TWN Info Service on WTO and Trade Issues (Oct14/05)
23 October 2014
Third World Network  

TFA/food security still at impasse, no progress in other areas
Published in SUNS #7897 dated 20 October 2014
 
Geneva, 17 Oct (Kanaga Raja) -- A solution for the current impasse over the issue of public stockholding for food security purposes in developing countries and the adoption of the Protocol of Amendment on the Trade Facilitation Agreement (TFA) has not been found, WTO Director-General Roberto Azevedo reported to a formal meeting of the Trade Negotiations Committee (TNC) on Thursday.
 
Also reporting at the formal TNC meeting were the Chairs of the various Doha Round negotiating bodies including on agriculture, non-agricultural market access (NAMA) and services, where they essentially indicated that there has been no forward movement either on work in these other areas of the Doha agenda.
 
Appraising members on the current situation following a period of intense consultations since mid-September, the D-G, in his capacity as Chair of the TNC, said that "we have not found a solution for the impasse."
 
Azevedo also said that in the eight weeks that members have until the December General Council meeting, "it seems very unlikely" that a detailed, precise, modalities-like post-Bali work programme is possible.
 
He also maintained that Members have been talking about the other, non-multilateral options that are open to them. "We may see these Members disengaging. We may see that these Members pursue other avenues. We may see that these Members explore other tracks - inside the WTO or outside."
 
Following the reports by the TNC Chair and the other negotiating group Chairs, the US, speaking on the issue of trade facilitation, said that "on today's facts we must confront the reality that a fully multilateral agreement may not be possible..."
 
The US said that it "has been considering how best we might keep such an effort inside the WTO. All of us have experience in negotiating outside the WTO, but this is a moment in which the preferred options, at least from a US perspective, would involve keeping trade facilitation inside this organization and not being forced into a position considering an agreement outside of it."
 
According to one participant at the formal TNC meeting, developing countries voiced opposition to engaging in plurilaterals, and stressed instead on the principles of transparency and inclusiveness.
 
India told the meeting that it believes that "one should abjure the temptation of seeking alternative approaches without assessing carefully the systemic implications of rearranging our founding value system."
 
India also expressed disappointment with the position of some members that no engagement is possible on the development of a post-Bali Work Programme till "we address the issue of Trade Facilitation implementation", adding that it sees the Work Programme as being on a separate track. (See below.)
 
The African Group highlighted that there is a new narrative emerging that seems to be pointing towards plurilateralisation of the subsequent WTO agreements. It recalled the declarations of various African Ministerial Conferences which patently took a stand against plurilateral approaches to negotiations. "This remains valid today," it said.
 
The LDCs were of the view that plurilaterals "are isolationist in nature and they undermine multilateralism."
 
In his statement at the TNC meeting, Azevedo provided his assessment of the situation following a period of intense and comprehensive consultations following an informal Heads of Delegation meeting on 15 September.
 
According to the D-G, "we have not found a solution for the impasse" and that as he feared "this situation has had a major impact on several areas of our negotiations". It appeared to him that "there is now a growing distrust which is having a paralysing effect on our work across the board."
 
He described the issues at stake as falling into four "concentric circles", the first covering Trade Facilitation and Public Stockholding, where he said that progress on the TF Agreement is stalled as members wait for progress on the adoption of the protocol of amendment.
 
And public stockholding is stalled too, as the conversations have ground to a halt, he said, asking, "So, how should we respond? Do we simply put these two Bali decisions on the shelf? Is there a way to move them forward?"
 
On Public Stockholding, his sense is that there is a widespread positive disposition to negotiate an outcome - or a "permanent solution", but that nonetheless, there also seems to be an overarching reluctance to put other issues on hold while that "permanent solution" is sought.
 
Is there any way for Members to move forward on these two issues in the context of the current paralysis and distrust that we are now seeing, he asked.
 
According to the D-G, in the second circle are the other eight Bali decisions, including in agriculture, the monitoring mechanism and the package of measures for LDCs, and that Members must consider what is going to happen with these issues.
 
On the post-Bali work program, which has a mandated deadline of 31 December 2014, he noted that members have until the December meeting of the General Council, giving them eight weeks.
 
