TWN Info Service on WTO and Trade Issues (Jul11/02)
WTO Members debate December deliverables
Geneva, 23 Jun (Kanaga Raja) -- Efforts at an LDC-plus package of early harvest Doha talks accord for the forthcoming Eighth Ministerial Conference in December faced increasing resistance at an informal Trade Negotiations Committee (TNC) meeting on 22 June.
The WTO Director-General and TNC Chair, Mr. Pascal Lamy, unveiled the five indicative issues of such a package - trade facilitation, export competition in agriculture, Special and Differential (S&D) Treatment Monitoring Mechanism, and "a step forward" on fisheries subsidies and on environmental goods and services.
In addition, Europe has been floating a "standstill" on industrial tariffs (to benefit its own market access in developing countries), and the US is tying the issue of eliminating its cotton subsidies held to be WTO illegal, to its own other demands in this and other areas.
However, several interventions at the TNC, as at Lamy's Green Room consultations the previous day, made clear that such an approach would fail to produce an accord.
The LDC-specific issues are: Duty-Free Quota-Free (DFQF) market access for LDC products, simplified rules of origin, a services waiver for LDCs, and "a step forward" on cotton, as Mr. Lamy formulated it at the last TNC meeting end-May.
While developing countries and their several groupings were fully behind an early harvest package of benefits to the LDCs, several of the items in the "plus package" involving market access outcomes being pushed in the Doha Round by the US and EU so as to balance the benefits they would provide in an LDC package, were seen as unbalanced and unlikely to reach any accord.
Lamy's proposals for the five issues in an LDC+ package for an early harvest came at an informal meeting of the TNC on 22 June.
In their intervention after the Director-General's statement, the LDCs stressed that the LDC issues are self-contained and do not need any balancing with other issues. The ACP Group appealed to all members that the LDC issues must be the central element of the package, complaining that more and more time is being devoted to discussing the so-called LDC-plus issues than the LDC issues.
The African Group also said that delivering at MC8 on a package that has the LDCs at the centre would be a litmus test on whether the Doha Round would be truly a development round.
In their interventions,
According to trade officials, during the interventions that followed the Director-General's remarks, some members also put forward a few other issues to the five proposed by the Director-General for an LDC-plus package. These other issues included horizontal subsides, standstill on tariffs (by the EU), Mode 4 (movement of natural persons) in services, non-tariff barriers etc.
Other members, on the other hand, said that the package is getting bigger by the day, making it more difficult for the membership to agree on the core LDC package.
Trade officials also said that there was a great deal of support for the need for an assessment as to whether or not a mini-package is achievable, with some members calling for a determination to be made by the end of July as to whether or not this can be done.
The informal TNC meeting was originally scheduled to take place on 9 June, but was postponed to 22 June amidst continuing differences among the membership over a possible deliverables package for the LDCs by the eighth Ministerial Conference in December.
At an informal meeting of the TNC on 31 May, Director-General Lamy, who is also the TNC Chair, had proposed that LDC-specific issues be put on the "fast track" for a Doha outcome at the upcoming eighth Ministerial Conference (MC8) in Geneva in December.
On the LDC-specific issues, Lamy had proposed that priority be given to Duty-Free Quota-Free market access for LDC products (DFQF), including Rules of Origin, an LDC services waiver and a "step forward" on cotton.
He had also proposed an "LDC-plus" outcome that would go into a "middle lane", while the issues of market access in agriculture, non-agricultural market access and services, as well as trade remedies and TRIPS issues be moved into the "slow lane", whereby members will need to look beyond MC8.
However, at the May informal TNC, while there
was wide support among the membership for an "early harvest"
for the LDCs, the
The informal TNC meeting on 22 June was preceded by a "Green Room" meeting on the previous day.
According to trade officials, at that Green Room meeting, the Director-General had floated the idea of five additional issues (apart from the LDC-specific issues) for consideration by members -- trade facilitation, some elements of fisheries subsidies, some parts of environmental goods and services, special and differential treatment (SDT) monitoring mechanism, and export competition with respect to agriculture.
