Ulla KASK Agriculture and Commodities Division WTO
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1 Ulla KASK Agriculture and Commodities Division WTO World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 1
2 Outline A. Introduction A. The WTO and environment B. Disciplines under the Goods Agreements: Agreement on Agriculture Agreement on Subsidies and Countervailing Measures Agreement on Technical Barriers to Trade C. Conclusion World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 2
3 A. Introduction The WTO is about trade & trade rules Non-trade concerns e.g. environmental protection World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 3
4 The Marrakesh Agreement (the founding charter of the WTO) A. Introduction The Preamble recognizes the need to: allow for the optimal use of the world s resources in accordance with the objective of sustainable development, and both protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 4
5 Decision on Trade and Development A. Introduction.. states that efforts to uphold multilateral trading system and to protect the environment must be complimentary World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 5
6 Agreement on Agriculture A. Introduction commitments under the reform programme should be made in an equitable way among all Members, having regard to non-trade concerns, including food security and the need to protect the environment World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 6
7 Agreement on Technical Barriers to Trade A. Introduction recognizes that: no country should be prevented from taking measures necessary for the protection of the environment,, at the levels it considers appropriate, sets the requirements: No arbitrary or unjustifiable discrimination between countries where the same conditions prevail No disguised restriction on international trade World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 7
8 Two key principles of the WTO A. Introduction Most Favoured Nation (MFN) & National treatment World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 8
9 Uruguay Round WTO 1A 1B 1C Multilateral agreements on trade in goods GATS TRIPS Dispute Settlement Understanding Trade Policy Review Mechanism Plurilateral trade agreements Marrakech Agreement establishing the WTO Signed on 15 April 1994 In force since 1 January 1995 World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 9
10 Are applicable to Production Feedstock and biofuels: Annex 1A Multilateral agreements on trade in Goods GATT 1994 (General Agreement on Tariffs and Trade) Understandings Marrakech Protocol 1A Multilateral agreements on trade in Goods Goods Agreements on: Agriculture Sanitary and phytosanitary measures Textiles and clothing (expired on 1º January 2005) Technical barriers to trade Trade-related investment measures (TRIMS) Antidumping Customs valuation Preshipment inspection Rules of origins Import licencing Subsidies and countervailing measures Safeguards 10
11 Classification issue Ethanol Biodiesel Production feedstock Biofuels Agricultural products Non-agricultural products Different legal regimes World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 11
12 Subsidies Agreement on Agriculture Applies to agricultural products only (as defined in Annex I) Amber, Green and Blue Box Support Agreement on Subsidies and Countervailing Duties applies to both agricultural and non-agricultural products prohibited, actionable, non-actionable subsidies Subsidies to production feedstock and/or biofuel production? World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 12
13 Subsidies Agreement on Agriculture Green Box, e.g. Annex Research 2 Payments under environmental programmes: (a) Eligibility for such payments shall be determined as part of a clearlydefined government environmental or conservation programme and be dependent on the fulfilment of specific conditions, including conditions related to production methods or inputs. (b) The amount of payment shall be limited to the extra costs or loss of income involved in complying with the government programme. Amber Box (i.e. most trade distorting support) All other support (except Green or Blue Box) Art.6.5 incl. measures directed at agricultural processors to the extent that such measures benefit the producers of the basic agricultural products World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 13
14 mber Box (AMS) Members with reduction commitments Argentina Iceland Morocco Chinese Taipei Australia Israel New Zealand Tajikistan Brazil Japan Norway Thailand Canada Jordan Papua New Guinea Tunisia Colombia Korea (Rep. of) Russia Ukraine Costa Rica Mexico Saudi Arabia United States European Union Moldova South Africa Venezuela FYR of Macedonia Montenegro Switzerland- Liechtenstein Vietnam 14
15 AMS Entitlements Table: AMS entitlements Final Bound Total AMS De minimis Country US$ million % Currency Value (value in 2016) 1 Argentina $ at the1992 rate 75,021, * 10 2 Australia $A million Brazil US$ thousand 912, Canada Can$ million 4, , Colombia US$ thousand 344, Costa Rica US$ thousand 15, European Communities (15) million 67, , European Union (28) 80, million 72,378.0 uncertified 8 FYR of Macedonia million Iceland SDR million Israel US$ thousand 568, Japan billion 3, , Jordan JD 1,333, Korea, Republic of W billion 1, , Mexico Mex$ 1991 million 25, ,164.4** Moldova SDR million Montenegro 333, Morocco DH million New Zealand $NZ million Norway Nkr million 11, , Papua New Guinea US$ million Russia US$ billion 4.4 4, Saudi Arabia SR million 3, South Africa R million 2, Switzerland Liechtenstein Sw F million 4, , Chinese Taipei NT$ million 14, Tajikistan US$ thousands 182,667 1, Thailand B million 19, Tunisia D million Ukraine UAH million 3, United States of America US$ million 19, , Venezuela US$ thousand 1,130, , Vietnam VND billion 3, ** 10 NB! De minimis is available to all Members 15
