TWN Info Service on WTO and Trade Issues (Dec10/13)
20 December 2010
Third World Network

WTO General Council adopts PTA mechanism, discusses several issues
Published in SUNS #7062 dated 16 December 2010

Geneva, 15 Dec (Kanaga Raja) -- The WTO General Council, at its end-of-year meeting, adopted a decision on a transparency mechanism for preferential trade arrangements (PTAs), and discussed a number of issues including development assistance to cotton, the TRIPS "Paragraph 6" system and the question of accessions to the WTO.

In a day-long meeting on Tuesday (14 December) just before the traditional Christmas and New Year breaks, the Council also heard amongst others a report by the Chairman of the Trade Negotiations Committee (TNC), Pascal Lamy, who is also the WTO Director-General.

The organization is set to intensify its work from the beginning of next year, in line with a plan that was outlined by the TNC Chair at an informal TNC meeting on 30 November.

It emerged at that informal meeting that negotiators are to embark on an intensive programme of work on all fronts of the negotiations from the beginning of next year. The proposed work programme envisages revised texts in all the areas of the negotiations to emerge towards the end of the first quarter of 2011, and a greater involvement of senior officials from capitals, as the work intensifies in the coming months. (See SUNS #7052 dated 2 December 2010.)

A developing country trade diplomat told SUNS that while there is a new window of opportunity in 2011 to conclude the Doha Round, the proposed time-lines are very tight, with agreed draft texts across the board expected by end April. Without the elements for tradeoffs (in the horizontal process) by end April, it will be difficult to get a deal by July, the trade diplomat said.

The trade diplomat said that he is "pessimistically optimistic", but that there is a lot of work to be done. The elements for the tradeoffs, he said, are not clear at this time, nor is it clear how the bilateral process will translate into the multilateral process.

The trade diplomat noted that there is already some talk of a "post-Doha" work programme involving issues such as regional trade agreements and non-tariff barriers.

(This would imply that the Doha Round could be sought to be concluded, pushing several of the items on the Doha agenda, particularly those being pushed by developing countries on to a post-Doha process.)

Following the report by the TNC Chair, the Least Developed Countries, the African Group and the African, Caribbean and Pacific (ACP) Group, in their interventions, pointed to the capacity constraints being faced by small delegations in participating in numerous meetings, and for the membership to understand these problems.

Responding to these concerns, the Director-General, with respect to what the LDC, the ACP and African Group had mentioned on the organization of the work, said that these concerns are well-known and have been taken into account. He said that both he and the Chairs, on an ongoing basis, will look carefully at the logistics and organization as well as the substance of these meetings, to ensure that there can be participation of all members. "We will ensure that there are no two meetings taking place simultaneously," he said.

Under the first agenda item of the meeting, the General Council adopted a decision on a transparency mechanism for preferential trade arrangements (WT/COMTD/71).

According to the decision, the mechanism shall apply to the following Preferential Trade Arrangements (PTAs): (a) PTAs falling under paragraph 2 of the Decision of 28 November 1979 on Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries ("Enabling Clause"), with the exception of regional trade agreements under paragraph 2( c) as described in the General Council Decision of 14 December 2006 (Transparency Mechanism for Regional Trade Agreements); (b) PTAs taking the form of preferential treatment accorded by any Member to products of least-developed countries; ( c) Any other non-reciprocal preferential treatment authorised under the WTO Agreement.

The purpose of the mechanism is to enhance transparency of the PTA under consideration. It contains provisions on notification of a PTA, procedures to enhance transparency, subsequent notification and reporting, and a reappraisal of the mechanism.

Under the second agenda item, the TNC Chair presented his report to the General Council.

Lamy said that delegations endorsed the intensive work programme that he and the Chairs of Negotiating Groups had proposed from the beginning of next year, advancing on all fronts of the negotiation at the same time. "In light of the intensification of work, there was an understanding that in scheduling meetings we will approach our work in full accordance with the established principles and make every effort to ensure transparency and full participation."

The TNC Chair noted that a collective sense emerged that texts in all areas of the negotiation will have to be developed so that they could appear towards the end of the first quarter of 2011. The various texts will mature according to the individual rhythm of work in the negotiating groups. "We all agree that they must emerge from a chair-driven bottom-up process. The onus being on participants take an active role and make the required contributions with which to move towards consensus."

