TN/RL/W/260  
 
16 July 2015  
(15-3671)  Page: 1/4  
Negotiating Group on Rules  Original: English  
 
 RULES NEGOTIATIONS - TRANSPARENCY 
COMMUNICATION FROM THE EUROPEAN UNION 
The following communication, dated 16 July 2015, is being circulated at the request of the 
Delegation of the European Union. 
 
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 The European Union considers that an outcome from negotiations on Rules is of paramount importance for ensuring fair and open trade. It is in this area that the multilateral trading system 
can continue to provide real additional value.  
 As a follow-up to the open-ended meeting on 29 May 2015 on the issue of WTO transparency, the 
EU in this paper wishes to elaborate on how tran sparency could be improved in the Rules areas. 
While the EU is attached to improving substantive disciplines, the necessity for recalibration across all negotiating pillars suggests that the immediate focus of work should be on improving 
transparency. While satisfying the overall objective of aiming for realistic and doable approaches, 
improving transparency would also be a useful basis for further rules work in the future.  However, the EU deems that an outcome of the DDA should include a roadmap to continue 
negotiating better and more modern rules in fields that are becoming more and more relevant in 
today's trade. This will involve a reflection not only on how to improve existing rules on subsidies, anti-dumping and regional trade agreements, but also exploring whether some of the rules that 
are currently negotiated in plurilateral and bila teral agreements – and respond to what traders 
need – can be developed or consolidated at multilateral level.   
The objective of improving transparency across the Rules area should of course take into account 
the need for special and differential treatment, including in particular the possibility to provide technical assistance to developing countries in order to improve their capacity to fulfil notification obligations.  
 
1  HORIZONTAL SUBSIDIES 
Despite the fact that the Agreement on Subsidies and Countervailing Measures (SCM Agreement) 
obliges Members to notify their specific subsidies to the WTO, the level of compliance is poor and, 
in recent years has actually deteriorated. The problems of compliance are two-fold: quantitative and qualitative. 
 
According to reports prepared by the WT O Secretariat on compliance among Members
1, 43% of 
Members failed to make any notification in the last reporting exercise in 2013 compared to 39% in 2011. Even though the issue of non-compliance ha s been subject to repeated discussion in the 
SCM Agreement bi-annual Committee Meetings since 2009, the situation has not improved.  
 Given this troubling state of affairs, the EU is of the firm view that it is both appropriate and timely 
to examine to what extent the current disciplines  on transparency, including notifications, in 
Article 25 of the SCM Agreement could be amende d to improve the compliance record of Members 
at large.  
                                               
1 G/SCM/W/546/Rev.6. TN/RL/W/260 
 
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Several approaches could be considered either in isolation or cumulatively.  
a. Streamlined monitoring of compliance with notification obligations 
One could envisage greater involvement of the WTO Secretariat in regularly monitoring the 
situation and reporting back to Members. For instance, this could include an examination by the WTO Secretariat of the Semi-Annual reports of Members of preliminary and final CVD 
actions which list the programs countervailed to establish if those programs have been 
notified by the Member granting the subsidy.    Where the subsidies have not been notified, the Secretariat could prepare a notification in 
the usual format and circulate as a supplement to any notification of the Member granting 
the subsidy.   
b. Incentives and disincentives  
The Membership could reflect whether it would appropriate that the notification (or lack 
thereof) would entail consequences for the treatment of the subsidy schemes in question 
under the disciplines of the SCM Agreement. For instance, it could be envisaged that notified 
subsidies would benefit from a rebuttable presumpt ion of non-actionability or an increase in 
the standards for action under the provisions of Part II or Part III of the SCM Agreement (such as de minimis  subsidy or serious prejudice thresholds). Conversely, it could also be 
envisaged that failure to notify subsidies would lead those subsidies to be presumed as 
automatically in breach of WTO disciplines and therefore actionable under the provisions of 
Part II or Part III of the SCM. This presumptio n would also be rebuttable by the subsidising 
Member.  
 The EU is aware that the proposals under (b) could be seen as going beyond pure 
transparency disciplines, but is nevertheless of the view that they would greatly contribute 
to improve adherence to the transparency obligations.  
Under the proposals above, specific measures could be taken to help Members complying with 
their notification obligations, such as specific technical assistance in particular to Developing 
Country Members.  
Given the need to "recalibrate" overall ambitions and to focus on what is "doable", the EU looks 
forward to discussing the feasibility of the above proposals as well as to discussing other possible 
ideas Members would suggest to improve compliance with existing transparency requirements in 
the SCM Agreement.  
 2  ANTI-DUMPING 
The number of Members which resort to the anti-dumping (AD) instrument has significantly 
increased since the entry into force of the Urugua y Round Agreements. Often, such increase in AD 
activity is not accompanied by sufficient transparen cy with regard to the procedures and practices 
followed. 
 
