MARKET ACCESS IssuesMARKET ACCESS Issues

Samer Seif El-YazalSamer Seif El-YazalCounsellorCounsellorInstitute for Training and Technical Institute for Training and Technical CooperationCooperationWorld Trade OrganizationWorld Trade Organization

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Structure of this Structure of this presentationpresentation

I.I. Market Access in the GATT/WTO Market Access in the GATT/WTO context: basic elements and context: basic elements and definitionsdefinitions

II.II. Introduction to NAMA negotiationsIntroduction to NAMA negotiations

III.III. Overview of Customs and Trade Overview of Customs and Trade Administration AgreementsAdministration Agreements

IV.IV. Market Access – Russian Market Access – Russian FederationFederation

V.V. Notification obligationsNotification obligations

I.I. MARKET ACCESS IN MARKET ACCESS IN THE GATT/WTO THE GATT/WTO

CONTEXT: CONTEXT: BASIC ELEMENTS AND BASIC ELEMENTS AND

DEFINITIONSDEFINITIONS

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1. What is Market Access?1. What is Market Access?

In the WTO framework, the In the WTO framework, the term stands for the totality of term stands for the totality of government-imposedgovernment-imposed conditions conditions (regulations/measures) under (regulations/measures) under which a product may enter a which a product may enter a country under non-country under non-discriminatory conditions.discriminatory conditions.

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1. What is Market Access?1. What is Market Access?

Market access in the WTO Market access in the WTO sense is regulated most of the sense is regulated most of the time through border measures time through border measures including, inter alia, tariffs, including, inter alia, tariffs, tariff rate quotas, quantitative tariff rate quotas, quantitative restrictions and other non-tariff restrictions and other non-tariff measures. measures.

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Predictable and growing access to Predictable and growing access to markets for goods and services is markets for goods and services is one of the goals of the WTOone of the goals of the WTO

Basic Principles: Non discrimination Basic Principles: Non discrimination (NT/MFN) and transparency(NT/MFN) and transparency

Predictable:Predictable: binding commitments binding commitments Growing accessGrowing access: periodic “rounds” : periodic “rounds”

of negotiationsof negotiations

2. GATT/WTO: ensuring MA2. GATT/WTO: ensuring MA

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3. Types of MA barriers in trade in 3. Types of MA barriers in trade in goodsgoods

In the GATT/WTO In the GATT/WTO framework there framework there are 2 basic types are 2 basic types of barriers to trade of barriers to trade in goods:in goods:

1.1. TariffsTariffs

2.2. Non Tariff Non Tariff BarriersBarriers

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4. Basic GATT/WTO framework4. Basic GATT/WTO framework

– Tariffs should normally be the only Tariffs should normally be the only instrument used to protect domestic instrument used to protect domestic industries industries

– Quantitative restrictions Quantitative restrictions (bans/restrictions) are generally (bans/restrictions) are generally prohibited (GATT Art. XI)... but they prohibited (GATT Art. XI)... but they could be allowed under certain could be allowed under certain circumstancescircumstances

– Tariffs should be transparent, Tariffs should be transparent, predictable and stable predictable and stable

– Tariffs are included in “Schedules of Tariffs are included in “Schedules of concessions”concessions”

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5. Tariffs: duty types5. Tariffs: duty types

Duty typeDuty type ExampleExample

Ad valoremAd valorem 5%5%

SpecificSpecific $5 per Kg.$5 per Kg.

CompoundCompound 10% + $2 per Kg10% + $2 per Kg

MixedMixed 10% 10% oror $2 per $2 per Kg, Kg,

NA V

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6. Tariffs and the GATT6. Tariffs and the GATT

Security and Security and predictability in predictability in trade in goods are trade in goods are achieved through achieved through the commitments the commitments embodied in the embodied in the ""bindingbinding” of ” of tariffs. tariffs.