There was also a general agreement that, at the right moment, a more global sense of what the final package would contain will need to be developed. Although some expressed the view that this process should start sooner rather than later, and others that it should start when there were texts, all participants agreed that the details of this process would become clearer in light of substantive progress in negotiating groups, said Lamy.

There was also agreement on the greater involvement of Senior Officials as work intensifies, and for the importance of Ambassadors remaining engaged, individually, in this intensified phase, as they will be central to the push for a final deal. "In sum, participants agree that we now have the right political signals, the technical expertise and the work programme. What is now needed is to translate these into a comprehensive deal that each of you can take back home."

Noting that in his remarks to the informal TNC on 30 November, he had outlined the intensive work programme for the various Negotiating Groups beginning the weeks of 10 and 17 January, Lamy said that the Chairs are planning ahead to ensure that "we hit the road running in early January."

"The Negotiating Group Chairs have followed up with more detailed communications to assist in your planning here and in your capitals. In addition, they are working hard to look further ahead in their respective negotiating processes. All Members now have a clear picture of the meetings which will be held as from 10 January and the issues which will be addressed."

The TNC Chair informed the General Council that he will be convening an informal TNC on 2 February, preceded by a Green Room meeting on 26 January.

"I call upon all delegations to ensure that your representatives, at whatever level, are mandated to negotiate. At this stage it is not enough to have answering machines around the table. We are at the point where we must have negotiators, and all negotiators have to be prepared to move out of their comfort zones towards agreement. There can no longer be any a priori red lines. All Members must be in a position to engage into substance on a without prejudice' basis, under the single undertaking."

The TNC Chair concluded that he sensed "a new energy and a determination among all participants to ensure that we grasp the narrow, but real opportunity to conclude the Round next year. As I said at the TNC, I genuinely sense that the final countdown has begun. It is up to everyone to make sure that it ends in a successful liftoff."

According to trade officials, following the TNC Chair's report, many delegations asked for the statements that they had made in the informal meeting of the TNC on 30 November to be read into the record of the General Council meeting. (See SUNS #7052 dated 2 December 2010 for statements made at the informal TNC meeting.)

According to trade officials, the LDCs voiced concern over the scheduling of meetings, saying that they do not want meetings to take place concurrently. Some delegations were concerned about being able to fund capital-based officials to be present in Geneva for lengthy periods of time next year.

Several delegations spoke following the report by the TNC Chair.

According to trade officials, Gabon, speaking on behalf of the African Group, expressed hope that the accelerated work that is taking place now will lead to an agreement on agriculture and non-agricultural market access (NAMA) modalities. It said that it can usually participate in about one meeting per week, and that it needs to be made clear that the Group will need help from the WTO, in this regard. It said that small delegations have difficulty in participating in the meetings.

It is important for the Group that there is a development dimension to the negotiations across the board, including on issues such as duty-free quota-free market access for LDC products (DFQF), the Special Safeguard Mechanism (SSM), a services waiver for the LDCs, and cotton. It recalled that when African trade ministers had met in Kigali earlier this year, they had made clear that any attempt to reopen issues that have been stabilized was not acceptable, and that it was important that the mandate not be changed.

Zambia, on behalf of the Least Developed Countries (LDCs), said that meaningful progress is only possible if there is a transparent and inclusive process, and that there are no surprises. It said that it is looking forward to text-based negotiations. It recognized that there are a number of political problems that remain, but said that these should not hold up the entire process. For the LDCs, the important issues remain amongst others cotton, rules of origin, a services waiver for the LDCs, DFQF, trade facilitation with special and differential treatment, and technical assistance and capacity-building.

Mauritius, on behalf of the ACP Group, said that it is important that Members still operate under a development mandate. The WTO needs to understand the capacity constraints of smaller delegations. There is a problem of lack of capacity for many staff that are in Geneva, and they are operating with constraints. They do not want these constraints to block or hold up progress. It is necessary for the membership to understand these problems, and that there should be no negotiating groups running concurrently, particularly on agriculture and NAMA.

The European Union said that there is new momentum that has not been seen before towards trying to conclude the Doha Round. It is extremely important to turn the political signals (emanating from the G20 leaders) into a proper negotiating process. There are indications that this is already happening. The Ambassador-led process has been instrumental in kick-starting the negotiations.

Brazil said that concerns in agriculture need to be addressed. The December 2008 text is the basis for the negotiations. It is important that outstanding issues in all three pillars of the agriculture negotiations are addressed, sooner rather than later.

