TWN Info Service on WTO and Trade Issues (Dec09/15)
22 December 2009
Third World Network

Lamy suggests Doha stocktaking for March End
Published in SUNS #6839 dated 21 December 2009

Geneva, 18 Dec (Kanaga Raja) -- Members of the World Trade Organization (WTO) have been asked to reserve the last week of March next year for a stocktaking exercise, with the aim of assessing whether concluding the Doha Round of trade negotiations in 2010 "is doable".

This emerged on Thursday at the final General Council meeting of the year.

Ministers, meeting at the seventh WTO Ministerial Conference in Geneva from 30 November to 2 December, had highlighted the need for a stocktaking exercise to take place in the first quarter of next year.

While the Ministers at the Conference had called for a stocktaking exercise in the first quarter of 2010, the United States has been opposed to such an exercise, particularly at the Ministerial level.

Asked at a media briefing following the conclusion of the Ministerial Conference if he agreed to such an exercise, US Trade Representative Ron Kirk had said that the substance of work in the bilateral and multilateral forum will determine success, not arbitrary setting of dates and time-lines (see SUNS #6828 dated 7 December 2009).

The call for a stocktaking exercise at the end of March next year came from WTO Director-General Pascal Lamy, as chair of the Trade Negotiations Committee, in his report to the General Council meeting.

Informing the General Council on the process forward, Lamy highlighted a combination of elements that are needed to arrive at the stocktaking at the end of March.

First, was that some Members need to intensify the bilateral, trilateral or quadrilateral meetings beginning as early as possible in 2010 so that the fruits of these are shared with the rest of the Membership as soon as possible and feed into the multilateral process.

Secondly, all of the Negotiating Group Chairs have scheduled activities starting from the end of January and running through to March. Thirdly, the practice of having senior officials in Geneva should be continued starting in the week of 15 February and again in the week of 22 March.

While pointing out that Members should reserve the last week of March for stocktaking, Lamy however did not clearly specify whether this should take place at the senior officials' level or at Ministerial level.

"At this juncture, my sense is that we should keep open the format and exact content of the stocktaking while keeping in mind that, at this stage, the aim of such an exercise is to assess whether 2010 is doable," he said.

"2009 has been the year in which we lived dangerously. But collectively, we managed to lift our economies out of the abyss. I hope 2010 is the year in which we build on the foundations for a safer global economy. We can and must make our contribution through clinching a Doha deal," he told the General Council.

Asked about the Director-General's plan for a stocktaking exercise at the end of March next year, Ambassador Ujal Singh Bhatia of India told SUNS that the Director-General had said that it is a little open regarding what kind of stocktaking and at what level, and so on.

Ambassador Bhatia said that India's position is that the intensive negotiations need to lead to progress. "We obviously support a stocktaking and let's see when the time comes as to how the stocktaking should be conducted."

He stressed that while India had no problem in engaging in any format, the major progress has to be through the multilateral process.

He also said that he did not expect anything substantive to emerge out of a mini-Ministerial meeting to be hosted by Switzerland in January 2010 on the sidelines of the Davos World Economic Forum - except that it would be a meeting of Ministers to exchange views.

Another developing-country diplomat told SUNS that there is anticipation that in February next year, there will be senior officials' meetings as well as dedicated sessions on agriculture and non-agricultural market access (NAMA). The diplomat was also of the view that nobody seems to know what is the nature and function of the stocktaking exercise.

According to trade officials, in the interventions following the Director-General's report, there was a desire expressed by Members to see the process accelerated. There were also some concerns that the bilateral process is not a way that is generating much progress.

In a detailed statement, Egypt, on behalf of the African Group, conveyed the Group's perspectives on the Doha negotiations and its concerns over the lack of progress made on substance during the course of 2009.

Indeed, the ramifications of the global economic crises, as well as the incremental adverse implications of the food and fuel crises, have considerably overshadowed attempts to undertake meaningful negotiations on substance on all fronts, said the Group.

"We have placed much emphasis, this past year, warning against increased protectionism, and over devising road maps, work programs; and some of us were driven by notions of 'outcome testing', 'no surprises' and achieving 'comfort' levels, which have all contributed on their part to derail and out-source the DDA (Doha Development Agenda)," it said.

