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RR RUEHWEB

DE RUEHGV #0012/01 0361641
ZNR UUUUU ZZH
R 051639Z FEB 10
FM USMISSION USTR GENEVA
TO RUEHC/SECSTATE WASHDC 0027
INFO RUEHGV/USMISSION USTR GENEVA
RUEHYN/AMEMBASSY SANAA 0001

UNCLAS USTR GENEVA 000012 
 
SIPDIS 
 
SENSITIVE 
DEPT PASS USTR FOR RHODE 
 
E.O. 12958: N/A 
TAGS: ETRD ECON WTRO YM
SUBJECT: 7th Working Party meeting on Yemen's Accession to the WTO 
held January 26, 2010 
 
Summary:  On January 26, 2010, the WTO held its 7th Working Party 
meeting on the accession of Yemen to the WTO.  Members of the 
Working Party supported Yemen's efforts to join the WTO, with many 
delegations calling for accession as soon as possible and urged 
Members to show Yemen appropriate flexibilities in their demands 
because of Yemen's status as an Least-Developed Country (LDC). 
Yemen's Minister of Industry and Trade, Dr. Yahya Y. Al-Mutwakel 
attended the meeting and described Yemen's efforts to meet Members' 
requests.  Notable interventions included concerns about Yemen's 
current trade regime in trading rights, import prohibitions and 
licensing, import fees, and implementation plans for WTO 
Agreements.  The Chair of the Working Party, Mr. Hartmut Roeben 
(Germany), urged expeditious work to try and finish this accession 
in 2010, and would try and schedule another Working Party meeting 
before the August 2010 summer break. The Chair requested that 
additional questions be presented to the Secretariat by February 
26, 2010.  Subsquent meetings were held between the United States 
and the Yemeni delegation, as well as with the Chair, to discuss 
ways forward on both the bilateral market access requests and the 
multilateral requirements.   End Summary. 
 
¶1.  The WTO Working Party on Yemen's accession met for its 7th 
session on January 26, 2010, chaired by Mr. Hartmut Roeben. 
Yemen's Minister of Industry and Trade, Dr. Yahya Y. Al-Mutwakel 
provided an opening statement on Yemen's efforts to accede to the 
WTO.  He urged negotiating partners to show understanding and 
flexibilities of Yemen's exceptional needs and circumstances, and 
reiterated his government's desire to conclude the accession 
process this year.  Minister Al-Mutwakel noted that on the 
bilateral front, Yemen had concluded negotiations with Australia, 
China, the EU, and quite recently with Canada.  Additional 
negotiations were underway with the United States, Korea, Japan, 
Ukraine and Honduras.  Revised bilateral goods and services offers 
have been recently submitted to its negotiating partners.  On the 
multilateral front, Minister Al-Mutwakel highlighted that Action 
Plans had been submitted for a number of areas that showed where 
things stand on the legislative front.  Notably, the Minister 
stated that Yemen is committed to meet WTO related rules from the 
date of accession on issues related to import licensing procedures 
and rules of origin.  On areas such as TBT, SPS, and TRIPS, the 
Minister said Yemen is committed to implement these agreements by 
the end of 2014, and 2015 for Customs Valuation.  Yemen, as of 
January 2010, became a full-fledged Member in the Gulf 
Standardization Organization. 
 
¶2.  After the opening statement by Minister Al-Mutwakel, the floor 
was open for delegations to make interventions.  Zambia, on behalf 
of the LDC group, Egypt on behalf of the Arab Group, Members 
Bangledesh, China, Nigeria, Nepal, India, Jordan, Kuwait, Nigeria, 
Turkey, Tunisia, and Morocco, and observers Lebanon, Sudan, and 
Algeria made similar interventions:  Members in negotiations with 
Yemen should show flexibilities for an LDC; restrain their demands 
on implementation of WTO Agreements ; show less ambition in their 
market access requests; and complete the accession process by year 
end.  A number of these delegations also cited the 2002 Declaration 
on LDC accessions that calls for special and differential treatment 
of acceding LDCs and encouraged WTO Members to expedite their 
negotiations bearing this in mind.  Some delegations (Turkey, 
Bangledesh, Zambia) noted that the 7th Working Party meeting was 
the highest number of such meetings for an LDC (somewhat 
misleading, as other LDCs, e.g., Samoa, have had as many meetings, 
but informally).   Australia noted its conclusion of its bilateral 
negotiations and urged other Members to conclude as soon as 
possible.  Canada announced it had recently concluded its bilateral 
market access negotiations on goods and services, and will continue 
to review the multilateral issues addressed in the draft Working 
Party report.  The EU reported that it had concluded bilateral 
negotiations in May 2009.  It fully supported Yemen's accession. 
 