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6. Tariffs and the GATT6. Tariffs and the GATT

A "A "boundbound" tariff is a " tariff is a tariff in respect of tariff in respect of which there is a legal which there is a legal commitment not to commitment not to raise it beyond a raise it beyond a certain levelcertain level

A binding is a A binding is a “ceiling”, not a “floor”“ceiling”, not a “floor”

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7. GATT Article II7. GATT Article II

““a. Each contracting party shall accord a. Each contracting party shall accord to the commerce to the commerce of the other of the other contracting partiescontracting parties treatment treatment no less no less favourablefavourable than that provided for in the than that provided for in the appropriate Part of the appropriate appropriate Part of the appropriate Schedule annexed to this agreement.”Schedule annexed to this agreement.”

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7. GATT Article II7. GATT Article II

Treatment Treatment cancan be more favourable: be more favourable:

bound tariffsbound tariffs vs. vs. applied tariffsapplied tariffs

Other tariff treatments are also Other tariff treatments are also possible due to, possible due to, inter aliainter alia, RTAs, CUs , RTAs, CUs and non-reciprocal arrangements and non-reciprocal arrangements ( “enabling clause”)( “enabling clause”)

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8. Other duties and charges 8. Other duties and charges (ODCs)(ODCs)

Include all taxes levied on imports in Include all taxes levied on imports in addition to the customs duties which are addition to the customs duties which are not in conformity with Article VIII (Fees not in conformity with Article VIII (Fees and Formalities) of GATT 1994. and Formalities) of GATT 1994.

GATT Article II:1 (b)GATT Article II:1 (b) stipulates that the stipulates that the products described in the schedules products described in the schedules ""shall be exempt from other duties or shall be exempt from other duties or charges of any kind imposed in excess of charges of any kind imposed in excess of those imposed at the time a concession those imposed at the time a concession was grantedwas granted".".

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8. Other duties and charges 8. Other duties and charges (ODCs)(ODCs)

Understanding on the Interpretation of Understanding on the Interpretation of Article II:1 (b): Members must include in Article II:1 (b): Members must include in Schedules any other duty or charge Schedules any other duty or charge existing on by 15 April 1994. existing on by 15 April 1994.

If not notified by then, then eliminated. If not notified by then, then eliminated.

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9. “Schedules” of concessions9. “Schedules” of concessions

Tariff bindings and other concessions Tariff bindings and other concessions are contained in the “Schedules of are contained in the “Schedules of concessions” (GATT Article II)concessions” (GATT Article II)

Each Member of the WTO has its own Each Member of the WTO has its own Schedule, identified by a roman Schedule, identified by a roman numbernumber

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9. “Schedules” of concessions9. “Schedules” of concessions

ExceptExcept customs unions where two customs unions where two or more Members have one single or more Members have one single schedule for a (i.e. European schedule for a (i.e. European Communities)Communities)

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GA

TT 1

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4G

ATT 1

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10. Structure of a Member's Schedule10. Structure of a Member's ScheduleS

chedu

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Sch

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Con

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Con

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Part I

Part II

Part III

Part IV

Section I

I.A

I.B

Section II

Preferential ratesPreferential rates

Non-tariff ConcessionsNon-tariff Concessions

Agricultural SubsidiesAgricultural Subsidies

MFN RatesMFN Rates

Duties (Tariffs and ODCs)

Tariff Rate Quotas (TRQs)

Agricultural Products

Other Products

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Why “non-agricultural” Why “non-agricultural” products?products? Agricultural Agricultural

products are products are defined in Annex 1 defined in Annex 1 of the Agreement of the Agreement on Agricultureon Agriculture

Non Agricultural Non Agricultural products are all products are all the “other the “other products”products”

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Schedule M – Member XSchedule M – Member XThis Schedule is authentic only in the English languageThis Schedule is authentic only in the English language

PART I – MOST-FAVOURED NATION TARIFFPART I – MOST-FAVOURED NATION TARIFFSECTION II – SECTION II – Other ProductsOther Products

Tariff item number

Description of products

Base rate of duty (U/B)

Bound rate of duty

Implem. period

INR ODCs

1 2 6 4 5 6 7

0301 LIVE FISH

030110 - ornamental fish 10$ /Tonne (U)

$5 / Tonne 1995/2004 5%

030191 -- trout (salmo trutta, salmo gairdneri, salmo clarki, salmo agua bonita, salmo gilae)

100% 50% 1995

030192 -- eels (anguilla spp.) 66% (U) 50% or $90, w.i.t.h.

