Proposal for a COUNCIL DECISION establishing the European Union position within the General Council of the World Trade Organization on the accession of the Republic of Vanuatu to the World Trade Organization
Date: 2011-04-06
Institutions: European Commission
Subjects: Vanuatu, World Trade Organisation, enlargement of an international organisation, the EU's international role

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EUROPEAN COMMISSION 

Brussels, 6.4.2011 
COM(2011) 185 final 

2011/0077 (NLE) 

Proposal for a 

COUNCIL DECISION 

establishing the European Union position within the General Council of the World 
Trade Organization on the accession of the Republic of Vanuatu 
to the World Trade Organization 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Overview of the Terms of Vanuatu's Accession to the WTO 

I. INTRODUCTION 

Members of the World Trade Organization (WTO) and the Republic of Vanuatu have reached 
the  concluding  stage  of  an  agreement  on  the  terms  for  Vanuatu's  accession  to  the 
organization.  This  comes  after  many  years  of  negotiations,  which  began  when  Vanuatu 
submitted  its  application  to  join  the  WTO  in  1995.  Vanuatu  concluded  its  accession 
negotiations in 2001 and the European Community formally accepted the accession package 
at the time. However, subsequently, Vanuatu requested more time to consider the accession 
package.  In  2008,  Vanuatu  announced  that  it  was  ready  to  resume  work  on  its  accession 
process.  Since  2009,  technical  work  has  therefore  been  carried  out  to  update  the  accession 
package  agreed  in  2001.  Vanuatu's  request  for  accession  has  been  examined  in  accordance 
with the guidelines set out in the WTO General Council Decision of 10 December 2002 on 
the accession of least-developed countries (LDC) and there must now be a Council Decision 
approving  the  terms  of  Vanuatu's  accession,  before  the  EU  can  formally  support  Vanuatu's 
entry. 

A summary of the terms of the accession is set out below. 

II. SUMMARY OF TERMS OF VANUATU'S WTO ACCESSION BY SECTOR 

The  average  final  bound  rate  (FBR)  of  Vanuatu  is  approximately  40%.  The  final  bound 
average  of  40%  is  also  the  average  in  most  of  the  industrial  and  agriculture  sectors,  with 
relatively few exceptions. 

Out of 5060 tariff lines in Vanuatu's schedule, only 98 will not reach its FBR at the moment 
of accession, and will consequently have an implementation period. Among those 98 lines, 52 
lines will be reduced to final bound rates on 1 January 2011,  45 lines (including wines and 
spirits)  will  be  reduced  to  final  bound  rates  on  1  January  2013  and  1  line  (beer)  will  be 
reduced to final bound rates on 1 January 2015. 

These average levels for tariffs are quite reasonable considering the LDC status of Vanuatu, 
the small size and vulnerability of its economy, and its insular character. Past EU practice in 
relation  to  LDCs  has  been  to  accept  as  reasonable  these  tariff  levels  for  comparable-sized 
economies. Vanuatu is participating in the negotiations of a comprehensive EPA as part of the 
Pacific-group of ACP countries. 

Industrial Goods 

–  The average FBR for non-agricultural products is 39.6%.  

–  Most of industrial sectors are bound at average tariffs of 40%, with a few peaks of 

65% in some tariff lines in Chemicals, Textiles, Paper and Machinery.  

–  The highest levels of average tariffs are found in Furniture and Toys (final bound 

tariffs above 60%).  

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–  Only  pharmaceutical  (duty  free)  and  Medical  Equipment  products  are  bound  at 

average levels below 10%. 

Agricultural goods 

–  On agricultural goods FBR average is 42.8%.  

–  The agriculture peaks are 75% in mineral waters and beer. Fresh vegetables and 

fish at 65%. Tobacco final bound rates are also peaks at 55%. 

