International Trade Negotiations:WTO and FTAs

- John Riley, NZ High Commission, London

Our panel:

Yaryna Ferencevych, US Embassy (State)

Matt Molloy, DEFRA, UK

Jennie Wilson, US Embassy (FAS)

Tiffany McDonald, Aus High Com

and John Riley

Countries tend to act in their national interest.

What is it that drives the decisions of politicians and officials?

Things to consider:

Trade Policy

•World Trade Organisation (WTO)•Free Trade Agreements (FTAs)•Bilateral Trade Access (removing regulatory barriers)

WTO

•Secretariat in Geneva•153 Members•Accession process – college fraternity•Membership led oganisation

WTO (continued…)

•Decisions made by consensus•Surprisingly very effective (dispute settlement)•Ministerial meetings roughly biannually

2 important WTO principles

•National Treatment•Most Favoured Nation

History

•Began 1947 with the GATT•Negotiating Rounds – GATT, Kennedy, Tokyo, Uruguay

•Started with non-agricultural subsidies then tariffs•Technical barriers addressed later

How are WTO Rounds Negotiated?

•By CONSENSUS!

Yeah, nah… but there are 153 Members so…

• Negotiating Groups• Modalities• Chair’s texts• Ministerial Meetings• The green room

How are WTO Rounds negotiated?

•The majors crunching it•Splitting the difference (don’t get salami sliced)•Hand of God text•Lock them in a room!

Why would they do a deal?

Important factors:•Political capital = industry + votes•Reason for urgency (TPA)

WTO Doha Round

•Commenced 2001•Called Doha Development Agenda•Incomplete

Some important Doha dates

•2001 mandate•July 2004 framework•Hong Kong December 2005•Came close to modalities in July 2008

The Negotiating Groups

•Agriculture (subsidies and tariffs)•Non-agricultural market access (tariffs and NTBs)

•Services

Other Negotiating Groups

•Rules (anti-dumping, fish subsidies)•TRIPS (intellectual property, GIs)•Trade facilitation

Special and Differential Treatment

•Developed countries•Developing countries•Least developed countries

Who are the key players?

•The G4

Do they have offensive interests or defensive interests?

• If a WTO Member wants to reduce tariffs or subsidies…

• If a WTO Member wants to maintain tariffs or subsidies…

the Member has defensive interests

the Member has offensive interests

Agriculture:Domestic support(subsidies reductions)

Agriculture:Market Access(tariff reductions)

Non-agricultural goods:Market Access(tariff reductions)

US

EU

Brazil

India

Is each Member mainly offensive or defensive?

defensive offensive offensive

offensive (?!) defensive offensive

offensive offensive defensive

offensive defensive defensive

Mainly wants to reduce measures Mainly wants to maintain measures

Which Members are saying this?

“We can’t offer to reduce non-agricultural tariffs until other countries offer to decrease agricultural subsidies and agricultural tariffs”

- Brazil and India

Which Member is saying this?

“We can’t offer to reduce agricultural subsidies until other countries offer to decrease their tariffs”

- US

Which Member is saying this?

“We can’t offer to reduce agricultural tariffs until other countries offer to reduce agricultural subsidies and non-agricultural tariffs”

- EU

What about China?

G20 (developing countries wanting reduced agriculture subsidies by developed countries)

Argentina, Bolivia, Plurinational State of, Brazil, Chile, China, Cuba, Ecuador, Egypt, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, Peru, Philippines, South Africa, Tanzania, Thailand, Uruguay, Venezuela, Bolivarian Republic of, Zimbabwe

G33 (developing countries who are defensive on agriculture tariffs)

Antigua and Barbuda, Barbados, Belize, Benin, Bolivia, Plurinational State of, Botswana, Côte d’Ivoire, China, Congo, Cuba, Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, India, Indonesia, Jamaica, Kenya, Korea, Republic of, Madagascar, Mauritius, Mongolia, Mozambique, Nicaragua, Nigeria, Pakistan, Panama, Peru, Philippines, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Sri Lanka, Suriname, Tanzania, Trinidad and Tobago, Turkey, Uganda, Venezuela, Bolivarian Republic of, Zambia, Zimbabwe

G10 (defensive on ag)

Chinese Taipei, Iceland, Israel, Japan, Korea, Republic of, Liechtenstein, Mauritius, Norway, Switzerland

Cairns group (offensive on ag subsidies and tariffs)

Argentina, Australia, Bolivia, Plurinational State of, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, Philippines, South Africa, Thailand, Uruguay

Cairns group (offensive on ag subsidies and tariffs)

Argentina, Australia, Bolivia, Plurinational State of, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, Philippines, South Africa, Thailand, Uruguay

G100

What is the situation with Doha now?

FTA Negotiations

•Substantially all trade•Can’t deal with subsidies

Some common FTA areas

•Goods (tariffs)•Services•Investment•Government procurement•Intellectual property•TBT/SPS (Non-tariff barriers)•Labour and Environment

Bilateral Market Access

•e.g. Sanitary and Phytosanitary conditions

•Sometimes justified•Sometimes not

Thank You!