1995/2004 $5 per Kg.

030193 -- carp 66% (U) 50% 1995/2004

030199 -- other: 66% (U) (U) 2000

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11. Changing a concession 11. Changing a concession

1.1. Tariff negotiations Tariff negotiations ((GATT Article XXVIII GATT Article XXVIII bisbis)) **19571957

2.2. Rectifications and modificationsRectifications and modifications

3.3. Renegotiations (GATT Article XXVIII)Renegotiations (GATT Article XXVIII)

4.4. Customs Union (GATT Article XXIV)Customs Union (GATT Article XXIV)

5.5. OtherOtheri.i. Implementation of the HSImplementation of the HS

ii.ii. Transposition to HS92, HS96, HS2002, HS2007Transposition to HS92, HS96, HS2002, HS2007……

All of them have special procedures!All of them have special procedures!

Need to be “certified” in order to be legally bindingNeed to be “certified” in order to be legally binding

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Binding coverage of Non AG Binding coverage of Non AG prod.prod.

50 Members have 100% binding 50 Members have 100% binding coveragecoverage (EC-25 counted as one)(EC-25 counted as one)

29 Members between 90% and 29 Members between 90% and <100%<100%

10 Members between 50% and < 90%10 Members between 50% and < 90% 10 Members between 25% and < 50%10 Members between 25% and < 50% 23 Members between 0.1% and < 23 Members between 0.1% and <

25%25%

NOTE: Agriculture already 100% NOTE: Agriculture already 100% bindingbinding

Part II. NAMA Negotiations:Part II. NAMA Negotiations:Paragraph 16 of the Doha Paragraph 16 of the Doha Ministerial DeclarationMinisterial Declaration

““116. 6. We agree to negotiations which shall aim, We agree to negotiations which shall aim, by modalities to be agreedby modalities to be agreed, to reduce or as , to reduce or as appropriate eliminate tariffs, including the appropriate eliminate tariffs, including the reduction or elimination of tariff peaks, high reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff tariffs, and tariff escalation, as well as non-tariff barriers, in particular on products of export barriers, in particular on products of export interest to developing countries.interest to developing countries.””

““Product coverage shall be comprehensive and Product coverage shall be comprehensive and without a priori exclusions.without a priori exclusions.””

““The negotiations shall take fully into The negotiations shall take fully into account the special needs and interests account the special needs and interests of developing and least-developed of developing and least-developed country participants, including through country participants, including through less than full reciprocity in reduction less than full reciprocity in reduction commitmentscommitments, in accordance with the , in accordance with the relevant provisions of Article XXVIII bis of relevant provisions of Article XXVIII bis of GATT 1994 and the provisions cited in GATT 1994 and the provisions cited in paragraph 50 below.paragraph 50 below.””

Paragraph 16 of DMD (cont.)Paragraph 16 of DMD (cont.)

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Basic framework for negotiating tariff concessions

Defining the rules of the gameGATT Article XXVIII bis

Tariff reduction: which option? Request/Offer? Sectoral? Formula? If so, which one?

New bindings: how many? at what level?

