WORLD TRADE  
ORGANIZATION  TN/MA/W/101 
17 January 2008 
 (08-0226) 
Negotiating Group on Market Access Original:   English 
  
 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS  
 
Revised Submission on Export Taxes
 
 
Communication from the European Communities 
 
 The following communication, dated 16 January 2 008, is being circulated at the request of the 
delegation of the European Communities. 
 
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 A. 
INTRODUCTION  
1. All import-dependent WTO Members are sensitive to the measures imposed by a few 
countries that restrict exports. In the extreme case, export taxes may be set at prohibitive levels and, 
hence, be tantamount to export restrictions or ev en export prohibitions. Expor t taxes can thus have 
serious distortive effects on global commodity trad e when applied by major suppliers. In addition, 
when used for industrial or trade policy purposes, e xport taxes can serve as indirect subsidization of 
processing industries and influence international trad ing conditions of these goods. As in the case of 
import tariffs, export taxes have similar effect to ta riff escalation. Thereby, the measures may obstruct 
the aspirations of WTO Members, in particular deve loping countries, to build new (infant) processing 
industries in specific sectors where export taxes by  other countries are prevalent on the raw materials 
or other inputs (as illustrated by the Joint Statement by the leather associations of West Africa and the 
EU previously submitted by the EC to the NGMA). Furthermore, export taxes can serve to displace 
imports on the market of the country imposing th e taxes, both for imported goods in direct 
competition with the taxed products and for impor ted processing products. In such cases, export taxes 
are similar other forms of NTBs on imports. 
2. These various negative effects of export taxes are not new. But among the reasons for the 
growing importance of export taxes today are inter alia : 
• the recent proliferation in the use of these inst ruments, which is possible under the weaker 
WTO rules on export taxes compared to those on import restrictions or other forms of NTBs; and  
 
