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2020-12-31 14:13

来源: 一瓣 作者: 陈达飞


Key elements of the EU-China ComprehensiveAgreement on Investment
The cumulative EU foreign direct investment(FDI) flows from the EU to China over the last 20 years have reached more than €140 billion. For Chinese FDI into the EU the figure is almost €120 billion. EU FDI in China remains relatively modest with respect to the size and the potential of the Chinese economy.
As regards investment, the EU-China Comprehensive Agreement on Investment (CAI) will be the most ambitious agreement that China has ever concluded with a third country. In addition torules against the forced transfer of technologies, CAI will also be the first agreement to deliver on obligations for the behavior of state-owned enterprises, comprehensive transparency rules for subsidies and commitments related to sustainable development.
The CAI will ensure that EU investors achieve better access to a fast growing 1.4 billion consumer market, and thatthey compete on a better level playing field in China. This is important forthe global competitiveness and the future growth of EU industry.
Ambitious opening by China to Europeaninvestments
Firstly, the CAI binds China's liberalisation of investments over the last 20 years and, in that way, it prevents backsliding. This makes the conditions of market access for EU companies clear and independent of China's internal policies. It also allowsthe EU to resort to the dispute resolution mechanism in CAI in case of breach of commitments.
In addition, the EU has negotiated furtherand new market access openings and commitments such as the elimination of quantitative restrictions, equity caps or joint venture requirements in a number of sectors. These are restrictions that severely hamper the activities of our companies in China. The overall package is far more ambitious than what China has committed to before.
On the EU side, the market is already openand largely committed for services sectors under the General Agreement on Tradein Services (GATS). EU sensitivities, such as in the field of energy, agriculture, fisheries, audio-visual, public services, etc. are all preserved in CAI.
Examples of market access commitments by China:
Manufacturing: China has made comprehensive commitments with only very limited exclusions (in particular, in sectors withsignificant overcapacity). In terms of the level of ambition, this would matchthe EU's openness. Roughly half of EU FDI is in the manufacturing sector (e.g.transport and telecommunication equipment, chemicals, health equipment etc.). China has not made such far-reaching market access commitments with any other partner.
Automotive sector: China has agreed to remove and phase out joint venture requirements. China will commit market access for new energy vehicles.
Financial services: China had already started the process of gradually liberalising the financial services sector and will grant and commit to keep that opening to EU investors. Joint venture requirements and foreign equity caps have been removed for banking, trading insecurities and insurance (including reinsurance), as well as asset management.
Health (private hospitals): China will offer new market opening by lifting joint venture requirements for private hospitals in key Chinese cities, including Beijing, Shanghai, Tianjian, Guangzhou and Shenzhen .
R&D (biological resources): China has not previously committed openness to foreign investment in R&D inbiological resources. China has agreed not to introduce new restrictions and to give to the EU any lifting of current restrictions in this area that may happen in the future.
Telecommunication/Cloud services: China has agreed to lift the investment ban for cloud services. They will now be open to EU investors subject to a 50% equity cap.
Computer services: China has agreed to bind market access for computer services - a significant improvement from thecurrent situation. Also, China will include a ‘technology neutrality' clause, which would ensure that equity caps imposed for value-added telecom services will not be applied to other services such as financial, logistics, medicaletc. if offered online.
International maritime transport: China will allow investment in the relevant land-based auxiliary activities, enabling EU companies to invest without restriction in cargo-handling, container depotsand stations, maritime agencies, etc. This will allow EU companies to organisea full range of multi-modal door-to-door transport, including the domestic legof international maritime transport.
Air transport-related services: While the CAI does not address traffic rights because they are subject to separateaviation agreements, China will open up in the key areas of computer reservation systems, ground handling and selling and marketing services. China has alsoremoved its minimum capital requirement for rental and leasing of aircraft without crew, going beyond GATS.
航空运输相关服务: 虽然CAI没有涉及交通权,因为它们受单独的航空协议的约束,但中国将开放计算机预订系统、地面处理和销售和营销服务等关键领域。中国还取消了租赁和无机组飞机的最低资本要求,超出了《服务贸易总协定》。
Business services: China will eliminate joint venture requirements in real estate services, rental and leasing services, repair and maintenance for transport, advertising, market research, management consulting and translation services, etc.
Environmental services: China will remove joint venture requirements in environmental services such as sewage, noiseabatement, solid waste disposal, cleaning of exhaust gases, nature and landscape protection, sanitations and other environmental services.
Construction services: China will eliminate the project limitations currently reserved in their GATS commitments.
Employees of EU investors: Managers and specialists of EU companies will be allowed to work up to three years inChinese subsidiaries, without restrictions such as labour market tests orquotas. Representatives of EU investors will be allowed to visit freely prior to making an investment.