On his aim for a very detailed and specific work program, which came very close to setting out modalities, in his view, "such a detailed and precise modalities-like work program is now very unlikely to be ready by the end of the year."
 
He reiterated that in the eight weeks that members have until the December General Council, "it seems very unlikely that a detailed, precise, modalities-like work program is possible."
 
The issue in the fourth and final circle, which encompasses all of the others, is what does this mean for the organization itself, asked Azevedo.
 
Once again the negotiating track is stuck, he said, adding that the lack of ability to find full convergence quickly leads to deadlock and deadlock leads to paralysis. "We have seen this situation too many times. So we can't continue in such an inefficient and ineffective way that is so prone to paralysis."
 
"Frankly, we know that Members have been talking about the other, non-multilateral options that are open to them. We may see these Members disengaging. We may see that these Members pursue other avenues. We may see that these Members explore other tracks - inside the WTO or outside," said the D-G.
 
This could be the most serious situation that this organization has ever faced, he said, adding, "I am not warning you today about a potentially dangerous situation - I am saying that we are in it right now."
 
Calling on members to think about "our next steps", the D-G posed several questions, namely, "What should we do with the decisions on Trade Facilitation and public stockholding? What should we do with the other Bali decisions, including the LDC package? How should we respond to the Ministerial mandate to develop a work program on the post-Bali agenda? And how do we see the future of the negotiating pillar of the WTO?"
 
In his statement, the Chair of the General Council, Ambassador Jonathan Fried of Canada, said that the impasse has already had a "freezing" effect on the Bali implementation work in a number of bodies - and its impact may well further deepen and affect other areas of work.
 
The Chairs of the various negotiating bodies also presented their reports.
 
The Chair of the Special Session of the Agriculture Committee (CoA SS), Ambassador John Adank of New Zealand, said that the meeting of the Special Session on 23 September confirmed what he had already heard in his consultations.
 
It was evident from the various views expressed that this unresolved situation regarding the implementation of the Bali TF Protocol was clearly of significant concern to Members, he said, adding that he had heard a range of different perspectives or takes on what this means for the work of the Special Session.
 
According to the Chair, a number of Members underlined that unless the TF Protocol can be adopted and opened for signature, it will not be possible to advance further work in the CoA SS or in any other Committee mandated to pursue follow-up negotiations to Bali.
 
These delegations pointed to the fact that Bali was a carefully negotiated package and that in order for work to be advanced across the board it has to be advanced - as a whole - as envisaged in the Bali decisions in accordance with the sequential milestones outlined there.
 
The Chair said that some other Members, in contrast, suggested that, notwithstanding the current situation affecting implementation of Bali decisions, work should continue within this Committee as envisaged prior to the summer break. These Members suggested that all issues in Bali decisions should be the subject of independent follow-up without linkages between issues.
 
Another set of Members highlighted more generally the importance they place on work within the CoA SS given the importance of agricultural reform more broadly and the unique role that the WTO has to play in this regard.
 
While these Members underlined that they want to see progress they also acknowledged that this will be extremely difficult in the current context given that advancing issues requires willingness for genuine engagement among Members on the range of substantive issues that will necessarily feature in any post-Bali work programme.
 
It was very evident to them that this kind of engagement was doubtful in the event that the impasse in respect of Bali implementation was not resolved, said Ambassador Adank.
 
In terms of more specific issues, in that meeting, the G-33 clarified that it would see this Committee, rather than the Regular Committee, as the place for taking forward negotiations regarding the public stockholding permanent solution issue.
 
At the same time, it was also clear that the willingness of many Members to move this work forward is dependent on progress made on adoption and opening for signature of the Trade Facilitation Protocol. A number of Members also noted the importance of finding ways to address issues of concern to LDCs.
 
Against this background, the Chair said that his general conclusion from the last informal CoA SS on 23 September unfortunately still holds - in the absence of a solution to the current impasse in respect of Trade Facilitation and broader Bali implementation, there is no consensus on how work can be taken forward in the CoA SS.
 
