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WORLD T RADE ORGANIZATION ORGANISATION MONDIALE DU COMMERCE ORGANIZACIÓN MUNDIAL DEL COMERCIO WORLD TRADE NEWS NEWS SUMMARY FOR WTO REFERENCE CENTRES AND NON-RESIDENT MISSIONS 17 November 2011 No. 2474 WTO summit must address food crisis: UN 16 November 2011 Agence France Presse A key WTO ministerial meeting next month must address the current global food crisis by ensuring that the Doha Round of free trade talks finds ways to guarantee food security, a UN expert said Wednesday. An over-reliance on food imports in the world's least developed countries has left them vulnerable to price shocks and shortages, the Special Rapporteur on the Right to Food, Olivier De Schutter, said, urging the World Trade Organization to act. The food import bills of the least developed countries have soared by over a third over the last year, he noted. De Schutter made a series of recommendations ahead of the WTO ministerial meeting in Geneva December 15-17 when the future of the Doha Round of trade liberalisation talks and the global trading system will be under discussion. These include the establishment of an expert panel to reconcile food security and trade concerns, and a protocol to monitor the impact of trade on food prices. He also called for a waiver to exempt food security-related measures from WTO requirements. "We must avoid face-saving, short-term solutions aimed at hauling Doha over the line," De Schutter said. "Instead, we should grasp the opportunity to ask what kind of trade rules will allow us to combat food insecurity and realise the human right to food." Among measures to boost local food production capacity were state purchases from smallholders, safety net insurance schemes and targeted farm subsidies, De Schutter said. "If the Doha Round is to move forward, it must lift any possible constraints on policies aimed at securing the right to food -- such measures should include food stock-holding that aims to reduce price volatility and ensure access to adequate food at the local level," he added. Launched a decade ago in the Qatari capital, the Doha Round of negotiations for a global free trade pact have repeatedly missed deadlines amid disagreements between industrialised states and developing nations over the level of farm subsidy and industrial tariff cuts. WTO to Study Relationship Between Trade, Exchange Rates By Jennifer M. Freedman Nov. 16 (Bloomberg) -- The WTO will discuss the relationship between trade and exchange rates and plans to hold a meeting on the topic in March, said Roberto Azevedo, Brazil’s ambassador to the WTO. The trade arbiter’s 153 members, including China, agreed to examine whether trade rules can be used when a currency is artificially cheap, causing global imbalances, Azevedo said. “What we’re looking for, in temporary circumstances, is the effect or the impact that certain currency misalignments may have on particular segments of one country’s economy,” he said today in a phone interview from Geneva. “In the future we may have an agreement on what the problem is, whether this kind of problem needs some kind of remedy, whether we already have the remedy in the WTO agreements.” The U.S., Europe and Brazil, Latin America’s biggest economy, have criticized China for what they say are measures to keep its currency undervalued and using the weak yuan to give Chinese companies an unfair edge over foreign rivals. Brazil isn’t targeting a specific country’s policies, Azevedo said. “This question was put to” Brazilian Trade and Development Minister Fernando Pimentel “and he said the initiative was not oriented against any single currency,” Azevedo said. “I assume that the yuan, like any other currency, would be under scrutiny. Wherever you have misalignments, you would have some kind of concern to be addressed.” ‘Steep Fluctuations’ Brazil proposed to the WTO in September that it allow members to protect their industries from trade imbalances prompted by currency fluctuations. Rules covering anti-dumping and safeguard mechanisms, as well as retaliation rights, must be updated to deal with “steep fluctuations in exchange rates,” Brazil’s Foreign Ministry said on Sept. 19. China, the biggest holder of U.S. debt, has allowed its currency to rise. The yuan has appreciated 30 percent against the U.S. dollar since the currency was revalued in July 2005 and gained about 8 percent since the central bank ended a two-year peg in June 2010 after the global financial crisis. In real terms the gain has been more than 10 percent, because inflation is higher in China than in the U.S. Criticism of China’s exchange rate is “groundless and unreasonable” and the yuan’s value isn’t the cause of lopsided trade flows, Commerce Ministry spokesman Shen Danyang said in Beijing today. WTO members agreed that the trade arbiter “is not the forum to debate, discuss, investigate, analyze