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Procedures to Enhance Transparency and Strengthen Notification Requirements Under WTO Agreements
April 12, 2019

A photo of Ambassador Shea.

Statement delivered by
Ambassador Dennis C. Shea in the WTO Council for Trade in Goods

Geneva, Switzerland
11 April 2019

As delivered

“Procedures to Enhance Transparency and Strengthen Notification Requirements Under WTO Agreements” 

Thank you Chair.  I would like to take this opportunity to thank our co-sponsors, Argentina, Australia, Costa Rica, Chinese Taipei, the European Union, Japan, New Zealand, and Canada, for making this proposal what it is today.  As you may recall, the United States initially tabled a proposal to improve Member compliance with the notification requirements of various WTO Agreements at the November 2017 CTG meeting.

The proposal circulated for today’s meeting is a culmination of improvements based on the work of all of the co-sponsors, the extremely helpful Member feedback we received during three CTG meetings, as well as countless bilateral and small group meetings.

We see this proposal as an effort to address deficiencies and gaps in notifications and transparency and put the WTO on a path towards a more successful and sustainable future.

As highlighted in the Secretariat’s annual report on notifications provided to the Council on Trade in Goods (G/L/223/Rev.26 and its revisions), compliance with the notification requirements of the various WTO Agreements is inadequate.

This lack of transparency is problematic for traders and it undermines the proper functioning and operation of the WTO Agreements.

From a systemic perspective, it is also very difficult to develop, evaluate and assess negotiating proposals to improve operation of various WTO agreements without the information that should have been provided under existing WTO notification obligations.

Lack of compliance with basic notification obligations also undermines confidence in the system.  If Members cannot comply with the most basic obligations, what certainty can there be that they are complying with the more substantive ones?

To encourage better compliance with notification obligations, we considered both incentives to seek improved performance, such as the ability to request technical assistance and the ability to compile information through the TPR process, as well as modest administrative measures that acknowledge that sustained problems in compliance should have at least some consequences.

To be clear, this proposal does not change the notification obligations required of any Member under the WTO agreements.

It merely seeks to encourage, through various incentives and administrative measures, better compliance.

I will turn it over to my colleague, Kelly Milton, to walk through the key revisions and improvements made since the previous version.  

Thank you, Ambassador. Regarding the revisions to the proposal,first, throughout the document, we have changed references from “complete” notifications to “required” notifications, to better clarify that we are seeking to capture those notifications required under the WTO Agreements and Understandings under the remit of the Council for Trade in Goods.  This change also clarifies that we are not seeking to address the quality of specific notifications, which is beyond the scope of this proposal.  The quality or completeness of notifications may be something the Working Group on Notification Obligations and Procedures could consider in the future.

Second, we heard from Members an interest in adding the Trade Facilitation Agreement to the scope of the proposal, and have now included the TFA, Section I, to paragraph 1.  We did not include Section II notifications given that Members are not required to submit Section II notifications. Such notifications are provided as a flexibility.  Concerning the TFA, we would like to remind Members wishing to avail themselves of this flexibility that the last deadline for TFA Section II notifications for Developing Country Members is in August.  After this point, Developing Country Members that have not submitted the required notifications will no longer be eligible to receive the flexibility provided under Section II.

The third revision pertains to the projected work of the Working Group on Notification Obligations and Procedures has been consolidated into a single paragraph, reflected in paragraph 2.

Fourth, we recognize that some notification requirements are on an annual or biannual basis, with a date certain for when such notifications are due.  Other notifications are required on an ad-hoc basis when a new measure is proposed, as is the case of newly proposed regulations notified under the TBT or SPS Agreements.  We intend for the proposed General Council Decision to apply to all notifications for those agreements listed in paragraph 1, as we have seen delays in the submission of each type of notification. However, developing a means to have this Decision cover such ad hoc notifications for the TBT and SPS Agreements is delegated to the respective committees addressing these Agreements in footnote 1 to paragraph 6.

Fifth, we treated Agriculture Agreement notifications differently from other notifications in the previous version of the proposed Decision, but have now limited the differentiated treatment to only the Domestic Support Table 1 notification, referred to as DS:1, in paragraph 7.  In reviewing the missing notifications covered by G/AG/2, there are over 800 missing DS:1 notifications.  There are less than 100 missing notifications for each of the other required agriculture notifications.  Thus, we have limited the flexibility of an additional two years until administrative measures could apply to only DS:1, until an update of G/AG/2 can be achieved.

