TWN Info Service on WTO and Trade Issues (Aug09/09)
5 August 2009
Third World Network

Lamy calls on Members to reflect and re-focus for work in autumn
Published in SUNS #6752 dated 30 July 2009

Geneva, 29 Jul (Kanaga Raja) -- Members of the World Trade Organization (WTO) broke up for the summer break Tuesday following the mid-year General Council meeting on 28 July, with WTO Director-General Pascal Lamy expressing hope that the holiday period will offer Members the chance to not only refresh themselves but also to reflect and re-focus, so that the autumn will indeed be "a season of fruitfulness".

Lamy told the General Council that the informal Trade Negotiations Committee meeting on 24 July (where he had presented his road map for the Doha talks in the autumn, with work to begin in all negotiating groups) that there had been unanimous agreement that the renewed level of political re-engagement by leaders urgently required translation into tangible progress in the negotiations.

At the informal TNC meeting, while providing this pep talk, Lamy had presented a road map for work from September. There were some critical voices at the informal TNC meeting over the lack of substance.

Talking to the media outside the meeting room on 24 July, Mr. Crawford Falconer, the former chair of the agriculture negotiations and currently the Deputy Secretary in the New Zealand Ministry of Foreign Affairs and Trade, struck a highly critical tone and was worried that the political expectations would not be met since "at the moment, all we've got is a series of dates of meetings and there's nothing any more of substance than that."

Beyond reporting that there was unanimous agreement at the TNC for urgently translating the political re-engagement of leaders into progress in the negotiations, Lamy did not seem to address such misgivings.

Falconer had further said to the media that there was a lot of work to be done at the multilateral level, but there was no programme for that. He was also critical over the issue of "sequencing" (that had been pushed by Lamy at the WTO, to reflect the view of the US that there should be scheduling by key developing countries of their proposed NAMA and agriculture market access commitments, before any modalities accord). The "sequencing" issue had made the entire process more and more confused, Falconer added.

In striking an equally critical tone Tuesday at the formal General Council meeting, Indian Ambassador Ujal Singh Bhatia had expressed disappointment that the steady stream of political signals seeking an early conclusion of the Doha Round have not been translated into action through intensive multilateral negotiations in Geneva.

The only test of political will, India added, is the adoption of a "problem solving approach" by all members in the concerned negotiating groups.

India pointed out that the agriculture and NAMA (non-agricultural market access) Chairs have presented a fairly low-key programme of engagement in September, saying that the Chairs are only interpreting the signals that they are receiving from the Members (see below).

(Negotiations in the two key areas of agriculture and NAMA have gone into technical mode, with agricultural negotiators last week getting down to identifying data that will be needed for them to draft their schedules of commitments. The Chair of the agriculture negotiations has outlined plans for more intensive talks in September, both on filling the gaps in the draft modalities and a continuation of the technical work that began earlier last week.

(In NAMA, the negotiators held a week of discussions on 13-17 July, most of which was devoted to a technical scheduling workshop. As to the road map for the work in the autumn, the Chair of the NAMA negotiations pointed to work on Non-Tariff Barriers and the sectoral initiative later on. The Chair however did not foresee work on the core modalities in September, saying that there was need to see other negotiating groups catching up.

(Speaking to SUNS outside the General Council meeting room on Tuesday, one trade diplomat from a developing country also pointed to the low-key work programme envisaged in the key areas of agriculture and NAMA.)

Lamy's remarks at the General Council was under the first agenda item, namely, the report by the Chair of the Trade Negotiations Committee (TNC). Lamy told the General Council that at the TNC, there was strong support for the process set out in the detailed road maps and for the need for all participants to be ready to work intensively in the autumn. The message was "all hands on deck".

Lamy said that at the TNC, the primacy of the multilateral arena was stressed by delegations, and various views were expressed about the possible impact of bilaterals on the speed and transparency of multilateral decision-making.

But there was wide agreement that bilateral engagement should be no reason for slowing or holding up the multilateral process, and that the two have to move simultaneously. It was also noted that bilaterals should not go on too long, and should be conducted with the maximum possible transparency.

The strong position was expressed at the TNC that scheduling in agriculture and NAMA would be the arrival point, to be just followed by a verification process; there was also strong support for the "no surprises" principle, not only with regard to the scheduling process in agriculture and NAMA, but also to other areas under the Single Undertaking.

Delegations had recalled the sequencing established by Ministers at Hong Kong, and the need to arrive at an acceptable level of certainty in all areas at the time of agreement on agriculture and NAMA modalities, Lamy reported to the General Council.

This called for a more horizontal process, using the "established pattern of working in concentric circles," and a text-based process as far as possible. To make this effective, delegations need to signal their "big ticket" items, and refrain from "hostage-taking" behaviour.

