US-China trade deal: preliminary analysis of the text from WTO perspective
By Peter Lunenborg
The long-awaited ‘Phase 1’ trade deal between the United States and China, officially termed the ‘Economic and Trade Agreement between the Government of the United States of America and the Government of the People’s Republic of China’, was signed on 15 January 2020. It will enter into force on Valentine’s Day, on Friday, 14 February 2020. This deal is a result of US exercise of political power and unilateral World Trade Organization (WTO)-inconsistent tariffs in order to extract trade concessions, an expression of the most pure protectionism that the WTO is supposed to prevent. Nevertheless, the WTO was unhelpful in addressing the US economic aggression against China. This failure to protect a Member from illegitimate unilateral measures is, perhaps, one of the most significant manifestations of the often-mentioned ‘crisis’ of the WTO, and actually is one of the subjects on which the proposed ‘reform’ of the organization should focus.
Crisis at the WTO’s Appellate Body (AB): Why the AB is Important for Developing Members
By Danish and Aileen Kwa
The World Trade Organization (WTO)’s Appellate Body (AB) will be made dysfunctional by 11 December 2019. A disabled AB means that the WTO’s dispute settlement system loses its enforcement mechanism. Even though many smaller developing countries are not major users of the dispute settlement system, nevertheless, they are beneficiaries of the rule of law, and a more predictable trading environment. Several stop-gap measures have been suggested. None are satisfactory. The right to appeal is an important right for all Members which was part of the Uruguay Round package. If this right is removed, why should other parts of that package also not be changed? The future is uncertain – between a much weakened multilateral trading system similar to the days of the General Agreement on Tariffs and Trade (GATT); or deep reform of the WTO, in ways that primarily benefit the US and its partners, whilst foreclosing important policy choices for the developing world.
Intellectual Property and Access to Medicines: An Introduction to Key Issues – Some Basic Terms and Concepts
Intellectual property and patents in particular, have become one of the most debated issues on access to medicines, since the creation of the World Trade Organization (WTO) and the coming into force of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Patents are by no means the only barriers to access to life-saving medicines, but they can play a significant, or even determinant, role. During the term of patent protection, the patent holder’s ability to determine prices, in the absence of competition, can result in the medicine being unaffordable to the majority of people living in developing countries. This first issue of the “South Centre Training Materials” aims, in its first part, to provide an introduction to key issues in the field of access to medicines and intellectual property. The second part describes and defines some basic terms and concepts of this relatively new area of pharmaceuticals policies which are the trade related aspects of intellectual property rights that regulate the research, development and supply of medicines and health technologies in general.
The Politics of Trade in the Era of Hyperglobalisation: A Southern African Perspective
About the Book:
Matters of international trade are increasingly widely recognised as major shapers of global politics. News bulletins are giving more and more coverage to matters like the so-called “trade wars” between the United States and China. These are, indeed, increasingly defining relations between the two largest economies in the world and could well underpin a multi-dimensional rivalry that could be a central feature of international relations for many years to come. Brexit is dominating and indeed re-shaping politics in the United Kingdom. By definition a rejection of a regional integration arrangement, Brexit has also revealed under-currents profoundly shaped by the outcome of a broader trade-driven process called “globalisation”. Just as regional integration is weakening in Europe, African countries have taken decisions that could lead to the most profound and ambitious step forward in African regional integration – the establishment of an African Continental Free Trade Area (AfCFTA). This study seeks to present an analysis of the political economy of trade negotiations over the past quarter century on two main fronts: the multi-lateral and those pertaining to regional integration on the African continent.
Author: Rob Davies is former South African Minister of Trade and Industry.
