TWN Info Service on WTO and Trade Issues (Aug05/2)

1 August 2005

WTO members give assessments on state of negotiations

A meeting of the WTO's Trade Negotiations Committee or TNC (which coordinates the Doha work programme's negotiations) was held on 28 July,

in between the General Council meeting of 27 and 29 July.

In fact this meeting of the TNC was the main forum during the week for the WTO members to voice their views and positions on the state of

the negotiations and the reports presented by the Chairs of the various negotiating groups and committees.

Below is the first report of what some of the countries said at the TNC meeting.   A second report with the views of more countries will be sent separately.

This report was published in the SUNS (South-North Development Monitor)

With best wishes,
Martin Khor


WTO Trade Negotiations Committee hears assessments on state of negotiations

By Martin Khor (TWN), Geneva, 28 July 2005

The Trade Negotiations Committee heard assessments from members on 28 July 2005 on the state of play in the negotiations, with many members expressing disappointment that there had not been as much progress as scheduled, and urging that negotiating momentum pick up from September, after the summer break.

When the TNC resumed its suspended session on 28 July, the TNC chair, Dr. Supachai Panitchpakdi, who last week had opened the TNC meet and said he was pressing the "alarm buttons" that the Doha talks were in trouble, toned down his assessment today, and said that "the situation is disappointing but not disastrous." With no breakthroughs at this July meeting, the situation made success in Hong Kong "harder but not impossible," he said. (See separate article on Supachai's statement).

The meeting heard the updated reports on the agriculture negotiations (by the chair of the agriculture committee special session, Tim Groser) and on the non-agriculture market access negotiations (by the NAMA negotiating group chair, Stefan Johannesson of Iceland), as well as other reports including the state of negotiations on proposals on special and differential treatment, SDT (by Faizal Ismal of South Africa) and on trade facilitation (by Ambassador Muhamad Noor Yacob of Malaysia).

The status reports had taken the place of the original target of concluding texts of "first approximations" that the TNC would then have transmitted to the General Council for adoption.

At the morning session, several delegations, including the G20, G33 and the Africa Group, made statements on their views on the state of affairs, with most of them reiterating known positions, and some expressing short and preliminary views on the reports on agriculture and NAMA.

The G20 said its proposals on agriculture had occupied the middle ground in recent negotiations. Interestingly this was supported both by the European Communities and the United States which welcomed the G20's role.

The statements of the EU and US contained veiled references to each other, in an attempt to brush off the burden of blame that each had seemed to try to place on the other - for lack of progress in the agriculture negotiations over the past several days.

The Group of 20, represented by Brazil, thanked the agriculture special session chair, Tim Groser, for his "outstanding work" but said that "unfortunately results continue to elude us." No one is encouraged by the current state of affairs in agriculture negotiations and a lot of impetus and political commitment is needed in September when negotiations resume, Brazil said.

The G20 considered Groser's report (presented to the TNC today) favourably, saying there may be differences of opinion on certain points but that his report had made an important contribution. By identifying the causes for the state of affairs and the key issues for more work, his report should help jumpstart the negotiations in the fall.

The G20 said the non-result in July clearly indicated that things were not moving as expected and the TNC chair's wake up call should prompt early work in September. The work done so far should be the platform for future negotiations. Too many decisions were postponed but the level of ambition remained intact. The G20 still expects an agreement on modalities for Hong Kong.

The G20 said it remains committed to the Doha mandate and its proposals on all three pillars reflect consensus building through accommodating different interests within the Group as they strike a balance between offensive and defensive interests. The G20 proposals are widely recognized as a genuine middle ground, are technically consistent and provide a basic structure on which to make progress and build consensus, Brazil added.

It called for the process of informal and formal meetings to continue, but under a bottoms-up approach. The G20 Ministerial in Pakistan in September will help it prepare the ground for Hong Kong. "We have put our cards in the centre of the negotiating table and it is time for others to do the same."

The Group of 33, represented by Indonesia, said it was disappointed with the lack of progress in agriculture but added it would be counter-productive to impose technical solutions to deeply unresolved political issues. A political commitment from all was now needed. Groser's report will allow members to focus discussion in September, Indonesia added.

The G33 reiterated that guaranteeing food security, livelihood security and rural development constituted the core foundation of the development agenda and reflected the right to development of developing countries. "Hence we urge that balanced solutions in all three pillars should be achieved to deliver effective SDT for developing countries."

The G33 said it was now developing indicators on the three criteria for self-designation of special products and expected others to respond constructively.

The Africa Group, represented by Ambassador Naela Gabr of Egypt, said it may be too early to conclude "we are in crisis" or to convey pessimism. The Group had shown significant flexibility and pragmatism. "While we remain committed to this spirit, we fail to see our partners providing similar flexibility," said Egypt. Further, recent consultations indicated a large portion of divergence among the developed countries, not just between developed and developing countries.

The Africa Group expressed unhappiness at the process. Reiterating the crucial importance of transparency and inclusiveness, it said its representatives were not invited to some of the recent consultations. "This may eventually lead to many problems, as it will be difficult to endorse the results if we have not taken part in all stages of negotiations," Egypt declared.

