New Issues in WTO Unit#1

NEW ISSUES IN WTO
Unit#1
WTO: New Issues
Environment Electronic Commerce
Investment Labour Standards & Social
Competition Policy Clause
Government Procurement Implementation & Monitoring
Trade Facilitation
30-11-2016 WTO: New Issues: Unit#1 2

WTO: Trade & Environment
Sustainable development and protection and preservation of the
environment are fundamental goals of the WTO. They are
enshrined in the Marrakesh Agreement, which established the WTO,
and complement the WTO’s objective to reduce trade barriers and
eliminate discriminatory treatment in international trade relations.
While there is no specific agreement dealing with the environment,
under WTO rules members can adopt trade-related measures aimed at
protecting the environment provided a number of conditions to avoid
the misuse of such measures for protectionist ends are fulfilled.
Source: https://www.wto.org/english/tratop_e/envir_e/envir_e.htm

WTO: Trade & Environment
The WTO contributes to protection and preservation of the
environment through its objective of trade openness,
through its rules and enforcement mechanism, through
work in different WTO bodies, and through ongoing efforts
under the Doha Development Agenda.
The Doha Agenda includes specific negotiations on trade and
environment and some tasks assigned to the regular Trade and
Environment Committee.

WTO: Trade & Environment: Issues
Trade & Climate Change
The issue of climate change, per se, is not part of the WTO's ongoing work programme
and there are no WTO rules specific to climate change. However, the WTO is relevant
because climate change measures and policies intersect with international trade in a
number of different ways.
Trade & Green Economy
The WTO offers a powerful supporting framework for sustainable development and green
economy. It provides an enabling environment through its objectives, institutions and
monitoring of potential trade protectionism, enforcement mechanism, toolbox of rules,
and growing case law in the environment area.
Sustainable Development Goals (SDGs)
The Sustainable Development Goals (SDGs) are a set of 17 goals and 169 targets that
members of the United Nations have endorsed as part of the 2030 Agenda for
Sustainable Development.

WTO: Trade & Investment
There are three main areas of work in the WTO on trade and investment:
1) A Working Group established in 1996 conducts analytical work on the
relationship between trade and investment.
2) The Agreement on Trade-Related Investment Measures (“TRIMs
Agreement”), one of the Multilateral Agreements on Trade in Goods,
prohibits trade-related investment measures, such as local content
requirements, that are inconsistent with basic provisions of GATT 1994.
3) The Agreement on Trade in Services addresses foreign investment in
services as one of four modes of supply of services.
Source: https://www.wto.org/english/tratop_e/trims_e.htm

WTO: Trade & Investment
Agreement on Trade-Related Investment Measures (TRIMs)
This Agreement, negotiated during the Uruguay Round, applies only to
measures that affect trade in goods. Recognizing that certain investment
measures can have trade-restrictive and distorting effects, it states that no
Member shall apply a measure that is prohibited by the provisions of GATT
Article III (national treatment) or Article XI (quantitative restrictions).
Source: https://www.wto.org/english/tratop_e/trims_e.htm

WTO & Competition Policy
The Competition Policy deals with how domestic and international
competition policy instruments, such as antitrust or competition laws,
interact with international trade.
In July 2004 the General Council of the WTO decided that the
interaction between trade and competition policy (in addition to
investment, and transparency in government procurement) would no
longer form part of the Work Programme set out in the Doha Ministerial
Declaration and therefore that no work towards negotiations on any of
these issues will take place within the WTO during the Doha Round.
Source: https://www.wto.org/english/tratop_e/comp_e/comp_e.htm

Working Group on Interaction between
Trade & Competition Policy (WGTCP)
Working Group on the Interaction between Trade and Competition
Policy (WGTCP)
As a result of the Ministerial Conference in Singapore (1996), the
Working Group on the Interaction between Trade and Competition
Policy (WGTCP) was established to study various aspects of this issue,
with the participation of all WTO Members.