the reasons for a particular currency misalignment,” Azevedo said. “There also seemed to be consensus that, given that a particular alignment does exist, it is the WTO’s competence to look at the impact and what to do about it, in terms of trade.” The WTO decision to study exchange rates and trade was reported earlier by the Wall Street Journal. Clarified work division crucial for int'l organizations: MOC BEIJING, Nov. 17 (Xinhua) -- Clarified work division is crucial for international organizations, and the WTO has never set any Dispute Settlement Panel (DSP) for exchange rate, said an official with the Ministry of Commerce (MOC) on Thursday. Assistant Minister of Commerce Yu Jianhua made the comment at a press briefing of the State Council Information Office in response to a question about international concerns over China's currency, the yuan. Media reported on Wednesday that the WTO would examine whether international trade rules cover efforts by governments to manipulate the value of their currencies, a debate driven by China's currency policy. "The WTO so far has never set any single DSP for exchange rate," said Yu. "Work division in international organizations must be cooperative but clarified." Currency policy takes account of trade protectionism, rising material costs and the bearing capabilities of enterprises, especially medium-sized and small ones, Yu added. Russian Economy May Slow in ‘Worst Case’ WTO Entry Outcome By Alena Chechel Nov. 16 (Bloomberg) -- Russia’s economy may slow after it joins the WTO, while the government hopes to use its membership to defend the interests of state-run OAO Gazprom, said Maxim Medvedkov, Russia’s chief WTO negotiator. Under the “worst-case” scenario, entry may wipe 0.5 percentage point a year off economic growth, Medvedkov, told reporters today in Moscow. After acceding, Russia may challenge European Union moves to force Gazprom to give competitors access to its transport networks, he WTO Information and Media Relations Division Centre William Rappard Rue de Lausanne 154 Case postale CH - 1211 Genève 21 Téléphone: (+41 22) 739 5019 Fax: (+41 22) 739 54 58 Internet: http://www.wto.org WTO OMC Page 2 added. “The third energy package violates bilateral agreements and aims to nationalize and expropriate investments of Russian companies in the energy sphere,” Medvedkov said, referring to legislation approved by the EU in 2009 to spur competition and investment in the industry. “It’s not clear if WTO entry will allow Russia to reexamine these agreements but we would like to of course.” The EU rules, which affect Gazprom as it owns assets in the 27-member bloc, would separate companies’ control over energy infrastructure and supplies. Gas export monopoly Gazprom, which provides about a quarter of Europe’s gas, has been seeking to expand further in the region, its biggest market by revenue. To comply with the EU legislation, Lithuania is splitting the ownership of gas utility Lietuvos Dujos AB’s gas sales and transmission divisions. The company is part-owned by Gazprom. EU: Energy Rules In Line With WTO Rules BRUSSELS (Dow Jones)--New European Union energy rules are in line with those of the WTO, a spokeswoman for the European Commission's energy department said Wednesday, responding to reports that Russia might challenge those laws in the trade forum. "We have taken note of media reports. The Commission has no comments to make. The Third Energy Package is in line with WTO rules," Marlene Holzner said. The Interfax news agency reported Monday, citing Russia's chief WTO negotiator, Maxim Medvedkov, that Moscow might use the WTO to challenge EU regulation on gas distribution. RF to cancel taxes on PCs, officeware three yrs after WTO accession MOSCOW, November 16 (Itar-Tass) —— Russia will reduce to zero the rates of taxes on imported computers and officeware three years after its accession to the WTO, the director of the trading negotiations department at the Economic Development Ministry, Maxim Medvedkov, told a news conference at Itar-Tass on Wednesday. Medvedkov, Russia’s chief negotiator at the WTO accession talks, explained that “the situations involving high-tech products vary a great deal from item to item.” “There is an agreement on IT products, mostly computers and officeware and everything related with them,” Medvedkov said. “The terms of our accession envisage the zero import tax upon the expiration of a three-year period after WTO accession.” Medvedkov recalled that the rates of taxes on this group of product have always been pretty lax. Russian WTO accession terms published 17 November 2011 SKRIN Newswire The WTO has published comprehensive details of the tax and trade commitments made by Russia as part of its accession bid, due to be deliberated upon at the WTO Ministerial Plenary in December at which Russia is tipped to be granted membership to the global trade body. Welcoming