TWN Info Service on WTO and Trade Issues (Dec09/08)
16 December 2009
Third World Network

Seventh WTO Ministerial Conference almost a non-event
Published in SUNS #6828 dated 4 December 2009

Geneva, 3 Dec (Kanaga Raja) -- The seventh WTO Ministerial Conference came to a close on Wednesday evening, with the Chairman of the Conference summing up the two-and-a-half-day event by stating that Ministers reaffirmed the need to conclude the Doha Round in 2010 and for a stock-taking exercise to take place in the first quarter of next year.

"There was support for asking Senior Officials to continue to work to map the road towards that point. Gaps remain on substance and there was wide acknowledgment of the need for leadership and engagement on the remaining specific issues over the coming weeks," he added.

While Ministers called for a stock-taking exercise in the first quarter of 2010, the United States is still somewhat opposed to such an exercise, even at the Ministerial level. Some of the other key countries involved in the Doha talks blamed the US for the impasse and the state of affairs.

Asked at a media briefing after the Conference if he agreed with the stock-taking exercise at the end of March and whether it should be at a Ministerial level, United States Trade Representative Ron Kirk was of the view that it is absolutely appropriate, "but we continue to maintain that the substance of our work in these bilateral and multilateral forum is going to determine our success, not the arbitrary setting of dates and time-lines."

Even as the Ministerial Conference got underway Monday afternoon, some trade observers wrote off the event as a mere talk-fest, in the absence of any substantive negotiations in relation to the Doha Round.

In fact, a significant event actually took place outside the Ministerial Conference, when some 22 developing countries adopted a decision on "modalities" for cutting tariffs on trade among them under the Global System of Trade Preferences Among Developing Countries (GSTP).

In announcing the GSTP decision at a media briefing Wednesday at the Conference venue, the Chair of that GSTP Ministerial session that took place at the United Nations, Minister of Foreign Affairs and International Trade of Argentina, Jorge Taiana, underscored that the problem in trade liberalization and trade negotiations is not in the developing countries.

"We can reach agreement, we can work together, we can advance our agenda, and I think it shows that developing countries have the will and the capability to reach agreement," he said.

Brazilian Foreign Minister Celso Amorim, at the same press conference on the GSTP, noted that the WTO Ministerial Conference after the opening day received little media attention, whereas there were a lot of journalists around the GSTP press conference, which he said "is already very significant." (See SUNS #6827 dated 3 December 2009.)

Director-General Pascal Lamy, at the closing press conference Wednesday evening, characterized the two-and-a-half-day event as a "no surprise" Ministerial that reviewed a whole range of WTO activities and discussed a number of issues.

Apart from the opening and closing plenary sessions, the Ministerial Conference held two working sessions.

The first one reviewed the activities of the WTO, including the Doha Work Programme, where Ministers also discussed the issues of regional trade agreements, Aid for Trade and the issue of accessions. The second working session was on the WTO's contribution to recovery, growth and development. Ministers discussed the WTO's monitoring and analytical function, the issue of coherence and international governance, and institutional and systemic issues, as well as other questions.

The Ministers also agreed to extend the moratoriums on E-Commerce duties and on TRIPS non-violation cases until the next Ministerial meeting, which they decided to hold in 2011.

The Chairman of the Conference, Chilean Economy Minister Andres Velasco, in a Chairman's Summary, said: "Ministers reaffirmed the need to conclude the Round in 2010 and for a stock-taking exercise to take place in the first quarter of next year."

"There was support for asking Senior Officials to continue to work to map the road towards that point. Gaps remain on substance and there was wide acknowledgment of the need for leadership and engagement on the remaining specific issues over the coming weeks."

The Chair said that the wide and active participation (nearly 3,000 delegates representing all 153 Members as well as 56 observers) has demonstrated the importance that stakeholders attach to the WTO system in these challenging times.

"The financial and economic crisis has been the backdrop to our meeting. Recognizing the crucial part that the WTO has played in mitigating the effects of the crisis, Ministers focused on what the Organization can do now to help in the recovery. The WTO needs to come out of the crisis strengthened."

"Members expressed a wide range of views and priorities, and I cannot attempt to list them all. This is a non-exhaustive summary of key points that I have taken from the very substantive discussions of the past two and a half days."

