The Chair informed members of his participation in September in the 70th session of the Harmonized System Committee (HSC) of the WCO. His participation followed a communication sent to the WCO, on behalf of the Committee on Market Access, highlighting the issues raised by WTO members in relation to the classification of COVID-19 essential goods in the Harmonized System (HS) and providing some suggestions for the HSC to consider (G/MA/406).
The communication underlined that while the HS is considered to be a powerful tool to facilitate international trade and to collect trade statistics, it had not always been easy to use when WTO members had to consider products critical to COVID-19 and identify and classify them in the corresponding commodity codes. For many members, this still presents a challenge for the formulation of trade policy measures as part of the pandemic response.
The Chair spoke of the importance of the WTO and the WCO, through their respective memberships, finding ways to work together to build resilience and improve preparedness for future crises. He stressed the general willingness in the HSC to establish cooperation with the Committee on the improved classification of certain goods of special importance in times of emergency.
Given that the Committee on Market Access does not have an explicit mandate or the relevant expertise to submit concrete classification proposals, it was a positive outcome that the HSC mandated the WCO Secretariat to further study the suggestions by WTO members. The WCO Secretariat was also asked to present specific proposals in relation to facemasks, vaccines and ambulances, which are key products not only for COVID-19 but for any global pandemic, added the Chair.
Mr Uehara also noted the flexibility shown by the HSC in accepting the Committee’s suggestion to explore the possibility of creating a mechanism with which the WCO Secretariat can hold ad hoc consultations with the HSC to issue classification guidelines in collaboration with other relevant international organizations, such as the WTO, in emergency situations.
“If there is something that we should have all learned from this pandemic, it is that we cannot rely on ‘business as usual’ in times of emergency. The Committee on Market Access is of the view that it is of utmost importance to strengthen the dialogue between our two organizations,” Mr Uehara said.
WCO Deputy Director of Tariff and Trade Affairs, Ms Gael Grooby, and the Chairperson of the HSC, Mr Álvaro Fernández Acebes, were invited to speak before the Committee. They highlighted that divergences or misclassifications in the HS are very often due to the absence of information about the products under consideration rather than a lack of clarity in the HS.
The WCO recalled that the next HS review cycle was close to finishing, so if proposals did not arrive in the next few months, the prospects of addressing the lack of specificity for critical medical products in the next version of the nomenclature (HS2027) would be limited.
The WTO Secretariat provided a brief overview (summarized in document G/MA/W/158/Rev.5) on the status of HS changes to schedules of concessions – the legal instruments that describe the treatment a member must provide to the trade in goods of other WTO members.
The Committee also agreed to extend the collective waivers, which allow members to apply the HS changes in their national nomenclature, while their WTO schedules for goods have still to be updated to the most recent HS version.
Ahead of the Committee meeting, the WCO and the WTO had held a joint workshop on 17 October to address the periodical HS updates. Participants in the workshop discussed the impact these updates to the HS could have on legal instruments recording tariffs and other commitments by WTO members with respect to trade in goods, and in particular on schedules of concessions.
Experience sharing
The Chair reported on the active role played by the Committee this year in organizing four experience-sharing sessions on trade in goods relating to COVID-19 goods, where members exchanged views and experiences and discussed how to improve their preparedness for future crises. The sessions took place on 4 March, 26 April, 18 July and 16 September and covered a series of topics identified by members at the beginning of the year:
The Chair thanked members’ active engagement during these sessions. He noted this exercise has been extremely useful to improve members’ understanding of the main challenges faced during the pandemic and to share information about how these challenges were addressed in practice.
Members took the floor to share their positive feedback with this exercise and agreed to organize an additional session on 21 November focusing mainly on the lessons learned across each topic identified during previous sessions. Some delegations expressed an interest in hearing the views of other stakeholders, such as the private sector, academia, other international organizations and NGOs.
Quantitative restrictions notifications
The Committee examined quantitative restrictions (QR) notifications from 20 members. Two least-developed countries (LDCs), Mali and Nepal, submitted complete notifications of all QRs in force and members praised their efforts for enhanced transparency.
The Secretariat presented document G/MA/QR/12, which summarizes the status of QR notifications as of 13 October 2022. The Chair emphasized that more notifications have been received when compared to previous years, in particular for the biennial periods 2018-2020 and 2020-2022.
The submission of notifications relating to COVID-19 restrictions explains partly this increase, but the Chair added that overall compliance with the QR notification requirement still remains relatively low. Even though the number and quality of notifications have improved over the past years, the vast majority of members have not provided information on their different trade restrictions.
Taking into account the benefit of enhanced transparency in the context of the COVID-19 pandemic and how the information provided under the QR Decision of July 2012 can help members to have a clearer understanding of the situation, the Chair encouraged members to comply with the QR Decision and contact the Secretariat if they need technical assistance.
In relation to the QR notified by Ukraine, many members took the floor to commend Ukraine for its notifications and express their strong condemnation of Russia’s invasion of Ukraine and its subsequent actions. The Russian delegate responded by questioning whether the Committee on Market Access was the proper venue for a discussion of this nature.
