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TWN Info Service on WTO and Trade Issues (Aug16/04)
4 August 2016
Third World Network

  
Lack of progress on key issues for South at WTO
Published in SUNS #8291 dated 27 July 2016

Geneva, 26 Jul (Kanaga Raja) - There has been a lack of progress on the key issues of crucial importance to developing countries in the WTO negotiating bodies, with positions remaining basically unchanged from before or since Nairobi MC10 on public stockholding for food security, the Special Safeguard Mechanism (SSM) and Special and Differential Treatment (SDT) issues.

This came out at an informal Heads of Delegation (HOD) meeting on Monday (25 July) at the WTO, when the Chairs of the various Doha Work Programme negotiating bodies reported on their recent consultations on key issues, with positions remaining basically unchanged from before or since MC10 on public stockholding for food security purposes, the SSM and SDT.

The informal HOD meeting was convened by WTO Director-General Roberto Azevedo.

In some remarks after the HOD meeting (posted on the WTO website), the DG said he has been urging members to move from reflection to action, and noted that members have submitted a number of papers, including on the core Doha issues.

Members, he said, have undertaken a wide range of exchanges in different formats in recent weeks, raising a number of other issues, and he had heard "positive reports" on the nature and tone of all these exchanges.

"We should welcome," he said, "the very fact that a range of discussions is taking place - and that other constituencies are becoming more engaged, including the private sector."

"There is a lot to be positive about. But, if we really do want to deliver again, then members will need to be pragmatic, realistic and creative. We succeeded in Bali and Nairobi because we adhered to these principles," he added.

According to Azevedo, the most important thing needed now is specificity, in each and every area. "We need to change the pace of our engagement and dive into a real proposal-driven process immediately after the summer. If we want to have outcomes in the near future, then we will need to accelerate our work significantly in the autumn. In all conversations we need to maintain and enhance our focus on development and LDC issues."

According to trade officials, Azevedo reported at the HOD on the meetings that he had attended recently including UNCTAD-14 in Nairobi, the APEC trade ministers' meeting in Peru, the OECD meeting, the ministerial meeting of the land-locked developing countries, and the G20 trade ministers' meeting in Shanghai.

Increasing engagement has been reflected in all of these meetings but "we need to increase the specificity of our discussions here," Azevedo said.

He also mentioned the meeting he had with the negotiating group chairs on 6 July at which he urged them to prod members to be more specific.

He noted that seven papers on agriculture had been put forward. There has been movement in services but less so in NAMA. The issue of fisheries subsidies is drawing a lot of attention but there is need to deepen the discussion in all of these areas if we are to move these DDA issues forward, he said.

There has been a lot of discussion and interaction among members on the question of micro, small and medium sized enterprises and e-commerce, the DG noted.

REPORTS OF NEGOTIATING GROUP CHAIRS

According to trade officials, the chair of the agriculture negotiations, Ambassador Vangelis Vitalis of New Zealand, said that he is encouraged by the level of engagement. Since Nairobi, there is evidence that we are moving from reflection to action. "We are now at an important inflection point."

For the first time since Nairobi, members are engaging on substance. There were four clear objectives that emerged. One is that agriculture should be part of any MC11 outcome, and that the process and outcome in agriculture should be driven by ministerial expectation.

There is a desire to see at MC11 an agriculture programme that is basically shaped by the Doha agriculture issues.

Members, he said, are prepared to look at other approaches, but it was very important in terms of principles that there be parallelism, and no prejudice to any outcomes, and no presumption and that there should be a lot of transparency.

The Chair said that domestic support is seen by the bulk of the membership as a priority, and most members want an outcome on domestic support at MC11. But what should this domestic support outcome be - should it be broad limits, should it be product-specific, should there be links to exports, he asked.

On cotton, members were reminded that domestic support on cotton was an issue of priority at MC10. Members have stressed that they would like to see this issue resolved by MC11.

The Chair said that it is very disappointing that out of 163 members, only 29 are up to date with their domestic support notifications through 2014. Only four developed countries - Australia, New Zealand, Norway and Russia - have submitted notifications and of all the others only Brazil is a major agricultural exporter.

On agricultural market access, the Chair said that tariff peaks, tariff escalation, tropical products, and tariff rate quotas have all been topics of discussion. Some have said they would like to see special products taken up as an issue as well.

