Chapter 4
Main Agreements II:
Non-Traditional Trade Issues
INTRODUCTION
Since the world began to move from the industrial to the
information age, the GATT, with its emphasis on the trade of goods, became
inadequate. International transactions in services, investment, and information
technology have surpassed the traditional trade of manufactured products.
The growth of tertiary transactions provides new challenges for international
trade agreements, and some argue traditional economic theory does not provide
an adequate model for addressing these issues. Not only is the definition
and measurement of tertiary trading a problem, but also the large disparity
between developed and developing countries appears to be accentuated. Meanwhile,
the U.S. leads these sectors of the global economy, and perhaps has more
at stake than others in promoting the openness of markets and protection
of information rights. The WTO has addressed some of these issues by initiating
agreements relating to services, intellectual property, investment, information
technology (IT) and government procurement.
GATS
The service sector has become increasingly important to
industrialized countries, especially the United States. Services, while
difficult to precisely define, include such things as transportation, insurance,
education, and telecommunications. On a global scale, the growth of trade
in services outpaced that of merchandise throughout the last decade, increasing
from 17 percent of total trade in 1980 to 20 percent of the total in 1995.
Global trade in services for 1995 amounted to approximately $1.2 trillion.(1)
For those concerned about U.S. budget deficits, it should be noted that
Americans maintain a hefty surplus in the trade of services. In 1996, U.S.
service exports totaled 221.2 billion (up 26 percent from 1992) while imports
of services were only $143.1 billion, producing a surplus of nearly $80
billion.(2) American exports of commercial
services almost doubled those of the next leading country (France) in 1995.
(See Annex VIIIa) It is not surprising the United States was eager
to gain a multilateral agreement on trade in services.
After lengthy discussions during the Uruguay Round, the
General Agreement on Trade in Services (GATS) entered into force on January
1, 1995. However, negotiations in some areas have continued until the recent
past and a new round of talks on the service sector is planned to begin
before the year 2000. With such a dynamic and important economic sector,
it is vital that timely decisions continue to be made. The WTO Council
for Trade in Services was created to oversee the operation of the agreement
and further its objectives as written in Article XXIV of the Agreement.
As the first-ever multilateral agreement to provide legally enforceable
rights to trade in services, the GATS nominally includes all internationally
traded services. This comprehensive approach covers services traded from
one country to another, consumers or firms making use of a service in another
country, foreign companies creating subsidiaries or branches to provide
services in another country and individuals traveling from their own country
to supply services to another.(3)
One major principle of the agreement is the bestowal of
MFN treatment. The idea is to give all countries equal treatment and thus
lower the possibility of retaliatory action. While the premise of MFN is
that countries should not discriminate between other members of the Agreement,
the GATS temporarily permits countries to maintain prior preferential commitments.
However, under the Agreement, no new preferential pacts can be arranged.
Moreover, existing preferences will normally last no more than ten years.
The GATS also calls for national treatment, which provides
that countries should treat foreigners the same as citizens with regards
to the services industry. However, this only applies where a country has
made specific commitments to provide foreigners access to its service market,
making a rather weak provision.(4) Other
sections of the Agreement deal with such issues as transparency in regulations.
Regulations are allowed, but countries must report new legislation to the
Council for Trade in Services. According to Article III of the Agreement,
only if a third country argues that the new regulations appear to unduly
impede the implementation of the GATS will the new regulations be questioned.
Other principles include the commitment to open markets,
progressive liberalization, and a decrease in restrictions on international
payments and transfers. Most of these principles currently offer loopholes,
such as the allowance of designating only a portion of their service sector
to the Agreement. Thus, the majority of services in all countries continue
to violate the GATS Agreement, mostly because developing countries have
made few commitments. High-income countries made commitments in 47.3 percent
of their service sector as compared to 16.2 percent for developing countries.
A more telling statistic shows that twenty-two of seventy-eight developing
countries scheduled less than 3 percent of all services.(5)
The GATS offers lofty goals, but in fact, members remain far from free
trade in services. Rather than opening markets, the agreement acts more
as a moratorium on creating preferential treatments and further closing
national markets.
