TWN Info Service on WTO and Trade Issues (Feb11/03)
8 February 2011
Third World Network

WTO holds post-Davos TNC meeting
Published in SUNS #7081 dated 4 February 2011

Geneva, 3 Feb (Kanaga Raja) -- Following a mini-Ministerial meeting over the weekend in Davos, the Trade Negotiations Committee (TNC) of the World Trade Organization (WTO), at an informal meeting Wednesday, issued a call for the bilateral/plurilateral process in Geneva to catch up with the multilateral work on revising the draft texts.

A mini-Ministerial meeting of some two dozen trade ministers was held on 29 January, on the sidelines of the World Economic Forum. The Swiss-hosted event was preceded a day earlier by the European Union hosting, also in Davos, a separate meeting of trade ministers from Brazil, China, India, Australia, the European Union, Japan and the United States.

In some concluding remarks at the end of the Swiss-hosted meeting, Federal Councillor Johann N. Schneider-Ammann, Minister of Economy of the Swiss Confederation, said that the Ministers noted with satisfaction that by now all negotiating groups were active and making progress with a view "to get to negotiating texts in all areas of the Doha negotiations by April."

"We stressed the need to work with higher intensity and to accelerate the negotiations in order to take advantage of the window of opportunity which the G20 and APEC Leaders have detected for 2011," he said.

He added: "There is a sense that we are in the end game and that if Doha is done, it needs to be done this year. The price for failure of the Round would be too high for each of us and the multilateral system as a whole. In this context, some of us mentioned a weakening of the multilateral rules, increase of protectionist pressures and a proliferation of divergent regional and bilateral agreements."

"We agreed with Pascal Lamy's (the Director-General) assessment that bilateral and plurilateral negotiations need to be seriously accelerated, the gaps in the positions need to be bridged and divergences need to be drastically reduced in order to have a package by July. This has to happen in parallel to the multilateral negotiations.

"We showed readiness to engage in striving for a more ambitious result in all areas of the negotiations while building on progress reached so far, Those who ask for more should also pay more... We agreed that there is a need for a reassessment of our positions and that we will empower our negotiators to engage in give and take and to come up with creative solutions," the Swiss Federal Minister added.

He further said that Ministers are ready to show leadership and to engage in the negotiating process whenever appropriate.

To sum up, he said, the next steps are: Negotiating texts in all areas by April; overall agreement on the package by July; the finalisation of legal texts and scheduling during the rest of 2011.

[According to a report in the "WTO Reporter" of 2 February, US Trade Representative Ron Kirk, who attended the mini-Ministerial, was reluctant about committing to any deadline but did not object to the concluding remarks of the Swiss Minister. Speaking at the informal TNC meeting on Wednesday, US Ambassador Michael Punke pointed to the "distraction of deadlines" hindering success. See below.]

Meanwhile, trade ministers from Brazil, China, India and South Africa met on 28 January, also on the margins of the Davos World Economic Forum.

In a press communique at the conclusion of their meeting, the Ministers from the four developing countries recognised that, although the July 2008 negotiating package embodies a careful balance of concessions strenuously negotiated since the launching of the Round in 2001, it should be improved to strengthen its development dimension.

In particular, the Ministers noted that, under the existing draft modalities, developing countries would be required to offer a level of contribution without precedent by any Member in any of the previous negotiating rounds. The Ministers also agreed that such contributions are not being reciprocated by developed countries, some of whom still seek further exceptions and flexibilities to continue with their existing trade barriers and trade-distorting policies, adversely affecting the developing countries' interests.

The Ministers believed that any effort to finalize the Round cannot ignore past trade-offs nor require new disproportionate and unilateral concessions from developing countries, ignoring the existing mandate. In this context, the Ministers cautioned against demands that clearly change the nature and scope of negotiations, jeopardising the present efforts to conclude the Doha Development Round.

A senior official from a developing country who participated in the informal TNC meeting on Wednesday, told SUNS that with respect to the time-lines of getting texts by April and a package by July, substantive work will have to be done by end February, so that areas of divergence in the texts could be matched. After the texts are out in April, a process of trade-offs would have to start and this will be difficult with bracketed texts.