Working Group on Interaction between
Trade & Competition Policy (WGTCP)
Under the Doha Ministerial Declaration (2001), the study
work within the Working Group was focusing on the
clarification of:
1. core principles, including transparency, non-discrimination and procedural
fairness
2. provisions on hard-core cartels;
3. modalities for voluntary cooperation; and
4. support for progressive reinforcement of competition institutions in developing
countries through capacity building.
5. The Working Group is currently inactive but the WTO Secretariat continues to
respond to national requests for technical assistance in this area for the benefit
of interested WTO Members and countries seeking accession to the WTO .

The close relationships between trade and investment and
competition policy have long been recognized.
One of the intentions, when GATT was drafted in the late
1940s, was for rules on investment and competition policy to
exist alongside those for trade in goods.

• Over the years, GATT and the WTO have increasingly dealt with
specific aspects of the relationships. For example, one type of
trade covered by the General Agreement on Trade in Services
(GATS) is the supply of services by a foreign company setting
up operations in a host country — i.e. through foreign
investment.
• The Trade-Related Investment Measures Agreement says
investors’ right to use imported goods as inputs should not
depend on their export performance.
Source: https://www.wto.org/english/thewto_e/whatis_e/tif_e/bey3_e.htm#investment
The same goes for competition policy.
GATT and GATS contain rules on monopolies and exclusive
service suppliers.
The principles have been elaborated considerably in the rules
and commitments on telecommunications.
The agreements on intellectual property and services both
recognize governments’ rights to act against anti-competitive
practices, and their rights to work together to limit these
practices.
Source: https://www.wto.org/english/thewto_e/whatis_e/tif_e/bey3_e.htm#investment
Government Procurement
Government agencies often need to purchase goods and
services with public resources and for public purposes to fulfil
their functions. Such purchases are generally referred to as
government/public procurement.
Achieving 'value for money' is a primary aim of most procurement
regimes. Open, transparent and non-discriminatory procurement is
generally considered to be the best tool to achieve this goal as it
optimises competition among suppliers.
At the same time, there are competing policy goals: many
governments also make use of government procurement to achieve
other domestic policy goals, such as the promotion of specific local
industry sectors or social groups.
Source: https://www.wto.org/english/tratop_e/gproc_e/gproc_e.htm
Government Procurement
The liberalization of government procurement markets holds the
potential to generate benefits both in terms of procurement efficiency
and commercial interests. Therefore, WTO members have worked on
this issue on three fronts, namely via:
1. The plurilateral Agreement on Government Procurement (GPA)
2. Doha Development Agenda (DDA) Working Group on
Transparency in Government Procurement (which is currently
inactive)
3. GATS negotiations on government procurement.
Among these three areas, work on the GPA is the most active and has
produced substantial trade liberalization. On 6 April 2014, the revised
GPA came into force and marks a significant milestone of the WTO.
Source: https://www.wto.org/english/tratop_e/gproc_e/gproc_e.htm
Government Procurement Agreement
(GPA)
What is the GPA?
The GPA is a plurilateral agreement within the framework of the WTO,
meaning that not all WTO members are parties to the Agreement.
 At present, the Agreement has 18 parties comprising 46 WTO
members.
Another 29 WTO members participate in the GPA Committee as
observers. Out of these, 9 members are in the process of acceding to
the Agreement.
The revised GPA agreement came into effect on 6th April 2014
Source: https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm

(GPA)
The fundamental aim of the GPA is to mutually open government
procurement markets among its parties.
As a result of several rounds of negotiations, the GPA parties have

opened procurement activities worth an estimated US$ 1.7 trillion
annually to international competition (i.e. to suppliers from GPA parties
offering goods, services or construction services).
The GPA is composed mainly of two parts: the text of the Agreement
and parties' market access schedules of commitments.

(GPA)
1) The text of the GPA establishes rules requiring that open, fair and
transparent conditions of competition be ensured in government
procurement.
2) However, these rules do not automatically apply to all procurement
activities of each party. Rather, the coverage schedules play a
critical role in determining whether a procurement activity is covered
by the Agreement or not.
3) Only those procurement activities that are carried out by covered
entities purchasing listed goods, services or construction services of
a value exceeding specified threshold values are covered by the
Agreement.

