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TWN Info Service on WTO and Trade Issues (Dec05/12)

9 December 2005
 

NEW HK MINISTERIAL DRAFT ISSUED, BUT WITHOUT COVER NOTE


The WTO Secretariat has issued a new and revised version of the Draft Ministerial Text for the WTO's Hong Kong Ministerial Conference. It contains three text changes as compared to the draft dated 1 December.

The most important of these is the square brackets placed around some important words in para 21 on services, denoting that there is no agreement on the controversial Annex C on services.

But the latest draft is more interesting for what it omits than what it has added. The cover note that was attached to the 1 December draft has been removed.

This makes it very difficult for participants in the Hong Kong Ministerial to understand that most of the annexes in the text are NOT agreed on by the members, nor even drafted by them.

It is especially confusing, and potentially dangerous, with regard to Annex C on services, as there could be the false impression that this has been drawn up by the members, and that there is broad agreement on it.

Senior diplomats from developing countries have met with the General Council chair to lodge their concerns.

Below is a report of this development on the eve of the Hong Kong meeting.

It was published in the SUNS of 9 December.


With best wishes
Martin Khor
TWN

PLEASE VISIT THE TWN WEBSITE FOR LATEST NEWS AND ANALYSES/REPORTS ON WTO AND ON THE HONG KONG MINISTERIAL CONFERENCE

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WTO ISSUES NEW MINISTERIAL TEXT FOR HONGKONG, BUT WITHOUT COVER NOTE

By Martin Khor (TWN), Penang, 8 December 2005


The WTO Secretariat has issued a new and revised version of the Draft Ministerial Text for the WTO's Hong Kong Ministerial Conference. The document (WT/MIN(05)/W/3 dated 7 December) contains three text changes as compared to the first revised draft dated 1 December.

But the latest draft is more interesting for what it omits than what it has added. The cover note that was attached to the 1 December draft has been removed.

The text is complicated enough, as it contains a mixture of texts and annexes with differing levels of agreement and disagreement among the WTO delegations in Geneva.

The removal of the cover note makes the draft even more confusing, especially for Ministers and officials who are not immediately familiar with the history of the document. It will be even more impossible for the public, who have not followed the Geneva negotiations closely, to understand the different status of various parts of the draft, especially the annexes.

Some developing country diplomats in Geneva are upset that the cover note has not been attached to the latest draft text itself. They were given an assurance during the General Council meeting on 2 December that the cover note would be attached.

The Ambassador of one developing country told the SUNS (via telephone) that without the cover note, it would be very difficult to understand that large parts of the document had not been agreed on, and that some parts of it were still hotly contested.

A number of diplomats also said that they would bring up the matter with the Chair of the General Council, Ambassador Amina Mohamed of Kenya, in an attempt to have the 1 December cover letter, or one similar to it, to be attached to the draft Ministerial text when it is distributed in Hong Kong.

According to diplomatic sources, senior diplomats from several developing countries met with the Chair on Thursday morning to discuss their concerns.

Without an explanatory note, it would be difficult for anyone, except those following the negotiations very closely in Geneva, to understand the status of each of the annexes. Most were written by Chairs on "their own responsibility". However, while there is a clear description in some of the annexes (for example, Annex A on agriculture and Annex B on NAMA) that these are reports written by the Chair of the respective negotiating group, there is ambiguity in some others.

In particular, Annex C on services contains what looks like text, and not a report. There are no square brackets in the Annex, thus giving the impression that it has been agreed to. There is no explanation in the Annex itself that it has actually been drafted by the Chair of the services negotiations on his own responsibility (rather than it being a text negotiated by the members), that it is not an agreed text, and that in fact most of the contents are hotly disputed.

There are now square brackets placed around some key words in paragraph 21 (that deals with services) in the main body of the new draft to denote that there is no consensus on Annex C.

However, it would be nearly impossible for anyone (unless he or she is well briefed on the details) to understand that the text in Annex C was drafted only by the Chairman and is not a negotiated text, or that there are many different views and positions on various key paragraphs of that Annex.