• the short global supply of some specific commodities, despite their abundance in a few 
countries – a situation that is aggravated by export taxes in key supplying countries. 
 3. Finally, it should be underscored that the cu rrent proliferation of export taxes and their 
increased distortions to global trade are in contra diction to the developments on import barriers. 
Serious efforts are underway in DDA to reduce duti es, eliminate tariff escalation and minimise NTBs 
on import. In contrast, very little progress has so far been made on export taxes.  
 TN/MA/W/101 
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  B. EC
 POSITION ON EXPORT TAXES  
4. The EC proposal on export taxes in the NAMA negotiations tabled in April 2006, and the 
subsequent legal draft tabled in March 2007, aims to fully reflect the importance of establishing balanced and proportionate WTO rules for Members’ use of export taxes. The main elements of the 
EC proposal on export taxes are threefold:  
(1) Confirmation and operationalisation of basic GATT disciplines to apply to those 
situations where WTO Members use export taxes for industrial or trade policy purposes with negative effects on other WTO Members and especially on developing countries. In line with core objectives of the WTO and GATT, this would prevent “beggar thy neighbour” practices. In partic ular, the approach proposed builds upon 
existing GATT rules on export duties and charges, inter alia  GATT Articles I, VII, 
VIII and XVII, as well as incorporates othe r key elements of the GATT acquis. Under 
the EC proposal, this also includes a number of legitimate situations under existing GATT rules where export taxes could be main tained or introduced, such as financial 
crises, infant industry, environment (preserva tion of natural resources) and local short 
supply.  
(2) Incorporation of additional flexibility for small developing country Members and 
least-developed country Members to mainta in or introduce export taxes in other 
situations, i.e. over and beyond what would be allowed through the strict application 
of GATT rules to export taxes.  
(3) Limitation of the GATT disciplines for e xport taxes to non-agricultural products in 
recognition of the mandate for NAMA (hen ce, agricultural products are excluded 
where export taxes are currently in force in many developing countries).  
5. Thereby, the EC proposal seeks to establish a workable compromise in the area of export 
taxes between those many countries affected by th e “beggar thy neighbour” measures adopted by a 
few major suppliers and other large economies, a nd the use of export taxes by small economies, 
which includes the majority of developing countries. Nothing in the EC proposal prejudges the use of 
export taxes for legitimate policy reasons under re levant GATT provisions. As such, it should be 
recalled that the current proposal represents a major refinement of the initial EC submission on export 
taxes in NAMA in 2003, in reflection of the cons tructive engagement by and discussions with many 
Members, not least small and vulnerable developing countries.   
C. 
POSSIBLE FURTHER REVISIONS OF THE EC PROPOSAL  
6. The EC remains ready to explore with Member s other approaches, whether alternative or 
complementary, for addressing the global trade problems caused by export taxes. Of course, in doing so, the EC considers that any revised proposal woul d still have to provide appropriate remedies to the 
specific problem related to the use of export tax es as “beggar thy neighbour” instruments. As for 
possible horizontal approaches to NTBs in line with paragraph 14 of the July Framework, the EC also 
believes that any negotiated solution for expor t taxes would have to build upon existing GATT 
concepts and rules. Therefore, any revised a pproach should ensure, as a minimum, increased 
transparency and predictability. 
7. Concerning transparency, it is a core objective of the WTO to ensure that Members are fully 
informed of measures taken by any other Member that may influence trade. In this context, it is also 
worth recalling that all WTO Members have already agreed to notify export taxes, as well as other 
export measures. The Ministerial Decision on No tification Procedures adopted on 15 December 1993 
establishes that the introduction or modification of  such measures is subj ect to the notification  TN/MA/W/101 
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  undertakings of the Understanding Regarding the No tification, Consultation, Dispute Settlement and 
Surveillance adopted on 28 November 1979 (BISD 26S /210). On the other hand, the Ministerial 
Decision of 1993 has had little, if any, practical eff ect on Members’ level of transparency. Hence, the 
EC believes that future transparency provisions on  export taxes would need to ensure that existing 
obligations are made operational and enforced  in a satisfactory manner. The Uruguay Round 
Understanding on the Interpretation of Article XVII of GATT 1994, whic h pertains to the notification 
requirements of Members’ state trading enterprises that influence the level or direction of imports and exports, could serve as a point of reference in this  respect. Finally, the EC considers that all WTO 
Members would be able to comply with such basi c transparency commitments, in line with what 
already applies for other trade policy instrument s, although appropriate special and differential 
treatment should be envisaged for developing c ountry and least-developed country Members.    
8. Regarding predictability, it is a core objec tive of the WTO to ensu re that Members can 
reasonably expect what measures any other Member may impose that influence trade. Therefore, EC 
considers that scheduling and binding of Members’ export taxes could offer an appropriate route of 
ensuring adequate predictability. Under such a nego tiated solution, similar to import duties, the EC 
deems that export taxes would have to be bound at a level that “reduce or eliminate tariff peaks, high 
tariffs, and tariff escalation” in line with paragra ph 16 of the DDA mandate. Moreover, in accordance 
with the spirit of the July Framework and in reco gnition that export taxes have to date only been 
scheduled or bound by a few Members, the EC wo uld be ready to support specific flexibilities for 
small and vulnerable economies. 
9. Thereby, this revised approach would represen t a shift from a general prohibition of export 
taxes, albeit with exceptions based on GATT rules, to the establishment of rules on transparency and 
predictability based on WTO objectives, concepts and principles. In practical terms, besides 
maintaining the right of WTO Members to apply export taxes when exceptional circumstances under 
GATT rules are invoked, the approach would imply that: 
(1) WTO Members should notify the introduction or modification of export taxes; 
(2) WTO Members should undertake to sch edule export taxes on non-agricultural 
products in their Schedules of Concessions a nd bind the export taxes at a level to be 
negotiated, except that: 
(a) Least-developed countries would undertake to schedule export taxes but may 
maintain these export taxes unbound; and 
(b) Paragraph 6 countries would schedule e xport taxes but may maintain these 
export taxes unbound for a certain number of tariff lines (the number is to be 
negotiated), in reflection of their specific developmental interests and 
concerns.     
D. 
CONCLUDING REMARKS  
10. Finally, the EC would like to underline that, in line with paragraph 16 of the DDA mandate, 
Members have agreed to “to reduce or as appropriate eliminate tariffs, including the reduction or 
elimination of tariff peaks, high ta riffs, and tariff escalation, as well as non-tariff barriers, in particular 
on products of export interest to developing countries”. Hence, no matter how Members may want to 
define export taxes, tariffs and non-tariff barri ers are included in the DDA mandate, which has no 
reference as to whether such measures are imposed on imports or exports. As clearly demonstrated in 
the introduction, apart from other effects including dist ortions to global trade, export taxes also often 
displace exports of other WTO members through the artificial price advantage provided to domestic 
industries. Therefore, the EC considers claims  that export taxes are a priori excluded from TN/MA/W/101 
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  negotiations to be in contradiction with the manda te. Such claims could set a dangerous precedent for 
other mandated parts of the nego tiations on non-agricultural market access. However, the EC fully 
recognizes that Members’ positions may differ on the appropriate level of ambition and approach to 
export taxes. To respond to Members’ different inte rests and concerns, the EC is thus prepared to 
thoroughly revise its proposal following the general pa rameters set out above a nd to consult with all 
interested Members on specific legal drafting. 
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