Regional Trade Agreements Address Issues Missed By Multilateralism, Speakers Say 28/09/2016 by Catherine Saez, Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)Although regional trade agreements are increasing, there is no hiding the fact that they are meeting rising resistance from the public and are difficult to negotiate. At the World Trade Organization Public Forum this week, an industry panel sought to explore how trade agreements could be linked to the WTO process, and if elements of those agreements could be taken on at the multilateral level. The event was organised by the Federation of German Industries (BDI), and the B20 Coalition, currently presided by Germany. The B20 Coalition “brings together leading independent business associations from G20 economies and advocates on behalf of more than 6.7 million small, medium and large companies,” according to their website. The 15th WTO Public Forum is taking place from 27-29 September. Jürgen Heraeus, B20 chair and chairman of the Supervisory Board, Heraeus Holding For Germany, said in Germany some 90 percent of jobs are dependent on exports. For small and medium sized enterprises (SMEs) it is very difficult to find ways to export. “We need open markets” to address the lack of global growth, he said. He remarked on the public resistance to the currently negotiated Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States. This resistance is fuelled by the fact that negotiations are being undertaken behind closed doors. “This is so stupid in our time,” he said, adding that the B20 would work towards more transparency. RTAs as Laboratories, Provide Answers to Unsolved Issues Prof. Jeffrey Schott, senior fellow at the Peterson Institute for International Economics, Washington DC, and former United States negotiator at the WTO, said at the WTO, “trade negotiators are usually fighting the last war, like generals.” Trade negotiators are usually fighting the last war, like generals – Economist Jeffrey Schott Some areas are not currently covered by trading rules of the WTO, he said. Regional trade agreements (RTAs) could be laboratories for global rule-making, he added. According to Schott, RTAs today are very different in scope to bilateral trade agreements, most of which “are becoming obsolete.” RTAs are not trying to create preferential walls, he said. Taking the example of the Trans-Pacific Partnership agreement (TPP), he said it contains an open accession clause and “a long queue of nations” have shown interest in joining the partnership once it enters into force. “The TPP is multilateralising areas that need multilateralisation and where the multilateral process has failed,” he said. “Developing countries who take a different position in this building go and seek strong rules on investment and strong liberalisation on agriculture, and they would not do that in this building.” The TPP has been fought over by civil society organisations for a variety of reasons, such as concern that it will limit access to medicines in several signatory countries. RTAs Spillover beyond Members of Partnership Thomas Cottier, emeritus professor of law, senior research fellow at the World Trade Institute, University of Bern, Switzerland, said that RTAs have a spillover effect, in particular because of the most-favoured nation (MFN) clause. Under the MFN rule, countries cannot normally discriminate between their trading partners. The MFN clause in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) applies to any privilege granted by a member to any other country and therefore automatically extends to any WTO members, he said. If a bilateral agreement increases patent protection, everybody will benefit from that increased patent protection, he explained, whether or not they are part of the agreement. He took the example of the potential effects of the TTIP on Switzerland (a non-EU member). If it turns out to be a modest agreement limited to tariff removal, there would be large disadvantages for Switzerland. However, if this is an ambitious agreement where the focus is actually on removing non-tariff barriers, the spillover effects will actually override the downside on the tariffs. RTA Transparency Mechanism Not Closely Applied Yonov Agah, deputy director general of the WTO, commented on the WTO transparency mechanism for RTAs adopted by WTO member states in 2006. This decision requires WTO members to make early announcement of any RTA they enter into, and notify the WTO. According to the WTO, “the transparency mechanism is 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.” Only a portion of RTAs have been notified to the WTO by members, according to sources. Trade discussions whether they are taking place at the WTO or in RTAs are generally difficult, said Agah. What countries get in most RTAs is not very different from international rules, except for market access, he said. Countries mainly reaffirm the rights and obligations that are in convergence with WTO rules, he said. Both sets of rules are inter-dependent, he added. Agah said RTAs are supposed to serve business interests but the voice of business has been very weak in the negotiations at the international level. Business needs to make its voice clear, he said. Mercosur-EU RTA Back in Conversation Gabriel Martinez of the permanent mission of Argentina commented on the length of the newly rekindled negotiations of an RTA between the Common Market of the South (Mercosur) and the EU. Members of Mercosur are Brazil, Argentina, Paraguay, Uruguay, and Venezuela. He said after 15 years of difficult discussions, the conversation has picked up speed again, with a meeting expected to take place from 10-14 October in Brussels. He said the hope is that agreement on this RTA can be finalised by the end of 2016. According to Martinez, there are few chances that RTAs could eventually become multilateral agreements, as they are custom designed to meet the needs of the signatories. Some provisions could land on the negotiating table at the WTO, but it would be difficult, he said. Lynette Magasa, CEO and founder of Boniswa Corporate Solutions, South Africa, said main challenges for SMEs in Africa are linked to cross-border activities, financial issues, and access to information. Information from internet or from the government is not easily accessible, she said. On RTAs there is a lot of information one needs to read and understand, she said, but SMEs are busy chasing revenues, financing and business development and they do not have the resources to process that information. She called for WTO to compress the information and make it more easily understandable by small players. New Platform to Track RTAs On 27 September, a panel jointly organised by the Inter-American Development Bank (IDB) and the International Centre for Trade and Sustainable Development (ICTSD), introduced a new platform providing information about RTAs, called RTA Exchange. The panel also looked into new innovations in RTAs. RTA Exchange is also meant to facilitate exchange among negotiators, according to the website. The platform is coordinated by IDB, through its Integration and Trade Sector, and is being further developed in partnership with the ICTSD, it says. Jonathan Fried, ambassador and permanent representative of Canada to the WTO, said of the exchange, “well done.” RTAs can be a catalyst for multilateral reform, he said. Looking back, Fried noted that the North American Free Trade Agreement (NAFTA), was agreed in 1992, at a time when the WTO Uruguay Round negotiations were stalled. Two years later, the WTO took a lot of content from NAFTA, he said. On political, legal, and practical terms, WTO-plus agreements can help advance the multilateral agenda by tackling tough issues, he said. Bernard Hoekman, professor and director of global economics at the European University Institute, said RTAs have different effects in terms of reducing trade costs for partnering countries. He also reflected on the lack of reporting by most WTO members of their engagement in RTAs. For Theresa Carpenter, executive director, Graduate Institute of Geneva’s Centre for Trade and Economic Integration, RTAs can be helpful for SMEs as they can provide a better comprehension of legislations, a clear set of rules and help small and medium sized enterprises to participate in the global economy. Image Credits: Catherine Saez Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related Catherine Saez may be reached at csaez@ip-watch.ch."Regional Trade Agreements Address Issues Missed By Multilateralism, Speakers Say" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.