the conclusion of negotiations, 18 years after they first began, Working Party Chairman Stefa'n Jo'hannesson said: "The completion of this Working Party’s activity represents an historic achievement for the WTO. I am convinced that Russia’s accession to the WTO will bring substantial benefits both to Russia and to the members of this organization. In these difficult economic times, this represents good news and I have no doubt that Russia joining our WTO family will strengthen the multilateral trading system and enhance global economic cooperation." Maxim Medvedkov, chief negotiator for the Russian Federation, added: "It is gratifying to see that after 18 years of sometimes uneasy negotiations the process of WTO accession is completed. The agreement as negotiated brings us into the system of multilateral trading rules, creating new opportunities for our traders and investors and enabling us to protect their commercial interests even more effectively than before." As part of the accession accord, Russia has agreed to undertake a series of important commitments to further open its trade regime and accelerate its integration into the world economy. Tuna Appeal at WTO Likely; Animal Welfare Groups Petition Obama Bridges Weekly Trade News Digest 16th November 2011 The long-running dispute between the US and Mexico over Washington’s ‘dolphin safe’ labelling practice for tuna products is likely to see a WTO appeal, after the two parties together asked for an extension of the appeals deadline. Meanwhile, animal welfare and consumer advocacy groups in Washington are urging the US to look into options outside the global trade body for resolving the trade row. WTO appeals deadline extended to January At its last meeting on 11 November, the WTO Dispute Settlement Body (DSB) decided to extend the deadline for submitting an appeal on the latest Tuna-Dolphin (DS381) ruling issued in September. In light of the Appellate Body’s substantial workload, the US and Mexico had jointly requested an extension of the normally sixty-day period, which otherwise would have expired on 15 November. In accordance with the agreed extension, an appeal will have to be submitted no later than 20 January. Requests of this kind have been used frequently throughout 2011, as the WTO’s appeal judges struggle to resolve the technicalities of the Airbus/Boeing spat and generally face a large caseload. While most members support this form of collaborative action, Japan has continuously warned that the practice must remain an exception in order to maintain a high level of fairness and efficiency in the dispute settlement system. The requested extension can be interpreted as a sign that the parties intend to appeal the decision. In almost all instances where members requested a deadline extension, appeals were subsequently filed. Already in an initial response in September, the United States Trade Representative’s office said it was carefully examining the possibility of an appeal. Washington had partially lost its claim in this high-stakes dispute over the US “dolphin safe” label for tuna products when a panel ruled the US practice unnecessarily trade restrictive. Animal welfare, consumer advocacy groups push back The global trade body’s September decision has come under heavy fire from animal welfare groups and consumer protection advocates in the US, to the point where some are now pushing Washington to explore options outside the WTO. “[The decision] puts at risk one of the most successful environmental consumer education programs in history, which has helped to reduce dolphin deaths in tuna nets from an estimated 80,000 to 100,000,” six animal welfare groups warned in an open letter to US President Barack Obama and US Vice President Joe Biden on 4 November. BRAZIL: New automakers to get tax break if targets met – paper Graeme Roberts 16 November 2011 Just-Auto Brazil will give newly established automakers in the country a break from higher taxes in exchange for the companies meeting targets that will be evaluated every six months, Folha de S Paulo newspaper reported. Automakers rumoured but not yet confirmed to be planning factories to meet tough new local content rules include BMW and Tata Motors' Land Rover. Brazil last month raised the so-called IPI tax on autos by 30 percentage points, excluding those cars with at least 65% local content. The move was meant to slow imports, which this year have accounted for about a quarter of Brazil's sale of 3m vehicles, Dow Jones Newswires noted. Under the new rules, likely to be made public next month, newly established car makers will be refunded the higher tax if, after six months, they fulfill certain requisites, Folha reported, without attribution. According to Folha, carmakers will have one year to bring local content on so-called popular models of cars - those with less powerful engines - up to the requisite 65%. (END)