Implications for Trade Policy Administration

The Agreements reached in the Uruguay Round of trade negotiations have had an important impact on the way governments in developing countries and countries in transition manage trade and related policies.

Members have established new institutions, allocated responsibilities more clearly and, in some case, revised administrative and policy practices to comply with the provisions of the Agreements.

The Agreements on Agriculture, Textiles and Clothing, Safeguards, Anti-dumping and Subsidies and Countervailing Measures require the establishment of an "investigating authority" to determine the existence and extent of "dumping", subsidization, "material" or "serious injury", "serious damage" or trigger prices and trigger import volumes, on the basis of the criteria set out in the Agreements.

The latter two Agreements, which deal with "unfair" practices, also provide for "Judicial review" which require the existence independent judicial, arbitral or administrative tribunals or procedures.

In many cases, existing specialized departments of Ministries have been made directly responsible for ensuring that the benefits and advantages offered by the WTO Agreements take real effect. The task of monitoring trading partners' implementation of the WTO obligations is usually carried out by a country's representatives to the WTO, and the trade sections of embassies abroad, in coordination with specialized departments of domestic Ministries.

The policy coordination function is crucial in the management of these trade policy institutions. The oversight of compliance with WTO obligations, defence of trade interests using the WTO framework and participation in multilateral, bilateral or regional trade negotiations usually demands some centralized body with broadly-based authority such as an office of the head of government.

Some WTO members - developed and developing - maintain agencies that are independent of the normal pressures of the political economy to conduct policy analysis and, sometimes, the investigations required by 'injury' tests under the Agreements. These agencies may also be responsible for

• analysis of trade data
• analysis of political developments with potential trade impact,
• preparation of technical argumentation in support of negotiating positions and trade disputes
• analysis of the implications of initiatives by their own government and by trading partners

They can provide a measure of transparency to trade policies that can be helpful to governments under pressure from sectional interests.

Notifications

One difficulty facing developing countries in implementing the multilateral obligations is the quantity of notification requirements. The WTO Secretariat has calculated that there are 215 -notifications required in the WTO system. In some cases, failure to notify can affect a member's rights under the Agreements. For example, WTO developing country members who joined the Organization at the outset but did not notify TRIMs by April 1995 are not eligible for the five-year phase out period.

Despite the weight of the notification requirements, the system provides valuable information on measures likely to affect the rights and interests of developing countries that would be still more expensive to gather by other means. Developing country members have a direct interest in maintaining a high level of conformity with the notification provisions of the Agreements.

One means of ensuring that notification requirements are respected, is to centralize responsibility within governments for maintaining notifications.

Investigations

Developing countries that have liberalized quantitative restrictions and bound their tariffs are facing demands from industries facing higher levels of import competition to levy countervailing and anti-dumping duties and to take emergency safeguard action as a means of providing protection.

Of course, there are important differences in the justification of measures under the different contingent protection mechanisms. Only the emergency safeguards provisions of GATT 1994 are intended to provide for a period of adjustment to unexpected competitive pressures from imports. Anti dumping and countervailing duties are provided as defences against 'unfair' import competition.

The use of these mechanisms in accordance with WTO provisions implies the existence of independent institutions, which must take decisions based on objective criteria, follow stringent procedures and provide for "due process" and transparency. In developing countries where discretionary protection using unbound tariffs or 'balance-of-payments' restrictions was formerly common, the establishment of such independent institutions requires a change in commercial policy and, possibly, in approaches to public administration.

Inexperience and inadequate preparation may give rise to procedural errors which would permit successful challenges by trading partners who are vigilant to ensure that their own rights are effectively respected.

Other administrative obligations

In deciding on the priorities for using scarce human and institutional resources, developing countries should keep in mind that the WTO rules and obligations do not require member countries to have provisions for imposing anti-dumping or countervailing duties. Nor is having such provisions a prerequisite for having recourse to WTO rules to defend against unfair treatment of the country's exports in foreign markets.

Although implementing legislation may be drawn up in strict conformity with the obligations of the WTO Agreements, its effective enforcement may involve considerable costs, both in the training of officials and daily operation. The TRIPs and Customs Valuation Agreements seem to impose the most onerous obligations in this respect, where customs staffs will have to be trained and augmented.

Other Agreements contain administrative obligations such as those on Technical Barriers to Trade, Sanitary and Phytosanitary Regulations and GATS, which require the establishment of enquiry points capable of providing a variety of information.