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TWN Info Service on WTO and Trade Issues (Sept13/05)
27 September 2013
Third World Network
 
Senior officials meet to discuss Bali issues
Published in SUNS #7659 dated 23 September 2013
 
Geneva, 20 Sep (Kanaga Raja) -- Senior officials from capitals, of a restricted group of some 30-odd countries including representatives of regional groupings, meeting at the World Trade Organisation (WTO) on Thursday, discussed the package of potential deliverables on trade facilitation, agriculture and development/Least Developed Country (LDC) issues for the upcoming Bali Ministerial Conference this December.
 
The meeting was held after a first round of intensive negotiations on the package over the past week or more in the "Room E" format (usually of some 30-plus delegations) at the ambassador-level.
 
The purpose of the meeting reportedly was to highlight areas of convergence as well as divergences on each of the three issues in the Room E meetings, as well as where political involvement may be needed to iron out the differences.
 
According to some trade diplomats, the format of the Room E meetings was for two seats at the table for each delegation: the Ambassador and one senior official from capital, or in his/her absence a capital-based expert.
 
(Trade observers note that this WTO practice and culture means the WTO decides who can negotiate for a country, rather than the country deciding who is best qualified to represent its interests: thus turning on its head the Vienna diplomatic conventions.)
 
Speaking to journalists during a break for lunch of the nearly-day-long session, WTO Director-General Roberto Azevedo, who chaired the senior official's meeting comprising some 30-plus delegations including representatives of groupings, said that the environment has changed.
 
"I think there is engagement, negotiating attitudes, solution-finding modes, but challenges are still big and time is short. I need capital engagement. There are some decisions that we can't take here in Geneva. I need their help," he added.
 
In a WTO press release issued the following day on 20 September, Director-General Azevedo said: "Over the past week the dynamic has changed profoundly. Delegations are no longer talking past each other but are seriously engaged in finding compromises on the issues that divide them. Senior officials from capitals and Ambassadors are making good progress that has improved our prospects for a negotiated outcome by Bali".
 
According to the press release, emphasising the continuing need for engagement of capital-based officials in the Bali preparation process, Mr Azevedo said: "Time is not our friend and we should not underestimate the challenges ahead with positions still far apart on a number of the key negotiating issues. If we are to reach agreement for Bali we will need to continue the further intensification of our negotiations in the coming weeks which is why continued engagement by Senior Officials will be important."
 
"I have asked that they also advise Ministers and other stakeholders in their capitals about the change in mood in Geneva and that it will be critical to find the needed flexibilities in positions to ensure Bali is a success," he added.
 
According to one trade diplomat, the senior officials' meeting on Thursday was not a negotiating meeting, but one that was held to inform senior officials from capitals that things are moving in Geneva, and for them to familiarise themselves. There has also been a collective change in mood, the trade diplomat noted.
 
According to trade officials, under the agriculture pillar, the issues that were discussed were Tariff Rate Quota (TRQ) administration, export competition and the proposed ‘peace clause' or ‘due restraint' mechanism relating to the food security concerns of developing countries.
 
On the ‘due restraint' mechanism, trade officials said that what is clear is that this would be an interim measure, and questions related to this are what would be the duration of the measure, the characteristics of it, could there be safeguards, and how to ensure that it does not become hugely trade-distorting, as well as what follows on from this.
 
[The Agreement on Agriculture (AoA) envisages commitments for reduction of domestic support provided by governments to farmers, but lists in Annex 2 those government support programmes that are not subject to any reduction commitments. All the government support programmes listed in the Annex, save one, are those used by OECD countries, and they have no conditions attached to them.
 
[The only programme listed in the annex with conditionalities are those relating to developing country programmes - where governments acquire food grains from poor farmers and use the stocks to provide food to the poor. Among other conditions (that in a sense is a reverse discrimination of Special and Differential treatment for developing countries) is that the value of the subsidy provided is to be calculated on the basis of an undefined external reference price (which amounts to the current high world market price of food-grains), and the current domestic market price at which the developing country acquires stocks from farmers. This is in sharp contrast to the treatment for developed countries, where the term ‘fixed external reference price', namely, the average of the 1986-88 period is used.
 
[The G-33 proposal, which is steadfastly opposed by the US as ‘trade distorting', has called for the provisions on public stockholding for food security purposes, already included in the Doha Round draft modalities text of 6 December 2008, to be taken up for a formal decision by the WTO ninth ministerial conference (MC9) in Bali in December. The proposal asks for deletion of the last sentence of the footnote 5 of paragraph 3 of the AoA Annex 2 on public stockholding for food security purposes, and would mean that "acquisition of stocks of foodstuffs by developing country Members with the objective of supporting low-income or resource-poor producers shall not be required to be accounted for in the AMS".
 
[As Jacques Berthelot, a French NGO and agriculture expert, has pointed out (see SUNS #7565 of 15 April 2013), though the US is angry in its ‘denunciation' of the G-33 proposal, in fact, it is a larger provider of per capita domestic food aid than India. This is a result of the defects in the Uruguay Round Agreement on Agriculture (AoA), agreed to in 1993 between the US and EU, and forced down on the rest of the membership for the conclusion of the Uruguay Round.
 
