TWN Info Service on WTO and Trade Issues (Oct12/07)
11 October 2012
Third World Network

General Council hears views and concerns on Doha talks
Published in SUNS #7452 dated 5 October 2012

Geneva, 4 Oct (Kanaga Raja) - A range of views and concerns over the Doha negotiations were voiced at a meeting of the General Council of the World Trade Organisation (WTO) on Wednesday.

A number of developing countries said that the issue of trade facilitation (being proposed by some developed countries for early agreement) is not a self-balancing agreement, and should not be a stand-alone agreement.

The African Group, for instance, considered that trade facilitation is not necessarily a win-win agreement, and should not be a stand-alone agreement. Other pro-development elements of the Doha Development Agenda (DDA) should be the foundation from which members harvest any "low-hanging fruit", it stressed.

Developing countries, including the Arab Group, also stressed the importance of the development dimension, and some had concerns about going down the plurilateral path in the negotiations.

These views came in the interventions of delegations following a report by the Chair of the Trade Negotiations Committee (TNC) Pascal Lamy, who is also the Director-General.

According to trade officials, among the key issues taken up at the General Council meeting were that on trade facilitation (TF), and associated technical assistance needs including that for infrastructure. Concerns have been voiced by developing countries over inadequate technical assistance to implement their commitments, and the need for some way of monitoring this. Some delegations also have difficulties in assessing their needs in facilitating trade.

The other issues raised include the 28 Agreement-specific proposals (implementation-related issues), the special and differential treatment (S&D) monitoring mechanism, and the two proposals tabled by the G-20 on tariff quota administration (in agriculture) and export competition (see SUNS #7450 dated 3 October 2012).

According to trade officials, concerns were also raised about plurilateralism, including that of an international services agreement being negotiated among some 19 countries, with some countries being concerned about its ramifications for the Doha Round and the multilateral trading system itself. In this respect, the issue of the expansion of the Information Technology Agreement (ITA) was also raised.

In his report as Chair of the TNC, Director-General Lamy said that "we are meeting at a time when the global economy is facing increasingly strong headwinds. Slowing global output growth has led us to downgrade our 2012 forecast for world trade expansion to 2.5% from 3.7% in April and to scale back estimates for 2013 to 4.5% from 5.6%. The trade slowdown in the first half of 2012 was driven by an even stronger deceleration in imports of developed countries and by a corresponding weakness in the exports of developing economies. Past experience has shown that in an increasingly interdependent world, economic shocks in one region quickly spread to others - no one is immune. In other words, and I think we all agree this is becoming increasingly obvious, the only way to effectively face up to this crisis is through global collective action."

He added: "Although welcome measures aimed at containing the slowdown in economic growth have been announced by some members, more still needs to be done. We need a strong and renewed commitment to revitalize the multilateral trading system, to increase demand and to restore economic certainty at a time when it is badly needed. We must not indulge in trade-restrictive practices."

Against this sombre backdrop, Lamy said it is encouraging that since the July Council, work in the Doha Development Agenda has seen signs of momentum. "At our meeting in July, several delegations signalled their collective desire to be more active on the negotiating front from the autumn, in recognition of the absence of progress and of results from the first half of the year."

"From the beginning of September, the responses I have heard in my contacts with Ministers, with officials and the private sector in capitals, with delegations in Geneva, including at last week's Public Forum, and with Chairs of negotiating groups with whom I met in September have confirmed this collective desire to re-engage. I am also aware that during the summer break a number of delegations have been exploring ideas amongst themselves. And at the regional level, agreement amongst APEC countries on a list of environmental goods and services was attained. These are encouraging signs on which we now must build. The challenge is to accelerate our work in the coming weeks and months before the year's end, exploring if there is more room for progress in some areas.

"But let me be clear. As I said in July, I am neither under any illusion that the factors that have shaped the impasse which we face have changed substantively, nor do I harbour any dream about achieving grand designs or comprehensive deals."