In his report, the Chair of the Negotiating Group on Market Access (NAMA), Ambassador Remigi Winzap of Switzerland, said that in the two earlier open-ended meetings of the Negotiating Group which had taken place on 31 March and 9 July 2014, he had been able to report on fruitful exchanges with Members in the preceding weeks and on a good engagement of the Membership.
 
Unfortunately, he was not in a position to do the same at the meeting of 22 September 2014, because he did not sense a comparable level of interest to engage in NAMA lately. He understood this to be a consequence of the deadlocked situation in the WTO since early July 2014, and in particular after the deadline of 31 July 2014 passed without a General Council decision on the adoption of a Trade Facilitation Protocol.
 
According to the Chair, the views expressed by Members in the meeting of 22 September may broadly be divided into three groups. For some, work on NAMA should continue. For others, business-as-usual was not possible because trust had been undermined as a result of the non-adoption of the TF-Protocol.
 
Having said that, these Members also said that they would be ready to move forward on NAMA once the current impasse was resolved. The view of the third group was that members should remain positive and wait for eventual results of on-going consultations.
 
Ambassador Winzap said that although some Members have expressed support for further work on NAMA in the open-ended meeting of 22 September 2014, his assessment, based also on bilateral contacts over the last weeks is that there is no appetite - and therefore also no consensus - in the Membership at large to work on NAMA and to engage on this aspect of the work programme at this moment in time.
 
The Chair of the Council for Trade in Services in Special Session, Ambassador Gabriel Duque of Colombia, reported that his consultations show that Members acknowledge the existence of an impasse in the DDA, and that this is having a serious effect on the services component of the negotiations.
 
Reactions vary however as to the effect of this crisis. Some Members are committed nonetheless to continue work in services, on the basis of previous milestones in the negotiations. Some added that the operationalization of the LDC services waiver should not be jeopardized by the overall impasse in the DDA negotiations.
 
However, a significant number of other Members take the view that the services negotiations cannot progress without full implementation of the Bali package, including the TFA. In their view, further negotiations are presently impossible, due to a climate of distrust arising from failure to agree on the TFA protocol.
 
Several Members argue that in any case there can be no progress for now in services without any advances in the agriculture component of the DDA.
 
The Chair reported that at present there is no consensus within the body to move forward with the services negotiations within its mandate.
 
The Chair of the Committee on Trade and Development in Special Session (CTD), Ambassador Harald Neple of Norway, said that an informal open-ended meeting of the Special Session of the CTD was held on 19 September 2014 to ascertain Members' views on the way forward given the impasse.
 
At that meeting, some Members strongly regretted the non-implementation of the Bali Package, in particular of the TFA-related deadlines, and said that had undermined the prospect of any productive engagement in the Special Session in the present circumstances. These Members felt that without the full and faithful implementation of the Bali package, any attempts to stimulate work in the Special Session of the CTD at this stage would be unrealistic.
 
According to the Chair, other Members, however, expressed the hope that the D-G-led consultative process would lead to finding a resolution to the current conundrum. They also felt that given the centrality of development issues, the work programme on special and differential treatment should continue, in spite of the current stalemate. They hoped that this would have a positive trickle-down effect in other areas.
 
There was, therefore, no consensus amongst Members on how to proceed with the work in the Special Session of the CTD given the impasse. There appeared to be somewhat greater convergence, but still no consensus, on the possibility of carrying on the work on LDC specific issues, the Chair concluded.
 
In his report, the Chair of the TRIPS Council in Special Session, Ambassador Dacio Castillo of Honduras, said that he had held informal consultations with the most active Members on 2 October to see whether there had been any new thinking on how to advance the work of the TRIPS Special Session, and on how to reflect it in a post-Bali work programme. It was his sense from these consultations that the situation in the TRIPS Special Session has not improved since the last time he reported to this body in June this year.
 
The substantive positions of Members have not changed and the appetite of delegations to engage in constructive work on the GI Register negotiations remains limited within the current overall negotiation framework, although several highlighted the continuing importance of this issue for them substantively.
 