Implementation period S&D / Flexibility provisions

Members prepare and submit offers

Multilateral verification Final Schedules of concessions

Mod

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Post-

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DDA (NAMA): Sequence of main DDA (NAMA): Sequence of main eventsevents

2001 2001 ->-> Doha Ministerial Declaration (Paragraph 16)Doha Ministerial Declaration (Paragraph 16)

July 2002 ->July 2002 -> Work program is adoptedWork program is adopted(deadline for modalities = 31 May 2003)(deadline for modalities = 31 May 2003)

May 2003 ->May 2003 -> Chairman’s Draft Elements for Modalities Chairman’s Draft Elements for Modalities (TN/MA/W/35 i.e. “Girard Text”)(TN/MA/W/35 i.e. “Girard Text”)

September 2003 ->September 2003 -> Cancun Ministerial fails to adopt a Cancun Ministerial fails to adopt a “framework” on NAMA “framework” on NAMA (JOB(03)152/Rev.2)(JOB(03)152/Rev.2)

July 2004 ->July 2004 -> “July Package” adopts the NAMA Framework “July Package” adopts the NAMA Framework with initial elements with initial elements (Annex B of WT/L/579) (Annex B of WT/L/579)

December 2005 ->December 2005 -> Hong Kong Ministerial clarified add. Hong Kong Ministerial clarified add. elements elements

20072007 Chairman's Introd. to the Draft NAMA Modalities Chairman's Introd. to the Draft NAMA Modalities (JOB(07)/126)(JOB(07)/126)

20082008 Third revision of draft modalities Third revision of draft modalities (TN/MA/W/103/Rev.2)(TN/MA/W/103/Rev.2) July Mini-ministerialJuly Mini-ministerial Fourth revision of draft modalities Fourth revision of draft modalities (TN/MA/W/103/Rev.3)(TN/MA/W/103/Rev.3)

Part III. Customs and trade Part III. Customs and trade administration administration

VAL: Customs valuation VAL: Customs valuation

PSI: Pre-shipment inspectionPSI: Pre-shipment inspection

RO: Rules of originRO: Rules of origin

LIC: Import licensing LIC: Import licensing proceduresprocedures

VAL: BackgroundVAL: Background

Specific and Specific and ad-valoremad-valorem customs customs dutiesduties

Short historical overviewShort historical overview

– Article VII GATTArticle VII GATT

– Brussels definition of valueBrussels definition of value

– Tokyo Round Valuation CodeTokyo Round Valuation Code

VAL: The WTO AgreementVAL: The WTO Agreement

The new AgreementThe new Agreement

Basic principle: Transaction valueBasic principle: Transaction value

The 6 MethodsThe 6 Methods

Other provisionsOther provisions

VAL: Method 1 - VAL: Method 1 - Transaction valueTransaction value Definition of transaction valueDefinition of transaction value

Conditions to be fulfilledConditions to be fulfilled

– Evidence of saleEvidence of sale

– No restriction on the disposition or useNo restriction on the disposition or use

– Not subject to additional conditionsNot subject to additional conditions

– Full prices, unless...Full prices, unless...

– Sufficient information for adjustmentsSufficient information for adjustments

– Buyer and seller not related, otherwise ...Buyer and seller not related, otherwise ...

– Related partiesRelated parties

Cases where Customs Administrations have Cases where Customs Administrations have reasons to doubt the truth or accuracy of the reasons to doubt the truth or accuracy of the declared valuedeclared value

VAL: Methods 2 and 3VAL: Methods 2 and 3

Method 2: Transaction value of Method 2: Transaction value of identical goods (Article 2)identical goods (Article 2)

– ExceptionsExceptions

Method 3: Transaction value of Method 3: Transaction value of similar goods (Article 3)similar goods (Article 3)

Other methodsOther methods

PSI: Background and PSI: Background and overviewoverview

Functions of PSIFunctions of PSI

– conformity of goods with the terms conformity of goods with the terms of the sales contractof the sales contract