It is difficult to quantitatively assess the effects of
the GATS since the results depend on the content of the specific commitments
made by countries. Even though the Agreement lacks "teeth," a single sector
analysis may help to clarify the potential of the GATS. The U.S. telecommunications
industry provides a useful case study for surmising the future impact of
this Agreement on American industry. Though the Agreement on Basic Telecommunication
Services did not take affect until January 1998, it is expected to significantly
impact the U.S. market. Unlike other sections of the GATS, the United States
was successful in gaining pledges from major foreign markets to open their
telecommunications industries. In fact, the sixty-nine WTO members that
made commitments in the telecommunications agreement accounted for over
91 percent ($550 billion) of telecom revenue.(6)
In terms of market share, the GATS affects a generous portion of the global
telecom industry. For example, the United States more than doubles the
earnings from telecom in Japan, the second largest revenue earner. (See
Annex IX)
The telecom agreement basically concerns market access,
foreign investment, and regulatory principles in all telecommunications
transport networks and services. The three major implications of this agreement
include the increased opportunity for operators to integrate and control
their international marketing and operations, improved dispute resolution
procedures and enforcement mechanism, and reduced profitability for some
telecom operators as accounting rate reforms accelerate.(7)
According to U.S. Trade Representative Charlene Barshefsky, only 17 percent
of the world's top twenty telecom markets were open to U.S. companies before
the agreement, whereas now American corporations have access to nearly
all of them. The ambassador also believes the agreement will lead to 1
million new jobs in the next ten years, while the average cost of long
distance calls will drop 80 percent in the next few years.(8)
The 80 percent figure would be especially helpful since, according to the
1996/97 MCI Global Communications Report, the world spent 60 billion minutes
communicating between countries via public networks in 1995, up from 15
billion minutes in 1985. Eighty percent savings would make $60 billion
(~$1.00/minute) in phone calls become $12 billion.
Since U.S. telecom corporations are already dominant in
world markets, they are in the best position to expand into new areas of
service. It appears that the telecom agreement provides a winning situation
for U.S. industry and consumers. The flip side is that in developing countries,
once access is opened, inefficient service providers will lose out to global
industries, many of which are based in the United States.
Like many of the GATS commitments, the telecom agreement
is not as simple as it seems. The complicated regulatory principles are
difficult for newly liberalizing economies to understand. Even the U.S.
Federal Communication Commission (FCC) continues to struggle in finding
solutions to problems such as universal service obligations, anti-trust
provisions, rate structures and technical interconnection between services.
To deal with these issues, the FCC has adopted domestic policies that some
feel violate the GATS' most favored nation and market access principles.(9)
Deregulation and more open competition in the telecom sector are envisioned
to improve efficiency through market-based principles.
The WTO's recent Financial Services Agreement provides
an example of ongoing GATS negotiations. In December 1997, seventy WTO
members reached the multilateral agreement that will be annexed to the
GATS and entered into force by March 1999. These commitments allow more
access of foreign financial service suppliers in areas covering over 95
percent of financial services trade.(10)
Perhaps more importantly, few signatories submitted MFN exemptions when
approving of the protocol annex. While the GATS offers numerous loopholes
to protect certain sectors of national economies, it does provide an agreement
to limit the amount of new protective measures and partial service agreements.
Until the GATS becomes more ambitious in rolling back current disparities,
it appears reaching the goals of the GATS will be a slow process.
TRIPs
Intellectual property issues are of special interest to
those countries, such as the United States, that are deeply involved in
high-technology industries. Some examples of American industry that rely
greatly on intellectual property rights (IPR) include computer-related
fields, pharmaceutical and chemical manufacturers, and audiovisual industries.
The common link between these industries is their heavy reliance on research
and development (R&D) and their relatively low costs of production.
A strong patent system and a copyright law covering domestic issues, but
lacking authority and enforceability abroad, protect these U.S. industries.
IPR-reliant companies argue that in order to continue innovating and improving
their products, larger and larger amounts of R&D must be used. Without
IPR, other companies will "steal" the development process from its originators,
and mass-produce these goods more cheaply while making a larger profit
due to lower sunk costs in R&D. If industry innovators fail to profit
from developments, they lose the incentive to spend large amounts on R&D
and the industry stagnates.
High-technology trade is vital to the U.S. economy, where
one in three manufactured exports are advanced technology items. The results
appear promising; the United States gained a $27.2 billion surplus in high-tech
trade in 1993.(11) It is estimated, however,
that a staggering amount of profit in these industries is lost each year
due to counterfeiting. The International Anti-Counterfeiting Coalition
has calculated that Americans lose about $200 billion each year, and the
U.S. Customs Service estimated in 1993 that Americans lost 750,000 jobs
from piracy.(12) Clearly, Americans have
a stake in ensuring their continued leadership in IPR industries.