On the question of "give and take", the senior official noted that the US has upped its level of ambition and wants developing countries to pay in NAMA (non-agricultural market access) and services.

A developing country trade diplomat told SUNS that the political signals will have to be translated into something concrete, and now negotiators will have to come to the table. He noted that market access is not the only issue in the negotiations.

According to trade officials, a large number of delegations stressed, at the informal TNC meeting, that there needs to be more results in the bilateral/plurilateral market access negotiations, where progress has been lagging behind. They also said that anything that comes out of this process must be channelled into the broader negotiating process.

In his statement at the informal TNC meeting, TNC Chair Pascal Lamy (who is also the Director-General), reporting on some of his most recent activities and meetings, including the small gathering of ministers organized by Switzerland in Davos, said that in his messages, he indicated that Members have been following the game plan agreed by Members in December across the board. "I also sensed a change in the mood as well as a change in gear in the negotiating process."

The change of gear and approach is detectable in both legs of the negotiating process, i.e. in the Negotiating Groups as well as in the bilateral and plurilateral consultations. In the Negotiating Groups, there is an overall sense of greater engagement and focus, with no single topic being left behind. Work is progressing on developing draft language and textual proposals as well as in removing brackets.

However, Lamy stressed to Ministers that the pace of multilateral work was still too slow and too short of the kind of substantive progress needed to fuel and sustain a momentum that will result in revised texts around Easter. "Atmospheric improvement is good and important, but we will not advance on air alone."

With respect to the bilateral and plurilateral leg, he said he shared with Ministers his belief that this leg is lagging behind. This leg also has to move faster and deeper to transfer the required energy onto the multilateral leg. "And this needs to happen now. Not tomorrow or the day after tomorrow but now. The mood music can be good but we need the two legs on the dance floor. I sensed that there was an unambiguous determination among Ministers to further accelerate the Geneva process to meet the 2011 window of opportunity identified by the G20 and APEC Leaders."

Ministers at Davos agreed that they needed to increase the pressure on their various bilateral and plurilateral negotiations so as to provide the necessary momentum and they also agreed that "our current work must build on progress reached thus far" and that they will instruct their negotiators to reassess positions and engage in genuine "give-and-takes", Lamy said, repeating his stress on "give and takes".

Finally, he added, Minsters emphasized their readiness to engage personally in the negotiating process at the appropriate moment. But they were also clear that they expect the Geneva process to bring them a limited number of issues for them to crack.

"It is clear from the level of activity planned in the various Negotiating Groups that we all face some intense and challenging weeks ahead. We urgently need to build on the good atmospherics to accelerate negotiations at all levels if we are to record substantial progress across the board by the summer break. Bilateral and plurilateral contacts, which I already said are lagging behind, need to get into substance now. This was the message from our political masters and I am confident that the Geneva process can respond not only in style, but more importantly in substance... Acceleration, texts, convergence is now the name of the game," he said.

Several delegations spoke following the report of the TNC Chair.

Brazil, on behalf of the G20, said that it welcomed the report on recent developments and the process outlined by the Director-General for the future of the negotiations. "The Doha Round is at a critical juncture and we must put together our best efforts to achieve our common goal of concluding the negotiations."

It is time for realism, said the G20, stressing that agriculture remains the engine of the Doha Round. The December 2008 draft modalities must be the basis for negotiations. Agriculture remains the key determinant of the level of ambition in all other areas of the negotiation. Agriculture will continue to be the benchmark for the end-game in terms of the landing zones of ambition.

The G20 said that it is prepared to engage constructively towards the objective of achieving an ambitious and balanced outcome that delivers on the development objectives of the Round in accordance with the Mandate.

Speaking also on its own behalf, Brazil, represented by Ambassador Roberto Azevedo, said that on the one hand, the bottom-up, transparent, and inclusive multilateral work in Geneva, fully owned by the Membership and respectful of the principles of the single undertaking, and on the other hand, the political support from ministers and leaders, "are the main pillars of our efforts to carry out negotiations in this window of opportunity identified by our political masters last year."

