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TWN Info Service on WTO and Trade Issues (Mar13/03)
14 March 2013
Third World Network

 
Members voice their views on possible deliverables at MC9
Published in SUNS #7534 dated 27 February 2013
 
Geneva, 26 Feb (Kanaga Raja) -- The WTO Trade Negotiations Committee (TNC), at an informal meeting on 22 February, heard a range of views from members concerning the package of possible deliverables at the upcoming ninth ministerial conference (MC9) in Bali in early December, as well as on the process post-Bali.
 
The views of members came following a statement at the meeting by Director-General Pascal Lamy, in his capacity as Chair of the TNC, in which he had urged members to accelerate work on all fronts, shift to a higher gear and work with greater determination if they want to arrive at MC9 with a relevant package of deliverables.
 
At the meeting, Lamy had identified three areas which he said are now clearly emerging as deliverables for MC9: trade facilitation, agriculture and development/LDC issues (see SUNS #7532 dated 25 February 2013).
 
Speaking after Lamy, a number of delegations gave their own views as to what issues should constitute the package of possible deliverables at Bali.
 
For example, the African Group highlighted issues pertaining to the development dimension, cotton, agriculture, food security, LDC issues, and special and differential treatment (S&D) as being of importance to the Group.
 
The LDC Group said that a deal on Duty-Free Quota-Free (DFQF) market access for LDC products is extremely important, adding that this was something on which a great deal of technical work does not need to be done, and that what is needed now is simply the implementation of the Hong Kong ministerial declaration (of 2005).
 
The ACP Group, pointing to the indication that trade facilitation, agriculture, development and LDC issues have emerged as areas of possible early harvest, stressed that an outcome in which only one of these is achieved would not be sufficient. There needs to be a balance, it added.
 
The Cotton-4 recounted that the group had a draft decision on cotton ready for the last ministerial conference held in Geneva in December 2011, but since this became a non-negotiating ministerial, the draft decision had to be set aside. It hoped that it could get a decision taken on this in Bali.
 
South Africa, meanwhile, referring to the recent announcement by the US and European Union to launch negotiations on a trade and investment agreement, said: "When the historians of the GATT/WTO reflect one day, they will agree that the second biggest threat against the principle of MFN (or non-discrimination) since the Treaty of Rome in 1957 established the European Customs Union was the EU-US bilateral agreement. There is no doubt that if it succeeds, an FTA between the first and second biggest economies in the world will have a huge systemic impact against the multilateral trading system."
 
According to trade officials, Switzerland recounted the ministerial meeting that was held in Davos in January, mentioning that there was a constructive mood, that the members agreed on a step-by-step approach, and that there was a strong signal on the need for deliverables.
 
Representing the G-10, Switzerland said that the G-10 countries were prepared to engage on the difficult issues in agriculture. It made a strong plea that they be involved in any consultations on these issues.
 
Morocco (for the African Group) said that the impasse in the negotiations is of great concern to the group. It is very important that the Doha negotiations be concluded with respect to the existing mandate and that the aquis that has been generated be retained. It does see more energy and political will now, but the question is whether this can be translated into progress at the negotiating table.
 
It added that there is a need to do hard technical work in the weeks to come. The agriculture discussions will certainly have to become an important element of any early harvest, but there is a lack of clarity with respect to the scope and value of what might actually be there.
 
On the other questions that are important for early harvest, it said that anything pertaining to the development dimension, cotton, agriculture, food security, LDC issues, and special and differential treatment (S&D) are among the issues that are of importance to the African Group. It supported efforts by net food importing developing countries (NFIDCs) to try and ensure greater food security.
 
On trade facilitation, Morocco said that there is need for a balanced agreement, adding that it is open to creative approaches to trade-related technical assistance.
 
If there is to be an early harvest, it must be something that is achieved by consensus and must be on all areas that are up for discussion as part of this package. There must also be a commitment by all members that the negotiations would continue as soon as possible after Bali, and that we would need a post-Bali roadmap, it said.
 
