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TWN Info Service on WTO and Trade Issues (Jan07/01) 10 January 2007
At the last WTO General Council meeting in 2006, held on 14-15 December in Geneva, many developing countries and their groupings made statements on the state of the Doha negotiations. They stressed the importance of respecting the development dimension as central to the Doha negotiations. All the major groupings of developing countries - including the G20, G33, NAMA-11, the African Group, LDC Group, ACP Group and small and vulnerable economies - made statements at the General Council meeting. A common theme in most of the statements was that the developed countries must make the main move to re-start the negotiations in earnest, that the development dimension is crucial, and that in the rush to meet deadlines, there should be no compromise with the principle that the Doha negotiations must put the developing countries' needs and interests at the centre. In his report to the General Council, TNC Chair Pascal Lamy said that "an increasing level of engagement" is starting to appear in consultations by the Chairs of the negotiating groups. He stressed the "need to maintain the rhythm of the informal work ... to exploit the window of opportunity in the first quarter of next year". Below is a report on the statements of the developing countries and their groupings, which give the most recent picture of the views of developing countries on the current state of play of the Doha negotiations. It was published in the South North Development Monitor (SUNS) on 18 December 2006. With best wishes -------------------------------------------------- Developing countries voice
concerns at WTO General Council The importance of respecting the development dimension as central to the Doha negotiations was stressed by developing countries at the WTO General Council on Thursday, when the Council was discussing the situation in the Doha talks and there is a rush to meet deadlines in the next weeks. The developing countries were speaking at the General Council after a report by the Chair of the Trade Negotiations Committee, Director-General Pascal Lamy, at the two-day General Council session (14-15 December). This is the last meeting of the Council for this year. All the major groupings of developing countries - including the G20, G33, NAMA-11, the African Group, LDC Group, ACP Group and small and vulnerable economies - made statements at the General Council meeting. A common theme in most of the statements was that the developed countries must make the main move to re-start the negotiations in earnest, that the development dimension is crucial, and that in the rush to meet deadlines, there should be no compromise with the principle that the Doha negotiations must put the developing countries' needs and interests at the centre. Brazil, for the G20, stressed that "falling short of the development promises of Doha would also be a failure. There is a window of opportunity at the beginning of next year. We must not allow it to close. But the real spark for the negotiations must come from movements by the major players in domestic support and market access." Indonesia, on behalf of the G33, stressed that the Group is committed to ensuring that the final outcome does not put at risk the livelihoods of the vulnerable and disadvantaged section of the population of its Members. It is thus critical that the core development instruments, such as Special Products and Special Safeguard Mechanism, are established adequately. "The issue of developing countries' flexibilities is not part of the problem. It is, indeed, part of the solution. The interest and needs of developing countries should rightly be placed at the heart of the round so that the development dimension of the Round is appropriately delivered," Indonesia said. Bangladesh, on behalf of the LDC Group, said that the LDCs wanted a mechanism for implementation of the agreements reached in Hong Kong pertaining to duty-free and quota-free market access for LDCs and more attractive rules of origin requirements. The ACP Group expressed worry that their issues are not receiving the same level of attention that would be the case were the ACP to be participating in the various fora. In his report to the General Council on Thursday, TNC Chair Pascal Lamy said that "an increasing level of engagement" is starting to appear in consultations by the Chairs of the negotiating groups. He stressed the "need to maintain the rhythm of the informal work ... to exploit the window of opportunity in the first quarter of next year". He said that since his last report to the General Council in October, he had continued his contacts with Ministers, Senior Officials and members of parliaments, visiting among other places Brussels and Washington. He also attended the APEC Ministerial Meeting in Hanoi, the 20th Anniversary of the launching of the Uruguay Round in Montevideo, and the IPU Parliamentary Conference on the WTO in Geneva. He said that the political will to conclude the Doha Round is being reaffirmed constantly across the board. New flexibilities have been announced by major players in general terms. The challenge remains to translate this political will and these signals of flexibilities into substantive changes in position, which are necessary in order to unblock the process. In this context, Lamy said that he had convened an informal meeting of the TNC on 16 November, where he suggested that it was time to start to multilateralise these contacts and bring them back to the Negotiating Groups in Geneva. At the conclusion of that meeting, he said that he was able to note a consensus on the working method that he had suggested, which gave the green light to the Chairs to take up again their processes, in accordance with the usual principles of transparency and inclusiveness. In line with what was agreed, the Chairs have started talking to Members in a variety of formats, from "fireside chats" to "transparency forums", in order to explore possible options to take the negotiations ahead. Lamy said that while no real changes in numbers, notably in agriculture domestic support or tariff protection, have shown up in these discussions so far, an increasing level of engagement is starting to appear. He believed that this indicates a willingness to enter into discussions on substance. ''So we can be ready to engage fully on substance when the time comes, we need to maintain