WORLD TRADE  
ORGANIZATION  TN/RL/25 
6 May 2010 
 
 (10-2528) 
Negotiating Group on Rules  
  
 
 
COMMUNICATION FROM THE CHAIR OF THE NEGOTIATING GROUP ON RULES,  
AMBASSADOR VALLES GALMÉS 
 
The situation of the RTA Negotiations
 
 
  Dear Colleagues, as you know I will be s oon relinquishing my responsibilities as Chair of the 
Negotiating Group on Rules.  I believe that this ma y be a good opportunity to reflect on the evolving 
situation regarding regional trade agreements a nd their potential impact on the multilateral trading 
system.  Also, having worked with you for over five  years, I consider it my duty to take stock on 
where we are in the area of regional trade agreem ents and present you with a few thoughts for the 
future.   To take stock of the current situation, let me first point out that the number of notified 
RTAs in force continues to increase, 276 notifica tions currently, compared to 195 in 2001 when the 
Doha Round was launched and 112 wh en the Committee on Regional Tr ade Agreements (CRTA) was 
established in 1996.  Thus, the trend towards more RT As is being reinforced, with all its implications. 
  Although the last time we discussed systemic issues in RTAs was in 2007 and we have not met since, the NG Rules Group worked  very actively before that to produce what I believe is an 
important result of the Doha negotiations, namely  the Transparency Mechanism for Regional Trade 
Agreements.  Indeed some members considered  this the very first harvest of the DDA.  
  The Mechanism which was established throug h a General Council Decision of 14 December 
2006, has provisionally been in place since 2007 and I have heard only positive things about it.   
 
 Thus far, the CRTA has considered 66 RTAs based on factual presentations prepared by the 
Secretariat;  although the experience of the CTD has been relatively limited in comparison, it too has considered 3 agreements, with one  additional agreement scheduled fo r consideration next month.   
  I have consulted periodically with the Chair of the CTD about this provisional experience and 
it is my view that the Mechanism is providing Members with valuable information on goods and 
services liberalization and regulatory provisions in  RTAs.  It has also helped to fulfil other 
transparency needs, such as the development of  a public Database on RTAs on which feedback from 
Members and the public has been positive.  It has also allowed the Secretariat, through its factual 
presentations, to gather information on agreements th at are in force but not yet notified to the WTO, 
and to use that information to improve notifications  and develop a more complete picture of all RTAs 
in force.  These in my view, c ould only be good news for the members, particularly developing 
countries which have fewer information sources about wh at is going on in the real world of trade.  
  Moreover, on 4 May, 2010, in the last Gene ral Council meeting I attended as Chair of the 
NGR, I was delighted to see the great interest and support that the joint proposal from China, India 
and Pakistan, contained in doc ument WT/GC/W/621, raised among the members.  Furthermore, 
following the formal meeting of the General C ouncil and upon what was agreed in that session, TN/RL/25 
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  Ambassador John Gero, as Chair and on behalf of that Body, requested me to start immediate 
consultations with the members with the view to discussing the possible adoption of the Transparency 
Mechanism on a permanent basis.     Under the particular circumstances in whic h I receive these duties you will understand that I 
can only underscore them as an urgent task for the incoming Chair.  But nothing prevents you as 
members, to start consulting informally among yourselves and as from now, on what to do in this regard.  As I have said in respect of other ar eas of the NGR, surprise the new Chair with good 
preparedness and even with consensus.  You may as well recall that this was precisely my suggestion 
to the General Council in its last meeting in 2009.  We have to move to the consideration of the 
Transparency Mechanism on RTA on a permanent basi s.  With the necessary adaptations this could 
only help us all.   Let me now refer to the crucial area of the systemic issues.   
 In the Negotiating Group, Members will recall that while we had decided to give priority to 
discussions on transparency, substantive discussions on systemic issues were also launched in June 
2004, on the basis of a road map suggested by the Chairman.  The road ma p was based on seventeen 
submissions by delegations betw een 2001 and October 2005 after whic h there have been no further 
submissions.    
 Four informal roadmaps were circulated, two dealing with broad subjects – namely coverage 
of RTAs, neutrality of RTAs vis-à-vis  third-parties, and other issues (coherence, development-related 
issues, interaction between RTAs and the multilate ral trading system, effects on non-parties, and 
retroactive application of rules) – while two others dealt more specifically w ith "substantially all the 
trade" and transition periods.   
 
