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Cablegate: 7th Working Party Meeting On Yemen's Accession to the Wto


DE RUEHGV #0012/01 0361641
R 051639Z FEB 10




E.O. 12958: N/A
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.

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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.


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:


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.


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.


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


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)


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.


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.


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.


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.


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