MARKET ACCESS Issues

Samer Seif El-Yazal

Counsellor
Institute for Training and Technical Cooperation
World Trade Organization
Structure of this presentation

I. Market Access in the GATT/WTO

context: basic elements and
definitions
II. Introduction to NAMA negotiations
III. Overview of Customs and Trade
Administration Agreements
IV. Market Access – Russian Federation
V. Notification obligations
2
I. MARKET ACCESS IN THE
GATT/WTO CONTEXT:
BASIC ELEMENTS AND
DEFINITIONS
1. What is Market Access?

 In the WTO framework, the term

stands for the totality of
government-imposed conditions
(regulations/measures) under
which a product may enter a
country under non-discriminatory
conditions.

4
1. What is Market Access?

 Market access in the WTO sense is

regulated most of the time through
border measures including, inter
alia, tariffs, tariff rate quotas,
quantitative restrictions and other
non-tariff measures.

5
2. GATT/WTO: ensuring MA

 Predictable and growing access to

markets for goods and services is one
of the goals of the WTO
 Basic Principles: Non discrimination
(NT/MFN) and transparency
 Predictable: binding commitments
 Growing access: periodic “rounds” of
negotiations
6
3. Types of MA barriers in trade in goods

 In the GATT/WTO
framework there are
2 basic types of
barriers to trade in
goods:

1. Tariffs
2. Non Tariff
Barriers

7
4. Basic GATT/WTO framework

– Tariffs should normally be the only

instrument used to protect domestic
industries
– Quantitative restrictions (bans/restrictions)
are generally prohibited (GATT Art. XI)...
but they could be allowed under certain
circumstances
– Tariffs should be transparent, predictable
and stable
– Tariffs are included in “Schedules of
concessions” 8
 5. Tariffs: duty types

Duty type Example

Ad valorem 5%
Specific $5 per Kg.
Compound 10% + $2 per Kg
NAV

Mixed 10% or $2 per Kg,

9
6. Tariffs and the GATT

 Security and
predictability in trade
in goods are
achieved through the
commitments
embodied in the
"binding” of tariffs.

10
 6. Tariffs and the GATT

 A "bound" tariff is a
tariff in respect of
which there is a legal
commitment not to
raise it beyond a
certain level

 A binding is a
“ceiling”, not a “floor”
11
 7. GATT Article II

 “a. Each contracting party shall accord to

the commerce of the other contracting
parties treatment no less favourable than
that provided for in the appropriate Part of
the appropriate Schedule annexed to this
agreement.”

12
7. GATT Article II

 Treatment can be more favourable:

bound tariffs vs. applied tariffs

 Other tariff treatments are also possible

due to, inter alia, RTAs, CUs and non-
reciprocal arrangements ( “enabling
clause”)

13
 8. Other duties and charges (ODCs)
 Include all taxes levied on imports in addition
to the customs duties which are not in
conformity with Article VIII (Fees and
Formalities) of GATT 1994.
 GATT Article II:1 (b) stipulates that the
products described in the schedules "shall be
exempt from other duties or charges of any
kind imposed in excess of those imposed at
the time a concession was granted".
14
 8. Other duties and charges (ODCs)

 Understanding on the Interpretation of Article

II:1 (b): Members must include in Schedules
any other duty or charge existing on by 15
April 1994.
 If not notified by then, then eliminated.

15
9. “Schedules” of concessions

 Tariff bindings and other concessions are

contained in the “Schedules of
concessions” (GATT Article II)

 Each Member of the WTO has its own

Schedule, identified by a roman number

16
9. “Schedules” of concessions

 Except customs unions where two or

more Members have one single schedule
for a (i.e. European Communities)

17
 10. Structure of a Member's Schedule

Part I MFN Rates

Member
x
Section I Agricultural Products

I.A Duties (Tariffs and ODCs)

of Concessions
GATT 1994

I.B Tariff Rate Quotas (TRQs)

Schedule

Section II Other Products

Part II Preferential rates

Part III Non-tariff Concessions

Part IV Agricultural Subsidies

18
Why “non-agricultural” products?
 Agricultural products  Non Agricultural
are defined in Annex products are all the
1 of the Agreement “other products”
on Agriculture

19
 Schedule M – Member X
This Schedule is authentic only in the English language
PART I – MOST-FAVOURED NATION TARIFF
SECTION II – Other Products

