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TWN Info Service on WTO Issues (Dec03/3)

9 December 2003

Third World Network

Dear friends and colleagues

APPARENT SHIFT IN EC POSITION SOURS ATMOSPHERE IN TRADE FACILITATION GREEN ROOM MEETING

An apparent shift in the European Commission position on Singapore Issues at the WTO has added to the confusion surrounding these issues, and affected a meeting of 4 December afternoon on trade facilitation, one of the Singapore issues.

On 4 December morning, at a meeting of a few Ambassadors, the EC apparently indicated that it would like the four Singapore issues to be retained in the WTO, if necessary through plurilateral negotiations for some of the issues.

This was seen as a shift from what the EC had said only the previous morning (3 December), that it was willing to drop two or even all the issues “from the Doha Development Agenda.”

The uncertainty and unhappiness surrounding the EC’s apparent turnaround soured the atmosphere of an informal consultation on trade facilitation on 4 December afternoon. Many developing countries indicated their unwillingness to undertake a discussion on technical details on the issue, when the major question of how the Singapore Issues as a whole should be dealt with remained unresolved.

There were clear differences and no agreement on how to continue on this issue in the future.

Below is a report on these developments.

Previous reports of TWN Info Service can be found on www.twnside.org.sg.

With best wishes

Martin Khor

TWN

EC’s SHIFT ON SINGAPORE ISSUES SOURS WTO GREEN ROOM MEETING ON TRADE FACILITATION

Report by Martin Khor, Third World Network, Geneva 5 September 2003

An apparent shift in the European Commission position on Singapore Issues at the WTO has added to the confusion surrounding these issues, and affected, for example, a meeting on 4 December afternoon on trade facilitation, one of the Singapore issues.

According to trade diplomats, at an informal meeting of a few Ambassadors convened on 4 December morning by the General Council chairman, Carlos Perez del Castillo, the EC apparently indicated that it would like the four Singapore issues to be retained in the WTO, if necessary through plurilateral negotiations for some of the issues.

The impression given was that the EC now wanted all four Singapore issues to remain on the agenda of the WTO, with some of them on a multilateral basis and others on a plurilateral basis for those who were willing.

Some diplomats said they considered this to be a shift from what the EC had said only the previous morning (3 December ) at an informal meeting involving about 30 delegations.

At that 3 Dec meeting, the EC Ambassador had said that the EC was willing to drop two or more issues “from the Doha Development Agenda.” Some diplomats understood it to mean that it was prepared to drop even all four issues.

Even then, it was not very clear what the EC had meant by this. In an earlier intervention at the same meeting, the EC had said it was prepared to unbundle the issues and deal with them outside the single undertaking, and negotiate with those prepared to do so (indicating a plurilateral approach at least for some issues).

The 3 December position of the EC had already disappointed the developing country members, many of whom called for the EC to maintain its Cancun offer of dropping three of the issues completely from the WTO agenda (which was understood to mean closing even the discussions on these issues).

On 3 December, the EC had at least offered to drop two or even all the issues “from the Doha Development Agenda.” Thus, its position at the 4 December meeting, when it apparently put more stress on a plurilateral approach to some issues in which there is greater resistance, was seen by some developing-country trade diplomats as detracting from “dropping from the Doha Development agenda.”

A developing country Ambassador told the media: “It is all very confusing now what the EC is saying. Under these circumstances, it is impossible for us to discuss technicalities until the underlying question is settled, of how to handle these Singapore issues. How can we discuss an issue when we don’t even know if it is in or out of the agenda?”

Another senior diplomat said: “On 3 December the EC clearly said it was prepared to drop two or even all the Singapore issues from the Doha Development Agenda. Now it seems to want to negotiate some issues and put the others onto a plurilateral footing. There is a total lack of clarity. So how can we continue to discuss any of these issues on a technical level?”

The uncertainty and unhappiness surrounding the EC’s apparent turnaround soured the atmosphere of an informal consultation on trade facilitation on 4 December afternoon. The meeting was convened by WTO Deputy Director General Rufus Yerxa, under the direction of the Perez del Castillo, who on Wednesday indicated he wanted progress on modalities for negotiations on this and another Singapore issue (transparency in government procurement).

At the consultation (or Green Room meeting), involving about 30 delegations, Yerxa reportedly asked delegations to try to bridge differences, especially on the application of the dispute settlement understanding to the GATT articles relating to the trade facilitation issue. It was apparent, said some trade diplomats, that the aim was to discuss parameters for getting negotiations started.

However many developing countries indicated their unwillingness to undertake a discussion on technical details on the issue, when the major question of how the Singapore Issues as a whole should be dealt with remained unresolved.

Egypt and other developing countries asked who are the demandeurs of the issue, so that they could be asked what they are prepared to pay.

Only Australia and New Zealand responded that they are demandeurs, and indicated that as long as there was a binding agreement, they could provide technical and financial assistance, to ensure developing countries can comply. They, together with Norway, insisted that trade facilitation rules would be beneficial for developing countries.

Several developing countries - including Malaysia, Egypt, the Philippines, China, Indonesia, India - made clear that they were not prepared to discuss the technical aspects of the trade facilitation issue, as doing so would preempt the question of the status and position of the Singapore Issues as a whole.

China referred to what it saw as a change in the position of one major member (referring though not by name to the EC) on the Singapore Issues, and said that the member had said it could drop two or three issues from the Doha Development Agenda; but apparently this position had now changed.

China expressed surprise about this, and it now had to contact its capital to get its response to this apparent change. Since there was lack of clarity and confusion now about the Singapore Issues, China would not want to take an active part in technical discussions on this issue as it did not want to preempt the outcome on discussions on the Singapore Issues overall.

Malaysia said that while an improvement in trade facilitation has a positive effect, this could be done by countries on their own, and there was no need for binding rules in the WTO and thus no need for negotiations. Countering a suggestion by Hongkong that APEC countries should support trade facilitation in WTO since APEC had already adopted a programme on trade facilitation, Malaysia pointed out that the APEC programme was of a non-binding nature.

Indonesia said it was not against trade facilitation per se but its position of not being prepared to start negotiations remained. It was not comfortable with having a technical discussion now on the issue, until the whole question of the status of the Singapore issues is resolved.

Kenya said that developing countries like itself were addressing trade facilitation at a national or regional level, and they did not want these efforts to be undermined if trade facilitation becomes part of WTO rules. It questioned whether any problems had arisen with the existing articles that had been chosen for discussion under this topic. There had not yet been proper clarification of several issues under this topic.

The consultations also raised questions as to on which text the discussions should be based.

When the meeting started, the Chair had expected to use the Derbez text (i.e. the draft Cancun Ministerial Text of 13 September) to be the basis.  This was supported by Norway.

However many developing countries objected to this, and pointed out that there was also a paper on Singapore Issues submitted for Cancun by many developing countries (WT/MIN(03)/W/4 dated 4 September 2003) which contained a section on Trade Facilitation: Issues for further clarification. They wanted this paper to be the basis for discussion.

At the end of the meeting, the Chair reportedly said the consultations should continue, and that the Derbez text as well as other documents such as the developing countries’ paper could be referred to.

 


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