TWN Info Service on WTO and Trade Issues (Oct15/09)
12 October 2015
Third World Network

G7, G20 conclaves give differing signals on Nairobi, post-Nairobi
Published in SUNS #8109 dated 9 October 2015

Geneva, 8 Oct (D. Ravi Kanth) - Trade ministers and senior officials from the United States, the European Union, China, India, Brazil, Australia and Japan remained divided at Istanbul, Turkey, on Monday (October 5) on commencing drafting work at this juncture without having clarity on the specific issues that form part of the ministerial declaration for the World Trade Organization's tenth ministerial meeting in Nairobi.

On the following day (October 6), however, trade ministers of the G-20 coalition in which all the seven countries are present gave a diametrically opposite signal to WTO Director-General Roberto Azevedo to commence work through a "credible" committee for drawing up the ministerial declaration/work program.

"This sudden transformation in a matter of two days remains a puzzle," said a capital-based senior trade official familiar with the two meetings. "Reconciling these two messages is going to be challenging," according to the official.

To start with, the meeting of the so-called G-7 countries resulted in differences on a broad range of issues, and an understanding or consensus of sorts on two elements: on a "Doha-minus" package and a ministerial declaration/ work program.

There was no agreement on the contents of the small package, and the need for a drafting committee without clarity on the issues that would go into the Doha package.

There was convergence of sorts on the need for preparing a "Doha-minus" package that would include as many issues as possible in the short span of time available to members between now and December 15 when the WTO ministerial meeting is scheduled to begin in Kenya. Also, there was understanding of sorts that there will be a final ministerial declaration/work program at the end of the four-day ministerial meeting.

But the seven countries were unable to come to any understanding on two other issues concerning the "post- Nairobi narrative" and the "small committee" for drafting the ministerial declaration, according to participants familiar with the meeting.

Besides, there was no agreement among the G-7 countries on the small package of outcomes: export competition, LDC issues, and transparency-related improvements in existing rules.

The WTO DG listed the issues of the small package and also said at the meeting that the G-33 coalition is demanding special safeguard mechanism (SSM), according to people familiar with the deliberations.

China said it is okay with the small package of deliverables of export competition and specific concessions for the least-developed countries.

India's Trade Minister, Mrs. Nirmala Sitharaman, underscored the need for "balance" in the package. The Indian minister said work can begin on the package but "it will be without prejudice to other issues of Doha Development Agenda."

She also said there has to be clarity first on the specific issues of the package and it should be "DDA-minus to the minimum".

Nairobi can't be a make-or-break meeting, the Indian minister said, according to people familiar with the meeting.

Brazil demanded an "assurance that all other issues in the Doha agriculture mandate will be dealt with, without any interruption."

Kenya's foreign minister, Ms. Amina Mohamed, who is going to host the Nairobi Ministerial, told SUNS that there was clarity and progress on two issues.

"There was general understanding on the Doha-minus package as long as members are very clear as to what would happen to the rest of the mandate and the ministerial declaration," she said after the meeting.

Meeting on the margins of the G-20 trade ministers' gathering, the Kenyan Minister Amina Mohamed and WTO Director-General Roberto Azevedo discussed three issues: the "small package of deliverables," the "post-Nairobi narrative," and the small drafting committee to prepare a ministerial declaration.

In his remarks at the meeting of the G-7, chaired by a senior Australian trade official, Azevedo said the "small package of deliverables" include export competition, the package of concessions for the least-developed countries.

The DG also spoke about the demand raised by the G-33 members on SSM outside the small package. The US has consistently opposed the SSM; but on the small package, it maintained that there would be most likely convergence on these issues, according to a participant familiar with the meeting.

The US also said that it will give comfort to countries on special and differential treatment flexibilities and less- than-full reciprocity (LTFR) without suggesting whether developing countries such as China, India, Brazil, Argentina, South Africa, and Indonesia will be eligible for such flexibilities.

EU Trade Commissioner Cecilia Malmstrom said categorically that she wants an outcome on all issues in the export competition pillar such as export subsidies, export credits, food aid, and state trading enterprises. The EU commissioner also said she wants improvements on the transparency in the rules concerning services, and non- tariff barriers for industrial goods.

"We are for a large and comprehensive package on Doha; but now it seems it is not possible [for some members] and we will see whether we have to do with smaller package but still comprehensive," Malmstrom said.

Asked whether the EU is open to "smaller but comprehensive [package]," Commissioner Malmstrom said "yes," maintaining that the EU wants "balance" and everybody should raise their issue. But some issues are more difficult than other issues and they need to be discussed, Commissioner Malmstrom maintained.

When the discussion moved on to the post-Nairobi narrative, the Australian chair asked Brazil to spell out its views on what must happen after Nairobi.

Brazil categorically said the package of deliverables is clearly linked to the post-Nairobi narrative, emphasizing that all the unresolved issues of the Doha agenda will remain part of the post-Nairobi work program.

The Indian minister supported the Brazilian position and later China also joined.

The deputy US trade representative said there will be neither convergence to terminate the Doha negotiations nor an agreement to continue with the Doha talks, at the Nairobi meeting.

