WTO SEMINAR Hanoi, 5-6 August 2003 Necessary Negotiations for Accession - what is negotiable, non-negotiable and optional? Case studies on WTO Accessions

WTO SEMINARHanoi, 5-6 August 2003

Necessary Negotiations for Accession - what is negotiable, non-negotiable and optional?

Case studies on WTO Accessions – Cambodia, Lithuania and the Former Yugoslav Republic

of Macedonia (FYROM)

by Mr. Cato Adrian, Counsellor

Accession Division

WTO

WTO Seminar Hanoi 5-6 August 2003, Cato Adrian, Counsellor, Accesisons Division, WTO

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Cambodia

• Cambodia applied for accession in October 1994. The Preparatory committee for the WTO decided to establish a Working Party to examine the application further at its meeting on 21 December 1994.

• The Working Party met for the first time on in May 2001, and held a further four meetings, including one informal meeting (in June 2003), before approving the accession package on 22 July 2003.


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Cambodia - Main Features of Accession Terms

• Full compliance with the WTO Agreements pertaining to Import Licensing Procedures, Subsidies and Countervailing Measures, Safeguards, Trade Related Investment Measures (TRIMs), Article VI of the GATT (Anti-dumping), and Preshipment Inspection from the date of accession without recourse to any transitional period.

• Customs valuation: Phased implementation until full compliance with the Agreement on Customs Valuation by 1 January 2009. WTO-consistent legislation to be enacted by 1 July 2004. Minimum customs values to be limited to a specific list of products and phased out – transaction valuation applying to major importers by 1 January 2005, other importers by 1 January 2007 or 1 January 2008, and any remaining imports by 1 January 2009.

• Technical Barriers to Trade: Full implementation of the TBT Agreement by 1 January 2007. TBT enquiry point to be established during 2003. Compliance with the Code of Good Practice no later than 1 July 2004.


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Cambodia - Main Features of Accession Terms cont’d

• Agreement on the Application of Sanitary and Phytosanitary Measures: Full implementation by 1 January 2008. Basic legislation in place prior to accession. SPS enquiry point to be established during 2003. Introduction of food safety legislation and capacity building to be undertaken during 2004-2005. Readjustment of technical regulations and work on accreditation of inspection bodies and testing laboratories during 2006-2007.

• Agreement on Trade-Related Aspects of Intellectual Property Rights: Full implementation by 1 January 2007. Copyright and related rights, patents, and industrial designs protected by basic laws prior to accession, implementing regulations in force by 1 January 2005; Law on Geographical Indications and Civil Code by 1 January 2005; Laws on Layout Design of Integrated Circuits, Protection of Undisclosed Information and Trade Secrets, Plant Variety Protection, Civil Procedure Code and Criminal Code by 1 January 2006; all implementing regulations in place by 1 January 2007.


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• No commitment to accede to the Agreement on Government Procurement nor the Agreement on Trade in Civil Aircraft.

• All export restrictions in conformity with WTO requirements from the date of accession.

• Agreement on Agriculture: No support exceeding the de minimis level of 10 per cent. Export subsidies bound at zero for all agricultural products.

• Rules of Origin. Provision of advance origin assessment upon request by 1 January 2004. Full compliance by 1 January 2005.

• Trading rights: Import regulations for pharmaceuticals to be amended by 1 June 2005. Full compliance with WTO requirements from that date, including national treatment and

all fees, charges and taxes to be commensurate with the cost of the services rendered.


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• MFN and national treatment in the application of excise taxes and value added tax from the date of accession.

• An independent tribunal, competent to consider appeals of administrative decisions, will be operational by December 2004.

• All initial notifications required by the WTO to be provided within 12 months of accession.


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Cambodia - Market Access for Goods

• All tariff lines bound, mostly in the range from 0 to 40 per cent. Higher bound rates for certain alcoholic beverages (60 per cent) and tobacco (50 per cent). The simple average of bound tariff rates estimated at 18.4 per cent [not yet confirmed by Secretariat calculations].

• ODCs bound at zero from the date of accession. Charges on petrol and diesel incorporated within the bound tariff rate.

• Chemical harmonization undertaken consistent with Cambodia's tariff bands. No adhesion to the Information Technology Agreement (ITA).

• No tariff rate quotas.


