TWN Info Service on WTO and Trade Issues (Dec12/07)
19 December 2012
Third World Network

Formal TNC hears views on the work towards MC9
Published in SUNS #7499 dated 12 December 2012

Geneva, 11 Dec (Kanaga Raja) - A formal meeting of the WTO Trade Negotiations Committee (TNC) on 7 December heard a number of members urging the need to make progress in the Doha negotiations and for some results to be delivered by, or at, the ninth ministerial conference (MC9) due to take place in Bali, Indonesia next December.

These views from delegations came in their statements following a report by the Chair of the TNC, Pascal Lamy, who is also the Director-General, as well as reports by the Chairs of the various negotiating bodies under the TNC.

According to trade officials, what is now emerging is that delegations are beginning to express hope that the time between now and MC9 in Bali (to be held in the first week of December 2013) will be used to produce an outcome of results for or at Bali. There is a clear understanding that another stocktaking (or housekeeping) ministerial conference will not cut it.

Among the possible "doable" issues, trade officials added, are trade facilitation, agriculture and development-related issues.

In his statement at the TNC, Director-General Lamy noted that the last informal TNC took place over one year ago in October 2011, and more than two years have passed since the last formal session in March 2010.

"Today's meeting is also timely because it is the half-way mark of the period between MC8 and MC9. The guidance provided by Ministers at last year's conference remains the road-map which will guide us to Bali and we have a collective responsibility to ensure that we all work towards clearly identifying where Members' interests lie, and recognizing which areas can be realistically considered short-term deliverables and which areas require further work to ensure a successful and balanced outcome."

Updating members on his recent contacts and meetings, Lamy said that the message that he took away from all of these high-level meetings was "a continuing strong support for the multilateral trading system and an overwhelming recognition of the importance of strengthening multilateral trade rules to limit protectionism and restore sustained levels of global trade growth."

"If I had to summarise in one sentence what I heard, I would say that Members remain committed to re-energising the WTO talks in a pragmatic and practical manner and to ensuring that 2013 is a productive year for the Organization," he added.

Lamy then gave the floor to the Chairs of the various negotiating bodies under the TNC to present their progress reports.

Following the reports by the Chairs of the negotiating groups, Lamy said that the work since January has been guided by the course of action set out at MC8, where Ministers acknowledged that the DDA (Doha Development Agenda) could not be delivered as expected in the near future and that "we need to more fully explore different negotiating approaches and advance negotiations where progress could be achieved."

He added: "MC8 left us with a long to-do list. Our work in 2012 has been devoted to preparing the ground for the follow-up to the Ministerial guidance. Early on, you have engaged - both formally and informally - in trying to advance areas of interest to your delegations. Despite a slow start, negotiating activities picked up in the second half of the year. At the General Council meeting on 3 October, we noted encouraging signs of re-engagement with the emergence of a basket of issues on which consensus could be achieved in the short-term, and agreed that it was time to seriously engage in bridging the gaps on these."

"We have just heard about the work that is on-going in each group. It obviously shows a diverse picture. Some areas show little activity, but there is progress on trade facilitation, on some agriculture items, on Special and Differential Treatment, including LDC matters, as well as on Dispute Settlement... I am firmly convinced that such engagement, along with some creativity, is the key to further progress early next year."

In moving forward, Lamy said, "we have to make sure that, during the first quarter of 2013, this momentum and renewed sense of engagement is translated into concrete proposals. Our credibility - your credibility - in the next phase will depend on our ability - your ability - to make tangible progress on specific issues as they mature."

The TNC Chair went on to highlight his own views about "the immediate next steps" that members can take "to develop a collective vision for the 2013 deliverables."

"The activities of 2012 have contributed to build some momentum. You have put on your negotiating caps again. And we cannot afford to lose this momentum. We must build on it. This requires us to step up our engagement and act in a timely and responsible manner to ensure that all proposals are given the right level of attention. For this to take place, together we need to make sure that proposals are put on the table in good time, to allow for discussions and for the regular process to take place.

"In other words, we must avoid introducing last-minute proposals that have not been discussed in the appropriate bodies first. We need to go back to our well known principle of ‘no surprises'. Any kind of Christmas-tree syndrome as we get closer to MC9 would have destabilizing effects on the entire process, probably jeopardize the Ministerial Conference itself and, hence, dent the credibility of the WTO. I want to make clear that the Negotiating Bodies are the starting point for any proposal to be considered by the membership."

