jeudi 15 mars 2007

Ad-hoc expert group on Regional Trade Agreements (15-16 March) DJ

Ad-Hoc Expert Group Meeting:The Development Interface between the Multilateral Trading System and Regional Trade Agreements

This Expert Group Meeting discussed the issue of Regional Trade Agreements (RTAS) with regard to five subjects:
1. The challenges of new regionalism
2. RTAs and market access
3. Regulatory provisions in RTAs
4. Enhancing South-South integration and Regional Cooperation
5. Interface between RTAs and the Multilateral trading system

1. Review of the recent RTAs and bilateral free trade agreements and their coherence with the multilateral system and the current Doha Round negotiations. The impact of RTAS on promoting development and integration in the global economy has also been studied.
NOT ATTENDED

2. How best can an RTA be designed to address critical trade and development interests of developing countries? The North-South Economic Partneship Agreements (EPA) are a source of worries for developing countries. The proposed EPA between Africa and Europe is thought to be against the African integration agenda and will impose significant costs on countries that won’t be completely covered by European aid. Therefore the developing countries’ supply and market access capacity has to be strengthened before their market is opened. Several panelists also noted that the strictness of RTA rules can hinder developing countries fully benefiting from these agreements. For example, the obligation to harmonise tariffs in all sectors in the Caribbean RTA is posing problems.

The expression of “spaghetti bowl” has been used several times to express the RTA world system where RTA memberships overlap. Mr. Oyejide from the University of Ibadan insisted on the necessity of eliminating this overlapping to achieve coherence and coordination, especially in Africa. The experience of the cooperation of the Southern African Development Community (SADC), the East African Community (EAC) and COMESA through a tripartite executive board is a good way to achieve more coherence and avoid the duplication of programmes. However, plans to create the African Economic Community by unifying several RTAs are hindered by confusion over the interpretation of art. 24 of the WTO (article on RTAs).

Mr. Holmes from the University of Sussex presented the Sussex Framework that gives advice for policymakers negotiating RTAs. It proposes a system to analyse the consequences of an agreement and maximize the integration while minimising trade diversion (see document at the mission).

3. The third session gave an overview of different RTAs and their solutions concerning trade facilitation, rules of origin, safeguards, institution building, etc.

The problem of implementation of the competition provisions was addressed by Mrs. Alvarez of UNCTAD. Her recommendation is that each country should adopt the model of RTA that suits it best but then implement fully the provisions of the agreement. To do this, the creation of an implementation institution is recommended. Finally, Mrs Alvarez insisted on creating synergies with local institutions like academic bodies, NGOs, consumer and trade associations, that can bring their knowledge and facilitate the implementation process.

Mr. Miroudot from the OECD talked about the increasing use of regional agreements for investment liberalization due to the lack of provisions at the multilateral level. His conclusions are that RTAs with investment provisions result in increases in trade as well as in foreign direct investment in both developed and developing countries. He therefore recommends the inclusion of investment provisions in future RTAs.

4. All the panelists representing a RTA insisted on the beneficial effects of the RTAs for the increase in trade at the inter-regional level as well as at the extra-community one. The importance of institutions to implement the agreements was stressed. They also emphasized the importance of the Dispute Settlement Mechanism (details on COMESA, MERCOSUR, CARICOM, SADC, NAFTA, China, Pacific Islands Forum agreements in the report at the mission).

5. The 5th session studied the parallel development between the multilateral trading system and the regional ones. Mr. Woolcock, from United Nations University, said that the OECD countries used to be at the centre of the rule-making process but since the Uruguay Round developing countries have played an increasing role and the WTO no longer responds to the needs of all global economic actors. RTAs and bilateral agreements are therefore filling the gap. RTAs are used either to go beyond the WTO rules or to restrict liberalization in sensitive sectors. The RTAs that go beyond existing international rules can constitute a threat because they satisfy selfish hegemons. By studying different RTAs, he has noticed an increasing number of GATS-plus or TRIPS-plus (agreeements that go further in trade liberalization than WTO rules). This could lead to a step forward at the multilateral level, hence the importance of studying the rule making process at the regional level.
A more precise set of WTO rules on FTAs and RTAs is needed to restict policies that have negative effects on third countries and to encourage transparency. To avoid this, a mechanism could be set up that when a regional rule goes beyond the international one, a process of negotiation would start at the international level while the regional rule would be suspended. UNCTAD could play a role by providing an inclusive forum where negotiations on future guidelines could be discussed.
For the success of future rounds, the advantages of trade liberalization should be recognized by all countries; the reluctance expressed by the developing countries on the signature of TRIPS should not be repeated. Another solution to restart the WTO negotiations would be to explore pluralistic negotiations and reach an agreement between a core group of members. This would be less dangerous than creating numerous regional agreeements which could be difficult and perhaps impossible to reconcile in the future.

Ms. Acharya from the WTO insisted on the necessity to increase the transparency of RTAs and the surveillance of them by the WTO. A clarification and improvement of existing WTO rules on RTAs is therefore highly desirable. This evolution is however really difficult because a consensus on the inclusion of Special and Differential treatment in art. 24 (RTAs) cannot be reached. The developing countries asked for this inclusion, but the developed countries think it would hinder the Most Favoured Nation principle.

Mr. Bilal from the European Centre for Development Policy Management insisted on the necessity of interpreting the aid-for-trade principle not only at a country level but also at a regional one. Regional Aid-for-Trade Committees could be created to improve the use of aid and to strengthen regional capacity. The COMESA Fund could be taken as a model.

Finally, the presentation of Ms. Jones from Oxfam was highly critical of the implications of RTAs. According to her RTAs are used by powerful countries to further their interests and by doing this they undermine the special and differential treatment principle. The developing countries are then forced to open young and sensitive sectors, losing important revenues and undermining development for the benefit of developed countries. The counterpart of these sacrifices are however still awaited, as developed countries still refuse to open their agricultural markets. The same exploitation can be observed on the issue of intellectual property where the developing countries have been forced to sign the TRIPS agreements and are now under pressure at the bilateral level to sign TRIPS-plus agreements. The danger now is that all these concessions made at the regional level will be implemented at the WTO level at the next round. RTAs also undermine solidarity between developing countries.