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PERMANENT COUNCIL OF THE ORGANIZATION OF AMERICAN STATES
SPECIAL COMMITTEE ON INTER-AMERICAN SUMMITS MANAGEMENT

OEA/Ser.G    CE/GCI-12/95 rev.1
October 13, 1995
Original: English

REPORT OF THE OAS TRADE UNIT TO THE SPECIAL COMMITTEE ON INTER-AMERICAN SUMMITS MANAGEMENT

 

I. Background

The new Trade Unit was established on April 3, 1995 under the Office of the OAS Secretary General to strengthen the capabilities of the Organization in dealing with trade issues (1). Its basic purpose is to support member countries in the area of trade, including the tasks assigned to the OAS by the Summit of the Americas in relation to the establishment of the Free Trade Area of the Americas (FTAA). The functions of the Trade Unit are to: provide technical support to the Special Committee on Trade (SCT); study the various aspects of hemispheric trade relations; ensure effective coordination with regional and subregional integration organizations; and strengthen trade information systems.

II. The Special Committee on Trade and its Advisory Group

The OAS Trade Unit acted as the secretariat of the Second Meeting of the Special Committee on Trade, held in Montevideo, Uruguay, on June 14-15, 1995. The main purpose of the meeting was to prepare the preliminary report of the SCT to the hemispheric Trade Ministers for their June 30 meeting in Denver. At its Montevideo meeting, the SCT had before it three main reports: a) the OAS Analytical Compendium of Western Hemisphere Trade Arrangements; a study prepared by the Inter-American Development Bank (IDB) and entitled Protection, Preferential Tariff Elimination and Rules of Origin, and the OAS report Toward Free Trade in the Americas (2).

In carrying out the request of the Summit, the SCT had the support of the Advisory Group which met three times after the Summit of the Americas, and prior to the Denver Ministerial, to organize the work to be undertaken. The OAS Trade Unit prepared, with the support of the IDB and other regional and integration institutions and individual countries, the analytical compendium of Western Hemisphere trade arrangements. The IDB made a major contribution to the work of the SCT by preparing a thorough analysis of tariff structures and rules of origin in the region. The U.N. Economic Commission for Latin America and the Caribbean (ECLAC) also contributed a paper of reflections on the topic of the FTAA.

At its meetings, the Advisory Group periodically received and examined progress reports by the Trade Unit on the compendium of trade and integration agreements, and by the IDB on its analysis of tariff structures and rules of origin in the region. It also reviewed a report prepared by the Trade Unit and entitled Toward Free Trade in the Americas, in which a number of considerations were made on issues relevant to the establishment of a FTAA.

The Advisory Group agreed on terms of reference for a study on the special needs of the small and relatively less developed economies in the Hemisphere, and in accordance with the Summit Plan of Action, the Advisory Group also identified a list of convergence-related topics for future study, among them: rules of origin, dispute settlement, market access, subsidies and dumping, intellectual property, services and investment. In addition, the OAS Secretariat presented to the Advisory Group a report on dispute settlement prepared by the Inter-American Juridical Committee. The Advisory Group encouraged the Inter-American Juridical Committee to continue its analysis and to work closely with the Special Committee on Trade in the examination of this important issue.

The Group also reviewed the operations of the Foreign Trade Information Service (SICE) and in light of efforts to expand coverage and facilitate cost-effective and user friendly access to trade data and agreed with the terms of reference for a consultant who would examine the operations of SICE and make recommendations on the most efficient way to collect and disseminate trade related information.

Following the first meetings of the FTAA Working Groups established by the Trade Ministers in Denver, the Advisory Group will meet in mid-October to assess the work program of the Trade Unit.

III. The Mandates of the Summit of the Americas

At the Summit of the Americas held, in Miami, in December 1994, the Heads of State and Government decided to begin immediately to construct the Free Trade Area of the Americas (FTAA), to conclude the negotiations no later than 2005, and to make concrete progress by the end of this century.

In regard to measures envisaged in the Miami Plan of Action, the Summit assigned an important role in supporting the countries with respect to, inter alia, free trade in the Americas. More specifically, it directed the OAS Special Committee on Trade (SCT) to "assist in the systematization of data in the region and to continue its work on studying economic integration arrangements in the Hemisphere, including brief comparative descriptions of the obligations in each of the Hemisphere's existing trade agreements." Furthermore, the Heads of State and Government requested the SCT to present an interim report of its work to the Meeting of Trade Ministers (held in Denver on June 30, 1995).

