WTO - Doha Development Agenda

Introduction

The European steel industry, which with 209 million tonnes of production (16 % of world production in 2007) is the second largest producer in the world after China, is a major global player with exports to third countries in 2007 of 23 million tonnes.

The European Union market for steel products is the most open in the world. Following the zero for zero agreement on steel in the Uruguay Round tariff rates for imports of steel in the EU were eliminated in 2004. Imports of steel into Europe have grown enormously in recent years, rising from 14.5 million tonnes in 1997 to 32.2 million tonnes in 2007, a 120% increase. The European steel industry wants to see the same openness in markets around the world. It looks to the Doha Round to provide a new liberalisation impetus.

The Doha Round provides an opportunity to make significant progress in unrestricted market access between WTO members.

It will also permit discussions on improvements to existing rules. Experience since the Uruguay Round has shown that there is a need to fine-tune or reinforce existing disciplines, notably anti-dumping.

In the wider perspective, an effective launch of negotiations on the four Singapore issues - trade facilitation, trade and investment, transparency in public procurement and trade and competition - would bring real benefits to industry in Europe and indeed world-wide.

The European Steel Industry has three priorities for the Doha Round

1. A substantial improvement in market access for steel products

2. Anti-dumping: a clarification and improvement of the rules

3. An Agreement on Trade Facilitation

A positive outcome of the Round would include

- a significant reduction in tariffs with 100 % binding

- identification and elimination of non-tariff barriers

- improved disciplines on anti-dumping and subsidies

- the official launch of negotiations on the Singapore issues

Market Access

A substantial improvement in market access is the result which the steel industry is seeking from the Doha Round.The priority of the steel industry is that the Round delivers effective gains in market access through tariff reductions accompanied by the simultaneous elimination of non-tariff barriers.The industry supports:

• as a first step the application of a single formula for all sectors resulting in a significant reduction in overall tariffs and a sharp reduction in tariff peaks;
• negotiations on the basis of applied tariffs;
• the binding of all tariffs by all WTO members

The industry urges negotiators to go further and as a second step seek to extend to all WTO members the zero for zero agreement concluded in the Uruguay Round for steel products. The European Union in line with this agreement will reduce its tariffs for steel products to zero in 2004. The Doha Round provides the opportunity to extend tariff elimination for steel products to all countries members of the WTO.

Special and Differential TreatmentThe specific needs of developing countries are being addressed in the Doha Round through special and differential treatment (SDT). Many developing countries have steel industries which are extremely competitive, and have a strong presence on world markets. The European steel industry believes that SDT should apply only on a case by case basis and distinguish between countries, and sectors, according to their level of competitiveness. SDT in itself should not therefore prevent tariff elimination by those developing countries with highly competitive steel industries.

Non-tariff Barriers (NTBs)Effective market access gains will only be achieved if tariff reductions are accompanied by the elimination of non-tariff barriers. As successive trade rounds have resulted in substantial tariff reductions EU industry increasingly faces NTBs. These have become more noticeable as tariffs decrease and more numerous.The industry therefore calls for simultaneous negotiations on tariffs and non-tariff measures to:- remove existing NTBs;- define NTBs more closely and identify means to tackle them with WTO mechanisms;- track compliance with elimination;- avoid creation of new NTBs.

Rules(anti-dumping, anti-subsidy, safeguards, government procurement etc.)The application of existing WTO rules can constitute a barrier to market access. The Doha Round provides an opportunity for governments to clarify existing rules where necessary and to harmonise their application on the basis of best practice.

Anti-dumping

The steel industry fully supports the aim of negotiations on the Anti-dumping Agreement as expressed at Doha. Negotiations are aimed at clarifying and improving disciplines under the Agreement while preserving the basic concepts, principles and effectiveness of the Agreement.

Given the unacceptably large differences between the application of rules by WTO members the EU steel industry considers it appropriate that discussions be pursued to achieve a greater harmonisation of the implementation of the existing WTO agreement on anti-dumping by the members of the WTO, preferably towards the EU anti-dumping standards. The same interpretation and criteria should be applied by all WTO members.

Special and Differential Treatment

The operation of trade discipline instruments must be impartial and non-discriminatory. The rules must apply to all equally, and without exception. The application of special and differential treatment to developing countries in respect of the anti-dumping instrument would amount to an unacceptable level of exemption to WTO rules.

Objectives for a harmonised application and strengthening of the Anti-dumping Agreement

Subsidies and Countervailing Duties

There is a need for increased transparency and disciplines.Negotiations should aim to:

• resurrect the concept of greenlighted subsidies consistent as far as possible with the EU's acquis;
• clarify the definition of disguised subsidies;
• clarify rules for local content subsidies;
• ensure coherence between WTO and OECD export financing rules;
• establish more effective notification rules;
• define specific new rules relating to subsidies aimed at helping protect the environment;
• a revised ASCM should incorporate WTO panel rulings that past subsidies are not countervailable if the recipient company has subsequently been privatised at full market value;
• generic rulings by DSBs should apply to all case.

