack the financial and human resources to meet their commitments under the more complex agreements and consider that the developed countries have failed to implement the agreements in a way that would benefit developing countries’ trade. An aspect of this is the special and differential provision for developing countries, which is sometimes specific, e.g. allowing longer transition periods or weaker commitments but may also sometimes be too vague. Developing countries wish to see the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, the Trade-Related Investment Measures (TRIMS) Agreement, the Sanitary and Phytosanitary (SPS) Agreement and the Technical Barriers to Trade (TBT) Agreement amended on this account.

6. Developing countries consider that their market-access expectations have not been met in the Agriculture Agreement and the Textile and Clothing Agreement, albeit the agreements have not been violated. This results from the manner of implementation by developed countries. Lower agriculture tariffs and more generous tariff quota systems are being sought; and in textiles and clothing, the more meaningful removal of quotas.

7. Developing countries are due to implement the TRIPS Agreement on 1 January 2000 and least-developed countries on 1 January 2006. Many think this is too short a period for the introduction of new legislation and enforcement measures and they are seeking an extended implementation period.

8. The Trade-Related Investment Measure (TRIMs) Agreement deals with such policies as minimum local content and trade balancing requirements, which are inconsistent with the GATT. Developing countries are due to implement this agreement on 1 January 2000 and least developed countries on 1 January 2002. Developing countries wish to delay implementation so as to retain flexibility in their policies for development needs.

9. Developing countries feel they are excluded from the creation of international standards under the SPS and TBT Agreements, and that they are often expected to comply with standards that go beyond their technical ability and financial capacity.

10. The Agreement on Textiles and Clothing provides for the return of restricted textiles and clothing trade to normal WTO rules in four stages (16% in 1995; 17% in 1998; 18% in 2003 and 49% on 1 January 2005). Developing country exporters are concerned at the lack of meaningful commercial benefits accruing in practice and are seeking, among things, the removal of half of existing quotas by 1 January 2002. Also, developing countries would like to have an agreement on the non-application of antidumping provisions until the full integration of the textile sector to normal GATT rules.

11. Several developing countries believe that a important imbalance exists in the Agreement on Subsidies and Countervailing Measures in that subsidies commonly used by developing countries for development purposes have been included in the actionable category, while some used by developed countries are in the non-actionable category.

III. Built-in agenda

12. The Agriculture Agreement provides for negotiations to reopen by the end of 1999 to continue the reform programme. The issues likely to be specifically covered are:

  • further reductions in tariffs, domestic support and export subsidies;

  • a review of tariff quotas and their administration;

  • a review of the special safeguards arrangements;

  • the inclusion of fishery and forestry products, which would cover environmental concerns, market access and export restrictions. (This could be a new, separate agreement.)

13. The General Agreement on Trade in Services (GATs) provides for negotiations to reopen on the further liberalisation of international trade in services in 2000. Aspects which are being considered for inclusion are:

  • improved commitments in respect of the ‘movement of natural persons’, which refers to the entry and temporary stay of persons for the purpose of providing a service;

  • rules dealing with subsidies, government procurement and safeguards;

  • rules dealing with such as the qualifications and licensing requirements for foreign service providers, with a view to preventing unnecessary barriers to trade;

  • commitments in respect of maritime transport, including access to port facilities and auxiliary services;

  • an annex in the interest of developing countries on tourism.

14. The TRIPS Agreement is due for review in 2000. Aspects likely to be included are:

  • geographical indications;

  • intellectual property protection for biotechnological inventions and plant varieties (article 27.3 (b) );

  • the need for developing countries to conform with the Agreement on 1 January 2000;

  • ensuring that the Agreement responds effectively and neutrally to new technological developments and practices;

  • the incorporation of new trade-related intellectual property treaties adopted outside the WTO;

  • the moratorium on nullification and impairment cases due to expire on 1 January 2000;

  • streamlining administrative procedures.

15. Since 1997, the Information Technology Agreement has provided for the reduction of customs duties on such as computers and telecommunications equipment. Consultations have taken place on the expansion of the list of products subject to duty reductions/elimination and on the need to address non-tariff measures also. This is likely to be considered at Seattle.

IV. "New" Issues

16. There is growing concern that the absence of mutually supportive trade and competition policies may not be in the best interests of development. Some 80 WTO Members, including 50 developing and transition countries, have adopted competition laws dealing with such as price fixing and monopolies. The desirability of developing a multilateral framework on competition policy - as an extension of the work of the existing WTO Working Group on the Interaction between Trade and Competition Policy – will likely be considered in Seattle.

17. Several developed Member States have proposed the negotiation of a WTO Agreement on Trade Facilitation aimed at reducing administrative barriers to imports and exports. Some developing Member States, however, favour guidelines, rather than a formal agreement, and a technical assistance programme.

18. Building on the work of the WTO Working Group on Transparency in Government Procurement established in 1997, there is growing support for a multilateral agreement aimed at ensuring that adequate information on procurement opportunities is made available and that decisions are fairly taken, which in turn would facilitate the monitoring of commitments not to discriminate against suppliers from other Members.

19. At the Second Ministerial Conference in 1998 a work programme was established to examine all trade related issues arising from electronic commerce and a declaration made that Members will continue their current practice of not imposing customs duties on electronic commerce. It will be proposed at Seattle that the no duties declaration be extended.

20. The Working Group on the Relationship between Trade and Investment has been considering the merits of a multilateral agreement on foreign direct investment. Development provisions would be central to the proposals and such as the ability of host governments to regulate the activities of investors, transparency and non-discrimination would be covered. However, a significant body of developed and developing countries are in favour of further analysis rather than a new agreement.

21. One of the most contentious of issues is the extent to which the WTO should be involved in labour standards. Some developed countries take the view that public confidence requires that there be some linkage between trade and certain core standards (eg. the freedom to bargain collectively, freedom of association, the elimination of discrimination and the elimination of forced and child labour). On the other hand, other developed countries and the developing countries argue that these issues are for consideration by the International Labour Organisation and that any linkage is essentially a form of protectionism in that the comparative advantage of lower-wage developing countries would be reduced.

22. Technical cooperation will feature prominently in the declaration. The issues are more funds, including a significant increase in the WTO budget provision, and enhanced coherence among the recipients, providers and sponsors.


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