TWN Info Service
on WTO and Trade Issues (June06/23)
UNCERTAINTY REIGNS AS STAGE IS SET FOR WTO TALKS THIS WEEK
But it is uncertain what will come out of this crucial period, in terms of both process and substance.
Please see the report below which gives a preview of the coming week. It was published in the SUNS of 26 June.
By Martin Khor (TWN), Geneva, 23 June 2006
But on Friday evening (23 June), it was uncertain what will come out of this crucial period, in terms of both process and substance.
In the corridors, members were exchanging news and rumours on which countries were being invited (and not invited) to the "Green Room" of some 30 Ministers that is expected to be convened by the Director General Pascal Lamy on 29 June.
The Green Room will run for some days - no one knows exactly how long. Parallel to it will be a series of informal meetings of the Trade Negotiations Committee, which can be attended by all delegations. Ministers and officials not invited to the Green Room can give their views there.
On Saturday 1 July morning, a formal meeting of the TNC is scheduled to start. It may go on for another day or two, depending on circumstances.
The key circumstance, according to trade diplomats, is whether the Green Room meeting goes on well, whether there is "new movement", especially by the major members the United States and the European Union, and whether there is any hope of agreement on the "modalities."
The mood ranges from pessimism (there are too many areas of contention and too short a time to bridge the gaps) to optimism (the EU and US are finally signaling ability to improve their offers, even if a little).
The sense that this is going to be an uphill battle was reinforced on 22 June when the chairs of the agriculture and NAMA negotiations issued their draft modalities papers. The agriculture paper had 760 square brackets, demonstrating lack of agreement on major and minor issues. In the NAMA paper, the Chair said he could not give texts or even suggestions on some key areas as the divisions were too deep.
At a press conference on 22 June night, Crawford Falconer, chair of the agriculture negotiations, and Don Stephenson, chair of the NAMA negotiating group, were asked how optimistic they were for an outcome in the following week.
"An awful lot remains for Ministers to do but I am optimistic they'll address them seriously," said Stephenson, diplomatically.
"I long ago stopped being optimistic or pessimistic," said Falconer, who was more direct. "Will there be serious engagement? Will there be the political will to make political decisions? The evidence is we are in a difficult situation. Things always look bleak when problems can actually be resolved. But then they also look bleak when they can't be resolved."
He added that April was another failed deadline, so there was more urgency for the end-June process to work. "We are two months further down the road and closer to the point of no return.," he said, quoting a saying that "the prospect of imminent death focuses the mind wonderfully."
At a session on agriculture on Friday 23 June, many members spoke up, stressing the importance of their issues and positions. The EU and G20 reportedly said they were willing to give new options, if others also move.
The orthodox thinking is that the US must improve its domestic support offer, the EU its offer on market access in agriculture, and the "big emerging markets" must agree to open their markets in NAMA and services. Then everything else will fall into place.
However, there are many catches in this "triangle" view of the WTO talks. For a start, countries like India may not be willing to give up its defensive interests in agriculture, simply because the EU and US are able to make marginally better offers.
Then there are the "silent majority" of developing countries, silent not because they are not vocal but because they do not seem to figure in many of the exclusive meetings of the G6 or the G12, etc.
Their priorities are mainly defensive, and they need to be satisfied that these are taken on board. They fear that while the developed countries make minimal real offers (although behind a smokescreen of seeming to have major movements), they will put on the pressure on the major developing countries to make deep cuts in NAMA.
And that they will be caught in the crossfire, being asked to also cut deeply (or even more deeply than the big developing countries) in NAMA, while also having to reduce their tariffs in agriculture by even more than during the Uruguay Round.
One acid test for these countries is whether their proposals on Special Products and Special Safeguard Mechanism in agriculture are taken seriously.
If their proposals remain intact, these countries will be more in a mood to accept a deal on modalities. If these issues are sought to be shunted aside, on the ground that they are not part of "core modalities", then they can be expected to fight tooth and nail.
The battle of coefficients in NAMA will be even more complex, because the coefficients constitute a screen that hide the facts on which countries are being asked to cut their tariffs by which degree.
It is hard enough for experts and diplomats to translate from coefficients to percentage cuts, and vice versa. It will be that much more difficult for the Ministers to do that.
The stage is thus being set, but the players are still uncertain of their role, and perhaps it is also uncertain what play is being put on next week.