Trade Facilitation
The Trade Facilitation Agreement contains provisions for
expediting the movement, release and clearance of goods,
including goods in transit.
It also sets out measures for effective cooperation between

customs and other appropriate authorities on trade facilitation
and customs compliance issues. It further contains provisions
for technical assistance and capacity building in this area.
Source: https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm

Trade Facilitation Committee: Tasks
Following the dissolution of the Negotiating Group on Trade
Facilitation after the conclusion of the negotiations in December
2013, work on trade facilitation primarily takes place in the
Preparatory Committee on Trade Facilitation.
The Committee, which is open to all WTO members, is
mandated under the Bali Ministerial Decision to “perform such
functions as may be necessary to ensure the expeditious
entry into force of the Agreement and to prepare for the
efficient operation of the Agreement upon its entry into
force.”

Trade Facilitation Committee: Tasks
The decision tasks the Committee to :
i. conduct a legal review of the Trade Facilitation Agreement
ii. receive notifications from members on the commitments they

can undertake immediately (Category A commitments )
iii. draw up a Protocol of Amendment to insert the Agreement

into Annex 1A of the WTO Agreement.

Trade Facilitation Agreements
Trade Facilitation Agreement
The Trade Facilitation Agreement has three sections:
Section I contains provisions for expediting the movement, release and

clearance of goods, including goods in transit. It clarifies and improves the
relevant articles (V, VIII and X) of the General Agreement on Tariffs and
Trade (GATT) 1994. It also sets out provisions for customs cooperation.
Section II contains special and differential treatment (SDT) provisions
that allow developing and least-developed countries (LDCs) to determine
when they will implement individual provisions of the Agreement and to
identify provisions that they will only be able to implement upon the receipt
of technical assistance and support for capacity building.

Special & Differential Provisions: Trade
Facilitation Agreement Section II
Category A: provisions that the member will implement by the time
the Agreement enters into force (or in the case of a least-developed
country member within one year after entry into force)
Category B: provisions that the member will implement after a

transitional period following the entry into force of the Agreement
Category C: provisions that the member will implement on a date

after a transitional period following the entry into force of the
Agreement and requiring the acquisition of assistance and support for
capacity building.

Trade Facilitation Agreement
Section III contains provisions that establish a permanent committee
on trade facilitation at the WTO,
Require members to have a national committee to facilitate domestic

coordination and implementation of the provisions of the Agreement.

WTO & Electronic Commerce
Work Programme on Electronic Four WTO bodies were charged with
Commerce
the responsibility of carrying out the
 In September 1998, the General Council
Work Programme:
adopted the Work Programme on Electronic
Commerce. the Council for Trade in Services;
Definition of electronic commerce: The the Council for Trade in Goods;
Work Programme on Electronic Commerce
states that: "Exclusively for the purposes the Council for TRIPS;
of the work programme, and without
the Committee on Trade and
prejudice to its outcome, the term
'electronic commerce' is understood to Development.
mean the production, distribution, The General Council plays a central
marketing, sale or delivery of goods and
role and keeps the work programme
services by electronic means".
under continuous review.
Source: https://www.wto.org/english/tratop_e/ecom_e/ecom_e.htm

Labour Standards & Social Clause
The concept of “Social Clause” has been accepted in the GATT agreement to
prescribe labour satndards
Social Clause Standards for protecting labour standards
Labour standards are those that are applied to the way workers are treated .
It covers a wide range of things :
a) Prohibition of employment of children in hazardous industries
b) Providing adequate wages
c) Providing healthy and hygienic working conditions
d) Special social welfare, protection for women
e) Prescription of hours of work and rest
f) Provision for efficacious remedy in case of default by employer to provide these conditions to his
workers
Source:
http://dspace.cusat.ac.in/jspui/bitstream/123456789/6536/1/Social%20Clause%20of%20WTO%20an
d%20India.pdf
Labour standards are not subject to any WTO rules or
disciplines at present, and while the issue continues to be a
deeply important one for some developed country governments
Advocates for including labour standards on the WTO’s agenda
of future work includes:
a) the freedom to bargain collectively,
b) freedom of association,
c) elimination of discrimination in the workplace and
d) the elimination of workplace abuse (including forced labour and certain

