enhancing capacity on trade policies and negotiations of the... · enhancing capacity on trade...
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Enhancing Capacity on Trade Policies and Negotiations
Training of Trainers
3-5 May 2017 Vientiane, Lao People’s Democratic Republic
Session 8 : Overview of the process of negotiations and implementation
Rajan Sudesh Ratna Economic Affairs Officer
Trade, Investment and Innovation Division
UNESCAP, Bangkok
Email: [email protected]
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Presentation Structure
• Preparation
• Exercise
• Consultation with stakeholders
• Performing regulatory audit
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PREPARATION
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Is preparation for negotiations necessary?
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THE FOUR MAIN QUESTIONS
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Prepare for…..
• Identify players/actors
– Coordinator
– Stakeholders
• Learning by doing or doing by learning?
• Examine the benefits and challenges/risks of engagement.
• Offensive and defensive interests – identify.
• Build consensus within the country.
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Preparedness
• Who sets the agenda for negotiations?
– You or your trade partner?
• Coherence with the existing domestic policies?
• Stock taking before start of negotiations
• Fix up the desired goal that you want to achieve.
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EXERCISE
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EXERCISE – 10 minutes
• Desired goal(s) that you want to achieve.
• Discuss and identify the agenda for negotiating FTA & EIA agreement:
– Good or Services or both
• Identify stakeholders in your country
• Any other issue(s) that your delegation would like to raise?
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Discussions
15 minutes
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STAKEHOLDERS
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Stakeholders
• Define as per your experiences:
– Who are the ‘Stakeholders”?
– How do you identify?
– Why in any negotiation identification of and consultations with stakeholders is very important?
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Identification of the stakeholders
Within government:
• Parliament
• Executive agencies
– Cabinet
– Ministries/Departments
– Agencies – regulators
• Provincial or local government
• Municipality and other agencies
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Outside Governments:
• Private sector – Companies
– Persons
– Associations
– Chambers
• Civil Society Organisations
• Think tanks / research organisations
• Ethnic groups
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Identification of the stakeholders
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What do stakeholders bring to the table
• Commercial interests • Economic impacts • Policy issues • Politics • Legal dimensions • Institutional considerations, legacy and hiearchy • Public opinion, morals and cultural values • Environmental considerations • Social considerations
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Managing Stakeholder interests
Complex Web of Domestic Interests
Manufacturing Industry
Agricultural Industry
Large Firms Small Firms
Consumer Interests
Demand and Supply
Firm Size
Sectors
With special-interest groups free to rent-seek, PTA outcomes could be less efficient
Especially actors who will suffer losses have strong incentive to lobby
Structural change in PTA can be facilitated through a compensation mechanism
Compromises will have to be made across groups
Importance of establishing channels of communication with different groups before and during negotiations
Considerations
Producer Interests
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Prioritizing Stakeholders
Generally expected to be passive, might move into group B on an issue of particular interest
A
Their cooperation is of key importance for successful negotiations. Engage them actively
B
Need only minimum effort and monitoring C
Should be kept informed, as they might be able to influence more powerful stakeholders
D
Po
we
r /
Infl
ue
nce
Interest
Keep satisfied
A
Manage closely
B
Monitor
C
Keep informed
D
Identify Stakeholders Engage Stakeholders Communicate
often
Preparation Negotiation Implementation 1 2 3
Analyze Stakeholders Prioritize Stakeholders
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The consultation steps
• Before starting the negotiations
• Study the benefit of engagement
• Inter-governmental consultation – discussion on study
• Decide to start negotiations – internal process
• Mandate
• Approach
• Time frame
• Start negotiations
• Consult private sector as well as other agencies in government
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• During negotiations:
– Legal Text
• Inter-government
• Regulators
• Law ministry or lawyers
• Think tanks
– Request and offers
• Inter-government
• Regulators
• Private sector
• Civil society
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The consultation steps (2)
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Industry’s preparedness
• Who sets the agenda for negotiations?
• To help successfully in policy making process
• Feedback during negotiations
• After implementation:
– Trade defense measures
– Circumvention
– Any other issues
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Formulating negotiating strategy • Frame the issue for negotiations
• Identify of win-win solutions
• Evidence based research and analysis
• Identify potential supporters among domestic and foreign stakeholders
• Outline message to potential supporters
• Identify opposing stakeholders & the means for reducing or deflecting opposition
• Establish the utility, legitimacy and fairness of proposed outcome
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Model FTA Process
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REGULATORY AUDITS
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Regulatory audit
• Various sources within and outside Government
• During WTO Trade Policy Review Mechanism
• However, changes do happen!
• Useful in negotiations: – Prepare for better understanding of trade
partner’s policies and regulations
– Enhances quality of dialogue between negotiators, sectoral regulators and private sector stakeholders.
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Regulatory audit: usefulness
• Better understanding among the negotiators and regulators of the implications of commitments being offered
• Benchmarking the national regulatory regime in terms of its effectiveness and compliance with international best practices
• Anticipating and preparing for requests that are likely to ensue from negotiating partners once the negotiations have started
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Pre–negotiation step • Cost benefit analysis : Study
– Patterns of trade – Modeling – Identify gains and losses – Vulnerable sectors – Regulatory audit
• Evaluation of maximum gain: – PTA or FTA, BIT or RTA, WTO, Autonomous?
