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Assistance to a Permanent Mission to the WTO in Preparation for Accession

Clinic: Graduate Institute, Fall 2020

Executive Summary

View Non-Confidential Excerpt here

This memo seeks to provide assistance to a Permanent Mission to the WTO in preparation for the Working Party Meetings on a trading partner’s accession. The accession process presents the Permanent Mission with an opportunity to address its concerns with the acceding trading partner not only in terms of trade, investment and infrastructure but on any aspect that it wishes to address under the instant negotiation process by leveraging its position as a current WTO member.

The mandate provided was two-fold - first, to identify the trade capacity between the nations and find sectors with the potential to enhance the current capacity, secondly and more importantly, facilitate their economic relationship by drafting questions and requests to be asked at the accession meetings.

Addressing the first point of our mandate regarding the “trade capacity”, it is found that the trade relationship between the nations is extremely lopsided, such that the Permanent Mission’s exports to the acceding partner are a mere fraction of what the member nation imports from the acceding partner. Some of the major products imported by the Permanent Mission are minerals and construction materials while the major exports are largely agri-based. Finally, there is vast potential for the expansion of the relationship into other commercially viable sectors.

The second part of the mandate is addressed comprehensively, where six specific concerns of the member nation regarding trade and investment with the acceding partner are identified. Three of these fall broadly under trade and three under investment. The concerns outlined in the project, include

Under Trade:

● ‘Protectionism in the Import Regime: Customs Duties and Internal Taxes’

● ‘Protectionism in the Import Regime: Non-Tariff Restrictive Measures’

● ’Transit Issues’

Under Investment:

● ‘Poor Dispute Resolution and Trust Deficit’,

● ‘Inaccessibility of Business Visas for Traders’ and

● ‘Currency Risks and Foreign Exchange Control Issues’

The redressal of each of these concerns is scoped in three different ways -

1. Within the mandatory WTO framework:

Some of the redressals will be triggered automatically on obtaining accession, for instance, by means of ratifying to the commitments outlined by the GATT articles. However, an obligation made to the WTO does not necessarily translate into compliance.

2. Within the optional WTO framework:

The redressals that do not get triggered automatically on accession, can be committed under the optional framework of the WTO. For instance, the Permanent Mission can leverage the negotiation process to request the acceding partner to commit to certain provisions under the Trade Facilitation Agreement (“TFA”). We advise the Permanent Mission to request to classify its TFA commitments under category A, or obligations that need to be implemented from the date of accession itself as have been done by other economically and demographically similarly-situated countries.

3. Outside the WTO framework:

Since some of the concerns identified cannot be redressed either within the mandatory WTO framework, or the optional framework, redressals are sought outside the WTO framework. These redressals are mentioned in this instant memo since the bilateral negotiations during the accession process can be utilised to ask for these additional preferential requests made by the Permanent Mission.

In order to redress our concerns during the negotiation process, certain actions are recommended to the Permanent Mission:

a. Request for additional information

b. Demand for commitment

c. Request for additional commitment

After analysing the nature of the concern and the possible redressal, we have drafted questions, which may be classified in aforementioned heads (in the above three forms) that can be used by the Permanent Mission during the negotiation process.

View Non-Confidential Excerpt here.

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