– verification of invoice priceverification of invoice price

Definitions Definitions

ObjectivesObjectives

PSI: Obligations of user PSI: Obligations of user MembersMembers

Non-discrimination (Article 2.1) Non-discrimination (Article 2.1) Governmental requirements (Article 2.2)Governmental requirements (Article 2.2) Site of inspection (Article 2.3)Site of inspection (Article 2.3) Standards (Article 2.4)Standards (Article 2.4) Transparency (Articles 2.5 to 2.8)Transparency (Articles 2.5 to 2.8) Protection of confidential business information Protection of confidential business information

(Articles 2.9 to 2.13)(Articles 2.9 to 2.13) Conflicts of interest (Article 2.14)Conflicts of interest (Article 2.14) Delays (Articles 2.15 to 2.19)Delays (Articles 2.15 to 2.19) Price verification (Article 2.20)Price verification (Article 2.20) Appeals procedure (Article 2.21)Appeals procedure (Article 2.21) Derogation (Article 2.22Derogation (Article 2.22))

PSI: Obligations of exporter PSI: Obligations of exporter MembersMembers

Non-discrimination (Article 3.1)Non-discrimination (Article 3.1)

Transparency (Article 3.2)Transparency (Article 3.2)

Technical Assistance (Article 3.3)Technical Assistance (Article 3.3)

PSI: Independent review PSI: Independent review proceduresprocedures

Purpose of the Independent Review Purpose of the Independent Review ProceduresProcedures

Independent EntityIndependent Entity

RO: BackgroundRO: Background

DefinitionDefinition

Where are rules of origin used?Where are rules of origin used?

No specific provision in GATTNo specific provision in GATT

Interest in the harmonization of rules of originInterest in the harmonization of rules of origin

– Increased number of preferential trading arrangementsIncreased number of preferential trading arrangements

– Increase in the number of origin disputesIncrease in the number of origin disputes

– Increased use of anti-dumping lawsIncreased use of anti-dumping laws

RO: The UR AgreementRO: The UR Agreement

IntroductionIntroduction

Aims of the AgreementAims of the Agreement

– harmonizationharmonization

– general principlesgeneral principles

Coverage: all non-preferential rules of originCoverage: all non-preferential rules of origin

InstitutionsInstitutions

– WTO Committee on Rules of OriginWTO Committee on Rules of Origin

– WCO Technical CommitteeWCO Technical Committee

RO: HarmonizationRO: Harmonization

The Harmonization Work Programme (HWP)The Harmonization Work Programme (HWP)

– Definitions of goods being wholly obtainedDefinitions of goods being wholly obtained

– Last substantial transformationLast substantial transformation

– Change of tariff headingChange of tariff heading

– Supplementary criteriaSupplementary criteria

Overall architectural designOverall architectural design

Results of the Harmonization Work ProgrammeResults of the Harmonization Work Programme

RO: Other provisionsRO: Other provisions

Disciplines during the transition Disciplines during the transition periodperiod

Disciplines after the transition periodDisciplines after the transition period

Consultation and dispute settlementConsultation and dispute settlement

Preferential rules of originPreferential rules of origin

LIC: Background and LIC: Background and definitiondefinition

DefinitionDefinition

Basic obligationsBasic obligations

– GATT Article VIIIGATT Article VIII

– GATT Article XGATT Article X

From the Tokyo Round Code to the From the Tokyo Round Code to the Uruguay Round AgreementUruguay Round Agreement

LIC: General principlesLIC: General principles

Main objectivesMain objectives

General provisionsGeneral provisions

– Neutral application, fair and Neutral application, fair and equitable administrationequitable administration

– Publication of rules and proceduresPublication of rules and procedures

– Simple forms and proceduresSimple forms and procedures

– Other principlesOther principles

LIC: Automatic import LIC: Automatic import licensinglicensing

DefinitionDefinition

ConditionsConditions

Main provision for automatic import licensingMain provision for automatic import licensing

– Approval of application within 10 working daysApproval of application within 10 working days

– UseUse

LIC: Non-automatic import LIC: Non-automatic import licensinglicensing DefinitionDefinition