The U.S.-led inclusion of Trade Related Intellectual Property
Rights (TRIPs) at the Uruguay Round went into force on the first day of
1995. A WTO TRIPs Council (which will cooperate with the World Intellectual
Property Organization) was formed to oversee the implementation of the
Agreement. TRIPs covers copyrights, trademarks, patents, and other areas
including industrial design, geographical indication, integrated circuits
and protection of trade services. The minimum standards set out by the
TRIPs Agreement for copyright and related rights are those of the 1971
Berne Convention for the Protection of Literary and Artistic Workforce
which protected a broad range of artists' and authors' rights. More importantly
for the U.S. computer industry, computer software is treated as "literary
work," thus stringent copyright protection is made available.(13)
The provision on trademarks guarantees that a registered trademark has
the exclusive right to use this mark in all countries. Furthermore, patents
now receive protection for twenty years from their date of file. The Agreement
also regulates that countries must enforce TRIPs within their own boundaries
and provides for technical assistance to those countries without appropriate
enforcement mechanisms. It is important to note that, like the GATS, this
Agreement includes the major principles of MFN and national treatment,
though exceptions are made for developing economies and prior commitments.
MFN is really a moot point if national treatment is followed, since it
is rare that a country would give more rights to foreigners than their
own citizens.
As stated in Article VII, the objective of the Agreement
is that,
The latter part of the statement refers to the developing
countries' argument that they can not afford the high costs of authentic
goods (especially pharmaceuticals) and thus believe the implementation
of monopoly rents are overly harsh. The true difficulty in negotiating
TRIPs was in compromising the need for innovation incentive in the developed
world with the desire for cheaper, accessible goods in lesser-developed
economies.
In order to assess the potential results of the Agreement,
the American pharmaceutical industry provides a clear case study. The U.S.
pharmaceuticals industry had a large stake in procuring a fortuitous TRIPs
Agreement. On average, 5 percent of all drugs are counterfeit, and in developing
countries the percentage can reach as high as 70 percent.(14)
In a study done by the U.S. International Trade Commission, it was found
that the global piracy of pharmaceutical patents reduces annual R&D
investment by American companies by $720-$900 million per year.(15)
A high amount of annual R&D ($15 billion in 1995) is spent each year
in the industry. (See Annex X) In order to recover some of the costs,
American pharmaceutical companies need to maintain exclusive control of
their product market. The TRIPs Agreement takes steps to ensure this is
done. A twenty-year patent term, measured from the patent filing date,
will be enforced for all pharmaceutical industries. However, since it takes
on average ten to twelve years after a drug is discovered for it to be
approved by the Food and Drug Administration, marketing time is rather
short.(16) Even developing countries (though
they receive an additional ten years to comply with the agreement) will
end up adhering to the terms of the Agreement, since Article 70.8 stipulates
that they must honor the remaining approximate ten years before producing
or marketing the new drug. However, no current protection is offered.
Importantly, the TRIPs Agreement offers different channels
for enforcement. The United States can push implementation through either
the TRIPs Council or other WTO dispute settlement procedures where countries
can no longer negate findings against them.(17)
However, problems with TRIPs remain. For one, a large number of countries
are not privy to the Agreement, and those who are may still find loopholes
or at least turn a blind eye to their own counterfeiters since it is difficult
to prosecute a company for providing cheap consumer goods.(18)
Nevertheless, like the GATS, TRIPs offers a framework for future negotiations
and further implementation. Though it will be a slow process, the Agreement
will become more of a norm than a regulation. These effects will be seen
more readily as developing countries become regular members of the Agreement.
TRIMs
Focusing on trade in goods only, the 1995 TRIMs agreement
recognizes that certain practices pertaining to investment can restrict
and distort trade. The Agreement seeks to prevent such distortions by prohibiting
TRIMs which contradict the GATT's principles of national treatment and
prohibition of quantitative restrictions (Articles III and XI, respectively).
The Agreement forbids four types of TRIMs:
Under the Agreement, signatories must provide notification
of all non-conforming TRIMs. Developed countries faced a two-year deadline
to eliminate their TRIMs (until January 1, 1997), developing countries
were allowed five years (until January 1, 2000), and LDCs had seven years
(January 1, 2002). A special committee was established to monitor the implementation
of the Agreement, and the Council for Trade in Goods must report on the
Agreement's operation by January 1, 2000.
