TWN Info Service on WTO and Trade Issues (Aug14/02)
01 August  2014
Third World Network

Azevedo meets group coordinators, positions unchanged on TF protocol
Published in the South-North Development Monitor (SUNS) #7855 dated 31 July 2014

Geneva, 30 Jul (Kanaga Raja) - The Director-General of the World Trade Organisation (WTO) Roberto Azevedo on Tuesday met with the coordinators of some fifteen groupings at the WTO, where he briefed them on the state of play since the General Council meeting was suspended last Friday.

Reportedly there were no change in positions since that General Council meeting, with the D-G highlighting the short time left between now and the 31 July deadline for the adoption of the Protocol of Amendment relating to the Trade Facilitation Agreement (TFA), and that Members should be prepared to meet on short notice.

According to trade officials, so far no General Council meeting has been called for Wednesday, and that Members are on call on short notice.

Azevedo had also reportedly met with India later in the day on Tuesday following his meeting with the group coordinators.

In a statement sent by email (issued Tuesday afternoon) to the media following the meeting between Azevedo and the group coordinators, WTO spokesman Keith Rockwell said: "This afternoon Director-General Azevedo met with the co-ordinators from 15 groups, representing a vast cross-section of the WTO Membership. The impasse on the Bali issues has raised deep concerns among WTO members on the future of Doha Round negotiations of which the 10 Bali agreements are a part."

"Director-General Azevedo briefed the coordinators on the state of play and outlined the steps he has taken so far and the actions he plans to take in the coming hours. He stressed that there are less than 48 hours to resolve the crisis and that all WTO Members should be on call to meet on short notice," he added.

According to a Business Standard news report from New Delhi, the D-G failed to break the impasse, with India continuing to stick to its position.

The paper cited officials in New Delhi and said that it is unlikely that India will change its stance now. "A compromise at this point is highly unlikely," the Business Standard quoted an Indian official as saying.

Another news report from the Hindustan Times said that India will push for the Trade Facilitation Agreement to be put on hold until a permanent solution to the issue of public stockholding for food security purposes has been found, when US Secretary of State John Kerry begins his visit to India from Wednesday where he is expected to co-chair the India-US strategic dialogue. The dialogue meeting, with a range of subjects, begins Thursday.

The General Council met last Friday to discuss the Trade Facilitation Agreement and later on the same day suspended its meeting due to a lack of consensus on the Protocol of Amendment with respect to the Agreement.

If the General Council Chair had not heard from any delegation by the midnight of 31 July (the deadline for the adoption of the Protocol), the discussion on the agenda item (report by the Chairman of the Preparatory Committee on Trade Facilitation) will close and the General Council meeting will be automatically adjourned.

The result of this would be that the adoption of the Protocol of Amendment to bring into effect the TFA by inserting it into Annex 1A of the WTO Agreement by the 31 July deadline, pushed by the US, the EU and others, will be missed. However, this is not the first time that the WTO has missed a deadline. (See separate article.)

In their interventions at that General Council meeting on Friday, concerns were voiced by many developing countries about the lack in their view of forward movement on issues of importance to them in the context of the Bali package.

According to one trade diplomat, at the meeting, the African Group, the Least Developed Countries (LDCs) and the African, Caribbean and Pacific (ACP) Group had reiterated the centrality of the single undertaking and paragraph 47 of the Doha Declaration (see below).

India made a strong statement wherein it said that it is of the view that the Trade Facilitation Agreement must be implemented only as part of a single undertaking on the entire Bali package, including the permanent solution on food security.

"In order to fully understand and address the concerns of Members, my delegation is of the view that the adoption of the TF Protocol be postponed till a permanent solution on public stockholding for food security is found. In this context we have suggested a modification to the Protocol in the PrepCom. We stand by that proposal," said Indian Ambassador Anjali Prasad.

"The Bali outcomes were negotiated as a package and must be concluded as such. Timelines are important but we cannot afford to act in haste in the WTO ignoring the concerns expressed by Members," India added.