To ensure that the process runs as smoothly as possible and to avoid any surprises, there is need to stick to a few simple guidelines, Lamy said.

"First, we need to work towards what is reasonably doable. Members should be realistic in their demands, take into account other Members' red lines and stay clear of what are known to be unattainable objectives. Second, when advancing a proposal, it is the proponents' responsibility to build consensus around it. Make sure that you are working towards convincing the other Members, not yourselves. Third, avoid being confrontational. Any proposal should not be framed as a kind of take-it-or-leave-it position. The negotiating process entails a trade-off between concessions and demands. Be flexible and work together with other Members and around their sensitivities to achieve a common understanding."

Lamy said: "Without setting new and unworkable deadlines, MC9 provides us with an opportunity to show that WTO Members can advance the negotiating front of the WTO agenda. Of course, we should be under no illusion about the breadth of what we can achieve in the short timeframe between now and MC9. Nor should we create unrealistic expectations. The main stumbling blocks of the DDA are still standing and many of the toughest nuts will likely not be cracked by the time Ministers meet in Bali."

"But although we must manage expectations and keep ambitions in check for Bali, we cannot fall short of delivering on a credible basket of issues that would signal your confidence that the rest of the Doha agenda can be addressed in due course," he added.

The TNC Chair concluded: "There are encouraging signs showing that there is overall interest and willingness to engage on preparing negotiating deliverables for 2013. The needed impetus to push the talks forward and translate them into action can come from any front. We should leave no stone unturned. But we should also not wait for the last minute to engage. Recent engagement must be switched to a higher gear. One more housekeeping Ministerial Conference in Bali would not suffice to keep the Doha house alive."

A number of delegations spoke following the reports by the TNC Chair and the various negotiating group Chairs.

According to trade officials, Mauritius (on behalf of the African, Caribbean and Pacific Group) said that progress has been uneven. While in some areas members are back in business, there is an unevenness, which is not surprising given that the guidelines from MC8 is to make progress where we can. "We will have to make progress and get some results by Bali in order to be credible. We can't be in a situation where we come back and simply repeat the same guidelines from MC8," it added.

There are several key issues that should be taken into account as we proceed. We need to focus on what is doable, and we need to have good faith in the process in the next few months, said Mauritius, adding that we should not attach unachievable conditionalities to any proposals. We should try to work to create balance.

There needs to be some things that are meaningful for developing countries, particularly for the Least Developed Countries (LDCs), and one of the key issues would be the group of LDC-specific issues that were agreed in principle at MC8 but which have yet to be delivered (LDC waiver for services, commitment to provide greater market access to LDC services providers and extension of the LDC exemption from the TRIPS Agreement). The precise guidelines on these issues remain outstanding, it said.

On the issues of global value chains and non-tariff barriers (NTBs), it said that this is something that is of great importance to developing countries and we should as part of the work programme that comes out of MC9, see if we can produce some kind of work on NTBs and development. A coherent approach is needed to address these issues.

Indonesia (on behalf of the G-33), while welcoming the increased engagement by members, was of the view that agriculture needs to be at the heart of the Doha Development Round. There are elements of agriculture that are doable by MC9, and they need to be addressed. Food security and livelihood security are primary issues for developing countries, and we need to deliver on the Doha-2001 and Hong Kong-2005 mandates in agriculture.

Speaking for itself, Indonesia said that Bali will be an important landmark and MC9 should not simply be a housekeeping exercise. It hoped that a breakthrough can emerge from this important gathering. It encouraged the key players to step up and show leadership.

Brazil (on behalf of the G-20) spoke on the G-20 proposals on tariff rate quota (TRQ) administration, saying that they are a real effort to try and spark the discussions. It was pleased that all delegates had shown a willingness to try and explore these issues further.

On the G-20 proposal on TRQ administration, it took some comfort from the fact that the complaints from both the exporters and importers came in a somewhat equal measure, which shows that it was a balanced proposal. This proposal would not require changes in any market access commitments but would ensure that the administration of TRQs does not become a hindrance to international trade. On the question of export competition, it hoped that the terms of the Hong Kong Ministerial Declaration (of 2005) could be delivered in terms of eliminating the trade-distorting measures.

Switzerland (on behalf of the G-10) said that it was happy to contribute to a successful conclusion, and that there is need for balance between ambition and member-specific domestic situations. It is ready to engage.