The standardization of a format for notification highlighted
1995, the first year of the TRIMs Agreement.(20)
During that year, twenty-six members submitted notification under Article
V, Section 1 of the Agreement. Argentina, Barbados, Colombia, Costa Rica,
Cuba, Cyprus, the Dominican Republic, Egypt, Indonesia, India, Mexico,
Malaysia, Pakistan, Peru, Philippines, Poland, Romania, South Africa, Thailand,
Uruguay, and Venezuela acknowledged TRIMs that needed to be removed. Honduras,
Mauritius, Slovenia, Switzerland, and Zambia claimed they had not enacted
any TRIMs inconsistent with the Agreement.(21)
The following calendar year saw the expansion of the TRIMs
Agreement with Chile, Ecuador, and Nigeria notifying the TRIMs Committee
of measures to be phased out. Meanwhile, Israel, Nicaragua, Saint Lucia,
Singapore, and Trinidad and Tobago noted that they had no TRIMs contrary
to the Agreement.(22) Both the TRIMs Committee
and the USTR reported that the Committee had served as a useful forum for
addressing concerns of members, gathering information, and raising questions
about the recent introduction or modification of TRIMs by certain members,
particularly in the automotive and agricultural sectors. The Committee
also dealt with the issue of how the TRIMs Agreement's provisions relate
to the Agreement on Subsidies and Countervailing Measures and the Agreement
on Agriculture. Several procedural measures were adopted, regarding the
notification process and the expanded circulation of WTO documents.(23)
Three main TRIMs-related disputes surfaced in 1996 prompting
requests for consultation under the DSU. First was the banana case already
discussed. Second was a similar request submitted by Japan and the United
States in response to certain Brazilian measures affecting trade and investment
in the automotive sector. Third, Japan, the EU, and the United States filed
for consultations with Indonesia in regards to some of its practices in
the automotive industry.(24)
In 1997, Uganda notified the Committee of its relevant
TRIMs, while Mali submitted that none of its TRIMs were contrary to the
Agreement.(25) The Committee planned to
examine modifications to TRIMs about which it had been notified, as well
as any new TRIMs whether declared or not. Further, the Committee intended
to review developing countries' plans to phase out their TRIMs by January
1, 2000. One major dispute which arose involved a U.S. request for consultation
with the Philippines regarding the latter's measures affecting trade in
pork and poultry.(26)
In addition to the TRIMs Agreement, another important
investment-related accord outside the auspices of the WTO is the Multilateral
Agreement on Investment (MAI). The MAI seeks to cover all forms of its
signatories' investments, including cross-border establishment of enterprises,
activities of established foreign-owned or controlled enterprises, portfolio
investment, and intangible assets.(27)
In May 1995, the Organization for Economic Cooperation and Development
(OECD) Council of Ministers agreed to launch negotiations on the MAI. The
source of three-fourths of global foreign direct investment, OECD members
were determined to forge a strong agreement which non-member states would
subsequently have the opportunity to join. The MAI would contain three
central provisions. First, it would establish legally binding rules to
ensure equally competitive opportunities for domestic and foreign investors
and guarantee the consistent treatment of foreign direct investors. Second,
it would set high standards of liberalization and investment protection.
Third, it would offer an effective mechanism for the settlement of disputes.(28)
It should be noted that the TRIMs Agreement represents
a very small component of the guidelines on investment, especially when
compared to the numerous requirements countries often impose on foreign
investors. Thus, the Agreement fails to discipline many common practices
that restrict or frustrate investment. During negotiations, moreover, there
was a conspicuous lack of consensus - particularly among developing countries
- regarding the need for a broader set of rules governing international
investment. Such rules must be established as part of the WTO if they are
to govern investment successfully. To prepare for an eventual agreement
on investment, the WTO should initiate a work program aimed at educating
members about the benefits of open investment regimes and investors' expectations.(29)
INFORMATION TECHNOLOGY
The Ministerial Declaration on Trade in Information Technology
Products seeks to eliminate all customs and other duties of any kind on
IT goods. Signed in Singapore on December 13, 1996, the Information Technology
Agreement outlines a process of equal rate reductions of customs duties
from 1997 through 2000. Products covered by the ITA totaled roughly $500
billion worth of global trade in 1995.(30)
In 1996, world trade in office machines and telecommunications equipment
comprised about 12.2 percent of merchandise trade, or $626 billion.(31)
The ITA's signatories account for over 80 percent of world trade and include
Australia, Canada, the European Community, Hong Kong, Iceland, Indonesia,
Japan, Korea, Norway, Separate Customs Territory of Taiwan, Penghu, Kinmen