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Cambodia - Commitments on Trade in Services

• Cambodia has made sector-specific commitments inI. Business Services

II. Communication Services (basic telecom from 1 January 2009)

III. Construction and Related Engineering Services

IV. Distribution Services

V. Educational Services

VI. Environmental Services

VII.Financial Services

VIII. Health Related and Social Services

IX. Tourism and Travel related Services

X. Recreational, Cultural and Sporting Services

XI. Transport Services

• Article II (MFN) Exemptions taken with respect to audiovisual services, land transport, internal waterways and maritime transport.


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Cambodia

• Note: Although the Working Party report and the Protocol do not explicitly refer to the Guidelines for LDC accessions adopted by the General Council in December 2002, Members will maintain that they have exercised restraint and only sought commitments which in their view are reasonable and commensurate with Cambodia's level of development.


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Lithuania

• Lithuania applied for accession in to the GATT in January 1994. The

GATT 1947 Council decided to establish a Working Party to examine the application further at its meeting on 22-23 February 1994. The GATT Working Party was transformed into a WTO accession Working Party in 1995.

• The Working Party met for the first time on in November 1995, and held a further three formal and several informal meetings, before approving the accession package on 2 October 2000. Lithuania has been a Member of the WTO since May 2001.


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Lithuania - Main Features of Accession Terms

• Full compliance with the WTO Agreements pertaining to Article VII of the GATT (Customs Valuation), Technical Barriers to Trade, Application of Sanitary and Phytosanitary Measures, Trade-Related Aspects of Intellectual Property Rights (TRIPS), Import Licensing Procedures, Subsidies and Countervailing Measures, Safeguards, Trade Related Investment Measures (TRIMs), Article VI of the GATT (Anti-dumping), and Preshipment Inspection from the date of accession without recourse to any transitional arrangements. Customs valuation – minimum prices and reference import prices eliminated in the course of the accession process.

• Commitment to seek accession to the Agreement on Government Procurement with a view to completing the negotiations during 2002. Signatory to the Agreement on Trade in Civil Aircraft upon accession.

• No quantitative import restrictions from the date of accession. Import prohibitions or restrictions to be applied only in conformity with WTO requirements.


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Lithuania - Main Features of Accession Terms cont’d

• All export restrictions in conformity with WTO requirements from the date of accession. Export taxes, if any, to be applied on an MFN basis from the date of accession.

• Agreement on Agriculture: Level of domestic support, including support below the de minimis level of 5 per cent, established at US$118.2 million during the reference period (1995-1997). Reduction commitment of 20 per cent implemented over 5 years, reaching US$94.56 million in 2005. Export subsidies granted to exports of various meat and dairy products during 1995-1999, but bound at zero for all products from the date of accession.

• Trading rights: Laws and regulations relating to the right to trade in goods and all fees, charges or taxes levied on such rights to conform fully with WTO requirement from the date of accession. Stamp taxes for trading licences in certain products were reviewed and reduced during the accession process.


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Lithuania - Main Features of Accession Terms cont’d

• All fees and charges for services rendered related to importation or exportation to be in conformity with WTO requirements from date of accession. Fees and charges for certain formalities listed in the Working Party report.

• MFN and national treatment in the application of excise taxes and value added tax from the date of accession, except for beer produced in small breweries and mead, where excise tax rates to be equalized or otherwise brought into conformity with WTO requirements by 31 December 2005.

• Right of appeal of administrative decisions, by court or administrative procedure, in place prior to accession.

• ●All initial notifications required by the WTO to be provided upon accession.


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Lithuania - Market Access for Goods

• All tariff lines bound. Simple average bound tariff for agricultural products of 15.6 per cent, only seven tariff lines bound at rates above 50 per cent ad valorem (compound rates established for 114 tariff lines). Simple average bound tariff for non-agricultural products of 8.2 per cent. No bound rate exceeding 30 per cent (no tariff lines have compound rates).

• ODCs bound at zero from the date of accession.

• Chemical harmonization implemented upon accession. Lithuania has subscribed to various zero-for-zero sectoral initiatives. Adhesion to the Information Technology Agreement (ITA).

• Four tariff rate quotas:

High quality beef (50 tons at 10 per cent)

Pig fat and poultry fat (10,000 tons at 20 per cent)

Certain vegetable oils (10,000 tons at 5 per cent)

Raw cane sugar (7,000 tons at zero per cent)


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Lithuania - Commitments on Trade in Services

• Lithuania has made extensive sector-specific commitments in (see WT/ACC/10/Rev.1 for details):

1. Business Services

2. Communication Services (Exclusive rights for telecom supplier expired at end 2002)

3. Construction and Related Engineering Services

4. Distribution Services

5. Educational Services

6. Environmental Services

7. Financial Services

8. Health Related and Social Services

9. Tourism and Travel related Services

10. Recreational, Cultural and Sporting Services

11. Transport Services

• Article II (MFN) Exemptions taken with respect to legal services, audiovisual services, tourist guide services, road transport, sale and marketing of air transport services and computer reservation systems (CRS), and purchase of land.