Notification and Transparency Issues in the WTO and the US’ November 2018 Communication
By Aileen Kwa and Peter Lunenborg
Various WTO Members submitted a Communication to the WTO in November 2018 which, if accepted, would affect the implementation of Members’ transparency and notification obligations at the WTO. It would strengthen the already burdensome notification obligations and introduce new punitive administrative measures should obligations not be complied with. This paper provides information about WTO Members’ current notification obligations and their level of compliance; looks at the history of discussions on notifications, particularly in the Working Group on Notification Obligations and Procedures which took place in 1995 – 1996; and provides an analysis of the Communication. The analysis focuses on the extent to which the elements are consistent with or go beyond the current WTO disciplines. It concludes that non-compliance with notification obligations is real. However, rather than expanding obligations and introducing punitive measures, constructive and effective solutions should be based on nuancing of obligations in the context of a Special and Differential Treatment approach and through the use of incentives. It also acknowledges that countries with a chronic lack of capacities will continue to struggle with the WTO’s complex notification obligations and requirements until they attain higher levels of development and, thus, improved institutional capacities.
Why the US Proposals on Development will Affect all Developing Countries and Undermine WTO
By Aileen Kwa and Peter Lunenborg
US submitted two highly problematic proposals to the WTO in January and February 2019, undermining the place of Special and Differential Treatment (S&D) for developing countries at the WTO. In the first paper (WT/GC/757), US criticises the practice of self-declared development status by developing countries arguing that the North-South construct no longer makes sense due to “great development strides”. The second paper (WT/GC/764) – a proposed Decision for the General Council – provides a way to operationalise what was in the first paper. It gave criteria that would exclude 34 Members or 53.6 percent of global population from S&D treatment in “current and future WTO negotiations”. This fundamentally changes S&D from an unconditional right for all developing countries to a concession that may or may not be provided. Even for those developing countries that are not part of the 34 excluded Members, the US notes that in sector-specific negotiations, other Members could also be “ineligible for special and differential treatment.” This paper critiques the US approach on Special and Differential Treatment and concludes that these papers by the US cannot be the basis for any further discussions. All developing countries must be able to decide the pace of their adjustment to trade rules.
US’ Section 301 Actions: Why They are Illegitimate and Misguided
By Aileen Kwa and Peter Lunenborg
This research paper examines the US’ Section 301 unilateral actions against China, stemming from the US’ concerns over China’s ambitious industrial policies and its rapid technological advancements. It outlines the accusations of the US regarding China’s conditions for technology transfer and what the US sees as overly intrusive Chinese government involvement in investments. It looks in detail at why the US’ actions are in fact illegitimate and misguided. (more…)
Implications of a US Border Adjustment Tax, Especially on Developing Countries
A new protectionist device, the US “border adjustment” tax, is being planned that could devastate the exports of developing countries and cause American and other foreign companies to relocate. This policy brief explains the complexities and implications of this proposed measure and the major question of whether such a measure will violate the rules of the WTO is also examined.
The WTO’s Special and Differential Treatment Negotiations (Paragraph 44)
Paragraph 44 of the 2001 Doha Ministerial Declaration mandates the ‘strengthening’ of Special and Differential Treatment (S&D) provisions in the WTO Agreement, and making them ‘more precise, effective and operational’. This Note tracks the evolution of these negotiations from the start of the Doha Round in 2001 until the Nairobi Ministerial in December 2015. (more…)
The WTO has a 1998 Work Programme on E-commerce. This Work Programme provides for the discussion of trade-related issues relating to electronic commerce to take place in the relevant WTO bodies: the Council for Trade in Services; the Council for Trade in Goods; the Council for TRIPS; and the Committee for Trade and Development. The General Council was envisaged to play a review or oversight role. (more…)
WTO’s MC9: Analysis of the Food Security ‘Peace Clause’ Text
The Peace Clause is time-limited (4 years) and partial in coverage (no inclusion of the WTO’s Agreement on Subsidies and Countervailing Measures- ASCM). Countries can still be taken to dispute. It also has onerous and intrusive transparency and information requirements and conditions. (more…)
Key Issues Still Under Brackets in the Trade Facilitation Text Presented to the Ministerial Conference in Bali (based on Room W-JOB/TNC/35)
The following document comments on the remaining bracketed articles in the trade facilitation (TF) draft text (Room W- JOB/TNC/35) presented to the ministerial conference in Bali. It includes five main sections, including: (more…)