TWN Info Service on WTO and Trade Issues (Mar10/19)
31 March 2010
Third World Network

Doha stocktaking ends, a “Chair-led process” to follow
Published in SUNS #6893 dated 29 March 2010

Geneva, 26 Mar (Kanaga Raja) -- A new process of engagement has been outlined aimed at "closing the gaps" on the substantive issues that have led to the current impasse in the Doha Round. This would involve a continuation of the Chair-led processes within the Negotiating Groups and smaller groups in variable geometry and bilateral contacts, within specific areas, as well as on a horizontal level.

This process was proposed Friday by WTO Director-General Pascal Lamy (who is also chair of the Trade Negotiations Committee), at a formal meeting of the TNC that wrapped up a week-long stocktaking exercise on the Doha Round.

In his statement at the TNC, Lamy however did not provide any specific time-line for Ministerial involvement to take political decisions, except to say that if more Ministerial engagement is needed, "we will evaluate this if and when the time is ripe."

The Lamy statement also does not seem to have made any mention of the deadline of 2010 for the conclusion of the Doha Round.

Asked about the 2010 date at a media briefing later, he said that the 2010 deadline was initially set by the G20 and APEC leaders as well as Ministers at the seventh WTO Ministerial Conference.

Given what's on the table, "it is technically feasible" to conclude the round by 2010, but this date is a "political date" and it is a question for political leaders to answer, not him, Lamy said.

According to a developing county trade diplomat, the process until now was lacking oxygen, and the process from now on may get Members somewhere, but it's not sure where. He said that there is need to keep the process alive.

Another developing country trade diplomat told SUNS that he did not expect to see much happening this year, and that the Lamy process was the best that could be done in the current circumstances.

Another trade diplomat noted that having an arrangement to have senior officials here in Geneva once a month (as has been done till now) and expecting this to bring about an outcome has now been given up. This was never going to produce an outcome.

The positive thing from the stocktaking exercise is that Members have accepted the reality and will have to deal with it. Also, for once, Members are not putting time-lines on the process, he added.

A developing country trade diplomat told SUNS that the good thing is that everyone is committed to the Doha Development Agenda and no one is ready to drop the ball.

He however said that "problem No. 1, 2 and 3 is the Americans." He noted that the US does not seem to have an interlocutor in Geneva yet and the US-ambassador-designate for the WTO (whose confirmation remains blocked by the US Senate) is only here as a consultant. In the absence of someone with political clout, the US is not a party you can engage with, but it's the most important one.

In a statement at the TNC meeting, South Africa said that it found it disconcerting that the US remains the most significant player in the Doha Round that is unwilling to work on the basis of the multilateral texts. Its major constituencies and business lobbies are demanding more market access commitments from its trading partners, particularly from the major emerging markets; including China, India and Brazil, with a longer list of countries in this targeted group that includes South Africa.

"This is the main reason for the current impasse in the Doha Round," stressed South Africa.

Sharing his overall impression with Members at the formal TNC meeting on the activities during the past week, including on the consultations that he has been holding, Lamy said that "although we have made some progress since 2008, there is no denying the fact that we are not where we wanted to be by now."

Noting that the informal consultations that he held this week with regional groups, small groups in variable geometry and with individual members have been "constructive, honest and, above all, lucid", he acknowledged that everyone agrees that no miracle solution is available to Members at this point in time.

"But what has come from every member I have met is that nobody is contemplating dropping the ball. Everyone is still very much committed to the mandate of the Round and to its successful conclusion."

"Of course, cynics will say this is a diplomatic fig leaf not to recognize failure. I disagree. What keeps you going is the value of the system for all of you - as we have explicitly evidenced over the past year and a half during the global economic crisis. The multilateral trading system has been a shock absorber' in the crisis: it has prevented a descent into full-scale protectionism," he added.

"While there is certainly disappointment that we are not closer to our goal, I have not detected any defeatism. Quite on the contrary. This endeavour is a test for the multilateral trading system and it is too important to all of our peoples, and in particular those in many poorer developing countries, to be allowed to slip away."

He said that if he had to define the feature of his consultations this week, it has been the commitment to now start working towards weaving all strings of the negotiations into an overall package.

Lamy said that the Chairs' reports at the opening of the stocktaking exercise on Monday were sober and factual. They identified areas of progress made as well as the gaps which remain. "We now have a clear catalogue of gaps."

However, he said that where the picture is more blurred is regarding the size of these gaps. In some cases, it is clearly spelled out in the reports - those concerning the Blue Box in agriculture or in trade facilitation, for example. The size of the gaps however are much less clear in areas such as NAMA (non-agricultural market access) or fishery subsidies, to name but a few.

Inevitably, this heterogeneity makes a collective narrowing of the gaps very challenging, he said.

"As long as possible trade-offs are not defined by clear differences, there remains understandable hesitations for negotiators to engage in possible options for compromises."

In terms of next steps in the process, the Director-General said that there is wide recognition that where the gaps are clear, political decisions will be needed as part of the final package. Similarly, he said that his contacts have shown that Members agree that where the size of the gaps are less clear, further technical work will be required before moving towards political consideration.

