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TWN Info Service on WTO and Trade Issues (July06/15)

31 July 2006
 

WTO General Council only "takes note" of suspension of WTO talks


In a surprising turn of events, the WTO General Council on 27 July did not take a formal decision on the suspension of the Doha negotiations, with the Chairperson merely "taking note" of the statements on the issue that were made by the Director-General and by the delegations.

The Council had been expected to adopt a formal decision on the suspension of the Doha negotiations that had been proposed by Director-General Pascal Lamy at an informal meeting of the Trade Negotiations Committee on Monday (24 July).

At the end of that informal meeting, there was an implicit agreement by the WTO members that the Doha negotiations would be suspended, but this was expected to be confirmed through a formal decision by the Council.

At the 27 July Council meeting, the proposed suspension of talks was the first issue to be discussed.

According to diplomatic sources, at the end of the debate on this agenda item, the Chairperson of the General Council said that he had heard various points of view on how the suspension of talks should be interpreted. He took note of Lamy's statement and the comments of the delegations.

Several delegations spoke up, many of them expressing concerns at the suspension and calling for a "bottom-up" and inclusive approach to negotiations in future, including on how or when to resume the talks.

Below is a report of the General Council meeting, including on the statements made by many delegations.


With best wishes
Martin Khor
TWN

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WTO General Council only "takes note" of suspension of
the Doha negotiations

By Martin Khor (TWN) Geneva, 27 July 2006


The WTO General Council which met on 27 July did not take a formal decision on the suspension of the Doha negotiations, with the Chairperson merely "taking note" of the statements on the issue that were made by the Director-General and by the delegations.

The Council had been expected to adopt a formal decision on the suspension of the Doha negotiations that had been proposed by Director-General Pascal Lamy at an informal meeting of the Trade Negotiations Committee on Monday (24 July).

At the end of that informal meeting, there was an implicit agreement by the WTO members that the Doha negotiations would be suspended, but this was expected to be confirmed through a formal decision by the Council.

At the 27 July Council meeting, the proposed suspension of talks was the first issue to be discussed under the agenda item "Report by the Chairman of the TNC."

After a briefing by Lamy, several delegations spoke, with some requesting that the statement they had made at the 24 July meeting be put on the record of the Council meeting.

According to diplomatic sources, at the end of the debate on this agenda item, the Chairperson of the General Council, Ambassador Eirik Glenne of Norway, said that he had heard various points of view on how the suspension of talks should be interpreted. He took note of Lamy's statement and the comments of the delegations.

There were no further interventions from the members on this subject, and the meeting proceeded to the next item, outstanding implementation issues.

Outside the meeting hall, several diplomats were speculating on the "taking note" by the Council chair and the Council's "non-decision".

The Ambassador of one country said the Council would not adopt a decision to suspend the talks because if it did, then another decision would have to be taken by the Council to have the talks resumed.

This might cause a problem if some members were not in favour of having the talks resume, said the diplomat. It was thus thought by some to be better not to have a decision made, as this would provide "flexibility" for the process on resumption of the talks.

However, according to another senior diplomat, it appeared that Lamy had wanted to pass on the task of adopting a decision to the Council chair. However, the Council chair had not wanted to take responsibility for the adoption of a decision, and thus merely took note of all the statements made, including Lamy's.

Another diplomat remarked that there could be doubts on whether there was a legal basis for the suspension of the negotiations when it took place, and that therefore it could be a problem if the Council were to formally adopt a decision on the suspension to legitimize it.

In his view, there had been an attempt by Lamy and Glenne to pass on to the other the responsibility of having the talks suspended.

An independent trade analyst, who has observed and analysed the GATT and WTO negotiations for many years. remarked that this was the latest example of the "way the so-called rules based WTO system functions without following rules of procedure."

The reason for arranging that the Council not take a formal decision is that it would be easier for Lamy and the major countries to manoeuver to resume the talks when they think the time is ripe, without having to get the agreement of the entire membership, according to the analyst.

