A reform project to improve compliance with the notification obligations of World Trade Organisation (WTO) members, in order to improve the transparency of the multilateral trading system, has been given a frosty welcome by China, according to sources in Geneva.
At a meeting of the WTO Council for Trade in Goods/Goods Council on Monday 12 and Tuesday 13 November, members discussed a proposal to improve the compliance of WTO members with their notification obligations. Indeed, countries are required to report on their trade policies, such as agricultural subsidies, the role of state-owned enterprises or the establishment of new import standards for products. However, many members more or less voluntarily fail to comply with this exercise.
Building on the central role played by these notifications, the proposal, put on the table by the United States along with the European Union, Japan, Argentina, Costa Rica and Taiwan, underlines their importance and proposes sanctions for ‘recalcitrant’ members. Thus, one year after the notification deadline, States that have not demonstrated their willingness to comply with this obligation will be subject to penalties in the form, inter alia, of removal from the list of candidates for the presidency of WTO bodies or an increase in their contribution to the organisation's budget. After two years, the offending country will be considered as an ‘inactive’ member.
The proposal also takes into account the needs of developing countries, which are encouraged to report their notification constraints to the WTO secretariat for technical assistance.
China was the first to react by expressing its scepticism about the six's proposal and opposing the punitive approach advocated by the proposal. Other countries said they shared this concern, particularly regarding the impact of these sanctions on poorer WTO members.
The initiative, however, was welcomed by other members, who stressed that the proposal was a good starting point for further talks to improve the transparency of the multilateral trading system. (Original version in French by Hermine Donceel)