Improving level playing field – makinginvestment fairer
State owned enterprises (SOEs) - Chinese SOEs contribute to around 30 percent of the country's GDP. CAI seeks todiscipline the behaviour of SOEs by requiring them to act in accordance with commercial considerations and not to discriminate in their purchases and sales of goods or services. Importantly, China also undertakes the obligation toprovide, upon request, specific information to allow for the assessment of whether the behaviour of a specific enterprise complies with the agreed the CAIobligations. If the problem goes unresolved, we can resort to disputere solution under the CAI.
Transparency in subsidies – The CAI fill sone important gap in the WTO rulebook by imposing transparency obligations onsubsidies in the services sectors. Also, the CAI obliges China to engage inconsultations in order to provide additional information on subsidies that could have a negative effect on the investment interests of the EU. China isalso obliged to engage in consultations with a view to seek to address such negative effects.
Forced technology transfers – The CAI lays very clear rules against the forced transfer of technology. The provisions consist of the prohibition of several types of investment requirements that compel transfer of technology, such as requirements to transfer technology to ajoint venture partner, as well as prohibitions to interfere in contractual freedom in technology licencing. These rules would also include disciplines onthe protection of confidential business information collected by administrative bodies (for instance in the process of certification of a good or a service)from unauthorised disclosure. The agreed rules significantly enhance the disciplines in WTO.
Standard setting, authorisations, transparency – This agreement covers other longstanding EU industry requests. China will provide equal access to standard setting bodies for our companies.China will also enhance transparency, predictability and fairness inauthorisations. The CAI will include transparency rules for regulatory andadministrative measures to enhance legal certainty and predictability, as wellas for procedural fairness and the right to judicial review, including incompetition cases.
Embedding sustainable development in ourinvestment relationship
In contrast to other agreements concluded by China, the CAI binds the parties into a value based investment relationship grounded on sustainable development principles. The relevant provisions are subject to a specifically tailored implementation mechanism to address differences with a high degree of transparency and participation of civil society.
China commits, in the areas of labour and environment, not to lower the standards of protection in order to attract investment, not to use labour and environment standards for protectionist purposes, as well as to respect its international obligations in the relevanttreaties. China will support the uptake of corporate social responsibility byits companies.
Importantly, the CAI also includescommitments on environment and climate, including to effectively implement theParis Agreement on climate.
China also commits to working towards the ratification of the outstanding ILO (International Labour Organisation)fundamental Conventions and takes specific commitments in relation to the two ILO fundamental Conventions on forced labour that it has not ratified yet.
Monitoring of implementation and disputesettlement
In the CAI, China agrees to an enforcement mechanism (state-to-state dispute settlement), as in our trade agreements.
This will be coupled with a monitoringmechanism at pre-litigation phase established at political level, which will allow us to raise problems as they arise (including via an urgency procedure).


This paper is intended to serve as a basis fordiscussion with the European Parliament, the Council and with other Members of the WTO, in response tothe conclusions of the European Council of 28 June 2018, which invitedthe European Commission to propose a comprehensive approach to improving together with like-minded partners, the functioning of the WTO in crucial areas, including thedispute settlement and the Appellate Body in particular. It is withoutprejudice to the final position of the European Commission on the mattersdescribed within.

The European Council of 28-29 June 2018 gave theCommission a mandate to pursue WTO modernisation in pursuit of the objectivesof making the WTO more relevant and adaptive to a changing world, andstrengthening the WTO's effectiveness.
The EU remains a staunch supporter of the multilateraltrading system and firmly believes that the WTO is indispensable in ensuringfree and fair trade. The multilateral system has provided the basis for therapid growth of economies around the world and for the lifting of hundreds ofmillions of people out of poverty. It has been the guarantor of trade at timesof growing tensions and the backbone of the international system of economicgovernance. Even at a time of the harshest economic conditions during the greatrecession, it has helpedavert recourse to the trade wars that have fuelled economic decline in thepast. As such the health and centrality of the multilateral system needs to bepreserved. Its marginalisation, weakening and decline have to be prevented at all costs.
Unfortunately,the rules-based multilateral trading system is facingits deepest crisis since its inception. For the first time, the basictenets of the WTO, both insetting the essential rules and structure for international trade and indelivering the most effective and developed dispute settlement mechanism of anymultilateral organisation,are threatened.