the rhythm of the informal work which is underway between now and the end-of-year break and then increase it when we return after the break, in order to exploit the window of opportunity that remains ahead of us in the first quarter of next year,'' he said. Brazil, on behalf of the G20, said that when G20 Ministers and other Developing-Country Group Coordinators - the G33, ACP Group, LDCs, Small and Vulnerable Economies, Cotton-4, and the NAMA-11 - met in Rio de Janeiro on 9 September this year, they deeply regretted the suspension of the Doha Development Agenda negotiations. They urged the Director-General to intensify the process of consultations with Member countries, in an inclusive and transparent manner, in order to create the necessary conditions for the prompt resumption of the negotiations. The multilateral process in Geneva has gradually started again with the "soft resumption" of the negotiations. This is a positive development that has been widely supported by Members, the G20 said, adding that it supports the process that has been initiated by the Chairman of the agriculture negotiations to try to reignite the discussions. The Chair-led process is useful but there are limits to what can be achieved by it in the current circumstances. ''In order to make meaningful progress - in order to move from chats to negotiations - we need clear signals, and we need them sooner rather than later,'' the G20 said. The current positions of developed countries do not provide an adequate basis for leading the negotiations to a successful conclusion, added the G20. "We need an early indication by developed countries that they are willing to achieve effective cuts in trade distorting domestic support together with disciplines to avoid circumvention. We also need substantial improvements in market access, where the differences between developed and developing countries must be reflected in any outcome." The G20 said that all issues are important and all must be addressed in order to have a successful conclusion of the negotiations and in order to achieve full modalities. This requires addressing issues of direct interest to developing countries like Special Products (SPs), Special Safeguard Mechanism (SSM), tropical products and preference erosion. It also includes addressing the concerns of LDCs, SVEs, cotton producers and developing countries Recently Acceded Members. Said the G20: "This is the first Round that has placed agriculture and development at its heart: it cannot be allowed to fail. And failure does not mean just the absence of a conclusion. Falling short of the development promises of Doha would also be a failure. There is a window of opportunity at the beginning of next year. We must not allow it to close. But the real spark for the negotiations must come from movements by the major players in domestic support and market access." Indonesia, on behalf of the G33, welcomed the "soft resumption" of the negotiations and the initiative of the Chairman of the agriculture negotiation to restart the multilateral process in agriculture. The G33 Ministers have stressed their commitment and readiness to put the negotiations back on track as soon as possible as a successful outcome is critical for economic growth, development and livelihoods in developing countries. The Group has always been supportive of transparency, inclusiveness and the bottom-up approach in the negotiations. Indonesia said that the G33 would like to emphasize that all outstanding issues in agriculture 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 negotiations and to impart confidence among developing countries that the negotiations will not in any way, subvert their development interests. The G33 is committed to ensuring that the final outcome does not put at risk the livelihoods of the vulnerable and disadvantaged section of the population of its Members, Indonesia said. In this spirit, the G33 said, it is critical that "we all adhere to Doha mandate further complemented by the July framework and the Hong Kong Declaration, in particular to the core development instruments, such as Special Products and Special Safeguard Mechanism." "These instruments are vital to delivering the development imperatives of the Doha Round," stressed the G33. "The food security, livelihood security and rural development needs of G33 Members in terms of flexibilities are not being sought as open ended opt-outs." "The outcome of Doha negotiations for these flexibilities can only be sustainable if it enables the developing countries to meet their development objectives. It must be appreciated that the issue of developing countries' flexibilities is not part of the problem. It is, indeed, part of the solution. The interest and needs of developing countries should rightly be placed at the heart of the round so that the development dimension of the Round is appropriately delivered." Benin, on behalf of the African Group, said that it is important to stick to the mandate - the Doha Ministerial Declaration, the July 2004 framework and the Hong Kong Ministerial Declaration. It is important to focus on agriculture. For the African Group, this means focusing on trade distorting domestic support, elimination of export subsidies, the concerns of net food importing developing countries, improvements in market access with an eye towards concerns raised by some members on preference erosion, special and differential treatment (SDT) and cotton. The cotton issue must be addressed ambitiously, specifically and expeditiously. Technical and financial assistance will be required by cotton-producing countries notably in West Africa. On NAMA, the African Group said that it is important that flexibilities for developing countries be preserved. The issue of preference erosion also needs to be considered. According to Benin, the sectoral approach to tariff reduction is non-binding and is better assessed after the formula is determined. On services, Benin said that it is important to take into account the concerns of developing countries. On trade facilitation, a balance is required with respect to technical assistance and capacity building, and SDT. There is also need to take into account infrastructure needs in African countries. Bangladesh, on behalf of the LDCs, said that trade is an important component of their development efforts. It is also important that members address both the market access and supply-side concerns of the LDCs. The LDCs cannot afford