Speeches: Nora Neuefeld, Legal Affairs Officer, WTO

7th IRU East-West Road Transport Conference Budapest, 15-16 May 2003 Budapest Congress Centre (BCC), Alkotas u. 63-67 - 1123 Budapest, Hungary

Video

Pierre Latrille
Counselor
Nora Neuefeld
Legal Affairs Officer

World Trade Organisation

Question: Negotiations on services within the WTO have just started. What sort of concrete benefits for international road transport operators could come out of these talks and in what sort of time frame?

Pierre Latrille:

The first time we shall hear about it will be at the time of the Cancun Ministerial Conference which is due in September 2003 and which is called mid-term review. Then, we intend to finish these negotiations very soon, i.e. in December 2004 - so very quickly, hopefully.

The first barrier can be the limitation of the number of suppliers. In fact, it is what you call in your own language licensing. It limits the number of truckers, be it in absolute terms or in percentage or on a case-by-case basis.

The second one is the limitation of the value of transactions or assets, such as limiting your turnover, the number of trucks and warehousing facilities.

The next obstacle can be the limitation of the volume of transactions, such as the limitation of the number of trips, the limitation in tonnage that you can carry in a given year, or on a given trade-lane.

The fourth one is the limitation on the number of employees or the foreign persons employed. And that covers for instance the limitation on foreign participation on the board of directors.

The fifth one is the limitation on the type of legal entity you can use. And this can be a prohibition or an imposition. This can cover things like joint ventures, representatives, subsidiaries, branches and so on.

The next one is a very simple one. This is the limitation on foreign ownership. This means, for instance, that in a given country you cannot own more than 49 % of the subsidiary. This is the limitation of foreign ownership. Of course, the aim there is to obtain everywhere 100 % foreign ownership.

Then, you have got the service-type limitation, which is called national treatment limitation. These are any types of restrictions. That is for instance, unfair advantage to local truckers versus foreign truckers. For example, subsidies reserved to national operators and not available to foreigners.

Question: EU enlargement, which takes place next year, could make trading conditions more difficult for some European countries, which remain outside of the enlarged EU. What can the WTO do to help them?

Nora Neuefeld:

First of all, the WTO retains certain non-discrimination guarantees, which, in the case of free trade areas or customs unions, such as the European Union, require from these entities to ensure that they do not lead to discrimination vis-Ã -vis third countries. So, there is an obligation not to create barriers to the trade of those third countries with these entities. That is one thing.

Secondly, there is the principle of compensatory adjustment meaning that there should not be any disadvantage emerging as a result of the formation of a free trade area or a customs union. Third countries are entitled to call for a compensation for those disadvantages. The principal really is that you are allowed to establish or enlarge those regional integration entities but they cannot result in a worse position for third countries.

Furthermore, the GATT contains provisions, which allow for certain advantages in frontier traffic, which might be of relevance for the transport sector.

And finally, on a general level, I think, it might make sense just to note that the WTO contains certain rights in the area of transit and this right touches upon areas of interest to the transport sector, such as, in particular, the freedom of transit as guaranteed by Article V of the GATT. And here, I would say, even non-EU member countries have rights established by this article irrespective of EU membership.

Going beyond that, these provisions, specifically Article V, are currently under consideration for improvement and clarification, which means that there would be an option for an additional track which will allow third countries to see one of their main problems addressed in the framework of the WTO.

Question: How can the industry ensure that its voice is heard in the next round of the WTO negotiations?

Reply: Well, first and foremost through their national governments, through their respective ministries, be it of trade, transport or foreign affairs. And as you know, since we do have certain members, which negotiate collectively such as the European Union, one has to keep in mind that this will have to take place at an early stage to allow in these cases for internal coordination prior to the final determination of members' negotiating position.But the principle is still the same. Since the WTO is a member driven organization, it is only members who can introduce ideas and make proposals. The industry has to go through its national institutions. The latter will be the ones who introduce proposals into the WTO negotiating process.

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