TWN Info Service on WTO and Trade Issues (July10/10)
19 July 2010
Third World Network

Remaining differences still substantial, says new Rules Chair
Published in SUNS #6966 dated 15 July 2010

Geneva, 14 Jul (Kanaga Raja) -- There has been a degree of convergence on many issues, but the remaining differences are very substantial and won't be easy to resolve, the new Chair of the WTO Negotiating Group on Rules, Ambassador Dennis Francis of Trinidad and Tobago, has cautioned.

Speaking at an informal meeting of the Rules Group on 13 July, the new Chair, who has replaced outgoing Chair Ambassador Guillermo Valles Galmes of Uruguay who has returned to capital, said that there is no substitute for hard work and constructive engagement.

The new Chair invited delegations to meet with him bilaterally this week, adding that he has already scheduled 20 such consultations. He further said that the rules negotiations are part of the single undertaking under the Doha Round, and that the Group is not starting from the scratch, as he was in fact the fourth chair of the Group.

The informal meeting was preceded by a short formal session, where the Group elected by acclamation Ambassador Francis as its new Chair. Ambassador Francis told the formal session that he saw his new position as a significant challenge, and pledged to do everything he could to move the work of the Group forward.

Following the announcement by the previous Rules Group Chair that he was being recalled to capital, the General Council Chair Ambassador John Gero of Canada had been conducting consultations, with the assistance of the Chair of the Dispute Settlement Body, regarding a successor for Ambassador Galmes.

The General Council Chair subsequently informed delegations on 14 June that the consultations had shown a consensus among Members on the appointment of Ambassador Francis and that he is expected to be formally elected Chair at the next formal meeting of the Rules Group.

Speaking during the informal session Tuesday, Japan, on behalf of the Friends of the Anti-dumping Negotiations (FANs, includes amongst others Brazil, Chile, Korea, Norway, Switzerland, Chinese Taipei and Thailand), said that the FANs have tabled more than 100 proposals, and urged that the anti-dumping negotiations be further intensified.

According to trade officials, Japan said that there have been anti-dumping measures in existence for thirty years and this situation is unacceptable. It further said that anti-dumping measures have distorted world trade, and that they are being used by more countries. It expressed particular interest on the issue of "zeroing", which it said is an important issue for the FANs, together with other issues such as sunset, public interest and the lesser-duty rule.

On fisheries subsidies, Japan called for limiting the scope of disciplines: fisheries subsidies to be targeted should only be those that directly lead to over-fishing and overcapacity; and that special provisions for developing countries should not be too large.

China said that the result in rules is an indispensable part of the Doha Round outcome, and that the aim should be to make the rules clearer and more transparent, adding that clear rules are especially important in the post-crisis era.

Agreement on "zeroing" and other issues is a precondition for an anti-dumping outcome, said China. On fisheries subsidies, China said that negotiations have to recognize the needs of developing countries.

According to trade officials, Morocco, on behalf of the Arab Group, said that they attach great importance to the development dimension of the rules area - there should be special treatment for developing countries, and sufficient flexibility in fisheries subsidies. It also cited the need to avoid more complex rules, and the provision of adequate technical assistance.

New Zealand, on behalf of the "Friends of Fish" (comprising Argentina, Australia, Chile, Ecuador, Iceland, New Zealand, Norway, Peru and the United States), referred to figures from the UN Food and Agriculture Organization (FAO) and the World Bank, and said that the situation of the world fish resources is "grim".

It further said that there is a unique opportunity for the Group to produce a win for trade, a win for the environment, and a win for development in the area of fisheries subsidies. It strongly supported the prohibition of fisheries subsidies, and called for intensified negotiations based on the previous Chair's text on fisheries subsidies.

According to trade officials, Ghana, on behalf of the African Group and the African, Caribbean and Pacific (ACP) Group, called for more emphasis on the development issues, particularly in providing special and differential treatment to developing countries. It called for less complex rules, and urged work on regional trade agreements in the context of the Economic Partnership Agreements (EPAs).