Sixth, as in the previous version, Members are encouraged to submit an explanation for any delay, together with information on the anticipated time-frame for submitting the notification and any elements of a partial notification.  The updated version clarifies in paragraph 8that the explanation for the delay should be submitted to the relevant committee by six months after the relevant deadline – and two years and six months after the notification deadline for DS:1 – and subsequently every six months thereafter. This clarifies the [x dates] in paragraph 8 of the previous version.

Seventh, the updated Decision also further streamlines the special and differential treatment for Members that have not submitted a notification due to a lack of capacity, outlined in paragraph 10.  These Members are encouraged to request assistance and support for capacity building from the Secretariat.  These Members are also encouraged to submit to the relevant committee and to the Working Group six months after any relevant deadline and every subsequent six months information on those notifications that it has not submitted due to a lack of capacity, including information on the assistance and support for capacity building that they require in order to submit complete notifications.  We modeled this text on provisions in Section II of the Trade Facilitation Agreement.

Further, if a Member provides the information identified in paragraph 10, paragraph 11(c) states that such Members will be eligible to have any administrative measures deferred by a year.

We heard that some Members may have difficulty identifying those notifications for which they need assistance.  Helpfully, some developing country Members reminded us that the Secretariat provides an annual accounting to each Member of those notifications which are currently outstanding.  Thus, rather than each developing country Member having to do an independent accounting, the Secretariat provides a list for each Member to review and determine potential assistance needs.

We hope that Members find this flexibility useful. The ultimate goal of this flexibility is to achieve timely notifications to the WTO on the part of all Members. 

But flexibility alone will not help to encourage notifications from Members that, for whatever reason, do not want to provide a notification.  If after one year from the deadlines established in the proposed Decision a notification has still not been provided, we propose that administrative measures be applied to the Member, as set out in paragraph 11.  We recognize that thus far, the Secretariat’s annual reporting on outstanding notifications and the specific efforts of the standing Committees to discuss the challenge of these missing notifications has done little to resolve the problem.

The administrative measures in the updated proposed Decision do not go into effect until after one year from the deadlines established in the proposal.  To be clear, the deadlines established in the proposed Decision are for the purposes of applying administrative measures.  For all Agreements and Understandings under the remit of the CTG, the relevant deadline is the notification deadline established in the agreements.  This is set out in paragraph 6.

Paragraph 11(a) clarifies that after one year from the deadlines in paragraphs 6 and 7, specific administrative measures will apply. The key substantive change to the specific administrative measures is contained in 11(a)(iii) to clarify that any monetary assessment “may be used for the purpose of providing Members with technical assistance to fulfil notification obligations, including through the ITTC”.

Paragraph 11(b) clarifies that a year after the administrative measures in paragraph 11(a) apply, additional administrative measures will apply.  The key substantive change to these administrative measures it to remove reference to “Inactive Member”, which is a term of art used by the Budget Committee, where many of these administrative measures were originally derived from. The term has been replaced with “Member with notification delay”.

Paragraph 11(c) has also been revised to close a loophole by which a Member may never be subject to any administrative measures if it simply requests technical assistance, but never follows through with a notification.  Paragraph 11(c) now defers the application of administrative measures to allow time to submit a notification.  But the end goal is to ensure that the technical assistance results in the submission of a notification.

Finally, we heard concerns from Members on the inclusion of the paragraph encouraging the development of enhanced fisheries subsidies notifications as part of the on-going negotiations.  This paragraph has been removed from the proposed Decision. Nonetheless, the co-sponsors continue to support a strong outcome in the fisheries subsidies negotiations, including in the area of transparency and notifications.

In closing, the United States appreciates the opportunity today to provide additional information on this notifications proposal, along with our co-sponsors.

We believe that improving transparency through existing WTO notification requirements is the kind of institutional reform that is necessary to facilitate future negotiations across negotiating topics, and is a worthy and desirable outcome in the near term.

To advance this work, the United States and other proponents plan to continue proponent-based discussions with all interested Members on further improving the current proposed General Council Decision on Notifications.

We look forward to Member comments and engaging with Members in the days and weeks to come.