This has caused situations where exporters are face d with uncertainty as to what they can expect 
during an anti-dumping proceeding (e.g. in terms of information required, verification visits, or 
language to be used), and, how the investigating authority of an importing country will normally 
react to certain situations (e.g. absence of domestic sales, or method of dumping margin calculation).   
While the work of the Committee on Anti-dumping Practices and of the Technical Group have gone 
some way in sharing knowledge of each other's practice, there remains room for improvements with regard to the monitoring of Members' actual AD policies and practices.  
 
Increased transparency is certainly beneficial to all as such, but by fostering a better understanding of each other's practice, it might also contribute to a reduction of disputes which, as 
we all know, are also on an exponential increase. 
 TN/RL/W/260 
 
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  This was the reason behind the EU textual proposal to the RNG in 2006 (TN/RL/GEN/110). The 
proposal was to establish a factual review system of each Member's AD practices. Such a review, made on the basis of a factual report under the resp onsibility of an independent entity such as the 
WTO Secretariat, would include a description of ac tual policies and practices and organisational 
aspects of the Member subject to review. 
 The EU continues to believe that the reasons which underpinned the 2006 proposal are more valid 
than ever.  
 In the EU's view, the un-bracketed Chair's text of 2011 on a new Article 18.6 and Annex III [Procedures for the review of Members' AD policy  and practices] could serve as a good starting 
point for further work.  
 3  FISHERIES SUBSIDIES 
The EU believes the following elements could be of broad interest within the WTO Membership and 
could constitute a possible deliverable in this area.  
3.1  Transparency 
Regarding transparency, there seems to be a cons ensus that notification of fisheries subsidies 
must be improved. The EU proposal would build on  the existing notification mechanism under the 
Subsidies and Countervailing Measures (SCM) Agreement. While the timing of notification (every 
two years) is satisfactory, the content of the noti fication for fish subsidies needs improvement. The 
objective would be that notification of fish subsidies above a certain threshold would contain elements in addition to those included in notification of subsidies in other sectors. Subsequently, 
these notifications would be summarised in a specific report. All subsidies currently falling under 
the scope of the SCM Agreement would continue to be notifiable and the Committee on SCM would continue to issue annually a horizontal report. 
 
The format 
Several WTO Members appear to be in favour of a new template for the notification of fisheries 
subsidies as the current template is very general. Categories of subsidies according to their nature 
and/or objective would be defined, and subsidies classified accordingly. Other elements to be 
considered include the management measures associated with the subsidies, the rules on public aid intensity, the fleet (gear, vessel length, etc.). Levels of subsidies should be compared against 
economic data on fleets and catches. Careful attention should be paid to avoid duplication with 
existing sources of information. One good practice example would be the current information system on subsidies (referred to as Governmental  Financial Transfers) carried out by the OECD 
where Member States voluntarily communicate data on subsidies.  
 Review of the notified subsidies 
Systematic review of the fish subsidy notifications by fisheries policy experts would give meaning 
to this exercise. A specific report could be prepared by the WTO Secretariat with comparative 
tables and factsheets. It would highlight the compliance of Members with the notification obligation.  
 
3.2  Discipline 
In addition to an improved transparency mechanis m, if there is progress in the three other Rules 
area, the EU is open to discuss disciplines on fish subsidies. 
 The EU proposes that duly notified subsidies wo uld be presumed to be non-actionable or more 
difficult to act against, similarly to what is proposed in the horizontal subsidy negotiations. A 
contrario , failure to properly notify subsidies in compliance with the SCM requirement would lead 
to those subsidies being presumed as automatica lly in breach of WTO disciplines and therefore 
actionable under the provisions of Part II or Part III of the SCM. This presumption would be 
rebuttable by the subsidising Member. If agreed in  the SCM debate, this would automatically apply 
to fish subsidies. If not, this could be proposed specifically for the fisheries subsidies negotiation.   TN/RL/W/260 
 
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  If a consensus emerges to prohibit the most harmful subsidies contributing to overcapacity and 
overfishing, it would be a positive and concrete outcome of this round. However, to be efficient and enforceable, the rules and the categories of pr ohibited subsidies should be precise, verifiable 
and legally certain. 
 
The principle of prohibiting subsidies to vessels engaged in IUU fishing is beyond objection. However, this principle must be efficiently appl ied and enforceable. Any form of public support 
given specifically to operators that were or are involved in IUU operations could be prohibited. An 
additional avenue to explore would be the extent to which obligations to recover past subsidies can be implemented in case an operator get involved in IUU operations. 
4  REGIONAL TRADE AGREEMENTS 
The Transparency Mechanism for RTAs, since its adoption and implementation on a temporary 
basis, is working properly. Its role could be further strengthened making this mechanism as permanent. 
 
The EU believes that Members have gained sufficient experience from the provisional application of the TM Decision and that it is therefore time to  engage with Members under the direction of the 
Chair on its review focussing, in particular, on elements that would be conducive to more clarity 
and transparency and with the final aim to have a permanent mechanism. 
 
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