TWN Info Service on WTO and Trade Issues (May14/03)
19 May 2014
Third World Network  

South stress on development, agriculture as key issues
Published in SUNS #7803 dated 14 May 2014

Geneva, 13 May (Kanaga Raja) - The centrality of development and the importance of the issue of agriculture were underscored by developing countries at a meeting of the General Council of the World Trade Organisation (WTO) on 12 May.

These views came in their statements under the agenda item of the report by the Chairman of the Trade Negotiations Committee (TNC).

For example, the Dominican Republic, speaking for the informal group of developing countries, stressed on the centrality of development in the Doha process, and that agriculture will be the benchmark for the level of ambition in the other areas of the negotiations.

It also stressed that the principle of the Single Undertaking should be adhered to and that this is the way to ensure a negotiated outcome that is consistent with the development mandate being at the core.

The African Group said that the issue of development must not be left to the tail-end of the process.

Earlier, in his statement under this agenda item, Director-General Roberto Azevedo, in his capacity as TNC Chair, referring to the last TNC meeting on 7 April, recalled that from that meeting, he had suggested that members take the work into a new phase, focused on resolving the problems that they have been outlining, testing what went wrong and putting forward potential solutions.

In a brief update on developments in this new phase since that TNC meeting, the D-G said that the messages he heard continue to be positive, in that Members remain focused on the two priorities of: implementing the Bali package; and meeting the December deadline for preparing a Work Programme to conclude the DDA (Doha Development Agenda).

On the Work Programme, Azevedo welcomed the positive commitment that he has been hearing to further progress, and said he thinks that members remain committed to the parameters that have helped frame discussions so far, particularly: keeping development at the heart of the efforts; focusing on what is doable; and being open-minded.

"In addition, I think there is broad recognition that the core issues of Agriculture, NAMA [non-agricultural market access] and Services need to be addressed promptly and that they need to be tackled in an integrated manner," Azevedo said.

"We all know that the Round is broader than these three areas alone, but I believe we will have to make progress here, and quickly, if there is to be any chance of advancing elsewhere," he added.

In Agriculture, the D-G reported that the Chair of the Special Session has been continuing his consultations with a range of members, including group coordinators, and that these consultations have shown a general willingness to work constructively.

"A start has been made on identifying key concerns, but there is a pressing need to intensify and deepen engagement among delegations and move to consideration of possible approaches to deal with contested areas."

While respecting different views on the status of existing drafts, the Chair has urged delegations to proceed without prejudice, "so that we can at least explore different perspectives on these issues to see where that leads us," said Azevedo.

Azevedo endorsed this call and said: "Otherwise, progress will be extremely difficult."

On NAMA, the D-G said that the Chair has held a number of meetings with members and group coordinators since the last TNC, and intends to pursue these consultations.

The objective of the consultations was to delve more deeply into the question he had raised which was "how and under what circumstances could each Member contribute to a meaningful NAMA result taking into consideration past experience, present realities and possible instruments at hand."

On Services, Azevedo reported that the Chair of the Special Session has continued his consultations among delegations, and that overall, the signals received from members remain the same: willingness to engage; ambition commensurate with other market access pillars; balance within the various services topics; and the importance of the development dimension.

"In the Chair's view, there is a pressing need to accelerate the process of moving from principles to specific elements of the Work Programme. He will continue his efforts in that direction."

"Moving on - a regular feature of my conversations, and those of the Chairs, has been how to build on the work done so far, particularly as it is captured in the 2008 texts," said the D-G, adding while "we could not agree on those texts in the past, and while it is clear that we cannot agree on them now, I believe members do agree that they provide important guidance on how to move forward."

"However, it is still unclear in my view how far these texts can help us in building the bridges we need to close some critical gaps in terms of level of ambition and negotiating architecture in areas where convergence has continuously eluded us," said Azevedo.

On the positive side, the D-G said that first, "we could not expect to be much further than where we are now. These uncertainties are natural and we will see the path ahead more clearly as we deepen our dialogue and get into a more focused and detailed conversation about substance."

Second, he said, "we have learned a lot with the past stalemates. We have to use that experience. I have personally been involved in these negotiations since 2001, so if there is anybody who doesn't want to see all that work go to waste, it's me."

The D-G also stressed that this is, and will remain, a bottom-up process, adding, "I can assure you there are no pre-cooked outcomes or approaches being prepared."

"We should be completely open-minded to any approach that shows promise. I hope that this will be the case in this second phase of our conversations - and I will be there to facilitate your dialogue whenever necessary," the D-G told the members.

"Finally, I think we should accept that this is not the round to end all rounds. It's not an isolated, self-contained or definitive task - rather it is part of a process. It's just a step in the continuous process of trade liberalization. Let's take a step that is commensurate with the size of our legs," said Azevedo.

He added that Bali was successful "because we were realistic. We should be in a position to make some progress in most - or all - areas of the DDA negotiations. Let's put everything on the table and see how far we can go in each area of the negotiations."