COVID-19 trade-related measures
Members were presented with an updated list (G/MA/W/157/Rev.5) of all notifications and communications relating to the COVID-19 pandemic which have been submitted to the Committee as of 12 October 2022. The Committee also addressed the revised summary report on export restrictions and prohibitions and trade easing measures relating to the COVID-19 pandemic, which was circulated in document G/MA/W/168/Rev.3.
As of 12 October 2022, a total of 98 measures that prohibit or restrict exports as a result of the COVID-19 pandemic have been adopted by members, which have either been formally notified as a quantitative restriction or recorded by the WTO’s Trade Monitoring Exercise.
The number of measures is unchanged since the last revision of this report in March 2022, with the only changes being that four restrictions have been terminated since then and one measure has been modified with regard to the types of products covered. In addition, the report contains information on 182 trade easing measures, of which many have been phased out since the beginning of the pandemic or their current status is unknown.
The Secretariat was requested to continue updating this report based on the inputs received by members as well as additional information coming from the Trade Monitoring Exercise, in particular of whether remaining restrictions are being phased out. The Chair encouraged delegations to verify the information provided in the Secretariat report and inform whether these measures are still in force or have been terminated, as well as the relevant dates.
Uruguay Round derestriction
Following the discussion initiated at the Committee in January 2021, members agreed to the derestriction process of the Uruguay Round negotiating material. However, some members requested more time to review the documents proposed for derestriction in document G/MA/W/177/Rev.1.
The Secretariat will update the draft decision before it is sent to the General Council, through the Council for Trade in Goods, for appropriate action. No document will be derestricted before the General Council adopts this decision.
The bilateral negotiating materials of seven rounds of negotiations under the General Agreement on Tariffs and Trade (GATT) have already been derestricted and, at present, only the bilateral negotiating materials of the Uruguay Round remain restricted.
Trade concerns
The Committee addressed 34 trade concerns, of which 16 were raised for the first time in the Committee, covering a wide range of trade policy measures:
- Angola’s import-restricting practices, raised by the European Union and the United States
- Unilateral trade restrictive measures against Russia by Australia, Canada, the European Union, Japan, New Zealand, Switzerland, the United Kingdom and the United States, raised by the Russian Federation
- Australia’s investigation and review of anti-dumping duties on A4 copy paper, raised by Indonesia
- Australia’s discriminatory market access prohibition on 5G equipment, raised by China
- Canada’s discriminatory market access prohibition on 5G equipment, raised by China
- China’s draft of recommended national standard (GB/T) for office devices, raised by Japan
- China’s procurement law draft revision, raised by Japan
- China’s trade-disruptive and restrictive measures, raised by Australia
- Dominican Republic’s discriminatory taxation on some food imported products, raised by the European Union
- Egypt’s mandatory use of a letter of credit as prior condition for imports, raised by the European Union and Norway
- The European Union’s carbon border adjustment mechanism, raised by the Russian Federation
- The European Union’s carbon border adjustment mechanism, raised by China
- The European Union’s proposal for a regulation on deforestation-free products, raised by the Russian Federation
- The European Union’s Green Deal: carbon border adjustment mechanism and deforestation free commodities, raised by Indonesia
- The European Union’s MRL reduction of certain substances to meet environmental objectives in third countries, raised by Paraguay
- The selective tax on certain imported products by Saudi Arabia, Bahrain, the United Arab Emirates, Oman and Qatar, raised by the European Union, Switzerland and the United States
- India’s import policies on tyres, raised by the European Union, Indonesia, Chinese Taipei and Thailand
- India’s import restrictions on air conditioners, raised by Japan and Thailand
- India’s basic customs duty on solar photovoltaic cells and modules, raised by China
- India’s approved list of models and manufacturers of solar photovoltaic modules, raised by China
- India’s quantitative restrictions on imports of certain pulses, raised by Canada, the European Union and the United States
- Indonesia’s customs duties on certain telecommunication products, raised by the European Union and the United States
- Indonesia’s import substitution programme, raised by the European Union
- Mexico’s import quota on glyphosate, raised by the United States
- Nepal’s import ban on energy drinks, raised by Thailand
- Peru’s tax treatment of pisco, raised by the United Kingdom
- The Philippines’ special safeguard on instant coffee, raised by Indonesia
- Sri Lanka’s import ban on various products, raised by the European Union
- Chinese Taipei’s discriminatory tariffs favouring champagne over other sparkling wine, raised by Australia
- The United States’ quantitative restriction on steel and/or aluminum imports, raised by China
- The United States’ Section 301 tariffs on certain goods from China, raised by China
- The United States’ quantitative restrictions on imports of sturgeon, raised by the European Union
- The United States’ trade distortive export control measures on semiconductor equipment and the global supply chain, raised by China
- Viet Nam’s anti-circumvention duty on sugar, raised by Indonesia
Next meetings
The formal meetings in 2023 have been scheduled to take place on 8 and 9 May and 17 and 18 October.
Informal meetings have been scheduled for 23 November 2022, 21 February 2023, 13 June 2023 and 21 November 2023.
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