WORLD TRADE  
ORGANIZATION  WT/GC/W/617 
14 December 2009 
 
 (09-6467) 
General Council 
17-18 December 2009 Original:   English 
 
 
 
THE FINANCIAL AND ECONOMIC CRISIS AND THE ROLE OF THE WTO 
 
Communication from Argentina and Ecuador  
 
 
 The Chairman of the General Council has received the following communication, dated 
11 December 2009, from the Delegations of Argen tina and Ecuador with the request that it be 
circulated to Members and included in the agenda for consideration at the meeting of the General 
Council to be held on 17-18 December 2009. 
 
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I. INTRODUCTION 
1. In previous communications1, Argentina and Ecuador highlighted the need for the WTO 
Secretariat to conduct a systematic  and comprehensive analysis on th e effects of stimulus programmes 
given in response to the crisis.  Such analysis would represent an improvement on transparency and a 
contribution to a better understanding on possible impacts of those programmes on trade flows.  An initiative in the same line has been discussed at a technical leve l in the framework of the Committee 
on Trade in Financial Services.
2 
2. The present communication aims to introduce some provisional ideas in order to contribute to 
a collective discussion on the methodological aspects of our proposal that could be considered when developing such analytical work. 
3. In general terms, we understand that it is nece ssary a two-tier approach.  The first level would 
refer to an evaluation of the information and data already available for the WTO Secretariat, while the 
second would relate to a systematic analysis of that information. 
II. IMPROVING INFORMATION ALREADY AVAILABLE 
4. The first stage involves evaluating the amount and reliability of the information on stimulus 
packages available at the present moment.  In that sense, the reports prepared by the Director-General
3 
contain useful data and information.  That inform ation has been consolidated in Annex II of the 2009 
Annual Report to the TPRB4, and was verified with participation of Members. 
5. We consider, on that basis, that there is room  for improvement to enhance transparency and 
facilitate further analysis.  With that objective,  in future reports some of the following assessments 
could be developed: 
                                                      
1 WT/GC/W/602  and WT/GC/W/609. 
2 Room document submitted by Argentina, Ecuador, India and South Africa. 
3 JOB(09)/2, WT/TPR/OV/W/1, WT/TPR/OV/W/2. 
4 WT/TPR/OV/12 Annex 2 “General  Economic Stimulus Measures”. WT/GC/W/617 
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  • Identification of different components of st imulus programmes, including “buy/invest 
local” requirements. 
 
• To the extent possible, specification of the amount involved for each component of 
the stimulus programs and not only the total amount. 
 
• Differentiation by type of measure, such  as trade measures, production subsidies, 
consumer subsidies, export subsidies, financial aid, government procurement, 
infrastructure, aids for household income, etc.   
 
• Specification on whether those different components are applied on a permanent or a 
temporary basis (in the last case, envisaged time frame). 
 
• Specification of the status of implementation of each component of the stimulus 
programmes. 
 
6. For the purpose of harmonization, it would be u seful to apply some kind of classification of 
the sectors involved, such as the International Sta ndard Industrial Classification (ISIC), which makes 
a classification by activity; or, alternatively, th e Central Product Classification, CPC, which makes 
classification by product.  
7. To the extent possible, this exercise should f acilitate a better understanding of the linkages of 
stimulus programmes and other macroeconomics indicators, including production, trade, as well as those related to the fiscal, financial and monetary systems. 
III. METHODOLOGICAL APPROACH 
8. Along with the improvement on transparency de tailed in the previous section, a second level 
of work would involve an in-depth analysis on possible trade impacts of stimulus programmes. 
9. In order to develop an appropriate methodolog ical approach it is necessary to take into 
consideration two facts: the limited amount of information already available and the fact that some of the measures to be analyzed coul d differ from traditional measures. 
10. Taking into account the above mentioned, we woul d like to propose that Secretariat began its 
work following, as a first stage, a qualitative approach , on the basis of information already available. 
This qualitative methodology would include a theore tical analysis which – while not seeking to 
quantify the magnitude of the impact of individua l measures on trade and production – could facilitate 
a better understanding on their effects. 
11. Qualitative analysis has been ex tensively utilized for traditional trade measures such as tariffs, 
tariff quotas, export subsidies, and could be easily adapted to cover fiscal and financial measures. 
12. As an example, the OECD has been conductin g research on agricultural support measures in 
terms of their effects on decisions of producers and consumers. Such analysis measures the monetary transfers (support) associated with agricultural po licies in OECD countries (and increasingly, in non-
OECD countries), using a standard method. For this purpose the OECD has developed several 
indicators of transfers, the most important and central one being the Producer Support Estimate (PSE). 
13. In short, the Producer Support Estimate (PSE) estimates the annual monetary transfers to 
farmers from three broad categories of policy measures that:  WT/GC/W/617 
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  • Maintain domestic prices for farm goods at levels higher (and occasionally lower) 
than those at the country’s border (market price support (MPS) estimation).  
 
• Provide payments to farmers based on, for example, the quantity of a commodity 
produced, the amount of inputs used, the numbe r of animals kept, the area farmed, an 
historical (fixed) reference period, or farmers’ revenue or income (budgetary 
payments). 
 
• Provide implicit budgetary suppor t through tax or fee reducti ons that lower farm input 
costs, for example for investment cred it, energy, and water (budgetary revenue 
foregone estimation). 
 14. This classification of categories of po licy measures based on how the policies are 
implemented has the potential to show the degree of flexibility that farmers have in their production 
choices and thus how different policies influen ce farmers’ decisions to produce commodities and 
other goods and services using farm resources. 
15. Other more sophisticated OECD methodologies, such as the Policy Evaluation Model (PEM), 
have been designed to investigate the potential im pacts of actual and hypothetical policy reforms on 
production, consumption, trade, a nd welfare and to assess scenarios illustrating the impacts of policies 
on production, trade, and welfare within and across countries. 
16. We believe that this kind of analysis could be re plicated in relation to this proposal.  Thus, as 
a first stage, an analysis along the lines of the PSE could be performed by the WTO Secretariat for 
stimulus programmes. 
17. In addition to this methodological approach, ther e are other aspects to be considered in order 
to reassure that this work aims at an improvement of transparency rather than at a “finger pointing 
exercise”: 
• The analysis should be factual and provi de Members with elements for a better 
understanding of impacts on trade of non-traditi onal measures, as well  as to facilitate 
comparability of the measures.  
 
• The purpose of the analytical work by the Secretariat should not be an exhaustive 
catalogue of measures. 
 
• The analysis should differentiate betwee n horizontal measures aimed to expand the 
global demand and other measures directed to specific sectors (such as, car industry or financial sector). 
 
• The analysis should not involve an evaluati on of compliance with notification or other 
obligations. 
 
• A disclaimer could be included with a similar wording to that of the Annex 3 of the 
Marrakech Agreement “Trade Policy Revi ew mechanism”, indicating that this 
analysis: “…is not intended to serve as a basis for the enforcement of specific 
obligations under the Agreements or for di spute settlement procedures or to impose 
new policy commitments on Members”. 
 WT/GC/W/617 
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  IV. CONCLUSIONS 
18. We consider the two-tier approach detailed above as a realistic work programme for 
improving our understanding of the impact of these non-traditional measures.  Furthermore, it could represent a contribution to strengthen the role of th e WTO in response to the present and future crisis. 
 
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