On 02 September the World Trade Organization (WTO) Deputy Director-General announced that the regular discussion of specific trade concerns in the Technical Barriers to Trade (TBT) Committee had helped to reduce the need for costly and time-consuming WTO litigation. A virtual event was organised as part of the TBT@40 Dialogue Series. The DDG said the transparency of the process for scrutinising WTO members’ TBT measures was remarkable. The process was praised as a model that contributes to reducing trade friction, he added. His remarks are below.
This is the second event in the “TBT@40 Dialogue Series” taking place this year. The subject of the first event, in June, was transparency. Today the focus is on the TBT Committee itself and the practice of discussing “specific trade concerns”, which is, of course, also a form of transparency.
The roots of the TBT agreement are to be found in the Tokyo Round 'Standards Code' – the forerunner to the 1995 TBT Agreement.
The Tokyo Round itself, concluded in 1979, was a major accomplishment. It was negotiated at a time when trade tensions ran high - between the U.S. and Europe on agriculture, and between the United States and Japan with respect to both industrial products and agriculture. It was negotiated against a background of failure: no major new trade agreement negotiated by the U.S. President had been implemented unless the Congress had approved the agreement in advance. Not only did the Round cut customs duties by an average of one-third, with a resulting rated of under 5% for the major participants, it also introduced new disciplines into the multilateral trading system. The Tokyo Round addressed important non-tariff barriers, such as technical standards, anti-dumping, government procurement and customs valuation. What is more, for the first time, it attempted to consolidate certain dispute settlement rules into a single and coherent understanding. Finally, it resulted in a significant new instrument addressing the development dimension of trade: the "Enabling Clause". The agreements were adopted by the U.S. Congress in a vote that was nearly unanimous.
An important achievement of the Tokyo Round was the plurilateral “Standards Code". It introduced for the first-time detailed disciplines on domestic regulatory measures affecting trade, a growing concern in the GATT since at least the 60s. The legal text charted the course for the Uruguay Round negotiators so clearly that much of the original Code remains intact and is included in the current WTO TBT Agreement. The new code also led the way for creating of a new, sister Agreement – the WTO Agreement on the Application of Sanitary and Phytosanitary measures (the SPS Agreement). Both of these agreements remain major active contributors to a world whose trade is facilitated by a functioning multilateral trading system.
Last year was the 50th anniversary of the first humans landing on the moon (Apollo 11, 19 November 1969). The way was prepared by Apollo 10 which orbited the moon just a few months earlier that same year. It was the orbiter's dress rehearsal that provided Houston the necessary assurance that an actual landing was safe, indeed possible.
Likewise, the Tokyo Round was just a beginning of a multilateral trading system that could reach and implement agreements. It prepared the way for the success of the Uruguay Round – the Round that created the WTO which came into existence 25 years ago.
One practice in the WTO that stands out and has received considerable positive attention is the regular discussion of “Specific Trade Concerns”, “STCs” for short, in the TBT Committee. These STCs drive the detailed, technical deliberations on specific measures that have (mostly) not yet entered into force and are therefore not yet entrenched in domestic law. WTO notifications (the subject of the previous dialogue), draw Members' attention to them, and, in the Committee, these measures - if they are considered of concern – are scrutinized. The full transparency of the process is remarkable: all WTO Members and Observers are party to the discussion and the minutes are available to the public. This is an example that many hope that other agreements will emulate.
To date, under the TBT there have been almost 40 000 notifications with some 638 targeted for discussion in Geneva (as STCs). Only 8 dispute rulings have been brought on TBT measures, not because they are not sometimes controversial, but because they are discussed in detail while issues can still be resolved. The process is praised as a model that contributes to reducing trade friction, reducing the need for costly and time-consuming WTO litigation. The process itself is graphically portrayed in the flyer for this event, and on the WTO website.
At this challenging moment for the multilateral trading system, it is important to emphasise what works - and this clearly does. That said, nothing is perfect. Please use this time to think out of the box, to come up with ideas and suggestions for new ways and means of improving the work of the TBT Committee. This is always welcome.
I look forward to hearing the results of your discussion on this topic today.
- The Tokyo Rd results included an average one-third cut in customs duties in the world’s nine major industrial markets, bringing the average tariff on industrial products down to 4.7%. See https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm
- “Understanding Regarding Notification, Consultation, Dispute Settlement and Surveillance” - adopted 28.11.1979 (L/4907).
- “Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries” - decision 28 November 1979 (L/4903).
- 395-7 by the House of Representatives and 90-4 by the Senate.
Story by: Riaan de Lange