"But what's essential is that we keep making progress - even if it's not perfect. Let's focus on what's doable," he said, adding that nothing he'd seen or heard so far suggests that "we can't do it. But we will need to redouble our efforts. We need to engage in a deeper way, and we need to do it now."

Be prepared to have some tough conversations, he further said. "I will be here to push you - and ask some difficult questions, such as: in 2008 you said you were prepared to do this - is this still the case today? You said you needed that - is this still the case? What are you prepared to put on the table to enable this trade-off?"

"Or, if you want a high level of ambition in agriculture, are you ready to give ground in NAMA and services? And vice-versa - if you are willing to have a high level of ambition in NAMA and services, are you ready to give ground in agriculture? You have to answer those questions," the D-G told the members.

"In a month or two, after having these discussions, that's when we will know whether we are back in 2008, or whether this is something which shows promise and can happen," he said, adding that his intention is that by the summer break "we will have had some very serious conversations along these lines."

Pointing out that he will be travelling to important meetings outside Geneva over the next 10 days, including APEC in China and a meeting of multilateral agencies in Berlin, the D-G said that when he gets back, "we will all need to be prepared for a busy June and July."

"I will be in Geneva for most of that period, so you will be seeing me constantly and I will be inviting you - individually or in groups - for some difficult and frank conversations. So get ready - it's time to start putting our Work Programme together," he concluded.

Several delegations spoke following the report by the TNC Chair.

According to trade officials, the Dominican Republic (on behalf of the informal group of developing countries -- but not Chile, Hong Kong-China, Mexico and Singapore who were still waiting for instructions from capital and thus not included) stressed on the centrality of development in the Doha process.

Tangible results for the poorest are important and that tangible results in agriculture will be a way to measure this, the statement by the Dominican Republic said, adding that agriculture represents 60% of the economies of many developing countries, as well as a sizable percentage of the employment in these countries.

Agriculture will be the benchmark for the level of ambition that is to be found in the other areas of the negotiations, said the Dominican Republic.

It said that the issue of trade-distorting domestic support is extremely important for developing countries. There needs to be S&D (special and differential treatment) and the flexibilities for developing countries that are to be found in Rev.4 (December 2008 draft agriculture modalities text) should be preserved, it said.

The Single Undertaking should be adhered to and this is the way to ensure a negotiated outcome that is consistent with the mandate of development being at the core, it said.

While the world has changed since 2001, what has not changed is the fact that the problems particularly with respect to agriculture remain unresolved.

The architecture of the 2001 Doha Round in general needs to be preserved, the Dominican Republic said, adding that developing countries are open and constructive but there needs to be an understanding that in agriculture and in other areas of the negotiations, there must be something that emerges that is of interest to developing countries.

They would like to see a transparent and inclusive process through a bottom-up approach and one that ensures that for the LDCs and developing countries generally, they can participate fully in the growth of world trade.

Guatemala (on behalf of the Small and Vulnerable Economies) said that SVEs' participation in world trade is negligible and as a result, their appeals for S&D are completely justified.

There is need to ensure that development is included in the negotiations in line with the Doha mandate, it said, adding that the economic crisis and natural disasters have made the situation worse for many small and emerging countries.

It said that it needs the policy space and the flexibilities that are included in the Rev.4 agriculture text, and the Rev.3 NAMA text.

On services, it would like to have flexibilities for developing countries. It also highlighted the importance of the issue of fisheries subsidies for SVEs, saying that over-fishing and over-capacity is one of the reasons for the depletion of fish stocks. Disciplines should include S&D for developing countries because fishing is a key source of income for many SVEs, especially those in the Pacific.

Bolivia supported the Dominican Republic and Guatemala, and said that the Bali outcome was unbalanced and that future work should be done in a way that is more oriented towards developing country interests.

The issue of agriculture is absolutely crucial for the Doha Round and under existing rules, the agricultural disciplines are of benefit only to certain members, it said, adding that the Rev.4 text is a reference point, and represents a collective effort, that even though things have changed, no one can be convinced that the markets are not being distorted by industrial country subsidies.

While the world has changed, what has not changed is that we still do not have solutions to problems that have been of concern for decades, Bolivia said.

Lesotho (on behalf of the African Group) said that the development paradigm must be the first parameter to shape the discourse among members. One key question that must be posed to members is what are they prepared to contribute to the development dimension. This is an issue that must not be left to the tail-end of the process, it added.

Transparency in the process will be indispensable, it also said.

Barbados voiced agreement with the statement by Guatemala on behalf of the SVEs. It said that it will be very important to define the level of ambition in agriculture as well as other areas.

The concerns of the SVEs and LDCs must be addressed, it said, adding that there must be adequate flexibilities for these countries.

Jordan (on behalf of the Arab Group) said that there must be a balanced approach across the three issues of agriculture, NAMA and services. The Single Undertaking is still relevant to ensure there is a right balance and that the outcomes will be in line with the Doha Ministerial Declaration.

There must be full participation, transparency and inclusiveness, it said, adding that no new issues should be introduced.