Nepal (on behalf of the Least Developed Countries) said that although LDCs represent 12% of the world population, they generate less than 1% of world trade. Market access is a big concern for the LDCs and they continue to face difficulties here with respect to a range of issues such as tariff peaks, non-tariff barriers (NTBs), and onerous rules of origin requirements.
 
It said that the percentage of LDC goods that currently receive duty-free quota-free (DFQF) market access, in some cases does not exceed 50%, so getting a deal on DFQF market access is extremely important. This is something that would be a very critical part of helping the LDCs achieve the Millennium Development Goals (MDGs), a programme and objective that many of these countries are not likely to achieve at the moment.
 
It added that DFQF is not a new issue, in that it has been on the table since 1996. It is not something on which there is a great deal of technical work that needs to be done. It's been agreed already in Hong Kong (in 2005). Most industrial countries and some developing countries have already implemented this programme, and what is needed now is simply the implementation of the Hong Kong Ministerial Declaration.
 
It also stressed the importance of cotton to the LDCs, adding that simplified rules of origin is another area of great importance. There would be no country losing when the LDCs gain, and it's time for members to think outside the box. The LDCs have set as an objective for themselves, a doubling of their export share by 2020 and this cannot be achieved without international support.
 
Chinese Taipei (on behalf of the Recently Acceded Members - RAMs) said that while there was some progress to report, in many areas, it was still unclear as to what was happening. MC9 cannot be a housekeeping (ministerial).
 
There must be a negotiated outcome at the Bali ministerial, it said, adding that it would like to see a process through which there is full participation, inclusiveness and transparency. This goes as well for the need to discuss what happens in the post-Bali process. It recalled that RAMs have already made extensive contributions to the WTO and their special situation should be taken into account in any of the negotiating fora.
 
Jamaica (on behalf of the African, Caribbean and Pacific Group) said that clearly there has been an indication that trade facilitation, agriculture, and development and LDC issues have emerged as areas of possible early harvest, but an outcome in which only one of these is achieved would not be sufficient. There needs to be a balance. The LDC issues are of great importance, and this is an area where the proposals for the LDCs have the full support of the ACP Group.
 
On agriculture, it said that there is support for the proposals put forward by the G-20 on TRQ (tariff rate quota) administration and by the G-33 on food security. On trade facilitation, the ACP welcomed the efforts that have been taken as well as the progress that has been made, adding that there is an obligation to ensure that there is benefit that extends to all members, most notably, to the developing countries.
 
There is need for adequate trade-related technical assistance and capacity-building if we are going to have an effective agreement here, it said, adding that there is need for timely and effective implementation of any technical assistance programmes.
 
Brunei (on behalf of ASEAN) supported Indonesia for the work that it has been doing to host MC9, adding that there is need for a strong effort to ensure that this ministerial ends successfully. There is a package that is emerging, it said, adding that on agriculture, it is encouraged to see that there is a higher level of engagement. In this context, it welcomed the G-20 and G-33 proposals.
 
Brazil (on behalf of the G-20) said that agriculture is the centrepiece of the Doha Development Agenda (DDA) and should be the centrepiece for any early harvest. It is pleased with the way the TRQ administration proposal that it had put forward has been taken up and discussed. It hoped that the information that it is looking for on export competition is available soon, adding that the G-20 is working on a proposal on export competition.
 
The European Union said that Bali cannot be a housekeeping ministerial, noting that there has been a lot of discussion on a package of deliverables. With respect to trade facilitation, it said that Section I and Section II (Section I pertains to commitments while Section II is on S&D, and technical assistance and capacity-building) should move in parallel. It said that it is prepared to engage with respect to the G-33 proposal on food security, and hoped to have more information about this proposal soon. It, however, cautioned that it is important that members are guarded about putting forward any proposal that may tilt the balance of the existing package.
 