Speaking for itself, Switzerland said that the WTO does level the playing field. There is need to go step-by-step and Bali is not the end. We must make Bali a place where we can deliver an outcome. There is need to focus on what is really doable. There must be a balance found and we cannot have an agreement that focuses primarily on agriculture, it added.

Australia (on behalf of the Cairns Group of agricultural exporters) said that it was encouraged by the G-20 proposals. It was still considering the G-33 proposal on food stock-holding. It is important to bring proposals forward as soon as possible, and agriculture is the right place to start.

On behalf of itself, Australia said that it was encouraged by what it has seen up to now. There has been a significant change in the discussion since the beginning part of the year, as well as a change in the atmosphere, which is most welcome. The proposals are being pitched so far at the right level. They are realistic and doable.

Haiti (on behalf of the LDCs) said that what it would like to see is special and differential treatment (S&D) for LDCs, mentioning in this respect the extension of exemption of the LDCs from the TRIPS Agreement, duty-free quota-free market access (DFQF) for LDC products, cotton, food security and the need to ensure that trade-related technical assistance and capacity-building (TACB) is being delivered in an effective manner.

Cambodia (on behalf of ASEAN) said that it is concerned that the progress on the Doha Development Agenda (DDA) remains slow, and that 2012 was less productive than it had hoped for. But it is nonetheless confident that members will achieve an early harvest in Bali, which would have some meaningful elements. It mentioned the 28 agreement-specific proposals, the G-20 proposals on TRQ administration, the need for export subsidies to be eliminated, food security and DFQF. There is need to work on other elements as well to prepare a work programme after Bali for future ministerial conferences.

Chinese Taipei (on behalf of the recently-acceded members) mentioned the importance of progress in trade facilitation and review of the dispute settlement understanding, on key development issues and TRQ administration. The recently-acceded members have made extremely ambitious commitments to the WTO and the special needs of these countries must continue to be taken into account in the Doha negotiations.

China said that despite the disappointingly slow progress during the first half of this year, it feels encouraged recently to witness some tangible movements and most-needed political will that seems to surface for the deliverables by MC9 in 2013. Members have been working very hard, at both ambassadorial and technical level, to identify the scope of a small package of deliverables. As several Members have mentioned, it seems that trade facilitation, S&D and some agricultural issues are potential candidates.

China stressed that it firmly stands behind this initiative to achieve credible deliverables at MC9 and the full conclusion of the DDA in the long run. "Up to now, China has not tabled our own requests. On the contrary, we have demonstrated maximum flexibilities to engage with other Members and to facilitate the negotiating process, including on the sensitive issue of agriculture."

On the long-term perspective, China reiterated its firm belief that a small package of deliverables is only the first stop of the entire journey. In any case, it shall neither be the only harvest nor the end of the Doha Round. It sincerely hoped that all Members share this spirit and exert equal efforts towards the same direction.

"Therefore, it is of paramount importance for our ministers to make a collective commitment at MC9 that we will continue our negotiations on the remaining issues and achieve the full conclusion of the single undertaking when the political and economic atmosphere is ripe."

Argentina supported the G-20 statement, and said the trade facilitation group is the only one making progress because they are the only ones meeting regularly. But an agreement on trade facilitation would not in of itself be balanced. "We must make sure that we bring development issues into the mix. With respect to the discussion of section II of trade facilitation (pertaining to S&D), this lags behind section I."

Welcoming the G-20 proposal on agriculture, Argentina said there can be no early harvest in trade facilitation without agreement in areas of interest to developing countries.

The European Union said that the bottom-up and step-by-step approach has been the appropriate way to move forward and as a result progress has been seen on the (S&D) monitoring mechanism, the 28 agreement-specific proposals, LDC issues, dispute settlement understanding, trade facilitation, and certain elements in agriculture. Perhaps with an enhanced Information Technology Agreement (ITA), this is where deliverables could come from.

There is need to address political elements in trade facilitation, specifically pertaining to S&D, it said, adding that this is key. The new proposals put forward in agriculture need to be discussed. It welcomed these proposals, but no one should be fooled into thinking that on these or other proposals, there are not limits to what can be done. On LDC issues, it said that this is very high on the EU agenda, and we must go forward with proposals for the LDCs that are acceptable to all. There is need to keep expectations and demands at reasonable levels and the need to see that a successful outcome in Bali is just a first step.