Agriculture has a central role, and that the Rev. 3 NAMA text and Rev. 4 agriculture text should be the basis for future work, it said.

According to trade officials, the United States, in welcoming the new ambassadors, said that it wished that it could be welcoming them to an environment that was more optimistic, but listening to the interventions today, it said it had heard nothing new at all. Listening to these interventions was like watching a dog chasing its tail. A lot of energy is being expended and no one is going anywhere.

It said that in the discussions on trade-distorting domestic support, you hear people acknowledging that markets are being distorted by trade-distorting support. It also hears people acknowledging that the world has changed, and said that one way in which the world has changed from 2004-2005 is who is providing subsidies.

According to trade officials, the US said that there are some developing countries that are able to subsidise their agriculture.

Why, it asked, is it okay if developing countries provide trade-distorting support. Why is it assumed that these subsidies don't distort markets? Why are we not admitting that some subsides are simply substituting for other kinds of subsidies? Why is there no understanding that these are being offset?

The US said that it has asked for more data for months but what it gets is ‘radio silence'. If we're going to have a conversation, let's have it; if not, why do we keep convening? We have to have a real conversation which represents the reality of the world today, it said.

Cuba supported what the Dominican Republic and Guatemala had said earlier. It said that the US has been waiting for four months for answers, but the developing countries have been waiting for 12 years for responses to the Doha Declaration.

It said that in practice, nothing has been achieved. It would like to ask the US to respond to questions that have been outstanding for 12 years.

The European Union said that there is need to find what is doable and the need to factor in recent developments. Outside of the three areas (agriculture, NAMA and services), it would also like to see discussions on industrial subsidies, non-tariff barriers (NTBs) and geographical indications (GIs).

It said that the development issue must be central to the Doha Development Agenda, and there may be need to simplify the approach that members are taking on the core issues. But this should not be construed as in any way an attempt to put at risk the development dimension.

China, noting that members have entered into the second phase in drafting the Post-Bali work program, said that "the general momentum is being created through our common efforts", and that the interactive discussions are getting more substantive in various negotiating bodies.

"To better advance our discussion in the second phase, we have to put things in perspective and strike a right balance. We should look at challenges and difficulties squarely, while fully capitalizing the positive momentum that we have built. We need to show not only what we want, but also what we can offer and contribute. We can declare the red lines of ourselves, while understanding and respecting the red lines of others," it said.

According to China, the Post-Bali Work Program is an integral part of the DDA, and that it believes that through substantive discussion, "we could build up mutual trust among ourselves. The spirit of bottom-up, member- driven, inclusiveness and transparency should be preserved throughout the negotiations."

Only by so doing, said China, "can we lay a sound foundation for drafting the Work Program, which would pave the way for the final conclusion of the DDA in the nearest future."

Referring to the talk about the changes in the world since 2008, China stressed, however, that from the development perspective, many key concerns of the developing members remained unresolved, and that due to the global financial crisis, some developing members' situation is getting even worse.

In this sense, it said that the 2008 text is not only a reflection of history, but also a reflection of today's reality.

"The DDA development objective and negotiation mandate should in no case be changed and the principle of special and differential treatment and less than full reciprocity as well as the consensus of addressing the overall trade distorting subsidies and tariff peaks and escalations etc. that are recorded in the result achieved in 2008 should be strictly preserved."

In cases where all members collectively decide to keep the ambition as reflected by the results of 2008, China said that it would "get along", and that in cases where members collectively decide to lower the ambition as compared with the 2008 benchmark, China is ready to move in the same direction.

"However, any proposal that requires a few members to contribute beyond the benchmark while allowing some major players to do less will only lead the negotiations to nowhere," it underlined.

"After years of negotiation, we all know each other's red lines well. For example, in the case of domestic support in agriculture, China made contributions on the basis of Uruguay Round, resulting in no AMS, no Development Box and a de minimis of 8.5%, lower than other developing members," it said.

China also noted that its domestic support is mainly targeted to the subsistence and small-scale agriculture production mainly in staple food for the food security purposes of 1.37 billion people.

"So it is understandable that the de minimis of 8.5% is our red line. Likewise, for NAMA, there should be no change to the voluntary nature of Sectorals," it said.

According to trade officials, the D-G then said that he had heard nothing new, and the only new thing that he had heard in the meeting was perhaps when Barbados mentioned that there was going to be a meeting of small and vulnerable island states on 20 June.

Meanwhile, under a separate agenda item of the report of the Chair of the Preparatory Committee on Trade Facilitation, trade officials said that many developing countries, in particular the African Group and the LDCs, expressed concern over the issue of technical assistance, in particular the question of the funding of this technical assistance and where it will come from.

They also queried the nature of this funding - whether it will be in the form of grants or low-interest loans.

A number of delegations suggested that this issue should be worked out through a transparency session.

Two other agenda items were also discussed, one concerning trade-restrictive measures of certain members (through a communication from the Russian Federation), and the other, regarding trade-restrictive measures by Russia (communication from the European Union).