and Matsu, Singapore, Switzerland (on behalf of the Switzerland-Liechtenstein
customs union), Turkey, and the United States.(32)
As of 1997, the ITA represented the only global agreement
on a sector in which participating governments have agreed to eliminate
all duties on a uniform list of products.(33)
Although it does not cover consumer electronics, the Agreement does include
six categories of products:
Participants agreed to begin implementing the Declaration's
provisions by April 1, 1997. In order to eliminate the potential for free-riders,
two conditions for implementation were established. First, countries representing
a combined 90 percent of world trade in IT products had to accept the agreement
by the April 1st deadline. Second, participants would establish a satisfactory
staging arrangement.(35)
The first condition was met when the USTR reported that
ITA participants accounted for over 92 percent of world IT trade as of
26 March 1997.(36) On that date, additional
participants joined the agreement, including the Czech Republic, Costa
Rica, Estonia, India, Israel, Macao, Malaysia, New Zealand, Romania, the
Slovak Republic, and Thailand.(37) (Poland,
the Philippines,(38) and El Salvador(39)
were later added as well.) Non-WTO members were expected to implement the
measures autonomously and incorporate them into their market access schedule
upon accession to the WTO. The ITA's second condition for implementation
centered on staging rules to eliminate duties on the product list in four
equal steps, or by 25 percent each. The first deadline was set for July
1, 1997, and the following three were January 1st of 1998, 1999,
and 2000. In certain exceptional cases, several countries requested extensions
for duty reductions on various products;(40)
No deadline extends beyond 2005.(41)
At the March 26, 1997 gathering, the signatories also
established the Committee of Participants on the Expansion of Trade in
Information Technology Products to oversee the Agreement's provisions and
provide a forum for meetings and consultations. The Committee was charged
with three main tasks: monitoring the ITA's implementation, handling other
countries' requests to join, and discussing and approving expansion of
product coverage.(42)
With regard to the first task, twenty-six participants
submitted reports documenting the modification of their duties on IT products
as of November 24, 1997. Of those, the Philippines, Poland, Switzerland
and Turkey indicated that implementation would begin pending the completion
of domestic procedural requirements. India and Israel, meanwhile, notified
the Committee that these requirements had been completed. For several countries,
the first rate reduction was not scheduled to take place until December
31, 1997, for Romania and Switzerland, or January 1, 1998, for the Czech
Republic, Malaysia, Poland, the Slovak Republic, and Thailand. Finally,
Estonia and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and
Matsu are not currently WTO members and hence were not expected to submit
reports on rate schedule modifications.(43)
Regarding its second task, the Committee will consider
the possible participation of Latvia, Panama,(44)
and China.(45) To fulfill its third task,
the Committee will examine non-tariff measures related to IT and differing
classifications of IT products. Participants have specifically expressed
an interest in standards and import licensing, as well as addressing the
concerns of small and medium-sized exporters. The Committee has surveyed
the participants on implementing mandatory technical regulations, conformity
assessment procedures, and standards.(46)
Participants' responses are expected to be returned to the WTO Secretariat
by April 15, 1998.(47)
In addition to these issues, ITA participants agreed on
a timetable for submitting lists of specific IT products to be considered
for additional tariff concessions. Discussions began October 11, 1997 and
last until September 30, 1998. ITA signatories will implement the results
on January 1, 1999. The following timetable illustrates the process for
expanding product coverage.
| DATE |
MEASURE |
| October 1 - December 31, 1997 |
Submission of lists of additional products for possible |
| January 1 - March 31, 1998 |
Consultation and clarification of documents |
| June 30, 1998 |
Deadline for meeting to decide on what new products |
| September 1, 1998 |
Deadline to submit revised product schedules (if a |
| September 15, 1998 |
Deadline for meeting to review and verify schedules. |
| September 30, 1998 |
Deadline to conclude review and verification and to |
| January 1, 1999 |
Entry into force of revised schedules.(48) |
As of February 12, 1998, fourteen participants had submitted
lists for hundreds of categories of IT products to be covered by a second
agreement, ITA II. These include equipment for manufacturing printed circuit
boards, flat panel displays, capacitors, audio, radio, and television,
electronic machines, and various instruments, parts and inputs for IT products.(49)
As a world leader in the production and trade of information
technology, the United States has a marked interest in the ITA. Not only
does the IT industry employ 1.8 million Americans (1995 figure), but U.S.