On the LDC issues, the EU said that it is glad to see that progress is being made. It warned against putting forward too many proposals on the table as members approach MC9. The reason we have been able to make progress up to now is that we have been able to curtail our appetites, it said.
 
MC9 will not be the end of the road but a first step. It may be small but meaningful and it will give us a chance to move forward, but if we fail there, it will be extremely difficult to find a way forward, said the EU, adding that for the post-Bali process, it is ready to engage with others on the other Doha issues after MC9, subject to other countries participating with the same level of enthusiasm.
 
Saudi Arabia (on behalf of the Asian Group) said that there is need to have a negotiated outcome in Bali. This was very important for revitalising the Doha Round, and that this was seen as not the end of the road but a way forward. It was ready to support reasonable proposals in agriculture, trade facilitation and development areas and it is open to discussion on various modalities. There is need to have a FIT (full participation, inclusiveness and transparency) approach to this.
 
Korea said that in Davos, it observed a sense of commitment and urgency. On trade facilitation, it said that it agrees with what Lamy said with respect to the approach. On development issues, it said that there is need to have sufficient information on all the proposals and to keep the number of proposals on the table at a manageable level. It said that it needs to see more on the G-33 proposal on food security. It supported what Lamy said on the post-Bali process.
 
Ghana supported the African Group and the ACP Group statements.
 
Japan said that it was very important that members see progress around Easter and that trade facilitation is an indispensable part of any Bali outcome. Among the non-Doha issues, it stressed the importance of the Information Technology Agreement (expansion) negotiations.
 
Burkina Faso (on behalf of the Cotton-4 comprising Burkina Faso, Benin, Chad and Mali) referred to the Hong Kong ministerial declaration which called for an ambitious, expeditious, and specific outcome with respect to cotton, saying that this has not been implemented. There is need to avoid the "Christmas tree" approach whereby governments decide to attach as many proposals as they could to a potential Bali outcome, thereby burdening the process and slowing things down.
 
It said that the Cotton-4 had a draft decision on cotton ready for MC8 (held in Geneva in December 2011), but because this became a non-negotiating ministerial, that had to be set aside. It hoped that it could get a decision taken in Bali.
 
Pakistan said that there has been an acceleration in terms of what has been happening with the work. It's very important that an outcome emerges in Bali, and it is now something that seems possible. A small-step approach is important, as we need to get to an outcome that would enhance the credibility of the WTO with the general public and the media.
 
According to trade officials, the United States said that there would be a stocktaking around Easter, and it saw 11 April (the date of the next informal TNC meeting) as an opportunity for a "stock-take" or a "gut check".
 
It agreed with those that have said that the pace has picked up, and that the trade facilitation discussions are more substantive than three or four months ago. There is greater clarity - that's the good news, it said, adding that the bad news is that this clarity has revealed gaps rather than bridges between positions.
 
It suggested that one of the issues on trade facilitation would be that there would be greater specificity with respect to concerns. For example, in Section II when developing countries say they have concerns about being able to implement certain obligations, what it needs is concrete understanding of what those difficulties are so that any assistance can be targeted in a very accurate way. Where are the commitments seen as being onerous, where would there be problems down the line?
 
One of elements that is missing is that governments are not yet asking themselves the "what-if" questions, it said, adding that there must be a willingness to decide that the Section II approach would enable all parties to operate with some degree of flexibility. It looked at the trade facilitation negotiations as an opportunity to utilise and mobilise multilateral support resources which would be used with a great deal of flexibility by recipient governments in terms of timelines and in terms of how these funds were appropriated.
 
Many governments are already doing things like these with respect to trade facilitation in a regional or bilateral context, (so) why would the WTO be the only place where governments do not do this, it asked.
 
On agriculture, the US said that while people have said it is important that there be greater clarity and technical detail on trade facilitation, this is also true in agriculture. There is a contrast between the two proposals on the table. There has been a lot of work on the G-20 proposal and it is calibrated for success over the limited timeframe. It's a proposal where technical work has been largely completed. There are binary decisions to be taken but these are not technical, but are more political.
 
