WTO NAMA negotiations: transparency versus the right to regulate
Willemien Viljoen, tralac Researcher, comments on the non-agricultural market access negotiations at the WTO and the proposal to enhance transparency of regulatory trade measures
On 21 July 2017, the members of the World Trade Organization’s (WTO) negotiating group on non-agricultural market access (NAMA) considered a proposal on enhancing transparency of regulatory measures for trade in goods. The proposal by the European Union (EU), Hong Kong, Taipei and Singapore aims to enhance transparency, not only in regulatory measures governing trade in goods (notably regulatory measures in the scope of the Agreement on Sanitary and Phytosanitary (SPS) Measures and Agreement on Technical Barriers to Trade (TBT)) by central government bodies, but also transparency in the process by which these measures are developed. Although the proposal was supported by the delegations of the EU, Asia and some Latin American countries, it was not as well received by many African and some Latin American countries and the United States (US). From the discussions, it is evident that Article 6, pertaining to public consultations of interested parties, is the main bone of contention; with the opposing countries citing increased administrative burdens and the infringement of sovereignty (the right to regulate) as the main concerns.
The need for transparency, especially in measures relating to SPS measures and TBTs to increase predictability and certainty and reduce the cost of doing business, is not a new concern. These measures are some of the most notable non-tariff barriers to trade often cited as being problematic, unpredictable and inaccessible; even though both the SPS and TBT Agreements contain notification and transparency provisions and the WTO notification system has long been in place. However, these measures are often not notified (most African countries have failed to notify SPS measures and standards in the past) or notified long after they came into effect. It is often not the lack of information which is problematic; the information exists, but timeous accessibility to the information is a major obstacle. Many countries do not have internet portals where the regulatory measures are published in a coherent and logical manner. This is precisely the situation the proposed enhanced transparency mechanism aims to address. However, it goes beyond just the timeous accessibility of current SPS and TBT measures – it aims to provide interested parties with access to draft regulations and to afford them an opportunity to give input into the regulatory process. It seems that this might be a step too far for some WTO member countries.
Except in the case of urgent matters (Article 7), Article 6 requires member countries to publish draft or newly proposed ‘major regulatory measures’ in advance to allow interested parties to determine how the proposed measure will affect them. The interested parties must then be afforded an opportunity to provide inputs into these regulatory measures and the member state must then ‘consider input received.’ Although these procedures are similar to domestic regulatory procedures for many countries, it is not just the domestic industries which are to be afforded an opportunity for inputs, but all interested parties, both foreign and domestic.
Do the arguments of the countries opposing the proposal carry any merit? In its current form Article 6 is likely to place an additional administrative burden on countries, not just in terms of the additional publication requirements, but also due to the wide discretion afforded to countries to participate in the regulatory process. The article is only applicable when it comes to ‘major regulatory measures’; however, there is no indication as to what this means. Furthermore, the article requires a ‘reasonable opportunity’ for countries to provide input into proposed regulations. However, there is no specification regarding timelines and what would be considered reasonable. Article 6(c) also just states that countries must ‘consider input received.’ Does this mean, as in the case of the WTO Agreement on Anti-Dumping, that countries must just apply their mind in the given circumstance? The article requires that countries track their whole regulatory development process; from the draft regulatory measures, to comments and inputs received to the publication (in advance) of the final regulatory measures which will be in place.
An important question for the countries is whether the domestic regulatory process falls outside the ambit of the WTO? Can foreign interested parties expect to participate in the domestic regulatory process; given that it will have an impact on their interests and international trade in general? Countries formulate regulations to address specific needs or concerns; these may be import or export regulations or regulation to benefit human, animal or plant life. To what extent should a foreign party play a role in determining what is in the best regulatory interest of another purely because it might affect their trade interests? Where does one draw the line between transparency to improve timeous accessibility to regulation and meddling in the domestic regulatory process? As a case in point is the South Africa import regulations pertaining to livestock imports from Botswana, Namibia, Lesotho and Swaziland (see previous discussion note). The stringent testing and quarantine requirements of the regulations have significant implications for farmers (especially small-scale and communal farmers) of these countries. Should these countries have been afforded the opportunity to influence the final formulation of a domestic import regulation due to its significant trade and economic implications?