Tariff item Description of Base rate Bound Implem. INR ODCs

number products of duty rate of period
(U/B) duty
1 2 6 4 5 6 7
0301 LIVE FISH
030110 - ornamental fish 10$ /Tonne $5 / Tonne 1995/2004 5%
(U)
030191 -- trout (salmo trutta, 100% 50% 1995
salmo gairdneri, salmo
clarki, salmo agua
bonita, salmo gilae)
030192 -- eels (anguilla spp.) 66% (U) 50% or $90, 1995/2004 $5 per Kg.
w.i.t.h.
030193 -- carp 66% (U) 50% 1995/2004
030199 -- other: 66% (U) (U) 2000 20
 11. Changing a concession

1. Tariff negotiations (GATT Article XXVIII bis) *1957

2. Rectifications and modifications

3. Renegotiations (GATT Article XXVIII)
4. Customs Union (GATT Article XXIV)
5. Other
i. Implementation of the HS
ii. Transposition to HS92, HS96, HS2002, HS2007
…

All of them have special procedures!

Need to be “certified” in order to be legally binding 21
 Binding coverage of Non AG prod.

 50 Members have 100% binding coverage

(EC-25 counted as one)
 29 Members between 90% and <100%
 10 Members between 50% and < 90%
 10 Members between 25% and < 50%
 23 Members between 0.1% and < 25%

 NOTE: Agriculture already 100% binding 22

Part II. NAMA Negotiations:
Paragraph 16 of the Doha Ministerial
Declaration

 “16. We agree to negotiations which shall aim,

by modalities to be agreed, to reduce or as
appropriate eliminate tariffs, including the
reduction or elimination of tariff peaks, high tariffs,
and tariff escalation, as well as non-tariff barriers,
in particular on products of export interest to
developing countries.”

 “Product coverage shall be comprehensive and

without a priori exclusions.”
Paragraph 16 of DMD (cont.)

 “The negotiations shall take fully into account

the special needs and interests of developing
and least-developed country participants,
including through less than full reciprocity in
reduction commitments, in accordance with the
relevant provisions of Article XXVIII bis of
GATT 1994 and the provisions cited in
paragraph 50 below.”
Basic framework for negotiating tariff
concessions

 Defining the rules of the game

GATT Article XXVIII bis
Modalities
 Tariff reduction: which option?
 Request/Offer?
 Sectoral?
 Formula? If so, which one?
 New bindings: how many? at what
level?
 Implementation period
 S&D / Flexibility provisions
modalitie
Post-

 Members prepare and submit offers

s

 Multilateral verification
 Final Schedules of concessions 25
 DDA (NAMA): Sequence of main events

2001 -> Doha Ministerial Declaration (Paragraph 16)

July 2002 -> Work program is adopted
(deadline for modalities = 31 May 2003)
May 2003 -> Chairman’s Draft Elements for Modalities
(TN/MA/W/35 i.e. “Girard Text”)
September 2003 -> Cancun Ministerial fails to adopt a
“framework” on NAMA (JOB(03)152/Rev.2)
July 2004 -> “July Package” adopts the NAMA Framework with
initial elements (Annex B of WT/L/579)
December 2005 -> Hong Kong Ministerial clarified add. elements
2007 Chairman's Introd. to the Draft NAMA Modalities (JOB(07)/126)
2008 Third revision of draft modalities (TN/MA/W/103/Rev.2)
July Mini-ministerial 26

Fourth revision of draft modalities (TN/MA/W/103/Rev.3)

Part III. Customs and trade
administration

 VAL: Customs valuation

 PSI: Pre-shipment inspection
 RO: Rules of origin
 LIC: Import licensing procedures
VAL: Background

 Specific and ad-valorem customs duties

 Short historical overview
– Article VII GATT

– Brussels definition of value

– Tokyo Round Valuation Code

VAL: The WTO Agreement

 The new Agreement

 Basic principle: Transaction value
 The 6 Methods
 Other provisions
VAL: Method 1 - Transaction
value
 Definition of transaction value
 Conditions to be fulfilled
– Evidence of sale
– No restriction on the disposition or use
– Not subject to additional conditions
– Full prices, unless...
– Sufficient information for adjustments
– Buyer and seller not related, otherwise ...
– Related parties
 Cases where Customs Administrations have reasons to
doubt the truth or accuracy of the declared value
VAL: Methods 2 and 3

 Method 2: Transaction value of identical

goods (Article 2)
– Exceptions

 Method 3: Transaction value of similar

goods (Article 3)

