Implementation and monitoring - Various WTO councils and committees seek to ensure that WTO agreements are being properly implemented. All WTO ...
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5 Implementation and monitoring Various WTO councils and committees seek to ensure that WTO agreements are being properly implemented. All WTO members undergo periodic scrutiny of their trade policies and practices.
68
General Council
73
Trade in goods
76
Spotlight: COVID-19 and world trade
109
Trade facilitation
111
Trade in services
113
Trade-related aspects of intellectual
property rights (TRIPS)
117
Trade and environment
121
Trade and transfer of technology
122
Regional trade agreements
126
Trade Policy Reviews
128
Trade monitoring reports
131
Trade, debt and finance
133
Government Procurement Agreement
I M P L E M E N TAT I O N A N D M O N I TO R I N G
General Council
The process for selecting a new
Director-General began in May 2020 and
culminated in the selection by consensus
of Dr Ngozi Okonjo-Iweala of Nigeria in
February 2021. She is the first African
and first woman to head the WTO.
The General Council was a prime
forum in 2020 for WTO members to
share information and views on trade
measures related to COVID-19. A
number of statements on questions
related to the pandemic were made
during the year.
The 12th Ministerial Conference (MC12),
originally scheduled for Kazakhstan
in June 2020, was postponed due to
the pandemic. On 1 March 2021, the
General Council agreed that MC12 COVID-19 trade-related matters
would take place in the week of 29
November 2021 in Geneva. Amid the global pandemic, the General
Council provided a prime forum for WTO
Members held extensive discussions members to share information and exchange
on the Work Programme on Electronic views on COVID-19 trade-related measures.
Commerce. Views continue to differ on
the moratorium on imposing duties on In May 2020, a special General Council
electronic transmissions. meeting was convened in virtual format to
discuss the trade-policy aspects and effects
of the global crisis, with 62 WTO members
and three WTO observers sharing their
experiences and views. This was the WTO’s
Background first formal virtual meeting and paved the
way for the organization to continue working
The General Council is entrusted through virtual means when physical meetings
with carrying out the functions were not possible.
of the WTO and taking actions
necessary to this effect between Throughout the year, matters related to
Ministerial Conferences in COVID-19 were at the centre of discussions.
addition to carrying out the WTO members presented several
specific tasks assigned to it communications and statements. These
by the Agreement Establishing
included a joint ministerial statement by
the WTO. As part of its overall
Australia, Canada, the Republic of Korea, New
oversight function, the General
Zealand and Singapore on sustaining global
Council conducts a year-end
review of WTO activities on the value chains, facilitating the movement of
basis of annual reports from its people and minimizing the pandemic’s impact
subsidiary bodies. on trade and investment. The Cairns Group of
farm goods exporters called for the protection
of global food security through open trade.
068 A N N U A L R E P O R T 2 0 21
I M P L E M E N TAT I O N A N D M O N I TO R I N G
Council Chair David Walker led the selection
process for a new Director-General (see
page 28). After three rounds of consultations,
the choice came down to two candidates –
Dr Ngozi Okonjo-Iweala of Nigeria and Yoo
Myung-hee of the Republic of Korea.
13 For several months, the General Council was
unable to reach a consensus. But on 5 February
A group of 13 WTO 2021, Ms Yoo withdrew her candidacy and Dr
members proposed Okonjo-Iweala was appointed as the WTO’s
the creation of seventh Director-General on 15 February. “This
a Trade and is a very significant moment for the WTO. On
Health Initiative. behalf of the General Council, I extend our
warmest congratulations to Dr Ngozi Okonjo-
Iweala on her appointment,” Ambassador
Walker said. She is the first woman and the first
African to lead the WTO.
Dr Okonjo-Iweala A group of 13 developing and developed Current trade debates
was appointed as country members proposed the creation of
the WTO’s 7th a WTO Trade and Health Initiative. As a first WTO members continued to discuss issues
Director-General
in February 2021. step, they urged all members to back a joint such as the negotiating function of the WTO,
declaration on enhancing the capacity of the development – inclusivity and special and
trading system to deal with COVID-19 and any differential treatment for developing countries,
future pandemic (see page 41). the importance of market-oriented conditions
to the world trading system, transparency and
Bangladesh drew attention to the plight of the the deliberative function of the WTO, including
garments and textile sector while Afghanistan strengthening the role of WTO committees.
called for action to support fragile and conflict-
affected countries. Asia-Pacific Economic In December, an extensive debate took
Cooperation (APEC) ministers responsible for place on a draft decision, co-sponsored
trade urged members to adopt digital solutions by more than 80 members, on agriculture
to strengthen supply chain resilience. export prohibitions relating to the World
Food Programme (see page 47). Other
At the December meeting, members held draft decisions presented for consideration
an exchange on a status report by the Chair included an action plan to enhance support
of the Council for Trade-Related Aspects for cotton by-product development in least
of Intellectual Property Rights (TRIPS) on developed countries (LDCs – see page 148).
the consideration by the TRIPS Council of a
proposal for a waiver from certain provisions Twelfth WTO Ministerial
of the TRIPS Agreement for the prevention, Conference (MC12)
containment and treatment of COVID-19
(see page 113). Originally scheduled for June 2020 in Nur-
Sultan, Kazakhstan, MC12 was postponed
Selection of a new Director-General due to the pandemic. Kazakhstan offered
to host the conference in June 2021.
Following the resignation of DG Roberto However, due to the uncertainties caused
Azevêdo in May 2020 (see page 43), General by the pandemic and the current situation,
A N N U A L R E P O R T 2 0 21 069
I M P L E M E N TAT I O N A N D M O N I TO R I N G
members decided that Geneva would be a Secretariat organized a webinar on quantifying
more realistic option. On 1 March 2021, the the moratorium and its impact on
General Council agreed that MC12 would economic development.
take place in the week of 29 November 2021
in Geneva. Members’ views continued to differ, with
some calling for a permanent moratorium
Implementation of Bali, Nairobi and to give predictability to e-commerce, some
Buenos Aires outcomes calling for it to be lifted to allow members
policy space, and others arguing for a
The General Council regularly reviewed continuation of the current periodic renewals.
