. /.   WORLD TRADE  
ORGANIZATION  TN/RL/W/253 
21 April 2011 
 (11-2022) 
Negotiating Group on Rules  
  
 
NEGOTIATIONS ON REGIONAL TRADE AGREEMENTS:   
SYSTEMIC ISSUES  
 
REPORT BY AMBASSADOR DENNIS FRANCIS  
CHAIRMAN, NEGOTIATING GROUP ON RULES 
 
 1. The scope of the discussion on systemic issues on regional trade agreements is very broad.  
Two background documents from the Secretariat have  been distributed listing "systemic issues", the 
most recent dating from January 2011;  24 s ubmissions have been made by Members. 
2. During 2004 and 2005, when negotiations focused  on systemic issues, they were based on 
priority issues as identified in participants' writte n and oral submissions to the Group.  Issues 
addressed therein included the definition of "substan tially all the trade", the length of the transition 
period, criteria to measure the incidence of "oth er regulations of commerce" on third parties, 
flexibility for developing countries and the coherence of rules for  RTAs involving developing 
countries.   
3. Two broad issues have been the subject of inten se scrutiny:  "substantially all the trade", and 
special and differential treatment for developing countries.   
4. On "substantially all the trade" (SAT), severa l proposals focused on the criteria for measuring 
SAT.  Around a third of the proposals that have been made concerned the setting of a minimum benchmark for SAT, on the basis of bilateral trade, tariff lines, both, or a combined average of both.  
It was proposed that SAT should be measured both at entry into force and at the end of the transition 
period.  Also, proposals were made with respect to  a clarification of the qualitative assessment of SAT 
(such as the treatment of major sectors and ta riff-rate quotas), as a necessary complement to any 
quantitative assessment. 
5. Special and differential treatment has also been the subject of various proposals, all of which 
were dealt with in various formal and informal meetings.  These proposals suggested incorporation of 
additional flexibilities for deve loping countries in either Article XXIV of the GATT 1994 , the 
Understanding on the Interpretation of Article XXIV of GATT 1994 , and/or the Enabling Clause .  A 
proposal made early in 2011 for amendments to Article XXIV of GATT 1994 has reactivated 
discussions for additional special and differential treatment in respect of agreements involving 
developing and developed countries, but sharply divergent views exist on the modifications being 
proposed.   
6. A late-comer to these discussions has been th e proposal for a forward-looking, post-Doha 
work programme on all systemic issues.  On the basis of what the Membership was telling me, I 
suggested, without prejudice, and on the clear understa nding that nothing is agreed until everything is 
agreed, that it might be pragmatic to commence a discussion on a work programme in parallel with 
the discussion of systemic issues.  Reactions have   been varied:  some Members stressed that 
considering the development mandate of the Round, a work programme could not be in lieu of, but 
only in addition to, an outcome on the developmen t-related aspects of RTAs.  They assert that TN/RL/W/253 
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  discussions on a work programme, at this stage, would divert attention from the Group's mandate on 
development-related issues.  Other Members were of the view that given the prevailing situation, the 
most practical approach on systemic issues would be to begin, as soon as possible, to explore a forward-looking post-Doha work programme, and with that in mind, possible elements to be included 
therein have been suggested.  Moreover, they hold the view that any discussion of selected aspects of 
the systemic issues would have to be balanced by a full discussion involving all elements.   
7. I have taken note of this situation and informed the Group that at this point in time my 
proposal to approach these issues in tandem is no longer on the table, pending any renewed signals 
from the Membership suggesting at what point, if at  all, it would be desirable to launch discussions on 
a post-Doha work programme.  More recently, and in light of calls made by some Members to 
commence this process, I again tested the Group's read iness to so engage and must report, with regret, 
that the situation remains unchanged. 
8. To conclude, it is clear that notwithstandi ng the mandate in Doha and the Ministerial 
Declaration in Hong Kong, China: 
(i) in essence, the objectives of various Members in these negotiations remain 
conceptually different;  and 
 
(ii) gaps persist in Members' positi ons on all elements proposed. 
 9. I reaffirm my advice to Members that unless they adopt a pragmatic, flexible and less 
doctrinaire approach to these negotiations it is  unlikely that this impasse will be overcome. 
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