Bilateral negotiations in the WTO accession process Presentation

Bilateral negotiations in the WTO accession process Presentation by Josip Pervan, Senior Policy Advisor IDEAS Centre, Geneva

The start • ACC/1: initial offer in response to requests received, or on its own initiative • In reality, most countries submit without receiving requests • At least one (goods/services) is submitted prior to the second working party meeting. • Subsequent offers submitted depending on the requests received.

The process • Multiple revisions necessary • At the beginning revisions tend to be multilateral, later on bilateral • Bilateral revision- multiple selling of the same commitment • Upon conclusion, bilateral protocols are signed • At the end of the process, offers are consolidated into one schedule, which is offered on an MFN basis and verified by all members

„Rules”of negotiations • There is no standard offer – the level of concessions is determined through negotiations • Regional level of concessions plays a role • Members ask for commercially meaningful market access including for future products • Each accession sets precedents for future accessions (length of transition periods, use of safeguards, TQRs, etc. )

Internal organization • Inter-ministerial groups at two-levels • Consultative mechanism with the private sector • Working groups for goods and services • Agreeing on sensitivities, red lines • Defining strategy • Adapting as the negotiations progresselaborating trade offs

15% bound duty level 5% applied duty level Goods negotiations • Bound tariffs are the basis for negotiations • Final bound rates close to applied levels • Transition periods accepted for sensitive items • Good arguments needed for protection of tariffs • Flexibility tools: transitional periods, special safeguard (SSG), tariffrate 0

Types of tariffs Duty type Ad valorem NAV Specific Compound Mixed Example 5% $5 per kg. 10% + $2 per kg 10% or $2 per kg, which ever is highest

Format of the offer 1 2 3 4 5 6 HS number Description Bound rate at date of accession Final bound rate Implementation period ODC INRs In this column, refer to the HS numbers used by the acceding country in its tariff nomenclature Description of the product as indicated in the tariff nomenclatur e of the acceding country Bound rate at date of accession Bound rate after the implement ation period has elapsed Indicate the number of years after accession after which the bound rate will have to be reduced to the final bound rate indicated in column 4. 1 Other duties and charges 2 Initial negotiating rights 01011910 xxxx 18 10 5 0 x Equal annual rate reductions, unless otherwise mentioned. 2 Can be replaced by a headnote “All ODCs are to be bound at zero. ” 1 7

Services Negotiations • Schedule divided in sectors and modes of supply • Concessions provided in market access and national treatment • Horizontal and sectoral commitments • Final bound commitments go beyond status quo • Flexibilities: transitional periods, MFN exemptions, unbounding

SCHEDULE OF SPECIFIC COMMITMENTS OF COUNTRY X II. SECTOR SPECIFIC COMMITMENTS 1. BUSINESS SERVICES MA limitations A. (a) Professional Services Legal Services (CPC 861) Excluding legal advisory and legal documentation and certification services provided by services suppliers entrusted with public functions (the profession of notary is excluded from these commitments) (b) Accounting, auditing and bookkeeping services (CPC 862) (d) Architectural services (CPC 8671) (e) Engineering services (CPC 8672) (f) Integrated engineering services (CPC 8673) (1)Cross‑border supply (2) Consumption abroad (1) (2) (3) (4) Unbound. None. Unbound. (1) None for accounting and bookkeeping services; Unbound for auditing services. (2) None. (3) None. (4) Unbound, except as indicated in the horizontal section. (1) Unbound. (2) None. (3) None. (4) Unbound. NT limitations (1) (2) (3) (4) Unbound. None. Unbound. (1) None for accounting and bookkeeping services; Unbound for auditing services. (2) None. (3) None. (4) Unbound, except as indicated in the horizontal section. (1) Unbound. (2) None. (3) None. (4) Unbound. (3) Commercial presence (4) Presence of natural persons Additional commitments

Challenges in negotiations • Typical developing country sensitivities: • Typical regulatory challenges: • • • • Professional services Audio-visual services Construction services Distribution services Educational services Health services Movement of Natural Persons Professional services Postal/courier services Telecom services Banking services Insurance services Road transport Land ownership Movement of Natural Persons

Results: AG goods 120 100 80 60 40 20 0 Russian F. Viet Nam Ukraine Nepal Mongolia Kyrgyz Republic Croatia China United States Switzerland Korea Japan European Union Canada Australia South Africa Mexico Indonesia India Costa Rica Brazil Argentina MFN applied Bound

50 45 40 35 30 25 20 15 10 5 0 Results: ind. goods Russian F. Viet Nam Ukraine Nepal Mongolia Kyrgyz Republic Croatia China United States Switzerland Korea Japan European Union Simple average MFN applied Canada Australia South Africa Mexico Indonesia India Costa Rica Brazil Argentina Simple average Bound

Binding coverage 100 90 80 70 60 50 40 30 20 10 0 Russian F. Viet Nam Ukraine Nepal Mongolia Kyrgyz Republic Croatia China United States Switzerland Korea Japan European Union Canada Australia South Africa Mexico Indonesia India Costa Rica Brazil Argentina

TRQs, SSGs AG. PRODUCTS Number of Tariff Rate Quotas Number of Tariff Lines with Tariff Rate Quotas Tariff Lines with Special Safeguards Croatia 9 9 (HS 4, 6, 8 digit level) 0 Lithuania 4 4 (HS 4, 6, 8 digit level) 0 Moldova 0 0 0 China 10 46 (HS 8 digit level) 0 Chinese Taipei 22 117 (HS 8 digit level) 32 (HS 8 digit level) Armenia 0 0 0 FYROM 1 1 (HS 10 digit level) 0 Nepal 0 0 0 Cambodia 0 0 0 Saudi Arabia 0 0 0 40 20 Viet Nam

Sectoral initiatives Ecuador Bulgaria Mongolia Panama Kyrgyz Rep. Latvia Estonia Jordan Georgia Albania Oman Croatia Lithuania Moldova Chinese Taipei Armenia FYROM Nepal Cambodia Saudi Arabia Viet Nam Tonga Ukraine Distilled Spirits Beer Furniture Toys Steel Paper Medical Equipment Construction Equipment Agricultural Equipment Pharmaceutic als Chemical Harmonizatio n Civil Aircraft Agreement New Member (by date of accession) ITA Sectors

Results: Services • Recent examples (of 160 sub-sectors): • • Bulgaria – December 1996 Kyrgyz Rep. – April 1999 Albania – September 2000 Georgia – June 2000 Macedonia – April 2003 Cambodia – October 2004 Nepal – April 2004 Vietnam – January 2007 ~ 68 ~105 ~ 95 ~126 ~116 ~ 96 ~ 84 ~ 98

Original members vs newcomers

Trends in the accession process • • • Non- existence of rules makes the process unpredictable More difficult to acceede as the time goes by Development status plays a role Acceeding countries do not have much negotiating leverage Negotiators must keep in mind the global political and trade importance of their country Services negotiations- problem of coordination The problem of conflicting requests by WTO members (EU-USA) The position of Ukraine and / or other bilateral disputes The result: negotiations are a time-consuming

THANK YOU josip. pervan@ideascentre. ch