progress in the implementation of decisions
taken by ministers at the 9th, 10th and At the October meeting, India highlighted At the General Council
11th Ministerial Conferences. The reviews the importance of continuing discussions on on 31 July 2020, it was
agreed that, following
included: progress in the implementation of the Work Programme and the moratorium the departure of Roberto
the Nairobi decision on export subsidies in and suggested having a standing item on Azevêdo as Director-
agriculture (see page 84); the Bali decision the Council agenda. In December, members General on 31 August
on tariff rate quotas; LDC preferential rules considered a joint submission by India and 2020, all four Deputy
Directors-General
of origin and the LDC services waiver (see South Africa highlighting the need for a
would stay on and
pages 99 and 111); implementation of the multilateral discussion to promote an inclusive continue their existing
Trade Facilitation Agreement (see page 109); and development-oriented approach to responsibilities until the
and Aid for Trade (see page 151). electronic commerce. new Director-General
took office. From left
to right: Yi Xiaozhun,
Work Programme on The joint submission suggested that the Work Alan Wm. Wolff,
Electronic Commerce Programme be a standing item not only in Karl Brauner, Yonov
the General Council but also in the relevant Frederick Agah.
Members agreed in December 2019 to
reinvigorate the Work Programme on
Electronic Commerce, including with
structured discussions based on all topics
of interest brought forward by members.
Members also agreed to extend the
moratorium on customs duties on electronic
transmissions until MC12. Early in 2020,
the Chair of the General Council held
consultations and convened an informal
meeting to hear members’ views on how to
structure the work.
In July 2020, an informal meeting was held
to look at two submissions. One was from
India and South Africa, and the other from a
group of 13 delegations: Australia; Canada;
Chile; Colombia; Hong Kong, China; Iceland;
the Republic of Korea; New Zealand;
Norway; Singapore; Switzerland; Thailand;
and Uruguay. The submissions presented
different views and perspectives on the scope
and impact of the moratorium on customs
duties on electronic transmission. The WTO
070 A N N U A L R E P O R T 2 0 21
I M P L E M E N TAT I O N A N D M O N I TO R I N G
Waivers under Article IX of the
WTO Agreement
The General Council considered and granted
four waivers from obligations under the WTO
Agreement, as set out in Table 1.
It also reviewed the following multi-year waivers:
• DC members – Obligations under
L
Article 70.8 and Article 70.9 of the
TRIPS Agreement with respect to
pharmaceutical products, granted on
30 November 2015 until 1 January 2033
• imberley Process Certification Scheme
K
for Rough Diamonds, granted on 26 July
2018 up to 31 December 2024
• anada – CARIBCAN, granted on 28
C
WTO bodies. It further proposed that the David Walker chaired July 2015 until 31 December 2023
General Council should play a central role the General Council
in 2020.
in the discussions and keep the programme • referential Treatment in favour of
P
under continuous review, and that members Services and Service Suppliers of Least-
continue structured thematic discussions. Developed Countries, granted on 17
December 2011 until 31 December 2030
At that same December meeting, the General
Council also heard the reports from the • referential Tariff Treatment for Least-
P
chairs of the Council for Trade in Services, Developed Countries, granted on 16
the Council for Trade in Goods and the October 2019 until 30 June 2029
TRIPS Council, where issues under the Work
Programme were also discussed. • uba – Article Xv:6 – Extension of
C
Waiver, granted on 7 December 2016
Requests for accession and until 31 December 2021
observer status
In 2020, the General Council established
a working party to examine the request for
accession of Curaçao and granted observer
status to Turkmenistan. Many delegations stressed the
important role of e-commerce
Other reports
in supporting economic
The General Council in 2020 considered recovery from the pandemic
the regular reports on the Work Programme and the need to address
on Small Economies, the report on the current vulnerabilities and
Development Assistance Aspects of Cotton
and the Annual Review of the Special bridge the digital divide.
Compulsory Licensing System.
A N N U A L R E P O R T 2 0 21 071
I M P L E M E N TAT I O N A N D M O N I TO R I N G
• uropean Union – Application of
E • United States – Trade Preferences
Autonomous Preferential Treatment Granted to Nepal, granted on 7
to the Western Balkans, granted on 7 December 2016 until 31 December 2025
December 2016 until 31 December 2021
Other issues
• nited States – African Growth
U
and Opportunity Act, granted on 30 As part of its overall oversight function, the
November 2015 until 30 September 2025 General Council conducted a year-end review
of WTO activities on the basis of annual
• nited States – Caribbean Basin
U reports from its subsidiary bodies. In addition,
Economic Recovery Act, granted on 16 the General Council approved the WTO
October 2019 until 30 September 2025 budget for 2021.
• nited States – Former Trust Territory
U
of the Pacific Islands, granted on 7
December 2016 until 31 December 2026
Table 1: Waivers under Article IX (decision-making) of the WTO Agreement.
In 2020, the General Council granted the following waivers from obligations under the WTO agreements.
Member Type Decision Date of adoption Expiry date
Introduction of Harmonized
System 2002 Changes into 18 December 31 December
China WT/L/1104
WTO Schedules of Tariff 2020 2021
Concessions
Introduction of Harmonized
Argentina; Brazil; China; Dominican Republic; European Union; System 2007 Changes into 18 December 31 December
WT/L/1105
Malaysia; Philippines; and Thailand WTO Schedules of Tariff 2020 2021
Concessions
Argentina; Australia; Brazil; China; Colombia; Costa Rica;
Introduction of Harmonized
Dominican Republic; Ecuador; European Union; Guatemala; India;
System 2012 Changes into 18 December 31 December
Kazakhstan; Republic of Korea; Malaysia; Mexico; New Zealand; WT/L/1106
WTO Schedules of Tariff 2020 2021
Norway; Philippines; Russian Federation; Singapore; Switzerland;
Concessions
Thailand; and United States
Argentina; Australia; Brazil; Canada; China; Colombia; Costa
Rica; Dominican Republic; Ecuador; El Salvador; European
Introduction of Harmonized
Union; Guatemala; Honduras; Hong Kong, China; India; Israel;
System 2017 Changes into 18 December 31 December
Kazakhstan; Republic of Korea; Macao, China; Montenegro; WT/L/1107
WTO Schedules of Tariff 2020 2021
New Zealand; Norway; Pakistan; Paraguay; Philippines; Russian
Concessions
Federation; Switzerland; Separate Customs Territory of Taiwan,
Penghu, Kinmen and Matsu; Thailand; United States; and Uruguay
072 A N N U A L R E P O R T 2 0 21
Trade
in goods
Thirteen new trade concerns were
raised in the Council for Trade in
Goods, up from 12 in 2019.