"We have come a long way, and we are not far from our journey's end," said Lamy. "The sense that we are entering the endgame needs to become both widely shared and effective."

Lamy hoped that the holiday period "will offer you all the chance to not only refresh yourselves but also to reflect and refocus, so that the autumn will indeed be a season of fruitfulness."

Trade officials said that the discussion at the General Council meeting was similar to that at the informal TNC meeting of 24 July. Some delegations that did not take the floor at the TNC meeting, did so at the General Council meeting. Many delegations asked for their statements made at the TNC meeting to be read into the record in the General Council meeting.

In its statement at the General Council meeting, India said: "We are disappointed that the steady stream of political signals seeking an early conclusion of the Doha Round have not been translated into action through intensive multilateral negotiations in Geneva."

"The gap between the two is clearly due to the fact that some members continue to harbour doubts about whether we really are in the end game situation. We also have to acknowledge that the issue of bilateral meetings is being viewed by some members as a hindrance to multilateral engagement," it added.

From India's perspective, the only test of political will is the adoption of a "problem solving approach" by all members in the concerned negotiating groups. "Sadly, there is no evidence of that at present," said India.

"We have noted that the Agriculture and NAMA Chairs have presented a fairly low key programme of engagement in September. We have no quarrel with what the Chairs are doing. They are only interpreting the signals that they are receiving from the members," said India.

India also said that there seems to be an impression that bilateral meetings among some members are holding up the multilateral process. It noted that bilateral meetings cannot be a substitute for multilateral engagement. These meetings can at best be useful in clarifying positions.

"We should not allow the impression to gather that multilateral engagement is being held hostage to the bilateral process. It is essential that we return to the multilateral process with full vigour at the earliest," India stressed.

India noted that the negotiating situation that confronts Members today is qualitatively different from what it was last year.

"We seem to be moving towards a definition of modalities which is more comprehensive and complete than in the past. If so, this has obvious implications for the other areas in the negotiations. The underlying principle of the Single Undertaking is horizontal trade-offs in all areas."

For this to happen, said India, "we will need to ensure that all areas of the negotiations move ahead commensurately. The exact precision of this parallel forward movement needs to be discussed and debated."

For India, the areas of services, rules and the TRIPS issues will need to figure in the synchronized marching. "It is important that we have a shared understanding of how this can be achieved."

On TRIPS issues, India thanked the Director-General for his consultative process since March and his reports to the TNC and the General Council. These efforts, as mandated in paragraph 39 of the Hong Kong Ministerial Declaration, are only a means to an end. "Paragraph 39 also enjoins us to find 'appropriate solutions' to these issues," said India.

In its statement, Tanzania, on behalf of the LDC Group, said that it is imperative that the goodwill shown by world leaders is translated into real actions at the Geneva process. Concluding the Doha Development Agenda negotiations would deliver the needed contribution to economic recovery and demonstrate the benefits of the multilateral trading system.

Tanzania said that the impact of the crisis has been asymmetric, hitting the most vulnerable LDCs who are barely surviving under sub-standard conditions. Of greatest concern to the LDCs is the fact that while other countries continue to adopt policy measures to contain the crisis, including provision of stimulus packages and imposition of trade restrictive measures within their governmental frameworks to revive and sustain their economies and employment for their people, governments in LDCs which do not have the resources are left to absorb the full impact of the crisis which is not of their making.

With foreign direct investment, migrant remittance and official development assistance diminishing, the ability of LDCs to respond to the crisis and reduce the tremendous human and social cost associated with the crisis is becoming even more limited, said Tanzania. The Group urged the developed countries to implement their commitment to allocate at least 0.7% of their gross national income towards supporting developing countries in meeting the UN Millennium Development Goals and deliver not only new but also their outstanding commitments.

Reporting to the General Council on the second global review of Aid for Trade (6-7 July), the WTO chief said that the presence of the United Nations Secretary General, heads of international organisations and ministers was "a clear demonstration of our collective resolve to collaborate to address the capacity challenges facing developing countries."

"Our assessment is that this conference was successful in taking stock of overall progress achieved since the initiative was launched in 2005 and also in highlighting the need for additional and substantive commitments from donors, particularly at this juncture when developing countries are facing even higher challenges as a result of the current global economic crisis," said the Director-General.

The WTO chief identified a few key issues as priorities for future work. First, was the need to reinforce the regional dimension of Aid for Trade. Secondly, the need to maintain momentum on commitments post 2010. Thirdly, the conference was also unanimous on the need to enhance the role of the private sector in this initiative.

Lastly, said Lamy, the conference highlighted the need to focus attention towards evaluating the impact of aid for trade interventions in developing countries. "For this initiative to maintain the current level of political support, we need to demonstrate clearly and convincingly that Aid for Trade is bearing fruit on the ground and that the capacity to trade in developing countries is effectively being enhanced."