Many diplomats agree that the suspension of talks is in reality in effect, and that this was a political move. After the Chairperson's conclusion on the agenda item, no delegation raised the question as to the status of the suspension, because "no one wanted to rock the boat, or to seem to disagree with the suspension," said one diplomat.

In his statement, Lamy referred to the report he had presented at the 24 July informal TNC meeting, in which he traced the recent developments and his recommendation "to suspend the negotiations across the Round as a whole".

"I did not propose any new deadlines or a date for resumption of activity in the negotiating groups nor do I think that this is possible today The ball is clearly in the court of members.

"Suspending the negotiations means that the progress made to date on the various elements of the negotiating agenda has been put on hold pending the resumption of the negotiations.

"At our meeting on Monday, my recommendation was accepted with regret. There were many expressions of disappointment, but delegations also reaffirmed the reasons why the Round is important for development and many stressed the systemic importance of the WTO.

"From Monday's discussion it is clear no one wants to give up our collective effort It is time for quiet thinking as opposed to megaphone diplomacy. I urge all members to avoid the well-known blame game."

Lamy said he would continue his contacts with participants at every level and be available to all Members. "You can count on me to do everything I can to keep up the pressure for the political movement to permit a resumption in negotiations. However this must come from you, the Members."

Following Lamy's statement, there were several interventions on the recent turn of events. Many developing countries and their groupings expressed regret for the suspension of negotiations. They asked for more details on how the talks would resume, and stressed the need for an inclusive process involving all members and not just a select few.

The ACP Group, represented by Mauritius' Ambassador Baboo Servansing said the ACP deeply regrets the setback in the negotiations. Five years ago, the WTO Membership launched the Doha Development Agenda and the suspension of the Round implies that all the development promises would be have to be kept on hold.

"The ACP countries despite their meagre capacities and resources have heavily invested in the Doha negotiations; we are therefore deeply frustrated by the current situation," said Ambassador Servansing.

The ACP Group also sought clarification from Lamy on his proposal for suspension of DDA negotiations: Does the DG intend to initiate consultations with the broader Membership with a view to define the exact scope of this suspension? What would be the length of this suspension? The DG should also engage in multilateral consultations to clearly define all parameters of this "suspension".

The Group also stressed that the draft Modalities on Agriculture and NAMA, which are on the table should remain the basis of the negotiations and should be the starting point when the negotiations resume.

It also stressed that the multilateral process, which involves the bottom up and transparent approaches, should remain at the core of the negotiations. There should also not be any attempts at redefining the single undertaking, which is part and parcel of the balance which was struck in Doha.

The Africa Group, represented by Benin's Ambassador Samuel Amehou, said that it was bitter to acknowledge that the negotiations are currently suspended, due to lack of movement and flexibility on by certain big actors of international trade. There are consequences that are economic, financial and social.

The Group's expectations of the contribution of the Round to development remain very large. That is why the African Group still does not understand why the process of negotiation is stopped. The African Group is deeply shocked.

The developing countries and the LDCs are those which would suffer the most from the prolongation of the Doha Round and it would be a waste to have an effective and indefinite suspension of the Round.

The Group cited the following problems that may arise if the commitments in Hong Kong are not met: the continuation of the developed countries' policies on domestic support in agriculture; the disastrous effects of continuing export subsidies and domestic support to cotton by certain developed countries; the serious consequences of the failure to implement the decision on duty free quota free status for products originating from LDCs; the non-adoption of the Aid for Trade package.

The African Group asked for the negotiations to start again after the summer break so that the concerns of developing Members and in particular the LDCs can continue being examined and receive adequate treatment.

It stressed that the process of consultation for the resumption of negotiations must involve all sections of the WTO membership and should not be limited to a restricted a group of Members.

The process of negotiations should not be taken as a hostage by some Members. In the same way, decisions will have to be made by consensus of all members, whether on the process or the substance.

Therefore the African Group demanded that it is closely associated with all the phases of the negotiations when the work starts again, especially since Africa does not have a representative in the G6.

Thus the consultations will have to be made truly inclusive, and conducted in a spirit of the search for real solutions to the problems and conducted under new conditions.