Against this backdrop, said Egypt, while the African group remained, in principle, supportive of resuming engagement at the level of Senior Officials to map the road towards the conclusion of the round, "we nevertheless believe that the working hypothesis for this level of engagement should be reviewed and improved to avoid the recurrence of any further shortcomings."

Needless to say, having agreed to intensify the negotiations prior to the G20 Pittsburgh Summit, "we are still left with the same gaps that we needed to bridge, we are still hearing the same positions that have become ever more entrenched, and we have been witnessing growing divergence over substance that has become ever more predominant; and to make matters all the more complex, disparities have been re-surfacing in some negotiating areas."

"We need to ensure that our work, during the next three months, has a bearing on substance to salvage any stocktaking exercise in the first quarter of next year," said the African Group.

"Needless to say, there are considerable disparities as to what this exercise truly resembles or how its results would guide us to conclude the DDA."

"For some, it is the moment of truth wherein our [resolve] to conclude the DDA would come under the test and, as such, we need to safeguard this exercise by moving beyond market access expectations and ensure a breakthrough that places development at the heart of the DDA and restore confidence in the multilateral trading system," stressed Egypt.

Questioning whether Doha can be completed next year is truly alarming, said the Group, adding that the conclusion of the Doha Round in 2010 is well in reach and doable.

"This is why we have maintained our calls to build on progress made to date, preserve the mandates and the sequencing of the negotiations, while averting any attempts to either reopen stabilized elements and texts, or oscillate the negotiating process, format and dismiss any attempts to undermine the core development components of the round," said Egypt.

On its part, the African Group highlighted that it is important for the future work in Agriculture and NAMA to be based on the considerable convergence that had been attained on some of the issues. It is therefore essential that future discussions resume on the understandings reflected in the December (modalities) texts.

On agriculture, the Group believed that template discussions have been constructive and that some progress had been achieved in step one of this exercise. However, with regard to the discussion on modalities, while the Group welcomed the technical discussions taking place on some important issues, it believed that certain aspects in the modalities need further clarification, especially with respect to SSM (Special Safeguard Mechanism).

"We hope that the necessary technical discussions would close the remaining gaps on the key outstanding issues," it said, adding that "an objective overall assessment would lead us to believe that Agriculture negotiations have not progressed in a manner that renders the expected results; much remains to be done to advance the negotiations and address key issues of vital interest to Africa."

The issue of Cotton subsidies needs to be urgently addressed, given that world market price for cotton continue to be heavily distorted downwards by cotton subsidies, the African Group said.

On NAMA, the African Group said that future work should advance in a manner that "brings us closer to a modus-operandi for concluding the negotiations on the basis of the December 2008 text, provided that adequate solutions are found to the issues pertinent to preference erosion and country specific flexibilities, especially for SACU (Southern African Customs Union)."

Egypt further said that any attempts to change the voluntary nature of sectoral initiatives should be avoided, and there is need to ensure that such initiatives remain unlinked to NAMA modalities in accordance with the DDA mandate. Negotiations on NTB's (Non-Tariff Barriers) should continue to narrow differences and the Group supports moving into a process whereby the various NTB proposals addressing the same areas of concern are to be merged, paving the way for issuing a draft negotiating text; while proposals which do not gather sufficient support be reconsidered.

It added that the "Horizontal Mechanism" continues to gather the Group's support which it believed is of added value to address the NTB issues.

On the issue of services, the Group said that invoking the exchange of information provisions on subsidy programs relevant to services is a GATS commitment that remains to be fulfilled.

There is evidence from studies undertaken by the OECD, UNCTAD, and the WTO's Trade Policy Reviews, on the prevalence of a high number and quantum of subsidies granted by developed countries to their services providers. Such subsidies potentially restrict the market access of developing country service providers thereby diminishing the value of any liberalization commitments that may be undertaken, it said.

The African Group noted with concern that there remains considerable differences between Members concerning the desired level of ambition of Domestic Regulation disciplines. However, this should not be a pretext to reintroduce "necessity test concepts" that are construed to erode the right of developing countries to regulate and achieve national policy objectives.

