TWN Info Service on WTO and Trade Issues (Dec11/07)
20 December 2011
Third World Network

General Council Chair reports on latest MC8 preparations
Published in SUNS #7269 dated 28 November 2011

Geneva, 25 Nov (Kanaga Raja) -- The Chair of the General Council of the World Trade Organisation (WTO) on Thursday reported on the most recent phase of his consultations, highlighting "a possible minimum level of convergence" on elements that he presented for the political guidance of Ministers at the upcoming eighth Ministerial Conference (MC8).

This came at an informal meeting of the General Council, just before the conference gets underway on 15-17 December. The General Council is expected to meet formally on 30 November-1 December.

The elements presented by the Chair, which he considered as "work in progress", were under two themes: one on the Importance of the Multilateral Trading System (MTS) and WTO, and Trade and Development.

The Chair, Ambassador Yonov Frederick Agah of Nigeria, at an earlier informal meeting in October, had identified three pillars in his "matrix" to explain how he had gone about his process of consultations, these being the importance of the Multilateral Trading System (MTS) and the WTO, trade and development, and the Doha Development Agenda (DDA). The DDA issues are being handled by Director-General Pascal Lamy.

The matrix also contained another pillar named "Ministerial Conference Practices" under which are listed reports for noting, decisions and political guidance. (See SUNS #7245 dated 24 October 2011.)

Trade officials said that the proposals that have reached consensus agreement among members so far and will be forwarded for decisions at the ministerial conference are on the extension of the current deadline of 1 July 2013 for Least Developed Countries (LDCs) to implement the TRIPS Agreement, TRIPS non-violation complaints, and on E-Commerce (moratorium on duties).

A lot of progress has also been made on the issue of streamlining the accession process of LDCs, added trade officials.

Trade officials further said that other proposals, for example, on Net Food Importing Developing Countries (NFIDCs), on greater transparency for Regional Trade Agreements (RTAs), pertaining to export restrictions and food aid, a standstill on tariffs, and on cotton, have not achieved consensus up to this point.

They said that the process will continue until 30 November (in terms of language for the first part of the Chair's Statement - elements on which members have reached consensus).

With respect to the upcoming ministerial conference, trade officials said that the accession of Russia will be taken up on the second day of the conference (16 December), while the accession of Samoa will be taken up on 17 December.

In his remarks at the informal General Council meeting, the Chair recalled that the last time members met in this format (in October) he had announced that he would begin consultations on possible elements for Ministers' political guidance under the first two boxes in his template - the Importance of the Multilateral Trading System and the WTO, and Trade and Development. The third box, on the DDA, is under the responsibility of the Director-General.

The Chair went on to give an account of the elements that have emerged from his consultations so far and to hear members' views.

"In presenting these elements to you, I want to be very clear. Let me stress that these elements need to be considered as 'work in progress'. I am not presenting them as anything that they are not. They represent a possible minimum level of convergence but clearly we cannot claim that they are agreed yet. Whether we can build further on them is up to you, the Members."

On the first theme on the Importance of MTS and WTO, the Chair said: "First, I have heard the need to emphasize the value of the rules-based multilateral trading system, to strengthen it and to make it more responsive to the needs of Members, especially in the current challenging global economic environment, in order to stimulate economic growth, employment and development. Second, I have also heard the need to reaffirm the importance of the WTO's role in keeping markets open and to resist protectionism. In this regard Members have pointed to the DG's (Director-General's) report on recent developments in the trading system."

Ambassador Agah said he had also heard the need to stress the importance of the work of regular WTO bodies.

"Particular points which emerged in this connection were their role in the oversight of implementing existing Agreements; dispute avoidance and encouraging transparency through monitoring and reporting, and as a forum for the consideration of trade-related issues raised by Members. I have also seen support for strengthening and improving the functioning of the regular bodies."

With regard to the Dispute Settlement System, the Chair said that his consultations have shown Members recognize that it is an important asset and are committed to strengthening it, including through concluding the DSU (Dispute Settlement Understanding) review negotiations.

He said that everyone he had consulted so far welcomes the accession of Vanuatu, Samoa and the Russian Federation. "I noted a widespread recognition that accession contributes to strengthening the multilateral trading system. There was also broad support for committing to efforts to facilitate accession, in particular those of LDCs. And I am sure we all welcome the outcome of recent work in the LDC Sub-Committee."

Turning to the second theme on Trade and Development, the Chair said that he had seen that development is a core element of the WTO's work and that there is need for focused work in the relevant WTO bodies, in particular the CTD (Committee on Trade and Development), to further examine the positive link between trade and development.