The 1 December draft contains a cover note explaining that the annexes are in differing formats, reflecting the differing situations in the areas, and that with the exception of Annex E on trade facilitation, "the texts in all of these annexes were presented on the responsibility of the respective Chairs. They do not purport to be agreed texts, and are without prejudice to the position of any Member."

With the disappearance of the cover note and its general explanation, the situation of the status of each annex, already confusing even with the cover note, becomes even more un-transparent and incomprehensible.

In forwarding the latest draft Ministerial text to the chair of the Ministerial Conference (Secretary of Commerce of Hong Kong, John Tsang), the General Council Chair and Director General Pascal Lamy have written a letter which contains the "operative parts" of the cover note that was attached to the 1 December draft.

The letter (which is on the WTO website) explains that the text remains a draft and does not represent agreement overall, and that it draws on work done by the Chairs of negotiating bodies. Added the letter: "Their consultations have in many cases produced inputs for the present draft which are either fully agreed by Members or reflect a high level of convergence. In other areas, the text still reflects a number of differences.

"A number of annexes are attached to the draft text. These are in differing formats, reflecting the differing situations in the negotiating areas to which they relate. We wish to make it clear that, with the exception of Annex E on Trade Facilitation, which is a report agreed by the Negotiating Group, the texts in all of these annexes were presented on the responsibility of the respective Chairs. They do not purport to be agreed texts, and are without prejudice to the position of any Member."

While the letter to Tsang repeats what was in the cover note of 1 December, the developing country diplomats in Geneva are concerned that the letter would not be a prominent document at the Hong Kong Ministerial. It even lacks an official document number.

The content of the letter would better serve as an explanation to the text if it was placed on the cover, as the text will be the most important negotiating document at the meeting.

Besides the dropping of the cover note, the new 7 December draft Ministerial text differs in three ways from the 1 December draft.

The most important change is the addition of square brackets in paragraph 21 on services, as a result of the insistence by several developing countries (including the ACP and African Groups, and a number of Latin American and Caribbean countries) during the General Council meeting.

Paragraph 21 now reads: "We are determined to intensify the negotiations in accordance with the above principles [and the Objectives, Approaches and Timelines set out in Annex C to this document] with a view to expanding the sectoral and modal coverage of commitments and improving their quality. In this regard, particular attention will be given to sectors and modes of supply of export interest to developing countries."

As a result of the decision by the General Council on a "permanent solution" on the TRIPS and Health issue, the 7 December draft now has a new paragraph 34 as follows:

"We reaffirm the importance we attach to the General Council Decision of 30 August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, and to an amendment to the TRIPS Agreement replacing its provisions. In this regard, we welcome the work that has taken place in the Council for TRIPS and the Decision of the General Council of 6 December 2005 on an Amendment of the TRIPS Agreement."

Finally, there has been the removal of brackets in paragraph 53 regarding the accession of Tonga.

The WTO Secretariat also posted on its website two lists of questions - on agriculture and NAMA - that the Ministers will be asked to focus on in the negotiations at Hong Kong.

On agriculture, the "list of issues to be addressed in light of the Doha mandate and the July 2004 Framework" are:

1. What are the elements of the formulae for the reduction commitments in trade-distorting domestic support? And what are the disciplines that should complement the reduction commitments?

2. What are the elements of the formula for tariff reduction commitments and other elements to support it? And what are the flexibilities that should accompany the tariff reduction commitments?

3. What agreement is needed regarding parallelism in order to determine an end-date for elimination of all forms of export subsidies?

4. What are the elements necessary to deal with cotton ambitiously, expeditiously and specifically in all three pillars?

5. What are the elements of S&D necessary in all three pillars?

On NAMA, the "list of issues to be addressed in light of the Doha mandate and the July 2004 Framework" are:

1. Can Ministers agree on all the elements needed to finalize the formula and other elements that support it?

2. Can Ministers resolve remaining differences about flexibilities?

3. On unbound tariffs, can Ministers agree that a mark up is the way forward?

 


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