On the forthcoming seventh session of the Ministerial Conference to be held in Geneva end November, the General Council heard a statement from the Council Chair, as well as the proposals by India on systemic improvements of the WTO.

In its communication (WT/GC/W/605 dated 2 July 2009), India had proposed that the seventh Ministerial Conference address some systemic issues with the aim of improving the functioning and efficiency of the WTO as a rules-based system, and to make the system more useful, relevant, vibrant and user-friendly.

India's set of five proposals relate to trade information based on member notifications, re-vitalizing WTO Committees, the WTO's engagement with Regional Trade Agreements, an omnibus legal instrument for preferential market access to LDCs, and the need to reaffirm the primacy of international standards and standards setting for WTO obligations (see SUNS #6739 dated 13 July 2009).

In its statement under this agenda item, India said that proposals are aimed at making course corrections in key areas. The underlying premise for these proposals is that the WTO, unlike the GATT Secretariat, is a whole lot more than just a negotiating forum. It is a service organization and has valuable and useful services to provide to the Membership and the trading community at large.

Referring to its discussions on these ideas with the larger membership, India said that it has been heartened by the reactions it has received across the board. Comments have ranged from whole hearted support; to being told they are "common sense", which "is high praise indeed in Geneva, to certain concerns being expressed on how the proposals would be implemented."

On the first proposal regarding the enhanced integrated database that will include non-tariff data of Members, India said that the proposal will have to be implemented as a phased project.

What India is seeking at the Ministerial Conference is an acknowledgment that IDB and CTS have been useful tools for the membership; that they now need to be enhanced to give a broader picture of Members' trade regimes by including non-tariff data derived from the notifications that members make to the WTO; that this database should be made available to the trade operatives as a service; and that a project be initiated, to efficiently and effectively complete this work in a phased and time-bound manner.

At the operational level, said India, following the Ministerial directions, the project could be designed in consultations with the Members and the various WTO Divisions servicing the relevant Committees to finalize the format/ procedural changes that will be required.

Regarding the proposal for revitalizing the WTO Committees, India said that the three elements that it proposed will need to be incorporated into the agreed Working Procedures of each WTO Committee.

In this case, India said that it will be seeking directions from Ministers asking for deliberation in each Committee on ways to revitalize them. In doing so, members would need to ensure that the three suggestions -- (i) the Secretariat providing a factual and verified update on developments on the issues covered by the Committee occurring between formal meetings; (ii) discussions in a Committee, including in the presence of outside experts, on the WTO disciplines covered by the Committee; and (iii) allowing timely problem solving for low threshold trade concerns -- are discussed and appropriately adopted.

The third proposal regarding WTO's engagement with Regional Trade Agreements (RTAs), is a critical issue to be addressed if the organisation is to remain the fulcrum of the global trading system, said India.

India proposed to seek a direction from Ministers that (i) the WTO enhance its engagement with the RTAs for greater transparency about their content and intents; (ii) the Secretariat assist Members in gaining the needed insight and (iii) Members in CRTA build this information into best practices for negotiating new RTAs.

The first part of its proposal seeks to move forward, based on actual experience gained over the last decade and a half. India is seeking that the Ministers agree to make the RTA transparency mechanism permanent in accordance with Para 47 of DMD which states that "agreements reached at an early stage may be implemented on a provisional or a definitive basis."

Ministers could also agree that the transparency mechanism for PTAs, which is not a part of the Doha single undertaking, should be established on a permanent basis, whenever it is finalised.

On the second part about the Secretariat compiling the factual report on RTAs on an annual basis and coming out with an "Annual RTA Review", India said that it will seek directions from Ministers that the Secretariat assists Members in gaining the needed insight into these agreements.

The fourth proposal, according to India, is largely a house-keeping exercise, based on its own experience in understanding the complexity in implementing LDC-related measures under the myriad provisions/ instruments that exist.

Here, India is proposing that Ministers direct the establishment of a Steering Committee, under the General Council, to deliberate and finalize an "Omnibus Legal Instrument for Preferential Market Access to LDCs".

The final proposal seeks to focus attention on the fact that increasing use of national standards and conformity assessment procedures is the biggest hindrance to smooth trade flows. For developing countries, which suffer severe structural deficiencies, having to meet with these myriad requirements is a particular problem, said India.

However, considering that this issue is being considered in various fora on WTO, including some ongoing negotiations, the proposal simply seeks inclusion in the outcome of the Ministerial Conference "of an exhortation, a reaffirmation that we should respect and adhere to international standards and standard setting," said India.

According to trade officials, the response from Members was generally favourable. Members also said that they are reviewing these issues, and that these issues are under consideration in capitals.

The United States welcomed the proposal. It said that more work will be needed. It also said that it needs to understand more clearly the objectives of this proposal, and what the impact would be on other WTO bodies. +