 How would I characterize these roadmaps?  These instruments presented "priority" issues as 
identified in Members' written and oral submissions to the Group, but did not
 constitute a 
comprehensive list of systemic issues for negotiations.     Intrinsically, in keeping with the rule-making approach taken by the Group, they had a legal 
focus, and offered a logical approach to the discu ssions, both in goods and services, while aiming to 
maintain balance between potentially more and less controversial issues. 
  We know the story so far:  the Group has expl ored all the proposals by Members and all the 
points raised by the road map, some more deeply than others.  The issues of "substantially all the 
trade" (SAT) and transition periods, for example, were discussed in greater depth and, several 
proposals were made on the criteria for measuring SAT.  The discussions, although useful, have 
shown that there was, and remains, no appetite for in terpreting, on a strict legal basis, controversial 
aspects of the WTO rules on RTAs.  
The present situation and a possible way forward
 
  The situation at present is that while we have a growing spaghetti bowl of regional trade 
agreements, some more comprehensive than othe rs, and a well functioning Mechanism to promote 
transparency and our understanding of these RTAs, we are not making much progress in the substantive part of our work to define WTO rules on RTAs.   
 
 The problem, it would seem to me is that we are trying to negotiate rules on RTAs, without a 
complete understanding of the market access pursued  by RTAs and implications of RTAs on the 
parties' and multilateral trade.     TN/RL/25 
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   Given this reality, it would seem to me that we might benefit from not only discussing the 
adoption of the Transparency Mechanism on a permanent basis but actually using  the 
Transparency Mechanism in a more effective manne r than we have so far.  The Transparency 
Mechanism is already improving our understanding of  newly notified RTAs on an individual basis.  
However, we probably need a more global picture of  the systemic impact of RTAs on the multilateral 
trading system to help us understand how to pur sue our legal discussions in the NGR.  You will 
remember that the CRTA had already started work  on systemic issues, and had agreed on a three 
pronged approach including legal analysis; horizontal  comparisons of RTAs;  and a debate on the 
context and economic aspects of RTAs.    
 In this regard, the Secretar iat had prepared two background pa pers in 2002 but with systemic 
issues being taken up by the NGR, further work was su spended.  However, now that the legal work in 
the NGR on systemic issues is clearly not advancin g, it would seem to be an opportune moment for 
the CRTA to take up again its mandate of system ic economic analysis.  Moreover, it now has the 
additional experience and analysis gained through the Transparency Mechan ism and the Database to 
help it and should do so. 
  It is very clear to me and perhaps to you al so, that regional trade agreements are going to 
remain an important and perhaps permanent part of the multilateral trading system.  We will have to 
look at their systemic implications sooner or later.    
 Moreover, we will have to look at their impli cations not only for multilateral trade rules, but 
also on our own individual economies and economic growth as the complexity of the RTA network 
grows.  While our goal remains a better definition of  WTO rules on RTAs, we also need to understand 
the economic implications of RTAs better before th e rules can be “clarified and improved”.  For this, 
we in the Rules Group need input from the CRTA and from the information emerging through the 
Transparency Mechanism on additional liberalizatio n undertaken by RTAs and their trade and wider 
impacts.     Furthermore it is my personal feeling that  beyond these consultations among the regular 
bodies of this institution and the NGR, we will also ne ed to prepare ourselves for the conclusion of the 
DDA. 
 
 In doing so it will be good to start visualizing what a built-in agenda would be for future work 
after the DDA is successfully concluded.  Addressi ng the systemic issues that the ever increasing 
number of RTAs brings to us might seem a daunting task.  But it will not go away and we need to 
address those issues.  They will certainly remain  a concern for ourselves and our successors, as we 
strive for more fair trade and a more integrated world. 
 
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