"In other words, I believe we need a mix of technical and political preparations to start devising the contours of a package."

During his discussions this week, Lamy said, delegations have also emphasized a number of principles that should guide these next steps. First, the need to maintain and strengthen the centrality of the multilateral dimension of these negotiations, while also recognising that this approach does not, and should not, discourage other avenues for making progress.

Second, there is general agreement among the Membership that they need to build on what is already on the table in the shape of Chairs' texts. Equally important, Lamy said that he has detected a determination to avoid backtracking. Third, the development dimension remains central to the outcome of the Round.

Lamy added that from a process point of view, that is how to address the remaining differences on substance. What he has heard is that there is need for a variety of simultaneous avenues - a "cocktail" approach, with the right dose of each ingredient and a good shake.

"First, we should continue the Chair-led processes within the Negotiating Groups, respecting the rhythm of work and maturity of individual issues... Second, to maintain an overview of the entire negotiating landscape, I intend to hold more frequent meetings with groups and TNC meetings, in order to ensure that all voices are heard and the principles of transparency and inclusiveness are fully respected."

Third, said Lamy, smaller groups in variable geometry and bilateral contacts remain necessary and essential - within specific areas as well as on a horizontal level.

During the course of this week, there has been widespread recognition that it remains more important than ever to move towards a more horizontal view of the issues, where the necessary connections can be made across negotiating subjects. "This is how we will find the synergies that will enable us to reach agreement."

"Many of you have advised against over-engineering' the next steps and have rather argued in favour of leaving members some space to negotiate. I think this can only work if we ensure that the negotiating groups and the TNC remain the anchor of the negotiating process."

As far as ministerial involvement is concerned, Lamy believed that Members should make productive use of the numerous up-coming gatherings that have already been scheduled, such as the Cairns Group, OECD and APEC, to foster and facilitate an on-going and supportive ministerial dialogue on the Doha Development Agenda.

"If it turns out that more ministerial engagement is needed, which many of you have also suggested, then we will evaluate this if and when the time is ripe."

Over the coming weeks, he said that he will be consulting with participants in various formats, here and in capitals, to explore the horizontal stage of the negotiations.

"So, to sum up - the message I take from this week's stocktaking is one of realism and resolve. Our road has been a long one. We are not yet at the end, but we are pressing on with determination, in the assurance that the prize is worth the effort."

"When we leave this room many outside will ask: is this not just more of the same? And how could more of the same produce results that have not yet been achieved? My answer will be: Yes, this is more of the same mandate you agreed in 2001. Yes, this is and has to be more of the same collective determination to get to the finish line.

"Yes, this is also more of the same doing it multilaterally' which is longer, more difficult but which is universal. But there is also a desire by Members to look beyond the individual elements of the Round to construct a global package which each and everyone of you can sell back home."

In conclusion, he said, the name of the game now is "closing the gaps".

At a media briefing at lunch-time, Lamy said that "we are not where we wanted to be. Yes, we made some limited progress since 08 but obviously not enough to enter into the final game, which will take some time."

He said that the good news is that "we have clarity on where gaps remain, they have been clearly identified in the Chairs' reports... The less good news is that the picture is more mixed regarding the size of the gaps that remain."

On the stocktaking, Lamy said that throughout the week of consultations, he had detected a growing interest in finding new approaches to the negotiations. "No one has suggested a sort of miracle recipe for resolving now all the differences that remain. No one said there is a quick fix."

Asked about the deadline of 2010 and whether this should now be considered to be not possible, Lamy explained that the deadline of 2010 for concluding the Doha Round was initially set out by the G20 and APEC leaders, as well as at the seventh WTO ministerial conference. The technical reality is that given what's on the table, "its technically feasible".

But it isn't a technical orientation but a political orientation, so whether or not this political orientation remains is not for him to say. The answer lies with leaders and not with him, he said.

Responding to another question on the same issue, Lamy elaborated that given what's on the table, technically, there is no insurmountable obstacle, "but as we all know, this 2010 date was not a technical date, it was a political date..."

His view is that this is a question for political leaders and not for him. He added that it is up to them to draw the consequences of this in political terms.

In a statement at the TNC meeting, Brazil, on behalf of the G20, highlighted two general principles (stated in JOB document 09/174 of 23 November 2009):

1. That the December 2008 draft modalities are the basis for negotiations and represent the end-game in terms of the landing zones of ambition. Any marginal adjustments in the level of ambition of those texts may only be assessed in the context of the overall balance of trade-offs, taking into consideration that Agriculture is the engine of the Round; and

2. That the draft modalities embody a delicate balance achieved after eight years of negotiations. This equilibrium must be respected, or we will need readjustments of the entire package with horizontal repercussions. Such readjustments cannot entail additional unilateral concessions from developing countries.