Everyone said that there was need to make sure that the most important thing is to see where the membership goes after MC8 regardless of whether there is a deliverables package or not by December, said trade officials.
Some members were pushing for a decision by end of July as to whether a deliverables package is possible or not, trade officials added.
One participant in the Green Room meeting told SUNS that Lamy said that at the moment the debate is still going on a package of deliverables for the LDCs, with no resolution yet on this package.
The trade diplomat said that the list of five issues that was highlighted by Lamy was an indicative list, and not a conclusive one.
The trade diplomat further said that some members were of the view that an LDC-specific package is not deliverable without an LDC-plus package.
On the other hand, some developing countries including the LDCs themselves, the ACP Group and the African Group felt that the focus should be on the LDC package. They argued that when you add more issues, it becomes more complicated.
According to many developing countries, there is no need to balance the LDC package (with an LDC-plus package), since this package is important in itself, added the trade diplomat.
There has however been no movement in positions since the last TNC meeting end-May. The issue is a complex one with everyone making linkages to the LDC package, said the trade diplomat.
According to trade officials, the Director-General had been meeting with the G7, the G90, and has attended a variety of meetings around the world in the last few weeks. Following this, he made an assessment by putting forward an indicative list of five issues on which he thought it was possible for members to reach agreement.
Trade officials said that during the discussions at the informal TNC, some members said that if these are the five issues that are to be included, they had a few other issues that they wanted to put forward.
Other members said that the package is now growing bigger and bigger by the day and is making it more difficult for the membership to obtain the core LDC package that is needed to alleviate poverty and enhance development in the poorest of the members, added trade officials.
Furthermore, for some countries, as important
as it is to get agreement on a mini-package is the fact there is need
for a collective assessment and judgment on the best way forward after
MC8. The question is what happens to all the other issues for a
The other area on which there appeared to be a great deal of support, said trade officials, is that there is need for an assessment as to whether or not a mini-package is achievable.
Some members, at the informal TNC meeting, have suggested that there should be a determination by the end of July on whether or not this can be done.
And if it cannot be done, then members should focus on what can be done in terms of a development outcome in December, and what the membership plans to do after MC8 in terms of the work programme, said trade officials.
Trade officials said that as to the five additional issues being proposed, clearly there are members who are uncomfortable with some of those issues. Also, there are now other issues being introduced as well, such as horizontal subsidies, standstill on tariffs, Mode 4 (movement of natural persons) in services, non-tariff barriers etc.
In his remarks at the informal TNC meeting, Lamy said that over the past couple of weeks, he undertook further consultations with a number of members individually and in groups to seek further clarity on what is possible and what is not possible by December. "The aim of my consultations was to try to facilitate convergence on refining the parameters of our work towards December."
"From all my contacts, it is clear that the level of political commitment to a successful conclusion of the Doha Round, including to our collective aspirations for this year and beyond, remains strong. Furthermore, Members' commitment to preserving the credibility of the multilateral trading system remains unwavering. They also continue to place development at the heart of the negotiations," said the TNC Chair.
"But, it is also obvious that we need urgently to have clarity about what we can and cannot do by the Ministerial Conference in December so that we get down to work without further delay. Time is certainly not on our side and we need urgently, honestly and realistically to define the boundaries for our work over the next 13 working weeks or so, if we are to avoid further drifting and the credibility damage this entails," he added.
He said that his consultations over the past couple of weeks have shown that – on the whole - Members are ready to work intensively between now and the end of the year with the idea of deliverables in time for MC8.
"It is clear that by December you will not
be able to reach consensus on all areas under the
It is also clear that a discussion on deliverables
for December cannot be a negotiation of a "single undertaking"
within the "single undertaking" which is the
"What we are aiming at is no more and no less than setting in place a negotiating process to achieve a set of deliverables in accordance with paragraph 47 of the Doha Declaration."
"In order to facilitate an outcome which
our least developed Members have been waiting for since
"In my judgment, and this is merely an indicative list, this plus could include issues such as Trade Facilitation, export competition, S&D (Special and Differential Treatment) Monitoring Mechanism, a step forward on fisheries subsidies and a step forward on environmental goods and services. Again, this is not an exhaustive set of issues and it does not preclude other issues from being worked upon and eventually delivered by the end of the year."
