TWN Info Service on WTO and Trade Issues (Mar10/02)
1 March 2010
Third World Network

Frustrations over Doha talks voiced at General Council
Published in SUNS #6870 dated 24 February 2010

Geneva, 23 Feb (Kanaga Raja) -- At a meeting of the WTO General Council on Monday, a number of countries voiced frustration amongst others over the lack of clarity on what the gaps are in the Doha negotiations, on the size of these gaps and how to narrow them, as well as over the lack of clarity over the upcoming Doha stocktaking exercise at the end of March.

These questions surfaced in various interventions at the General Council following the report by Director General Pascal Lamy, in his capacity as chair of the Trade Negotiations Committee (TNC), on the state-of-play in the negotiations and where Members stand at this juncture vis-a-vis the stocktaking exercise. This exercise, Lamy said, would be at the level of senior officials and would take place on 29-30 March.

In other actions, the General Council took note of the consensus on a slate of chairs for the various WTO bodies reporting to the General Council, as well as negotiating bodies under the TNC. (See separate article.)

In a statement commenting on Lamy's report, Egypt, on behalf of the Arab Group, told the General Council: "We even seem to have difficulty in agreeing on an effective stocktaking exercise, that would be able to deliver the necessary breakthrough in the negotiations. It is also not clear for some, as to what this exercise really means, or how its results would guide us to conclude the Round this year, needless to mention the lack of clarity and understanding for some of where we actually are in the negotiations, and the road ahead."

The African Group, represented by Gabon, also had concerns over where the gaps are and the need to identify these gaps. There was also a need for a better understanding of what the Doha stocktaking exercise holds for Members.

India said that based on the present progress, "we can only conclude that while we continue to make progress in a number of areas, the prospects for concluding the negotiations this year appear to be in question." (See below for the interventions of Members.)

According to trade officials, the tone of the discussions (following the Director-General's report) was one of "frustration" in relation to a lack of clarity over the end-March stocktaking exercise, what the gaps are, how large are the gaps, and on narrowing them. There was a degree of confusion in that Members were not clear on where they are going from here.

Some delegations were of the view that the longer Members go on without a clear-cut path, the more would be the need to have Ministerial involvement. Others were of the view that without that clear-cut path, bringing Ministers to Geneva would be a mistake. There was also a reasonably strong view expressed that the problems being confronted by Members are of a political nature, rather than a technical one, said trade officials.

A developing-country trade diplomat told SUNS that the reactions following the Director-General's report under the first agenda item of the General Council meeting was one of frustration. Members do not know what the stocktaking exercise will lead to. The gaps and their size were also not known.

He added that some Members were pessimistic about concluding the Doha Round in 2010.

Another developing-country trade diplomat told SUNS that the scope and structure of the stocktaking exercise was not clear. He said that the gaps are wide, but those gaps that are wide are not known, adding that the Chairs will have to identify the gaps.

It's quite clear that concluding the Doha Round in 2010 may not be possible, he remarked to SUNS, adding that everyone will be looking at the upcoming G20 summit in June for political guidance.

In his report to the General Council, Director-General Lamy pointed to his consultations last week including a Green Room meeting last Thursday.

(At the Green Room meeting of some 30-35 delegations last Thursday, Lamy's assessment following his consultations with senior officials from several key Members was that a substantial number of gaps remain and that the stocktaking exercise, to assess whether concluding the Doha Round in 2010 is doable, would be at senior officials' level, rather than at Ministerial level. See SUNS #6868 dated 22 February 2010.)

On the state of play in the bilateral and multilateral processes, Lamy said that his sense is that, although some progress is taking place, gaps remain. "At this stage, we do not yet have a clear sense of the size of these gaps and we would certainly need to have a better sense by the stocktaking at the end of March."

On the latter point vis-a-vis the political decision about 2010, Lamy said he believes that this is a judgement that belongs to Ministers and that, on this specific issue, engagement will be needed.

"Given where we are right now, it is also clear, however, that the end of March is too early for that."

"Given where we are, I believe the stocktaking provides an important opportunity to inject the political energy and momentum in the negotiations so that we can hopefully chart the path for cracking the remaining nuts. I believe that this exercise is best undertaken by Senior Officials at this stage," he said.