exports of IT good surpassed $90 billion in 1995 and $100 billion in 1996.(50)
The U.S. administration has solicited advice and public comment on ITA-related
issues, which has prompted an overwhelming response in support of forging
a comprehensive and ambitious ITA II.(51)
GPA
Since the Agreement on Government Procurement (GPA) is
a plurilateral agreement, it does not bind all WTO members. It was signed
in Marrakesh, Morocco on April 15, 1994 at the same time the Agreement
Establishing the WTO was signed. The Tokyo Round of trade negotiations
produced the first agreement on government procurement, which was signed
in 1979 and entered into force in 1981. This Agreement was amended in 1987
and took effect the following year. During the Uruguay Round, parties to
the Agreement held negotiations to extend the Agreement's scope. Pointing
to the GPA's significance, the WTO estimates that government procurement
typically represents between 10-15 percent of GDP.(52)
As of October 1997, parties to the Agreement included
Canada, China, the EC, Israel, Hong Kong, Japan, Korea, the Kingdom of
the Netherlands with respect to Aruba, Liechtenstein, Norway, Singapore,
Switzerland, and the United States. Observers to the Agreement consisted
of Argentina, Australia, Bulgaria,, Chile, Colombia, Iceland, Panama, Poland,
and Turkey. Two non-WTO members, Chinese Taipei and Latvia, also held observer
status, as did two intergovernmental organizations, the IMF and the OECD.(53)
Three main features comprise the GPA. First, it establishes
an agreed upon framework of rights and obligations regarding government
procurement among the parties' national laws and practices. Second, the
non-discrimination principle anchors the GPA. In order to ensure compliance
with this principle - that is, to ensure that foreign suppliers of products
and services have access to procurement - the GPA emphasizes transparent
regulations and practices regarding government procurement. Third, the
Agreement allows parties to modify their procurement practices by incorporating
a series of bilateral agreements between its parties. The frequently-updated
GPA has expanded its scope.(54)
Although the GPA does not cover all types of government
procurement, it does apply to a significant amount. Under the GPA, the
parties face obligations of the following types:
Much preparatory work took place before the GPA's entry
into force between April 1994 and January 1996.(56)
Formed to perform these preliminary tasks, the Interim Committee on Government
Procurement tackled numerous issues likely to surface during the GPA's
implementation. One such issue was the development in information technology
in national procurement systems and how these technologies could be accommodated
under the GPA while ensuring that market access is enhanced.(57)
The year 1996 saw a number of administrative and procedural
developments, such as the establishment of the Committee on Government.
The Committee refined the parties' notification procedures for new agreements
and coverage. That year, the Committee reported several bilateral agreements,
which extended mutual benefits between the United States and other nations
such as Japan, Norway, Switzerland, and the EU.(58)
These bilateral agreements allowed the United States to expand the GPA's
scope by enhancing its coverage of procurement by various sectors, most
notably by sub-central government entities and government-owned utilities.(59)
Further executive changes took place in 1996. In order
to maintain the GPA in a single document while remaining current, the Committee
established a "loose-leaf" system for updating coverage schedules. The
Committee also enacted procedures by which the parties would notify the
Committee of legislation designed to implement GPA provisions.(60)
After some early obstacles, the Committee also agreed on systems for classifying
goods and services in statistical reports.(61)
Information technology receives specific attention under
the GPA. Article XXIV:8 calls on parties to consult within the Committee
on developments in the use of IT in procurement and, if necessary, to negotiate
modifications to the Agreement itself. The GPA attempts to ensure non-discriminatory
access to government procurement opportunities through the use of IT. The
Committee has also considered possible modifications to the GPA that would
enable the benefits of IT to be harnessed.(62)
In 1997, a number of member-states modified their Appendices
to the Agreement. For example, the EU and the United States submitted modifications
relating to the 1995 expansion of the EU to include Austria, Finland, and
Sweden. Canada, meanwhile, amended its Appendix I, so that the GPA would
cover sub-central government entities and enterprises in all its provinces.
