TRADE DEAL LINGO Glossary of Trade terms-What is a "standstill clause"? What is a "rollback clause"?
SICE Trade Term Glossary:
LINK: http://www.sice.oas.org/dictionary/IN_e.asp
___also___
http://www1.oecd.org/daf/mai/pdf/dg2/dg2953r1e.pdf
Standstill and Rollback- This is from MAI - but the term is generally defined this way..
So a trade deal with a standstill prevents new laws that are not "liberalisation" (privatization or disinvestment is a better word) irregardless of what voters say, more privatization is the only way.
II. STANDSTILL AND THE LISTING OF COUNTRY SPECIFIC RESERVATIONS
3. The fundamental aim of the “standstill principle” is to ensure an irreversible minimum standard
for liberalisation through the exclusion of new or additional restrictions. Standstill is also the starting
point for the removal, via rollback, of existing restrictions.
4. The standstill principle would not apply, however, to any general exceptions (e.g. national
security) or to any temporary derogations (e.g. balance of payments) that might be allowed under the MAI.
5. The Drafting Group considered that the standstill principle should be reflected in the provisions
governing country specific reservations. For standstill to apply, these provisions should provide that:
a) each Contracting Party list all non-conforming measures in an Annex of the Agreement;
b) the reservations should describe, in the most precise terms possible, the nature and scope of
the non-conforming measures. This would ensure that the scope of the reservations is not
broader than these measures and, thus, that the reservations are not of a “precautionary”
nature;
c) no additional non-conforming measures could be introduced (and listed) except when the
MAI obligations are extended or sectors or activities are demonopolised or privatised;
d) an amendment to a non-conforming measure would be permitted only if it did not decrease
the conformity of the measure; and
3
e) a breach of standstill should be subject to the dispute settlement provisions of the Agreement.
6. The Drafting Group also considered that a standard presentation of the non-conforming measures
listed in Contracting Parties’ specific reservations would enhance transparency and facilitate the operation
of the Agreement. The Drafting Group felt that specific reservations listed in the schedules of the
Contracting Parties should include the following elements:
a) the sector
(s)
or sub-sector
(s)
covered by the reservation ;
b) the obligation or MAI article for which the reservation is taken;
c) the level of government which maintains the non-conforming measure;
d) the legal source or authority of the non-conforming measure; and
e) the description of the non-conforming measure
.
7. For practical reasons, however, the amount of information to be provided should be limited to
the minimum necessary to describe the non-conforming measures.
III. ROLLBACK
8. Rollback is the liberalisation process by which the reduction and eventual elimination of non-
conforming measures to the MAI would take place. It is a dynamic element linked with standstill, which
provides its starting point. Combined with standstill, it would produce a “ratchet effect”, where any new
liberalisation measures would be “locked in” so they could not be rescinded or nullified over time.
9. There are a number of ways for achieving rollback. The most commonly known in the trade
field is that of successive rounds of negotiations where rollback results from the trade-offs or exchange of
trade concessions. Peer pressure, on the other hand, has been the approach of the OECD liberalisation
instruments. Its main element are the periodic examinations of Member countries’ restrictions. These
country reviews aim at encouraging the unilateral liberalisation of restrictions and the extension of the
resulting benefits to OECD countries and, whenever possible, to all other members of the IMF as well.
Rollback commitments may also be inscribed in schedules of commitments or list of reservations. While
this has not been a generalised practice, it has been done in some cases under the OECD instruments
.
10. Rollback during the negotiations might be achieved through:
a) liberalisation commitments by the Contracting Parties effective on the date of entry into
force of the MAI. This would imply that that not all restrictions currently maintained would
be included in the list of reservations of the Contracting Parties;
b) rollback commitments inscribed in a country reservation or description of a non-conforming
measure by means of a “phase-out” or a “sunset clause” specifying a future date when the
non-conforming measure would be removed or made more limited in the future. Phase-out or
sunset provisions could not be envisaged for all non-conforming measures. They might be
useful, however, where the phase-out of a non-conforming measure is inscribed in domestic
4
legislation or where a Contracting Party is able to commit itself to future liberalisation by a
specified date.
11. Rollback after the entry into force of the MAI could result from:
a) an obligation for a Contracting Party to adjust its reservations to reflect any new liberalisation
measure (the “ratchet” effect). This procedure could monitored by the Parties Group.
b) periodic examinations of non-conforming measures. These examinations could lead to
recommendations in favour of the removal or limitations of specific measures
.
These reviews
could be conducted on a country-by-country basis and/or on an horizontal basis. This could
also be specified in the functions of the “Parties Group”; and
c) future rounds of negotiations designed to remove any remaining non-conforming measures.
The decision to launch future negotiations could be taken at the conclusion of the MAI
negotiations or could be left to the “Parties Group”. This would need to be specified in the
implementation provisions of the MAI
= new reply since forum marked as read