Several WTO members proposed
that the Council discuss in a
systemic manner trade-related
measures taken over COVID-19.
W
A proposal was made for an TO members raised 13 new trade An engine
authoritative interpretation of the concerns in 2020 (see Table 2), manufacturing facility
in Jakarta, Indonesia.
Enabling Clause to provide greater little changed from 12 in 2019.
legal certainty to non-reciprocal
preferences granted by developing Among the new issues brought before the
countries to least-developed Council, Russia – supported by Armenia,
countries (LDCs). China, Kazakhstan and the Kyrgyz
Republic – expressed concerns regarding
the European Union’s proposed carbon
border adjustment mechanism. Under the
mechanism, the European Union will impose a
levy corresponding to the carbon footprint of
an import from outside the European Union.
Background
Members expressed concerns as to whether
The Council for Trade the proposed measure would be consistent
in Goods is responsible with WTO rules against discrimination.
for the workings of WTO
agreements on trade in Australia expressed concerns over measures
goods. It consists of the implemented by China on a range of goods
full WTO membership imported from Australia, including live rock
and reports to the WTO lobster, barley, wine, timber logs, cotton
General Council. The Goods and other agricultural commodities. Turkey
Council has 12 subsidiary expressed concerns over the Kingdom of
committees dealing with Saudi Arabia’s trade policies, including
specific subjects, such what it said were long delays in customs
as agriculture, market clearance and increased safety inspections
access, subsidies, applied to perishable goods. Hong Kong,
technical barriers to trade, China expressed concerns over a revised US
sanitary and phytosanitary requirement that goods produced in Hong
measures, import licensing,
Kong, China could no longer indicate “Hong
customs valuation and
Kong” as their origin but had to indicate
trade facilitation. These
“China” instead.
committees also comprise
all WTO members.
Working parties on state In addition to previous concerns regarding the
European Union’s renegotiation of tariff rate
9
Nine WTO
trading enterprises and the
Information Technology quota (TRQ) commitments as a consequence members proposed
Agreement also report to of the United Kingdom leaving the European discussion in a
the Goods Council. Union (Brexit), nine members expressed new systemic manner
concerns regarding the TRQ commitments of of COVID-19
the United Kingdom following Brexit. trade measures.
A N N U A L R E P O R T 2 0 21 073
I M P L E M E N TAT I O N A N D M O N I TO R I N G
Other previously raised concerns included:
Indonesia’s import and export-restricting
policies and practices; India’s restrictions
on imports of pulses; EU quality schemes
for agricultural products; China’s measures
restricting the import of scrap materials; the
European Union’s renewable energy directive;
13
Thirteen new trade
and Russia’s trade-restricting practices.
COVID-19 and measures relating
concerns were to trade in goods
raised by WTO
members in 2020. Nine WTO members proposed that the
Council provide a platform for members to
discuss, in a systemic manner, the trade-
related measures adopted in the context
of the COVID-19 pandemic. Issues would Authoritative interpretation of the
include the expiry date and notification of Enabling Clause
measures, the list of products, an indication
of trade-facilitating measures, good practices The Republic of Korea introduced a
Face mask
in monitoring those measures in the Council’s proposal for an authoritative interpretation
production in subsidiary bodies and collaboration with other of the Enabling Clause, which allows for
Pune, India. international organizations. preferential trade arrangements between
developed and developing countries and
among developing countries. The aim is
to provide greater legal certainty to non-
reciprocal preferences granted by
developing countries to LDCs.
Transparency
Proponents introduced a revised proposal
on transparency to enhance members’
compliance with notification requirements,
adding flexibilities and clarifications
with respect to the previous revision.
In particular, LDCs would no longer be
covered by proposed administrative sanctions
if they requested technical assistance to
address challenges in submitting notifications
in a timely manner.
Some members reiterated their opposition
to administrative measures and the differential
treatment of notifications on agriculture.
Other delegations referred to the need for
an inclusive approach that considers the
challenges faced by developing and least-
developed countries.
074 A N N U A L R E P O R T 2 0 21
Table 2: New trade concerns raised in the Council for Trade in Goods in 2020
Member(s) raising the concern Topic
Russian Federation EU’s proposed carbon border adjustment mechanism
Australia, Brazil, Canada, China, New Zealand, Russian Federation,
UK draft goods schedule and proposed tariff rate quota commitments post-Brexit
Switzerland, United States and Uruguay
European Union US import restrictions on apples and pears
United States Mexico’s front of pack nutrition-labelling (NOM 51)
China US Executive Order on securing the bulk-power system
Russian Federation EU safeguard measures on imports of certain steel products
Australia China’s implementation of trade disruptive and restrictive measures
European Union Egypt’s import restrictions for sugar
European Union Nigeria’s foreign exchange restrictions affecting dairy imports
Costa Rica Panama’s import restricting practices
Turkey Kingdom of Saudi Arabia’s trade-restrictive policies and practices concerning Turkey
European Union Sri Lanka’s import ban on various products
Hong Kong, China US revised origin marking requirement for goods produced in Hong Kong, China
E-commerce
The Council continued discussing e-commerce
in response to the call from the 11th
Ministerial Conference to reinvigorate the
WTO’s work in this area (see page 70).
Proponents introduced a revised proposal
Functioning of the Council on transparency to enhance members’
Discussions continued on how to improve the compliance with notification requirements.
work of the Council and its subsidiary bodies.
A N N U A L R E P O R T 2 0 21 075I M P L E M E N TAT I O N A N D M O N I TO R I N G W O R L D T R A D E O R G A N I Z AT I O N
SPOTLIGHT
COVID-19 and world trade
Global trade in goods and services was severely impacted by the COVID-19 pandemic that
erupted in early 2020 and the adoption of global health measures taken by WTO members
to try and mitigate the crisis.