[These defective rules have enabled the US (just as the EU) to understate its actual subsidies. Moreover, along with the EU (which also is opposing the G-33 proposal as one weakening AoA disciplines), the US has not even been complying with existing rules in terms of notifications of actual and up-to-date figures for AMS (Aggregate Measurement of Support). In addition, according to the OECD's figures for 2011, the total farm support provided by the OECD countries has increased from $350,654 million in 1996 to $406,749 million in 2011.
 
[The proposal of the G-33 countries, as part of a mini-package for Bali, suggests various formulae to overcome the differences on this issue, and remove the discrimination aimed at hitting developing countries attempting to provide food-grains to the poor in their countries, to end hunger.
 
[The US is opposing any compromise, merely indicating in some financial media that it was willing to side-step this issue, to win a Trade Facilitation (TF) agreement in Bali, by agreeing to a time-bound ‘peace clause' - so that at the end of that period, having pocketed a TF agreement and putting Doha in deep freeze, if not burying it, it could challenge developing countries like India providing subsidised food to its poor. - SUNS]
 
Under the Development/LDC pillar, the issues of the Special and Differential Treatment (S&D) monitoring mechanism and rules of origin were discussed, said trade officials, adding that there was some traction vis-a-vis the LDC proposal on rules of origin (see SUNS #7657 dated 19 September 2013).
 
According to trade officials, one of the sticking points on Trade Facilitation was the question of customs cooperation, with issues here amongst others being what information is required and why, what are the confidentiality requirements, and what is the administrative burden.
 
According to trade officials, Director-General Azevedo's conclusions from the senior officials' meeting were that progress had been made and that it was very important to have capital-based officials in Geneva so that they have a very clear picture of where the negotiations are. The mood and dynamic has changed, and that there is movement and members are actually negotiating texts, which they have not done in a very long time.
 
The D-G however noted that there is still a lot of work to do, and that in all of the areas, there has been progress made but there is still a lot to do, trade officials added.
 
Trade officials further noted that in the Room E meetings, the Director-General has been working with the Chairs of the respective negotiating groups, with the Chairs sitting with him and switching depending on the issue.
 
According to one trade diplomat, the Director-General has had very much an active role and has been directly involved (in the process.)
 
According to another trade diplomat, the D-G's conclusions were that members had made a bit of progress but that it was difficult to see a way forward, as there are still gaps to close.
 
Speaking to journalists during the session's lunch-break, Ambassador Jayant Dasgupta of India, when asked about D-G Azevedo's leadership in energising the process, said that the D-G has infused "a new spirit, I think, of positivism."
 
Pointing out that the WTO is a member-driven organisation, he further said: "I think there is this very common feeling amongst the members that we need to have something in Bali. It needs to be balanced, it can't be just one issue. It has to be much larger than that. And there has to be something for everybody, and that the poorer countries' concerns need to be addressed."
 
Also speaking to journalists, Ambassador Faizel Ismail of South Africa said that "At this stage, we are just narrowing the issues, narrowing the gaps," adding that the D-G is making a huge effort to try and get senior officials to take the issues seriously and to bring from capitals possible compromises.
 
But there are still many issues where members "remain far apart on and it will take a lot of hard work in the next few weeks to narrow these gaps. At this stage, it's very uncertain whether we will get a package," Ambassador Faizel stressed.
 
On trade facilitation, the South African envoy said that there are too many issues that are open, adding that even on some issues, new proposals are being created, "so it's a bit early to tell whether we are close to real landing zones."
 
Ambassador Michael Punke of the United States told journalists: "I think the main challenge for this senior officials' meeting is to try and focus the issues because we're all very mindful that there's not very much time left and there are certain issues where there is almost no focus, for example, issues like customs cooperation. We don't even have a text at this point."
 
"And so wherever there are broad issues like that, we're hoping to find focus," he said.
 
Asked what is holding up progress on customs cooperation (under trade facilitation), he said that basically in the customs cooperation area, "we're still having a broad conceptual discussion. In every other part of trade facilitation, we're focused on a text. And so, it gives you a sense that there is a lot of catching up to do on that particular issue."
 
That said, he added, the mood in the room continues to be good. "And I think everyone is now focused on trying to problem-solve and that's a change from three weeks ago."
 
On the proposed ‘peace clause' or ‘due restraint' mechanism, Ambassador Punke said that on the G-33 issue, over the last couple of weeks, "there's been some important work done to focus the discussion, and that's been helpful."
 
"The focus of the discussion is on some type of ‘due restraint' mechanism, but everybody acknowledges that the conditions for that due restraint still have to be figured out. So there's been some focusing, that's good, but the development of the specific conditions is going to be hard" and members have to keep working, he added.
 
On what elements the ‘peace clause' needs to have from the US perspective, he cited issues such as transparency and a safeguard mechanism that guards against market distortions. "So, those are the types of things that have to be part of that discussion."
 
But everybody is aware of what the conditions are and agree that "we have to be having a conversation about those things". So there's not a dispute over what elements need to be discussed. There is just a dispute about how they come out, he said.
 
According to trade officials, a second round of Room E meetings will commence from 24 September onwards following a meeting of the Trade Negotiations Committee (TNC) on 23 September. Some issues may need to be settled in smaller groups, they added.
 
Trade officials further said that members will keep pushing until the end of October (with a short break in early October) and then see where they are, noting that by mid-November, texts need to be sent to the Ministerial Conference, which takes place in Bali from 3-6 December.
 
If by the beginning of November, members are not where they need to be, then it will be a real problem, trade officials added. +

 


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