At the stocktaking, he said that Members should identify progress made until now at the technical level and the outstanding gaps. On the multilateral side, this could be done by the Negotiating Chairs in factual reports to the TNC under their own responsibility according to standard practice.

"With respect to the work taking place bilaterally among a number of you, I believe that by the time of the stocktaking, and given the bilateral engagement taking place in the meantime, we should have a clearer sense from participants on the gaps in their positions as well as a clearer sense of a negotiating dynamic to address these gaps."

Lamy further said that at the stocktaking, Members would therefore have a better sense of where the gaps remain, the size of these gaps, as well as the dynamic to address them. "This would enable you to report to your ministers and decide after further consultations on how best to address the next steps post-stocktaking, which will need political guidance."

In terms of timing, the Director-General said that the dates being considered for the stocktaking are 29 and 30 March. This would provide delegations and Chairs with the week starting 22 March for any further consultations to prepare the stocktaking.

Lamy said that he will continue to meet frequently with the Negotiating Chairs as Members move towards the stocktaking. "At a time when many Members in this organisation are getting frustrated at the time it takes to realise the gains of this Round for them, the Negotiating Chairs and I can and will chart a path for your engagement."

"2010 cannot be a wasted year and my consultations last week confirmed that the determination to ensure that we use this year wisely and fruitfully is very present among delegations," he concluded.

Lamy also outlined the state-of-play in the different negotiating groups.

A number of countries spoke following the Director-General's report to the General Council.

Egypt, on behalf of the Arab Group, said that it was "seriously concerned" with the current stalemate in the negotiations, which has not seen any tangible progress since early 2009. "There has been a growing abyss between rhetoric and reality."

It said that it is no secret that Members are at a very critical juncture of the Doha Round, where nuances that have recently factored in, made the challenge to conclude the Round even more difficult, let alone this year.

"We even seem to have difficulty in agreeing on an effective stocktaking exercise, that would be able to deliver the necessary breakthrough in the negotiations. It is also not clear for some what this exercise really means, or how its results would guide us to conclude the Round this year, needless to mention the lack of clarity and understanding for some of where we actually are in the negotiations, and the road ahead," said Egypt.

"It is clear however that this exercise will represent the moment of truth, wherein our resolve to conclude the Round this year would come under the test."

The Arab Group considered that there is need to ensure that the current work has a bearing on substance for the stocktaking exercise next month. "We need to safeguard this exercise by moving beyond market access expectations, and ensure a breakthrough that restores confidence in the multilateral trading system."

Determination, real commitment, and translating political commitments into concrete actions to bridge the remaining gaps, are the main necessary factors for concluding the Round this year, said Egypt, adding that "we should not lose sight that delivering on 'development' should remain the core component of the Doha Development Agenda."

Egypt said that the Arab Group shares the views of many developing countries on the need to uphold the mandates and build on the progress achieved thus far in the negotiations, oppose any backtracking and any form of selective re-sequencing of issues or re-opening of the stabilized parts of modalities, and the need to counter new notions introduced to the detriment of development. It added that Members must also recognize that there is room for improving transparency and the inclusiveness of the negotiations.

The Arab Group stressed that accessions of LDCs should be facilitated and accelerated as mandated by the Fourth WTO Ministerial Conference, and that they not be requested to negotiate concessions and commitments that go far beyond those made by LDC Members of the WTO. It equally considered that all acceding developing countries should not be compelled to make concessions incompatible with their level of development, and that go beyond the existing WTO rules.

The group voiced concern that the Director-General's first annual report on WTO accessions for 2009 did not contain any reference to the accession request submitted by Syria in 2001, which was renewed in 2004 and 2005, and the request by Palestine last year, as a separate customs territory, to obtain observer status in the General Council and its subsidiary bodies. The Arab Group reiterated its full and unequivocal support to those requests.

