The paper calls for a stronger approach to requiring notifications by member governments on issues including customs valuation and subsidies.
The U.S., EU, Japan, Argentina and Costa Rica recently submitted a joint proposal to increase transparency and strengthen notification requirements at the World Trade Organization (WTO).
The Nov. 1 document notes a “chronic low level of compliance with existing notification requirements under many WTO agreements.”
The WTO members call for the organization to instruct appropriate committees or other groups to assess and report yearly regarding members’ compliance with notification obligations, take appropriate steps to reinforce compliance with notification requirements, including notification workshops, and to recommend ways to achieve greater compliance.
The paper calls for greater transparency regarding notification procedures pursuant to the WTO agreements on agriculture, antidumping, subsidies and countervailing measures, safeguards, state trading, customs valuation, import licensing procedures, rules of origin, preshipment inspection, trade-related investment measures, application of sanitary and phytosanitary measures and technical barriers to trade.
The WTO Working Group on Notification Obligations and Procedures should be instructed to meet before a specific date to develop recommendations to improve member compliance with notification obligations under those agreements and should consult with appropriate committees and working groups to consider proposals to help members improve compliance, the paper says.
The working groups should report their findings to the Council for Trade in Goods before a specific date and provide updates at each subsequent meeting, the WTO members said.
During a Washington International Trade Association (WITA) panel event on Wednesday, Terence Stewart, managing partner for Stewart and Stewart law firm, said an ongoing lack of transparency by WTO members regarding their required notifications is “atrophying” the utility of the WTO committee process.
He added that there has been an “unacceptable” level of notification by some members on areas such as subsidies.
In addition to the size of the U.S. market, the transparency of the United States’ domestic policy environment can incentivize countries to target the U.S. at the WTO, in cases such as those involving previous U.S. use of zeroing in antidumping calculations, Ronald Lorentzen, senior international trade adviser for Kelley Drye, said during the WITA event.
Zeroing refers to a practice by countries in calculating AD duties in which the import price is subtracted from the foreign domestic price of a product and the importing country sets at zero any negative number that results from the subtraction. Critics argue that this unfairly raises dumping margins because it omits negative calculations.
In a case brought by Japan against the U.S., the WTO Appellate Body ruled in 2009 that the U.S. use of zeroing was inconsistent with the WTO Anti-Dumping Agreement and the General Agreement on Tariffs and Trade.
The transparency of the United States’ system “really allows people to see the path toward the decision and the rationale,” Lorentzen said. “I think both in the context of the transparency exercise and the work of the system, a lot more effort can be put into forcing people to be a bit more open about how they reached their decisions. Because … people zero every day, just like companies dump every day. But you need to be able to sort of identify when and how they do it.”
U.S. among submitters of WTO transparency proposal