The crisis is set to deepen further in the comingmonths, as moreunilateral measures are threatened and imposed, leading, in some cases, to countermeasures, or to mercantilist deals. In parallel, as moreAppellate Body members leave office while the new appointments are beingblocked, the disputesettlement system will soon fall into paralysis, rendering enforcement of the rules impossible. Thatwould equate to a 20-year step backward in global economic governance. It wouldmean going back to a trading environment where rules are only enforced whereconvenient and where strength replaces rules as the basis for trade relations.
This development constitutes a major risk for the EU, both for thestability of the political order and for the sustainability of economic growth.The EU economy is highly integrated with global value chains and depends onpredictable, rules-basedinternational trade for both imports and exports.
For this reason, there is an urgent need to move the current debate ona positive path focusing on the modernisation of the WTO. It is clear that 23years after the creation of the organisation and the conclusion of the UruguayRound, themultilateral system is in need of change. While the broader WTO membership mayhave different views regarding the particularities of this change, it isunquestionable that a discussion needs to take place on the question of how tomake the WTO relevant again.
For the EU, the current crisis and the ongoing marginalisation ofthe WTO have their roots in the inefficiencies of the current system. The WTO'snegotiating function has not been able to deliver any significant improvementsin the trade rulebook apart from the agreements reached on Trade Facilitationand Export Competition. The system remains blocked by an antiquated approach toflexibilities which allows over 2/3 of the membership including the world'slargest and most dynamic economies to claim special treatment. The WTO'smonitoring function is crippled by ineffective and repetitive committeeprocedures which are based on insufficient transparency. And, the core ofthe dispute settlement system is being challenged, with the distinct possibility of its paralysis in thenear term. These problems are compounded by the broader geo-strategic developments.In essence, since 1995 theworld has changed;the WTO has not.
In this broader context, the EU believes that a modernisation of the WTO isurgently needed. The following three papers covering:(1)rulemaking anddevelopment;(2)regular work and transparency;and(3) disputesettlement set out the direction of a possible modernisation effort.


The European Council of 28-29 June 2018 gave theCommission a mandate to pursue WTO modernisation in pursuit of the objectivesof (1) making the WTOmore relevant and adaptive to a changing world, and (2) strengthening the WTO's effectiveness. Modernising theWTO’s rulemaking activities form the central pillar of this process.
Broader contextand the focus of EU efforts
The WTO also has the objective of facilitatingrulemaking. Unfortunately, this has only materialised to a very limited extent.Despite an institutional structure designed to help advance discussions, the WTO’snegotiating function has largely been blocked and is now effectively paralysed.There are multiple reasons for this situation including, in particular, divergentinterests, the extremedifficulty in arriving at consensus decisions by all 164 Members and thecurrent approach on development. In this context, any modernisation discussion has to cover both thesubstantive side and the process side of negotiations.
Overallobjective for modernization
The objective is to update the rules and to create theconditions for the rules to be updated.
Substance:address issues that are key toglobal trade as it evolves.
Process:move the organisation towards amodel of negotiations where individual issues can be built up by interestedMembers under the auspices of the WTO toward eventual agreement by some or allMembers forming integral part of the WTO framework .
(一)Proposals for future rulemakingactivities in the WTO
While the EU should continue to pursue the issues thatform part of the existing Doha mandate, there is an urgent need to broaden the negotiatingagenda with the objective of creating rules that:rebalance the system and level the playing field;address market access, discrimination and regulatory barriers in all sectorsof the economy;and strengthen the contribution oftrade to addressing the sustainability objectives of the global community. Thisshould build upon a number of initiatives already launched in Buenos Aires toreduce the costs of trade and go together with a broader reflection ondevelopment.
A. Creatingrules that rebalance the system and level the playing field
Economic operators in a number of countriesincreasingly benefit from targeted and significant market-distorting governmentsupport that is often channelled through state-owned enterprises. While theprovision of industrial subsidies can in certain cases constitute a legitimatepolicy tool, their use mayalso carry significant risks for global trade as they can disrupt productionprocesses, affectbusiness performance and skew the competitive field. The Agreement on Subsidiesand Countervailing Measures (SCM Agreement) is the main tool for disciplining industrialsubsidies. However, it has not been as effective as necessary to curtailcertain practices that have emerged in recent years. Indeed, itsapplication has revealed a number of gaps and ambiguities that need to beaddressed as a matter of urgency.

In this contextthe EU should pursue the following proposals aimed at disciplining the use ofindustrial subsidies and the activities of state-owned enterprises.
1. Improvetransparency and subsidy notifications
The lack of comprehensive information on subsidiesprovided by Members is one of the biggest shortcomings in the application ofthe current system. Although the SCM Agreement already requires Members tonotify their subsidies, the level of compliance is poor and has deterioratedin recent years, to the extentthat as of end of March 2018 over half of the membership (90 Members) had not madeany notification1. Yet, without transparency in subsidies, Members cannotreview each other's actions and face significant obstacles in seekingenforcement of the rules. This greatly weakens the value of the substantivedisciplines.
