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TWN Info on Finance and Development  (Oct06/01)

2 October 2006


IMF/WORLD BANK MEETINGS DISCUSS WTO DOHA TALKS

The World Trade Organization's Doha negotiation was one of the issues highlighted during the World Bank-IMF annual meetings held in Singapore from 19 - 20 September 2006. WTO Director-General Pascal Lamy told key Finance Ministers present for the meetings that much of the work to revive the talks had to be done at home to convince their domestic constituencies, and he indicated March 2007 as the deadline for concluding the talks.

Lamy said that the deadline for concluding the Doha negotiations overall is March 2007, to take advantage of the United States' present fast track authority.

Meanwhile, the UK Chancellor of the Exchequer Gordon Brown struck an optimistic note on the Doha talks, saying that he was confident they would re-start. However, some of the media at the Singapore meeting have also highlighted comments by some Trade Ministers (particularly Susan Schwab, the US Trade Representative and Kamal Nath, the Indian Commerce Minister) who each indicated that their positions remained the same.

Below is a report synthesising the various statements and positions on the Doha negotiations, including speculations on the resumption of trade talks, advanced during the course of World Bank and IMF annual meetings.

It was published in SUNS #6101 Tuesday 19 September 2006

With best wishes
Martin Khor
Third World Network

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IMF/WORLD BANK MEETINGS DISCUSS WTO DOHA TALKS
By Martin Khor, Singapore 19 September 2006


The World Trade Organization's Doha negotiations was one of the issues highlighted during the World Bank-IMF meetings being held here. WTO Director-General Pascal Lamy told key Finance Ministers that much of the work to revive the talks had to be done at home to convince their domestic constituencies, and he indicated March 2007 as the deadline for concluding the talks.

Meanwhile, the UK Chancellor of the Exchequer Gordon Brown struck an optimistic note on the Doha talks, saying that he was confident they would re-start. However, some of the media here have also highlighted comments by some Trade Ministers (particularly Susan Schwab, the US Trade Representative and Kamal Nath, the Indian Commerce Minister) who each indicated that their positions remained the same.

Lamy told the Straits Times (Singapore) that the deadline for concluding the Doha negotiations overall is March 2007, to take advantage of the United States' present fast track authority.

In an interview, Lamy was asked if the timing is now right to resume the Doha talks (which had been suspended indefinitely at the end of July). "Not yet," replied Lamy, adding that there is need for "quiet diplomacy" and "discreet, multilateral conversations" before countries can return to the negotiating table.

He said that what this means is that the Doha talks will not be sewn up by December, and added that the latest date by which the WTO will have to come up with a comprehensive deal is March, according to the Straits Times report. "If we go beyond that, the risk of the US not having any authority to negotiate will increase."

Lamy was in Singapore to address the meeting of the International Monetary Fund's main policy making body, the International Monetary and Financial Committee.

His comments in the Straits Times seem to be in line with a time schedule estimated by American lawyer, Lori Wallach, director of Public Citizen's Global Trade Watch division. According to this schedule, the US President has to give notice to the US Congress of his intent to enter into a Doha Round Agreement by 2 April 2007, in accordance with the required 90-day advance notice, and before the fast track authority expires on 30 June 2007. (See article in SUNS #6097 dated 13 September.)

A paper by Wallach explains that if the Doha negotiations concluded so that "notice of intent to enter into" a final agreement could be given by 2 April (i. e. negotiations were done by 2 April) then the Fast Track procedures for congressional consideration would apply to such an agreement whenever it was finally brought to Congress.

According to Wallach, the agreement thus should be entered into (i. e. signed) before 1 July, and the Fast Track's extraordinary limits on normal parliamentary procedure would apply even if the agreement did not come to the US Congress for consideration until a year after the July 1, 2007 Fast Track end date.

In Singapore, Lamy said that the Finance Ministers at the IMF meeting had demonstrated stronger resolve against protectionism. They had realized that they have to engage in more "domestic debates" in their own countries if they are to help jump-start the Doha talks.