"I have seen wide recognition of the need to further integrate developing countries, particularly LDCs and small and vulnerable economies, into the multilateral trading system. Also, with regard to LDCs, I saw convergence on the need to acknowledge their needs and to commit to ensuring that their interests are given due priority in the future work of the WTO."

The Chair noted that there was also convergence that S&D (Special and Differential Treatment) provisions are an integral part of the WTO agreements and that the Doha mandate to review them with a view to strengthening them and making them more precise, effective and operational should be fulfilled.

"In my consultations Members have also reiterated the importance of expediting work towards finalising the Monitoring Mechanism for S&D treatment."

On Aid for Trade, the Chair said that there was convergence on the need to take note of progress made and of the Third Global Aid for Trade Review.

"From what I have heard in my consultations, there also appears to be convergence to maintain, beyond 2011, Aid for Trade levels that at least reflect the average of the period 2006-2008. Also in the context of Aid for Trade, I have noted readiness to work with development banks to ensure the availability of trade finance to low income countries. With regard to the WTO Global Trust Fund, my consultations have shown commitment to continue funding it in a predictable and timely manner to enable the Secretariat to continue to provide the required Technical Assistance and Capacity Building."

Referring to these elements that he had shared with members, the Chair said: "Clearly they are rather general in nature and I am sure many of you would like to make them more specific. However, my consultations have shown that convergence becomes more elusive the higher the level of specificity."

Given the general understanding that MC8 is not to going be a negotiating meeting, and the need to provide for adequate preparation for Ministers, "there is a need for us to take stock of where we have got to sufficiently in advance of the Ministerial. As you all know, I have always worked on the basis that our benchmark in this process should be the level of success we can reach. In other words, that we continue our efforts to build incremental convergence up until it is clear we cannot go further. I have heard from many delegations that this means the General Council of 30 November. Their view is that whatever level of convergence we have reached by then on the elements of political guidance in all three areas - systemic, development and DDA - will be what goes to the Ministers for their endorsement. This would be in line with the 'no surprises' principle."

"Of course agreeing to such a limit to our convergence-seeking process does not mean that issues on which there is no convergence are forgotten. Ministers are free to pursue them in their speeches, as can delegations in the future. It just means that we enable our Ministers to have an orderly meeting," the Chair added.

The Chair said that another idea which has been gaining support in his consultations relates to the outcome document. "The idea is to have a Conference Chair's statement which would have two parts - one would be the elements on which we have reached consensus, and the other would be the Chair's summary of the main points he has heard in the Ministerial discussions."

The Chair announced that he intended to hold a further informal meeting on 29 November where he said members can take stock of progress in all three political guidance boxes - systemic, development and DDA.

Trade officials said that delegations that spoke at the meeting stressed amongst others that they wanted to see all the three pillars (importance of MTS and WTO, trade and development, and the DDA) more fully developed before they decide to support any one of the elements in the three pillars.

Members also accepted the notion of the upcoming General Council meeting of 30 November being the cut-off point after which there would be no further negotiations, primarily because of the need to ensure that there are no surprises at the Ministerial Conference where ministers are caught off-guard, trade officials added.

According to trade officials, several developing countries stressed the importance of strengthening the Committee on Trade and Development (CTD), making it the fulcrum of all development-related activities in the WTO. Some members also referred to the 28-Agreement specific proposals (in-principle agreement reached in 2003, but not yet formally adopted).

Trade officials said that some delegations stressed the importance of having strong language on resisting trade protectionism, and on the importance of development being at the heart of the negotiations.

A number of delegations spoke of the importance of recognising the emergence of many regional preferential trade agreements, and that the relationship of these agreements with the WTO needs to be discussed.

The importance of strengthening the Trade Policy Review mechanism was also raised be some delegations at the meeting, said trade officials.

There was also support for a Chairman's statement (as compared to a negotiated ministerial declaration) being the output document from the ministerial conference, added trade officials.

A number of delegations spoke after the remarks by the General Council Chair.

According to trade officials, Egypt said that it would like to see the role of the Committee on Trade and Development be strengthened. It wanted the committee to be the centre of development-related activity. It also referred to the
28-Agreement specific proposals. It would like to see some mention on the need for transparency with respect to RTAs, a focus on the importance of Aid for Trade, its proposal on NFIDCs to be taken up, and some mention of the importance of food security and the threat brought on by food price volatility.

Bangladesh (the LDC coordinator) said that it was very important that there be a transparent process, that members are able to use the ministerial conference to focus on key issues pertaining to the MTS and development. It wanted to know what is happening on all three tracks to assess the development elements in each of them. It is important to realize that linking the issues of importance to LDCs to other issues is self-defeating.