First, on the Doha Round, he said that there was strong convergence on the importance of trade and the Doha Round to economic recovery and poverty alleviation in developing countries. The development dimension should remain central to the Round and particular attention should be paid to issues of importance to developing countries.

"There was wide support for building on progress made to date. There was also support for not attempting to reopen stabilized texts. It was pointed out that while priority is being given to Agriculture and NAMA, it is important to advance on other areas on the agenda, including Services, Rules and Trade Facilitation," the Chilean Minister said.

He also noted that LDC-specific issues were underlined as needing particular attention, including Duty-Free Quota-Free market access, cotton, and the LDC Waiver for Services. The particular needs of Small and Vulnerable Economies were also emphasized.

"There was broad agreement that the growing number of bilateral and regional trade agreements is an issue for the multilateral trading system, and that there is a need to ensure that the two approaches to trade opening continue to complement each other. Some support was expressed for the eventual convergence of the two approaches. However, the idea of extending to all Members benefits offered in a regional context was questioned by some."

He said: "There were suggestions that while the WTO RTA transparency mechanism had worked quite well, there is still room for improvement, through making the mechanism permanent, highlighting better the common elements in different RTAs and introducing an annual review."

The Conference Chairman also said that there was strong convergence on the importance of accessions in broadening and strengthening the WTO and on the importance of technical assistance at all stages of the accession process. Many stressed the need to adhere to the 2002 guidelines for LDC accession.

There was broad support for the suggestion that there should be a sharing of experiences, particularly those of the recently acceded Members. There was, though, some divergence as to how to advance accessions, whether through closer collective action or through the usual practice of giving priority to bilateral channels, he added.

"There was wide recognition that providing market access to developing countries and LDCs is not enough on its own. Capacity-building was seen as vital to addressing supply-side constraints. The importance of keeping up the momentum of Aid for Trade, including the Enhanced Integrated Framework, was stressed. There was wide agreement on the need to continue actively mobilizing resources and to keep up monitoring implementation of commitments."

The Chairman's Summary further noted that Ministers had a wide-ranging discussion on enhancing the institutional effectiveness of the WTO. Its monitoring and analytical work was widely seen to have been of particular value in helping to stave off protectionist responses to the crisis. There was substantial convergence on the need to improve notifications as well as data collection, analysis and dissemination.

"High value continues to be placed by members on transparency and inclusiveness in the WTO. Improving the institution's effectiveness should not compromise this principle."

The value of the Dispute Settlement System was underlined by many participants, with some urging that it be made more responsive to the needs and circumstances of poorer and smaller Members, he said.

Numerous comments were made on other current and future issues facing the WTO. Climate change was raised by many. The contribution the WTO can make through removing barriers to trade in environmental goods and services was widely endorsed. There were also warnings against "green protectionism".

Food security and energy security were also highlighted. Concern was also voiced about the effect of private standards on trade, especially for developing countries. Other items suggested for consideration included government procurement, competition and investment, though reservations were also expressed, he said.

"There was broad agreement that the WTO must remain credible in the face of emerging challenges. There were calls for deepening the WTO's relationship with other relevant international organizations, while respecting the WTO's mandates."

The Chairman said that it was widely acknowledged that the importance of the WTO extends beyond the Round. It was also noted that finishing the Round - a stimulus package with limited fiscal cost - is vital in order to ensure that the WTO remains relevant.

"Finally, I would like to offer my own assessment that this Conference, organized in keeping with the principles of full participation, inclusiveness and transparency (FIT), has itself made a positive statement about the WTO," he concluded.

Later, at a concluding press conference, Minister Velasco said that his assessment was that "we've had a fruitful and successful meeting, one that has gone swiftly".

He highlighted the good spirit of collaboration that presided over this meeting, and "the shared value that we all attach to the WTO and to the crucial role the institution and its system of rules has played over the last few months in preventing protectionism and helping contain less than useful answers to the crisis."

That was one element about which there was broad convergence, he said, adding that he also sensed broad convergence in the importance of the Doha Round, both the importance of moving forward and concluding the Round and the key role that development issues should play in this Round.