By contrast, the US said, the G-33 proposal is not a case where there has been a lot of technical work done. The proposal is not yet calibrated to suit the limited timeframe. It is disappointed at the pace at which even basic questions are being answered. There is nothing like the information that is needed at this stage to see the scope of the problem.
 
We must also be thoughtful about what can and cannot be done, what we should be putting on the table, it said, adding that we all have a very clear sense of what is doable and if we do not exercise an extreme amount of calibration, we will find ourselves heading for an outcome which is not good, the US added.
 
South Africa agreed that the WTO is systemically too important to become marginalised in the trading system.
 
"This organisation is not just relevant to the world we live in, but is vitally important to strengthen cooperation, find creative solutions to the increasing number of global issues that the world expects us to address, and to prove that an equitable, balanced and development orientated multilateral trading system is indeed possible."
 
"It is for this reason that we have rolled up our sleeves and have drilled down into the intricacies of customs cooperation, advance rulings, release and clearance of goods, expedited shipments, appeals procedure, etc."
 
It noted that Members have put forward a number of issues that they feel should be part of the package of deliverables for Bali: these include a few issues in agriculture (TRQ administration, food security, export competition); Special & Differential Treatment and issues of interest to LDCs (Cotton, Duty Free Quota Free Market Access, etc).
 
"However, as we move forward we are painfully aware that even this small package of issues remains challenging," it said.
 
In agriculture, there are some that are still concerned that the flexibilities developing countries seek for their food security may impact on their market access needs; there are others that are afraid to discuss the commitment they made in Hong Kong to eliminate export subsidies for fear of disturbing their protectionist agriculture lobbies; and for other major developed countries the request for transparency in TRQ administration may open the pandora's box of market access in agriculture.
 
"LDCs as we know have been waiting for relief from the injustices of the trading system that continues to distort their trade and discriminate and marginalise them in global markets. However, their issues have been painted as red lines by some members," said South Africa.
 
Whilst a great deal of work is going on in trade facilitation, the underlying challenges hidden in several hundred brackets have begun to surface. The issues are detailed and complex. The process is still too cumbersome; there are facilitators-led processes, proponent-led processes, Ambassador-led processes, friends-of-the-system-led processes; and Chair-led processes in the negotiating group underway, it said.
 
"Adding to the complexity of the challenge before us, the global economic context we live in today is not the most conducive to an expeditious result. The effects of the Great Recession are still lingering on. Global growth is anaemic, unemployment is still high and persistent and emerging market economies have slowed down, threatening the progress made in reducing poverty."
 
"As we proceed to Bali, there are three major setbacks since Doha that bedevil this organisation. The first is that the continuing impasse in the Doha round has prompted many observers and indeed major opinion makers such as the Economist and the Financial Times to declare that the Doha Round is all but dead!
 
"However, the Doha Development Agenda incorporates the promise we made to address the underlying imbalances in the trading system. It contains the promise we made to address the needs and interests of developing countries for the first time since 1947. The continued impasse on it remains of concern to the vast majority of members."
 
Second, said South Africa, the disturbing trend began with the "new pathways" chosen by some members towards plurilateral and bilateral approaches instead of the multilateral approaches that the Doha mandate and the Single Undertaking clearly spells out is a cause for concern and serious reflection.
 
Thirdly, South Africa said, "we cannot simply allow the biggest news item on trade to pass without comment."
 
"When the historians of the GATT/WTO reflect one day they will agree that the second biggest threat against the principle of MFN (or non-discrimination) since the Treaty of Rome in 1957 established the European Customs Union was the EU-US bilateral agreement. There is no doubt that if it succeeds, an FTA between the first and second biggest economies in the world will have a huge systemic impact against the multilateral trading system."
 