At this juncture, said the TNC Chair, "I believe we can and must explore those spaces, areas or topics on which we can make progress. We need to explore any and all options, small as they may be, for incremental progress on the negotiating agenda. Taking small steps now will be crucial for the credibility of the rule-making capacity of the WTO tomorrow. And as we take these small steps, we must also look at the wider picture, at the areas where progress has been more elusive, and start exploring and testing new approaches, including on so-called more intractable issues, to deliver results."

"Over the past months, we have heard several of you highlight issues that you are prepared or not prepared to advance in the absence of certain guarantees. Trade facilitation, including resolving section II on technical assistance and capacity building, has been at the heart of this discussion. A number of ideas have also started to informally emerge on what could constitute other elements to be delivered if there were to be a trade facilitation outcome. Ideas for possible elements emerging so far have ranged from TRQ [tariff rate quota] administration in agriculture to a number of other development-related issues, such as special and differential treatment and the monitoring mechanism, and non-DDA [Doha Development Agenda] issues like the ITA [Information Technology Agreement] expansion. We need to test and explore these ideas in our work ahead," he added.

"In sum, I see the beginning of much-needed work to deliver on a basket of issues on which work is advancing. I believe what we now need is to seriously engage in bridging gaps on these issues. This has to be done in a pragmatic and constructive manner, without setting a priori red lines and without pushing for unattainable levels of ambition. The key word must be to work on ‘deliverables'," Lamy concluded.

A number of delegations spoke following the report by the TNC Chair.

According to trade officials, Brazil, on behalf of itself, said that there is need to harvest the "low-hanging fruit". On the question of trade facilitation (TF), Brazil said that it is not sure whether it is a low-hanging fruit or not - it depends on what is being talked about in terms of the level of ambition. It is not a self-balancing agreement, it added.

Brazil said that the one area where members can try and make progress is in agriculture, which is the centrepiece of the negotiations, adding that it has been working with its G-20 colleagues to put forward some proposals (in this area), which it thought was perfectly doable. There is need to be realistic and pragmatic with respect to going forward. It is looking as well to putting forward proposals in other areas such as sanitary and phytosanitary (SPS) measures and on trade facilitation (pertaining to perishable goods). We should not try to put artificial deadlines in front of us, said Brazil, noting that some Members are already trying to do this.

On behalf of the G-20, Brazil outlined the group's proposals on tariff quota administration and export competition. The G-20 also attaches great importance to the issue of cotton, which is a priority issue for developing countries. The G-20 view is that there is need to find a pragmatic and realistic approach, which is needed now more than ever. It is looking to identify other development issues that would make this be the platform upon which progress can be made and which would also inject a great deal of positive momentum into the Doha Round negotiations.

Korea said that it shared the view that members must follow the mandate from trade ministers at the eighth ministerial conference (MC8 held last December), and there is need to find ways to operationalise paragraph 47 (of the Doha Declaration that refers to the single undertaking) and breaking elements off that could be negotiated separately. There is need for a step-by-step approach, with TF being one area, but there are other areas as well including expansion of the ITA, the international services agreement (ISA), WTO accession, accession to the Government Procurement Agreement (GPA) and the question of environmental goods and services.

With respect to these issues, Korea is pleased to see meaningful progress being made on ITA expansion, and it is encouraging that the number of ITA participants has been growing. On the ISA, it said that this is in line with what ministers urged, i.e. for members to seek a credible approach to addressing problems and to try and make progress. On the GPA, it hoped to have more candidates accede including China. On environmental goods and services, it wants to see the translation of the APEC commitments into WTO language.

The European Union said that it is important to take concrete small steps to rebuild the negotiating foundation of the WTO. It welcomed the progress on the Agreement-specific proposals and the S&D monitoring mechanism. It was of the view that an agreement on TF would be important on its own merits, but also systemically in that it would show that the WTO is capable of reaching agreement on elements of the Doha Development Agenda (DDA).

On agriculture, the EU said that it was ready to discuss and contribute to the new ideas on the table, keeping in mind the overall balance of the agriculture package. It welcomed efforts to re-engage on this front. On the expansion of the ITA, it was important that progress is made. "Bali (venue of MC9) is on the horizon and we have not taken enough steps to ensure that we follow concretely what the ministers recommended at the eighth ministerial conference. We need further urgency," it cautioned.