types of child labour)
Source: https://www.wto.org/english/thewto_e/minist_e/min01_e/brief_e/brief16_e.htm,
http://www.businessandeconomics.mq.edu.au/our_departments/Economics/econ_research/2001/Num
ber203202001.PDF
The issue of trade and labour standards has been with the
WTO since its birth.
In April 1994, when trade ministers gathered in Marrakesh to

sign the treaty that formed the WTO, nearly all ministers
expressed a view on this issue.
The Chairman of that conference concluded that there was no

consensus among member governments at the time, and thus
no basis for agreement on the issue.
Source: https://www.wto.org/english/thewto_e/minist_e/min01_e/brief_e/brief16_e.htm

At the 1996 Singapore Ministerial Conference, members
defined the WTO’s role on this issue, identifying the International
Labour Organization (ILO) as the competent body to negotiate
labour standards.
 There is no work on this subject in the WTO’s Councils and

Committees. However the secretariats of the two organizations
work together on technical issues under the banner of
“coherence” in global economic policy-making
Source: ://www.wto.org/english/thewto_e/whatis_e/tif_e/bey5_e.htm

Labour Standards & Social Clause: The
1996 Singapore Ministerial Declaration
a) “We renew our commitment to the observance of internationally recognized
core labour standards. The International Labour Organization (ILO) is the
competent body to set and deal with these standards, and we affirm our
support for its work in promoting them.
b) We believe that economic growth and development fostered by increased

trade and further trade liberalization contribute to the promotion of these
standards.
c) We reject the use of labour standards for protectionist purposes, and agree
that the comparative advantage of countries, particularly low-wage
developing countries, must in no way be put into question. In this regard,
we note that the WTO and ILO Secretariats will continue their existing
collaboration.”
Source: https://www.wto.org/english/thewto_e/whatis_e/tif_e/bey5_e.htm
Labour Standards and Social Clause: Issues
Developing countries believe that attempts to introduce this issue
into the WTO represent a thinly veiled form of protectionism which is
designed to undermine the comparative advantage of lower-wages in
developing countries.
workplace conditions will improve through economic growth and
development, which would be hindered should rich countries apply
trade sanctions to their exports for reasons relating to labour
standards.
Application of such sanctions, would perpetuate poverty and delay
developmental efforts including those aimed at improving conditions in
the workplace.
Source: https://www.wto.org/english/thewto_e/minist_e/min01_e/brief_e/brief16_e.htm

Labour Standards: Key questions for debate
1) If a country has lower standards for labour rights, do its exports gain an
unfair advantage? Would this force all countries to lower their standards
(the “race to the bottom”)?
2) If there is a “race to the bottom”, should countries only trade with those
that have similar labour standards?
3) Should WTO rules explicitly allow governments to take trade action as
a means of putting pressure on other countries to comply?
4) Is the WTO the proper place to discuss and set rules on labour — or to
enforce them, including those of the ILO?
5) whether trade actions could be used to impose labour standards, or
whether this would simply be an excuse for protectionism.

WTO & Labour Standards: The action taken
1) In the WTO, the debate has been hard-fought, particularly in 1996 and 1999.
2) It was at the 1996 Singapore conference that members agreed they were
committed to recognized core labour standards, but these should not be used
for protectionism
3) The economic advantage of low-wage countries should not be questioned, but
the WTO and ILO secretariats would continue their existing collaboration, the
declaration said.
4) The countries concerned might continue their pressure for more work to be
done in the WTO, but for the time being there are no committees or working
parties dealing with the issue.
5) No agreement reached in the 1999 Seattle Conference
6) The 2001 Doha Ministerial Conference reaffirmed the Singapore declaration
on labour without any specific discussion. For the time being there are no
committees or working parties dealing with the issue.
Implementation & Monitoring: Key
Highlights
1) By the end of April 2016, 77 WTO members had ratified the trade
facilitation agreement which will come into effect once two-thirds of
WTO membership have ratified it
Implementation of the agreement will help in cutting trade costs by speeding up the flow
of goods and services across borders
2) By 2015, ten more members accepted the protocol amending the