Indeed, said the Chair, the majority of delegations in his consultations emphasized that they saw no possibility of engaging in work on any aspect of the post-Bali work programme as long as the implementation of the Bali decisions remains stalled. Those few delegations that did signal readiness to continue working on the post-Bali agenda offered no novel ideas on how to advance the process or the substance of the TRIPS Special Session negotiations.
 
In light of this, it seems clear that any resumption of substantive work in this negotiating group remains dependent on resolving concerns of Members that lie squarely outside the mandate of the TRIPS Special Session, the Chair added.
 
The Chair of the Committee on Trade and Environment in Special Session, Ambassador Wiboonlasana Ruamraksa of Thailand, said that the attention of delegations is now focused on obtaining greater clarity on the overall Bali implementation.
 
The Chair of the Negotiating Group on Rules, Ambassador Wayne McCook of Jamaica, said that in his consultations last spring the prevailing view was that the general approach and level of ambition on the so-called "core" issues of Agriculture, NAMA and Services need to be defined before a serious discussion on the role of Rules can be engaged. To date, he saw no indication that this has changed, nor has any delegation advised him otherwise.
 
The Chair of the Dispute Settlement Body in Special Session, Ambassador Saborio Soto of Costa Rica, said that he intends to consult further with participants as to the next steps towards obtaining elements of a possible outcome on all issues, with the aim that these elements can be a basis of future work.
 
In its statement at the TNC meeting, India (represented by Ambassador Mrs. Anjali Prasad) said that it concurs with statements that the negotiating pillar of the WTO is important, and that it must yield results, but that equally important, is to ensure that the results that "we are collectively seeking, respond to the needs and interests of all WTO members, particularly developing country members. It is in this context that Members termed the Doha Round of negotiations as a ‘development' Round."
 
Reiterating its commitment to the implementation of all Bali decisions, India said that its has been emphasizing the need for balanced progress on all Bali outcomes, including the Bali Ministerial Decision on public stockholding for food security - an issue which is of utmost importance to India and several developing country members.
 
India noted that whenever the membership has engaged seriously and with commitment, they have been able to quickly resolve the most challenging of issues.
 
On its part, it has been engaged with members in different formats and remains optimistic that members would be able to show flexibility and understanding on the public stockholding issue, and that it is also prepared to take a step forward towards an acceptable resolution of the issue which meets the aspirations of the membership.
 
India expressed disappointment with the position of some members that no engagement is possible on the development of a post-Bali Work Program till "we address the issue of Trade Facilitation implementation", adding that it sees the Work Program as being on a separate track.
 
It reiterated its belief that the multilateral trading system is in the best interest of developing countries, especially the poorest and most marginalised among them. However, if the system fails to function in a just and fair manner, then the most vulnerable sections of the world's population will be left behind.
 
"It is our collective responsibility to ensure that the multilateral trading system works for all."
 
In India's view, the Marrakesh Agreement establishing the WTO enshrines cardinal principles delineating the scope and functions of the WTO as well as the decision making procedures. Members would recall that it was the outcome of extremely careful and prolonged deliberation and captures the values of inclusiveness and transparency with effective decision making.
 
"My delegation believes that one should abjure the temptation of seeking alternative approaches without assessing carefully the systemic implications of rearranging our founding value system," said India.
 
In its statement on behalf of the African Group, Lesotho said that the Group is acutely concerned by the turn of events since July. In the first instance, the political linkages that have been drawn between the current gridlock and other Bali decisions do not enjoy support of the Group particularly because no element of the Bali outcomes created such a hierarchy or legal linkages regarding the implementation of Bali outcome decisions.
 
It is therefore paradoxical today that the Bali decisions which will undoubtably be of benefit to African countries and LDCs are being engaged as a lever to diffuse the gridlock between trade facilitation agreement and public stockholding decision.
 
In the second instance, said the African Group, it is regrettable that some Members went to the extent of blocking the convening of one committee meeting in an outright disregard of the rules of procedure of the concerned committee. This is indeed regrettable because this act sets a procedural precedence whereby Members can veto the convening of meetings. It hoped that this situation will be rectified.
 
In the third instance, the African Group has been extremely disappointed and alarmed "by disrespectful comments" which have been used by some Members during the very last PCTF (Preparatory Committee on Trade Facilitation) meeting.
 
