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Trade Policy Dialogue on the Multiple Dimensions of Market Access and Development

Trade Policy Dialogue on the Multiple Dimensions of Market Access and Development. Session IV Regional Trade Liberalizations as a Complement of Multilateral Liberalization?. Mario Matus Ambassador of Chile to WTO México, October 24, 2006. Presentation. Why FTAs/RTAs? Chilean experience

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Trade Policy Dialogue on the Multiple Dimensions of Market Access and Development

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  1. Trade Policy Dialogue on the Multiple Dimensions of Market Access and Development Session IV Regional Trade Liberalizations as a Complement of Multilateral Liberalization? Mario Matus Ambassador of Chile to WTO México, October 24, 2006

  2. Presentation • Why FTAs/RTAs? • Chilean experience • Looking for complementary to WTO?

  3. FTAs/RTAs • Scope for Regional Trade Arrangements: • Limited • Comprehensive • Problems • Exception to MFN • Discrimination. Exclusion of other members. • Trade deviation • Complexity for business community • Different level of negotiating leverage • Do not address all issues (i.e. DS, Export Subs) • Erosion of multilateral system if they do not go beyond & under WTO rules & principles

  4. Why FTAs/RTAs • Market access (goods) • Easier to negotiate (bilateral fine tuning) • Political reasons: • International (i.e. US-Chile; US-Jordan, etc) • Domestic (i.e. push for internal changes) • To be paid for liberalization • Not to be kept behind • To minimize trade deviation (further negotiations) • WTO slowness for honest free traders • Real free trade (0% tariff) • Develop more and stricter rules (i.e. TR, Compt, etc) • Protection of foreign investment

  5. Chilean reasons • Foreign trade policy • Open economy (free flows goods, S & I) • Dependent on international trade (more trade) • Small country (disciplines) • Transparent/legalistic/non corrupted (disciplines) • Certainty. Rules and disciplines • Dispute settlement • Reduce external economic vulnerability • Attraction of FDI • Differentiation in international economic context

  6. What do we are looking for? • Commercial • Trade creation & reduction of trade diversion • Elimination tariff peaks • Promote exports • Induce more competition • Economic • Rules and disciplines • Reduce external economic vulnerability • Attract FDI • Political • Dispute settlement • Differentiation in context of international economic turbulence

  7. Chile's bilateralism Limited Trade Agreements: • Mexico 1991 • Venezuela 1993 • Colombia 1994 • Ecuador 1995 • Mercosur (4) 1996 • Peru 1998 • India 2005 Comprehensive FTAs • Canada 1997 • Mexico 1999 • Central America (5) 2002 • European Union (25) 2003 • USA 2004 • South Korea 2004 • EFTA (4)2004 • Singapore 2005 • New Zealand 2005 • Brunei 2005 • China 2005 • Panama 2006 • Japan2006 54 +

  8. Chilean Trade I

  9. Chilean Trade II

  10. Chile : Merchandise Exports Billion dollars Source : Central Bank of Chile

  11. Gross Domestic Product (1984 = 100) Source : Central Bank of Chile Annual average GDP growth rate 84-05: 5.9 %

  12. Growth, trade and poverty (1990-2000) Evolución del Producto, Intercambio Comercial y Pobreza 40 000 40 36 000 38 32 000 36 28 000 34 24 000 32 miles de millones de Ch$ de 1996 20 000 30 % de la población total 16 000 28 12 000 26 8 000 24 4 000 22 0 20 1990 1992 1994 1996 1998 2000 GDP # of poors años Intercambio (X+M)

  13. Comprehensiveness • Institutional • Transparency • Objectives, exceptions, final provisions, etc. • DSM • “Non trade issues” • Intellectual Property Rights • Labor • Environment • Cooperation • Political commitments • Goods • Tariffs (no exceptions) • NTM (prohibition) • Customs (proced & standards) • Rules of origin (simple) • Disciplines • Safeguards (Bilat-Global) • TBT/SPS • Competition / AD • Services (negative list) • Investment (pre-post) • Temporary entry

  14. Bilateralism vs Multilateralism • Comprehensiveness • All topics includes • GATT Art. XXIV • GATS Art V • Enabling clause • Minimum exceptions in MA (goods & services) • Future work • Common rules of origin • Precision on Arts. XXIV & V • Common definition of “going beyond WTO” • Best practices in APEC, OECD? • Develop model for FTAs/RTAs?

  15. Spaghetti bowl

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