Front Matter Page
Office in Geneva
Contents
Summary
I. Introduction
II. Customs Valuation
1. Description of the rules framework
2. Preferential treatment and exceptions
3. Normative analysis
4. Potential or existing concerns for Fund advice
III. Subsidies
1. Description of the rules framework
2. Differential treatment and exceptions
3. Normative analysis
4. Potential or existing concerns for Fund advice
IV. Safeguards
1. Description of the rules framework
2. Preferential treatment and exceptions
3. Normative analysis
4. Potential or existing concerns for Fund advice
V. Antidumping
1. Description of the rules framework
2. Preferential treatment and exceptions
3. Normative analysis
4. Potential or existing concerns for Fund advice
VI. Trade-Related Investment Measures
1. Description of the rules framework
2. Preferential treatment and exceptions
3. Normative analysis
4. Potential or existing concerns for Fund advice
VII. Trade in Services
1. Description of the rules framework
2. Preferential treatment and exceptions
3. Normative analysis
4. Potential or existing concerns for Fund advice
Text Tables
1. Customs Valuation: Summary of Issues and Implications
2. Subsidies and Countervailing Measures: Summary of Issues and Implications
3. Safeguards: Summary of Issues and Implications
4. Antidumping: Summary of Issues and Implications
5. Trade-Related Investment Measures: Summary of Issues and Implications
6. Trade in Services: Summary of Issues and Implications
7. Special and Differential Treatment for Developing and Transition Countries
8. Reservations to the Agreement on Customs Valuation
9. Type of Subsidies and WTO Action
10. Subsidies, Phasing-Out Periods, and Country Status
11. Notification of Safeguards Legislation to the WTO
12. Antidumping Legislation Notified to the WTO by Developing and Transition Countries
13. Trade-Related Investment Measures and Their WTO Status
14. Examples of Trade-Related Investment Measures
15a. Trade-Related Investment Measures in Africa Notified to the WTO
15b. Existing Trade-Related Investment Measures in Africa not Notified to the WTO
16. Trade-Related Investment Measures in Latin America Notified to the WTO
17a. Trade-Related Investment Measures in Asia Notified to the WTO
17b. Trade-Related Investment Measures in Asia not Notified to the WTO
18. Trade-Related Investment Measures in Europe Notified to the WTO
References
Appendix I Tables
19. Members of the World Trade Organization
20. GATT Members not yet WTO Members
21. GATT/WTO Accessions
22. Members of the World Customs Organization
23. Tariff Bindings on Industrial Products for Selected Developing Countries
Summary
The founding of the World Trade Organization (WTO) in January 1995 set ambitious objectives for strengthening the framework and implementation of trade policies. Because member countries can no longer “pick” the agreements they wish to ratify, but are automatically parties to all agreements, international trade rules may pose some constraints on certain macroeconomic policies. These constraints seem to play a particularly important role in many developing and transition economies, where Fund-supported programs may fall under the scope of the WTO rules framework.
The paper reviews six WTO agreements: Customs Valuation, Subsidies and Countervailing Duties, Safeguards, Antidumping, Trade-Related Investment Measures (TRIMs), and Trade in Services. It emphasizes both the economic implications of the rules and some possible issues of particular relevance for Fund activities in developing and transition economies. The paper shows that the rules covered have different implications for different groups of countries. For example, many developing countries should, within five years, bring their customs valuation systems into line with the WTO rules, which implies substantial structural reforms, with possible adverse fiscal revenue affects.
Although, under the WTO rules, export subsidies will only gradually be eliminated, present subsidies may be countervailed in specific circumstances. In addition, fulfillment of notification requirements may affect the rights and obligations of transition countries. The paper also suggests that the Agreement on Safeguards provides some useful guidelines for trade policy advice. Although clearly second best, it could prove the least damaging to the national economy of the WTO’s legal instruments for protection, provided that transparency and specific constraints on its use are followed.
On antidumping, the paper highlights economic efficiency questions because of the welfare-decreasing effects of antidumping policies. An economically sensible antidumping regime may require that a country not only achieve consistency with the WTO but that it implement additional measures to minimize the negative welfare effects of antidumping. In the area of trade-related investment measures, developing and transition countries using prohibited TRIMs were required to notify the WTO to benefit from a transition period to phase them out. This is one of the few cases where notifications affect rights and obligations. On trade in services, the paper suggests that the General Agreement on Trade in Services (GATS) has few immediate implications for the majority of developing countries owing to their low level of commitments. However, conceptually, the WTO may approve capital controls, or the countries themselves may do so on prudential grounds.