The rulemaking in this area should focus on creatingincentives for WTO Members to fully comply with their notification obligations.The EU has already identified ways to improve transparency and subsidynotificationn, for example, the creationof a general rebuttable presumption according to which if a subsidy is notnotified or is counter-notified, it would be presumed to be a subsidy or even bepresumed to be a subsidy causing serious prejudice.
2. Better capture SOEs
State-owned enterprises (SOEs) are, in a number of countries, an instrument through which the state decisivelygoverns and influences the economy, often with market distortive effects. However, the growth andinfluence of SOEs in recent years is not yet matched with equivalentdisciplines to capture any market-distorting behaviour under the current rules.
Subsidies granted to SOEs are already captured by theSCM Agreement, in the sameway as any other subsidy granted by the state. With regard to instances whereSOEs themselves grant subsidies, the SCM Agreement captures them through the concept ofa "public body". However, this has been interpreted in a rather narrow manner, which allows aconsiderable number of SOEs to escape the application of the SCM Agreement. TheEU therefore should propose a clarification of what constitutes a public body, on the basisof a case by case analysis to determine whether a state-owned or astate-controlled enterprise performs a government function or furthers agovernment policy, as well as howto assess whether a Member exercises meaningful control over the enterprise inquestion.
In addition, the EU should propose rules capturing othermarket-distorting support provided by SOEs when used as vehicles to pursuegovernment economic policies rather than focusing on their own economicperformance, includinginter alia, transparencywith regard to the level and degree of state control in SOEs.
3.Capture more effectively the mosttrade-distortive types of subsidies
The SCM Agreement provides for two categories ofprohibited subsidies, namely subsidies contingent upon export performanceand subsidies contingent upon the use of domestic over imported goods. Allother subsidies are actionable:they are permissible, unless the complaining country shows that the subsidyhad an adverse effect on its trade interests. However, the latter isquite often a challenging exercise and therefore a number of egregious types ofsubsidies that heavily distort international trade, such as thosecontributing to the overcapacity plaguing several sectors of the economy, cannot becaptured sufficiently under the current rules.

The rulemaking in this area should aim at subjectingthe most harmful types of subsidies that are in principle permissible under thecurrent rules to stricter rules. This could be achieved for example by expandingthe list of prohibited subsidies or by creating a rebuttable presumption ofserious prejudice similar to the lapsed Article 6(1) of the SCM Agreement. Types of subsidies that could besubject to such stricter rules include, for example, unlimited guarantees, subsidies given to an insolvent or ailing enterprisewith no credible restructuring plan or dual pricing.
B. Establishingnew rules to address barriers to services and investment, including inthe field of forced technology transfer
Following the Joint Statements agreed in Buenos Aires, work isalready ongoing in the areas of domestic regulation, e-commerce andinvestment facilitation but further efforts will be needed to address gaps andto update the WTO rule book.
1. Need to addressmarket access barriers, discriminatory treatment of foreign investors andbehind the border distortions, including as they relate to forced technology transferand other trade distortive policies
The multilateral rule-book on investment, whether inservices or other sectors of the economy, needs to be updated. The GATS covers investment in thearea of services via Mode 3. Nonetheless, many WTO Members still maintain broad reservations orexclusions. Sectors outside of services (such as investment in manufacturing or mining) are notcovered (althoughservices incidental to mining and incidental to manufacturing are covered). The TRIMSonly contains a limited set of disciplines relating to discriminatorymeasures/quantitative restrictions regarding trade in goods.
Forced technology transfer, where foreignoperators are directly or indirectly forced to share their innovation andtechnology with the state or with domestic operators, has emerged asa major trade irritant. There are a number of provisions in the current WTOrule book in GATT, GATS, TRIMS andTRIPS, that shouldhelp to address forced technology transfers. However, the scope ofapplication of these provisions (including in terms of commitments taken by the parties) is limited andtherefore insufficient to address some of the most important sources ofproblems such as requirements prohibiting or limiting foreign ownership (e.g. jointventure requirements or foreign equity limitations). New rules arealso needed to address administrative review and licensing processes based onunclear rules, and processesallowing for wide discretion (e.g. marketing approvals) as well as licensing restrictions (where foreigninvestors are limited in setting market-based terms when negotiating theirtechnology licensing agreements). Certain rules in areas such as trade secrets shouldalso be reinforced, notably as regards enforcement. For example, investors arefaced with difficulties to get effective protection before the administrationand courts against unfair commercial use and unauthorised disclosure of tradesecrets.
