Trade Policy Note Final-rev08 - Development

(i) Commitments on subsidies may prohibit dual price systems for energy, which
are permitted under the WTO.
FTAs may also fall short of their objectives in terms of market access for developing
countries:Key export products (e.g. rice, sugar, beef) or services (e.g. MNP) may be
excluded, or subject to minimal liberalization,
(j) Rules of origin requirements may be difficult to meet and ,thus, many exports
may not benefit from duty free treatment.. Attention should be given to
ensuring that stringent rules of origin do not undermine the competitiveness of
industries, and that cumulative origin provisions are included. “Yarn forward”
type rules of origin may undermine the competitive position of the beneficiary
exporting country to the extent that the preferential tariff margin is not
sufficient to offset competition from non-preferential suppliers.
(k) Non tariff barriers (e.g. SPS) may still impede exports,
(l) Some measures distorting mutual trade may not lend themselves to bilateral or
regional solutions (e.g. agricultural subsidies, anti-dumping measures). Yet,
they could nullify the expected benefits of the FTA provision aimed at
eliminating export subsidie s which has been included in some agreements. 118
Conversely, on the positive side of the balance sheet, FTAs may provide an
opportunity to deal with issues not easily amenable to multilateral solutions,
including:
(m) MNP commitments, such as access for MNP at an occupational level.
Measures for protection of foreign workers may be easier to negotiate at a
bilateral level 119
(n) Negotiations of Mutual Recognition Agreements, with respect to testing
facilities (e.g. SPS) as well as the certification of service professionals are
often better facilitated in a sub-regional or bilateral context. 120
(o) Assistance for net-food importing countries. 121
(p) Cooperation measures in areas such as cultural services and transportation can
be worked out in FTAs.
118 Some attempts have been made, e.g. Canada /Chile prohibits anti-dumping duties on mutual trade,
Chile/USA and Peru /USA provide for the elimination of export subsidies in mutual trade , so long as
action is taken to confront export subsidies from third countries, see
www.ustr.gov/Trade_Agreements/bilateral/Peru_TPA and
www.ustr.gov/Trade_Agreements/bil ateral/Chile_TPA.
119 The last issue to be resolved in the negotiations of a Philippine Japan FTA was the quota for the
entry of nurses and respect for their professional qualifications. For a description of the issues involved
see Tullao, Tereso S .and M. A. Cortez , M ovement of Natural Persons between the Philippines and
Japan: Issues and Prospects, presentation at De La Salle University, Manila, September 2003
(available at http://pascn.pids.gov.ph/jpepa/docs/tullao-revised_sept%209.PDF).
120 See for example the approach of Singapore, www.fta.gov.sq
121 See draft Economic Partnership Agreement between the EU and the COMESA countries, 4 th draft
EPA/8 th RNF/24-8-2006 (available at www.bilaterals.org).
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