"This is very much something which is in Members' hands. It is certainly my expectation that we will work as hard as we can to advance as many issues as possible by the end of the year - as a signal of credibility of the negotiations still to come on the remainder of the topics," said Lamy.
The TNC Chair thought that it would be fair to describe the attitude of the delegations with whom he has consulted as constructive, but cautious.
"Approached in isolation, each of the issues I have mentioned has its own problems, but there is also a sense that when linkages are taken into account – and there are linkages being drawn by some Members in these issues - perhaps there is some room for manoeuvre. In other words, I believe that delegations consider it worthwhile trying to move ahead and further explore these issues and test whether an acceptable balance can be found."
Lamy said that it is also very clear from his consultations that there is need to consider the post-MC8 work on the DDA (Doha Development Agenda), and the need to establish a shared view of the process post-MC8 for advancing negotiations on issues that remain outstanding, including the cluster of market access issues in NAMA (non-agricultural market access), agriculture and services.
In terms of immediate process, the TNC Chair suggested that the negotiating groups focus on some of these specific issues that he had tried to identify.
"Chairs and myself will consult on the best way to do that, depending on the issues. TNCs will review the overall situation and ensure transparency. I also intend to complement this with smaller groupings in variable geometry, at Ambassador level, and also with Green Rooms to encourage and facilitate movement. As usual, I strongly recommend that Ambassadors remain fully engaged throughout and in every aspect of this process."
"We will also need to keep our progress under review and be prepared to evaluate it realistically. I am well aware of the dangers of drifting towards the ministerial with a collection of unresolved issues. However, on this, the evaluation will depend very much on you all and the convergence you can reach. The time for discussion is gone - you now need to negotiate. In short, loads of work and challenges ahead and no guarantee of success. But, in my view it is worth trying - and it is our duty to do so," Lamy concluded.
According to trade officials,
There is need to formalize the understanding that has been made among members so that we can have these deliverables by December. The LDC issues are self-contained and do not need any balancing with other issues, stressed Bangladesh, noting that they are not a substitute for the single-undertaking, but by the same token, these issues can be settled on their own. They must not be linked with others. There must also be a very clear and coherent work programme beyond MC8.
Unfortunately, more and more time is being devoted to discussing the so-called LDC-plus issues than the LDC issues. The LDC issues must be the ones that drive the process and they should have centre-stage in the process to come.
The DFQF negotiations are very important plus
the cotton issue. The negotiations in these two issues need to continue
being carried out. The LDC issues are not wrapped up. DFQF and cotton
are not resolved and the parameters of them will require time and effort,
so that negotiation must begin soon. The longer we wait to determine
the parameters of the so-called LDC-plus issues, the less time available
to work on this, said
The package on the table now is not necessarily small and it seems to be expanding day by day. We need an understanding that a small package is indeed small. We cannot go on adding elements. It is not helping the process for MC8. We are still strongly supporting the single-undertaking and it is in the single-undertaking where the balance lies, not in the December package, said the ACP Group.
So don't try and bring forward issues on which we have been grappling for the last ten years, Mauritius cautioned, adding that there is need to set a clear objective for ourselves for the Ministerial meeting and that objective needs to deliver for the poorest members. To pursue issues beyond the five-plus issues is creating trouble for ourselves and creating the conditions for failure in December. There is need for a clear time-frame where a serious assessment can be made on how to prepare for MC8. We cannot allow the process to drift up to MC8. We must have a time-frame by which we decide the contours of the package.
In the single-undertaking, we have agreed on a two-track approach – deliverables before and a work programme after - and this is something which is very important to the ACP countries.
Domestic regulation in services, non-tariff barriers, and the notion of getting agreement by members to make permanent the transparency mechanism for regional trade agreements is something that holds merit as well.
It however said that some of the linkages that
have been put forward have become a source of concern to
It suggested a possible standstill commitment (on tariffs) as an important signal by the membership of its on-going commitment to the Round and to getting it back on the rails in the near future.
