BACK TO MAIN  |  ONLINE BOOKSTORE  |  HOW TO ORDER

TWN Info Service on WTO and Trade Issues (Jul15/28)
30 July 2015
Third World Network

Work programme on DDA unlikely by 31 July, says DG
Published in SUNS #8073 dated 30 July 2015
 
Geneva, 29 Jul (Kanaga Raja) -- The Director-General of the World Trade Organisation (WTO) Roberto Azevedo has reported "very limited" progress on work towards defining the elements of the post-Bali work programme on the remaining Doha Development Agenda (DDA) issues, and said that it is very unlikely that such a programme could be agreed by the 31 July deadline.
 
Contrary to the normal practice, the General Council meeting on 27-28 July came ahead of the meeting of the Trade Negotiations Committee (TNC) that Azevedo has scheduled for 31 July.
 
In his capacity as Chair of the TNC, Azevedo reported to the meeting of the General Council on 28 July that he had expressed concerns at the "Room W" meetings (at level of heads of delegation at the WTO where the DG reported on his various consultations) held in June and July that insufficient progress was being made on the substantive points, particularly on the gateway issues, and that significant differences remained across many areas.
 
He said that despite willingness to explore different approaches and consider proposals or ideas, many members have still not been willing to move towards convergence, and that progress has remained very limited.
 
The DG said that with just three days from the deadline (set out in a November 2014 General Council decision), he finds it hard to see how things can change sufficiently in the time that is available.
 
However, the DG's consultations are still continuing this week. A green room meeting of senior officials and ambassadors was reportedly held last Friday at which market access issues in agriculture, non-agricultural market access (NAMA) and services were discussed.
 
Further such meetings are reportedly to be held this week as well on agricultural market access, export competition and domestic support, NAMA, services, LDC issues, development issues, and on rules.
 
However, one trade diplomat said privately that the possibility of agreeing on a work programme by the deadline of 31 July is pretty remote.
 
According to another trade diplomat, there is no common ground on how to move forward, and the divergent levels of ambition among the major players is preventing progress on the work programme.
 
Yet another trade diplomat said that the current situation does not look good for the upcoming Nairobi Ministerial Conference (MC10).
 
REPORT BY THE CHAIR OF THE TNC
 
Under the agenda item of report by the Chair of the TNC, DG Azevedo reported on activities towards preparing the DDA work programme since the last General Council meeting on 5 May.
 
Referring to the three ‘Room W' meetings that he had convened since that General Council meeting, the DG said that on each of these occasions, he had expressed his concern that despite intense and active engagement, insufficient progress was being made on the substantive points - particularly on the gateway issues, and that significant differences remained across many areas.
 
The reality is that despite willingness to explore different approaches and consider proposals or ideas, many members have still not been willing to move towards convergence. Progress has remained very limited, he added.
 
His assessment today was that despite the best efforts so far, his earlier view (on members being quite far away from consensus) still remains valid.
 
Azevedo said that the process has to remain member-driven, and that members should not expect him, or the chairs, to put forward a work programme for members to discuss. "It has to come from you."
 
He has encouraged members to come forward with new ideas and proposals to help build consensus, and they have done that.
 
"But, as things stand, we still don't have a work programme," he said, adding that there are still clear conceptual differences in expectations.
 
For example, he said he saw some large gaps between what some members want to put on the table and what they want in return. This is true for many, including the major players.
 
"So there is still a long, long way to go. We are just three days from our deadline and so, despite recent efforts by some groups, I find it hard to see how things can change sufficiently in the time we have available. But it is vital that we keep working and keep pushing."
 
Azevedo said that at the upcoming TNC meeting (scheduled for Friday 31 July), "we will have no alternative but to face the reality of what we will have been able to achieve by then. This will not mean making the final call on what we can achieve in Nairobi, or on the DDA more broadly - it is mainly about the work programme."
 
In a scenario where there is no work programme by the Friday deadline, there will certainly be a sense of disappointment that members have missed an opportunity to establish a clear roadmap to move forward.
 
"But we should not allow this to lead us to inaction. It cannot become an obstacle. We will need to redouble our efforts and work towards achieving substantive outcomes for Nairobi."
 
It is vital that members remain committed and focussed on substantive outcomes, and that come September, they should be ready to hit the ground running on substance, not process, he said.
 
"If a common understanding materializes early in the 2nd semester, then I think we still have an excellent chance of delivering meaningful outcomes in Nairobi."
 
Only a few delegations spoke following the DG's report. (Members are expected to make their full statements at the formal meeting of the TNC on Friday).
 
Speaking under this agenda item, Kenya's Minister for Foreign Affairs and International Trade Ms Amina Mohamed, who will be chairing MC10, said that President Kenyatta has made it clear that the first ministerial conference to be held in Africa should not be allowed to fail.
 