Pakistan said that there has been a renewed vigour in the negotiations and this is welcome. The new proposals in agriculture and the tangible progress in the monitoring mechanism and the 28 agreement-specific proposals in the development group is important. The square brackets in the trade facilitation text have been reduced. There are further suggestions that we could deliver something on issues of concern to LDCs. There is need to develop convergence on a work programme following MC9. It supported the agriculture proposals coming from the G-20 and G-33.

Jamaica supported the G-33 and ACP statements.

Japan said that economic recovery is on a fragile track and trade has a major role to play in facilitating growth and employment. We have a real challenge to the WTO's role in the multilateral system. There is need to ensure that trade facilitation advances sufficiently enough in the lead-up to MC9 so that an agreement is possible. Trade facilitation is a win-win proposition and it is gradually being recognised by many developing countries, and that with the evolution of global value chains and with many links of these chains being located in developing countries, it is by no means the case that only developed countries will benefit, but that developing countries will benefit too from a trade facilitation agreement.

Colombia agreed with the Cairns Group. It is very satisfied with the G-20 proposals on agriculture. It has seen progress on trade facilitation, saying that there is need to step up the work in section II on S&D. All countries in the WTO would benefit from a trade facilitation deal. The WTO will in the coming months need a horizontal process as a means of assessing where members are across all the issues under discussion.

According to trade officials, India said that there has been significant progress in three areas - trade facilitation, agriculture and development. It associated itself with the G-20 and G-33 statements. There are only 150 working days before Bali and the membership must be reassured that MC9 would not be the end of the road for Doha but a stop along that road. While specific proposals on trade facilitation, agriculture and development issues are perhaps a set of deliverables, there are other issues that need to be looked at too, particularly those for the LDCs.

The United States noted that there are fewer than 12 months at members' disposal. Bali is not a deadline but a milestone. It will mark a moment where we and the outside world take stock of our work and of the health of the multilateral trading system. If we go to Bali and we have done nothing since MC8, we should not delude ourselves into thinking about what the world will then think about the Doha negotiations, it said.

The US does not believe that an early harvest is the end of the road for the Doha Round. There is a growing perception that the WTO may not be an effective forum for trade negotiations. It is vitally important that this perception does not become the reality.

On trade facilitation, the US said it is an area where progress should be pursued vigorously. It was of the view that a trade facilitation agreement is like having a healthy circulatory system. It helps to clear blockages that are the economic equivalent of arteriosclerosis. It has heard carefully to what the developing countries have said about S&D and on trade facilitation.

The G-20 TRQ administration proposal is not perfect but it has obviously been calibrated and seeks to solve an important problem. But it does offer significant benefits without affecting in any significant way the balance of benefits and obligations to members. Its scale fits the current short-term negotiating context and it seems to pass the test of doeability, said the US.

On the other hand, there are real questions about the scale and doeability of the recent food stockpiling proposal (by the G-33). These questions are creating new concerns about what we can collectively achieve by Bali, said the US, adding that it is still hopeful that this proposal might be re-scaled into something appropriate for today's negotiating context.

It said the US cannot go down the path of opening a brand-new WTO-authorised open-ended carve-out of agricultural subsidy programmes. It also wanted to make it clear that taking an action in the name of food security for some should not be something that undermines the food security of others.

Nepal endorsed the LDC statement (made by Haiti).

Korea said that there is need for a horizontal process, and agreed with the G-10 and G-33 statements vis-a-vis agriculture. There is need to follow the guidelines from MC8, and the need not to write-off in the future the single undertaking.

Bolivia said that it did not see any benefits in trade facilitation for developing countries. This is not a stand-alone issue, it added.

Bangladesh said that there is no real progress in the Doha negotiations, and it does not appreciate the selective focus. It wondered why DFQF for the LDCs has not been given more attention. It does not understand why it is that a single developed country has been unable to implement the decision taken in Hong Kong on the 2013 deadline for opening the market to LDC exports.

Barbados said that an outcome is important in Bali, but it has to be balanced and have a development focus. A trade facilitation agreement cannot lead to a deterioration in trade balances.

Singapore called for a non-confrontational code of conduct in the negotiations. It encouraged all stakeholders to make pragmatic proposals.

Norway was encouraged by the fact that members have had proposals on the table. It is a sign that members want to make tangible progress. It wants to see that any proposal that comes forward be one that has a probable potential outcome. It wants members to be realistic but we also need to deliver in Bali, it added.

Kenya supported the ACP and G-33 statements. It called for S&D in trade facilitation.