US, EU Submit Joint Proposal to Penalize WTO Members That Fail to Notify on New Trade Measures
Several high profile members of the World Trade Organization recently submitted a proposal to penalize countries that are late in submitting notifications of subsidies and other changes to their trade practices. In a document distributed Nov. 1 at the WTO, the U.S., the European Union, Japan, Argentina and Costa Rica set out a series of sanctions for countries that fail to notify, including monetary penalties and the loss of WTO privileges. The WTO Council for Trade in Goods is set to discuss the proposal at a meeting set to begin Nov. 12.
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Under the proposal, countries that fail to meet notification requirements under the WTO agreements on agriculture, subsidies, safeguards, state trading, customs valuation, import licensing, rules of origin, preshipment inspection, quotas, trade-related investment measures, sanitary and phytostanitary measures and technical barriers to trade would face consequences for their non-compliance. Taiwan subsequently joined onto the proposal on Nov. 7.
One year after the passing of the relevant notification deadline, a country that has still failed to notify of a new measure, and that has not requested assistance as a developing country, would no longer be able to preside over WTO bodies and would not be able to ask questions during WTO trade policy reviews. It would also be assessed an extra 5 percent on its normal contribution to the WTO budget. After two years, the member would be designated “inactive,” and would only be called on at WTO meetings after all other WTO members have taken the floor.
The joint submission comes about a year after the U.S. released its own proposal for sanctioning non-notifying WTO members. That earlier U.S. proposal had included additional sanctions, including WTO documentation no longer being provided to delinquent countries, the discontinuation of their access to the WTO members’ website, and the denial of their access to WTO training or technical assistance other than for meeting notification requirements.
At the time the U.S. proposal was submitted in October 2017, less than half of WTO members had submitted their required 2015 subsidy notifications, and at least one-third of notifications under the WTO agriculture agreement were outstanding. Compliance with notification requirements for other agreements, including for import licensing, hovered around 20 percent to 30 percent, according to the U.S. submission. “The chronic low-level of Members' compliance with existing transparency obligations undermines the proper functioning and operation of these agreements,” the U.S. said. “The absence of this information also makes it difficult to develop, evaluate, and assess negotiating proposals to improve operation of the agreements.”