The G20 expressed regret that, despite best efforts, no meaningful substantive progress has been achieved over the past several months. It therefore supported the new process announced by the Director-General and welcomed two elements in particular:

1. That alongside the Negotiating Group's work, the Director-General will also conduct consultations that will focus on the key issues that have led to a general negotiating impasse. "To move forward, we must no longer avoid these enabling issues. We must identify and measure the existing gaps in those critical areas";

2. This exercise must be conducted by the membership as a whole. "Such horizontal discussions could potentially affect the whole membership and we must take collective ownership of the difficult political decisions that lie ahead."

Lamy first outlined the process for the future of the negotiations at a Green Room meeting of some 30-35 delegations on Thursday afternoon.

Speaking to SUNS following that Green Room meeting Thursday afternoon, Ambassador Ujal Singh Bhatia of India said that Lamy informed delegates in the Green Room what he was intending to announce in the formal TNC on Friday, which is a process of engagement on substantive issues at the level of negotiating groups, small-groups etc.

"So, it's not very formalized as such. It's not a very distinct road map kind of a work plan," he said, adding that no time-lines were mentioned. He also said that there would be no ministerial meetings or even of senior officials.

There was also no discussion of the 2010 deadline for concluding the Doha Round talks, he said.

Asked what this would mean for the prospects of the Doha Round, the Indian envoy said: "We continue to work and hope for divine intervention'."

On whether the process would be at the level of Ambassadors, Ambassador Bhatia said that this would depend on issue to issue. If senior officials would like to join a particular consultation, they are most welcome, "but it's not a formalized engagement."

Asked if he thought that the process to be outlined by the Director-General will lead to progress, Ambassador Bhatia told SUNS: "We continue to remain concerned about the lack of progress, and we have not seen anything this week which gives us any new encouragement."

Asked if the Doha Round of trade negotiations could be concluded this year, the Indian envoy emphatically said "no way."

"We have almost no chance of closing the round this year," he added.

He also said that there had been no movement in India's bilateral consultations. "We continue to have bilateral discussions with a number of people, but I don't think there is any substantive progress to report this week."

Also speaking to SUNS, Ambassador Roberto Azevedo of Brazil said that the Director-General was going to propose to the membership on Friday a new process, a way of engaging that would try to somehow address the main issues, "the issues that have been stalling the negotiations for [the] past several months."

Mr Nestor Stancanelli, Argentina's chief negotiator, told SUNS that the Green Room meeting was to evaluate the situation and the process forward.

There was an acknowledgment among delegates on the need to work harder, and that this process of the Doha Round is important, he said, adding that having a balanced round and one aimed at the development objective is very important to push for the international economic recovery and for sustainable growth.

He also stressed the centrality of agriculture in order to solve the problems that many countries are facing, especially the poorest and most affected countries in Latin America, Africa and other continents.

He noted that there is a Doha package in which agriculture is rather "diluted", and thus there is need to put emphasis on agriculture, as well as to redress many elements in the NAMA (non-agricultural market access) package in order to have flexibility to cover everyone.

On the process outlined by Lamy, he said that it must be borne in mind that substance is the priority and that the process has to respond to the substance. The process can be used in many ways such as bilateral and plurilateral meetings, the Trade Negotiations Committee, Green Room, and regional meetings.

If the substantive issues are not targeted, it would be difficult to achieve success, he stressed.

On whether the deadline of end-2010 for conclusion of the Doha talks is possible, Mr Stancanelli said that the delegates in the Green Room did not talk about target dates.

"If we resolve the substantial problems, well, it will be easy to finish the Round independently of the deadline (of 2010)," he said. "I believe that for now, we have to go and try to resolve these main problems that are blocking the Round and that are substantive problems... We have to tackle them in Geneva."

He also said that this has to be tackled politically and to try to profit from various fora, pointing for example, to the upcoming OECD and APEC ministerial meetings as well as the G20 Summit in Canada in June.

Asked about the process, he said that there is need to work at the ambassador-level in Geneva, and having senior officials from capitals when you see there is a possibility to politically discuss some of the issues in order to bridge the gaps.

In his view, Ministers should be convened when you are more or less sure of success, for example, when you have only two or three managable issues for the ministers.

A developing country trade diplomat told SUNS that Lamy had proposed to keep working on the technical issues which will be led by the negotiating group chairs and the TNC. Senior officials will continue to tackle some of the political issues.

There will also be small-group meetings among Geneva ambassadors to identify the size of the gaps and to narrow them, he said.

According to the trade diplomat, there would also be Ministerial engagement at some stage, as there is need for political energy, but no time-line has been set for such a ministerial. The Director-General will also make use of the upcoming Cairns and OECD ministerial meetings.

Another trade diplomat said that bilateral/plurilateral consultations will also continue. He also said that from now on, it will be Member-driven and in various formats. It will be at ambassador's level, and that senior officials will not necessarily come every month (as was before).

A developed country trade diplomat told SUNS: "We'll see, according to the evolution of the situation."

He noted that first Ministers had delegated the work to senior officials and now, it has been delegated to the ambassadors (in Geneva).

Meanwhile, the WTO also released its trade figures on Friday, saying that world trade is set to rebound in 2010 by growing at 9.5%, after the sharpest decline in more than 70 years. +