The Group remained adamant about the priority to swiftly operationalize the transitional waiver for preferential and more favorable treatment to services and services suppliers of least developed countries, in order to beneficially and meaningfully integrate LDCs into the multilateral trading system.

With regard to special and differential treatment, the African Group believed that it is of vital importance to enable developing countries to implement their commitments and obligations, as it will provide them with flexibility, policy space and balanced rules to achieve greater market access for their products of interests.

While the Group appreciated the efforts of the Thai Ambassador to advance the negotiations on the Agreement-specific proposals in all its three categories and the monitoring mechanism, it remained concerned that the discussion on both tracks have achieved minimal progress so far.

Turning to the issue of accessions, the African Group expressed its full solidarity with all African countries and LDCs that are undergoing the WTO accession process, and urged all WTO members to facilitate and accelerate their accession.

In this context, the Group reiterated that countries undergoing accession should not be compelled to make concessions incompatible with their level of development. The Group supported enhancing the structured technical assistance for acceding countries.

The African Group also pointed out that since the positive effects of trade on economic development do not materialize automatically, Aid for Trade must be seen as an essential component in tandem with a balanced, development friendly outcome to the DDA.

The Group stressed that for Africa, development outcomes in each of the negotiating areas remain the raison d'etre of the Doha Round and Africa will join the consensus only if the Round delivers on concrete development outcomes.

In other actions, the General Council suspended the agenda item concerning a communication from Honduras and Guatemala on the non-recognition of rights under Article XXIV: 6 and Article XXVIII of the GATT 1994 (which involves the issue of bananas), as a result of the banana agreement reached between the EU and Latin American banana producers.

(Earlier in the week on Tuesday, the European Union and some eleven Latin American banana producing countries agreed to end their long-standing dispute concerning imports of bananas into the EU. They initialed an agreement that would result in the EU cutting gradually its import tariffs on bananas from Latin America. In return, the Latin American countries will drop their dispute cases against the EU. In parallel, the US and the EU also initialed an agreement whereby the US agreed to settle its dispute with the EU - see SUNS #6837 dated 17 December 2009.)

During the discussion on the banana issue, the EU and the Latin American banana producers said that the banana agreement was a good one.

In the interventions, Mauritius, on behalf of the African, Caribbean and Pacific (ACP) group of countries, said that it agreed to this EU commitment to the Doha Development Agenda. This is closing a very long and bitter chapter in the WTO disputes, it added.

However, Mauritius said that this is not an agreement that delivers uniform or equal levels of satisfaction for all parties. The fortunes and hopes of poor peasants in Cameroon or the Windward Islands will be adversely affected by this agreement, as will other ACP banana producers.

The Dominican Republic said that it was not a party to the banana agreement. The Windward Islands will the ones that will be most negatively impacted and injured by this agreement.

According to trade officials, on the banana issue, India and Pakistan said that they had heard that there was an effort on the part of the EU and the Latin American banana producers to use the banana agreement as the framework for preference erosion and tropical products. India and Pakistan said that they do not see that linkage, according to trade officials.

(In parallel to the banana agreement, an EU press release announcing the end of the long-running banana dispute, had also noted that the EU, ACP and Latin American countries had agreed on an approach on the tropical and preference erosion products, which they will jointly promote in the context of the ongoing Doha Round negotiations.)

Asked about this issue, Ambassador Ujal Singh Bhatia of India told SUNS that what India has been asking for a long time is the beginning of a multilateral process of negotiations on the issues of tropical products and preference erosion, because the bulk of India's agricultural exports as for many other developing countries - are tropical products.

He explained that what India is saying is that an agreement between a few Members - a sub-set of Members - obviously cannot be the multilateral agreement. The multilateral agreement has to be negotiated in the multilateral process, he said, expressing hope that this process will begin soon.

The General Council also agreed to extend the end-of-year deadline for another two years for governments to accept an amendment to the TRIPS agreement with respect to TRIPS and public health. The deadline is now 31 December 2011. +