A considerable number of countries notified the Committee of similar modifications,
which have significantly expanded the scope of the GPA.(63)
The Committee initiated an examination of a number of
issues beginning in 1997. First, it considered simplifying and improving
the GPA, particularly by adapting to IT advances.(64)
This would allow governments to employ new information technologies in
procurement procedures, such as posting electronic notices of procurement
opportunities, which would improve dissemination capabilities and lower
costs for both suppliers and the governments themselves.(65)
Second, the Committee is investigating an extension of the GPA to sectors
it does not presently cover. Third, it continues to target discriminatory
measures that distort open procurement practices. Fourth, the Committee
is striving to enhance the security of market access under the GPA. Expanding
the GPA's membership by making the Agreement more accessible to non-members
represents the final objective of the Committee's efforts.(66)
Similar efforts will persist through 1998. The USTR reported
that the Committee will continue to review the GPA, especially in terms
of modifying rules on procurement procedures. Expanding the GPA's coverage
and eliminating discriminatory measures will also command attention. Further,
the Committee will begin monitoring the GPA's implementation, which entails
an evaluation of the signatories' domestic legislation, among other measures.
Negotiations over the accession of Bulgaria and Mongolia will commence
in 1998 as well. Finally, two disputes over government procurement practices
have arisen. First, the EU and Japan have requested consultation with the
United States over American procurement practices. Second, the EU and the
United States have settled their dispute with Japan over the latter's procurement
of a navigation satellite.(67)
1 WTO. Annual
Report. Geneva: World Trade Organization, 1996.
2 Bureau of Economic
Analysis, Survey of Current Business. Washington, DC: United States
Department of Commerce, October 1997, 98.
3 http://www.wto.org/wto/about/agmnts5.htm
About the WTO. Updated February 2, 1997
4 Hoekman, Bernard
and Carlos A. Primo Braga. Protection and Trade in Services: A Survey.
The World Bank, March 1997, 25-26. Manuscript prepared for the Open Economies
Review.
5 Ibid.
6 http://www.wto.org/press/data3.htm
Data on Telecommunications Markets covered by the WTO Negotiations on
Basic Telecommunications. WTO unofficial news release, February 17,
1997.
7 Sisson,
Peter. The New WTO Telecom Agreement: Opportunities and Challenges.
Horizon House Publications Inc., 1997, as cited on Nexus, September 1997.
8 From testimony
before the Senate Finance Committee as transcribed by Federal News Service,
Federal Information Systems Corporation, June 3, 1997.
9 Drye,
Kelley and Aileen A. Pisciotta. Navigating New Telecom Trade Routes:
the WTO Basic Telecommunication Agreement. The Metropolitan Corporate
Counsel, 1997, as cited on Nexus, October 1997.
10 http://www.wto.org/wto/services/press86.htm
Successful Conclusion on the WTO's Financial Services Negotiations.
Updated December 15, 1997.
11 Hill, Eileen.
"Strong IPR Protection is Important for High-Tech Trade." In Business
America. August 1994.
12 Lehman, Bruce
A. "Intellectual Property: America's Competitive Advantage in the 21st
Century." In Columbia Journal of World Business. Spring 1996.
13 Treblicock,
M. and Howse, R. The Regulation of International Trade. New York:
Routledge, 1997, 266.
14 Shultz II,
Clifford J. and Bill Saporito. "Protecting Intellectual Property: Strategies
and Recommendations to Deter Counterfeiting and Brand Piracy in Global
Markets." In Columbia Journal of World Business. Spring 1996, 19.
15 Mossinghoff,
Gerald J. and Thomas Bombelles. "The Importance of Intellectual Property
Protection to the American Research-Intensive Pharmaceutical Industry."
In Columbia Journal of World Business. Spring 1996, 39-40. The authors,
executive members of the Pharmaceutical Research and Manufacturers of America
offer numerous statistics from surveys and government documents highlighting
the dominance of the industry and necessity of IPR.
16 Ibid.
17 Lang, Jeffrey
M., Deputy U.S. Trade Representative testimony before the Subcommittee
on Trade of the Committee on Ways and Means as transcribed by Federal Document
Clearing House, Inc., February 26, 1997.
18 Shultz II,
Clifford J. and Bill Saporito. "Protecting Intellectual Property: Strategies
and Recommendations to Deter Counterfeiting and Brand Piracy in Global
Markets," 21.
19 Agreement
on Trade-Related Investment Measures (TRIMs).
20 Committee
on TRIMs, Report (1995) of the Committee on Trade-Related Investment
Measures, Rept. G/L/37, 21 November 1995. Also, United States Trade
Representative (USTR), 1996 Trade Policy Agenda & 1995 Annual Report
of the President of the United States on the Trade Agreements Program.
21 Committee
on TRIMs, Report (1995) of the Committee on TRIMs.
22 Committee
on TRIMs, Report (1996) of the Committee on TRIMs, G/L/133, 1 November
1996.
23 Ibid. Also,
USTR, 1997 Trade Policy Agenda & 1996 Annual Report of the President
of the United States on the Trade Agreements Program,.