T
rade in goods declined by 5.3 Around 39 per cent of the restrictive
per cent in 2020 (see also page measures implemented in response
73). Trade in services also to the pandemic had been repealed
declined as limits to travel and other by mid-October. Some 18 per
health-related restrictions prevented or cent of trade-facilitating measures
severely curtailed face-to-face service related to COVID-19 had also been
335 delivery activities. Travel and transport eliminated. The trade coverage of
services declined by 63 per cent and pandemic-related trade-facilitating
WTO trade 19 per cent respectively. measures implemented since the
monitoring beginning of the pandemic was
reports Most of the 335 COVID-19 trade estimated at US$ 227 billion while
identified 335 and trade-related measures identified trade-restrictive measures stood at
COVID-19 trade in WTO trade monitoring reports US$ 180 billion.
measures were adopted on a temporary basis.
imposed by In the early stages of the pandemic, To help respond to trade issues
WTO members. most of the measures taken by arising from the global health crisis,
WTO members restricted trade. the WTO established an internal,
But by mid-October, 195 (58 per cross-cutting working group.
cent) of the measures were trade- This was directed to help ensure
facilitating compared with 140 (42 comprehensive monitoring of
per cent) that could be considered COVID-19-related trade measures
trade-restrictive. touching on WTO work.
076 A N N U A L R E P O R T 2 0 21W O R L D T R A D E O R G A N I Z AT I O N I M P L E M E N TAT I O N A N D M O N I TO R I N G
The first paper produced by the group The General Council spent much
was on “Trade in Medical Goods in time discussing COVID-19. It held
the Context of Tackling COVID-19”. a special virtual meeting in May for
It was published in April and updated WTO members to share information
in December (see box). and views on COVID-19 trade-related
matters. It was the first time that a
Travel and Other topics covered by group special General Council meeting had
notes included transparency been convened to discuss the trade-
transport services and why it matters at times of policy aspects and effects of a global
were particularly crisis, trade in services, trade crisis (see page 68). The Council
costs, agriculture, what measures continued to address the issue in
hard hit. WTO members used to expedite subsequent meetings.
access to COVID-19 medical
These ranged from sanitary and goods and services, and trade- Trade and health
phytosanitary (SPS) measures and related issues concerned with
technical barrier to trade (TBT) vaccine distribution. COVID-19 has placed health systems
regulations to intellectual property worldwide under extraordinary
measures. The group produced 20 As of November 2020, there had pressure. In the early phase of the
information notes on the impact of been over 270,000 downloads of pandemic, many countries faced
COVID-19 on world trade, provided the group’s reports. a shortage in essential personal
regular trade data updates and closely protective equipment (PPE). As
monitored members’ trade-related The WTO also created a dedicated production increased to meet the
policy developments. It focused on section on its website to provide unparalleled spike in demand, trade
ensuring transparency around trade up-to-the-minute information on played an important role in getting
and trade policy developments while COVID-19 and world trade, supplies to those most in need.
providing substantive information on including relevant notifications by In the first half of 2020, imports of
trade issues relevant for policymakers WTO members, the impact of the face protection products jumped
and businesses as they attempted to virus on exports and imports, and by 90 per cent while trade in medical
navigate the rapidly evolving global how WTO activities have responded goods increased by 16 per cent
trading environment. to the pandemic. (see box).
A N N U A L R E P O R T 2 0 21 077I M P L E M E N TAT I O N A N D M O N I TO R I N G W O R L D T R A D E O R G A N I Z AT I O N
As the pandemic took hold, WTO became more readily available. However,
members shared information with the certain measures remain in place.
WTO about their trade-restrictive and
trade-facilitating measures. More information on members’
responses to the crisis is available
Duties, taxes and charges on COVID- in the information note “How WTO
19-critical medical goods and other members have used trade measures
essential supplies were temporarily to expedite access to COVID-19
Trade in medical goods removed or deferred by 40 WTO critical medical goods and services”
members. These trade-facilitating and on the WTO’s dedicated webpage
actions helped reduce the cost of the on COVID-19 and world trade.
goods needed to fight the pandemic,
both for the health sector and for the Vaccine production
public. Measures to reduce or eliminate and distribution
import tariffs made up around two-thirds
of the import trade-facilitating measures Successive waves of coronavirus
reported to the WTO. infection led to increased efforts to
develop and manufacture vaccines
In addition, members expedited and diagnostics to combat the
Imports of face masks jumped customs procedures and border pandemic, with the aim of meeting
80.9% in 2020 to reach clearance for COVID-19-critical national needs and providing equitable
US$ 141.4 billion. medical goods by cutting back access worldwide. However, demand
red tape. Actions taken included far exceeded supply, leading to export
Imports and exports of medical establishing priority clearance limitations in some countries as
goods increased by 16 per cent in channels, lessening and simplifying producers struggled to fulfil orders.
2020, reaching US$ 2,343 billion documentary requirements and
– at the same time as total world electronic processing, and improving Vaccine production is supported by
merchandise trade declined by border agency cooperation. complex value chains for raw materials
7.6% in value. and components. A typical vaccine
Members also took steps to enhance manufacturing plant will use in the
The world’s average tariff applied regulatory approval and cooperation region of 9,000 different materials
on textile face masks is 14.3%. on standards for traded goods, sourced from some 300 suppliers
including measures to expedite across approximately 30 different
Export restrictions on personal regulatory assessments, recognizing countries, according to an estimate
protective equipment, such as the results of foreign regulators, from the International Federation
gloves and masks, drugs and and allowing remote or electronic of Pharmaceutical Manufacturers
medicine taken in the early stages conformity assessment procedures. and Associations.
of the pandemic were gradually Many members improved access to
phased out. COVID-19-critical medical services. WTO trade statistics suggest
The international movement of health that global exports of some
Many countries took measures to workers was facilitated, together with particularly critical raw materials
exempt imports from tariffs and to new rules on telemedicine. for vaccine production (including
streamline customs and nucleic acids, amino acid phenols,
other procedures. Export restrictions on PPE and medical acyclic amides, lecithins and sterols)
goods taken by some countries in the grew by 49 per cent in the first six
Source: WTO Secretariat Information Note
– “Trade in Medical Goods in the Context of early stages of the pandemic were months of 2020 to reach some US$
Tackling COVID-19”. gradually phased out as supplies 15.5 billion in value.
078 A N N U A L R E P O R T 2 0 21W O R L D T R A D E O R G A N I Z AT I O N I M P L E M E N TAT I O N A N D M O N I TO R I N G
but this decline was reduced to
2 per cent by the fourth quarter.
Iron and steel trade is indicative of
broader economic conditions as these
products are heavily used in both
automobile manufacturing and building
construction, both of which were hit
hard by the pandemic.
