RESTRICTED
WORLD TRADE WT/REG/W/13
15April 1997
ORGANIZATION(97-1620)
Original: English Committee onRegional Trade Agreements
COMMUNICATION FROM AUSTRALIA
Acommunication, dated 9April 1997, hasbeenreceived from thePermanent Mission of
AustraliawiththerequestthattheattachedpaperonbiennialreportingbecirculatedtoallWTOMembers
tofacilitate proposed discussion onthisissue.WT/REG/W/13
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BIENNIAL REPORTING ONTHE OPERATION OFPREFERENTIAL
REGIONAL TRADE AGREEMENTS
1. Preliminary discussions onthisitemwere based onachecklist ofpoints prepared bythe
Secretariat (WT/REG/W/3). Members were oftheviewthatthefulfilment ofthelegal obligations
toprovide forbiennial reporting ontheoperation ofpreferential trade agreements (RTAs) could help
toincrease thetransparency ofsuchagreements. They alsoconsidered thattheprocedures togive
effect tothisobligation should bedesigned tooperate inanefficient manner, taking intoaccount other
relevant WTO procedures.
2. Biennial reporting hasbeenlargely ignored formany years, despite thelegalobligation imposed
onWTO Members byparagraph 11oftheUruguay Round Understanding onArticle XXIV andthe
much earlier GATT decision. Webelieve partofthereason forthisstems from thelackofaclear
definition andobjective ofthebiennial reporting procedure, anddoubts astotheusetowhich such
reports havebeenputinthepast. Thisneeds tobeaddressed sothatallWTO Members canclearly
seetheadvantages ofthereporting process.
3. Themainobjective ofbiennial reporting should betofacilitate aregular systematic discussion
intheCRTA which would increase thetransparency ofpreferential RTAs andcomprehensively examine
theimpact ofsuchRTAs onthemultilateral trading system. Toachieve thisobjective, theCRTA
should agree thatbiennial reports ought tofocus onimplementation oftheRTA, changes intheRTA
orinitsapplication, andthesupply ofup-to-date trade datadesigned toclarify theeffects oftheRTA
ontheparties toitandonother WTO Members.
4. There should beacalendar forsubmission ofbiennial reports, drawn upbytheSecretariat,
sothatWTO Members areadequately forewarned oftherequirement. Forthesakeofconsistency
andfairtreatment, biennial reports should besubmitted forevery RTA involving preferential access
conditions foronlysome WTO Members, andnotjustforthose deemed tohaveasignificant impact
onthemultilateral trading system. Because oftheirpossible impact onthemultilateral trading system,
biennial reports should alsoberequired ofRTAs which arejustified under waivers andtheEnabling
Clause. Long-standing RTAs, theGATT Working Party Reports onwhich donotcontain clearly
delineated reporting requirements, should alsobecome subject tobiennial reporting obligations.
5. Thecontent ofbiennial reports should cover, ideally:
bilateral trade trends over thelasttwoyears, aswell asthird party trade, bykey
products/sectors;
where there isaninterim agreement, steps taken tobring theRTA intofullconformity with
Article XXIV, including progress withmeeting thetimeschedule intheRTA(ifthereisone);
anychanges totheRTA negotiated inthelasttwoyears (such asproducts newly included or
excluded from theagreement, aswellaschanges tokeyborder measures suchastariffs and
quotas), andanyadditional agreements, sideletters, MOUs, jointinterpretations, results of
reviews etc.;
remaining barriers totrade, andpastandproposed efforts under theRTA toeliminate them;
plans forongoing evolution oftheRTA, suchasextension ofmembership ortransformation
intoacustoms union (ifrelevant).WT/REG/W/13
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6. There should beastandard outline forallbiennial reports, withthecoverage reflecting the
above elements andanyothers which arenecessary toachieve theobjectives ofthereporting process.
7. There isaneedtoensure thatbiennial reporting doesnotinvolve duplication -forexample,
theEU'sbiennial review under theTPRM should haveasubstantively different focus fromthebiennial
report totheCRTA. Thesame would apply toreporting under waivers.
8. Members needtoconsider howthereports aretobedealtwith, andwhether thereports should
beconsidered inanadhocorsystematic manner. Wehaveargued above thattheobjective ofbiennial
reporting ought tobefortheCRTA toanalyse theinteraction between preferential regional trade
agreements andthemultilateral trading system andtodrawconclusions astowhether action isnecessary.
There would thusseemtobelittlepointinconsidering biennially developments under individual RTAs,
although thiswould notbeprecluded. Inouropinion, allbiennial reports ought tobeconsidered at
theonemeeting oftheCRTA, rather thanindividually astheyaresubmitted. Aspecial, annual meeting
oftheCRTA ought tobeheldtodiscuss allbiennial reports submitted intheprevious period. Therefore
wewould propose thatasystematic examination should bethepreferred option, asthiswould enable
comparisons tobemade between certain aspects ofdifferent RTAs, andfacilitate identification oftrends
andanysystemic issues which needtobefurther considered bytheCRTA. TheCRTA maydecide,
onthebasis ofsuchexamination, torecommend totherelevant Council thatconsideration begiven
torevising particular WTO rules ordecisions.
9. TheabovediscussionrelatestotheprovisionsofArticleXXIVandRTAscoveredbytheUruguay
Round Understanding. Inthecaseofeconomic integration agreements (services) Article V.7.b ofthe
GATS indicates theperiodical reporting ontheimplementation ofanagreement isrequired onlyfor
agreements thataretobephased in.Thequestion thusarises astowhether thereporting requirements
ought tobeextended tocover economic integration agreements inservices, which would beanissue
fortheServices Council toconsider onrecommendation from theCRTA. Thiswould seem tobea
logical step, andwewould suggest thatreports would fallduenolaterthantwoyears afterfirst
examination bytheCRTA.