Thus, besides the specific rules to address forcedtechnology transfers, the EU should propose new rules that would complementthe existing disciplines. The new rules would introduce disciplines that wouldenable us to improve overall market access conditions for foreign directinvestment (both in theservices and non-services sectors) as well as address distortive and discriminatorypractices including legal form restrictions and performance requirements (such as thesourcing or production of goods or services locally) in a morecomprehensive manner.
There is also a clear need to address behind the borderdiscriminatory practices by reinforcing national treatment obligations anddeveloping strong domestic regulation disciplines ensuring non-discriminatoryand transparent regulatory and enforcement processes in the services andnon-services sectors.
2. Need to addressbarriers to digital trade
Digital trade, or trade enabled by electronic means, is nowadayspervasive throughout the economy, covering both trade in services and in goods andenabling transactions performed completely online as well as facilitatingphysical transactions. As a consequence, establishing disciplines covering digital trade isimportant to remove unjustified barriers to trade by electronic means, to bring legalcertainly for companies, and to ensure a secure online environment forconsumers. Crucially, there are important cross-linkages to addressingforced technology transfers (such as disclosure of source code requirements). Again, newdisciplines should cover not only trade in services, but apply toall economic sectors.
C.Addressing the sustainability objectives of the globalcommunity
Finally, it is crucial to bring the WTO and its trade agendacloser to citizens and ensure that trade contributes to the pursuit of broaderobjectives set by the global community, in particular as regards sustainability. TheSustainable Development Goals agreed by the world’s leaders in 2015 already setout a detailed set of actions that need to be pursued, many of themwith strong links to trade.
At the current moment, the only SDG issues that is actively being negotiatedin the WTO is the elimination of the most harmful fisheries subsidies, which ishowever also an area of negotiations clearly mandated by the Doha Declaration.More can and should be done by the trade community.
Consequently, the EU should over the coming months prepare adetailed analysis of the SDG targets and identify ways in which trade policy couldcontribute to achieving them. The EU should then together with other Membersactively pursue putting forward these issues for exploration and discussion inthe WTO.
(二)Proposals for a new approach toflexibilities in the context of development objectives
The WTO was founded with development at its centre, underpinned bythe fact that free rules-based trade contributes to growth and development. However, the currentdebate promotes the view that global trade rules are somehow an impediment todevelopment and therefore that developing countries need to be exempt fromcurrent and future rules;in fact the opposite is true. The current distinction betweendeveloped and developing countries, which allows no nuance, no longer reflects the reality of the rapid economicgrowth in some developing countries. The result is that the developing countrygroup now includes some of the world's top trading nations, who havesignificant economic differences from other members of this group and who insome cases even present a level of development which surpasses that of certainMembers who are designated as developed in the organisation. This lack ofnuance and its consequences with regard to the special and differentialtreatment question has been a major source of tensions in the WTO and anobstacle to the progress of negotiations:the demand for blanket flexibilities for two thirds of the WTOmembership dilutes the call from those countries that have evident needs fordevelopment assistance, leads to much weaker ambition in negotiations and isused as a tool to block progress in, or even at the beginning of, negotiations.
The EU fully supports the view that developingcountries should be allowed the assistance and flexibilities they need to meettheir development goals. Nevertheless, change is needed in the organisation regarding howflexibilities are crafted and implemented with a view to ensuring that flexibilitiesare made available to those Members who actually need them. In order to advancethis debate, the EU shouldpropose the following:
1. Graduation:Members should be actively encouraged to "graduate" andopt-out of SDT, whether horizontally or agreement by agreement.In the interim, Members shouldbe encouraged to clarify in which areas they actually use existingflexibilities and to present roadmaps detailing when they would expect to beable to assume all the obligations stemming from the WTO agreement. This couldform an integral part of a Member's TPR process.
2. Special and Differential Treatment (SDT) in futureagreements:while acknowledging the need forparticularly flexible treatment of LDCs, flexibilities available to other Members should move awayfrom open-ended block exemptions toward a needs-driven and evidence-basedapproach that will ensure that SDT will be as targeted as possible. Variousapproaches can be used, which should satisfy the following principles:
(1)the agreement in question will eventually be universallyimplemented, so that thecore rights and obligations will apply to everyone and any exceptions will betime-bound;
(2)in-built flexibility in the form of additional commitments going beyond acore set of provisions should cater for differences among Members
(3)the flexibilities available in any agreement should be proportionalto the number of Members participating and the ambition of the agreement.
There are a number of tools that can be used toimplement these proposals, for example, differentiation, graduation mechanisms, grace periods and assistance linked to implementation.
