Agriculture in Regional Trade Agreements

Frank van TongerenOECD Trade and Agriculture

OECD Trade & Agriculture 2

•How much additional market access is provided through RTAs?

•How much is ‘WTO-plus’?

•Tariffs, ROOs, SPS/TBT

•Transparency

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More RTAs and evolving provisionsMore RTAs and evolving provisions

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Regional trade agreements: aggregatesRegional trade agreements: aggregates

•Asia-Pacific:

•Inter-regional: agreements between countries of different continents, Europe-Africa, Europe-Latin America, Latin America-Asia-Pacific, North America and Latin America

•Latin America

•Over 50 agreements and 158 tariff concessions examined

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Conforming to GATT Article XXIV Conforming to GATT Article XXIV •T

ariff and 'restrictive regulations of commerce' non tariff barrier elimination on substantially all trade(SAT) in a reasonable length of time.

– SAT not well-defined, but no significant sector excluded

– Reasonable length of time: 10 years for developed countries

– Restrictive regulations ~~ trade barriers

•Liberalisation of agricultural trade in regional trade agreements~~conforming to Article XXIV

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Measuring liberalisation in regional trade Measuring liberalisation in regional trade agreementsagreements

•Tariff elimination measure: percentage of tariff lines 0

• Exceptions to complete liberalisation

– tariff lines

– TRQs

• Non-tariff measures: going beyond WTO requirements WTO plus– SPS/TBT/Anti-dumping/SS/

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Tariff elimination by region and yearTariff elimination by region and year

0

20

40

60

80

100

120

total

Latin America

Inter-regional

Asia Pacific

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Not all products equally fast (I)Not all products equally fast (I)

0

20

40

60

80

100

120

yr1

yr2

yr3

yr4

yr5

yr6

yr7

yr8

yr9

yr10

yr11

yr12

yr13

yr14

yr15

yr16

yr17

yr18

yr19

yr20

yr21

yr22

yr23

yr24

yr25

Asia-Pacific

dairytobacco

sugar

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Not all products equally fast (II)Not all products equally fast (II)

0

20

40

60

80

100

120yr

1yr

2yr

3yr

4yr

5yr

6yr

7yr

8yr

9yr

10yr

11yr

12yr

13yr

14yr

15yr

16yr

17yr

18yr

19yr

20yr

21yr

22yr

23yr

24yr

25

Latin America

dairysugar

veg.plaiting and gums and resins

cereals

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Not all products equally fast (III)Not all products equally fast (III)

0

20

40

60

80

100

yr1

yr2

yr3

yr4

yr5

yr6

yr7

yr8

yr9

yr10

yr11

yr12 y2

…yr

14yr

15yr

16yr

17yr

18yr

19yr

20yr

21yr

22yr

23yr

24yr

25

Inter-regional

dairy

sugar

cereals

veg.plaiting ,gums and resins

tobacco

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South-South moves faster and furtherSouth-South moves faster and further

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Rules of Origin(ROOS): determining product Rules of Origin(ROOS): determining product eligibilityeligibility

•wholly originating

•non-originating undergo substantial transformation

– Change of tariff classification

– Value added-regional value content

•Leniency in rules of Origin(ROOS)

– de minimis

– Cumulation (bilateral cumulation in almost all RTAs)

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Example of ROO requirements Example of ROO requirements

•Japan-Thailand: 0710.22-0710.29 A change to subheading 0710.33 through 0710.29 from any other heading provided that, where non-originating materials of heading .07.09 are used each of the non-originating materials is harvested, picked or gathered in a non-Party which is a member of ASEAN.

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Behind the Border measures: SPS Behind the Border measures: SPS

•Usually re-affirm WTO SPS agreement

•Often go beyond WTO agreement requirements with respect to one or more requirements

•… but not enforceable (excluded from DSU)

•MOUs, Annexes and Ad-hoc agreements provide product specific details on commitments

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Behind the Border Measures: TBT Behind the Border Measures: TBT

•Most RTAs do not provide a food related chapter but agreement wide rules are applied to food and agriculture

– 4 inter-regional, 3 Latin American and 3 Asia Pacific RTAs contain specific paragraphs for Food/agriculture, i.e

• Latin America-principle of national treatment of marketing arrangements

• US-Chile, Australia- Chile provide for mutual recognition of beef grading systems

• New Zealand Thailand recognize equivalence and mutual recognition in food regulations as per Apec

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Agricultural SubsidiesAgricultural Subsidies

•Export Subsidies: 60% prohibit their use

– 100 % of Asia Pacific agreements and 66% of those among Latin American and between Latin America and North American countries

– countervailing measures apply in case of non-compliance

•Domestic Support to Agriculture:

– most do not limit support

– emphasize the need to make support measures WTO consistent

• Mexico's agreements with Costa Rica, Nicaragua, Northern Triangle, Bolivia, Uruguay restrict support to producers

• New Zealand -China: not maintain subsidies destined to the other but not agriculture specific

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Taxonomy of TransparencyTaxonomy of Transparency

• Review and Appeal• Tribunals • Anti-corruption• Review Mechanism

• Consultations• Prior Comment • Public Hearings• Cooperation

• Publication• Notification• Enquiry Points• Translation

WHAT?

WHO?

HOW?

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•Transparency is the only ‘WTO – beyond’ provision in RTAs

•Guidelines for transparency notifications: not binding at multilateral level, but included in many RTAs

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ConclusionsConclusions

•Significant tariff elimination commitments in RTAs

•South-South agreements make the greatest effort to eliminate tariffs

•Exemptions and TRQs continue to characterise tariff schedules. Especially in traditionally sensitive sectors: dairy, meat, sugar and cereals.

•Rules of origin appear to be quite restrictive; but unclear if this is a constraint to trade in agricultural products.

• Prohibition on agricultural export subsidies in over half of the agreements

• Little concrete progress have been made in the SPS and TBT areas

• Transparency provisions are promising way ahead, WTO+, WTO beyond

• New institutional framework of SPS joint committees

– => ongoing OECD work.

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OECD RTA workOECD RTA work

•Linda Fulponi, with Matthew Shearer, Juliana Almeida (IADB): ‘Regional Trade agreements – treatment of agriculture’, working paper 2011

•Iza Lejarraga, ‘Multilateralising regionalism – transparency’

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Thank you for your attention

Comments and suggestions

OECD Trade and AgricultureOECD Trade and Agriculture