Brexit and Food Law The default WTO rules. Brian Kelly

Transcription

1 Brexit and Food Law The default WTO rules Brian Kelly

2 Overview of Covington In an increasingly regulated world, we have an exceptional ability to navigate clients through their most complex business problems, deals and disputes. Over 1,000 lawyers and advisors firm wide, over 150 of whom are based in Europe In addition to our in-house expertise, our clients benefit from our network of relationships with leading lawyers at firms around the globe, which enables us to select the right local counsel for the specific task at hand 2

3 Global Problem Solving Covington s global problem solving team includes 120+ former government officials and several individuals who served in some of the most high-ranking positions in the world. Péter Balás Deputy Director- General of DG Trade at the European Commission Howard Berman U.S. House of Representatives Carl Bildt Prime Minister of Sweden Kevin Coates Head of Cartel Unit DG Comp at the European Commission Stuart Eizenstat U.S. Ambassador to the EU Eric Holder U.S. Attorney General Karel Kovanda European Commission Deputy Director General of External Relations Jon Kyl U.S. Senator Alan Larson Assistant U.S. Secretary of State Sir Michael Leigh Director-General for Enlargement with the European Commission Erika Mann Member of the European Parliament Lord Francis Maude UK Minister Trade and Investment Whitney Schneidman Deputy Assistant Secretary of State for African Affairs Timothy Stratford Assistant U.S. Trade Representative for China Affairs Arturo Valenzuela Assistant U.S. Secretary of State for Western Hemisphere Affairs John Veroneau Deputy U.S. Trade Representative and USTR General Counsel Robert Wang U.S. Department of State Senior Official to APEC Forum 3

4 Outline The WTO Key Agreements Main Principles Brexit, Food and the WTO 4

5 WTO The WTO sets the global rules of trade established in members (including the EU and each of its Member States) based in Geneva, Switzerland responsible for 95% of world trade negotiating forum aimed at reducing barriers to trade 5

6 Agreements that govern WTO today are the results of the Uruguay Round Key Agreements: Marrakesh Agreement Key Agreements General Agreement on Tariffs and Trade 1994 (GATT) General Agreement on Trade in Services (GATS) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Understanding on Settlement of Disputes (DSU) Other relevant Agreements for Food Law: Agreement on Agriculture Agreement on Technical Barriers to Trade (TBT) Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) 6

7 Market Access Tariffs Main Principles (1) Each WTO Member has a Schedule of Concessions for GATT and GATS Quantitative restrictions Generally prohibited; special case: tariff-quotas Non-tariff barriers to trade any measure other than a tariff, i.e. red tape includes Regulations: any rules which dictate how a product can be manufactured, handled, or advertised Rules of origin: rules which require proof of which country goods were produced in Also: import licensing, customs valuation, preshipment inspections etc. With the exception of a few sensitive products where tariffs remain high, it is non-tariff barriers that are the real impediment to international trade today 7

8 Non-discrimination Most-favoured Nation Principle (MFN) National Treatment Technical Barriers to Trade and Harmonisation SPS and TBT: technical restrictions based on scientific assessment and not more trade restrictive than necessary Use of international standards (e.g. Codex Alimentarius) Unfair Trade Rules on anti-dumping and subsidies Exceptions Main Principles (2) Public health; human, animal or plant life or health etc. See e.g. Article XX of the GATT

9 Main Principles (3) A core activity of the WTO is handling trade disputes arises when a member government believes another member government is violating a WTO agreement or a commitment the WTO has one of the most active international dispute settlement mechanisms in the world Stages: Consultations 60 days Panel possibility to appeal panel report to Appellate Body Dispute Settlement Body adopts panel or Appellate Body report WTO member concerned has to implement the recommendations possibility of compensation for non-implementation or retaliation if parties cannot agree on compensation suspension of concessions or other obligations under the WTO Agreements possibility of arbitration over level of retaliation 9

10 WTO Dispute Examples European Union Measures Affecting Approval and Marketing of Biotech Products (DS291- Argentina, DS292- Canada, DS293- US) de-facto moratorium on the approval of GMOs Old Novel Food Regulation: 3 objectives of the Regulation, only danger for the consumer constitutes an SPS measure European Union Measures Concerning Meat and Meat Products (DS26 - US, DS48 - Canada) EU measures concerning meat and meat products treated with hormones for growth purposes Retaliation and related arbitration US and Canada requested suspension of concessions to the EU and its Member States in the amoung of US: US$202 million; Canada: CA$75 million per year Awards: entitled to suspension of concessions up to a maximum amount of US: US$116.8 million per year; Canada: CA$11.3 million per year 10

11 Brexit, Food and WTO UK is a member of WTO in its own right. It does not have to reapply. UK currently operates under the EU Schedules of Concessions UK intends a copy and paste approach as part of an FTA Market access tariffs should be relatively straightforward but significant cost implications if not? quotas and subsidy limits? Rules of Origin? Regulatory convergence Likely to be a sector-by-sector approach If no FTA reached: key principle of WTO is that countries do not discriminate against one another both EU and UK would have to place tariffs on the other 11

12 Brexit and WTO Recent Developments 11 October 2017: UK and EU send Joint Statement to WTO membership Proposal: UK s intention to replicate existing EU Schedules to the extent possible Tariff-rate quotas ( TRQs ): Apportionment between the UK and the EU-27 following a common approach inter alia to data and methodology Agricultural subsidies: Apportionment between UK and EU-27 Procurement: EU-27 to remain part of Government Procurement Agreement, UK to remain part on the basis of EU-28 commitments; UK to develop own Schedule of Services Commitments Trade and Development: UK continued commitment to preferential treatment for developing countries and LDCs, as well as technical capacity building Financial Times in early October 2017: Report in anticipation of joint UK/EU proposal on apportioning TRQs Argentina, Brazil, Canada, New Zealand, Thailan, USA and Uruguay joint letter to EU and UK Requesting parties to honour existing market access commitments Raise concerns over TRQ apportionment (supplier-country TRQs) 12