It said that additionally, plurilateral and bilateral meetings, provided that they are fully integrated in the multilateral process, can also play an important supplementary role. "It is evident that in procedural terms we are marching at a steady pace. The work program seems well designed and it counts with the support of the membership. Nevertheless, we are about to enter a most delicate stage of our process. Very soon, we will test the limits of the political engagement and ascertain whether the proclaimed commitment to an outcome will translate into negotiating flexibilities that allow us to bridge the quite significant and substantive differences that have kept us apart since early 2009."

"The essence of our differences remains the same: finding a balance across the market access issues that is acceptable to all. As we all recall, the main trade-offs were defined simultaneously during the July 2008 Ministerial - agricultural tariff cuts, number and payment of sensitive products, cuts on trade-distorting domestic support, NAMA formula coefficients and flexibilities and, finally, a pledging conference on services was held," noted Brazil.

"At that time, a few issues kept us from fully agreeing on the landing zones, but the order of magnitude of what was required to close the deal was well defined in our minds. These boundaries are not simply imaginary, they were reproduced in the December 2008 draft modalities texts. Contradicting this understanding, we now face demands that attempt to change the nature and scope of those deals. They try to selectively change the outcomes in areas where developing countries would be the only ones paying," Brazil underscored.

"We do accept that ambition is an important driving force in trade negotiations. Actually, it is an indispensable one. Nonetheless, at a certain stage, particularly after long and complex negotiating efforts, ambition - particularly when coupled with selectiveness - can backfire, risking to unravel the delicate network of trade-offs we so carefully wove over the last 9 years," it warned.

"The collective wisdom contained in the draft modalities texts before us constitutes an achievable balance between our collective ambitions and restraints. Those texts embody our desires framed by reality," it added.

"Our challenges concerning substance and timing do not, however, necessarily prevent us from achieving a marginally improved framework. But for this, what is required is a carefully designed and executed effort, where the fundamental premise is to keep the balance that has been achieved so far. As far as Brazil is concerned, any attempts to shift this balance away from agriculture or development are bound to fail."

According to Brazil: "The only means to accomplish this marginally improved framework is via trade-offs in which we take on board a representative cross-section of all interests - offensive and defensive - in all market access issues - NAMA, agriculture and services. Additional concessions in one area must be matched by strictly proportional concessions in another area. More market access in NAMA or Services, means also more market access in agriculture."

"If some developing countries are asked to do more than the general rule applicable to all, key developed Members, especially those who have been asking for more in areas of their interests, must also do more than the general rules, not less. If we all understand and accept this, we are in good shape for this final push," said Brazil.

On the negotiation of horizontal disciplines, Brazil said that they represent a major contribution to the package that, unfortunately, so far, has been consistently underestimated. The outcomes there can be very significant, as is the case of trade facilitation.

Indonesia, on behalf of the G33, took note of the encouraging report on the latest developments in the Doha Development Round negotiations and reaffirmed its support for the roadmap initially outlined by the TNC Chair and underscored last month by the Chair of the Committee on Agriculture in Special Session.

The G33 reiterated its commitment to constructive engagement in the forthcoming intensified negotiations aimed at closing the gaps in the draft agriculture modalities text of December 2008. As always, the process has to be bottom-up, transparent and inclusive, it stressed. It continued to pursue a balanced and fair outcome of the agriculture negotiations that fully observes the development mandate of the Doha Round and respects the special and differential treatment flexibilities that would ensure food security, livelihood security and rural development of developing countries.

According to trade officials, Kenya, on behalf of the African Group, said that the Geneva process must pick up the messages that came from the political masters. There is need for a balanced and ambitious outcome and this depends on everything moving in tandem, so that no issue lags behind. It stressed that agriculture has a critical and pivotal role to play. There is also need to avoid unravelling the texts - not to go back into the existing texts and take away what many developing countries have already secured. Kenya further said that the Rev.4 text in agriculture (of December 2008) should be the basis on which the negotiations continue, and that cotton should be the subject of an early harvest. Due to the complexity and multiplicity of issues, the process should be transparent, fair and equitably-backed with appropriate content.

