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EC and Japan prepare new draft texts on Singapore issues for Cancun

The EC and Japan, ardent advocates of WTO negotiations on the Singapore issues in the face of opposition from many developing countries, have drawn up draft decisions which envisage a fast track towards concluding agreements on the four controversial subjects.

by Martin Khor

GENEVA: The European Communities and Japan have prepared drafts of texts on negotiations on the Singapore issues, for adoption at the WTO’s Cancun Ministerial Conference.

The EC and Japan drafts are separate documents but they are similar or even identical in many parts.

The drafts have to date not been presented to the WTO but are believed to be circulating among a few WTO members for discussion and refining. 

They represent the current thinking of Japan and the EC on their approach to resolving the question of modalities of negotiations on the Singapore issues - trade and investment, trade and competition policy, transparency in government procurement, and trade facilitation.

A striking feature of the two proposals is the highly accelerated pace of negotiations implied.  Both papers bring the Singapore issues within the ambit of the Doha Declaration’s single undertaking and its deadline of completing negotiations by 1 January 2005.

The Japan paper also sets out rushed deadlines: that participants submit their negotiating proposals by 31 December 2003 and for the Chairs to present draft texts by 30 June 2004.

If these deadlines are adhered to, they would set records for completing complex negotiations for multilateral agreements on such important, complicated and controversial subjects in so short a time.

In a way, the deadlines can be considered “realistic” in that they would have to be along these lines if indeed a decision is taken at Cancun to start negotiations on the Singapore issues and if they are to join the Doha single undertaking, thus following the Doha target of completing the negotiations on all issues by 1 January 2005.

But then this shows the absurdity of launching negotiations on the Singapore issues at Cancun.  These issues are of such importance and of such complexity that there has been little common understanding on them among WTO members even after so many years of discussions since the 1996 WTO Ministerial Conference in Singapore. 

It is most unlikely that, if launched in Cancun, the negotiations on these issues can be concluded by the end of December 2004.  In that case, there would be no way for the Doha work programme to be completed by its 1 January 2005 deadline.     

The EC and Japan have been the strongest advocates of starting negotiations on the Singapore issues at Cancun.  However, many developing countries have been against a Cancun decision to launch negotiations. 

The Doha Declaration mandates that for each of the four issues, negotiations will take place at the Fifth Ministerial (i.e., the one at Cancun) on the basis of an explicit consensus on modalities of negotiations. It does not specify the definition of “modalities.” 

An official EC paper to the General Council (27 February) sets out an approach where a decision on modalities is to be taken on all four issues together, and “modalities” are listed as three “elements”: procedural issues, scope and coverage of the agenda, and special and differential treatment. (TWE #305 featured an analysis of this EC proposal.)

The EC approach was contested by 12 developing countries in their paper to the General Council (8 July).  They rejected the EC assumption that negotiations will commence after Cancun and the putting of the four issues in a single basket.  They also opposed the EC treatment of “modalities” as being a mere listing of elements of modalities or classification of issues.

The 12 countries said that looking at how previous and current WTO negotiations treat “modalities”, it is clear the substance of those subjects and the nature and direction of obligations form a fundamental and intrinsic part of the modalities.  Their approach implies that for each Singapore issue, the required consensus demands a common understanding on the scope, meaning and substance of the subjects to be covered in a potential agreement, and the nature and direction of the specific commitments involved in the subjects.

Such a substantive approach can be seen in the recent and current negotiations on modalities in agriculture and non-agriculture market access.

This sharp difference in approach has also been evident in recent “informal consultations” on the Singapore issues.  In July, at a heads-of-delegation meeting, the EC (supported by Japan) insisted that the Ministers at Cancun should be provided with proposed modalities, whilst several developing countries said there was no basis for consensus on modalities since views on the issues were so divergent, and thus it was not possible to work out modalities for Cancun.

Superficial treatment

The EC and Japan papers appear to continue their previous approach of having a simple and superficial treatment of modalities.

The Japan draft text, entitled “Negotiations on the Singapore Issues”, has two introductory paragraphs. It starts: “On the basis of paras 20 through 27 of the Doha Declaration, we agree that the negotiations on each of the four Singapore issues shall be conducted in accordance with the following modalities of negotiations.”

It adds that recognizing the needs for enhanced support for technical assistance and capacity building in the Singapore issues,  “we shall continue to work to provide adequate technical assistance and capacity building during the negotiations and after their conclusion.”

Under the main heading “Modalities”, the draft Japan text has seven sub-headings.