According to trade officials, Gabon, on behalf of the African Group, reaffirmed its commitment to the Doha Development Agenda. As Members approach the stocktaking exercise end March, it is indispensable that it is recognized that the vital element of the Doha Round is the development dimension. It would be destabilizing to open areas (of the package) that have already been agreed. The African Group also had concerns over where the gaps are and the need to identify these gaps. There is also a need for a better understanding of what the stocktaking exercise holds for Members.

Zambia, on behalf of the Least Developed Countries (LDCs), said that "as we set our eyes to the stocktaking exercise next month, we as Members should realize that this is a time of reckoning and deep reflection as to whether we are in a position to conclude the Doha Development Agenda by 2010."

It said that this should not be business as usual and that the group expects that this exercise will provide an added opportunity for positive engagement among all the Members. This engagement should, it hoped, be candid enough to address the gaps in more specific terms with a view to finding workable solutions. Unless there is a genuine shift in positions for more flexibility, the exercise will be business as usual.

The group said that there is need for progress in work in areas that will make duty-free quota-free market access for the LDCs (DFQF) effective. It highlighted issues such as the rules of origin, product coverage and the details of the monitoring procedure envisaged in the modalities. These issues are important for the LDCs to progress from obtaining market access to accessing the markets.

Zambia said that it is regrettable that despite the clear mandate of 1 August 2004 on cotton, discussions in this area have not been on the active agenda list of the Special Session of the Committee on Agriculture (where the agriculture negotiations are taking place). "We are left to wonder if there is any other meaning to the words ambitiously, expeditiously and specifically' (stated in the decision adopted by the General Council on 1 August 2004)," Zambia said.

It added that this delay does not give hope to the cotton dependent LDCs who continue to be adversely exposed to the negative effects of trade distorting domestic support measures maintained by some Member countries.

On services, Zambia said that the work on the LDC waiver has progressed positively and it is the intention of the group to engage Members in clarifying some of the issues that have been raised during the last formal meeting of the Special Session of the Council for Trade in Services. It added that the successful conclusion of discussions on the waiver will be a positive input into the stocktaking exercise.

On the issue of trade facilitation, Zambia said that the focus of work will be to ensure that the special and differential treatment text is sufficient and effective in addressing the issues of capacity and technical assistance by having full regard to the limitations of LDCs and to the provisions of Annex D.

India, represented by Ambassador Ujal Singh Bhatia, said that based on the present progress, "we can only conclude that while we continue to make progress in a number of areas, the prospects for concluding the negotiations this year appear to be in question."

"In the absence of any real energy in the negotiations, we obviously have to rely on the stocktaking exercise to assess the size of the gaps and discuss measures to bridge them. We have not achieved fresh convergence of a significant nature to reasonably expect the stock taking to generate any new momentum," said India.

After the stocktaking, India said, there is a clear need for fresh directions from Ministers and then, presumably, from leaders in the G20 meeting.

"There is a sense of deja vu here because we have been doing similar things for some time now. In the Davos meeting, South Africa's Trade Minister Rob Davies quoted Einstein's definition of insanity - doing the same thing over and over again and yet expecting different results. I am sure Einstein would find the WTO of today a very interesting place," said Ambassador Bhatia.

As things stand, said India, "we are not on course to achieving the politically mandated target of concluding in 2010 because the political commitment to conclude the negotiations based on the broad ambition manifest in the December 2008 texts of Agriculture and NAMA is clearly absent across the board."

Unless something dramatic happens in the next few weeks to inject new realism into the negotiations, India said that "we cannot move towards full modalities. If this premise is accepted, the only two options that we will have are to continue to negotiate the way we have been doing the past few months, or to re-calibrate our negotiating objectives for the year."

"The first option can bring us incremental progress which still does not provide the momentum to address the big issues on which there is no consensus. The second option would require creative thinking with the promise of bigger reward. The first is, on the face of it, safer, but the systemic damage of an unending Doha Round to the WTO and the global trading system will have to be factored in. The second option is certainly riskier but anything worth having involves risk."

"While we certainly hope that we will soon witness a change of political momentum to take us towards conclusion, we have to be ready to review our options in the next few weeks and make our choices," stressed India.