India reiterated that the two TRIPS-related issues of GI (Geographical Indications) extension and the relationship between the TRIPS Agreement and the Convention on Biological Diversity are a priority and critical for India. India said that it attaches great importance to an outcome on these issues in the final package of the Round.

With regards to the agenda item on the development aspects of cotton, the Director-General reported that to date the value of specific development assistance for cotton stands at about $570 million. Assistance within a broader framework for agriculture infrastructure-related support comes to $4.2 billion.

On the trade policy aspects of cotton, the Director-General said that agriculture negotiations chair Ambassador David Walker of New Zealand has intensified consultations in agriculture and is placing a priority on cotton in accordance with the Doha mandate.

In an intervention, Zambia (on behalf of the LDCs) said that commitments to cotton in 2007 were $2.09 billion and disbursements were $25 million. By November 2010, commitments were at $4.08 billion and disbursements were $848 million. It said that the trade aspects are still lagging behind and there cannot be a conclusion to the Doha Development Agenda without a satisfactory outcome in cotton.

According to trade officials, Egypt pointed to some statistics from the International Cotton Advisory Committee, which compared cotton production and exports in the Cotton-4 countries of Benin, Burkina Faso, Chad and Mali in the period 2004-2005 and 2009-2010.

It said that acreage in the Cotton-4 countries has declined by 48%, yield is down by 15% and production is down 56%. With respect to the share of world production of Cotton-4 countries in 2005, it said that this was 2.8%, and in 2010, the world production share for the Cotton-4 countries was 1.5%. Exports were at 8% (2005) and are now at 5% (2010).

Several countries spoke with respect to the agenda item of review under paragraph 8 of the decision on the implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health.

Paragraph 8 of the Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health of 30 August 2003 provides that the Council for TRIPS shall review annually the functioning of the System set out in the Decision with a view to ensuring its effective operation and shall annually report on its operation to the General Council.

The "Paragraph 6" system is aimed at helping developing countries with insufficient or no manufacturing capacities in the pharmaceutical sector to import cheaper generic medicines produced under compulsory licensing.

According to trade officials, Brazil said that it wanted a meeting (for an in-depth study of the issue) that would involve all stakeholders.

Cuba said that it was concerned about the limited application of the Para 6 mechanism. There is need to look at other areas that are causing problems including the impact of patents on the price of medicines, it added.

India said that it is disappointed that members have been able to implement the Para 6 system only once in the last six years. There should be a meeting held (for an in-depth study of the issue) that is open to all members of the WTO and non-governmental organizations and drug-makers. It was also disappointed that there are members that are not in favour of having a meeting such as this.

Zambia said that the LDCs support the idea of a workshop (for an in-depth study of the issue).

According to trade officials, the US said that any future discussion of the issue of the Para 6 system should take place in the TRIPS Council.

Under a separate agenda item on the issue of accessions to the WTO, the Director-General provided his annual report on this issue.

According to the report, currently, 30 Acceding Governments are in the process of WTO accession. Ten formal Working Party meetings were held in 2010. These were: Azerbaijan, The Bahamas, Bosnia and Herzegovina, Lao PDR, Serbia (two meetings), Seychelles, Tajikistan and Yemen (two meetings). Nine Informal Working Party Consultations/Meetings were held in 2010. These were: Kazakhstan, the Russian Federation (five meetings), Samoa and Yemen (two meetings).

With respect to Iran, the report noted that the Memorandum on the Foreign Trade Regime was submitted in November 2009, after the establishment of its Working Party in 2005. Members were invited to submit their questions to the Memorandum by 18 January 2010. The Chairman of the General Council is consulting on the appointment of a Working Party Chairperson. The First Working Party meeting should be convened after Iran responds to Members' questions and the Chairperson is appointed, it added.

(According to trade officials, there is no consensus as yet around the appointment of a Chair for the Iran accession working party.)

Zambia (on behalf of the LDCs) commended the report by the Director-General, and for keeping the issue upfront. It was pleased to see the prioritization given to LDC accessions.

The Dominican Republic, on behalf of the informal group of developing countries, expressed support for Zambia's statement.

It said it was unfortunate that only three LDCs have acceded to the WTO since its creation, and after 39 years of UN classification of LDCs, only three countries have graduated from LDC status. It further said that it is important that accession candidates are not asked to take on commitments that exceed their level of development.

Iran said that it has submitted detailed documentation of its trading regime. It said that it would like to have more engagement with governments with respect to finding a Chair to run its Working Party (on its accession to the WTO). +