AFRICAN FOCAL POINTS MEETING NAIROBI 7-8 SEPTEMBER,2009

1. AFRICAN FOCAL POINTS MEETINGNAIROBI 7-8 SEPTEMBER,2009

2. REGIONAL TRADE AGREEMENTS WTO RULES ON RTAs Main Elements GATT ARTICLE XXIV Coverage � N-N, N-S RTA in goods ENABLING CLAUSE Coverage - S-S RTA in goods Note that all provisions thereunder allow for derogation from MFN obligations in providing preferencial treatment to RTA partners BUT under certain conditions

3. GATT ARTICLE XXIV 5-8 Duties and other restrictive regulations of commerce must be eliminated with respect to SUBSTANTIALLY ALL THE TRADE among parties ( para 8(a)(i) &(b) Duties and other regulations of commerce must not be higher or more restrictive than prior to the formation (para 5(a)(b) Reasonable length of time for the formation of CU/FTA should not exceed 10 years only in exceptional cases (para. 5(c) Notification to the CTG, examination & reporting by the CRTA on WTO consistency and make necessary recommendations

4. ENABLING CLAUSE Does not assume a formal link with the GATT Article XXIV conditions The Enabling Clause is les stringent in application than GATT Article XXIV as it permits reciprocal preferences on a limited range of Product, & not substantially all the trade provisions The Clause also permits reduction in tariffs only and non-tariff measures.

5. GATS ARTICLE V Deals with EIAs in trade in services V:4 Facilitate trade between the parties and not to raise the overall level of barriers to trade in services vis-a-vis third parties V:1(a) Covers ��substantial sectoral coverage�� ( # of sectors, vol. of trade affected, and modes of supply), with no a priori exclusion of any mode of supply. V:b) ��the absence or elimination of substantially all discrimination, in the sense of (GATS ) Article XVII�� ( National Treatment) through elimination of existing discriminatory measures and/or prohibition of new measures

6. GATS V:(2) V:4 & 5: Not to raise overall level of barriers to trade in services within the respective sectors compared to the level applicable prior to the EIA V:3(a) Flexibilities shall be provided for DCs regarding the conditions of V:1 in accordance with the level of development V:3 (b) Under S-S EIAs, more favourable treatment may be granted to juridical persons owned or controlled by Natural persons of an EIA member with respect to substantive business operations.

7. MAIN ISSUES UNDER NEGOTIATIONS DMD Para. 29 �� Negotiations shall aim at clarifying and improving disciplines and procedures�� on RTAs while taking into account ��development aspects��. ��Substantially all the trade�� a vague term : how much is �� Substantially all the trade�� What percentage? ORRC � what are they? Transition period �� reasonable period of time�� - how long What are �� Exceptional cases��? Monitoring compatibility - RTA TM adopted in 2006

8. THE ACP PROPOSAL ON GATT XXIV SUBMISSION ON REGIONAL TRADE AGEEMENTS TN/RL/W/155 - 28 April, 2004 HIGHLIGHTS - Focus Developemental aspects of RTAs SDTs should be included in GATT Article XXIV The crucial legal cover that the Enabling Clause would provide DCs, since it is less stringent in application than the provisions in GATT XXIV.

9. POLICAL SUPPORT African Group�s consistent support for the Paper - endordsed by the AU Conference of Trade Ministers in Addis Ababa ( March 2009 ) Review of Article XXIV - Acknowledged by the Blair Commission Report � Special and Differential Treatment must be made to work better for Africa and other developing countries, by making resort to legal disputes conditional on assessing development concerns. A review of Article XXIV of the GATT in order to reduce requirements for reciprocity and increase focus on development priorities may be useful.

10. RATIONALE FOR SDTs ( Flexibilties for Development) GATT Art. XXIV did not consider development issues of RTAs between Developed and Developing Countries. Specific S&D for DCs in N-S RTAs not provided for in existing WTO rules including Art. XXIV Explicit de jure S&DT provisions to ensure that these are legally bindng, operational and effective Need for some harmony/consistency between GATS Art. V:1 and GATT Art. XXIV on SDTs.

11. GATT Art. XXIV :8(a)(i) and (b) on �� Substantially all the trade should be amended to include flexibilities in respect of : Trade Product coverage Application of favourable methodolgy and/ or lower threshold levels etc. Other restrictive regulations of commerce- should be interpreted in a flexible manner to afford DCs the right to invoke trade remedy measures in defence of their trade Transition period - ��reasonable period of time�� - should exceed 10 years to allow for effective re-structuring of sectors Enabling Clause must be preserved for DCs to provide legal cover

12. Alternative proposal A GLOBAL APPROACH - A generic S&D provision for Article XXIV Reason � if this approach could be adopted, actual details of flexibilities that would be accorded parties to an RTA would be the subject of Negotiations between the parties. Proposal - Draft Text Pursuant to the Doha Mandate on regional trade agreements,(paragraph 29 of the Doha Ministerial Declaration), and in the spirit of the development focus of the Doha Round, the African Group of States maintains that Special and Differential Treatment in regional trade agreements under GATT Article XXIV conditions as proposed in the ACP Group of States` submission of April 2004 constitutues an overriding systemic issue to be addressed on a priority basis in the Doha Negotiations. Without prejudice to the right of African Group to submit Specific proposals on GATT Article XXIV such as on substantially all the trade requirements in duties and other restrictive regulations of commerce and transition period, the African Group proposes that SDT shall be formally incorporated in GATT Article XXIV in respect of its substantive requirements in paragrapghs 5-9. The following provision also mirroring GATS Article V:3(a), is proposed for inclusion in GATT 1994 Article XXIV :

13. ��Where developing countries are parties to an agreement with developed countries for the formation of a customs union, or a free trade area, or an interim arrangement leading to either a customs union or a free trade agreement, special and diff�rentiel treatment shall de provided to developing countries regarding the conditions set out in GATT 1994 Article XXIV paragrapghs 5 to 9 inclusive, in particular, sub-paragraph 5(c) and sub-paragraph 8(a) and (b).��