Strong growth in textiles trade in
both the third and fourth quarter
partly reflected high demand for
medical face coverings. Electronic
goods including computers also saw
steady growth of 12 per cent in the
second half of 2020, reflecting strong
demand for upgraded equipment to
facilitate working remotely.
In view of the complexity of raw material and Health Initiative. As a first step,
and component value chains and they urged all members to back a joint Travel and transport services, down 63
limited production capacity in many declaration on enhancing the capacity per cent and 19 per cent respectively
countries, export controls, border of the trading system to deal with in 2020, were directly impacted by
clearance and transit issues affecting COVID-19 and any future pandemic containment measures designed to
the sourcing of imported raw materials (see page 69). limit the spread of COVID-19, many
and other essential components posed of which remain in place or have
difficulties for scaling up vaccine Discussions have continued in 2021 been tightened in response to the
manufacturing operations and ensuring in response to revised proposals resurgence of the disease.
equitable access. submitted by WTO members.
The number of daily international flights
At the WTO, members discussed a Impact of COVID-19 on world trade fell around 80 per cent in the first
proposal, initially submitted in October quarter of 2020 as countries closed
2020, for a waiver of certain provisions Global merchandise trade volumes their borders to reduce the spread
of the Agreement on Trade-Related declined by 14.3 per cent in the of COVID-19. This number gradually
Aspects of Intellectual Property Rights second quarter of 2020 compared picked up as cases declined and
(TRIPS) in relation to the “prevention, to the previous period as COVID-19 people resumed limited travel. The end
containment or treatment” of COVID-19. containment measures affected of 2020 saw an uptick in flights as
According to the proponents, the economies around the world. This people travelled to meet friends and
objective is to avoid barriers to timely contraction is sharper than the 10.2 per family for seasonal holidays, but a
access to affordable medical products cent drop recorded during the financial resurgence of the virus has reduced
including vaccines and medicines or to crisis between the third quarter of 2008 flights again in 2021.
scaling-up of research, development, and first quarter of 2009.
manufacturing and supply of essential WTO economists estimate the
medical products (see page 113). However, most categories of volume of world merchandise
manufactured goods saw significant trade will increase by 8.0 per cent
In November 2020, a group of gains in the second half of 2020. in 2021. Travel services are not
developing and developed countries World trade in iron and steel was expected to fully recover until the
proposed the creation of a WTO Trade down 17 per cent in the third quarter pandemic wanes.
A N N U A L R E P O R T 2 0 21 079I M P L E M E N TAT I O N A N D M O N I TO R I N G
Market access
The Committee discussed 19 trade
concerns, one more than in 2019.
The WTO launched a new
goods schedules e-library,
facilitating access to all legal
instruments recording tariff Trade concerns
and other commitments made
by WTO members. WTO members raised 19 trade concerns on
issues such as border delays, applied tariffs
A record 35 members submitted allegedly in excess of WTO commitments,
notifications on quantitative procedures to modify schedules of
restrictions, up from 14 in 2019. concessions, discriminatory internal taxation
Many of these notifications referred and, in particular, prohibitions and restrictions
to export restrictions on products on imports and exports. Many concerns had
essential to combating COVID-19. been raised previously but a number were new.
Several members also notified
when the restrictions were Russia submitted a proposal on enhancing
subsequently lifted. transparency on applied tariffs. Australia,
Brazil and Canada submitted a proposal on
transparency in tariff rate changes and their
impact on shipments en route. Colombia
and other members called for enhancing
transparency of trade-restricting measures
adopted in response to COVID-19. The
Background Committee requested the WTO Secretariat to
provide additional information on the COVID-
The Committee on Market 19-related measures notified.
Access supervises the
implementation of tariff COVID-19
and non-tariff measures
not covered by any other WTO members commended efforts by the
WTO body. In addition, it Secretariat to monitor governments’ trade-
seeks to ensure that WTO related measures during the COVID-19 crisis
members’ schedules of (see page 76). They discussed ways to ensure
concessions are up to date, that the emergency measures introduced to
including changes required
restrict exports are lifted once they are no
to reflect amendments to
longer deemed necessary and asked the
the Harmonized System
Secretariat to produce a more detailed report.
(HS). The HS allows
countries to classify traded
goods on a common basis. Agreement on pharmaceuticals
Without this technical work
at the Committee, it would The WTO Secretariat presented a
be difficult to compare
members’ tariff obligations
with the tariffs they apply
19
WTO members
consolidated list of products covered by a
plurilateral agreement on pharmaceuticals,
known as the Pharma Agreement. The
in practice. raised 19 trade European Union said the participation of
concerns on market signatory parties in global pharmaceutical trade
access issues. had fallen from over 90 per cent in 1994 to only
080 A N N U A L R E P O R T 2 0 21I M P L E M E N TAT I O N A N D M O N I TO R I N G
64 per cent. Since export curbs and tariffs are enter into force – have been nearly concluded
depriving many of life-saving medicines, the EU for all members. The Committee made good
invited WTO members to rethink the relevance progress on the HS2012 transposition, with
of maintaining tariffs on such products. the schedules of 99 members updated. In
addition, 54 schedules were transposed to
Databases HS2017 in 2020, of which 18 were certified.
The Committee was informed by the WCO
In 2020, the Secretariat launched a goods that a new amendment will enter into force
schedules e-library (https://goods-schedules. on 1 January 2022.
wto.org), an online platform with access
to thousands of files and legal instruments Together with the WCO Secretariat, the
recording tariff and other commitments made Committee organized a workshop on the
by WTO members, known as their schedules Harmonized System, including sessions on
of concessions. The platform also shows the its practical application, its role in the WTO
various changes that have taken place, such and on the new amendments that will enter
as renegotiated schedules, transpositions into force on 1 January 2022.
of schedules, sectoral initiatives and other
rectifications and modifications. Quantitative restrictions
The WTO’s Integrated Database, the main The Committee received quantitative
source of tariff and import data, began restrictions notifications from a record
automatic data transmission with interested 35 members, up from 14 in 2019. These
members. This procedure significantly notifications include information on
simplifies data notification both for members prohibitions and other restrictions that
and the Secretariat. do not take the form of a tariff, tax, fee or
The Secretariat presented a revised version
of the quantitative restrictions database,
charge, and are allowed by the WTO in
specific circumstances only. Many related
to temporary export restrictions introduced
35
The Committee
which transforms notifications into a machine- by WTO members to fight the COVID-19 received quantitative
readable format and makes it easy to search pandemic. The number of these temporary restrictions
and display data. It is expected that this revised measures peaked in the second quarter of notifications from a
system will be released to the public in 2021. 2020 and many have since been phased out. record 35 members.