 Other methods
PSI: Background and overview

 Functions of PSI
– conformity of goods with the terms of the
sales contract

– verification of invoice price

 Definitions
 Objectives
PSI: Obligations of user
Members
 Non-discrimination (Article 2.1)
 Governmental requirements (Article 2.2)
 Site of inspection (Article 2.3)
 Standards (Article 2.4)
 Transparency (Articles 2.5 to 2.8)
 Protection of confidential business information (Articles 2.9
to 2.13)
 Conflicts of interest (Article 2.14)
 Delays (Articles 2.15 to 2.19)
 Price verification (Article 2.20)
 Appeals procedure (Article 2.21)
 Derogation (Article 2.22)
PSI: Obligations of exporter
Members

 Non-discrimination (Article 3.1)

 Transparency (Article 3.2)

 Technical Assistance (Article 3.3)

PSI: Independent review
procedures

 Purpose of the Independent Review

Procedures

 Independent Entity
RO: Background

 Definition

 Where are rules of origin used?

 No specific provision in GATT

 Interest in the harmonization of rules of origin

– Increased number of preferential trading arrangements

– Increase in the number of origin disputes

– Increased use of anti-dumping laws

RO: The UR Agreement
 Introduction
 Aims of the Agreement
– harmonization
– general principles
 Coverage: all non-preferential rules of origin
 Institutions
– WTO Committee on Rules of Origin
– WCO Technical Committee
 RO: Harmonization

 The Harmonization Work Programme (HWP)

– Definitions of goods being wholly obtained
– Last substantial transformation
– Change of tariff heading
– Supplementary criteria

 Overall architectural design

 Results of the Harmonization Work Programme

RO: Other provisions

 Disciplines during the transition period

 Disciplines after the transition period
 Consultation and dispute settlement
 Preferential rules of origin
LIC: Background and definition

 Definition

 Basic obligations
– GATT Article VIII

– GATT Article X

 From the Tokyo Round Code to the

Uruguay Round Agreement
LIC: General principles
 Main objectives

 General provisions
– Neutral application, fair and equitable
administration

– Publication of rules and procedures

– Simple forms and procedures

– Other principles
LIC: Automatic import
licensing

 Definition

 Conditions

 Main provision for automatic import

licensing
– Approval of application within 10 working days

– Use
LIC: Non-automatic import
licensing
 Definition
 Main provisions applicable to non-automatic import
licensing
– No additional restrictive or distortive effects

– All relevant information to be published

– No discrimination among applicants

– Time limits for processing applications

– Validity of a licence

– Other provisions
Part IV. Market Access: Russian
Federation

 On average the final legally binding tariff ceiling

for the RF will be 7.8%
– Average tariff ceiling for Agriculture, 10.8%
– Average tariff ceiling for NAMA, 7.3%
– Final tariffs will be bound at zero for cotton
and information technology products (ITA)
 Implementation: 1/3 of tariff lines upon
accession, another 1/4 cuts in 3 years. Longest
tariff cuts on pork 8 years and cars 7 years.
44
Notification Obligations
NOTIF: Customs valuation

 Art. 22.1 - “one-time”

Notification of laws and regulations
All Members once they apply the
Agreement, including Checklist of Issues

 Decisions on Interest charges and media-

carrier
All Members if they apply the Decisions

45
NOTIF: Preshipment
Inspection

 Art. 5 - “one-time”
Notification of laws and regulations
All Members

46
NOTIF: Rules of Origin

 Art. 5.1 - “one-time”

Notification of non-preferential rules of origin
All Members

 Annex II para. 4 - “one-time”

Notification of preferential rules of origin
All Members
47
NOTIF: Import Licensing

 Notifications
– Copies of publications and full text of
laws and regulations
– Notification of changes
– Reverse notification
– Annual questionnaire (by 30 September
each year)
NOTIF: Quantitative
Restrictions
 Decision G/L/59 of the Council for Trade
in Goods (1 December 1995)

 Basic document: G/MA/NTM/QR/2

 Notification of all quantitative restrictions

(by 31 January 1996 and at two-yearly
intervals thereafter)
All Members 49
NOTIF: Integrated Data Base
(IDB)

 Decision WT/L/225 of the General Council

All Members
 Basic document: G/MA/IDB/W/6
 Tariff data at the tariff line level
Every year (by 30 March)
 Trade data at the tariff line level
Every year (by 30 September)
50
Thank you!

51