India then went on to suggest the following course of action: (1) establish immediately an institutional mechanism such as a dedicated Special Session of the Committee on Agriculture to find a permanent solution on public stockholding for food security; (2) There must be clear-cut procedures, timelines and outcomes under this institutional mechanism so as to arrive at a permanent solution by 31st December 2014; (3) A similar approach must be adopted on all other development and LDC issues. In this regard, it welcomed the submission of the collective request on Services by the LDC group; (4) The progress of these accelerated discussions must be reviewed in October 2014 by the General Council.

"If WTO Members demonstrate the same energy and commitment on the other Bali issues as they have done on TF, we will not only be able to find a permanent solution on the issue of public stockholding for food security but will also be able to implement TF in the agreed timeframe as well as deliver favourable outcomes on all development and LDC issues," India had said (see SUNS #7853 dated 28 July 2014).

India had received support from Bolivia, Cuba and Venezuela, who had said that they are now watching a TFA that is about to be implemented without there being progress in the other areas of the Doha Development Agenda (DDA), including the other nine Bali outcomes. This is why they will have difficulty joining a consensus on the Protocol of Amendment while no progress has been made on the areas of interest to developing countries.

In its statement at the General Council meeting on Friday, Bolivia, also on behalf of Cuba and Venezuela, had said that they had expressed on several occasions their disappointment with the outcomes of the Ninth Ministerial Conference, where developed countries harvested a binding agreement on trade facilitation for free, with the commitment that priority will be given in the post-Bali program to those issues of a non-binding nature adopted in Bali.

Nevertheless, it said that it is witnessing once again that the Trade Facilitation Agreement is almost ready for implementation while no real steps forward have been made in other matters related to the Doha Development Agenda, particularly in the remaining Bali issues.

Therefore, said the Bolivian statement, it has serious concerns on joining the consensus for the adoption of the Protocol that will bring into force the Agreement on Trade Facilitation, which it said cannot be considered as an independent agreement - "stand alone" - while there is no progress to report on matters of interest for the majority of the developing countries.

In this sense, it considered that the Trade Facilitation Agreement must be an integral part of the Single Undertaking in the framework of paragraph 47 of the Doha Declaration.

While development should be the core of these negotiations, unfortunately, real concerns related to development have been set aside on multiple occasions over the years in the context of the Doha Development Agenda, said Bolivia, adding that this situation must be rectified as members move towards the conclusion of the Round.

It went on to underline some principles that it said should be highlighted at the post-Bali stage, namely, that issues related to development should be prioritised, and market access as a means that must serve the needs of development.

It also said that Special and Differential Treatment for developing countries in all areas of the negotiation remains crucial, and that key development issues such as Special and Differential Treatment and implementation issues are vital parts of the Single Undertaking and thus constitute a priority.

According to Bolivia, another priority issue is to ensure that in the negotiations on market access in agriculture, non-agricultural goods and services, robust and genuine elements of special and differential treatment are considered and agreed to. Formulas or methodologies for tariff reduction should be commensurate with asymmetries and development levels.

In agriculture, Bolivia reiterated its position that the negotiations should take as a reference, the fourth revision of the modalities (Rev. 4 text). Subsidies in developed countries must be effectively disciplined, and export subsidies should be eliminated without delay, as agreed in the Hong Kong Ministerial Declaration, while disciplines on export credits should take into account the special situation faced by some developing Members.

Bolivia also said that the principles of promoting food security, livelihood of small farmers and rural development should be made effectively operative in the agricultural modalities, and that a permanent solution for public stockholding programs for food security purposes in developing countries should be agreed as soon as possible.

On NAMA, Bolivia said that the negotiations should be guided by the principle of less than full reciprocity and the level of ambition should be guided by agriculture. The Rev. 3 draft modalities text should be the starting point for reviving the negotiations, and that sectoral negotiations should be on an entirely voluntary basis.