Bangladesh, on behalf of the Least Developed Countries (LDCs), was encouraged to see momentum in the negotiations. It is important that activity be paced in such a way that small delegations can participate. As Members enter into the end-game, it is important to be able to participate in areas of interest to LDCs. The LDC group is looking at issues such as cotton, rules of origin, and the implementation of a monitoring mechanism that would enable the LDCs to keep an eye on how the Duty-Free Quota-Free (DFQF) market access provisions for LDC products were being implemented, said Bangladesh.

There is also need to make sure that special and differential treatment (SDT) programmes are operational and effective. It further said that the Fourth LDC Conference (to take place in Istanbul in May 2011) is a good place to secure deliverables, it added.

Mauritius, on behalf of the ACP group, said there is need to accelerate the work. While the rhetoric has been good, the substance has been short. Issues that have been discussed in the plurilateral context such as preference erosion and tropical products need to be multilateralised. The Rev.4 texts (of December 2008) need to be preserved. It is important that issues of importance to LDCs and SVEs (Small Vulnerable Economies) are preserved, it said, also pointing to the progress needed on cotton. The gaps in other areas especially those pertaining to the development dimension need to be addressed.

Barbados, on behalf of the Small Vulnerable Economies (SVEs), said that it remained fully committed to achieving a balanced and successful outcome to the Doha negotiations, and reiterated a number of fundamental objectives that it believed should continue to guide the work in the process of intensification for the months ahead.

Firstly, an inclusive and transparent approach to the development of any new and, or revised texts. The Chair-led negotiating process provides the greatest opportunity for the involvement of all delegations in the multilateral decision-making process. Secondly, focus on outstanding work to be completed and not seek to unravel areas of the Chair's texts and negotiations that have been stabilised, while remaining conscious that the outcome of the negotiations must be relevant. This is particularly important for its delegations in the areas of Agriculture, NAMA and Services. Thirdly, "we need to seek to fulfil the developmental objectives across all areas of the negotiations, including the appropriate flexibilities for Small, Vulnerable Economies  ...if this is indeed a Development Round, the task at hand can be no less."

Speaking on behalf of the CARICOM (Caribbean Community), Barbados said that it would wish to enlist the support of the WTO in assisting the region to maximise the benefits to be derived from the Round and in particular from Aid for Trade from international financial institutions for those highly indebted countries in the region who have graduated from eligibility for aid through certain IFIs (international financial institutions). It said that the region continues to pledge its support for the Round and continues to urge that the development focus of the Round be reflected in the composition of the small-group meetings, given the enhanced role of such meetings in the accelerated negotiations so that the gains made be safeguarded by continued vigilance.

Australia, on behalf of the Cairns Group, said the call for reinvigoration of the work has been heeded. The Group stands ready to move forward. The need to conclude the Doha Round is ever-more apparent, and 2011 is a window of opportunity that is important for all parties. It is important that all parties show their genuine resolve.

It is time for real engagement, said Australia, adding that there is a renewed sense of urgency. It pointed to the need for Members to change from platitudes to substance. There are clear indications of political momentum, but this must be translated into concrete negotiations. Senior officials and ambassadors must heed the call from the Ministers (in Davos). The development objectives must be central to the work.

Speaking on behalf of itself, Australia said that the momentum needs to be transferred into real progress at the negotiating table very quickly. The objectives from Davos is that Members cannot afford to fail this time, as this will have huge implications for the multilateral trading system and the WTO. On what needs to be done, Australia said that there is need for more market access in agriculture, NAMA and services. There is much work that needs to be done in the negotiating groups and the bilateral/plurilateral contexts, all of which need to be underpinned by the multilateral process. There is need to raise the overall level of ambition.

Switzerland, on behalf of the G10, said that G10 Ministers met at Davos where they said that they were committed to accelerating the process. The G10 has already shown a great deal of flexibility in the negotiations, and that it has moved more than others, and that it was time for others to move as well.

Mexico said that the Davos mini-Ministerial highlighted the fact that 2011 was a decisive window of opportunity. It may be the last window that Members are going to have. The signals show that the cost of failure would be large for the multilateral trading system and its members. There needs to be more creative solutions proposed and more give-and-take. There is need for an ambitious and balanced package. Ambition in all areas including agriculture, NAMA and services will make it easier to get an agreement.