3. Additional SDT in existing agreements:Though existing SDT provisions incurrent agreements should not be contested, when Membersrequest additional SDT this should be done only on the basis of a case-by-caseanalysis, on the basisof:
(1)a clear identification of the development objectivethat is being affected by the rule in question;
(2)an economicanalysis of the impact of the rule and of the expected benefits of itsrelaxation;
(3)an analysis of the impact of the requested flexibilityon other WTO Members;
(4)a specification of the time period for whichflexibility is requested and of its scope of application (one Member, a group ofMembers or all developing country Members).
Depending onthe outcome of this analysis, various approaches can be used to consider additionalflexibilities.
(三)Proposals to strengthen theprocedural aspects of the WTO’s rulemaking activities
The blockage of the WTO’s negotiating function confirmsthe need for flexibility in terms of negotiating approaches. This reflects theconcept of flexible multilateralism, where Members interested in pursuing a certain issuewhich is not yet ready for a full multilateral consensus, should be ableto advance the issue and reach an agreement if its benefits are made availableto all other Members on an MFN basis. However, other ideas should be explored as well with a view tostrengthening the negotiating function and helping build political engagementand support for multilateral negotiations.
In this regard, the EU shouldpursue the following issues:
Multilateralnegotiations: Maintain support for full multilateral negotiations andoutcomes in areas where this is possible.
Plurilateralnegotiations: In areas where multilateral consensusis unattainable, actively support and pursue plurilateral negotiationswhich should remain open to all Members to join and whose results will beapplied on an MFN basis. Explore the feasibility of amending the WTO agreementso as to create a new Annex IV.b. which would contain a set of plurilateralagreements that are applied on an MFN-basis and which could be amended througha simplified process.
Role of thesecretariat: the EU should put forward a proposal for a MinisterialDecision which strengthens the role of the WTO Secretariat in support ofvarious negotiating processes as well as in the implementation and monitoringfunctions.
Buildingpolitical support: the EU should explore with other Members possible waysof building greater political support and engagement in the WTO, includingpossible options as to the frequency of Ministerial Conferences as well as waysof intensifying Senior Officials processes.


The European Council of 28-29 June 2018 gave theCommission a mandate to pursue WTO modernisation in pursuit of the objectivesof (1) making the WTOmore relevant and adaptive to a changing world, and (2) strengthening the WTO's effectiveness. Making theWTO’s regular work and monitoring function more effective is a key component ofthis process.
Broader contextand the focus of EU efforts
With its negotiating function paralysed and its disputesettlement system challenged, the WTO post-MC11 is in an existential struggle toremain a credible basis for trade relationships. The so-called regular work inthe WTO's councils and committees – i.e. the work that is neither related tonegotiations nor dispute settlement – can be such a basis to some extent anddoes useful work, but itspotential is generally underutilised. Making this regular work respond moreeffectively and efficiently to the real interests of stakeholders would helpkeep the WTO relevant at a time where solutions to the negotiating and disputesettlement functions are being sought.
Overallobjective for modernization
The long-term objective is to enable the WTO to achievemore concrete results in terms of i) ensuring transparency about Members' trade measures, ii) solvingspecific trade concerns before they get to litigation state and iii) incrementallyadjusting the WTO rulebook, where necessary.
A.Transparencyand notifications
A fundamental task of the WTO is to monitor whetherMembers implement the WTO agreements properly and whether they make their tradepolicies transparent by following WTO notification rules. This monitoring isdone in the regular WTO councils and committees as well as the Trade PolicyReview Body.
While the EU invests significant resources to makecomplete and timely notifications, several of our top trading partners do not complysufficiently with notification obligations. As a result, their tradepractices remain opaque, which makes it impossible to monitor compliance withWTO rules and seek their enforcement. Where EU firms cannot get the informationon how to access markets, they cannot compete with domestic firms on an equalfooting. In order to remedy this long-standing problem, the EUproposes to improve or establish the following practices regardingnotifications:
1. More effectivecommittee-level monitoring:All committees overseeing WTO agreements with notificationobligations regularly review individual notifications and Members' generalperformance. These reviews, however, are not effective enough in closing gaps, partly becausethe Secretariat is not allowed to make qualitative assessments and Members arenot held accountable to explain the reasons for their underperformance. Thegaps are of particular concern in the area of trade in goods.
As a first step,the EU proposes that each committee overseeingnotification obligations on trade in goods explores, under theoversight of the Council for Trade in Goods, how to make notification reviews more effective andinteractive, e.g. by i) introducing arequirement for Members to explain reasons for delays and provide a substantivereply to comments;ii) allowing theSecretariat to make more qualitative assessments both on notifications and onreplies to comments received;iii) publishing both comments on notifications and repliesthereto on a single, public database managed by the WTO;and iv) puttingnon-compliant Members more on the spot in meetings as well as written reports.