After the discussion on the package of deliverables and post-Nairobi roadmap, the DG informed the meeting that he would ask a small group to start drafting the ministerial declaration.

The Indian minister asked the DG, "What are we drafting? We must be specific on what goes into the ministerial declaration."

Minister Sitharaman said members must first finalize the specific elements so as to start work on the drafting of the declaration. She also maintained that Nairobi cannot be a make-or-break meeting.

China also expressed its reservations on the small committee. Subsequently, other ministers also sounded caution before commencing work on the drafting committee.

In a nutshell, the G-7 meeting came to an understanding on only two issues - the need for finalizing a "Doha- minus" package of deliverables for the Nairobi meeting, and a ministerial declaration/work program.

But on the other two fundamental issues - the post-Bali work program and the small package of deliverables - there was no consensus at the meeting.

In sharp contrast to the understandings and differences at the G-7 meeting, events at the G-20 trade ministers' meeting took a totally different turn.

Notwithstanding the differences on the small package and the rush to form a drafting committee, the G-20 trade ministers gave the green signal for commencing work on drafting the possible outcomes for the Nairobi ministerial.

"The drafting committee has to be balanced, and it has to be decided by the General Council," Kenya's Foreign Minister Amina Mohamed told SUNS after the ministerial meeting.

"Members of the drafting committee must be drawn from different groups and coalitions and the outcome has to be credible and fair so to ensure developmental results," Minister Mohamed emphasized. Minister Mohamed will chair the Nairobi ministerial meeting beginning on December 15.

Turkey's economic minister Nihat Zeybekci said there are three clear positive results from the G-20 meeting.

First, there is a growing acceptability for institutionalizing the G-20 trade ministers' meeting to address major trade-related global challenges. Second, there is consensus among trade ministers that WTO Director-General Azevedo should proceed with the drafting committee. And three, trade ministers want "credible" outcomes at the Nairobi meeting, despite lack of clarity on the post-Nairobi work program.

WTO Director-General Azevedo did not address the media at the end of the meeting, but said in a statement: "The support of G-20 countries and all other WTO members is vital in moving forward towards strong and successful outcomes in Nairobi.

"I welcome the recognition by G-20 Ministerial that WTO members need to also intensify discussion on the path forward after Nairobi.

"I was encouraged to hear that no one disagrees on the continuing central importance of development to this work and the core unresolved issues of the Doha Development Agenda, such as agriculture, industrial goods, and services, will continue to be an important part of discussion," Azevedo argued.

The coming days, according to Minister Amina Mohamed, will be critical as time is short and some concrete work must be completed in Geneva even if certain issues are decided in Nairobi.

"There is clear acknowledgement that due to paucity of time, we would not be able to do everything in the Doha Development Agenda and therefore, we have to finish some things now and agree with what we have to do with the rest in the outcome document," she maintained.

She said repeatedly that "there is clear understanding that what is done as part of the Doha-minus package will be linked to the post-Nairobi work program."

The Kenyan minister said every member has the right to put their proposals before the drafting committee. But members must be cautious and responsible in putting their proposals in the last hour.

European Union Trade Commissioner Malmstrom reiterated Brussels' demand for a comprehensive package but its willingness to work with a "small comprehensive" package.

Several industrialized countries, including the United States, spoke about their preference for a small package of deliverables.

South Africa's trade minister Rob Davies said "nobody now believes we can go to Nairobi and come out with an agreement for concluding the Doha Round, nor nobody is going to Nairobi to declare the Doha Round is dead."

"But there are growing views that the post-Nairobi will remain linked with the Doha Round," he maintained.

Minister Davies said "what is going to be there in the ministerial declaration or the work program is going to be a critical issue and one of the things we made it very clear is the drafts should be made available so that we can all study them before reacting to them."

More importantly, said Minister Davies, the Nairobi outcomes for the least-developed countries cannot be "recycling of the Bali results all over again."

"Those Bali decisions were not even implemented and so we have to know what is going to be additional to the Bali decisions for LDCs," he told the SUNS.

The South African minister expressed strong reservations on the so-called "transparency" deliverables for the Nairobi meeting, saying his country is not in favour of binding provisions.

India's trade minister Nirmala Sitharaman called for clear outcomes on special products, special safeguard mechanism, and the permanent solution for public stockholding programs for food security at the Nairobi ministerial meeting. But she remained silent on the issue of the drafting committee at the G-20 meeting.

Indonesia's new trade minister Tom Lembong issued the strongest statement yet at the G-20 trade ministerial, saying that "we are in a crisis situation" without knowing the deliverables for the Nairobi meeting.

Minister Lembong listed three priorities for the Nairobi meeting. First, members must agree on "credible and balanced outcomes" from the perspective of developing countries in a development round. Indonesia doesn't want "development agenda to be squeezed into merely an LDC agenda," he said.

As a coordinator for the G-33 developing country coalition, said Minister Lembong, the second priority is that the Nairobi package must include "Special Safeguard Mechanism or SSM as a balancing ingredient for a do-able Nairobi package from development perspective."

And third, members "should agree on a post-Nairobi work program to properly conclude the Doha Round."

Clearly, there are unresolved issues that surfaced at the two meetings and it has to be seen how things will proceed in the coming days before the Nairobi meeting.