Mexico highlighted a horizontal approach in market access in four areas (in order to obtain a deal) -- environmental goods and services, services, agriculture and NAMA. On NAMA, it said that the approach would be that only those developing countries applying formula cuts would be expected to engage in sectoral negotiations. The developing countries themselves could self-select those sectors they want to participate in and they could define for themselves exceptions and options within the tariff reduction models that have been discussed. Developed countries would have to participate in all areas they sponsor, without exceptions for derogations.

In environmental goods and services, this would also be self-selecting in that governments would choose those products in which they wish to participate, and the developed countries would have to put forward more products than the developing countries. On services, the idea would be to bind on the basis of existing commitments, with self-designated exceptions. Developing countries would be entitled to more exceptions than developed countries. In agriculture, for developed countries where the formula cut does not cut into the applied rate, they would have to bind their rates at the applied level, said Mexico, adding that there could be no more exceptions for developed countries with respect to sensitive products.

With this kind of approach, Members can start scheduling immediately, said Mexico.

Japan said that there is need for more progress to come out of the bilateral and plurilateral process. The negotiating groups are central and any progress made elsewhere must be channelled into this. On NAMA, it would like to see more done on the sectoral initiative. On agriculture, supporting the G10, it said that key areas of the text should not be opened up. There is need for stronger disciplines in the area of anti-dumping, and for the elimination of the practice of zeroing and a hard sunset for all anti-dumping actions that have been prolonged for decades.

The European Union said that there is need to accelerate work on all levels with variable geometry. It said that it is ready to funnel any inputs it has into a text-based process. There is need for a package in July, that all negotiating groups have advanced to a point where there could be agreement there. Some areas need catching up that are lagging behind -- agriculture and NAMA modalities, services, the sectoral initiative, trade and environment, the multilateral register for GIs for wines and spirits, the extension of GIs beyond wines and spirits and the relationship between the TRIPS Agreement and the Convention on Biological Diversity.

Supporting the statements of the G20, G33, African Group and the LDCs, China said that the plan in place now is desirable, agreeable and doable. The window of opportunity is small and to execute a plan that will lead to an agreement will not be easy. There is need for firm resolution and an agreement that the level of ambition is one on which all parties could support. All players should move out of their comfort zones.

The United States, represented by Ambassador Michael Punke, said: "Looking at developments since the start of the new year gives cause for both concern and cautious optimism. There is cause for concern because the window of opportunity is truly narrow and we have not, as yet, seen Members make the pivot from talking substance to resolving substantive issues. But at the same time, there is cause for cautious optimism in that we are hearing almost all Members recognize, and in fact call for, a true spirit of give and take."

Gatherings over the last week have indicated that there seems to be a new mood and a better atmosphere for negotiations. Most Ministers want to get beyond sterile debates of the past and they are looking to senior officials and Ambassadors to roll up their sleeves and get the job done, said the US. "As we have said before, the first step towards success is to avoid the mistakes of the past."

"We will not achieve success by the distraction of deadlines; which is a bit like making hotel reservations at a nice resort while not making the reservations to get there. The most important deadline, from the perspective of the United States, is now. We must begin serious negotiations now - or we will fail to profit from the current window of opportunity. At the same time, there are no detours around the hard work that lies in front of us in each market access pillar. There are no blanket prescriptions, or over-arching formulaic solutions that will determine what individual Members will be able to accept in terms of final, horizontal trade-offs."

At the end of the day, said the US, there is simply no substitute for the act of sitting across the table from one another engaging, negotiating, and working through the issues in problem-solving mode. "It is clear that we are at a crossroads. If we are going to seize the current window of opportunity, we need to shift to the type of give and take discussions that our Leaders and Ministers have called for. We need breakthroughs soon on major roadblocks."

"And we do not subscribe to the notion of inherent balance in the 2008 package. By contrast - the cloth woven in 2008 has major holes - including widely acknowledged unfinished work in services and sectorals. Balance can only be achieved by completing our work in all areas. The United States has made it clear, from the highest level, that we are ready, willing, and able to engage in a process of give and take on all fronts - bilateral, plurilateral, and multilateral. Give and take, though, can only take place at the negotiating table - not as a price for admission for sitting at the table," said Ambassador Punke.+