The African Group urged that work begin again in September on the basis of various texts submitted by the Members of WTO and the reports presented by the Chairs of the various bodies of negotiation, in particular Agriculture and NAMA.

Venezuelan Ambassador Oscar Carvallo said the Council was about to make an important decision. The suspension of the Doha negotiations, is of a novel character, as it implies establishing a precedent for the future. That is why the form and the parameters to be decided on for the suspension must carefully be weighed.

Venezuela said it was important to reflect on what the press has called the collapse of the Doha Round. What has failed is the "mini-ministerial" process, and the G-6 process, and the attempt to separate the single undertaking, by prioritizing some aspects.

Venezuela asked what will remain of what was achieved up to now, in terms of the documents of the Chairs of the negotiation groups, which with all their defects, are the results of a bottom up process? That process is the one that has not yet failed, it is the one that has obtained results, is the one that will allow us to advance if these negotiations are to start again. When the negotiations start again, it is from there, that we will have to start off.

It added that it is necessary to define the form of the decision to be taken. Specifically, what is the meaning of "renewal of the negotiation when the negotiating conditions are as required ". Who decides that it is the case, what is the key to the restarting?

It was Venezuela's understanding that since it is the General Council that makes this decision of suspension, it will also have to be this Council, or an organ superior to it, which makes the decision to restart. It requested that this point be expressed clearly in the language of the decision to be taken.

Venezuela also stressed that the suspension should not enable a modification of the negotiation mandate as this would not create a conducive negotiating atmosphere. It asked to know in advance the exact language being proposed for adopting the decision.

Ambassador Clodoaldo Hugueney of Brazil took note of Lamy's recommendation to suspend the negotiations across the Round as whole. "We lament that this became unavoidable, but it is the right one under the circumstances," he said.

"This is a sad moment for the WTO. We are left with a sense of loss for the missed opportunities for trade reform and liberalization. We must now overcome our perplexity and prepare for the eventual resumption of the negotiations. We count on the energy, determination and sense of fairness of the Director-General to help set the process in motion again. But the main responsibility lies with the Members.

On the road ahead, Brazil said firstly we must aim at resuming negotiations in the short rather than in the long run. Second, we must preserve the "acquis" of the negotiation. We must build up the political impetus to fully implement the Doha mandate, the July Framework and the Hong Kong Declaration, which remain the basis for our negotiating effort.

"Bringing down the negotiating objectives to match the level of political commitment that led us to this state of affairs is not an option. Any deceptive "easy way out" at the expense of the developing countries will not be acceptable to Brazil.

"In addition to the mandate, we must preserve what is on the table. A considerable amount of technical and political work is reflected in negotiating proposals. They are the only sound basis for future negotiations.

"We expect that the Director-General will continue to hold consultations and report to the General Council on a regular basis. For our part, we will also be looking at ways to move the process forward, in consultation with our negotiating partners. As the G-20 stated in its communique on Monday, we will be prepared to re-engage in the negotiations at any moment."

Ambassador Manuel Teehankee of the Philippines said his country accepted the suspension of the negotiations as perhaps the only viable course given the divergence of views and positions.

"However, it is our view that the suspension of the negotiations and period of reflection cannot be indefinite or indeterminate, as we will all be acting inconsistently with the developmental spirit and mandate of Doha and commit an injustice to the efforts that we have all invested in the DDA negotiations if at the end of the period of reflection we are unable to resume the negotiations and address squarely the hard political decisions that need to be made."

While the Director General made it plain there must be sufficient political will and movement on the part of all the G6 countries that would permit a resumption of the negotiations, "this movement and political will must also come, however, from all the other Members of this organization.

"While indeed the G6 countries are the major players, these same countries must acknowledge that their individual country interests should yield to the need to preserve the integrity and credibility of the WTO as an institution and the multilateral trading system as a whole as well as that their interests should yield to the developmental interests of the vast majority of members who represent the billions of people living below the poverty line."

The Philippines also believed that "any attempt to carve out issues and items of the DDA agenda, the resolution of which should properly form part of the overall balance of the round and the single undertaking, should be resisted as premature and inconsistent with the spirit of the suspension for a limited period for purposes of reflection."