• Wide consultations: stakeholders – Strengths and weakness – Sensitive sectors – Market access benefits – Rules of Origin – Juridical or natural persons
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Negotiation step
• Decide modalities first
• Negotiations are held in different Rounds
• Positive/Negative list approach
• Request is made to other Parties on export interest sectors
• Other Party then offers – items & level
• Negotiations are then held on expanding the sectors and domestic regulations
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What countries do presently?
• First stage: In-house analysis – trade & tariff
• Second stage: Studies on purely economic parameters
• Third stage: Findings – stakeholders consultations
• Fourth stage: Finalising study
• Fifth stage: Share study in inter-governmental consultations
• Final stage: Final consultations with all stakeholders and firm up its negotiating position
• Time to time information is also posted online
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RESEARCH CONSULTATIONS NEGOTIATIONS
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Issues
• Process of negotiations?
• What are post negotiation issues?
• How to enforce?
• Way forward
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Negotiations Process
Framing the negotiations and issues.
•Analysis of the issues involved
Create negotiating team
•Exploration of Stakeholders Interests
•Establishing a Negotiating Strategy
•Start negotiation
Consultations and seeking mandate
Implementation Rajan Ratna 33
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National Law and International influence
National law needs to be in conformity with
international obligations
Care to be taken while making international commitments
Experience in negotiations a crucial factor
Negotiating skills
Networking with like-minded states
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… International influence…2
First stage of using trade positions
Identify national priority and objectives on the issue (SWOT)
Harmonise the laws across borders irrespective of the stage of development
Second stage
Stress on effective enforcement of harmonised laws in bilateral negotiations
Third stage
Seek multilateral redress at WTO/RTA Dispute Settlement
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Key negotiating strategy
• Frame the issue for negotiations
• Identify of win-win solutions
• Identify potential supporters among domestic and foreign stakeholders
• Outline message to potential supporters
• Identify opposing stakeholders & the means for reducing or deflecting opposition
• Establish the utility, legitimacy and fairness of proposed outcome
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Structure
• Text - Definitional and legal issues?
• Schedules - Market access
– WTO Doha Round Negotiations
– FTA negotiations
• Goods or services – different approaches
• Opportunities and Challenges
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Negotiating issues
• How do you define what is “environmental goods or services”?
• Should you look at national perspective or global perspective?
• What is a ‘win-win-win’ situation?
• Is import always bad?
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Negotiations • Goods
– Reduction/elimination of tariffs and non-tariffs
• Services – Market access
– Domestic Regulation
– Mutual Recognition
• Investment
• Technology Transfer
• Different approaches to be followed in WTO and RTAs
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Services, Investments and ToT (2) • Market access
– Mode 1
– Mode 3
– Mode 4
• MRAs
• Liberalizing sectors for investments – attract FDIs
• Technical assistance and capacity building.
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Approaches • WTO (Bound, different than actual)
– Goods – tariff and non tariff
– Services – market access and domestic regulations
• FTAs (WTO bound plus) – Goods – tariff (duty free), non-tariff
– Services – market access and domestic regulations
– Transfer of technology - investment
– Technical Assistance
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Implementation
• Schedules to be drawn:
– WTO
– FTAs
• Binding commitments
• Violation - subject to disputes
• Ratification:
– Domestic policy changes
• Implementation
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Monitoring and enforcement • Role of coordinating Ministry is important
• Ratification
• Ensure that all the domestic legislations are in place before the implementation date
• Transparency: notify to partners
• Preparing domestic industry as well as other stakeholders
• Monitor progress – annual or as per schedule and re-notify
• Cases of surge in imports - monitor
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Conclusion • The importance of proper research and
stakeholders consultations in the design of trade agreements – very important and essential
• There can be several problems associated with: • Conflicting interests
• Domestic policies
• Inefficiencies
• Large industry vrs. SME
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Lessons • Trade can be an important means of
implementation for attaining SDGs. • Tremendous potential exist for production and
export of CSGT in Asia Pacific. • Even MFN tariffs on these items are lower. • Countries are liberalizing these items in PTAs/FTAs.
But needs to be established if this is as a conscious policy to liberalise CSGT or in general.
• Non-tariff issues are not yet addressed, especially standards maintained due to environmental reasons.
• Technology transfer on these items need to be facilitated as market access is not the only solution.
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India’s negotiations: Some illustrations
Country/Group Start Finish Total Time No. of consultations
held) (Inter Govt. &
industry)
Sri Lanka August 1998 November 1998 4 months 4-5
SAFTA 1999 2004 5 years > 20
Singapore 2003 2005 2 years >40
ASEAN 2004 2009 5 years > 70
South Korea 2006 2009 3 years >30
Thailand 2004 Not concluded >13 years >50
BIMSTEC 2004 Not concluded >13 years >50
EC 2007 Not concluded >10 years >30
Japan 2007 2010 4 years >30
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THANK YOU