WTO market access committee sees considerable increase in activity

The World Trade Organisation’s (WTO’s) committee on market access said it sees a considerable increase in activity at the meeting held on Wednesday, 10 October, noting substantial progress made on the updating of WTO members’ schedules.

The committee specifically examined a number of notifications on quantitative restrictions (QRs), and considered ten specific trade concerns raised by delegations.

WTO members took note of progress made on five ongoing HS transposition exercises (HS96, HS2002, H2007, HS2012 and HS2017) and welcomed the announcement by the chair of the committee, Zsófia Tvaruskó of Hungary, that the special procedures for the transposition into HS96 of the schedules of 64 developing countries and least-developed countries (LDCs) had been finally concluded.

The committee agreed to forward to the General Council, through the Council for Trade in Goods (CTG), the extension of four collective waivers relating to the HS2002, HS2007, HS2012 and HS2017 transposition exercises, and discussed the specific HS2017 transposition methodology that will be used by the Secretariat.

In addition to taking note of the revised report by the Secretariat concerning Article XXVIII renegotiations, which allows WTO members to modify or withdraw concessions from their schedules through negotiation and agreement with other members, and adopting the Draft Report (2018) of the Committee to the Council for Trade in Goods, members discussed a number of trade concerns.

Members reviewed 11 notifications on quantitative restrictions (QRs), including seven new submissions.  Note was taken of five notifications, and members agreed to revert back to the remaining six, which have remained outstanding for some time because either they relate to specific trade concerns or members have requested additional information. Quantitative restrictions generally refer to prohibitions and restrictions other than tariffs and taxes that members implement to take account of certain concerns, such as the protection of human, animal and plant health, the environment, or even national security concerns (more on the issue here).

The Committee on Market Access also oversees the tariff and import data administered by the WTO. In this regard, members heard a report by the WTO Secretariat concerning the Consolidated Tariff Schedules (CTS) database and notifications to the Integrated Database (IDB). Since the decision by the General Council to establish the IDB dates back to more than 20 years, the committee agreed to launch discussions on possible ways to improve it.

WTO schedules of concessions have been regularly changed and updated since 1995, so it is important for the Committee on Market Access to keep track of them (a list of the changes can be found here). These include a series of modifications necessary to reflect amendments to the Harmonized System (HS), an international classification nomenclature administered by the World Customs Organization (WCO), which is updated every 5-6 years.

Updating these legal instruments is critical to properly monitor the hundreds of thousands of tariff concessions that have been negotiated in the WTO context, as schedules are intended to provide security, transparency and predictability to the multilateral trading system.

Several members expressed concern over the methodology and the accuracy of the import data that had been provided by the European Union to justify its proposal to modify its current WTO commitments as a consequence of the upcoming exit of the United Kingdom from the EU. These statistics do not meet the requirements of Article XXVIII and the relevant procedures, because they include trade with preferential partners and non-WTO suppliers, according to those members that requested the EU to submit corrected statistics.

They also questioned whether a renegotiation could be undertaken based on an “uncertified” schedule for the 28 EU members. The EU replied that having an uncertified schedule did not prevent it from engaging in Article XXVIII negotiations and that it would be addressing bilaterally the concerns over the statistics. It also stressed its intention is to analyze any claims submitted by WTO members as part of the ongoing negotiations and in full conformity with its obligations

Members acknowledged the difficulty of the Brexit process and called for a mutually acceptable solution that is as close as possible to WTO rules. The lack of compensatory adjustment and the fact that the UK was copying an uncertified EU-28 schedule, which may contain errors, was a concern expressed by delegations.

Members also shared concerns over the approach proposed for determining post-Brexit goods trade commitments as, in their view, they could result in substantial reductions in market access commitments, especially with regards to TRQs, as well as the UK’s large farm subsidy claim. Moreover, they went on, the UK proposal does not identify how the EU would be treated in the UK’s market access commitments. In the view of these members, these are matters of general and systemic concern, and Brexit should not result in a loss of market access that was established through previously negotiated outcomes.

The European Union took the floor to indicate that it was not in a positon to respond to questions on the UK’s proposed goods schedule, which will take effect when the EU’s schedule stops applying to the UK.  It also invited members having expressed concerns to engage directly with the UK government.

Other trade concerns brought up in the Committee on Market Access included India’s duties on telecommunication and other products, Australia’s market access prohibition on 5G telecommunications equipment, the enlargement of the EU to include Croatia, India’s quantitative restrictions on certain pulses, a selective tax on energy drinks, carbonated drinks and other products applied by three GCC countries, Oman’s customs duties on cigarettes, and the Russian Federation’s QRs on birch logs.

The next formal meeting of the Committee is provisionally scheduled for 28 May 2019, and the next HS Multilateral Reviews are scheduled for 6 November 2018 and 5 February 2019.

The Committee also elected Mr. Diego Nunes Oger Fonseca of Brazil as new vice chair.