The Philippines recalled that most developing countries agreed to launch this round on the premise that the existing imbalances and fundamental inequities in the multilateral trading system would be rectified in these negotiations.

"Thus, at the end of the day, to be truly a development round, developed trading partners should be willing to accept a smaller share of the benefits from the DDA negotiations in order to offset the entrenched imbalances and the greater share and benefits obtained already by developed Members from previous rounds."

The G33 did not make a statement at the General Council but Indonesia, the G33 coordinator, asked that its statement at the informal TNC meeting of 24 July be put on record.

In that statement, the G33 said it had always adhered to the view that the multilateral system, based on fair trade, just and equitable rules, provides a major opportunity to propel our rural and national development.

"It is therefore with great disappointment that the G33 notes that, thus far, the needed breakthrough continues to elude us. We have worked for five years in an attempt to remove the distortions in agricultural trade caused mainly by the huge agricultural subsidies paid for decades by a few countries.

"The overly ambitious demand for market access in developing countries cannot be used to justify inability to deliver fundamental reforms in this pillar.

"The G33 developing countries are home to 75% of the poor and subsistence farmers and cannot afford to overlook their livelihood and food security concerns. As Minister Kamal Nath has rightly pointed out, we are here to negotiate trade not the livelihood concern of our constituents. The G33 is willing to open its markets for agricultural products, not for subsidized agricultural products.

"The Group reaffirms its full commitment to the Doha mandate. We remain open to these engagements as soon as there are discernible indications from those responsible for the greatest distortions in the world market, both in terms of what they are willing to contribute in order to achieve meaningful reforms, as well as their flexibilities to establish truly effective and operational special and differential treatment for developing countries.

"A great deal of technical work done in the last few years should not be wasted and should provide a strong basis for resuming our work as and when there are indications of further flexibility from all parties. The Group expresses its complete faith in the unity of the Group and is committed to collectively strive for its common objectives."

Several Carribean countries (Antigua and Barbuda, Dominica, Grenada, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago) made a statement, delivered by Antigua and Barbuda.

They said that five years after the Doha Round was launched, we find ourselves at a crossroad, with the talks suspended. "How did we get to this point after expending so much time, energy and resources in these negotiations?" asked the Caribbean countries.

They said that a contributing factor to this situation "stems from the gradual erosion of the bottom-up approach which in effect has made the process less transparent.

"Despite this being a Development Round, we have forgotten or ignored the development dimension. We have allowed development issues to be back-loaded. Many developing countries such as ours, have exhibited flexibility and good faith to ensure the success of the Round.

"However, the often extreme demands made of developing countries by some developed countries have contributed to the creation of greater imbalances.

"In what seems to be a reverse form of less then full reciprocity, some developed countries have sought carve-outs in areas where they have sensitivities while refusing to accept the legitimate developmental trade needs of developing countries."

The Caribbean countries said "we need clarification on what a "suspension" or "time out" entails with respect to the negotiations. What does it mean f or the Doha Development Agenda?

"What are the exact areas in which such suspension will apply and how long for? We believe that it would be more useful if negotiations resumed sooner rather than later and with development interests and concerns at its core, otherwise we run the risk of missing a window of opportunity while the multilateral trading system still enjoys some credibility and momentum."

They added that in terms of the next step, "the negotiations should resume in a manner that ensures full transparency, one in which the positions of all Members are heard and taken into account - that is, a true bottom up approach.

"Development issues much be placed at the forefront. Resumption of the trade negotiations cannot be on the basis of prepared text which Members are expected to endorse as fait accompli to secure progress in the Round.

We should aim to ensure the stability of the Round by returning to the very tenets of what our Ministers envisioned in 2001 and which has been endorsed in subsequent Ministerial Meetings. We should not perverse our objective by turning the Development Round into a market access round.

"Given this impasse, given that development is at the heart of this round, we think that serious consideration should be given in seeking to advance S&D issues even while the impasse persists".

 


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