Lesotho, on behalf of the African Group, said that it was aware of bilateral and plurilateral approaches that are emerging. It is hoped that somewhere along the way that these negotiations will be multilateralised. Trade facilitation is something on which the interests of the Least Developed Countries (LDCs) must be considered. The African Group considers that TF is not necessarily a win-win agreement within the Doha Round, and it depends on the shape of the agreement. It is also not exactly self-balancing, both internally or externally.

The African Group does not think that TF should be a stand-alone agreement. Other pro-development elements of the DDA should be the foundation from which members harvest any "low-hanging fruit". Paragraph 47 must be the basic framework within which members operate, i.e. to carry out the mandate from MC8. It was of the view that there is need for core elements on which members agree and that could include TF, but it also needs to consider implementing other elements of the Doha mandate, and the whole Doha package must not be eroded, added to, or abandoned.

Saudi Arabia, on behalf of the Arab Group, said that it wished to underline the group's dedication to completing the Doha Round, as this was important for the credibility of the WTO and the multilateral trading system. But there is need to have participation in a transparent and inclusive manner. There is also need to move forward in areas where there is convergence. The development dimension is extremely important. It had some concerns about going down the plurilateral path.

Japan said that it is important to recognise that a number of trade restrictive measures have been implemented, especially by G-20 countries and this is a major cause for concern for Japan, not least because of the impact on growth of trade contraction. It is encouraged to see progress on the ITA (expansion) as well as on the development issues coming out of the Special Session of the Committee on Trade and Development (CTDSS). On the (G-20) agriculture proposals, it said that these need to be viewed in the context of the fourth revision of the agriculture (modalities) text.

Pakistan said that it is happy with the work on the S&D monitoring mechanism and the Agreement-specific proposals. The negotiations on TF are another area of possible convergence. On the G-20 proposals, it said that the tariff quota administration proposal is based on an issue in the negotiating text on which there were no square brackets. The proposal is a good starting point for discussions.

In addition to the issues that are under discussion here, Pakistan said that there are other important issues that need to be looked at including food security, which is a major concern for food-deficit countries. There was no consensus on the way forward on this at MC8. With rising prices, the issue of food security is on the radar screens of many developing countries. On global value chains (GVCs), it said that this is an important thing for developing countries. The import content of exports may soon rise to 60% and it is important that GVCs are integrated into developing countries. But there are developing country concerns with respect to this issue. How are developing countries going to climb the value-added ladder, it asked, adding that this is an issue on which more information is needed.

China said that the successful WTO Public Forum held a week ago confirms the cruel reality that multilateralism is in crisis, mostly because of Members' inability to conclude the Doha Round. As the Director-General repeatedly pointed out during the recent occasions, "multilateralism is at a crossroads. Either it advances in the spirit of shared values and enhanced co-operation, or we will face a retreat from multilateralism".

As a firm and consistent supporter of the multilateral trading system, China no doubt strongly prefers the former and "will make our best efforts to advance Doha Round and to deliver outcomes where possible." Noting that "we are in a very difficult time with gloomy economic prospects, rising protectionism and policy fragmentation by bilateral, plurilateral and regional initiatives," China stressed that the importance of multilateralism and the Doha Round is more obvious than ever.

That's why, it said, it holds totally contrary views with the article titled "Goodbye Doha, Hello Bali" published by The Economist in early September. "We still firmly believe that, through our joint efforts, some tangible results could be delivered in short term and the Round could be successfully concluded when the political and economic atmosphere is ripe."

In the months ahead, said China, "we are of the view that the most important task for us is to identify areas where progress can be achieved in accordance with the MC8 political guidance. We tried hard before the summer break, but unfortunately no consensus was yet reached. Nevertheless, Members, at least, realized that trade facilitation, although one of the possible candidates for the early agreement, has to be balanced by some other issues. We could continue to move on only if we collectively acknowledge this reality." China added: "We also hold that good faith and mutual trust are the decisive elements in the above-mentioned water-testing exercise. On one hand, any request proposed by Members should be realistic and the approach of ‘asking for the moon' must be avoided. On the other hand, Members shall exert their maximum willingness and flexibility to any reasonable request with a view to forging consensus of balanced interests."