Main provisions applicable to non-automatic Main provisions applicable to non-automatic import licensingimport licensing

– No additional restrictive or distortive effectsNo additional restrictive or distortive effects

– All relevant information to be publishedAll relevant information to be published

– No discrimination among applicantsNo discrimination among applicants

– Time limits for processing applicationsTime limits for processing applications

– Validity of a licenceValidity of a licence

– Other provisionsOther provisions

Part IV. Market Access: Part IV. Market Access: Russian FederationRussian Federation

On average the final legally binding tariff On average the final legally binding tariff ceiling for the RF will be 7.8%ceiling for the RF will be 7.8%– Average tariff ceiling for Agriculture, 10.8%Average tariff ceiling for Agriculture, 10.8%– Average tariff ceiling for NAMA, 7.3%Average tariff ceiling for NAMA, 7.3%– Final tariffs will be bound at zero for cotton Final tariffs will be bound at zero for cotton

and information technology products (ITA)and information technology products (ITA) Implementation: 1/3 of tariff lines upon Implementation: 1/3 of tariff lines upon

accession, another 1/4 cuts in 3 years. Longest accession, another 1/4 cuts in 3 years. Longest tariff cuts on pork 8 years and cars 7 years. tariff cuts on pork 8 years and cars 7 years.

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Notification ObligationsNotification ObligationsNOTIF: Customs valuationNOTIF: Customs valuation

Art. 22.1 - “one-time”Art. 22.1 - “one-time”Notification of laws and regulationsNotification of laws and regulationsAll Members once they apply the All Members once they apply the Agreement, including Checklist of Issues Agreement, including Checklist of Issues

Decisions on Interest charges and Decisions on Interest charges and media-carrier media-carrier All Members if they apply the DecisionsAll Members if they apply the Decisions

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NOTIF: Preshipment NOTIF: Preshipment InspectionInspection

Art. 5 - “one-time”Art. 5 - “one-time”Notification of laws and Notification of laws and regulationsregulationsAll MembersAll Members

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NOTIF: Rules of OriginNOTIF: Rules of Origin

Art. 5.1 - “one-time”Art. 5.1 - “one-time”Notification of non-preferential rules of Notification of non-preferential rules of originoriginAll MembersAll Members

Annex II para. 4 - “one-time”Annex II para. 4 - “one-time”Notification of preferential rules of Notification of preferential rules of originoriginAll MembersAll Members

NOTIF: Import LicensingNOTIF: Import Licensing

NotificationsNotifications

– Copies of publications and full text Copies of publications and full text of laws and regulationsof laws and regulations

– Notification of changesNotification of changes

– Reverse notificationReverse notification

– Annual questionnaire (by 30 Annual questionnaire (by 30 September each year)September each year)

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NOTIF: Quantitative NOTIF: Quantitative RestrictionsRestrictions

Decision G/L/59 of the Council for Trade Decision G/L/59 of the Council for Trade in Goods (1 December 1995)in Goods (1 December 1995)

Basic document: G/MA/NTM/QR/2Basic document: G/MA/NTM/QR/2

Notification of all quantitative Notification of all quantitative restrictionsrestrictions(by 31 January 1996 and at two-yearly (by 31 January 1996 and at two-yearly intervals thereafter)intervals thereafter)All MembersAll Members

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NOTIF: Integrated Data NOTIF: Integrated Data Base (IDB)Base (IDB)

Decision WT/L/225 of the General Decision WT/L/225 of the General CouncilCouncilAll MembersAll Members

Basic document: G/MA/IDB/W/6Basic document: G/MA/IDB/W/6 Tariff data at the tariff line levelTariff data at the tariff line level

Every year (by 30 March)Every year (by 30 March) Trade data at the tariff line levelTrade data at the tariff line level

Every year (by 30 September)Every year (by 30 September)

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Thank you!Thank you!