In respect of another agenda item on the financial and economic crisis and the role of the WTO (Communication from Argentina, Ecuador and India - WT/GC/W/617), India said that in the wake of the ongoing economic and financial crisis in various parts of the world, Governments have naturally adopted mitigation measures to neutralise its impact, of which India was one of the countries that have taken such action.

India said that fiscal and monetary interventions that Members have witnessed over the last two years have an obvious implication for competitive conditions across borders, thus affecting the terms of trade. There are a number of possible implications of such measures which are of interest to WTO Members.

These include the issue of financial services liberalisation, an issue which continues to acquire fresh resonance through recent revelations of the role of international financial services providers in the still unfolding Greek tragedy. Other relevant issues relate to the subsidies provided for various manufacturing and services sectors and their compliance or otherwise, with WTO disciplines, added India.

"It is this aspect of the fiscal and monetary interventions that concerns us in the WTO and which explains our continuing efforts to launch an informed dialogue in this forum on this issue. An informed dialogue can only be possible if we have a comprehensive factual study of such measures."

"In our view, the Secretariat is fully competent to conduct such a study. Much of the information regarding the measures taken in various countries is in the public domain and we are therefore surprised that lack of information is being cited as an excuse for inaction," added India.

The absence of such a discussion in the WTO has clear and obvious implications for the role and relevance of the WTO in the global economy.

In brief, the WTO ignores such issues only at its peril, said India, adding that it is amazed that despite a number of discussions on this issues, and despite widespread support for the proposal, a clear decision has not emerged.

It expressed hope that Monday's discussion will lead to a clear decision directing the Secretariat to take up the study at the earliest. "If we are still not able to come to such a decision today, I will urge you, Chair, to immediately hold consultations to discuss a way forward."

Ambassador Fernando de Mateo of Mexico said that he had learnt a new English word last week - "despondent".

"It was mentioned in the context of the mood negotiators appear to be in, regarding the future of the Round. I believe that 'angst' would be a more appropriate word to describe our situation."

He said that although there is clarity on how Members are going to proceed on the stocktaking exercise - dates are fixed and the level of participation defined - there is complete uncertainty with regard to both the substantive scope on which Senior Officials will concentrate their discussions and the outcome expected from this exercise.

"But our collective angst is not referred to next month's stocktaking. It goes well beyond, for no one has a clear sense of what process or mechanism should be put in place to conclude the Round, let alone of how to conclude it in 2010 as ministers agreed to do."

"We are stuck in a box with a number of corners where dark shadows prevail. We all know what the issues are, but don't know how big the gaps are. Moreover, there's been talk to open, shake or reconfigure the box, with no agreement on how to do that or what to do next," he added.

He pointed to three scenarios. The first one is letting the Round become even more irrelevant. No one is going to kill it. It will just fade away, and maybe in the future a new different Round will be called to take place. The problem with this scenario is that the Organization and therefore the rules-based multilateral trading system might be weakened. The launching a new substantive round in the future would have no credibility.

The second scenario is that Members agree to suspend for a while the negotiations while they try to identify how big the gaps are in the different issues. "The problem here is that the gaps are not static, they are dynamic. The gaps now seem to be wider than in July 2008," he said.

"The third one is that through persistent bilateral, plurilateral and multilateral efforts we are able to close the gaps to such an extent that ministers could reach an agreement on the gateway issues, providing the required momentum to conclude the Round," the Mexican envoy said.

Nepal said that the LDCs are paying the price for the non-conclusion of the Doha Round.

The European Union said that it was open to examining adjustments to the package, but was against a fundamental reopening of the package. It said that the stocktaking exercise was being approached with a lack of clarity on the size of the gaps and the way forward. The problems are more political than technical.

The United States said that it was committed to a successful Doha Round outcome. It said that there is need for a Round that can be seen as a success - this would mean work by all the major players. It added that it was willing to work with others to identify the gaps, the size of them and how to close them.

China shared the views of the Director-General's assessment. It looked forward to the stocktaking exercise. If anything is missing, it is political will and the inability to recognize the value of what is on the table. It is important to have a Doha outcome as it would boost confidence in the multilateral trading system.

There is need to respect the mandate for a development round and must lock in what has been agreed and negotiate on the basis of the Chairs' texts of December 2008, said China. +