Harmonized System
The Committee works to ensure that
members’ schedules of concessions reflect
the latest amendments to the World Customs
Organization’s Harmonized System (HS),
the system used to classify traded goods
on a common basis. This technical work
at the WTO seeks to ensure that WTO
schedules are up to date, thereby facilitating
the comparison of a member’s applied tariff
regime with its WTO obligations.
The HS96, HS2002 and HS2007
“transposition exercises” – amendments are
typically referred to by the year in which they
A N N U A L R E P O R T 2 0 21 081I M P L E M E N TAT I O N A N D M O N I TO R I N G
Agriculture
The Committee received 351
notifications from members
in 2020, the second-highest
number after 2019’s 439, and
a sign of members’ commitment
to increased transparency.
Members raised 547 questions
on individual notifications and
on members’ implementation
of commitments, the highest
figure ever.
A special meeting of the Committee
was convened in June 2020 on
COVID-19 and agricultural trade
policies. Many members called for
enhanced transparency on COVID-
related trade measures.
Rice farming in
Sylhet, Bangladesh.
Background
T
The Agreement on he Committee on Agriculture
Agriculture aims to reviewed 133 notifications from WTO
reform trade and make members and discussed 116 specific
WTO members’ policies implementation matters concerning members’
more market oriented. agricultural policies under Article 18.6 of
The rules and commitments the Agreement on Agriculture, which allows
apply to market access, members to raise questions on any matters
domestic support and relevant to the implementation of commitments.
export competition as well
as export restrictions and A total of 547 questions were raised in the
prohibitions. The Committee
Committee in these two areas, significantly
on Agriculture oversees
more than the 404 questions raised in 2019
the implementation of the
and an all-time high. As Figure 1 shows,
Agreement. The Committee
also monitors follow-up to agricultural policy developments in developing
the Marrakesh ministerial countries have been increasingly subject to the
decision regarding the Committee’s review over recent years.
least-developed and net
food-importing developing Around 71 per cent of the questions
countries, which sets raised concerned domestic support (subsidy)
out objectives and
mechanisms on the 133 notifications, including from Brazil, the
European Union, India, Israel and Turkey.
provision of food aid The Committee For the first time since 2011, the Committee
and other assistance. reviewed 133 reviewed notifications concerning export
notifications from restrictions or prohibitions, most of which
WTO members. related to measures implemented in
082 A N N U A L R E P O R T 2 0 21I M P L E M E N TAT I O N A N D M O N I TO R I N G
response to COVID-19. Figure 2 provides
Figure 1: Questions addressed to developed
a snapshot of the questions on notifications
600 and developing countries, 2005 to 2020
by subject area.
Transparency continued to be an 500
important topic in 2020, and compliance
with notification obligations, particularly for
domestic support and export subsidies, was 400
Number of questions
subject to specific scrutiny in the Committee.
Eighteen questions were raised concerning
300
pending notifications from Australia, China,
Egypt, the European Union, India, Kenya,
the Republic of Korea, Morocco, South 200
Africa, Turkey and the United States.
Thirty-four per cent of domestic support 100
notifications (848) and 30 per cent of
export subsidy notifications (874) remained
0
outstanding as of 31 December 2020.
Nevertheless, Figure 3 shows a rising trend
2011
2005
2007
2009
2015
2019
2013
2017
2016
2018
2020
2010
2012
2014
2008
2006
in the number of annual notifications, with
the total reaching 351 in 2020, the Developed country members
second-highest since 1995 after 2019’s Developing country members
439 and a sign of members’ continuing Least developed country
commitment to increased transparency.
A N N U A L R E P O R T 2 0 21 083I M P L E M E N TAT I O N A N D M O N I TO R I N G
COVID-19 and agriculture
Figure 2: Questions on notifications
In March 2020, as the COVID-19 crisis raised in the Committee on
deepened, the heads of the WTO, the UN Agriculture in 2020, by subject area
Food and Agriculture Organization and the
1%
World Health Organization issued a joint
statement calling on governments to minimize
Several members the impact of COVID-19-related border 3%
called for enhanced restrictions on trade in food (see page 175).
transparency 21%
on COVID-19 In response to members’ requests, a special
measures. meeting of the Committee was convened in
June 2020 on COVID-19 and agricultural 4%
trade policies. Members agreed to include
“COVID-19 and agriculture” as a standing
71%
item on the Committee’s agenda. It was
also agreed to invite observer international
organizations to contribute to the discussions.
Domestic support Export restrictions
Several written contributions were submitted Export competition Net food-importing countries
by members on COVID-19 and agriculture, Market access
including specific notifications and ad hoc
reports on measures taken in the agricultural
sector in response to the pandemic. Some
observer international organizations also
circulated contributions on this theme. focused on guaranteeing the immediate
availability of food had been followed by a
Several members called for enhanced second phase of policies seeking to mend
transparency on COVID-19 measures at a broken supply chains and help producers.
Committee meeting in July. In a subsequent
information session dedicated to COVID-19, Export competition
members also heard from several international
organizations about their research work. The Committee held its annual dedicated
discussion on export competition in
In August, the WTO Secretariat published September. Export competition covers
an information note on the impact of the export subsidies, export credits, export
pandemic on world agricultural trade. It credit guarantees or insurance programmes,
said that agricultural trade had fared better international food aid and agricultural
than other sectors and that initial measures exporting state trading enterprises.
The 2015 Ministerial Conference decided
to eliminate agricultural export subsidies
and established disciplines on similar export
“The lessons from the pandemic for global measures. Of the 16 WTO members that
foods systems are clear. The continued had export subsidy reduction commitments
at the time, 12 have modified their schedules
strengthening of the WTO Agreement on of commitments in line with the decision.
Agriculture is absolutely vital”- DDG Alan Wolff Canada and the European Union have
already circulated draft revised schedules and
084 A N N U A L R E P O R T 2 0 21I M P L E M E N TAT I O N A N D M O N I TO R I N G
certification is expected in due course. Brazil members, academics, civil society, farmers
and Venezuela are yet to submit their draft and agri-business.
revised schedules incorporating the decision.