She said that a meaningful outcome is needed. Based on what she has heard, she is very worried that the differences between members are profound and that there is a great deal of difficulty in finding convergence.
 
If convergence is not found, it will be difficult not only for MC10 but for the WTO's negotiating function as well, she said.
 
The Minister said that she is encouraged that members are still working but efforts need to be redoubled. There is need to ensure that there is a positive role for the WTO, not only as a place for dispute settlement, but also in terms of rule-making and trade policy.
 
Noting that this is the twentieth anniversary of the WTO, she said that members have to build on success, build on what they had done in Bali and indeed go beyond Bali.
 
The Minister congratulated the membership on the expansion of the Information Technology Agreement (ITA), saying that this is the first agreement in 18 years. It is a success for all members and she looked forward to its completion in Nairobi.
 
This is the first ministerial conference to be held in Africa, she said, adding that it must be a meeting that delivers for Africa.
 
African countries are very much committed to the multilateral trading system and they want to deliver growth, development and poverty reduction. "We must have a meaningful development outcome," she said.
 
Indonesia said that the G-33, the Small and Vulnerable Economies, together with Chinese Taipei have submitted a document in which they underline that Special Products and Special Safeguard Mechanism in agriculture are a ‘must-have' for a successful MC10.
 
Tonga said that trade is an important tool for generating economic growth. Limited progress in the Doha Round and in the Bali package is of concern to it. It is counting on success at MC10. It is important for development to be at the centre of any outcome at MC10 as well as throughout the DDA.
 
The key issues for Tonga are development, agriculture and fisheries subsidies.
 
Barbados said that it is going to be putting forward the ACP Group's proposal on bridging the gaps on the key gateway issues in the DDA.
 
Lesotho, on behalf of the African Group, said that we must have meaningful outcomes for Africa as well as for the LDCs in Nairobi. Development issues are at the core of the DDA but these have not yet come to pass. Nairobi will not be the end of the DDA, as some members have said.
 
It is not the end of the DDA because we do not have a work programme. Members must work hard in the autumn to advance the agenda and produce something of importance in Nairobi, it said.
 
Sierra Leone, referring to the outcome document of the UN Financing for Development Conference that was held recently in Addis Ababa, pointed out that in that document great importance was assigned to the WTO's Aid for Trade and Enhanced Integrated Framework programmes.
 
According to trade officials, the DG agreed with what Lesotho had said, in that 31 July is definitely not the end of the round, but a wake-up call. We need to come back with ideas, with focus and with substance. We need to come back and focus quickly, he said.
 
He was pleased to see that some members are carrying forward new proposals and putting them on the table.
 
He was concerned that members have devoted so much attention to key gateway issues of agriculture, NAMA and services, and that there are other issues that need members' attention.
 
We have not focused as much as we should on the LDC issues. We are behind on these, he said, adding that it is one area where we need to hit the ground running.
 
Bangladesh, on behalf of the LDCs, fully agreed with the African Group and the DG. 31 July is not going to be the end for the LDC issues.
 
ACCESSION OF KAZAKHSTAN TO THE WTO
 
The General Council on Monday formally adopted the accession package of Kazakhstan, thus paving the way for it to become the 162nd member of the organisation.
 
The accession package will now have to be ratified by the country's parliament by 31 October 2015. It will become a full member thirty days after it notifies the WTO of the ratification.
 
The Working Party to consider Kazakhstan's accession to the WTO was first established some 19 years ago, on 6 February 1996.
 
Following adoption by the General Council, the Protocol of Accession was signed by both Director-General Roberto Azevedo and Kazakhstan's President Nursultan Nazarbayev.
 
The accession of Kazakhstan was the first item on the agenda of the two-day General Council meeting.
 
Speaking at the General Council meeting, President Nazarbayev said that during the negotiations on his country's accession to the WTO, the configuration of Kazakhstan's economy had changed dramatically.
 
First, it has become more robust and open. GDP per capita has registered an actual 18-fold increase and reached the level of Central and Eastern European countries, and the volume of foreign trade has reached $120 billion.
 
WTO Member States account for over 90 per cent of Kazakhstan's foreign trade turnover, he said, noting that the European Union countries are the main economic partners of Kazakhstan, accounting for over 40 per cent of the country's trade.
 
Secondly, he said, the structure of Kazakhstan's economy has undergone significant changes.
 
Today, the services sector, whose development is a top priority, accounts for some 54 per cent of the country's GDP. It covers the financial, telecommunications, construction and energy transportation sectors.
 
Thirdly, Kazakhstan has significantly enhanced its investment capacity. Over the past 10 years, the country's economy has attracted foreign investment worth more than $200 billion.
 
The biggest investors come from the Netherlands, the United States, Switzerland, France, Great Britain, Canada, Japan and the Republic of Korea, he said.
 