In its report to the Denver Trade Ministerial, the SCT annexed two studies prepared by the Trade Unit: 1) An Analytical Compendium of Western Hemisphere Trade Arrangements, and 2) Toward Free Trade in the Americas. The compendium is an analysis of 11 trade and integration agreements. It is divided into four sections. The first is a general section covering broad issues such as type, scope and objectives of the agreements, their basic administrative and executive structures, accession and withdrawal provisions and dispute settlement. The second section is devoted to an examination of the terms of liberalization, provisions relating to market access and regulation of trade. It includes an examination of safeguard measures, trade remedies, technical and agricultural standards related measures and rules of origin. The third section deals with issues such as services, government procurement, the regulation of state enterprises, competition policy issues, foreign investment and intellectual property provisions. The fourth and final section examines four sectors (energy, autos, textiles and clothing, and agriculture) in which various agreements provide for special approaches.

The report "Toward Free Trade in the Americas" examines merchandise trade flows in the Americas, describes existing trade and integration agreements in the region, discusses regionalism in the context of the multilateral trading system, deals with the situation of the small and less developed countries, and finally provides a number of considerations regarding the content, the timeframe and the modalities for the negotiations of the FTAA.

IV. The OAS Mandates Following the Denver Trade Ministerial

In order to carry out the preparatory process of the FTAA negotiations, seven Working Groups (market access; customs procedures and rules of origins; investment; standards and technical barriers to trade; sanitary and phytosanitary measures; subsidies, antidumping, and countervailing duties; and smaller economies) were established at the Denver Ministerial Meeting. The Trade Ministers of the Western Hemisphere requested the Tripartite Committee --Organization of American States (OAS), the Inter-American Development Bank (IDB) and the U.N. Economic Commission for Latin America and the Caribbean (ECLAC)-- to provide analytical support, technical assistance, and relevant studies within their respective areas of competence, as may be requested by these Working Groups. The Working Groups will complete a report for presentation to the March 1996 Trade Ministerial, to be held in Colombia, including recommendations for subsequent action.

All seven Working Groups have completed their initial meetings. At the request of the five groups for which the OAS is the "lead" agency for the Tripartite Committee, the Trade Unit has agreed to a work program.

The Working Group on Smaller Economies (which met in Kingston, Jamaica, on August 28-29, 1995) requested the Trade Unit to:

-- conduct a survey of existing international, regional, and subregional agreements and arrangements to assess their treatment of smaller economies (e.g. transitional measures).
-- prepare a comparative compendium of the treatment of smaller economies in such agreements and arrangements.

The Working Group on Standards and Technical Barriers to Trade (which met in Ottawa, Canada, on August 31-September 1, 1995) requested the Trade Unit to:

-- compile an inventory of national systems of standards, technical regulations and conformity assessment bodies based on the written description that will be provided by the 34 countries by September 30, 1995.
-- prepare a draft "analytical framework" for consideration by the countries at their next meeting, provisionally scheduled for the middle of November.

The Working Group on Investment (which met in San Josť, Costa Rica, on September 4-5, 1995) requested the Trade Unit to:

-- prepare an inventory of bilateral investment treaties signed within the region. This compendium will also include treaties signed with countries outside the region when a country of the Hemisphere has only signed this type of agreement, or in those cases when treaties between countries of the region and others from the rest of the world contain some unique and interesting elements.
-- prepare an inventory of the investment provisions of all major Western Hemisphere trade arrangements (NAFTA, Central American Common Market, CARICOM, Group of Three, Andean Pact and MERCOSUR).

The next meeting of the Working Group on Investment will be held in San Josť on November 29-30, 1995.

Following the meeting of the Working Group on Subsidies, Antidumping and Countervailing Duties, which met in Buenos Aires on September 11-12, 1995, the Trade Unit will:

-- compile an inventory of agricultural export subsidies and export practices having similar effect, drawn from information supplied by the countries.
-- prepare a compendium of the laws and regulations relative to dumping, subsidies, and countervailing duties in the region, including a comparison of the important features of each country?s practice in relation to relevant obligations and provisions contained in the WTO, based on information to be supplied by the countries.
-- prepare a survey of disciplines existing in subregional agreements.
-- assemble statistical information submitted by members of the Working Group on current antidumping and countervailing duties cases (including information on measures in force).
-- prepare a compilation of existing background materials on conceptual and methodological approaches followed in various regional and international fora with respect to the identification and notification of subsidies.
-- compile past proposals presented in multilateral fora with respect to the reduction or elimination of export subsidies and other practices with similar effects on agricultural trade.