24 Committee
on TRIMs, Report (1996) of the Committee on TRIMs.
25 Committee
on TRIMs, Report (1997) of the Committee on TRIMs, Rept. G/L/193,
15 October 1997.
26 USTR, 1998
Trade Policy Agenda & 1997 Annual Report of the President of the United
States on the Trade Agreements Program.
27 OECD-MAI
home page, http://www.oecd.org/daf/cmis/mai/maindex.htm.
28 The President's
Advisory Committee for Trade Policy and Negotiations (ACTPN), Report:
Discussion Draft on Investment.
29 The President's
ACTPN, Report on WTO Implementation: Cementing and Improving Existing
Agreements, 11 March 1996.
30 USTR, 1997
Trade Policy Agenda and 1996 Annual Report.
31 "More Information
Technology products proposed for Tariff Elimination," Press/90, 16 February
1998.
32 Ministerial
Conference, Ministerial Declaration on Trade in Information Technology
Products, (Singapore, December 1996).
33 USTR, 1997
Trade Policy Agenda & 1996 Annual Report.
34 Goods:
Market Access: Information Technology Products (ITA), http://www.wto.org/eol/e/wto02/wto2_64.htm.
35 Ministerial
Conference.
36 Secretariat
of the WTO Council for Trade in Goods, Implementation of the Ministerial
Declaration on Trade in Information Technology Products, Rept. G/L/159/Rev.
1, 24 April 1997.
37 Secretariat
of the WTO Council for Trade in Goods, Implementation of the Ministerial
Declaration on Trade in Information Technology Products, Rept. G/L/160,
2 April 1997.
38 Secretariat
of the WTO Council for Trade in Goods, Implementation of the Ministerial
Declaration on Trade in Information Technology Products, Rept. G/L/160/Add.
1, 5 May 1997.
39 Secretariat
of the WTO Council for Trade in Goods, Implementation of the Ministerial
Declaration on Trade in Information Technology Products, Rept. G/L/160/Add.
2, 17 September 1997.
40 USTR, 1997
Trade Policy Agenda and 1996 Annual Report.
41 Ministerial
Conference.
42 Secretariat
of the WTO Council, Rept. G/L/160.
43 Secretariat
of the Committee of Participants on the Expansion of Trade in Information
Technology Products, Status of Implementation, Rept. G/L/IT/1/Rev.
2, 27 November 1997, and Status of Implementation, Rept. G/L/IT/Rev.
3, 9 February 1998.
44 Report
(1997) of the Committee of Participants on the Expansion of Trade in Information
Technology Products, Rept. G/L/216, 5 December 1997.
45 USTR, 1998
Trade Policy Agenda & 1997 Annual Report.
46 Report
(1997) of the Committee of Participants.
47 Committee
of Participants on the Expansion of Trade in information Technology Products,
Survey, Rept. G/IT/4, 19 February 1998.
48 Information
Technology, http://www.wto.org/wto/goods/infotech.htm.
49 "Ruggiero
Cited Progress in the Information Technology Agreement," Press/69, 3 March
1997.
50 USTR, 1997
Trade Policy Agenda and 1996 Annual Report.
51 USTR, 1998
Trade Policy Agenda and 1997 Annual Report.
52 Overview
of the Agreement on Government Procurement, http://www.wto.org/govt/over.htm.
53 Committee
on Government Procurement, Report (1997) of the Committee on Government
Procurement, Rept. GPA/19, 29 October 1997.
54 Ibid.
55 Ibid.
56 Interim Committee
on Government Procurement, Report on the Interim Committee on Government
Procurement to the Committee on Government Procurement to be Established
Under the New Agreement on Government Procurement, Rept. GPA/IC/9,
16 January 1996.
57 USTR, 1996
Trade Policy Agenda & 1995 Annual Report.
58 Committee
on Government Procurement, Report (1996) of the Committee on Government
Procurement, Rept. GPA/8, 17 October 1996.
59 USTR, 1997
Trade Policy Agenda & 1996 Annual Report.
60 Ibid.
61 Committee
on Government Procurement, Report (1996).
62 Ibid.
63 Committee
on Government Procurement, Report (1997).
64 Ibid.
65 USTR, 1998
Trade Policy Agenda & 1997 Annual Report.
66 Committee
on Government Procurement, Report (1997).
67 USTR, 1998
Trade Policy Agenda & 1997 Annual Report.
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Last Updated on 4/1/98