According to trade officials, Haiti, on behalf of the LDCs, said that the group is committed to contributing in a productive way in all areas of work. It is concerned about the slowdown in trade and the global economy because this affects the LDCs more than it affects the others. The multilateral approach is important to the LDCs because this is an approach where the weak has representation and a voice.

Australia said that a step-by-step approach is needed to build momentum. On agriculture, it welcomed the G-20 proposals, adding that the Cairns Group (of agricultural exporters, with Australia the coordinator) is still in the process of consulting. For Australia, these proposals are seen as extremely encouraging, adding that it has seen very little work going on in agriculture up to this point. These are credible papers that deserve consideration, and should be included in the basket in which the "low-hanging fruit" is put. Other issues for "low-hanging fruit" include TF and ITA expansion, but it is very hard to deliver on these without something on agriculture, said Australia. The implementation-related issues for developing countries must be addressed seriously. It also mentioned the APEC meeting and the deal reached there on environmental goods and services. On the international services agreement, it shared the views expressed by Korea.

Barbados, on behalf of the Small and Vulnerable Economies (SVEs), said that it wants a transparent, inclusive and bottom-up approach. The multilateral approach gives a voice to those that are vulnerable. It sees that some issues that are being looked at are not necessarily the core issues. It noted the progress in TF, and the need for S&D. The vulnerabilities of the developing countries must be taken into account. There is no consensus as yet whether TF should be a stand-alone issue. On ISA, it said that the SVEs would prefer a multilateral approach. It is happy to see the progress that is being made in the CTDSS.

On behalf of itself, as a net-importing country, it is worried whether a deal on TF will facilitate a more efficient operation, and while recognising the importance of these efficiencies, it said that this may contribute to a deterioration in its trade balance. It added that it will put forward a proposal that might give some comfort to net-importing countries in the form of a safeguard. It did not want to choose between a more efficient trading operation and a deteriorating trade balance.

Mexico said that there is need to go step-by-step on TF. It is encouraged by the work done in the CTDSS. It is of the view that TF is something on which it has full willingness to reach a substantial and balanced agreement.

Indonesia supported the G-20 papers on tariff quota administration and export competition, saying that this is the right step to make progress in agriculture. As the host for MC9, it encouraged all members to shore up the multilateral trading system, and that they should be operating in a transparent and inclusive manner, with a bottom-up approach.

Switzerland, with respect to the G-20 papers, said that as the Chair of the G-10, it remained open to discussing these papers with the objective of achieving a balanced outcome, and any work on trade should be based on what has already been achieved.

Zimbabwe said that agriculture is key to developing countries and the importance of cotton cannot be underestimated.

According to trade officials, India noted that not much has happened since the July General Council meeting. To move forward, members must follow the guidance given at MC8. Ministers at MC8 said that the single undertaking is not going to happen in the short-term especially given the economic downturn and rising unemployment around the world, as well as rising food prices. It is very difficult at this particular time to take big steps and to move forward the trade agenda. We need to lay out what we will do going up to MC9 and possibly beyond, India said, adding that it is a turning point for the multilateral trading system. It is not for setting any artificial deadlines because these tend to fail.

Noting that some people have hinted very strongly that TF is a self-balancing "low-hanging fruit" which is good for everyone and will lead to efficiencies and benefits, India said that could possibly happen but there would be a lot of caveats to that. What is key to making a TF deal work is enhanced infrastructure. It referred to World Bank and OECD studies that said that improving the physical infrastructure is absolutely key. TF could be a candidate for early agreement but there are other areas as well, it added. On environmental goods and the APEC deal, it said that it did not want to stand in the way of anyone on this, but we should be looking at this in a way that is multilateral. Whether that leads to agreement or not remains to be seen.

Paraguay said that agriculture is very important, adding that 80% of its exports are agriculture in nature. As a land-locked developing country, it is keen to be involved in Aid for Trade and GVCs. It feels that this can help the country, but more educational capacity-building on this front is needed.