On services, Bolivia insisted that each developing country has the right to choose the commitments in the GATS that it wishes to make, that Special and Differential Treatment must be fully taken into account and there is need to ensure that developing countries maintain their policy space and the right to regulate their services.

In its statement at the General Council on Friday, Uganda, on behalf of the Least Developed Countries (LDCs), had said that whilst the group is looking forward to concluding work in the Preparatory Committee on Trade Facilitation, it is also cognizant of the views espoused by those who have continued to call for linkages with the overall Doha Development Agenda. These concerns should be addressed, it said.

Uganda recalled that in Paragraph 1.11, Ministers in Bali directed that issues in the Bali Package where legally binding outcomes could not be achieved would be prioritised.

"The truth of the matter is, there has been a very limited attention paid to these matters and these include LDC issues. Naturally this causes apprehension. The entire DDA is a development round. It should be treated as such," said Uganda.

It added that the notion of ‘winner takes all' is neither helpful nor sustainable. "To that end therefore, it would be advisable that as we make haste to cause the implementation of the Trade Facilitation Agreement (TFA), the same attention should be paid to Para 1.11 as highlighted above."

Kenya, on behalf of the ACP Group, told the General Council meeting that agriculture is a clear priority for its members, and that there are a number of flexibilities the group supported and fought for that must be preserved, including on SVEs (Small and Vulnerable Economies), Preference Erosion, Special Products and the Special Safeguard Mechanism.

"In addition, a satisfactory solution on cotton is long overdue and we trust that its prioritization will result in a concrete solution on this issue."

With respect to NAMA, the ACP said that while it is not a demandeur, it remains concerned about preference erosion, the increasing impact of non-tariff barriers, and approaches "that can undermine our national developmental and regional integration efforts."

The ACP stressed that the single undertaking must be observed in accordance with Paragraph 47 of the Doha Ministerial Declaration, and that as affirmed in the Bali Ministerial Declaration, along with agriculture, development and LDC outcomes must be prioritized.

Central to concluding the Doha Development Round includes observance of the Doha Declaration mandate in paragraph 44 for special and differential treatment together with resolution of the original 88 proposals, which are still on the table, in a manner that reflects clear value to developing countries and LDC integration into the multilateral trading system, said Kenya.

Lesotho, on behalf of the African Group, endorsed the statements delivered by the LDCs and the ACP Groups.

It said that the ‘Development Dimension' must be at the heart of every negotiated outcome. It noted with great concern that since the inception of the DDA the prominence of the development dimension has been gradually fading away with each passing WTO Ministerial Conference.

The recent post-MC8 (eighth ministerial conference) oscillation of LDCs' issues from being at the centre of negotiated outcomes to being at the periphery of Members' priorities bears testimony to this fact.

"A paradigm shift is therefore necessary with a view to ensuring that the development dimension is brought back to the center of negotiations and that it underlies every negotiated outcome for the benefit of developing and LDCs Members, particularly the African Countries," said Lesotho.

The African Group stressed that the mandate for the DDA negotiations must be fully respected and implemented.

For the African Group, the Doha Ministerial Declaration remains the custodian of both the guiding principles on the conduct of DDA negotiations and the shared responsibilities to be shouldered by Members.

Once again, the Group cautioned against attempts to rewrite the Doha Ministerial Declaration under the guise of developing a DDA work program. The work program must be characterised by the principles of less than full reciprocity, special and differential treatment and the single undertaking.

"These principles must remain indelible in as long as the Doha Ministerial Declaration continues to subsist."

The 2008 texts, in particular Rev. 4 of the Agriculture Modalities and Rev. 3 NAMA Modalities, must remain the basis for the negotiations, it underlined, adding that the priority is that the flexibilities captured in the 2008 texts must be fully preserved.

The African Group also stressed that full priority must be given to Bali outcomes where binding outcomes were not achieved. "Once again the African Group takes this opportunity to sound a clarion call to all Members to translate the commitment by Ministers in Bali into constructive engagement on non-binding Bali outcomes."