16 Subsidies Agreement on Subsidies and Countervailing Duties (ASCM) Prohibited subsidies: export incentive subsidies that are contingent on export performance, and local content subsidies granted for use of domestic inputs over imported goods Actionable subsidies: remedial measures if there is serious prejudice: imports into the market of the subsidizing country are displaced; exports to third country markets as a result of the subsidy are displaced; there is significant price suppression as a result of the subsidy; and there is an increase in world market share by the subsidizing country World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 16
17 Subsidies (cont d) Agreement on Subsidies and Countervailing Duties (ASCM) Non-Actionable Subsidies (Art. 8) (a) assistance for research activities conducted by firms or by higher education or research establishments (b) assistance to disadvantaged regions (c) assistance to promote adaptation of existing facilities to new environmental requirements imposed by law and/or regulations which result in greater constraints and financial burden on firms, provided that the assistance: (i) (ii) is a one-time non-recurring measure; and is limited to 20% of the cost of adaptation; and (iii) does not cover the cost of replacing and operating the assisted investment; and (iv) is directly linked to and proportionate to a firm s planned reduction of nuisances and pollution, ; and (v) is available to all firms Expired in 2000 World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 17
18 Agreement on Technical Barriers to Trade Mandatory and voluntary technical specifications for products for a variety if legitimate objectives, incl. environmental protection Conditions: non-discirmination no unnecessary obstacles to trade transparency Sustainability criteria World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 18
19 TBT: specific-trade concerns IMS ID Title Member(s) subject to STC Member(s) raising STC First date raised Russian Federation - Implementation plan related to excise tax on palm oïl and soda products (ID 500) Russian Federation Indonesia 09/03/2016 France - Amendment 367 on Biodiversity Law (ID France; European 499) Union Brazil; Indonesia 09/03/2016 European Union - Regulation (EU) No 1169/2011 of the European Parliament and of the Council of 25 October 2011 on the provision of food information to consumers establishes the general principles, requirements and responsibilities governing food information, and in particular food Indonesia; labelling (ID 431) European Union Malaysia 18/06/2014 United States EPA Palm Oil Biofuels Regulatory Program (ID 408) Spain Ministerial Order of the Government of Spain IET/822/2012, published on 21 April 2012 and in force as of 22 April 2012 (ID 346) European Union Directive 2009/28/CE, Renewable Energy Directive (EU - RED) (ID 307) Colombia Draft Decree Establishing Provisions to Promote the Use of Biofuels (ID 216) United States of America Last date raised Indonesia; Malaysia 30/10/ /03/2014 European Union; Spain Argentina 13/06/2012 Argentina; Indonesia; Malaysia; United European Union States of America 15/06/ /03/2014 Argentina; Mexico; Colombia European Union 18/03/ /03/2012 World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 19
20 Tariffs and export taxes Tariffs - cannot be challenged per se at the WTO if not above the bound levels Export taxes no disciplines, however the tax escalation may make a difference DS473: European Union Anti-Dumping Measures on Biodiesel from Argentina (Export tax on biodiesel = 5%, export tax on soy = 30%) World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 20
21 Prohibitions Article XI*: General Elimination of Quantitative Restrictions 1. No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, on the importation or on the exportation or sale for export. 2. Exceptions (none of them is based on environmental consideration): (c) Import restrictions on any agricultural or fisheries product, imported in any form,* necessary to the enforcement of governmental measures which operate: (i) to restrict the quantities of the like domestic product permitted to be marketed or produced, (ii) to remove a temporary surplus of the like domestic product,.. (iii) to restrict the quantities permitted to be produced of any animal product the production of which is directly dependent,, on the imported commodity, 21
22 Prohibitions/restrictions through multilateral environmental agreements Examples: the Montreal Protocol for the protection of the ozone layer the Basel Convention on the trade or transportation of hazardous waste across international borders, and the Convention on International Trade in Endangered Species (CITES) Priority given to the domestic environmental policies World Trade Organization/ 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 22
23 GATT Article XX - General Exceptions Allows to take measures: (g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption that are not applied in a manner which would constitute: a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 23
24 Conclusion Environmental protection is a legitimate policy objective under the WTO disciplines Policy space available for both: production feedstock and biofuels, e.g. tariffs subsidies technical regulations Implementation is crucial non discrimination (MFN / National treatment) no unnecessary trade obstacle least trade distortive Information on the actual use of these measures is very fragmented World Trade Organization / 154, rue de Lausanne / 1211 Geneva 21 / Switzerland / ulla.kask@wto.org 24
25 For more information: Trade and environment Agriculture Agricultural Information Management System Technical Barriers to Trade Information Management System Documents online
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