The Working Group on Sanitary and Phytosanitary Measures met in Mexico on September 18-19, 1995, and gave the Trade Unit the following mandates:

-- prepare an inventory of hemispheric agreements in the area of sanitary and phytosanitary measures.

The Institute for Inter-American Cooperation on Agriculture (IICA) will prepare an inventory of national sanitary and phytosanitary regimes in the Hemisphere. Each inventory will take into account the special circumstances that might surround plant health, animal health, and human health.

All these studies, requested by these Working Groups, preliminary in nature, should be ready by November 15, 1995.

With respect to the two other Working Groups (Market Access, which met in San Salvador on September 7-8, 1995; and Customs Procedures and Rules of Origin, which met in Bolivia on September 28-29, 1995), the Inter-American Development Bank will be the "lead" agency for the Tripartite Committee.

The Trade Unit will also cooperate with Colombia, the host of the next Trade Ministerial, in order to prepare the terms of reference for the meeting of the private sector that will be held at the occasion of the Ministerial.

V. Reorganization of the Foreign Trade Information System (SICE)

SICE is now under the authority of the Trade Unit and is in the process of restructuring itself. A new director began in late July and started re-engineering efforts, which so far have focused on increasing efficiency. This has included concentrating on the update of the most utilized databases, suspending both the billing and promotional activities while the restructuring takes place, reducing costs and continuously updating SICE's homepage on the Internet. This homepage provides resources on both quantitative and qualitative information. It links trade agreements if they are available elsewhere, and locate copies of agreements on SICE's homepage, if not available elsewhere.

SICE was established by the OAS to provide foreign trade information to the public and private sectors of member states, in order to help them promote the entry of their country's products into foreign markets and to assist them in the decision-making process. Since 1988, it has provided trade information on an on-line system, bringing together data from different sources.

Technology and the world of trade have changed a great deal since SICE was established. This led SICE to re-evaluate its services. As a result of the Summit of the Americas, additional data is likely to be needed. SICE's primary focus in the next few months will be to build databases concerning trade rules and disciplines currently applied within the Western Hemisphere. The prototype project currently under development is a database version of the Trade Unit's compendiums.

As a follow up to the recommendations from the Advisory Group to the Special Committee on Trade to consider improvements to SICE, the Trade Unit accepted the offer of the Canadian Government to have an initial evaluation of SICE carried out by specialists from Statistics Canada. This will take place in October-November, 1995.

VI. The Trade Unit's Communications Strategy

As the Organization's role grows in relation to trade and trade-related matters, the need for a well defined and effectively executed communications strategy becomes more pressing. A key element in the Trade Unit's communications strategy is the publication of a monthly newsletter on trade and integration issues in the Americas (in Spanish and English). The Trade Unit is now preparing the prototype of the newsletter with a view to having the first issue published at the end of the year or at the beginning of 1996 at the latest.

The Trade Unit has also its homepage on the Internet, where some of its publications (for instance, Toward Free Trade in the Americas) are available. As mentioned above, with the cooperation of SICE, all the compendiums that will be prepared by the Trade Unit will be available on the Internet.

VII. Inter-Institutional Cooperation

In carrying out its activities with respect to the FTAA process, the OAS Trade Unit is working closely with the IDB and ECLAC with which it has established the Tripartite Committee. It will also be seeking the participation and cooperation of institutions such as the World Bank, the International Centre for Settlement of Investment Disputes (ICSID), the Inter-American Institute for Cooperation on Agriculture (IICA) and the secretariats of the subregional trade arrangements, in accordance with the requests of the different Working Groups.

The Trade Unit has also organized two meetings of the Secretariats of Regional and Subregional Integration and Cooperation Organizations. The first of these meetings took place in Washington, D.C., on March 13-14, 1995. The second meeting was held in Montevideo, Uruguay, on June 13, 1995. Representatives of the Latin American Integration Association (ALADI), the Inter-American Development Bank (IDB), the Economic Commission for Latin America and the Caribbean (ECLAC), the Inter-American Institute for Cooperation on Agriculture (IICA), the Junta of the Cartagena Agreement (JUNAC), the Caribbean Common Market (CARICOM), the Latin American Economic System (SELA), the General Secretariat of the Central American Integration System (SICA), and the Permanent Secretariat of the General Treaty on Central American Economic Integration (SIECA) and the General Secretariat of the Organization of American States (OAS) attended these two meetings.


Endnotes

(1) Although the Trade Unit was formally created on April 3, 1995 by an executive order of the OAS Secretary General, it started its operations in early 1995
(2) See the following section for more detail on the two OAS reports.


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