a slow pace towards the resolution of the negotiations. As an illustration of why supply-side improvements are required, Bangladesh pointed out that even if the LDCs, which comprise 10% of the world population, exported all of their output, this would only make up 2.4% of global trade. Bangladesh added that the LDCs would like to see movement on the development of a mechanism for implementation of the agreements reached in Hong Kong pertaining to duty-free and quota-free market access for LDCs and more attractive rules of origin requirements. Although the proposals put forward by the LDCs earlier this year have not met with the response they would have liked, the LDCs remained ready to engage on this in more detail, Bangladesh said. In respect of trade facilitation, there needs to be a major emphasis on the question of the capacity of the LDCs, in that significant capacity building would be needed to implement the agreements. Mauritius, on behalf of the ACP Group, said that the multilateral trading system offers the best platform for growth and development. Many ACP countries do not have access to the parallel processes that are underway inside and outside of Geneva. The ACP Group expressed worry that their issues are not receiving the same level of attention that would be the case were the ACP to be participating in the various fora. It is important to have an early and full resumption of the negotiations according to the mandate. There is need to ensure that the development dimension mandate is central to the negotiations. Mauritius said that the key issues for the ACP Group are trade distorting domestic support and market access in agriculture, as well as NAMA. These issues must be dealt with in the short term if advantage is to be taken of the narrow window of opportunity that members face. On the other hand, moving forward in haste to conclude these agreements without attention to the merits that are included would be something that should not be considered. The ACP Group insisted on full modalities and built-in protections to ensure that the ACP Group's issues are addressed in any final deal. Issues of concern to the ACP Group include substantial market access improvements, preference erosion, Special Products and Special Safeguard Mechanism, a reduction in trade distorting domestic support by developed countries, duty-free and quota-free market access for LDCs, cotton, NAMA flexibilities (including Paragraphs 8 and 10 of the July Framework), and issues of concern to the Small and Vulnerable Economies. South Africa, on behalf of the NAMA-11 countries (Argentina, Brazil, Egypt, India, Indonesia, Namibia, Philippines, Tunisia, Venezuela and South Africa), said that sequencing was very important. Development issues should come first, followed by agriculture and NAMA. It was important that these not be turned on their head so that NAMA comes first. According to South Africa, sectorals are not part of the core modalities and they should be sequenced accordingly. In addition, export taxes are not part of the mandate and should not be included. The issues of importance to the NAMA-11 are that the development concerns be at the head of the negotiations. The issues of less than full reciprocity with respect to tariff reductions and market access improvements are important. There should be a comparable level of ambition with agriculture and that there be appropriate flexibilities for developing countries. They remained ready to resume negotiations on the basis of the Chair's text but stressed that the concept of real market access is not part of the mandate nor the question of enhanced trade flows. Barbados, on behalf of the Small and Vulnerable Economies (SVEs), said that they were pleased that the talks have resumed. It is very important that the question of integrating the SVEs into the global economy be taken up with major trading partners. Barbados highlighted several issues of importance to the group including trade distorting domestic support, and market access in agriculture and NAMA. India said that to achieve closure by next year, we need to find common ground on the key areas within the next few weeks. The spark which will ignite the negotiations will have to come through the political process in general and from developed countries in particular. The process has to balance the need to hurry with the need to be complete. "We cannot allow timelines to force us into an outcome which either circumvents the mandate or defers some areas for future consideration, an issue emphasised by the African Group and the ACP," stressed India. "All areas of the single undertaking are equally important and outcomes on all such areas consistent with the mandate are required to provide a balance for all members. "The main deliverable in this negotiation is an outcome which does justice to the development promise of the Round. In agriculture, this implies an outcome that substantially reduces distortions in developed countries, improves market access and provides developing countries with the flexibilities they require to address the needs of their poor and vulnerable farmers. The removal of distortions would need to be accompanied by appropriate disciplines to ensure that they do not re-appear in another form. "In NAMA, the development outcome has to be based on the principle of less than full reciprocity with appropriate flexibilities for developing countries to address their development needs. There can be no new conditions on any developing country's recourse to flexibility provisions. We do not see sectorals, participation in which we already have agreed is non-mandatory, as part of the core modalities. Sectorals cannot be part of the central equation and, therefore, need to be sequenced at the end of the tariff negotiations." In services, India remained committed to a meaningful outcome, both in market access and disciplines in domestic regulations. "India already has a significantly ambitious Revised Offer on the table, which is well over and above our Uruguay Round Commitments. We would like to see similar market openings in sectors and modes of interest to developing countries." India stressed that in the services negotiations, the development aspect can largely be addressed through meeting developing country requests in Modes 1 and 4. Indeed, an indication of liberal commitments from developed countries in all Modes, but particularly in Mode1 and Mode 4, will strongly incentivise