"However, after interactions with other delegations, it became clear to us that some want to work with a much larger package; a package that is still growing. We have often expressed our view that the more elements we add to the small LDC package, the more unmanageable the whole effort will become."
Noting that the TNC Chair's list includes, and
others also demand results in non-agricultural market access,
"We believe that further insistence on significant,
ambitious, unilateral and non-reciprocal contributions by developing
countries can only be interpreted as disguised unwillingness to achieve
results by the next ministerial. One may skillfully try to explain how
reasonable these demands are, but we, who are perfectly familiar with
the particularities of the negotiations, know quite well where these
attempts will take us: and that is 'nowhere'," said
According to trade officials,
In addition to the five issues mentioned by the
Director-General, the African Group sees the issues of net food importing
developing countries as being important as well as specific SDT issues
which are important for consideration as
According to trade officials, the European Union said that there is a consensus emerging that the way forward should be a productive one. The idea of settling for a smaller package is clearly a second-best option, but it is ready to follow it and to work for a smaller package that would be the first installment of an overall Doha Round agreement.
The focus of this should be on elements that help the poorest countries, namely, DFQF, rules of origin, a step forward on cotton, and a services waiver. The WTO needs to deliver for them. There is no need for any payment or balance on this. This issue can stand on its own. Industrial and developing countries should contribute to this package in line with the Hong Kong Ministerial Declaration.
As far as the LDC-plus is concerned, the issues need to be internally balanced and pro-development, said the EU, adding that trade facilitation seems to be an issue that meets this criteria. The EU is ready to accelerate work in this area, and it is open to discussion in other areas too. It took note of some of the proposals that have been put forward.
On other elements beyond the so-called five-plus issues, the EU said that focus must be on those issues that will reinforce the systemic elements of the work. It mentioned RTA transparency mechanism, elements of the Dispute Settlement Understanding, non-tariff barriers, and technical work on domestic regulation in services can continue. On export competition, the EU was of the view that its agreement in 2005 to phase-out EU export refunds was a major concession that it has on the table, and this concession was made as part of an ambitious, balanced package that is linked to reductions in domestic support, and enhanced market access, as well as issues related to TRIPS.
The EU said that it needs to see some other issues taken up as well, including the level of industrial subsidies that have been extended by some major players, which are trade-distorting in nature. These include below market financing and distorted input costs. On fisheries subsidies, the EU said that this will be a major challenge to try and deliver on this. The setback for the Doha Round has been deeply worrying and it urged members to think carefully on the way forward and ensure there will be a wide balance in terms of any outcome. A December package is just the first step in gaining an agreement. All DDA issues must be taken up soon including those that are mandated and implementation issues. There needs to be a clear path forward after MC8. It also thinks that the notion of a standstill commitment is something that is worthy of consideration.
"Time is short between now and December. We must know where to focus our energies and we need to know that we are all pulling towards the same broad objectives. In that regard, there is a threshold determination that we - collectively - need to make soon. That threshold question is this: can we reach agreement on the core elements of a December package? Our viewpoint, strongly held, is that we need to make this determination quickly. If there is agreement on core elements, we will need the fall to negotiate the details. If there is not agreement, we will need the fall to plan for an MC8 that will not have a December package as a deliverable."
"As painful and difficult as the weeks ahead
may be, let us not shirk from our collective responsibility to engage
directly and honestly. As many have noted, with justification, the credibility
of the institution is at stake," said the
"If in our endeavour to work out a suitable balanced LDC+ package, we fail once again to deliver anything to the LDCs by December, it would indeed be disastrous and lower the credibility of the WTO immeasurably," India cautioned. "Our basic dilemma today in working out the elements of the December package, stems from the expression 'balanced' and what it connotes."
"We are struggling to find a Highest Common Factor among the various elements suggested so far and some delegations want the door to be kept open to bring in newer elements into the discussions. Our delegation apprehends that this could snowball into an avalanche, making it difficult to manage, specially in light of the limited time available."