"Kazakhstan will soon start working under the WTO rules. Yet for a long time now, we have been shaping our economic policies, in the spirit of the WTO, by removing barriers, acting as an engine of regional integration and promoting the principles of open collaboration," said President Nazarbayev.
 
According to information provided by the WTO Secretariat, in the area of goods, Kazakhstan has undertaken tariff concessions and commitments that bind tariff rates for all products on average at 6.1 per cent.
 
For agricultural products, this average is 7.6 per cent while for non-agricultural products, the average is 5.9 per cent.
 
Tariff rate quotas (TRQs) will be applied to beef other than high-quality beef and to poultry products.
 
Imports entering the market within the quota will benefit from lower tariffs, while higher duties will be applied to products imported outside the quota, as per: (1) For beef, 15% for the in-quota tariff rate, and 40% for the out-of-quota tariff rate; (2) For poultry products, 15% for the in-quota tariff rate, and 40% but not less than 0.65 euro/kg for the out-of-quota tariff rate.
 
Kazakhstan has agreed to bind export duties for 370 tariff lines spread over 21 Harmonized System Chapters, of which 55 are bound at 0%.
 
If and when a common Eurasian Economic Union (EAEU) policy on export duties is implemented, Kazakhstan will also be bound by the list of commitments of the Russian Federation on export duties. This list consists of 556 tariff lines, of which 81.3% are bound at 0%.
 
In agriculture, Total Aggregate Measurement of Support (AMS) is bound at zero, and the de minimis level is set at 8.5% of the value of Kazakhstan's total agricultural production, and all agricultural export subsidies are bound at zero.
 
On services, Kazakhstan has made specific commitments in 10 services sectors, including 116 sub-sectors, including telecommunications, insurance, banking, transport, tourism, and distribution.
 
Kazakhstan will also fully implement the TRIPS Agreement as of the date of accession. It has also committed to join the Information Technology Agreement (ITA) upon its accession to the WTO.
 
OTHER ACTIONS
 
Under the agenda item of tenth session of the Ministerial Conference, the General Council elected three vice-chairs of MC10: Heraldo Munoz, Minister of Foreign Affairs of Chile; Gregory L. Domingo, Secretary of Trade and Industry of the Philippines; and Carlo Calenda, Member of the Italian Cabinet of Ministers in charge of Trade and Investment.
 
Kenyan Minister Ms Amina Mohamed will chair the conference.
 
The General Council also announced that Ambassador Vangelis Vitalis of New Zealand will be the new chair of the Special Session of the Committee on Agriculture, with the appointment to take effect at the next formal meeting of the Committee.
 
Ambassador Vitalis will be replacing Ambassador John Adank also of New Zealand, who is reportedly leaving Geneva.
 
Under "other business", the European Union informed the membership on the recent conclusion of the ITA expansion (ITA-II) negotiations.
 
It said that following the 17th negotiating round, which took place between 14 and 18 July, the participants in the negotiations reached an agreement in principle on the "Declaration on the Expansion of Trade in Information Technology Products" as well as on the list of products.
 
The EU, as the Chair of the negotiating round, had called for an Ambassadors' meeting last Friday 24 July to confirm with participants the approval by capitals of the Declaration and the list of products.
 
As a result, said the EU, out of the 25 participants in the negotiations (representing 54 WTO Members, counting the 28 EU Member States and the European Union), 22 participants have already confirmed their acceptance of the Declaration and the list.
 
The participants who have already accepted the list are: Albania, Australia, Canada, China, Costa Rica, European Union, Guatemala, Hong Kong-China, Iceland, Israel, Japan, Korea, Malaysia, Montenegro, New Zealand, Norway, Philippines, Singapore, Switzerland, Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), Thailand and the United States.
 
According to the EU, the remaining three participants (reportedly Mauritius, Turkey and Colombia) are still undergoing the internal domestic procedures for approval but hope to be able to confirm soon.
 
As to the coverage, the EU said that the list comprises as many as 201 products and includes a wide range of IT-related products, from medical devices, to audio-visual products to new generation semi-conductors and GPS navigation equipment, smart cards, optical media and many other products.
 
The EU said that the Declaration provides for a roadmap which should allow participants to finalise the overall negotiations in time for the Nairobi Ministerial.
 
The negotiations on staging, i. e. timeframe for implementation, will start as from September with the objective to finalise them by October, so as to allow every participant to produce draft schedules by 30 October and to verify and approve other participants' draft schedules by 4 December, it added.
 
Under the Declaration, the parties shall apply three-year staging in four equal annual reductions of customs duties, beginning in 2016 and concluding in 2019. +

 


BACK TO MAIN  |  ONLINE BOOKSTORE  |  HOW TO ORDER