The Hindu Business Line : WTO transparency mechanism for RTAs

Countries such as India which have been suffering from trade diversion due to being excluded from major regional trading agreements (RTA) should have reason to cheer now as a new WTO transparency mechanism for all RTAs is now in place.

According to a statement issued in Geneva on July 10 by the Negotiating Group on Rules, members will now consider the notified RTAs on the basis of a factual presentation by the WTO Secretariat.

The new transparency mechanism provides for early announcement of any RTA and notification to the WTO.

Important step

Hailing the new mechanism, the WTO Chief, Mr Pascal Lamy, said, "this decision will help break the current logjam in the WTO on RTAs.

This is an important step towards ensuring that RTAs become building blocks, not stumbling blocks to world trade.

Hopefully, this decision is a good omen for much needed progress in other areas of the talks, such as agriculture and industrial goods trade where agreement is urgently needed".

Review issues

As per the new structure in place, the Committee on Regional Trade Agreements would conduct the review of RTAs falling under Article XXIV of General Agreement on Tariffs and Trade (GATT) and Article V of the General Agreement on Trade in Services (GATS).

The Committee on Trade and Development will conduct the review of RTAs falling under the enabling clause (trade arrangements between developing countries).

The transparency mechanism is to be implemented on a provisional basis.

Members are to review, and if necessary modify, the decision and replace it by a permanent mechanism adopted as part of the overall results of the Doha Round. The Chairman of the Negotiating Group on Rules, Ambassador Guillermo Valles Games (Uruguay), said the decision is an early contribution to the Doha Round. The Group has since forwarded the decision to the Trade Negotiations Committee (TNC).

RTAs, which include bilateral free trade agreements between countries that are not in the same region, have become so widespread that all but one WTO member are now parties to one or more of them. It is estimated that more than half of world trade is now conducted under RTAs. Some 197 such agreements in force have been notified to the GATT/WTO.