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WTO Members Would be Penalized for Failure to Submit Notifications Under New Proposal

Thursday, November 08, 2018
Sandler, Travis & Rosenberg Trade Report

The U.S. is proposing and several of its trading partners have submitted to the World Trade Organization a proposal that would penalize WTO members who do not submit required notifications.

The proposal responds to what it calls “the chronic low level of compliance with existing notification requirements under many WTO agreements,” including those on agriculture, antidumping and countervailing measures, safeguards, state trading, customs valuation, import licensing, rules of origin, pre-shipment inspection, and quantitative restrictions. It calls for WTO bodies to report annually on compliance with these obligations, take steps to reinforce compliance, and develop recommendations on “both systemic and specific improvements” to increase compliance. It also provides that beginning in 2019 each WTO trade policy review would include a specific focus on the member’s compliance.

In addition, the proposal states that if a WTO member fails to provide a complete notification after a specified time frame it would be subject to a supplemental assessment comprising a not-yet-determined percentage (though five percent is set forth as a placeholder) of its normal contribution to the WTO budget. In addition, representatives of that member could not be nominated to preside over WTO bodies, questions posed by that member in a trade policy review of another member would not have to be answered, and the member would be subject to specific reporting at General Council meetings. Further noncompliance would result in the member being designated as inactive.

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