It wished to place on the record that such comments addressed to representatives of states are "highly unacceptable and will not be tolerated."
 
According to the African Group, there is a new narrative emerging. These seem to be pointing towards plurilateralisation of the subsequent WTO agreements. Members may recall declarations of various African Ministerial Conferences which patently took a stand against plurilateral approaches to negotiations. "This remains valid today."
 
The African Group strongly believes in a strong multilateral trading system -- a system that gives a voice to the marginalised Members of the global community and a system anchored on the principle of multilateral consensus in reaching agreement on negotiated outcomes.
 
Devoid of this, the alternatives are well known to Members. Going back to pre-Uruguay Round negotiating environment or as it were, the GATT days, would be unacceptable to the African Group.
 
According to the African Group, at this critical juncture, "we must be careful to ensure that we do not set ourselves up into being locked in procedural discussion on how the organisation working methods should be changed," adding that the substantive areas of interest to African countries remain unaddressed.
 
The African Group recalled that the issue of new approaches to negotiations predates the current gridlock. Today Members retain full options at their disposal to have exclusive arrangements as foreseen in the WTO Agreement. That is, whether through plurilateral agreements, regional trade agreements or mechanisms such as the PTAs, these exclusive arrangements are available. These arrangements continue to be on an upward trend.
 
It therefore remains unthinkable that with these legal options available the organisation should be reeling itself towards a procedural agenda-setting discussions. On the contrary, every effort must be invested in ensuring full participation of developing countries and ensuring that negotiated outcomes are carried out in a transparent fashion and with the buy-in of all Members.
 
For the Group, it would seem premature for Members to turn away negotiations from the substantive elements of the DDA to a new agenda in a form of a procedural question as to whether consensus-based approach to negotiating outcomes still holds relevant.
 
"We must therefore not allow the system that has been carefully constructed with safeguards that ensure full participation of weak Members to collapse under our watch."
 
Uganda, on behalf of the Least Developed Countries (LDCs), said that the Group is committed to the implementation of all Bali outcome decisions including but not limited to the TFA. Of specific importance to its members are the LDC-specific issues such as the LDC services waiver, Duty-Free Quota-Free Market Access (DFQF), rules of origin and cotton.
 
According to the LDC Group, Bali had many decisions, and therefore, disagreement on one should not stop movement on other issues especially the work program. The LDC Group does not understand why for instance, members should create linkages to LDC-specific issues. The LDC issues are not the ones causing the current impasse. "Our issues should be separated from the current impasse."
 
It noted that deadlines have been missed before, including on LDC-specific issues such as on cotton, but it has never stopped movement on other areas of work in this organisation. It therefore called for the continuity of work. Members should not use this as yet another opportunity to deny LDCs the right to development.
 
On the implementation of the TFA, Uganda said that it is no secret that the LDCs attach a great deal of importance to the question of Assistance and Support for Capacity Building. Does anyone seriously expect the LDCs to undertake the much needed reforms, despite their paltry share of world trade, without the requisite assistance and support for capacity building, it asked.
 
It also said that patience and caution ought to be exercised on new approaches. It is not far-fetched to posit that, in fact, this organisation was fashioned in such a way that the interests of both developed, developing and least developed countries are taken into account. The Marrakesh Agreement was constructed on the premise of accommodation, especially in decision-making.
 
"This is why many of us, especially the LDCs, despite its many imperfections, still consider it to be a field we can play on. However, some have taken exception and suggested that perhaps the WTO is not the place to negotiate, indeed, they have taken steps in that direction, unaided and uninhibited, in the past, and they continue to do so as well with the various plurilateral arrangements that are taking place. Our view is that plurilaterals are isolationist in nature and they undermine multilateralism."
 
On the post-Bali work program, the LDC Group said that it is sad to imagine that hardly two months to the close of the year, "we have not even drafted an identifiable paragraph on the post-Bali work program," adding that guidance is needed on how members are to take forward this part of the mandate. The LDC issues should not be sacrificed, it said.
 