WTO’s Intellectual Property (IP) TRIPS Agreement
3) By the end of April 2016, 61% of WTO members had accepted the
protocol
The protocol is aimed at making access easier of affordable medicines for WTO’s poorest
countries
Source: https://www.wto.org/english/res_e/booksp_e/anrep_e/anrep16_chap5_e.pdf

Implementation & Monitoring: Key
Highlights
4) The Committee on Sanitary & Phytosanitary (SPS) Measures
received a record 1,681 notifications from WTO members
concerning food, safety, animal/plant health regulations
helping to improve the transparency of members’ use of these
measures
5) The use of trade-restricting measures by WTO members is a
cause of deep concern as per latest WTO-monitoring reports
as the overall number of trade restrictions introduced by
members since 2008 has continued to increase

Implementation &Monitoring TRIPS

Implementation &Monitoring: TRIPS
• The TRIPS council has continued to promote transparency in WTO
members’ Intellectual Property systems and has reviewed the
implementation of TRIPS Agreement
The major topics of discussion being
Access to medicines
Bio Diversity
Traditional Knowledge
The Patentability of life forms
Bio Technology
Technical Cooperation

Implementation &Monitoring: TRIPS
The Council extended until January 2033 a waiver on least developed
countries (LDCs) having to apply TRIPS provisions on pharmaceutical
patents
It also recommended a parallel waiver on least developed countries
(LDCs) obligations regarding two other TRIPS provisions on
pharmaceutical products
The council has discussed various aspects of innovation policy,
including the role of Intellectual Property (IP) in financing innovation

References
 https://www.wto.org/english/res_e/booksp_e/anrep_e/anrep16_chap5_e.pdf
https://www.wto.org/english/thewto_e/whatis_e/tif_e/bey5_e.htm
https://www.wto.org/english/thewto_e/minist_e/min01_e/brief_e/brief16_e.htm
https://www.wto.org/english/thewto_e/minist_e/min01_e/brief_e/brief16_e.htm
http://www.businessandeconomics.mq.edu.au/our_departments/Economics/econ_resea
rch/2001/Number203202001.PDF
 http://dspace.cusat.ac.in/jspui/bitstream/123456789/6536/1/Social%20Clause%20of%
20WTO%20and%20India.pdf
 https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm
 https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm
 https://www.wto.org/english/tratop_e/envir_e/envir_e.htm
 https://www.wto.org/english/tratop_e/trims_e.htm
 https://www.wto.org/english/tratop_e/comp_e/comp_e.htm
 https://www.wto.org/english/thewto_e/whatis_e/tif_e/bey3_e.htm#investment

New Issues in WTO Unit#1

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NEW ISSUES IN WTO

Investment Labour Standards & Social

Competition Policy Clause

Government Procurement Implementation & Monitoring

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As a result of several rounds of negotiations, the GPA parties have

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It also sets out measures for effective cooperation between

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i. conduct a legal review of the Trade Facilitation Agreement

ii. receive notifications from members on the commitments they

iii. draw up a Protocol of Amendment to insert the Agreement

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Section I contains provisions for expediting the movement, release and

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Category B: provisions that the member will implement after a

Category C: provisions that the member will implement on a date

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Require members to have a national committee to facilitate domestic

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Social Clause Standards for protecting labour standards

b) Providing adequate wages

c) Providing healthy and hygienic working conditions

d) Special social welfare, protection for women

e) Prescription of hours of work and rest

c) elimination of discrimination in the workplace and

d) the elimination of workplace abuse (including forced labour and certain

In April 1994, when trade ministers gathered in Marrakesh to

The Chairman of that conference concluded that there was no

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 There is no work on this subject in the WTO’s Councils and

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b) We believe that economic growth and development fostered by increased

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2) By 2015, ten more members accepted the protocol amending the

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