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Former Yugoslav Republic of Macedonia (FYROM)

• FYROM applied for accession in December 1994. The Preparatory committee for the WTO decided to establish a Working Party to examine the application further at its meeting on 21 December 1994.

• The Working Party met for the first time in July 2000, and held a further three formal meetings (in the final stages also meeting informally), before approving the accession package on 17 September 2002. FYROM has been a Member of the WTO since April 2003.


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FYROM - Main Features of Accession Terms

• Full compliance with the WTO Agreements pertaining to Article VII of the GATT (Customs Valuation), Technical Barriers to Trade, Application of Sanitary and Phytosanitary Measures, Trade-Related Aspects of Intellectual Property Rights (TRIPS), Import Licensing Procedures, Subsidies and Countervailing Measures, Safeguards, Trade Related Investment Measures (TRIMs), Article VI of the GATT (Anti-dumping), and Preshipment Inspection from the date of accession without recourse to any transitional arrangements.

• Technical Barriers to Trade: All standards to be considered voluntary unless reviewed and confirmed as technical regulations pursuant to legislation enacted in July 2002.

• Commitment to seek accession to the Agreement on Government Procurement with a view to completing the negotiations within two years of accession to the WTO. Signatory to the Agreement on Trade in Civil Aircraft upon accession.


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FYROM - Main Features of Accession Terms cont’d

• No quantitative import restrictions from the date of accession. Import prohibitions or restrictions to be applied only in conformity with WTO requirements

• All export restrictions in conformity with WTO requirements from the date of accession.

• Agreement on Agriculture: Domestic support exceeding the de minimis level of 5 per cent may be granted up to the level of 16.3 million Euro per year. No reduction commitment. Export subsidies granted to shipments of sheep meat in 1998, but bound at zero for all products from the date of accession.

• Trading rights: Laws and regulations relating to the right to trade in goods and all fees, charges or taxes levied on such rights to conform fully with WTO requirements from the date of accession.


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FYROM - Main Features of Accession Terms cont’d

• All fees and charges for services rendered related to importation or exportation to be in conformity with WTO requirements from date of accession. Euro 100 truck fee at one border crossing to be reviewed and eliminated as soon as possible.

• MFN and national treatment in the application of excise taxes and value added tax from the date of accession, except for tobacco products where excise rates will be equalized for cigarettes by 2007 and other tobacco products by 2005.

• Right of appeal of administrative decisions, by court or administrative procedure, in place prior to accession.

• All initial notifications required by the WTO to be provided upon accession.


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FYROM - Market Access for Goods

• All tariff lines bound. Simple average bound tariff for agricultural products of 15.0 per cent, only six tariff lines bound at rates above 50 per cent ad valorem (compound rates established for 305 tariff lines). Simple average bound tariff for non-agricultural products of 6.1 per cent. No bound rate exceeding 30 per cent (10 tariff lines have compound rates).

• Variable-levy-type charges were eliminated at the end of December 2001. ODCs bound at zero from the date of accession, except for an Export Promotion Fee of 0.1 per cent to be eliminated by 31 December 2005.

• Chemical harmonization implemented upon accession or by 2005. FYROM has subscribed to various zero-for-zero sectoral initiatives. Adhesion to the Information Technology Agreement (ITA) with some phase-ins running until 2005 or 2007.

• One tariff rate quota (1001909900 - other (other) wheat and meslin – 80,000

tons per year)


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FYROM - Commitments on Trade in Services

• FYROM has made extensive sector-specific commitments in (see WT/ACC/10/Rev.1 for details):

1. Business Services

2. Communication Services (Exclusive rights for existing telecom supplier expire at end 2004)

3. Construction and Related Engineering Services

4. Distribution Services

5. Educational Services

6. Environmental Services

7. Financial Services

8. Health Related and Social Services

9. Tourism and Travel related Services

10. Recreational, Cultural and Sporting Services

11. Transport Services

• Article II (MFN) Exemptions taken with respect to real estate and land, legal services, audiovisual services, educational services, CRS and sales and marketing of air transport services, and road transport services.

Documents

WTO SEMINAR Hanoi, 5-6 August 2003 Necessary Negotiations for Accession - what is negotiable, non-negotiable and optional? Case studies on WTO Accessions