Special and differential treatment for developing countries could include exemption from the ASCM disciplines for clearly defined subsidies that aid development. However, this should not apply to sectors in developing countries whose state of development and competitiveness is so advanced that subsidisation could have a severe distortional impact on competing European industries. Therefore for ASCM purposes special and differential treatment should not be applied to sectors in particular countries which have already achieved world class cost levels and a major trade presence on international markets.

Steel Subsidy Agreement

The European steel industry remains strongly in favour of the development of disciplines specific to the steel sector, disciplines which go further than the ASCM and provide for tight limitation on subsidies in particular for the construction of new capacities and the support of uncompetitive facilities, with mandatory notification and pre-authorisation of permissible subsidies together with penalties for non-authorised subsidies. An agreement is only of interest if it is effective and enforceable. The work started on this should continue at the OECD.

Dispute Settlement Understanding

Greater emphasis on compliance with WTO obligations, bilateral consultation and prompt implementation of DSU panel rulings rather than retaliation.

Requests:

• WTO members place greater emphasis on using all possibilities to settle disputes bilaterally;
• suspension of concessions must be highly focused and applied on a provisional basis until the non-compliant country has implemented the WTO ruling;
• governments should recall that the suspension of concessions on a discriminatory basis is a measure of last resort;
• there should be a mechanism to shift the financial burden of retaliation for non-compliance away from business and onto WTO members.

Furthermore, the following improvements to the DSU are proposed:

• governments should conduct a systematic ex ante assessment of their national legislation to check whether they might be in breach of WTO obligations and would therefore need to adapt accordingly;
• proposals to introduce greater legal certainty in and expeditiousness in the sequence of steps to be taken when a member disagrees that another member's remedial actions are adequate to achieve compliance with WTO (DSU articles 21 and 22);
• transparency should be improved throughout the DSU without jeopardising its decision making process;
• European business supports the idea of establishing a standing panel body of independent experts knowledgeable in WTO matters to decide WTO cases at first instance.

Singapore Issues: Trade Facilitation

The European Union is the largest exporter of steel products worldwide. Negotiations to promote trade facilitation are a clear interest for the industry:

Trade facilitation:

• will substantially reduce the costs of trade procedures which are estimated at 4-5% of each transaction;
• will simplify and harmonise trade and customs procedures eliminating unnecessary bureaucracy;
• will reduce risk by improving efficiency and reducing unnecessary delays;
• will increase the transparency of import and export procedures and regulations reducing the scope for discrimination.

Any agreement should seek to promote:

• transparency, non-discrimination and least trade-restrictive measures;
• rules to improve the efficiency of moving goods across borders and minimise unnecessary intervention in trade;
• harmonisation and simplification of standards on transport and border control procedures together with import and export automation;
• the maintenance of good quality statistics on trade. Trade facilitation should not interfere with the legitimate collection of trade statistics;
• a balance between legitimate security concerns and trade facilitation objectives;
• financial and technical assistance for developing countries for trade facilitation.

Singapore Issues: Public Procurement

The EU steel industry fully supports the further opening of public procurement markets worldwide. It is a major player in public procurement markets and seeks to extend further its equal access to these markets in conditions of fair competition.

It supports:

• a review of the current Government procurement Agreement to extend its scope and coverage;
• the launch of negotiations on transparency in public procurement aimed at improving access by defining a clear set of rules respected by all participants allowing competition on a level playing field, reducing corruption and increasing accountability.

Singapore Issues: Trade and Investments

The EU steel industry has a major presence outside the European Union. European companies have substantial foreign investments worldwide. They require more legal certainty for this FDI and additional liberalisation of investment markets.

The EU steel industry supports the establishment of a multilateral framework on investment to:

• improve the legal framework of Foreign Direct Investment world-wide;
• reduce the risk of investing abroad, thus enhancing investment flows;
• establish a level playing field among host countries and among investors;
• respect the interests of home and host countries, in particular developing countries.

Multilateral rules on FDI should:

• promote consistency and transparency, a coherent and complete international framework for FDI is needed providing a basic set of investment principles;
• reduce distortions caused by discriminatory practices, subsidies/incentives, legal uncertainty. Provide legal security and ensure dispute settlement;
• increase market access for investor

Trade and Environment

On the WTO-Multilateral Environmental Agreement (MEA) relationship:

• an interpretation of WTO rules in such a way as to allow MEAs and WTO Agreements to co-exist;
• granting WTO observer status to MEA secretariats;
• in a wider context, there should be an explicit understanding that PPMs are incompatible with the WTO since they could lead to discrimination.

On eco-labelling:

• clarification of labelling rules based on non-discrimination;
• clarification of how TBT rules apply to labels;
• rules to minimise the potential trade-distorting effect of labels;
• recognition of developing country environmental efforts and labels.

On Environmental Goods, in principle the elimination of duties for environmental goods is to be supported provided that:

• environmental goods can be defined in a coherent, objective and non-discriminatory manner;
• a list approach must not lead to a distinction between good and bad goods. Such a result must be rejected;
• no distinction between goods on the basis of the end-use since this could lead to discrimination. Nor should negotiators introduce differences on the basis of non product-related process and production methods.