Kenya, speaking on behalf of the ACP Group on the issue of fisheries subsidies, called for limiting the scope of prohibition and for granting exemptions to developing countries.

The US said that it is committed to achieving a balanced and ambitious agreement in all areas of this negotiation.

Overall, the process seems to be working and it believed that progress in being made.

In order to continue to make progress, the US said that the Group must remain engaged at a technical level to better understand each others' views and positions. "This, in turn, should better position all of us to find ways to reach compromise on difficult issues."

According to the US, strong and effective anti-dumping and subsidy rules encourage greater trade liberalization because they provide Members with some assurance that mechanisms remain in place to address unfair trade practices. In other words, trade remedy instruments function as an important "safety valve" for participants in the rules-based trading system. It noted that developing country Members are increasingly using this safety valve.

The US strongly supported the inclusion of nearly all of the transparency and due process provisions in the December 2008 draft text.

The US said that the Chair's December 2008 text identifies several issues of particular interest, including sunset, public interest and lesser duty. It expressed concern over proposals from some Members that lessen the strength and effectiveness of the existing trade remedy rules, counter to the mandate. "It is important that Members understand that the United States has very little flexibility in these areas."

Noting that some Members have been calling for an explicit prohibition on "zeroing" in any final agreement, the US said: "Suffice it to say that the United States continues to maintain that any final Antidumping Agreement must accommodate the critical issue of zeroing in a manner that respects the legitimate differences that exist among Members' antidumping laws and practices."

On the issue of fisheries subsidies, the US supported the statement of New Zealand on behalf of Friends of Fish, saying that it sees this negotiation as part of the effort by the WTO to balance the interests of trade and the environment.

The Rules Group has made considerable progress toward achieving its mandate and the Chair's draft text is a good basis for work. "We are pleased that the Chair's text features a strong prohibition at the centre of the discipline, consistent with our shared mandate," said the US.

It stressed that it has been a leader in the discussions by submitting proposals to address the technical and legal complexities of this negotiation, but always within the context of obtaining an ambitious outcome.

The US said that it will support clear, appropriate, and effective flexibilities through special and differential treatment, provided that they do not undermine overall ambition or create loopholes for fleets that are already operating at full capacity.

The US also noted that the work on the horizontal subsidy rules has resulted in little progress, if any, on strengthening disciplines. This represents a serious failing of this Group to meet its mandate and deserves greater attention.

In terms of specifics, the US said that it remained concerned with the issue of state-owned banks lending to un-creditworthy state-owned enterprises and remained committed to working on this issue moving forward.

According to trade officials, India said that the Group faces a formidable task ahead on a number of issues in anti-dumping, including "zeroing", sunset and lesser-duty rule. It said that it is an active user of anti-dumping measures but that its exports are also subject to these measures.

India also said that it had made recent proposals on horizontal subsidies, and together with Brazil, China and Mexico, on fisheries subsidies.

Zambia, speaking on behalf of the Least Developed Countries (LDCs), called for more flexibility in fisheries subsidies. It also urged making anti-dumping and subsidies agreements more user-friendly.

According to trade officials, the European Union agreed with the Chair that the Doha Round is a package deal, and that participants must "keep it together". It said that a lot of work needs to be done in all the areas.

On the issue of anti-dumping, it urged the use of other meeting configurations aside from plenary meetings. On fisheries subsidies, the EU called for a balanced outcome - it said that one cannot just replace one fishing fleet with another one.

Brazil said that it fully supported Japan's statement on behalf of the FANs. On horizontal subsidies, it called for addressing what it said is the current imbalance with respect to export credits between developed and developing countries. On fisheries subsidies, it supported a strong prohibition.

In concluding the meeting, the Chair said that he has listened very carefully to messages from delegations, adding that he would be consulting intensively with individual delegations this week.

He took note of the shared recognition in the Group of the importance of the work in the rules area, and the common commitment to move forward.

According to trade officials, the Chair expected the Group to resume its efforts in all areas, and has provisionally scheduled a round of meetings in the week of 1 November. He will consult with delegations on the possibility of holding an earlier round of meetings in September. +