"The need for the hour is, therefore, is not to lose sight of the basic objective of the core of the December package, which is to provide an LDC package. Anything else that we may strive for by way of a +, would be by way of a bonus but the LDC package should not be held hostage to the divergent ambitions and aspirations of the non-LDC members to add more and more issues to the already bulging basket," said India.
As far as India is concerned, it said that it does not require or demand an LDC+ package and would be very happy with an LDC Only package. However, if there is a consensus on striving for an LDC+ package, India would engage constructively, positively and with an open mind to further explore the elements of the package.
As to the five issues mentioned by the TNC Chair, India said that it feels that the negotiations on Trade Facilitation, Fisheries Subsidies and Environmental Goods and Services are far from reaching a sufficient level of maturity and hence the chances of their being harvested before December are not bright at all.
Also, if issues like Environmental Goods and Services, which has now transformed into a pure market access issue despite the idealistic ambitions of the negotiators at Doha ten years ago, is included in any package, there would be demands for including other market access issues for reaching a balance, said India. "This would obviously not be a simple problem to solve."
On the demand for a standstill in tariffs, which has been raised by some delegations, India said, there is a complete lack of clarity about the proposal, because there is no proposal on paper. "We do not know whether it is proposed for all countries, including LDCs or developing countries excluding LDCs or only developed and so-called emerging countries. We can look at it only after a detailed proposal is tabled."
"Thus it follows that the package has to be a small one, primarily in terms of the + issues, and that it has to be balanced. If it reflects primarily the ambitions of a small section of the membership, it would not be balanced and it would have little hope of attaining the support of the entire membership before the December deadline. Moreover, in a Development Round, it has to have a pronounced development content, at the minimum," said India.
"The challenge, therefore, before us is to first focus on how to deliver on the LDC package," said India. "After resolving the LDC issues, the next endeavour could be to find out which are the minimum number of elements that can satisfy the criteria of a balanced and development oriented LDC+ package." India agreed with the Australian delegation, which has suggested end July for a mid-course review.
India said that the Doha Round is not about the DDA alone and "if we just focus on harvesting a part of the DDA in December and not devote enough time and attention to the non-DDA issues, we would indeed be doing a great disservice to preserving the credibility of the WTO and the multilateral trading system. We can ill afford to miss the woods for the trees - once again."
China (represented by Ambassador Yi Xiaozhun) said that it supports the statements by the LDCs, the G20, the G90 and the African Group.
"China is certainly open to discussions of any issue in the single-undertaking at any time, as is always the case for the past ten years. However, the rule of thumb is that the Plus should facilitate rather than frustrate the LDC package. The more issues we put in, the less likely it will be for the package to succeed. So the basic question is whether it is appropriate to seek balance or linkage for the LDC package - it's obvious that any linkage, balancing or compensation prerequisite on the LDCs could end up killing the LDC package and therefore should be avoided."
China said that it is a developing country with 150 million people living under 1 dollar per day. Despite itself facing the same formidable development challenges, to value the Hong Kong Mandate, China already started to provide duty-free quota-free market access for products originating from the LDCs.
"As a result, China has become the world largest export destination of the LDCs since 2008, absorbing roughly 23% of their total export. Between 2000 and 2009, China's import from the LDCs increased 24% annually. Starting from July 2010, China began to provide DFQF treatment to the LDCs for 4762 tariff lines, which accounted for 60% in terms of product coverage and 98.2% in terms of the LDCs' export value to China."
"In order to deliver the December package,
we are willing to make our best efforts to further increase DFQF coverage
for LDC products from the current level to 95%. We appeal to all major
players, especially the developed ones, to do their part in honouring
the Hong Kong Mandate to deliver the LDC package," said
According to trade officials,
It said that it has more than 21,000 vessels that
were damaged or lost as a result of the earthquake and tsunami. It is
now engaged in a long and painful process of rebuilding. It is facing
under-capacity and it is difficult for
It is however happy to discuss other elements of the fisheries question without prejudice to any outcome. Having a review before the end of July to avoid difficulty at the Ministerial meeting makes sense, it added.