Within the rules

PUBLISHED : Saturday, 13 September, 2003, 12:00am
UPDATED : Saturday, 13 September, 2003, 12:00am

I refer to the debate between Professor Wang Guigao of the Hong Kong WTO Research Institute and Raymond Young Lap-moon, Deputy Secretary for Commerce, Industry and Technology, on whether the Closer Economic Partnership Arrangement (Cepa) conforms with WTO requirements against discrimination.

Cepa resembles the numerous regional trade agreements (RTAs) worldwide which give preferential treatment to the parties to those agreements.

Both the General Agreement on Tariffs and Trade (GATT) and that on trade in services carve out an exception to the non-discrimination principle for RTAs, which have the general objective of liberalising trade. Cepa prima facie comes within this exception and conforms with the WTO system.

The narrow issue on which they do not agree appears to be whether Cepa's undertakings not to apply anti-dumping or countervailing measures and its safeguard measures undermine Cepa's objective of trade liberalisation, thereby lifting it out of the exception and bringing it into conflict with the non-discrimination principle. In his letter headlined 'Fully compatible' (South China Morning Post, September 6), Mr Young cites the GATT exception in support of his contention that Cepa is valid. He also draws an analogy with the RTA between Australia and New Zealand which, like Cepa, contains provisions against anti-dumping measures.

Professor Wang's response to Mr Young ('Arguments defending Cepa are faulty, says trade expert', September 8) appears aimed at distinguishing Cepa from the RTA between Australia and New Zealand on the basis that they negotiated it 'only after strengthening their respective laws on competition to avoid any market distortion, including dumping'. It is difficult to see how this is relevant to whether the text of the agreement violates central principles of the WTO.

From a legal perspective, since Cepa is prima facie consistent with WTO rules, the general rule that 'he who alleges must prove' would appear to be applicable. Any allegation worth raising that Cepa is not in conformity with WTO rules should accordingly be substantiated by the citation of solid on-point authority.

Even if an academic argument can be mounted that certain clauses of Cepa are theoretically not in conformity with WTO rules, who is going to complain about this? Most WTO members are parties to RTAs themselves or have an interest in concluding one if they have not already done so.

Have there been many complaints related to the agreement between Australia and New Zealand?



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