It further said that ‘forum shifting' remains a concern particularly to the extent that the DDA negotiations will be compromised. "This is still a grey area yet it is clear that mega RTAs and plurilateral negotiations undertaken outside the DDA framework will inevitably have an impact on the DDA negotiations. Developments in these areas need to be monitored quite closely."

In its statement at the General Council, South Africa, supporting the African Group, LDC and ACP statements and associating itself with the G-20 statement, had said that the Doha Round was launched in 2001 with an explicit commitment to place the needs and interests of developing countries at the heart of its work programme.

"In the Doha mandate we made a commitment to ‘address a number of implementation problems of developing countries', we made this commitment in full recognition of the fact that the agreements inherited from the Uruguay Round were unbalanced and biased against developing countries."

In South Africa's view, these imbalances persist and, in Bali, South Africa had cautioned against concluding an outcome that was unfair and lacked balance.

It recalled that in his address to the Bali Conference, Minister Davies had stated: "We have been more deeply concerned that we have not established an adequate balance between the three pillars that have made up the Package, namely Development and LDC issues; Agricultural issues; and Trade Facilitation."

Minister Davies had further observed, "The LDC pillar remains weak, again postponing the legitimate demands of the poorest countries with uncertain promises of delivery in the future. The Agriculture pillar contains nothing more than best endeavour on the critical issues of export subsidies and an ‘opt out' clause for an important member on the issue of tariff rate quotas. We see the critical need to find a meaningful and permanent solution to addressing the food security needs of poor people in developing countries".

South Africa said it has been consistent in expressing deep concern about the inability of the WTO to deliver on the promises that were made to developing countries and LDCs.

"We reiterate our commitment to the Bali decisions, including the decision on TFA, and to all declarations and decisions of previous WTO Ministerial Conferences. South Africa remains fully committed to implementing all decisions that were reached in Bali, notwithstanding the lack of balance which we have continuously pointed to. The challenges confronting us all at this stage is not simply about Trade Facilitation; indeed, the TFA was negotiated and agreed upon in Bali."

The challenges that arise are in the first place a direct result of a lack of balance in the progress across all the decisions taken in Bali, said South Africa, adding: "In the Bali Declaration, we committed to prioritise the issues where no legally binding outcomes were achieved. There is little or no evidence that such prioritisation has been given effect, almost half a year after the Bali Conference."

The question of balance also arises in the context of the processes relating to the implementation of the TFA, particularly in relation to how the burden of implementation will be shared, it said.

All Members will be required to implement the TFA but those countries that will disproportionately bear the costs of implementation do not, at this stage, have the requisite clarity either on the scope of the commitments they will undertake, or on the availability and adequacy of capacity support they will need to meet such obligations.

In the context of a decision that WTO Members will need to take as to the relationship between the TFA and the WTO dispute settlement mechanism, these open questions should be settled satisfactorily and urgently, and in an open and transparent manner.

"This morning we heard references to the credibility of the WTO being at stake if the TFA is not implemented, yet our repeated failure to deliver meaningful outcomes on issues of interest to the poorest members of this organisation, can equally be characterised as harming the credibility of our organisation."

A down payment for development is precisely what the WTO needs to provide it with credibility, to restore its legitimacy, and to build confidence amongst the majority of its members. The poorest developing countries, especially the LDCs, have waited too long for members to deliver on the promises made at the Hong Kong Ministerial Conference in December 2005.

South Africa said, "We have to ask, how is it that the WTO cannot even deliver on the promises made in Hong Kong (at the Ministerial Conference) to provide Duty Free Quota Free Market Access to LDCs and to remove the trade distorting subsidies that destroy jobs in cotton farms in poor African Countries."

South Africa also told the General Council meeting that "Decision making by consensus" has been a fundamental pillar of the WTO since its establishment. Consensus can only be reached by negotiation, and consensus guarantees inclusivity in decision-making and strengthens multilateralism.

South Africa would not support any move to depart from this core underpinning of the WTO.