2. Incentivesfor improving notification compliance:The EU acknowledges that numerous WTO Members, particularlysmall developing countries, have limited resources for meeting notificationobligations and deadlines. While acknowledging these constraints, it should beborne in mind that notifications form a central part of the monitoringprocesses of the WTO and may provide advantages to the notifying Member itselfas it may contribute to stimulating reflection about administrative coherencedomestically. Significant resources already exist for assisting Members whoexperience capacity constraints to meet their notification obligations, including inthe form of WTO technical assistance.
The EU proposes to examine, together withother WTO Members and the WTO Secretariat, whether improvements in the provision of assistanceare necessary. The EU also encourages making more use of workshops anddedicated informal discussions at committee level to share information and bestpractices, and todisseminate the results more widely. Further, improvements in a Member's notification practiceshould be showcased and lauded more in meetings, reports and TPRs.
3. Sanctionsfor wilful and repeated non-compliance:A distinction needs to be drawn between, on the onehand, lack ofcapacity to prepare notifications and missing deadlines for a justifiablereason and, on the otherhand, systematicobfuscation. The latter is a serious breach of the spirit and rules of themultilateral trading system but, at present, has no consequence for the Member in breach beyondbeing exposed to complaints by others.
The EU considers that instruments are needed to enforcenotification compliance wherecapacity constraints are not the issue and proposes towork with other WTO Members, including the United States who recently made aproposal in this regard, on developing sanctions which are effective, fair andcommensurate. Such sanctions could include, inter alia, exposing non-compliant Members to stronger criticismat a political level and in public and limiting certain rights related toparticipation in WTO proceedings (e.g. chairing WTO bodies, seeking replies from other Members).
4. Counter-notifications, i.e.notifications made by a Member on behalf of another, are apotentially powerful instrument available in various agreements. They are, however, hardly used, partly becausepreparing them requires a significant amount of research and intelligence.
The EU proposes to i) cooperate more with like-minded Members in preparingjoint counter-notifications, ii) explore how the WTO Secretariat could be involved more, whilstguarding its neutrality towards Members, and iii) strengthen the consequences of a Member being subjectto a counter-notification.
Strengthening the Trade Policy Review Mechanism (TPRM):Even though the TPRM has no mandate to assess Members' compliancewith WTO rules, it is a useful tool for peer pressure. Moreover, the vastamount of information on Members’ trade policy measures which is gathered boththrough the reviews of individual Members and the biannual global trademonitoring reports feeds into the work of other committees. A particular assetis that the Secretariat can do its own research when preparing its reports anduse information from other Members to highlight measures even if they have notbeen notified – provided that the Member under review does not object to thisinformation being included in the report.
Bearing in mind that improvements to the functioning ofthe TPRM can only be negotiated during an appraisal of the TPRM (the lastappraisal took place in 2016 and there is no date yet for the next one), the EUproposes to increase the effectiveness of the TPR exercise by empowering theSecretariat to go further in assessing notification performance in its reportfor a Member's review. The information on notifications could be expanded intoa separate chapter and made more informative by systematically highlightingqualitative aspects of compliance and describing how the Member's notificationperformance has evolved since the last review.
B.Solving marketaccess problems
Raising awareness on trade irritants and seekingclarifications from the Member applying them is an essential part of the workof numerous committees. Despite the significant amount of time and resourcesthat the EU and some like-minded Members put into raising these irritants, the outcomesare slim for a number of reasons. Most importantly, not givingsatisfactory replies – or not giving a reply at all – does not have realconsequences for a Member, beyond being put on the spot for the duration of theagenda point. The result is repetitive meetings in which speaking points getrecycled.
The EU proposesto make the pre-litigation problem solving of the WTO more effective by:Developing rules that oblige Membersto give substantive replies within specific timeframes to written questions byother Members or to specific trade concerns raised by other Members in aCommittee meeting;andStrengtheningcross-committee coordination on market access issues (i.e. makingsure that the various measures criticised at CTG level are coherently followedup on in the TRIMS, TBT and Market Access Committee, for example), with the helpof the Secretariat.
C. Adjusting theWTO rulebook incrementally
The regular WTO councils and committees also have theability to incrementally adjust and clarify the WTO rulebook outside thenegotiations. While there are examples of such incremental adjustments (e.g. thecatalogue of instruments available to manage SPS issues adopted by the SPSCommittee on 2 March 2018, the CTG decision of 2012 on notification proceduresfor quantitative restrictions or the 2000 Decision of the TBT Committee onprinciples for the development of international standards), decisions withreal consequence are rare. Often, the WTO’s ability to adjust its rules throughcommittee work hinges on the mandate of the committee concerned:While some bodies like the TBT andSPS Committees are mandated to further the TBT and SPS Agreements, other bodiesare limited to monitoring and implementing the agreements they oversee.
