TWN Info Service on WTO and Trade Issues (Oct06/12)

20 October 2006


Countries voice views and concerns at WTO General Council meeting

The General Council of the WTO held its first meeting on 10 October following the suspendion of the Doha talks at the end of July.

At the meeting, Director General Pascal Lamy urged the members to conclude the Round as soon as possible. But he admitted there were no visible signs of flexibilities in agriculture to date.

Many WTO members spoke at the meeting. Noteworthy was a statement by the G33 voicing concerns at attempts by developed countries to shift the blame for the suspension onto developing countries that are defending their small farmers' interests.

Other speakers included the LDC Group, the ACP Group and the G20.

Below is a report of the meeting. It was published in the SUNS of 11 October.

With best wishes
Martin Khor


Lamy outlines "parameters" to conclude Doha Round, as countries voice concerns at WTO General Council meeting

By Kanaga Raja (SUNS): Geneva 10 October 2006

''If we are to have a chance of finishing in 2007, the space to move is somewhere between November and springtime, which appears to be the latest time to get the breakthrough we need,'' WTO Director-General Pascal Lamy told members at a meeting of the WTO General Council on Tuesday 10 October.

''The window of opportunity we have is limited,'' he warned.

This was one of the three ''parameters'' highlighted by Lamy in his report as Chair of the Trade Negotiations Committee (TNC) to the General Council.

First, said Lamy, ''we can only resume when substantive positions have changed on key problem issues, in particular in the key area of Agriculture which holds the key to unlocking the rest of the agenda. No visible indications of flexibilities until now. Unless and until it happens, we will remain deadlocked.''

Second, Lamy added, ''when we resume, it must be across the board - the whole negotiating agenda must resume in step.''

''All our efforts over the next weeks must be dedicated to meeting these conditions.''

Lamy said that since July, he had talked to many Ministers and officials across a broad range of the membership. He had attended meetings of the G20, the Cairns Group and the World Bank-IMF and had visited China and Nigeria. He had also met in Geneva with the Negotiating Group chairs, coordinators of regional and other groups and various delegations.

From what he had heard from different interlocutors, ''there appears to be no doubt whatsoever in anyone's mind that we must conclude the Round as soon as possible,'' Lamy added.

He said that calls had now been heard for a swift resumption of the negotiations from every quarter - ASEAN, the G20, the Cairns Group, the World Bank-IMF Finance Committee and many Presidents and Ministers around the world.

This was no time for inaction but rather for discreet and quiet activity, Lamy said, urging members to continue technical work, discreet calculations and private sounding to prepare the ground.

The General Council took up as its first agenda item the report and recommendations of the task force on aid for trade established pursuant to paragraph 57 of the Hong Kong Ministerial Declaration.

According to trade officials, members endorsed the recommendations of the report. Developing countries stressed the need to operationalise aid for trade, and said that there should be no conditionalities attached to the aid. The aid should also be in the form of grants or donations.

On aid for trade, Lamy, in a separate statement, said that there is strong and broad commitment to increasing aid for trade in the context of a projected overall increase in ODA. Since July, he has been working with the US, the EC and Japan to clarify the pledges made in Hong Kong both in its content, including what they compare with, as well as in the modalities for its implementation.

Lamy said that there is also broad agreement that members cannot continue to do aid for trade in the same way that they have done in the past. This supports the view expressed by the majority of members that this initiative is not about replacing or duplicating existing mechanisms, but about making them work better, more effectively, with measurable results in a focused manner.

On the issue of monitoring aid for trade, Lamy said that the secretariat has already started reflecting on how the WTO's own internal mechanisms can best be utilized to monitor aid for trade.

Lamy underscored that it was important to move forward on aid for trade, building on the progress and momentum that clearly exists despite the current temporary setback in the negotiations.

Several countries spoke at the General Council.

Bangladesh, on behalf of the LDCs, said that the group endorsed the report of the task force on aid for trade.

As regards the implementation of the recommendations in the report, Bangladesh said that many international organizations and countries will be key players in making aid for trade a reality. It urged these organizations and countries to cooperate very closely and achieve the degree of coherence required to make aid for trade operational and meaningful.

Bangladesh said that for aid for trade to have an impact, it must be adequately funded. The funds must be made available in grant form, and without conditionality. This will require a change in the culture of the multilateral institutions and the countries concerned.