Services  

Vanuatu's  schedule  of  specific  commitments  in  services  is  very  satisfactory  considering  its 
LDC status. Vanuatu will undertake market access and national treatment commitments in a 
broad  range  of  services  sectors,  including  professional  services,  communication  services 
(courier  and 
services),  construction,  distribution,  educational, 
environmental, financial, tourism and air transport services.  

telecommunication 

Protocol commitments 

In the final, multilateral stage of the accession process, WTO Members collectively sought to 
ensure  the  basic  compatibility  of  Vanuatu's  trade  laws  and  institutions  with  WTO  rules  and 
agreements,  setting  these  out  in  the  Protocol  of  accession  and  Working  Party  Report.  The 
following issues are of particular interest to the EU: 

Trading rights  

Vanuatu  has  committed,  by  the  date  of  accession,  to  issue  upon  request  to  any  domestic  or 
foreign  entity  automatically  and  promptly,  business  licences  enabling  foreign  and  domestic 
holders  to  engage  in  the  importation  and  exportation  of  goods  without  engaging  in 
manufacturing or distribution. In addition, a single licence category is to be created to allow 
licence  holders  for  distribution  to  engage  in  importation  and  exportation  as  well.  Business 
licence fees that violate any commitment to non-discrimination and national treatment are to 
be removed. The relevant legislation has recently been amended and implemented. 

Internal taxes on imports 

Vanuatu committed to apply its domestic taxes in full compliance with the relevant provisions 
of  the  WTO  in  a  non-discriminatory  manner  to  imports  from  all  WTO  Members  and  to 
domestically-produced goods. 

The schedule of excise duties has recently been amended to remove discrimination between 
like or similar alcoholic beverages. 

Intellectual Property Rights 

Vanuatu  passed  legislation  in  2000,  2003  and  2008  on  different  categories  of  intellectual 
property rights to ensure compliance with the TRIPS Agreement, and has taken a commitment 
to  enact  the  remaining  necessary  legislation.  It  requested  a  transitional  period  until  1 
December 2012 to fully implement the obligations of the TRIPS Agreement, and presented a 
timetable  for  each  step  until  then.  Vanuatu  confirmed  that  during  the  transitional  period, 

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national  treatment  and  most-favoured-nation  treatment  under  current  legislation  in  place 
would apply. 

III. RECOMMENDATION 

In submitting the terms of Accession of the Republic of Vanuatu to the WTO for approval by 
the Council, the Commission considers these terms as representing a balanced but ambitious 
package  of  market  opening  commitments,  which  will  bring  substantial  benefits  to  Vanuatu 
and its WTO trading partners alike. 

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2011/0077 (NLE) 

Proposal for a 

COUNCIL DECISION 

establishing the European Union position within the General Council of the World  
Trade Organization on the accession of the Republic of Vanuatu 
to the World Trade Organization 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 91, 
100(2) and 207(4), first subparagraph, in conjunction with Article 218(9) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

On  7  July  1995  the  Government  of  the  Republic  of  Vanuatu  applied  for  accession  to  the 
Agreement establishing the World Trade Organization (WTO), pursuant to Article XII of that 
Agreement. 

A  Working  Party  on  Vanuatu's  accession  was  established  on  11  July  1995  in  order  to  reach 
agreement on terms of accession acceptable to the Republic of Vanuatu and all WTO Members. 

The  Commission,  on  behalf  of  the  European  Union,  negotiated  a  comprehensive  series  of 
market  opening  commitments  on  the  part  of  the  Republic  of  Vanuatu  which  are  of  particular 
importance to the European Union. 

These commitments are now embodied in the Protocol of Accession of the Republic of Vanuatu 
to the WTO. 

Accession to the WTO is expected to make a positive and lasting contribution to the process of 
economic reform and sustainable development in the Republic of Vanuatu. 

(6) 

The Protocol of Accession should therefore be approved. 

(7) 

Article XII of the Agreement establishing the WTO provides that the terms of accession are to 
be agreed between the acceding Member and the WTO, and that the Ministerial Conference of 
the  WTO  approves  the  terms  of  accession  on  the  WTO  side.  Article  IV.2  of  the  Agreement 
establishing  the  WTO  provides  that  in  the  intervals  between  meetings  of  the  Ministerial 
Conference, its functions shall be conducted by the General Council. 

(8) 

Accordingly, it is necessary to establish the position to be taken by the European Union within 
the General Council, 

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HAS ADOPTED THIS DECISION:  

Sole Article 

1. 

2. 

The position to be taken by the European Union within the General Council of the WTO on 
the accession of the Republic of Vanuatu to the WTO, is to approve the accession. 

This  decision  shall  enter  into  force  upon  its  adoption.  It  shall  be  published  in  the  Official 
Journal.  

Done at […], 

For the Council 
The President 

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