On export competition, Ambassador Vitalis said that it was the least prioritised area, but there were delegations that have called for implementation of what was agreed in Nairobi.

On the issue of public stockholding for food security purposes, the Chair said that there have been dedicated sessions on this issue. Members agree on the mandate and the deadlines, but on little else. The G33 sees its 2014 proposal as the basis for discussion but positions have not changed since Nairobi.

The G33 favours food security and poverty alleviation and these are key for their programmes but those who have difficulty with the public stockholding issue are worried of unintended consequences which could have impacts on their agricultural programmes, said the Chair, adding that substantial differences remain.

On the Special Safeguard Mechanism (SSM), the Chair reported that there has been no change since before Nairobi.

The G33 would like its 2014 proposal to be the basis; but the problem here is that the G33 says that there should be no link between the SSM and agricultural market access and those that have concerns about the SSM saying completely the opposite.

There has to be a discussion on market access if there is to be any meaningful discussion on SSM, he added.

The Chair of the NAMA negotiations, Ambassador Remigi Winzap of Switzerland, reported that as of today, there does not seem to be any convergence or movement on NAMA. There has been no fresh momentum since Nairobi.

There could be a broader approach to dealing with this issue in terms of looking at market access or at least reducing policy space in agriculture, services and NAMA at the same time.

This being the last HOD meeting as both NAMA Chair and Swiss ambassador, he offered some ideas, saying that perhaps for NAMA one thing that members could do is to start to address incomplete bindings (some countries do not have fully bound schedules), and the 'water' in the schedules (difference between bound and applied tariffs).

There is some talk among some members for plurilateral discussions and the area where this is seemingly most prevalent is in the area of chemicals, he said.

Ambassador Gabriel Duque of Colombia, the chair of the services negotiations, said that there has been a clear message from members that they are keen to move forward, and that the progress in agriculture at MC10 has given some members the impression that there is less of a need for sequencing, that is, dealing with agriculture first.

There is a common acknowledgement that services have lagged behind and equal recognition that services are extremely important to the economies of all WTO members.

The Chair referred to a meeting held on 4 July with 25 delegations at which there was discussion about the need for new ideas and initiatives and less a repeating of common positions. There was an in-depth discussion about domestic regulation. There is hope for more progress here. There is need for more specific proposals to move those discussions ahead.

On the question of market access in services, delegates said there has been little progress here because of a lack of leadership.

According to the Chair, many members have mentioned e-commerce as an important area of discussion for their economies and the notion of trade facilitation in services has been mentioned by many delegates, and there was a need to put forward a concrete proposal.

On the objectives, the Chair said one of the ideas in market access is that there needs to be some new thinking and that solid proposals are long overdue.

A couple of the ideas put forward would be to eliminate any difference between what you apply in your market and what you have submitted as your offer in the WTO. Another idea would be to bring your WTO commitments up to the level of what you have had in regional trade agreements, he said.

Another idea would be that commitments that had been made by recently acceded members (now called Article XII members) could be seen as a basis for the level of ambition for services offers.

Ambassador Wayne McCook of Jamaica, chair of the rules negotiations, reported that a paper had been put forward by some delegates on questions about fisheries subsidy schemes of governments. There were some questions about how to achieve the Sustainable Development Goal 14.6.

The Chair said that there is a strong desire for an outcome by MC11. There is a gap among the proponents on how and where this issue should be taken up. But there is strong support for getting some kind of an outcome.

Others are concerned about imbalance in the negotiations and would like to see a balance between fisheries subsidies, anti-dumping and subsidies.

It is very important to see more specific papers coming forward. There is a willingness to move forward in the negotiating group on fisheries subsidies but on balance, i.e. equal movement on fisheries subsidies and anti-dumping, some say that this is absolutely crucial, while others say, go for agreements where you can get them.

The road ahead is challenging, said the Chair.

The Chair of the Committee on Trade and Development in Special Session, Ambassador Yee Woan Tan of Singapore, reported that all delegates understand the importance of special and differential treatment (SDT) but members have not moved from the positions that they had when the Committee met before Nairobi.

Some have said that we should pick up where we left off, while others said that to pick up the 25 Agreement-specific proposals in the current or the previous format would not lead to a positive outcome.

Some delegates said that there is need to re-orient the discussion, while others said that we shouldn't. Some said what we should do is talk about doing away with exemptions and carve-outs and that we should look for better ways to integrate developing and least developed countries into the multilateral trading system. But others rejected this idea.