In addition, the Secretariat launched
Transparency tools the WTO Trade Dialogues on Food in April
2020. This will become a regular feature
The WTO Secretariat continued its work on the of virtual outreach conducted by the
improvement of its online tools, including the Agriculture and Commodities Division
new online system for submission of agriculture designed to explore topical issues in food
notifications released at the end of 2019. and agricultural trade.
The Secretariat added new features to
the question and answers function of the
Agriculture Information Management System Figure 3: Number of agriculture notifications
(AG-IMS), which allows members to pose submitted by WTO members, 1995 to 2020
500
questions and provide answers to be
discussed at Committee meetings.
Outreach and information exchange 400
The WTO Secretariat organized a 2020
edition of the WTO Agriculture Symposium, 300
in virtual mode, exploring the role of
international trade in agriculture in food
system transformation. The symposium 200
marked 25 years of the Agreement on
Agriculture. It assessed and drew lessons
from the impact of the COVID-19 pandemic 100
on agricultural trade.
“The lessons from the pandemic for
0
global foods systems are clear. The
2001
2011
continued strengthening of the WTO
2007
1999
1995
2009
2003
2005
2013
2015
2019
1997
2017
1996
2004
2020
2006
1998
2002
2018
2010
2014
2016
2000
2012
2008
Agreement on Agriculture is absolutely
vital,” Deputy Director-General Alan Wolff
said in an address to the symposium. Notifications submitted to the Committee on Agriculture (1995-2020)
The virtual meeting was attended by WTO
A N N U A L R E P O R T 2 0 21 085I M P L E M E N TAT I O N A N D M O N I TO R I N G
Sanitary and
phytosanitary
measures
The Committee adopted the Report
of the Fifth Review of the Agreement
on Sanitary and Phytosanitary (SPS)
Measures, with recommendations for
tackling new issues and continuing
existing activities.
Tending seedlings
at a community
Committee members began using a new nursery on the island
online platform – eAgenda – to submit of ‘Eua, Tonga.
and share agenda items, statements and
specific trade concerns.
Adoption of the Fifth Review Report
The number of new specific trade
concerns raised by WTO members rose In 2020, the SPS Committee adopted
to 36 – more than double 2019’s 17 – the Report of the Fifth Review of the SPS
covering a wide range of issues, such Agreement, concluding a process launched
as pesticide-related policies and COVID- in March 2018. Members showed a high
related restrictions. level of engagement, submitting 22 proposals
covering ten topics (see Box 1).
Members notified 2,122 new or changed
SPS regulations, an all-time high, and up The Fifth Review Report contains
from 1,762 the previous year. recommendations for tackling new issues
and continuing existing SPS activities. It
includes an overview of work undertaken
from 2014 to 2019.
Background Implementation of the Fifth
Review recommendations
The Agreement on the
Application of Sanitary The SPS Committee commenced
and Phytosanitary (SPS) implementing several recommendations in
Measures establishes the the report. A Working Group on Approval
rights and obligations of Procedures was established to enhance
WTO members regarding implementation of approval procedures that
measures taken to ensure
facilitate trade while meeting an importer’s
food safety, protect human
appropriate level of SPS protection. This
health from plant or animal-
working group, led by Canada and Paraguay,
spread diseases, protect
plant and animal health held its first meeting in November.
36
from pests and diseases,
or prevent other damage The SPS Committee held a thematic
from pests. Governments session on voluntary third-party assurance
must ensure that their SPS WTO members programmes – formal, documented food-
measures are necessary for raised 36 new safety systems to improve food-safety
health protection and based specific trade outcomes – to increase awareness of
on scientific principles. concerns, more the work of international standard-setting
than double bodies and share approaches to third-party
2019’s total. assurance in official controls.
086 A N N U A L R E P O R T 2 0 21I M P L E M E N TAT I O N A N D M O N I TO R I N G
Box 1: Review of the SPS Agreement
Every four years, WTO members evaluate how
they are applying the SPS Agreement. The
Fifth Review proposes new or continued work
on the following topics:
Appropriate level of protection,
risk assessment and science
Control, inspection and approval
procedures (Annex C)
Equivalence (encourages members
In addition, the Committee continued to to accept others’ SPS measures
exchange information on various topics, offering equivalent protection)
including under the new standing agenda item
on control, inspection and approval procedures.
Fall armyworm (a crop-damaging
pest native to tropical and
New eAgenda platform sub-tropical regions in the Americas)
Because of the pandemic, several changes
were made to Committee meetings to
facilitate virtual participation. Starting in June, National SPS coordination mechanisms
members could use a new online platform
– eAgenda – to submit and share agenda
items, statements and specific trade concerns
(STCs).
Notification procedures
and transparency
Proposed SPS declaration for 12th
Ministerial Conference
The Committee discussed a proposal on
an SPS declaration for the 12th Ministerial aximum (pesticide) residue levels
M
(MRLs) for plant protection products
Conference, initially submitted by Brazil,
Canada and the United States, and
subsequently co-sponsored by 22 members.
This declaration aims to initiate a work
programme to deal with future regulatory Regionalization
challenges, including emerging pests and
diseases, climate change and technological
innovation. Proponents responded to
Role of standard-setting bodies Codex,
members’ queries, and indicated their
the World Organisation for Animal
intention to hold further discussions, including
Health (OIE) and the International Plant
in smaller group settings. Protection Convention (IPPC) with
respect to specific trade concerns
SPS issues related to COVID-19
Members shared information on SPS issues oluntary third-party assurance
V
pertaining to the pandemic in Committee schemes (see page 86).
A N N U A L R E P O R T 2 0 21 087I M P L E M E N TAT I O N A N D M O N I TO R I N G
Figure 4: Total number of SPS notifications and percentage of notifications
submitted by developing countries and LDCs, 1995-2020
2122
2400 100%
2200 90%
1762
2000
1681
1634
80%
1631
1800
1479
1408
70%
1392
1391
1600
1299
Total notifications
1264
1219
1196
60%
1156
1400
1019
1200 50%
926
856
856
810
1000
776
40%
800
30%
468
445
600
336
298
20%
241
198
400
200 10%
0 0%
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Regular notifications (incl. addenda and corrigenda) Emergency notifications (incl. addenda and corrigenda) Percentage submitted by developing countries and LDCs
meetings and at an informal information- Agreement are more relevant than ever,”
sharing session held in June. Codex, OIE, Deputy Director-General Alan Wolff said
IPPC and the World Health Organization in opening remarks.