"Notwithstanding these challenges we should remain resilient, resourceful and determined not to move backwards from Doha but to build our new world on the principles of equity, inclusiveness, and balanced rules and development," South Africa added.
 
China said that there is a better chance for success in MC9, if progress can be made by the spring. Members have worked hard to identify deliverables. In the short-term, it was important to work creatively and pragmatically to achieve progress on a small package, it added, mentioning trade facilitation, S&D and agriculture. In the longer-term, what is important is that we view MC9 as a stepping stone to the full conclusion of the Doha Round.
 
According to trade officials, India said that MC9 was going to be extremely important. It agreed with the areas that have been identified. The LDC and development issues have to come first, and have to take centre-stage. Other issues that are important include agriculture issues, and the two proposals that are on the table. Trade facilitation could also be a possible candidate. There has been a lot of work done on trade facilitation and agriculture, and it hoped to see similar engagement on the LDC issues where not much technical work is needed to be done.
 
India was encouraged by the spirit of engagement it has seen on trade facilitation, and agriculture, but sounded a word of caution that a lot of technical work remained to be done on trade facilitation.
 
Argentina supported the G-20 with particular emphasis on the export competition element. On trade facilitation, it said we cannot wait until the very end before we do the technical work that is necessary.
 
Bangladesh agreed with the LDC group statement, particularly with respect to DFQF for LDCs.
 
Thailand said that time is very short and there is need to set aside any tactical manoeuvres and we need to put faith in the chairs as they try to find common ground. On the post-Bali process, it said that it is very important that we are committed to dealing with the broader issues as soon as possible after the conclusion of the Bali ministerial.
 
Barbados said that with respect to trade facilitation, it was very important that vulnerabilities of certain countries be reflected in the text, and that there be some way of assessing imports versus exports in terms of the impact they may have. That is not yet in the text and it is important that this be seen.
 
Singapore said that it had a sense of deja vu and it's not a good one. Just saying we are doing things differently doesn't make things better. Some proposals that have been alluded to today had not even been put on the table yet, it added.
 
Uruguay emphasised the importance of getting something on export competition, which had been agreed at the Hong Kong ministerial. It said that the G-33 proposal requires more technical work and there is not much time left.
 
Oman (on behalf of the Arab Group) said that any early harvest must be accompanied by assurances that the rest of the work will be completed as soon as possible after MC9.
 
Colombia said it supported the G-20 and G-33 proposals. It would like to see progress made on trade facilitation. There still needs to be more clarity given on Section I technical issues, and that there is need as well to have assurances vis-a-vis the support that would come from enhanced technical assistance.
 
Australia (on behalf of the Cairns Group) said that it is pleased to see that they are getting a better sense of the way in which agriculture issues are being considered. It welcomed the G-20's TRQ administration proposal. It also welcomed the start of consideration of the G-33 proposal.
 
It mentioned the importance of eliminating export subsidies and all forms of export competition by developed countries as soon as possible. It was essential that more progress is made on this issue and expressed hope that this issue will be resolved sometime soon. Bali will be a stepping stone to further reform in agriculture, it added.
 
Bolivia said that there needs to a balance in the negotiations. More attention is being paid to trade facilitation and less to the areas of interest to developing countries. It supported the work being done by the G-20 and G-33, and it saw that industrial countries are putting obstacles in the way of progress in this area. An outcome in Bali without an agricultural outcome would be unacceptable.
 
It is also very important that something be achieved on development, and that the existing so-called development issues are very difficult to assess in terms of what is on the table in a concrete way. This is not the case with DFQF and cotton, and it is very important that we get an agreement on this in Bali, it added.
 
According to trade officials, Lamy concluded by saying that there will be a TNC meeting on 11 April, adding that there is a lot of work to do and we need to roll up our sleeves.
 
Trade officials said that it has been suggested that the 11 April TNC meeting could serve as an occasion for an assessment/stocktaking of where members are. +

 


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