Bangladesh agreed with Haiti, which spoke on behalf of the LDCs. It would like to see issues of importance to LDCs being addressed. On TF, there is no problem with any approach, but it would be difficult for it to accept TF if the duty-free, quota-free (market access for LDC products) issue for LDCs is not put in place. TF is not self-balancing. It would like all LDC issues to be implemented by MC9 in Bali (early December next year).

Argentina said that it agrees with the G-20 statement. The two questions to ask are what are we doing and what should we be doing. The TF negotiating group is the only one that is meeting regularly. While it does not oppose TF, it said that TF is only one of many areas where progress could be made. It is not self-balancing. It is important that the issue of agriculture is taken up, and that the G-20 documents are a very good basis for work. It would like to see progress in other areas of agriculture. It is very difficult to accept progress in other areas without something in agriculture.

According to trade officials, the United States said that its view is optimistic and that it sees the glass as being half full. There is need to continue to operationalise the guidance of ministers, and to take a pragmatic, realistic and step-by-step approach. On the TF negotiations, it said that an agreement here is very important. The US agreed that TF is not a stand-alone issue, and it did not hear any delegation say that it should be a stand-alone issue.

It sees many delegations wanting to put issues together, (but) the difficulty of putting issues together is to avoid the kinds of difficulties we had in 2011, when the mini-package did not generate any momentum. At that time, there were "poison pills" and stalemates, but it is good to see that in the discussion today and generally, there isn't a reflex to put poison pills in. It is encouraged to see the G-20 paper on tariff quota administration. It agreed strongly that agriculture is not an issue that can be left behind.

All of us know each other very well and all of us know if someone is going to put forward a poison pill, we will all recognise it. We all know each other's red-lines very well, the US said. Referring to China's comments on the need to be realistic and not ask for the moon, the US said that the moon was not on its wish list in any category.

Under another agenda item of appointment of officers to WTO bodies, according to trade officials, the Chair of the General Council, Ambassador Elin Johansen of Norway, reported that she is continuing her consultations over the new chair of the NAMA group (to replace Ambassador Luzius Wasescha of Switzerland).

Trade officials said that the new chair of the Working Group on Trade, Debt and Finance will now be Ambassador Faizel Ismail of South Africa.

Meanwhile, under other business, in a statement, the General Council Chair said that following on the guidelines set by the General Council in 2002, the Director-General's term of office comes to an end on 31 August 2013. The process of appointing the new Director-General begins on 1 December 2012.

Between 1 December and 31 December 2012, there will be a period of nominations. The members will have one month to nominate their candidates and all nominations will go to the Chair of the General Council, who will be assisted by the Chair of the Dispute Settlement Body (Ambassador Shahid Bashir of Pakistan) and that of the Trade Policy Review Body (Ambassador Eduardo Munoz Gomez of Colombia).

Over a three month period - from the beginning of January till the end of March - the candidates will campaign.

Shortly, after the nomination period closes, the candidates will be invited to the WTO to speak to the General Council where they will make a presentation, to be followed by a Q&A. This will likely take place at the end of January. Each of these candidates will also give a press conference of a half hour duration.

According to trade officials, the objective is to have chosen the new Director-General by 31 May 2013. The process will conclude with a meeting of the General Council convened not later than three months prior to the expiry of Lamy's term, i.e, 31 May 2013.

Also, under other business, was a proposal by Ukraine to raise its tariffs on some 350 tariff lines (under Article XXVIII of the GATT).

According to trade officials, one of the concerns raised at the meeting was that having joined the WTO recently, Ukraine now proposes raising its tariffs on a number of products.

According to trade officials, the EU said it is seriously concerned over Ukraine's announcement to renegotiate its bound tariffs. The request raises serious systemic implications, it added, urging Ukraine to reconsider its position on this issue.

Trade officials said that Mexico, Brazil, New Zealand, Turkey, Australia, Switzerland, the United States, Nigeria, Cambodia (on behalf of ASEAN), Japan, Malaysia, Colombia, Hong Kong-China, Chile, Canada, Norway, Guatemala and China also raised concerns.

Ukraine said that it takes note of the statements and will forward them to its capital.