(WHO) provided updates on COVID-related
activities. Many members underscored the New observer organization
need to respect the core principles of the
An event to mark SPS Agreement, such as transparency The SPS Committee agreed to grant
25 years of the and scientific basis, in the design and observer status to the Arab Organization
SPS Agreement implementation of COVID-19 measures for Agricultural Development.
underlined its and highlighted the role of guidance from the
central role in Food and Agriculture Organization (FAO), Specific trade concerns
enhancing trade WHO and OIE.
in safe food. WTO members raised 36 new specific
SPS@25 event trade concerns – more than double 2019’s
17 – covering a wide range of issues, such
Members participated in a special event as pesticide-related policies, COVID-related
to mark 25 years of the SPS Agreement. restrictions on agricultural products and
The event underlined the central role the phytosanitary restrictions on fresh vegetables
Agreement has played to enhance trade in and fruits. The Committee also considered 17
safe food. Negotiators of the Agreement, previously raised concerns.
the former Secretary of the SPS Committee
and Chair of the working group, former Following an exercise conducted by the
Committee chairs, experts and delegates WTO Secretariat in September on the status
reflected on the work done and tried to of certain specific trade concerns, members
anticipate the challenges the next 25 years reported 35 resolved and 42 as partially
will bring. resolved. This brings the total number of
fully or partially resolved concerns to 272
“In these uncertain times, the SPS Committee (over 50 per cent of the 516 concerns raised
has shown that its work and the SPS since 1995 – see Box 2).
088 A N N U A L R E P O R T 2 0 21I M P L E M E N TAT I O N A N D M O N I TO R I N G
Box 2: Easing SPS trade tensions: 1995-2021*
SPS Measures relating to food safety, animal health and plant health
Notifications
The SPS Agreement requires notification of
draft regulations that are not “substantially the Notifications
same” as an international standard. In 2020, Members notify about proposed
new measures and changes
members notified 2,122 new or changed SPS 28,390 to existing measures
regulations, an all-time high, and up from 1,762
the previous year. Of these, 1,253 were regular
notifications (up from 1,118 in 2019) and 265 Specific Trade Concerns
raised at a full
were emergency notifications (up from 119 in 516 membership committee
2019). Developing countries submitted 71 per
cent of SPS notifications compared with 67
per cent in 2019 (see Figure 4). Disputes started
50 via the Dispute
Settlement Body
Out of 294 COVID-related WTO notifications,
28 per cent were submitted under the
SPS Agreement. At the onset of the crisis,
13 Disputes resulting
emergency trade restrictions on imports of in a ruling
animals and animal products from affected
areas were the most common. But since
April 2020, most notifications and
communications relate to measures to
facilitate trade (see page 109). Some trade-
facilitating examples include the acceptance
*until 31 March 2021.
of electronic/scanned certificates and the
identification of dedicated websites to verify
the validity of, or to submit, certificates.
Capacity-building The note was part of a series on COVID-19
(see page 76). The Secretariat released
Despite the challenges of organizing technical another on “Standards, regulations and
assistance activities, due to the pandemic, COVID-19 – what actions taken by
the WTO Secretariat held 12 SPS technical WTO members?”. Around two-thirds of
assistance activities in virtual formats. notifications by WTO members in response to
COVID-19 are related to product standards
Publications and regulations, or procedures to assess
conformity with such measures (i.e. technical
In 2020, the WTO Secretariat published barriers to trade and SPS measures).
an information note, “Future resilience to
diseases of animal origin: the role of trade”,
noting that the impact of COVID-19 has
far eclipsed that of other recent outbreaks
of such diseases. This note maps out the
international framework in place to address
these issues along with efforts to ensure “In these uncertain times, the SPS
safe trade in animals and animal products, Committee has shown that its work and
including wildlife. It is clear from the current the SPS Agreement are more relevant
pandemic that international cooperation is
essential in global animal health and world
than ever”- DDG Alan Wolff
trade, the publication notes.
A N N U A L R E P O R T 2 0 21 089I M P L E M E N TAT I O N A N D M O N I TO R I N G
Technical barriers to trade
The Committee used new IT tools,
such as the eAgenda online platform, to
continue its work despite the restrictions
stemming from the COVID-19 pandemic.
The Committee’s implementation
of its current 2019-21 workplan
continued, including on developing
guidelines on the choice and design
of appropriate and proportionate
conformity assessment procedures.
The Committee held a number of thematic
sessions on various topics, including
mandatory marking and labelling, technical
assistance, conformity assessment and
good regulatory practices.
The Committee adopted a timeline for
the completion in 2021 of the ninth Progress on several fronts
triennial review of the Technical Barriers
to Trade (TBT) Agreement, which will The TBT Committee continued implementing
lay down its 2022-24 workplan. its 2019-21 workplan, adopted in
November 2018. Alongside its regular
Members’ TBT notifications and meetings, the Committee also held several
specific trade concerns rose to thematic sessions on various issues,
record levels, indicating increasing such as technical regulations (mandatory
use of the Committee’s transparency marking and labelling), technical assistance,
and monitoring mechanisms. conformity assessment procedures and
good regulatory practices. The Committee
also agreed on the timeline for the completion
of its ninth Triennial Review in 2021, which
will adopt its 2022-24 workplan.
Background
The adoption of enhanced procedures
The Technical Barriers to Trade and its use of new IT tools, such as the
(TBT) Agreement aims to ensure eAgenda online platform, allowed the
that regulations, standards, testing Committee to continue its work despite
and certification procedures disruptions caused by the COVID-19
followed by WTO members do not pandemic. Members considered that the
create unnecessary obstacles to eAgenda in particular greatly facilitated
trade. The number of regulations
discussing specific trade concerns
adopted by WTO members has
(STCs). Engagement in STCs increased,
continued to grow in response to
including by LDCs.
consumers’ demands for safe, high-
quality products, the protection of
health and the need to curb pollution The Committee’s work continued with respect
and environmental degradation. to its mandate for developing guidelines
on the choice and design of appropriate
and proportionate conformity assessment
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