The "big news" coming out of the 17 September meeting of the IMF's International Monetary and Finance Committee was a statement by Gordon Brown (the British Chancellor of the Exchequer and the Committee's chair) that the Ministers felt that the Doha talks can be revived, after the richest countries agreed to give $4 billion a year in "aid for trade infrastructure."

"As a result of our meeting, and what we heard from different continents, I am more optimistic now that there is a way forward, that there is a basis for a deal, that countries are now seized of the importance of a deal and the urgency of achieving one," he told a media briefing on 17 September.

"I believe the prospects of such a deal are enhanced by the pledges of more than $4 billion a year made by the richest countries to the developing world to aid trade for infrastructure," he said.

"I have never seen such a discussion in all the years I've been to IMF meetings so determined to bring the trade talks to a conclusion... that they actually say in the communique that [not] only do they want an early resumption of the negotiations, but an ambitious, successful outcome by the end of the year."

Brown's optimistic viewpoint on the Doha talks was given top treatment by many newspapers in their coverage of the IMF-World Bank talks.

Brown also cited a statement by US Treasury Secretary Henry Paulson, who had said that he strongly supports a renewed commitment to Doha and that he (Paulson) encouraged his G7 colleagues to work together to achieve an ambitious Doha outcome.

However, the optimism ascribed to the Finance Ministers did not appear to be shared by at least Trade Ministers of some key countries, who are the ones who undertake the WTO negotiations.

A paper "Emerging Markets" specially produced by Euromoney for the World Bank-IMF meetings said that key players that it had interviewed showed "little inclination to shift from entrenched positions."

For instance, the US Trade Representative Susan Schwab told the paper in the run-up to the meetings: "If you're serious about a development round, the first, second, third and fourth issues that should come to mind as priorities are market access, not cuts in domestic subsidies."

She said that any country had to ask itself, "What are we prepared to do on market access that will generate new trade flows?" She described the discussion of cutting domestic subsidies as a "diversion." She told Emerging Markets that she believes that a deal could still be two or three years away.

Comments by the Indian Commerce Minister Kamal Nath in the past couple of days also countered the optimism displayed by Brown. The Straits Times (Singapore) reported that even as Brown spoke, Kamal Nath "poured cold water on the chances of a breakthrough, saying [that] too many Indians scraped a living from the land for India to countenance opening up its market further to import of farm goods."

It quoted Kamal Nath as saying in a Reuters report that "There is no question of India making concessions at all where agriculture is concerned because our issue is subsistence."

According to a report in The Hindu, Chennai, Kamal Nath said that a 'road map' for resumption of the Doha talks is there as a result of the unified position adopted by the bloc of developing countries after the recent setback in the process.

Presumably he was referring to the recent Rio ministerial meeting of the G20, along with coordinators of other groups of developing countries - the G33, the African Group, the ACP group, the LDCs group, the small and vulnerable economies group, the Cotton Four and the NAMA 11.

The Hindu report said that Nath, who was answering questions on the sidelines of the IMF meetings here, said that "we have agreed that technical discussions should continue and we (the developing countries) will be doing it. But the talks can only be resumed "once we find that those developed countries on which the onus lies, move forward.". The Doha talks had neither been suspended nor abandoned, but there was now a 'time-out' in the Round - "a time for reflection for developed countries to exercise their leadership in the development round."

In its 17 September communique, the International Monetary and Financial Committee made a one paragraph reference to the WTO's Doha talks.

It stated: "The Committee expresses its deep disappointment that the trade negotiations have been suspended. It urges all WTO members to maintain their commitment to the rules-based multilateral trading system, resist protectionist calls, and preserve progress that has already been made. The Committee calls for leadership from the major trading nations to work urgently toward an early resumption of the negotiations, and an ambitious, successful outcome by the end of the year, based on a commitment to a comprehensive package on agriculture, industrial products, and services, to which all countries will need to contribute."

In another paragraph on aid for trade, the communique said the committee recognizes the importance of achieving the MDGs and in this context it stresses the importance of implementing Aid-For-Trade assistance, "which is firmly grounded in national development strategies, independent of progress on the Doha Round. We welcome the reports of the task forces on the Integrated Framework and on Aid for Trade and the financing commitments by donors for the enhanced Integrated Framework."

 


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