¶3.  The United States delegation stated that we appreciated the 
efforts of Yemen to respond to our questions, as well as provide 
new and revised action plans and notifications, and to agree to 
requested commitment language in a number of areas in the Draft 
Working Party Report.  The US noted continuing questions about 
Yemen's ability to implement WTO obligations concerning trading 
rights, customs valuation, quantitative restrictions, technical 
clearances and permits (import licensing), and fees for services 
rendered.  The US recognized the status of Yemen as an LDC and said 
it would continue to use the 2002 Declaration on LDC Accessions as 
a basis for its approach to participation in Yemen's WTO accession 
process.  The US delegation noted that significant inter-sessional 
work had occurred via e-mail, DVCs, bilateral meetings, and phone 
conferences since the last Working Party meeting, and that progress 
was being made.  Japan said it hoped to conclude its bilateral by 
end of summer.  Ukraine supports Yemen's accession, and would keep 
up the constructive dialogue. 
 
REVIEW OF THE DRAFT WORKING PARTY REPORT 
 
¶4.  After the many opening interventions (18 Members and 3 
Observers), the Chair turned to a review of the draft Working Party 
Report.  The United States, and to a lesser degree the EU, Canada, 
and Australia were the only active participants in the review.  The 
United States and others had submitted questions in advance of the 
meeting, and Yemen explained that they were reviewing these 
questions and would provide written responses as quickly as 
possible.  The US noted that it was still reviewing the new draft 
Investment Law and it intended to provide comments in writing to 
Yemen.  The following issues were reviewed: 
 
TRADING RIGHTS 
 
¶5.  It remains unclear that Yemen will allow foreign natural or 
legal persons to be the importer of record in Yemen.  The EU 
delegation confirmed that it was willing to accept the commitment 
language agreed to by Yemen in the draft Working Party Report but 
could not accept a transition period for establishing trading 
rights.  [Note:  the EU reiterated this point in a subsequent 
meeting held by the Chair with delegations from the EU, US and 
Yemen.]   Canada also sought clarification on why Yemen had 
requested a transition in its commitment on trading rights.  The US 
agreed, and also requested additional information on the draft 
system of registration of importers of record as Yemen proceeds in 
this area. 
 
¶6.  The US and EU had additional concerns about certain 
requirements that only Yemeni nationals could be granted the 
technical clearance needed to import medicines, medical equipment, 
fertilizers, pesticides, books, newspapers, audiovisual and other 
artistic literary works, and requested that the Trading Rights 
Action Plan be updated to include information on these technical 
clearance requirements. 
 
FEES AND CHARGES ON IMPORTS 
 
¶7.  Yemen applies a number of fees and charges to imports, 
ostensibly for customs processing or other import services, which 
are not actually related to the cost of the services provided. 
While Yemen is, in theory, prepared to revise its trade regime in 
this area, we still have no indication of how, or to what extent, 
this will actually be done.  The US, supported by the EU, requested 
additional information on these fees and charges for services 
rendered, in particular in areas where Yemen did not believe it 
could implement by the date of accession.  The EU found some of the 
requests for transition periods difficult to accept, and asked that 
the commitment in the Draft Working Party Report be amended to 
reflect the changes Yemen was prepared to make to its fees and 
charges related to not only exports but also imports, and also to 
include commitments concerning Article X of the GATT 1994 as well 
as Article VIII.  Yemen reiterated that it would need a transition 
to change or eliminate these fees. 
 
OTHER IMPORT REGULATIONS 
 
¶8.  The US raised concerns about some of the quantitative import 
restrictions, including prohibitions, quotas and licensing systems, 
and requested that Yemen remove all bans and restrictions on the 
products listed in paragraph 88 of the Draft Working Party Report. 
The EU, Australia and Canada also raised concerns about some of the 
seasonal restrictions, noting that the WTO recommended that the 
least restrictive measures still effective should be used.  Yemen 
commented that it was committed to eliminating these bans upon 
accession, and Australia wanted that reflected in the Report. 
 