First, under “Organization and management”, the text says paras 45 through 50 of the Doha Declaration shall apply. (This implies the Singapore issues will be part of the Doha single undertaking and be bound by the 1 January 2005 deadline for concluding the Doha work programme.)

A negotiating group for each Singapore issue shall be established under the Trade Negotiations Committee (TNC), and the chairs appointed, at the first TNC meeting after Cancun.  Except for the negotiating group on trade facilitation, the chair of the working group dealing with the particular Singapore issue shall assume the chair of the relevant negotiating group.

Participants shall submit their negotiating proposals for each Singapore issue by 31 December 2003. The chair of each negotiating group “shall conduct the negotiations with a view to presenting a draft text no later than 30 June 2004.”

(This implies that it is the chair, not the members, of each group that will present, and thus presumably prepare, the draft texts of the agreements.) 

Other organizational issues, including the number and timing of meetings and benchmarks for each negotiating group, shall be determined at the first meeting.

Second, under “Relationship between trade and investment”, the Japan draft says the clarification work carried out under para 22 of the Doha Declaration shall serve as a basis of the negotiations.

Third, under “Interaction between trade and competition policy”, the draft states that the clarification work under para 25 of the Doha Declaration shall serve as a basis of the negotiations.

Fourth, under “Transparency in government procurement”, the draft says the negotiations shall build on the progress made in the working group on this issue.

Fifth, under “Trade facilitation”, it states that the review and clarification carried out under para 27 of the Doha Declaration shall serve as a basis of the negotiations.

Sixth, under “Special and differential treatment,” the draft says special and differential treatment for developing and least developed countries, taking into account developmental needs and levels of development, shall be part of the negotiations.

Seventh, under “Compliance mechanisms”, it says the review and compliance mechanisms shall be determined in light of the overall outcomes of the negotiations.

The EC informal paper dated 8 July, also titled “Negotiations on the Singapore Issues”, is prefaced by an explanatory note that “We consider simple modalities are sufficient but at the same time would like to try to accommodate concerns by partners on the substantive issues to be negotiated to the greatest extent possible without prejudging the result of negotiations.  We table a bracketed text as a basis of discussion which may be modified taking into account concerns raised.”

The EC draft’s first two paragraphs on agreeing to negotiate the Singapore issues and on technical assistance are similar to the Japan draft.

In the section on modalities, the EC paper also has a sub-section on “organization and management” which is very similar to the same sub-section in the Japan paper.  Thus, the implication of single undertaking and the 1 January 2005 deadline for completing negotiations also applies.

The EC paper however does not specify that the chairs of the working groups on the Singapore issues will assume the chairmanship of the negotiating groups. It also does not specify the deadlines for members to submit negotiating proposals and for chairs to present draft texts. The missing deadlines are represented by empty dots within brackets.

The EC paper also has a section with a heading “Basis of negotiations”.  There are sub-headings for each of the Singapore issues, and the words under each sub-section that the relevant paragraph of the Doha Declaration (i.e., para 22 for investment, para 25 for competition, para 26 for transparency in government procurement, and para 27 for trade facilitation) “shall serve as a basis of the negotiations.”

This implies that the issues for clarification by the respective working groups or bodies in the period before Cancun will be given priority or pride of place as the “basis for negotiations”.  Thus the issues listed for clarification could, under this scheme, be transformed into elements of modalities.  

It would be  difficult for  issues listed for clarification to  be excluded from the “basis  for  negotiations”, even if some of the issues (such as the national-treatment principle) have become controversial during the discussions since Doha.

At the same time, it would be more difficult for issues not listed in the clarification process to be part of the “basis for negotiations”, even though some members have asked that some issues not specifically mentioned in the Doha Declaration be included, for example, obligations of investors and home states with regard to the investment issue.

However, the EC paper has two lines of dots within brackets at the bottom of the sub-heading on each of the Singapore issues.  This implies that the EC expects more language to be included for each of the Singapore issues.

The EC paper ends with a paragraph on special and differential treatment stating that the negotiations shall take fully into account the principle of special and differential treatment for developing and least developed countries as embodied in para 50 of the Doha Declaration.

These two papers by the main proponents of the  Singapore issues are likely to meet with strong opposition from many or most developing countries, which have made it clear that there are so many deep divergences of views that there is no basis for consensus on modalities, and thus that negotiations should not begin. The recent Ministerial conferences of the least developed countries, of African Union countries, and of African, Caribbean and Pacific countries have taken similar positions, that since there is no common understanding on the Singapore issues, there should be further discussions and clarification of the issues after Cancun, instead of negotiations.                                                                   

 

 

 

 


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