WTO Director-General Pascal Lamy told the press conference that the "objective for this Ministerial was to review with our Members... the whole range of WTO activities. We had not been doing this for a long time."

Members also need to listen to each other on the priorities and activities they want to push, and "we have been able to do this friendly and openly without any so-called spasm or pressure."

"We discussed the (Doha) Round, which remains priority Number One," but after a long time, "we also had an occasion ... to review accessions, to review the articulation between regional trade agreements and the multilateral system, to review the whole range of our capacity-building activities, Aid for Trade, the enhanced Integrated Framework, and trade-related technical assistance," he said.

Lamy said that "we also got extremely good support, very favourable comments on the way the WTO had been handling this crisis, starting with the monitoring nature." There has been wide recognition in the Membership that "we probably need more of that."

He said that Ministers have also been discussing the state-of-play in the Doha Round. "This was never to be a negotiating Ministerial. There remain a number of differences which our Members have not papered over," he said, noting that Ministers haven't written lengthy and complex communique where differences would have been hidden or adjusted without giving precision.

"There remain differences on both the number and the size of issues which we need to address to close the Round," he said.

"Overall, we've gathered I believe, a political energy with the Membership at large... to try and organize the necessary convergence in the months to come, so that this overall objective, which is to conclude the Round in 2010, which remains... our time horizon."

Lamy thought the conclusion of the Round in 2010 is perfectly doable. "Whether or not this will be done remains in the hands of our Members," he said. Senior officials, he noted, will be back in Geneva before the break at the end of the year to organize the work from December to March, so that the stock-taking can take place at the right moment.

In responding to questions, Lamy said that it is too soon to say about the nature of the stock-taking, and at what level. After the Ministerial, together with senior officials, "we will organize the work that is necessary to prepare for this stock-taking."

But it remains to be seen, on the basis of progress between now and then, at what level this stock-taking will take place, and at which moment. The purpose of this stock-taking is to assess whether or not the collective determination to conclude in 2010 is doable, he said.

"They (Ministers) have told us they want to do this. We now have to make sure whether or not at that time, building upon what is already on the table, this is doable."

The timing at the end of the first quarter in 2010, is because that is the latest moment where "the sort of breakthrough we need on the modalities" would allow for a conclusion in 2010, given what remains to be done after this breakthrough to conclude the negotiation in areas which are legally very complex like dispute settlement, fisheries, or anti-dumping for instance.

On the time-line of negotiating texts, Lamy said that "we already are in a process of text-based negotiations except for some areas like fisheries subsides" where the Chairman's text is more about methodology and the issues that should be dealt with.

The rest of the negotiations is already based on texts and it is up to the Chairs of the various negotiating groups to table revised texts when they believe that they have gathered enough change, enough convergence as compared to the previous version.

He also said that the Doha Round was launched as a single-undertaking and comprising twenty topics, and that remains the case. "I haven't heard Members questioning this single undertaking."

He noted that it is true that the Least Developed Countries for instance would like an early harvest with respect to a number of their own priorities such as cotton, Duty-Free Quota-Free Market Access for the LDCs, and a specific waiver on services.

As long as there is no consensus to break the single undertaking, all these topics remain bundled in the negotiating bag and the negotiation will finish when Members will have agreed on each and every one of these twenty topics, he said.

The Director-General said that everyone within the WTO membership agrees that it is not the process that drives the negotiations, but the substance.

While considerations, organization, statistics, timetables and road-maps are useful in terms of organizing and preparing the work, it is not a deadline-driven negotiation, said Lamy, adding that it is convergence on substance that creates the final finishing line. Roughly, the end of March next year probably is the moment "where we will know whether or not 2010 will be doable."

Asked whether some governments seem to be backtracking on their offers, Lamy said that the experience in trade negotiations is that a change of government rarely leads to an upturn in trade policy. But he was not aware that any Member that recently had a change of government or parliament has said that "we have to go back to square one and re-do the negotiations."

Reminded about the five or so deadlines that had been established previously but not achieved and whether this deadline of 2010 will be achieved, Lamy said that he did not think that "we have established a deadline. What Members have said is that given where we are and given what remains to be done, they wish to conclude before 2010. Nobody disagrees with that, which should mean that their view is that this is possible."