¶9.  Canada and the US requested Yemen provide the Working Party 
with a copy of its draft Customs Law, with emphasis on customs 
valuation.  The U.S sought clarification that compliance with the 
Agreement on Rules of Origin would begin by the time of accession 
and asked whether there are certain rules for non-preferential 
trade.  Yemen explained that the practice described in paragraph 
110 of the Report (rules of origin for non-preferential trade) 
would not be continued after accession; there are no rules of 
origin for non-preferential trade. 
 
¶10. In response to questions from the US and EU, Yemen said that it 
would provide a copy of its laws pertaining to Anti-dumping to the 
WTO Secretariat and more information to the Working Party on export 
customs tariffs, fees and charges, which are currently under 
review. 
 
TBT AND SPS 
 
¶11. In the area of internal policies affecting foreign trade in 
goods  (Technical Barriers to Trade and Sanitary and Phytosanitary 
Measures), the US had extensive technical questions that Yemen was 
still reviewing and not prepared to discuss at the Working Party 
meeting.  The US delegation highlighted for the Working Party some 
of the main concerns and requests for additional information.  In 
particular, it requested more information on the status of 
conformity certificates issued by YSMO, and further information on 
various practices for accreditation and conformity assessment.  The 
US also wanted an update on developing legislation that takes into 
account systems equivalence for food safety and regional 
characteristics for existing animal or plant health.  (Comment: 
Prior to the next meeting, it will be necessary to closely review 
Yemen's action plans in the areas of TBT and SPS, particularly if 
draft legislation is not yet available.  End Comment) 
 
AGRICULTURE 
 
¶12. The US also requested more information related to Yemen's 
domestic agricultural support policies and on Yemen's internal 
policies on food security and strategies for poverty reduction. 
The EU agreed that there was a need for further review of Yemen's 
data tables on agricultural supports and subsidies.  Australia 
noted that Article 9.4 of the Agreement on Agriculture, granting 
developing countries the right to subsidize their agricultural 
exports, had expired. 
 
TRIPS and Services 
 
¶13. In the areas of Intellectual Property Rights, the US stated 
that it was reviewing the new draft legislation provided by Yemen 
the week prior to the Working Party meeting related to copyright, 
trademarks, industrial design and GIs, and patents.  On Trademarks, 
the US asked Yemen if, in response to one of the questions posed by 
Members, it was asserting that the owner of a trademark in Yemen 
whose rights were acquired prior to the date a GI was afforded 
protection in Yemen was able to oppose, cancel, or have its 
trademark be the basis for a refusal of that subsequent GI.  Yemen 
said yes, through a court proceeding.  On Transparency, the US 
requested that language in the draft Report paragraph 244 "whenever 
possible" be deleted.  Yemen suggested the language be changed to 
"as applicable."  The EU noted the need for Yemen to update the 
information on Trade in Services contained in the draft Working 
Party Report, presumably to match the commitments Yemen had made in 
its services negotiations with the EU. 
 
CONCLUSION AND NEXT STEPS 
 
¶14. In his concluding remarks, the Chair acknowledged that there 
was still substantive work that needed to be done.  He requested 
that Working Party Members submit additional questions and comments 
in writing on the Draft Working Party Report by February 26, 2010, 
as well as any drafting suggestions for the Draft Working Party 
Report.  He noted that Yemen still owed the Working Party Members 
draft legislation, updates to the Action Plans, and answers to a 
number of technical questions.  He indicated a preference to having 
another Working Party meeting before the summer 2010 break, 
possibly in July 2010.  He promised that a revised Working Party 
Report would be circulated "well in advance" of the proposed 
meeting.  He also noted the need for technical assistance that 
might be necessary to assist Yemen in some of these areas.  The 
Chair underscored his points about moving this process forward by 
noting the need to take into consideration the 2002 LDC guidelines. 
Members should work with Yemen to reduce differences on the scope 
of requested transitions and intensify work to conclude market 
access bilateral work.  Minister Al-Mutawakel thanked the Working 
Party Members for their supporting statements and assured the 
Working Party that Yemen was doing  its utmost to provide the 
necessary legislation and other documentation requested.  He 
emphasized that Yemen wanted to continue work in the coming months 
and, with necessary good will and flexibility from Working Party 
Members, hoped to conclude bilateral market access negotiations 
before the summer break. 
 
