. Soft enforcement: Transparency, notifications and trade policy reviews Concerns over non-compliant measures do not always require that co...
. Soft enforcement: Transparency, notifications and trade policy reviews Concerns over non-compliant measures do not always require that countries resort to the hard option of a formal dispute. There are other, softer forms of enforcement that are intended to promote compliance. These include norms and rules of transparency, the requirement that countries notify their measures, and the conduct of trade policy reviews. Transparency was a well-established principle in the trading system long before the advent of WTO. GATT article X provides that “[l]aws, regulations, judicial decisions and administrative rulings of general application” on matters related to trade “shall be published promptly in such a manner as to enable governments and traders to become acquainted with Box 5. Sources of information on compliance and non-tariff barriers Countries may take advantage of several programmes and databases in order to monitor the compliance of their partners with the commitments made in trade agreements. The trade policy reviews (TPRs) conducted by WTO, as discussed elsewhere in this manual, provide regular examinations of members’ trade regimes and sometimes identify laws or policies that may not be consistent with a country’s commitments. The TPR rules explicitly prohibit countries from citing these reports as the basis of a formal complaint in the WTO’s Dispute Settlement Body, but any non-compliant measures that are identified in a TPR could certainly be verified through some other source. Another WTO resource is the Integrated Trade Intelligence Portal (I-TIP), which gathers the data generated in members’ notifications to the WTO and through other sources to provide practical information on a wide range of issues affecting specific products and sectors. UNCTAD offers the database on NTMs developed in collaboration with the African Development Bank, ITC and World Bank, as well as ALADI, ERIA and the WTO secretariat. It provides a global information dataset on NTMs used by more than 60 countries, representing more than 80 per cent of global trade. All the trade-related regulations, including the SPS and TBT areas, are collected and classified in a systematic and coherent database. The NTMs database is disseminated through WITS/World Bank, UNCTAD-iTIP and ITC dissemination systems. The World Bank hosts two specialized databases that catalogue the restrictions that countries impose. The Temporary Trade Barriers Database offers detailed information on more than 30 Governments’ use of antidumping duties, countervailing duties and safeguards. The Services Trade Restrictions Database provides information on services measures for 103 countries in five sectors (telecommunications, finance, transportation, retail and professional services) and by modes of delivery. Several other databases on NTBs are available on a national or regional basis. Examples include the following: • The Association of Southeast Asian Nations has a non-tariff measures database that allows users to download files on its members’ measures. • The European Union maintains a market access database of other countries’ NTMs that can be either browsed or searched. • The regional economic communities of Africa sponsor a mechanism for reporting, monitoring and eliminating non-tariff barriers that allows users to register complaints, seek to resolve them, and browse details and summary statistics of the NTBs that others have reported to the system. The global financial crisis of 2008–2009, which could have led to a new wave of protectionism, inspired the creation of the Global Trade Alert (GTA). This is an independent project that catalogues all new measures adopted by any country that affect trade, classifying them as protectionist, market opening, or neutral. The GTA measures can be browsed or searched by several different criteria, and users may also register to receive alerts for any new measures affecting specific countries or sectors. IV. TRADE NEGOTIATIONS AND TRADE PROMOTION 45 them” . Other GATT articles supplemented this general principle of transparency and publication by requiring the notification of certain types of measures. The scope of notifications expanded with the agreements negotiated in later rounds, as well as with the horizontal requirements set by the Understanding Regarding Notification, Consultation, Dispute Settlement and Surveillance. Today there are more than 200 provisions in WTO agreements requiring notifications, most of which are related to non-tariff measures. A notification will typically consist of a short statement that follows a standard format in which the member identifies the law, regulation, action, etc., that is at issue, the precise content of which varies according to the agreement and topic involved. These documents are routinely filed and made available on the WTO website to other members and the public. Specific agreements may also require that members take other steps to promote transparency. The agreement dealing with sanitary and phytosanitary (SPS) measures, for example, not only obliges members to publish all SPS measures and notify changes that are made to them, but further requires that they identify a single central government authority responsible for the notification requirements (i.e. the national notification authority) and establish a national enquiry point responsible for answering questions from other members about SPS measures and related issues. Compliance with notification requirements is uneven. Most developed countries appear to file most of the required notifications most of the time, and the same can be said for some of the developing countries, but many of the poorer and smaller developing countries struggle to meet this obligation. A single example suffices to illustrate the problem. The Agreement on Subsidies and Countervailing Measures requires that members make a subsidy notification no later than 30 June of each year, whether or not they employed any subsidies. In 1995, when there were 112 WTO members, 56 of them notified subsidies and 27 made a nil notification of no subsidies; that left 29 members (25.9 per cent ) that failed to meet the obligation to notify. The rate of non-compliance rose steadily thereafter, to the point where in 2015 there were 106 members (65.4 per cent of the total) that had failed to make the mandatory notification.16 This failure to comply with a notification requirement is by no means the most serious problem that the multilateral system faces; yet it is symptomatic of a declining commitment to abide by the norms of that system. Members and the WTO secretariat have addressed the problem of incomplete notifications from two directions. One approach views the number and complexity of the requirements as the root of the problem, with developing countries proposing that the burden be reduced and the procedures simplified. These concerns led to such steps as the publication of the Procedural Step-by-Step Manual for SPS National Notification Authorities and SPS National Enquiry Points, a guidebook with detailed instructions. Some WTO committees have also worked to simplify procedures for the notifications that fall within their purview. The other response has been for the secretariat to provide greater assistance to developing countries in complying with these obligations. This is, together with accessions and scheduling, one of the highest priorities in the technical assistance that the secretariat offers to members. The WTO’s Trade Policy Review Mechanism is another and more thorough form of soft enforcement. It provides for regular diagnostics of all members’ trade policies, with members being subject to a review once every two, four or six years (depending on their weight in global trade). The results of these reviews can help a country to identify areas where its own laws and policies may need to be brought into compliance, and also — although explicitly not intended to serve as a basis for the enforcement under the disputesettlement procedures — to determine whether its trading partners are living up to their obligations. This process and its relationship to TPFs are taken up in part VI of this manual.
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