The stock-taking is not a deadline, but a moment where given previous indications, they (Members) believe we should review where we are and hopefully confirm their will to conclude in 2010, he explained.

If the result of the stock-taking was that 2010 would not be doable, he said, then the question will be how do we move the process forward starting from where we will be at the time. Again, the most important thing is that each time, we've made a bit of progress, including during this Ministerial Conference, where there has been a lot of bilateral engagement.

There have been many issues that were discussed, but they simply were not yet ripe for Ministers to tackle collectively, he said.

As for the negotiations on farm subsidies, Lamy said that the negotiations are firstly on export subsidies. In his view, these are nearly finished - zeroing of export subsidies and more disciplines on export credits, where there remains a tiny difference in the monetization of food aid for some countries who rely on food aid for the moment.

The second chapter of the agriculture negotiations is trade-distorting subsidies, i. e., stricter disciplines on Amber Box and Blue Box. He said that this is stable. The amount of trade-distorting subsidies that developed countries such as the EU, the US and Japan will be entitled to post-Round is minus 70-80% as compared to the ceilings which they have been authorized by the Uruguay Round. This is on the table.

There remains a difference on cotton subsidies which is not solved, he said.

Asked if the 2010 deadline cannot be reached and if so, should Ministers discuss the idea of putting the Round out of its misery or consider an alternative approach such as side agreements or early harvests, Lamy said that there will always be misery because the negotiations is always painful and complex.

The important thing is progress and at looking at the value of what is on the table, looking at the value of the system as a whole, and then moving to the maximum of what your domestic political situation and constituencies that control trade negotiations can allow.

Minister Velasco said that nobody has ever thought or ever said that a negotiation involving 153 countries would have a quick or easy resolution. But the fact is the world has shown eight times before that it can be done. There is much strength in Members' desires to move forward and the importance we all attach to the fruits of trade opening, which has been much enhanced by the events of the past eighteen months, he said.

Lamy said his sense of the pace of the negotiation is that at this pace, concluding in 2010 would be a challenge and that is the reason to accelerate, which is what has been heard from Members. This is a Member-driven organization. "I did not decide that it would be good to have a stock-taking. They decided this...," he said.

Meanwhile, in a press release on 2 December, the Institute for Agriculture and Trade Policy (IATP) said that the negotiations at the WTO are intractably stalled as trade ministers find themselves stuck debating a Doha Round that has long been outdated for the times. Instead, trade ministers need to step back and chart a new course for trade.

"This ministerial was so meaningless that many trade ministers actually left before the meeting was over," said IATP's Anne Laure Constantin in Geneva. "They continue to be mired in an endless Doha Round discussion. Even at a time of unprecedented global crises, there is no appetite for meaningful reform. The outcome of this conference is a weakened, not strengthened, trading system stuck in an unacceptable status quo."

"The Doha Round is the wrong approach for the times," said Karen Hansen-Kuhn, director of IATP's international programs, in Washington.

In other comments, a number of civil society groups said that the WTO's crisis of legitimacy is evident in that despite deepening food, financial, economic and climate crises - to which the WTO has contributed significantly - its deregulation and liberalisation agenda remains much the same as in 2001.

Alexandra Strickner from ATTAC Austria/Seattle to Brussels network stressed that "the current global crises (finance, climate, food, energy) is a consequence of an economic model promoted by failed institutions of which the WTO is a key one. Despite this, the European governments continue to do business as usual by promoting further trade expansion, via the WTO, and EU FTAs."

Deborah James, Centre for Economic and Policy Research (CEPR) Director of International Programs, said that "As countries around the world work to stimulate economic recovery, re-regulate their financial sectors, and advance new global climate commitments, governments must be free of WTO rules that limit domestic policy space. This requires not only a suspension of the efforts to expand WTO through the Doha Round, but rolling back of various existing WTO policies that have actually contributed to the global economic and financial crises".

In a separate release, James Kintu, ActionAid's policy director in Uganda said: "Millions of dollars were spent on this WTO Ministerial Conference - they could have been better used to feed hungry people in Africa. The WTO just reiterated the conclusion of the Doha Round in 2010 - with no concrete proposals to tackle the current food crisis." +