The Chair reported that the issue of differentiation between developing countries came up, with continuing strong disagreements on this.

While there has been some movement to action, by and large, there has been an absence of new approaches and the work in this committee is not moving well, said the Chair.

Deputy Director-General Yi Xiaozhun read out the report of the Chair of the TRIPS Council in Special Session, Ambassador Dacio Castillo of Honduras, saying that the issue here is those delegations that call for the mandate to include not just the GI register for wines and spirits but to extend the geographical indication mandate to cover other products and to ensure coherence between the TRIPS Agreement and the CBD.

The Chair of the Committee on Trade and Environment in Special Session, Ambassador Syed Tauqir Shah of Pakistan, said that there has been very little progress.

Members spoke on the importance of the Paris Agreement (on climate change) and Agenda 2030 for Sustainable Development, but most of the discussion that he had in his consultations has been on work that is being done in fora other than the committee in special session.

Deputy Director-General Karl Brauner reported on behalf of the Chair of the DSB in Special Session, saying that very little progress has been made (on DSU reform). There was some discussion about whether there can be deliverables at MC11.

Some say that a target date should not be put on any outcome, while others say that this could focus the discussion. There were many who said that what is needed is an outcome that would favour an incremental approach to progress, said the Chair.

VIEWS OF MEMBERS

A number of delegations spoke following the reports by the Chairs, with developing countries including the African, Caribbean and Pacific (ACP) group highlighting the importance of obtaining development outcomes and that priority should be given to the Doha issues.

They also underlined that the issues of public stockholding for food security purposes and the SSM must be delivered at MC11.

South Africa, for example, said that all the reports of the Chairs indicate that - in one way or another - much more needs to be done to close the gaps between Members.

This task is made more challenging in a context of low global growth, depressed global demand, widening inequality and unemployment.

"We are also aware of growing calls that we rethink approaches to trade policy so that it delivers on inclusive growth and sustainable development more effectively in future. In our work, aside from a range of specific issues that make progress difficult, there are several more deep-seated challenges."

According to South Africa, the first revolves around the starting point for engagement: While most Members have not abandoned the DDA texts as the basis for work, others, who propose new approaches, have not been able to offer any agreed alternative.

In addition to divergences on "how", we are not clear on "what" to advance, South Africa said.

"Members have different views on whether we should move forward on all the Doha Round issues or on a smaller basket of issues. The essential, unresolved challenge remains defining a 'balanced' agenda acceptable to all."

Another fault line running through the work is the different views on how we understand "Trade and Development", and the importance of policy space for development. This is compounded by upfront calls to narrow the scope and application of special and differential treatment.

The situation is not very different on new issues: some want them; others do not.

In South Africa's view, until there is some shared understanding on how we intend to address the remaining Doha issues, deemed 'the priority' at MC10, it will be difficult to get 'buy in' from all Members to even discuss non-DDA issues, lest we create a new 'imbalance' in the negotiating process.

"We have heard that we are moving from reflection into a proposal-driven phase, and we will see how this unfolds over the next few months. However, it seems clear to us that we need to come to terms with the deeper divergences if we are to make real progress. It also seems clear that we need a continued focus and progress on trade distorting domestic support - including and notably on cotton - and public stockholding if we are to unlock progress on any of the other issues."

South Africa underlined that to have any chance of success, any proposal - on any issue, including non-DDA issues - would need to be sensitive "to our developmental objectives and would need to include an undiminished application of the principle of special and differential treatment."

"We also need to see a much greater appreciation of the varied developmental needs of developing countries - as defined by developing countries themselves."

South Africa said that while this is complex and difficult work, "we should resist becoming impatient or being tempted to pursue short-term 'solutions' that run the risk of fragmenting the trading system and storing problems for the future."

Plurilateral formats for negotiation will inevitably divert attention from our collective work: And we know they fall short in their developmental content and can undermine the objectives of inclusive growth, it cautioned.

"We need more patience, more hard work and more time to close the gaps amongst Members. Difficult as it is, multilateral cooperation and engagement continues to offer the best chance for inclusive growth and sustainable development from which all Members can derive benefit," said South Africa.

(A further report on the statements of delegations at the HOD meeting will appear in a future issue of SUNS.)

 


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