negotiations for developing countries and enhance the latter's ability to respond to plurilateral and bilateral requests put on them. On domestic regulations, India said that liberal market access commitments are negated many a time by invoking domestic regulations. This can be prevented by putting in place clear disciplines in domestic regulations. "We look at such disciplines as an integral part of the outcome in the Services negotiations since they are meant to promote free and fair trade, rather than to restrict trade. The key, of course is the right balance between the right to regulate and ensuring that domestic regulations do not negate market access. To address the concerns of developing countries, appropriate S&D provisions would also have to be added." Australia said that it will require an extraordinary effort to conclude the round in 2007. Everyone agrees that it is essential to conclude the round and that the criteria set for the Doha Round - the Doha Ministerial Declaration, the July 2004 framework and the Hong Kong Ministerial Declaration - need to be preserved. It is important that agriculture be at the heart of this, added Australia. In this respect, it referred to trade distorting domestic support and improvements in market access. Effective cuts are needed with strict disciplines. There needs to be elimination of all forms of export subsidies. Members are too far apart to achieve the Doha mandate of significant improvements in market access. Australia said that it has refined its thinking on sensitive products and is ready to engage members on this topic. According to trade officials, the US and the EU did not make an intervention in respect of the agenda item on the report of the Chair of the TNC. As regards the other agenda items taken up at the meeting, with respect to the Work Programme on Small Economies and the Work Programme on Special and Differential Treatment, the respective Chairs said that they had nothing new to report as differences had not narrowed in any of the areas concerned. The General Council endorsed a decision on a Transparency Mechanism for Regional Trade Agreements (RTAs) where Member parties to a newly signed RTA shall convey to the WTO, in so far as and when it is publicly available, any foreseen timetable for its entry into force or provisional applications, relevant contact points and/or website addresses, and any other relevant unrestricted information. The information is to be forwarded to the WTO Secretariat which will post it on the WTO website and will periodically provide Members with a synopsis of the communications received. To assist Members in their consideration of a notified RTA, the Secretariat shall prepare a factual presentation of the RTA. Associated with this, another decision was adopted on a proposal by Brazil and India where the Committee on Trade and Development has been invited to consider transparency for preferential trade arrangements under paragraph 2 of the Enabling Clause (other than RTAs), and to report back within six months for appropriate action by the General Council. Later, at a media briefing on Friday following the conclusion of the General Council meeting, Lamy referred to what he described as the 'traffic accident' that took place at the end of July and the period of reflection that followed, and expressed hope that members are now turning the corner. He said that the year 2007 looks like a defining year for the organization. From his numerous contacts, his overall impression was that there was a clear unanimous desire to come back to the negotiating table and to conclude the round. He said that the challenge remains to translate the signals of political will into substantive changes in positions. ''We haven't yet seen real changes in numbers, notably in agricultural subsidies and protection, although clearly there is a high level of engagement either here in Geneva or bilaterally,'' he said. Asked whether he would come up with his own text if there is no breakthrough on agriculture, Lamy reiterated that a text by the Director- General is a last resort option and that it does not fit in with the tradition of the WTO of a bottom-up process. It only happened once in the last 50 years and it is very risky, he added. Lamy said that there is now a better appreciation of the cost of failure after this period of reflection that followed the July suspension. As to the costs, he said that what is presently on the table could disappear. What is on the table is a huge package - in terms of numbers, reduction of trade distorting domestic support at a minimum are 3 times what was agreed in the Uruguay Round, and in reduction of export subsidies, it is much more constraining. On industrial tariffs, the formulas on the table are much more powerful than the previous ones, not to mention duty-free and quota-free market access for LDCs and trade facilitation. There would also be an erosion of the insurance policy that WTO members contracted against trade protectionism. In addition, the developing countries have invested a lot and take the Doha mandate at face value which is that it has to result in a re-balancing of some of the WTO rules which they feel are development-unfriendly. The developing countries would see failure of the Round as a very negative signal to them, in contradiction to what the overall international agenda has been in recent years - which is to put development at the top of the list. Asked as to whether it was a right decision to suspend the talks in July, Lamy said that we just have to remember what happened. ''I am not the one who said publicly that the US walked out from the process...'' He referred to the US Trade Representative saying that what was on the table was not worth moving the process further. Lamy said that under the circumstances that it happened, he did not think that putting people around the table the next day would have produced anything but acrimony and potentially the unravelling of what was already on the table. As guardian of the system, Lamy said that his first duty was to make sure that what was already on the table would not disappear. As to when the next WTO Ministerial Conference would take place, Lamy said that the General Council Chair had touched on this issue with a number of members and the Chair had basically said that he felt no real sense of urgency in that regard given the uncertainty on parts of the negotiations.
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