More incremental adjustments could help demonstratethat the WTO is able to evolve even though its negotiating function is notdelivering the expected results. The EU proposes to assess, agreement byagreement, whethertargeted proposals could be put forward for advancing WTO rules. Such proposalscould either be topics which were part of the DDA negotiations or new ideas, should reflectthe interests of stakeholders and be able to get traction among WTO Members.
D.  Downsizing ineffective committees
The flipside to investing more resources into the workof some committees would be deactivating those that are running idle. There areseveral bodies which were created to address specific issues of interest to agroup of Members at a particular moment in time, but which proponents no longer feed with input.Deactivating would not necessarily mean shutting these bodies down completely, but puttingthem to rest – like the Working Groups on the Singapore issues. Alternatively, the number ofmeetings could be reduced, as was done in the case of services bodies where onlythe Council for Trade in Services meets regularly whereas its subsidiary bodiesare only convened upon explicit request by a Member.



This paperexamines possible approaches in order to follow up on the European Councilconclusions of 28 June 2018. The European Council underlined, in a contextof growing trade tensions, the importance of preserving and deepening therules-based multilateral system and stated that the EU is committed to workingtowards its modernisation. The European Council invited the Commission topropose a comprehensive approach to improving, together with like-minded partners, thefunctioning of the WTO in crucial areas, including "more effective and transparent disputesettlement, including theAppellate Body, with a view toensuring a level playing field." (paragraph 16 of the conclusions)
本文研究了可能的方法,以便对欧洲理事会2018年6月28日的决议采取后续行动。在全球贸易日益紧张的背景下,欧洲理事会强调了维护和深化以规则为基础的多边体系的重要性,并表示欧盟应致力于实现其现代化。欧洲理事会(European Council)邀请欧盟委员会(European Commission)提出一项全面方案,与志同道合的伙伴一道,改善世贸组织在关键领域的运作,包括“更有效、更透明的争端解决机制,包括上诉机构,以确保公平的竞争环境”。(结论第16段)
The disputesettlement function of the WTO is at grave danger, and swift action by Members is needed to preserve it. Ifthe United States' blockage of Appellate Body appointments continues, it willundermine the WTO dispute settlement at the latest by December 2019. At thatpoint in time, there will beless than 3 Appellate Body members left, which is the minimum number required for the AppellateBody to hear an appeal. Without a functioning Appellate Body, any party tothe dispute may attempt to block the adoption of panel rulings (by appealing it), so – if noaction is taken – this may undermine the operation WTO dispute settlement as awhole.
4. 无视90天上诉期限:美国实质上是在批评AB不尊重DSU第17.5条,根据这条,“在任何情况下,诉讼程序都不应超过90天”。在美国看来,这引发了对透明度、与“迅速解决争端”不一致,以及90天后报告有效性的不确定性的担忧。
2. 由不再是上诉机构成员的人继续提供服务:美国声称,上诉机构“无权将非上诉机构成员视为成员”。美国认为,是争端解决机构,而不是上诉机构,有权力和责任决定任用期满的人是否应继续任职。
3. 对不需要解决争议的问题发表咨询意见:美国指出,“世贸组织的报告有一种倾向,它使调查结果对于解决争端而言是不必要的,或是针对争端中未出现的问题而提出的”。他们特别指出“一个令人震惊的例子”——“上诉机构的超过三分之二的分析——46页——本质上是只是附带说明”。
4. 上诉机构对事实和成员国国内法的审查:美国批评了上诉机构审查事实的方式。根据DSU第17.6条,上诉仅限于“小组报告所涵盖的法律问题和小组制定的法律解释条例”。然而,美国认为,上诉机构“一贯按照不同的法律标准审查调查结果,所得出的结论并非基于小组事实调查结果或无可争议的事实”。美国认为,上诉机构审查小组关于国内立法的含义(这应该是一个事实问题)的调查结果的情况更是如此。
5. 上诉机构声称其报告有权被视为判例:美国声称,上诉机构声称其报告有效地充当了判例,以及专家组遵循此前缺乏“有力理由”的上诉机构报告,在世贸组织规则中没有任何依据。美国提出,“尽管上诉机构报告可以对涉及的协议提供有价值的说明,但上诉机构报告本身并不是一致同意的文本,也不能替代经过谈判和商定而成的文本。”
EU position/欧盟的立场







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