Kenya, on behalf of the African, Caribbean and Pacific (ACP) Group of countries, stressed the urgency in preparing the post-Bali work programme to conclude the remaining issues in the DDA. It also looked forward to the expeditious resolution of the current impasse on the implementation of two Bali decisions in order to enable all Members to reap the benefits of the achievements this year.
 
The ACP recognised that efforts to break the impasse are underway, and as a group, "we do not stand in the way of moving forward on all the decisions as taken at Bali, especially on TF. We, as a group, worked very hard to achieve not only the Bali package but also what we have achieved after Bali particularly the TF Trust Fund Facility. The facility will be indispensable for successful implementation of the TF Agreement once the deadlock is resolved."
 
On the post-Bali work programme, the group noted that it circulated a document on principles that it has pronounced since the beginning of the year (see SUNS #7891 dated 10 October 2014.). It said that substantial work must be done by the end of next month in order to meet the deadline of 7 December which is consistent with the timeframe agreed by ministers at Bali.
 
It believed in the multilateral trading system and wanted to capitalise on the years of negotiations on the DDA to ensure inclusiveness, transparency and balance. Paragraph 47 of the Doha Declaration must therefore be observed.
 
In its statement at the TNC meeting, the US (represented by Ambassador Michael Punke) said that as of today there is no indication that the handful of Members blocking implementation of the Trade Facilitation Agreement have altered their position of July 31st in any way.
 
The US reiterated that, in response to specific concerns it heard from one Member, it had made a specific offer of new flexibility to clarify that the duration of the Bali due restraint mechanism would last until Members reached agreement on a permanent solution for food security.
 
"Implicit in this offer is the expectation that the Trade Facilitation Agreement will be implemented in the straight-forward manner envisioned by our Ministers at Bali. For the time being, our offer stands as a way out of the current morass, but it has not been accepted," it said.
 
The US maintained that if there is one sliver of brightness over the past two months, it is the "large number of developing countries" that have moved forward to submit their Category A notifications under the TFA, and that as of today, 48 developing countries have demonstrated the seriousness with which they take their obligations, "even in the face of uncertainty created by others."
 
According to the US, trust has been shattered, "and business as usual in such circumstances is impossible. The Bali Package has been significantly undermined, and it is axiomatic that post-Bali work has been impacted. The reports today from the Director General and the chairs make crystal clear that the actions of a few have placed us in a situation of deadlock across a wide range of issues. This was wholly foreseeable."
 
"As for trade facilitation, on today's facts we must confront the reality that a fully multilateral agreement may not be possible. The immediate question is obvious: Can we salvage something from the work done by so many in this room?"
 
In considering options for preserving the work, the US said that it "has been considering how best we might keep such an effort inside the WTO. All of us have experience in negotiating outside the WTO, but this is a moment in which the preferred options, at least from a US perspective, would involve keeping trade facilitation inside this organization and not being forced into a position considering an agreement outside of it."
 
In its statement, the European Union said that the current stalemate will have consequences on the WTO and the multilateral system.
 
There is a certain number of decisions taken in Bali which require further negotiations, the DDA work-programme being the most prominent, it said, adding that in view of the current stalemate, "we do not see the necessary conditions and trust present for WTO Members to engage in the difficult discussions which are needed to prepare the work-programme."
 
"What we need now is to get out of this vicious circle. However, the solution has to be found through upholding the Bali decisions not undermining them. This is also the only way forward that can allow us to recover the spirit of cooperation and trust that made Bali possible," said the EU.
 
The EU further said that it has a long history of consistently supporting the multilateral system, which remains a core element of its trade policy. It has repeatedly expressed its interest and readiness to engage in discussions with a view to advancing and concluding the DDA. While it remains fully committed to these objectives, they can only be attained if the commitments made in Bali are adhered to.
 
The EU has already expressed its readiness to find a compromise regarding trade facilitation and public stockholdings as long as the substance of the Bali decisions does not change.
 
It said that it remains ready to re-confirm the open-ended nature of the peace clause on public stockholdings and "we are ready to engage in further discussions to find a permanent solution. In order to do this however, we need clarity regarding the willingness of all WTO Members to make good on their commitments. In concrete terms this means that the Trade Facilitation Protocol must be adopted, if the post-Bali process is to be put back on track." +