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AEYLS

WORKSHOP III
WTO
"Identifying Ways Asia and Europe Can Cooperate under the WTO Regime"

Final Report

1. Systemic Issues: Relation between Regionalism and Multilateralism

The workshop participants listened to a presentation by Mr. Masaru Yoshitomi on systemic issues pertinent to regional integration and its effects on the multilateral trading system. They then engaged in a lively and open exchange of views on these issues. During this discussion, some participants noted that these regional integration arrangements had the potential of being discriminatory and harmful to the multilateral process of trade liberalization. Concluding that discussion, it was noted that types of regional integration such as Free Trade Areas and Customs Unions could be beneficial to the multilateral trading system, provided that they were fully consistent with WTO rules and principles. The trade diverting and restricting potential of such endeavors, however, would have to be controlled through strict application and safeguarding of multilateral rules governing these arrangements.

2. Specific Issues

The workshop dealt with five specific issues: trade and investment, trade and competition, labor standards, matters related to least developed countries (LLDCs), and China's accession to the WTO.

(1) Trade and Investment

Some participants emphasized that the views of developing countries, i.e., the importance of developmental aspects, must be better reflected in the WTO's ongoing work. Others emphasized the need for a binding multilateral framework on investment.

Participants agreed that ongoing discussions in other fora, such as OECD, UNCTAD, ASEM and APEC, could be helpful preliminaries to the establishment of an agenda for the WTO working group on investment.

All participants referred to the close relationship between trade and investment flows. They recommended that, apart from the discussions taking place in the WTO context, further progress was urgently needed on the ASEM Investment Promotion Action Plan (IPAP).

(2) Trade and competition

Some participants emphasized the need for developing a multilateral framework of rules governing trade and competition. Others expressed the view that, without prejudice to the outcome, discussions on competition policy must include the aspect of trade remedies such as anti-dumping measures. Some participants expressed the view that the essence of discussions on competition policy lay in anti-trust rules.

There was a clear acknowledgment by the participants that enhancing competition is vital for all, and to that effect, studies at the WTO should be vigorously pursued.

All participants recognized that there is a role for the WTO to encourage all its members, irrespective of their level of development, to prepare, enact and apply competition structures. Participants recommended that an agreement on international antitrust rules should mainly focus on jurisdiction and comity, i.e., definition of clear rules to resolve conflicts of laws and enhanced cooperation among authorities to enforce domestic laws. Such an agreement should also contain common rules on cartels, mainly to encourage enforcement against export cartels.

(3) Labor standards

Some participants thought that the WTO is not the appropriate place for discussions on labor-related issues, while others thought that discussions within the framework of the WTO were necessary, inter alia, in order to prevent a legal vacuum in this matter.

Participants affirmed the need for observance of internationally recognized core labor standards. Participants agreed that labor standards should not be used, under any circumstances, for protectionist purposes, including not being used to adversely affect any country's comparative advantage.

Bearing in mind the balance struck at the Singapore Ministerial Conference of the WTO, the participants encouraged the WTO and ILO Secretariats to continue their existing collaboration. This must happen with a view to renewing ASEM members' commitments to the observance of core labor standards, while at the same time rejecting their use for protectionist purposes.

(4) Matters related to Least-Developed Countries (LLDCs)

Some participants stressed the importance of more committed elimination of tariffs on imports from LLDCs, while others preferred liberalization on a more autonomous basis.

Participants emphasized the need to differentiate the pace of liberalization, reflecting the differing levels of economic development. While acknowledging the work done thus far, participants encouraged a more ambitious approach in the WTO addressing the problems of LLDCs.

The participants recommended that the WTO take urgent action to foster development of the LLDCs, and to enhance further opening of the markets of developed economies to the exports of LLDCs.

(5) China's Accession to the WTO

There were different views with regard to the conditions of China's accession to the WTO.

All participants, however, agreed that early accession of China to the WTO is extremely beneficial to the rule-based trading system.

Participants welcomed the progress made in the negotiations to date. In particular, they were encouraged by the recent progress, and they urged that all parties concerned should expedite the process.

3. General Recommendations and Conclusions

Participants agreed that unilateral sanctions, as well as extra-territorial application of domestic laws, are detrimental to the stability of the multilateral trading system.

The establishment of an ASEM database on market access was proposed by the group. This could include Asian, European and other regions' barriers to trade, to facilitate the activities of small- and medium-sized enterprises.

All participants emphasized the crucial need for strengthening and support of the multilateral trading system. They concurred that in this context, discussions between Asia and Europe, in particularly within ASEM, should lead to enhanced co-operation in these areas in the interest of free and open trade, as well as ongoing liberalization, such as through implementation of the Uruguay Round results.

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