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

OEA/Ser.G CE/GCI-13/95
29 September 1995
Original: English/Spanish

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

 

I. Background

In the Plan of Action adopted at the Summit of the Americas, the leaders of the Hemisphere requested the Special Committee on Trade (SCT), with the support of the Inter-American Development Bank (IDB), the Economic Commission for Latin America and the Caribbean (ECLAC) and other specialized regional and subregional organizations, "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." The SCT was instructed to prepare a preliminary report on its work and to deliver it to the Trade Ministers meeting scheduled for June 1995.

The Special Committee on Trade was established by OAS General Assembly Resolution 1220 in June 1993 to "follow the process of trade liberalization and expansion in the Hemisphere and make available up-to-date information..., (and) to study and put forward suggestions for improving conditions under which trade takes place among the member states...." The SCT is made up of high-level trade officials representing each member state. Resolution 1220 also created the SCT's Advisory Group, which is comprised of nine senior trade policy officials elected by the member states.

The Special Committee on Trade held its Second Meeting in Montevideo on June 14-15, 1995. The following officers were unanimously elected. They took up their functions after the Trade Ministers meeting in Denver.

Chairman: Guillermo Valles, Director General for Economic Affairs of Uruguay
Vice Chairman:
Víctor Rico Frontaura, Under Secretary of Integration, Ministry of Foreign Affairs of Bolivia
Rapporteur:
Luis Alberto Noriega-Morales, Deputy Minister of Economy of Guatemala

II. Report of the Chairman of the Advisory Group on the Work Undertaken by the Group

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. 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 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.

III. Analysis of the Work in Response to the Mandates of the Summit of the Americas

-- An Analytical Compendium of Western Hemisphere Trade Arrangements; OAS Trade Unit
-- Protection, Preferential Tariff Elimination and Rules of Origin in the Americas; Inter-American Development Bank

The compendium on trade and integration arrangements in the Americas is a technical analysis of eleven agreements./ It is composed of four sections. The first offers general considerations on overall trade policy objectives, structure, withdrawal and accession provisions and dispute settlement in the agreements. The second section deals with basic disciplines related to market access, including the regulation of trade in such areas as emergency measures. The third section is devoted to areas such as services, investment, intellectual property and competition policy. In addition, government procurement and regulation of state enterprises are covered. The fourth section is devoted to four industrial sectors that are, in a number of cases, subject to special trade provisions. The four sectors are: trade in energy, textiles and apparel, automotive related trade, and trade in agricultural products.

The study of tariff structures and rules of origin examines existing structures of trade protection, tariff preferences, rules of origin, and other related issues in regional and sub-regional trade and integration agreements in the Americas. The study is comprehensive in its coverage and required the construction of an important data base of information on tariffs and rules of origin. It also provides important information with respect to tariffs applicable to third parties, and offers some preliminary suggestions on how to deal with the issue of rules of origin at the Hemispheric level.

It was the view of the SCT that the analytical compendium on trade and integration arrangements as well as the study on tariff structures and rules of origin were determined to be important contributions towards Hemispheric wide understanding of existing arrangements. The SCT decided that these reports should be expanded and deepened as suggested by the Advisory Group.

IV. Draft Report on the Special Committee on Trade to the Meeting of Trade Ministers in Denver, Colorado

-- "Toward Free Trade in the Americas."

The report entitled Toward Free Trade in the Americas builds upon the work completed in, and provides some preliminary conclusions with respect to, the analytical compendium and the study of tariff structures and rules of origin. It examines merchandise trade flows among and between the trade and integration agreements in the Hemisphere and describes existing trade and integration agreements. The report provides a discussion of Western Hemisphere regionalism in the multilateral context. A chapter is devoted to a discussion of Hemispheric free trade and the situation of the less developed countries. The report also discusses possible approaches as the countries of the region move towards Hemispheric wide free trade.

The report was the subject of a lengthy discussion at the Second SCT Meeting. Some members of the SCT expressed general appreciation of the considerations contained in the report, while others expressed different views on certain policy considerations in the report. The SCT agreed that it could be used as one of the sources in the preparation of the final report of the SCT to the 1996 Trade Ministerial. The SCT decided to annex the three documents to its report to the Denver Trade Ministerial, as contributions from the institutions concerned.

V. Future Work Program

In view of the recent important developments that have been taking place in the Americas on trade and trade related matters, particularly with respect to the decisions of the Summit of the Americas "to begin immediately to construct the Free Trade Area of the Americas", and the ongoing preparatory process, the SCT has decided to focus its activities up to the March 1996 Trade Ministerial meeting in the following areas:

- To expand the OAS analytical compendium of trade and integration agreements in the Hemisphere to cover arrangements not yet included, to provide additional information on areas already covered and to deepen the level of analysis to take into account developments on an ongoing basis; in doing this, the views of countries and sub-regional institutions should be sought.

- To complete the IDB comparative analysis of tariffs structures and rules of origin in the Hemisphere with a view towards deepening the sectoral and country level coverage and to develop a delivery system to make the study's data base available to government officials and the private sector.

- To initiate analysis of some of the issues identified in the Summit Plan of Action, in accordance with the areas defined by Trade Ministers, in topics such as: tariff and non-tariff barriers, agriculture, subsidies, investment, intellectual property rights, government procurement, technical barriers to trade, safeguards, sanitary and phytosanitary measures, antidumping and countervailing duties, dispute resolution, and competition policy.

- To prepare a study, in light of the terms of reference agreed by the Advisory Group, on the issues facing of the small and relatively less developed economies of the Hemisphere.

- To review progress on the strengthening and linkage of existing data bases maintained by the secretariats of the regional and sub-regional integration and cooperation organizations, in an attempt to achieve a means by which such data bases, including SICE could be used as a supporting mechanism in the negotiating process by making available trade and trade policy related information.

In implementing this work program, the SCT is counting on the OAS-IDB-ECLAC institutional cooperation mechanism which has been supporting the work of the SCT. It was the view of the SCT that this tripartite mechanism can play an important role in assisting the countries of the Hemisphere in their efforts aimed at achieving a Free Trade Area of the Americas (FTAA), including with respect to the provision, upon request, of technical and analytical support to any of those working groups that were established by the Trade Ministers in their meeting in Denver. In addition, the SCT encouraged the efforts aimed at strengthening inter-institutional cooperation between the OAS and the other specialized regional and subregional organizations. The SCT, in particular, commended the joint efforts by these institutions to initiate work with respect to tariff nomenclature, customs valuation and information gathering. In addition, the SCT stressed the need to ensure that high level trade officials from all member countries be designated as representatives to the SCT so as to promote greater linkages between different fora dealing with hemispheric trade issues, as established by Resolution AG/1220/93 which created the SCT.

VI. Report on the Meetings of the Secretariats of Regional and Subregional Integration and Cooperation Organizations

The 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), met in Montevideo, Uruguay on June 13, 1995. Representatives of the Group of Three (Colombia, Venezuela and Mexico), the North American Free Trade Agreement (NAFTA) and the Common Market of the Southern Cone (MERCOSUR) also participated fully, in their capacity as national representatives. The host of the meeting was the General Secretary of the Latin American Integration Association (ALADI). The meeting followed on that held in Washington, D.C. on March 13-14, 1995.


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