On substance, the Africa Group's main interest was development and the term 'development' was losing its meaning in the course of the negotiations. "Development is not merely the agreement-specific SDT proposals, but is a main integral part of all negotiating tracks," Egypt said.

On SDT, there was a good start by addressing LDC proposals first, but a consensus was not reached. A further push is needed in September.

On NAMA, the Africa Group noted the NAMA Group chair's 8 July report stating movement to convergence on members and support for a Swiss formula. "The Africa Group shares his belief if what is meant is support for a non-linear Swiss-type formula, with a predetermined coefficient for each member qualified by its current average."

The Group stressed the critical importance it attached to all elements of NAMA negotiations, of which some were not included in recent consultations.

On trade facilitation, the Africa Group believed time will be needed for developing countries to digest all the proposals and evaluate their impacts and costs, and the period from September to Hong Kong should primarily be an educative one.

The Group also expressed concern that progress had been made in tracks where the African countries had a defensive position (where there are the highest costs and commitments) whilst tracks where they hold an offensive position (with hopes of market access) are lagging behind or stagnating.

For example, in agriculture there has been little progress. The cotton issue, of vital importance to 32 African states, was yet to achieve results. The Group reiterated the modalities it suggested last April, and expected extensive negotiations after the summer break.

On services, it expressed concern on the quality of offers in sectors and modes of export interest of African countries, which undermined the objectives of GATS and the Doha mandate.

"We re-emphasise that the services negotiations should continue to be based on the existing mandate and negotiating guidelines." Consultations should be pursued on SDT and implementation of LDC modalities.

The European Communities said a main problem is the uneven speed of progress in different issues. It called on major players to make difficult political choices between now and September and for a change in working methods.

On agriculture, the EC largely agreed with Groser's assessment. It welcomed the G20 proposals on all three pillars, and said it was a "good and solid basis" to work on. The EC saluted the work done in the G20 to table this proposal as it succeeds to steer negotiations to the middle ground. It said the negotiations on market access after the summer break could resume "centred on the G20 proposal."

The EC was however deeply disappointed with the virtual lack of progress since July 2004 on trade-distorting domestic support. Though both cuts and disciplines were to be addressed, little if any progress had been made, despite the G20's useful ideas. Some early political decisions were needed in key developed countries. The EU had carried out reform and did not ask anyone to pay for this, "nor did we ask others to reform or open their markets in exchange." Reform is long overdue in many markets and should be done for its own sake and not linked to progress or payment by others in this or other areas.

Much also needed to be done on export competition. There was limited progress on export credits but little if any on STEs (state trading enterprises) and food aid.

On NAMA, the EC welcomed the NAMA chair's reports, and called for ambition. A NAMA deal would include: new market access for all; developed countries should do most, developing countries less; poorer developing countries (LDCs and others in a similar situation) should not be asked to make any tariff reduction; developing countries who had made efforts to open their markets should get recognition of this; tariff and quota free access by LDCs to all developed country markets.

The EC said the start in September should be on the basis of "one or the other of the Swiss formula proposals that seem to have attracted large support." It proposed a simple Swiss formula, with one coefficient for all developed countries and a higher coefficient for developing countries, modulated according to the degree and kind of additional flexibility that each of them required.

On services, the EC termed it a "very serious" situation with hardly any progress. The number of improved offers fell far short, and in most cases they did not even reflect existing liberalization levels in some developed members. The situation was "unsustainable and must be corrected by Hong Kong."

The EU proposed modalities for services for Hongkong with a similar level of specificity as for agriculture and NAMA. The request-offer method has not generated meaningful results and complementary approaches should now be explored. The EC asked the services negotiations Chair to pursue this so that Ministers in Hong Kong can decide on "a set of modalities on services."

The United States, said that approval by the US Congress of CAFTA was "very good news for US participation in WTO negotiations." (The House of Representatives approved CAFTA by a majority of just two, 217 against 215, and US media reports indicated that the administration had made many concessions to its domestic textiles and other industries).

The US was disappointed that "we have not made more progress in moving the Doha Development Agenda forward." In agriculture, the market access talks signalled the need for a middle ground between the Swiss formula and Uruguay Round approach and the G20 had offered useful suggestions to focus the discussions.

On domestic support, the US recognized a strong outcome required important changes in its own farm programmes, but changes could not be made by just one country. For some reason, those who subsidised the most still sought reassurance with respect to domestic support, the US said.

The US was committed to domestic support reform in all counties, including substantial reduction in allowed level of trade-distorting domestic support, product-specific caps on amber box, a cap on partially decoupled payments under the blue box, and new criteria to ensure that the partially decoupled support payments of all countries were less trade-distorting than amber box payments.

On NAMA, the US said the path ahead was "much clearer" due to recent work, with signals of flexibility from all sides on the formula and use of coefficients. Work on sectors and non tariff barriers must intensify.

The Cairns Group, represented by Australia, said it was disappointed with the little headway on agriculture. Time was now seriously short. Recent consultations have underscored that without progress on agriculture, "we cannot move on other issues."

The TNC meeting is to resume Thursday afternoon, with many more delegations slotted to speak. +