CHAIR'S CONSULTATIONS 
 
¶15. After the Working Party meeting, the Chairman met with the 
delegations of the EU, US and Yemen to consider what steps were 
needed to move forward and prospects for another Working Party 
meeting in the summer.  The EU and US both flagged major areas of 
the Working Party Report that needed more information and Yemeni 
commitments, e.g., in trading rights, import bans, and fees and 
charges, as well as finalization of the action plans for WTO 
implementation.  The timing of another Working Party would depend 
on Yemen's provision of responses to the questions and comments 
submitted by Working Party Members, and the speed with which these 
materials could be incorporated into a nearly complete draft 
Working Party Report.  The US pointed out that you have to 
calculate work deadlines moving backwards from the selected meeting 
date to accurately predict what will be required from all concerned 
to get to that point.  Much of this will depend on the Yemeni 
legislative process and how quickly important, required legislation 
can be pushed through that process.  Yemen mentioned the TIFA 
process with the US as a possible venue to pursue further market 
access negotiations and resolution of outstanding issues.  US 
delegation deferred on that question until it could consult with 
Washington.  EU suggested that the Chair could call a smaller group 
together prior to July to address some of the technical issues and 
take stock of progress.  Since Yemen's data on agricultural 
supports had never had a technical review, the idea also was 
floated to hold a plurilateral meeting on agricultural supports to 
examin the Yemeni tables.  The US noted that the Cairns group 
usually called for such a plurilateral on the margins of Working 
Party meetings.  Yemen repeated its request for flexibilities, 
including in the area of trading rights, and hoped for agreement at 
the next meeting on requested transition periods.  EU repeated its 
strong position that it would be impossible for transitions on 
trading rights; it's a systemic issue according to the EU delegate. 
Yemen confirmed that WTO accession remained a national priority 
notwithstanding current political problems and that it is willing 
to do what it takes to complete the accession process.  The Chair 
said he would keep in touch with delegations on progress toward 
another Working Party. 
 
BILATERAL MEETINGS 
 
¶16. On January 27, 2010, Minister Al-Mutawakel met with WTO Charge 
d'affaires, David Shark.  Many of the same issues were raised at 
this meeting.  The US could not commit to a set timeframe for 
another Working Party meeting until we saw progress in the rules 
negotiations, and this depended on the continued dialogue.  The US 
would convey back to Washington the desire to use the next TIFA 
meeting as a possible opportunity also to hold bilateral meetings 
to review some of the technical issues, as well as remaining market 
access concerns.  Yemen recalled that the United States had played 
a constructive role in negotiating transition periods for Cape 
Verde in its accession package.  Yemen reiterated its desire to see 
transitions in trading rights.  We emphasized that transition 
periods are an option for LDC accessions but that the acceding 
country must make the case for them.    They would need to explain 
to Members why such a transition is needed and for how long, and 
importantly, they would need to set out a plan to come into 
compliance by the end of the transition period.  Generally, Charge 
conveyed the sense that we believed Yemen was making progress in 
addressing Members' concerns.  Continued dialogue would determine 
the speed with which this accession would conclude. 
 
¶17. On January 28, 2010, the US delegation held a bilateral market 
access meeting with the Yemen delegation to review the new offer on 
services.  The US was still reviewing Yemen's goods offer.   The US 
had provided comments on Yemen's latest services offer (November 
2009).  Yemen explained it would have difficulties meeting the US 
request in the areas of Audio Visual,; Accounting; Architectural, 
Engineering, Integrated Engineering, and Urban planning; 
Telecommunications; Distribution; and Insurance and Banking 
(subsidiaries)  services.  Yemen made positive moves in the area of 
mode 4 (movement of persons); possibly Courier; Educational; and 
Banking (securities) services.  The US thanked Yemen for its 
technical clarifications on telecommunications and environmental 
services.  The main concern that Yemen had in meeting some of the 
US request had to do with regulatory capacity.  It is concerned 
that without the adequate regulatory framework in place, it would 
be hard to open up certain sectors (accounting and financial 
services were two examples).  As for a new offer, Yemen would like 
to work through the remaining issues bilaterally before providing a 
revised offer in writing. 
 
 
SHARK