Bangladesh said that aid for trade is essentially for the LDCs to expand exports and benefit from the process of globalization. This requires attention to supply-side issues and on finding markets for their products. Major changes are required in the way the programs are designed, approved and implemented.

Bangladesh also said that considerable work would need to be undertaken within the Secretariat of the WTO to implement the recommendations. It said that it would like a brief report from the Secretariat on the type of structure that they would like to put in place to implement the recommendations.

Mauritius, on behalf of the ACP Group, said that the group welcomes the recommendations of the aid for trade task force.

At a juncture where the Doha Round has yet to deliver on its development objectives, and while we will continue to press for a prompt resumption of the negotiations, Aid for Trade represents a necessary complement in helping developing countries, especially the most vulnerable ones, deal with urgent trade and economic challenges.

For ACP countries, the situation is exacerbated by the steady erosion of long-held preferences with serious socioeconomic implications for the countries concerned. All these make it imperative for ACP countries to put in place coherent trade and development strategies to avoid further marginalisation and to reduce poverty levels. This implies having economies that are more competitive by increasing supply-side capacity, enhancing human, institutional and physical infrastructure, creating an environment conducive for investment, both domestic and foreign, consolidating existing sectors and seeking new opportunities for growth.

The aid for trade initiative should concentrate resources on two areas: a soft component which will provide for adjustment through capacity building and address the social costs of this adjustment; and a hard core physical component that will address the issues of trade infrastructure and diversification, the ACP group said.

Indonesia, for the G33, said that they had already stressed their political commitment and readiness to put the negotiations back on track as soon as possible to secure a successful pro-development outcome. The group emphasized that it is critical to adhere to the mandate across all issues, including in respect of the core development instruments of Special Products and the Special Safeguard Mechanism. These instruments are vital to delivering on the development imperatives of the Doha Round and meeting the expectations of the poor and vulnerable across the world.

''To establish the conditions for a successful resumption of the negotiations, it is imperative that we do not lose sight of the report of the Chairman of the TNC 'that the main blockage is on the Agriculture legs of the triangle of issues' that were being sought to be addressed.''

Accordingly, Indonesia said, bridging these gaps across domestic support and market access must remain our main focus in this period of reflection.

The G33 said that it was deeply concerned and dismayed by the attempts of some of the major players to shift the focus, and the responsibility onto developing countries to provide market access to their corporate agri-business. They are now seeking to introduce new concepts and parameters into the negotiations. By doing so, they are discrediting the legitimate needs of the poor and vulnerable in developing countries. Moreover, the three agreed criteria of food security, livelihood security and rural development needs are being sought to be undermined and questioned by introducing a new concept of so-called new trade flows, the G33 said.

The G33 said that it has repeatedly stressed that the purpose of SPs and SSM is not to impede market access. This is clear since they have not sought any increased protection. On the contrary, the G33 proposal on SPs entails tariff reductions on 90% of the agricultural tariff lines with lower liberalization on some of them than would otherwise be the case, while allowing developing countries to provide exemption from tariff cuts on 10% of agricultural tariff lines for SPs. The G33 proposal on SSM is simply a remedy against import surges and price decreases.

The G33 said that it remains ready to engage in a dialogue that is constructive in its process and substance without being selective. All outstanding issues across all the 3 pillars would have to be dealt with in a balanced and timely manner in the resumed negotiations. These aspects are critical towards creating the right conditions for the successful resumption of negotiations and to impart confidence among developing countries that the negotiations are not being designed to subvert their development interests.

Brazil, on behalf of the G20, said that the G20 remains committed to the speedy resumption of the Round, and this had been reaffirmed at the High-level meeting of Ministers last month in Rio de Janeiro.

Brazil said that the Ministers reaffirmed their willingness to join efforts with a view to ensuring that WTO negotiations in agriculture live up to the commitments of the Doha mandate. This would entail results that guarantee substantial and effective reduction in trade-distorting domestic support coupled with necessary disciplines to prevent box-shifting and product-shifting of support; substantial improvement on market access; and special and differential treatment for developing countries in all areas of the negotiations.

In this context, the Ministers emphasized the overall proportionality in the reduction commitments and the vital role of SPs and the SSM in addressing the food security, rural development and livelihood concerns of developing countries, Brazil said.

The Ministers noted that the substantial political and technical work carried out until now provides a solid platform for the eventual resumption of the negotiations. They confirmed their readiness to re-engage immediately in the negotiations and to work towards its prompt resumption, Brazil added.

(* With inputs from Goh Chien Yen.) +