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TWN Info Service on WTO and Trade Issues (July06/04)

5 July 2006


Engineered crisis? Members decided my new role, says Lamy

At a media briefing after the WTO meeting closed on 1 July, WTO Director General Pascal Lamy admitted: ''We are in a crisis."

He also denied he had managed or engineered the crisis in order to get the final decision -- his mandate to facilitate further consultations -- saying the members wanted him to do it and he could not resist their will.

He said Ministers had gathered to bridge gaps on agriculture subsidies, agriculture tariffs and NAMA tariffs. ''The results are pretty clear, there has been no progress, we are in a crisis,'' he said, adding he believed the gaps are not unbridgeable and "it remains doable.''

Below is a report of the Lamy press conference

With best wishes
Martin Khor
TWN

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Engineered crisis? Members decided my new role, says Lamy

By Kanaga Raja (SUNS), Geneva, 1 July 2006


At a media briefing after the WTO meeting closed on 1 July, WTO Director General Pascal Lamy admitted: ''We are in a crisis."

He also denied he had managed or engineered the crisis in order to get the final decision -- his mandate to facilitate further consultations -- saying the members wanted him to do it and he could not resist their will.

He said Ministers had gathered to bridge gaps on agriculture subsidies, agriculture tariffs and NAMA tariffs. ''The results are pretty clear, there has been no progress, we are in a crisis,'' he said, adding he believed the gaps are not unbridgeable and "it remains doable.''

Lamy said that there need for a different mode of operations and the members have mandated him to play the role of "facilitator and catalyst." In his view, this meant a lot of engagement, shuttle diplomacy and probable high-level consultations.

This would involve ''testing of numbers and a good amount of 'what ifs' so that we can fill the gaps, primarily between the big players to unlock the rest of the issues,'' Lamy said. What he heard in the TNC meeting was a sense of being on the brink of failure but also that there is need to change the present red lines in order that serious negotiations can resume.

Returning to his analogy of a Gothic cathedral, Lamy said that the plans of ''our Gothic edifice have not changed, nobody wants them changed - real cuts in subsidies and new trade opportunities in market access. But we have to come to the conclusion that more bricks, more stones and more sand need to be there to build it. ''I will now move forward, crack heads together, consult [and] confess, starting with the G6, so that we can get to that numbers which are missing in the existing texts...,'' he said.

Asked if he thought it was technically possible to draft the modalities in light of the risk of a logjam, and also on his 'promotion' from facilitator to a catalyst and possibly a scapegoat if the talks fail, Lamy said that he was aware of this possible promotion, saying that the risk of being a scapegoat was higher for him, but that the reward is higher for the members.

As they could not do it in the usual way, how could he refuse this request by members, he said. It remains necessary to do the draft schedules in approximately 6 months, he said, but modalities were still technically possible to be achieved.

On EU Trade Commissioner Peter Mandelson's remarks that in order to meet the end of July deadline, a G6 agreement was needed in two weeks, Lamy said that he was happy to hear that at least one member of the G6 was in a hurry. He will require some time to think about how he would proceed.

When asked to elaborate as to what he meant when he said that there was a crisis at the WTO, Lamy said that this was based on what he had heard from the members, especially the smaller and poorer members of the WTO. He mentioned that for instance the coordinator of the LDC Group in various discussions had been extremely eloquent on the fact that for the poor developing countries, no Round was the worst possible outcome because of the consequences it might have on the credibility of the multilateral system and the rather easy switch to more bilaterals, which was an option for powerful economies.

Developing countries know that in this sort of relationship, the imbalance that is sought to be corrected within the WTO rules will not only not be rebalanced but will be balanced the other way around, Lamy added. The pressure that non-G6 members are putting on the G6, in his view, was a reflection of that.

A journalist asked for a response to comments that the situation looked like a managed crisis (by Lamy himself), and whether his credibility remained intact. Lamy said that he preferred a managed crisis to an un-managed crisis.

Whether it is an engineered crisis is the real question. He was aware of media stories with the view that the DG knew that when he convened this Ministerial meeting, it would bump into a wall, but that he had carefully engineered this bumping so that the final decision would be the one that members made today.

He said if he could make sure that negotiations failed, he could also probably make sure that they could succeed. "I am not so intelligent," he said, adding that the members wanted him to do it (facilitate consultations), it is their will, how could I resist the will?"

When asked on his 20/20/20 proposal (G20 proposal on agricultural market access, Swiss-20 coefficient for developing countries in NAMA, and below $20 billion for the US in domestic support), Lamy said that it was not a proposal but a vague indication of some of the values of the landing zone... the numbers have to be tested with members.

Asked if he intended to put forward a Dunkel-type draft text, Lamy said that ''we are not short of texts... we've got plenty of that... What we do not have on the table is numbers. So, let's focus on numbers and not on texts.'' He said the material he would use to close the gaps in numbers are the ones already on the table.

When asked to elaborate on the main difficulties in the meeting, Lamy said members did not move on core issues where there was an absence of numbers. He said other issues where discussions have advanced technically were small and vulnerable economies, paragraph 8 flexibilities, and paragraph 6 countries... once members have the main numbers, it will not be difficult to find solutions for these.

He said the main difficulties are clear, pointing to sensitive products, Special Products, Special Safeguard Mechanism, agricultural subsidies, the overall trade-distorting domestic support, de minimis, Amber Box, Blue Box and the NAMA coefficient for developing countries.

 


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