Voicing unhappiness, Cuba said that it thought the process was confusing up to this point, and there wasn't sufficient clarity. While the Chair's statement (at the meeting) had brought greater clarity, it wanted to see more.

According to trade officials, Brazil said that it was not in a position to agree to anything that has been discussed, but it thought that the elements that have been raised by the Chair are a good basis for work. There is need to look at everything together, and to see what the Doha issues might be. The idea is to reach the maximum common denominator. It recognized that what members are talking about with respect to the elements that the Chair has highlighted are very general issues - issues on which it would like to see greater specificity. It agreed on the notion of a deadline under which members draw a line on what they want to put forward to ministers. It also agreed with the notion of having a Chairman's Summary. It is not optimistic about getting a ministerial declaration.

Ecuador referred to paragraph 47 of the Doha Declaration, saying that issues under consideration in paragraph 47 should strictly be limited to implementation-, development- and LDC-related issues. It believed that the Committee on Trade and Development should be strengthened, and the Special and Differential Treatment monitoring mechanism should rest there.

Australia said that it can accept the concept of some form of deadline (General Council of 30 November). It said that it is a pretty low level of ambition but it understood what the situation is. In terms of the outcome, it is willing to work on the basis of a Chairman's Summary. In its view, there are still things that could be advanced further through the course of the next few days. It said that its minister would want to raise other issues that are of importance to Australia whether or not there was a consensus to go forward for decision. It wanted to see some language on the MTS and RTAs, that would be simple and clear and that would say that ministers recognize that the proliferation of RTAs is an issue of importance to the multilateral trading system.

According to trade officials, India said that it seems that members are now charting a course that will enable them to reach harbour safely. The statement that was read by the Chair has gone some way to addressing misgivings about the lack of clarity. It said that it can support the deadline of 30 November. It noted that language that could be agreed could go into a Chairman's statement, and that a ministerial declaration would be very different. What is being talked about here is not a negotiated Chairman's statement, but a summary.

According to trade officials, Mauritius (the ACP coordinator) said that transparency will be key. It had noted the language pertaining to the MTS and development. It said that these are a work in progress and that these elements could be further enhanced. It agreed with the time-frame that has been put forward by the Chair. It also agreed that there should be no surprises (at the ministerial conference). It further agreed with the Chairman's statement, saying that members should avoid going into a situation where things are decided at the last minute. Stressing that balance is the key, it said that it would like to see all three clusters of issues be given adequate attention.

Barbados (the Small Vulnerable Economies coordinator) said that it agreed with what has been said with respect to the rules-based multilateral trading system. There is need to strengthen it. It also agreed with language on keeping markets open and resisting protectionism. It believed in the importance of the accession process, and it wanted to have a look at the third pillar pertaining to the DDA before it agrees to the first two pillars. It welcomed some acknowledgement of the importance of LDCs and making their needs a priority. It also mentioned the importance of Special and Differential Treatment and Aid for Trade. It agreed on the enhanced role of the Committee on Trade and Development.

Hong Kong-China said that it is important to see some language that reflects the desire of ministers to strengthen the multilateral trading system.

Kenya (African Group coordinator) approved of what has been proposed by the General Council Chair, but said that it is concerned that many African Group officials are leaving for Accra to attend a meeting of trade ministers and officials there (African Union Conference of Trade Ministers takes place on 29 November-3 December), and important decisions could be taken while some people are out of town.

Venezuela said that there is need to uphold the "gentlemen's agreement" and that there should be a ministerial conference every two years.

(The "gentlemen's agreement" is that any member pursuing an issue for decision, but not achieving consensus on it six weeks before the ministerial, which means 2 November, will not insist on putting the item on the conference agenda.)

According to trade officials, the United States said it strongly supported the principle of no surprises. It is important to be able to fully prepare ministers. It would be useful to have an output document along the lines of a Chairman's statement, it said, adding that there is no time for a ministerial declaration. While the outcome for MC8 is likely to be modest, the progress that has been shown on the LDC issue shows that there can be useful progress made as well.

The European Union said that it could support the 30 November time-line. The issue of accession is one that is important. It would like to see strong language on the use of the MTS pertaining to keeping markets open and resisting protectionism. There should be a commitment on this from the ministers. There is need to discuss more in the future issues of relevance to the MTS in the modern world. All elements of transparency are important including notification obligations. The LDC issue without linkages is something that it considers to be very important.

Canada said that it would like to see something on RTAs, and the threat of protectionism, which it said are important.

Argentina said that it would like to see a Chairman's statement as an output document. It would also like to see reflected issues of interest to it which are use of technical barriers to trade and sanitary and phytosanitary measures to restrict trade. It also wants a strong message on protectionism, said trade officials. +