TWN Info Service on WTO and Trade Issues (June 07/24)

27 June 2007

"The G4 as such is dead", says Amorim 

Brazilian Foreign Minister Celso Amorim gave a press conference in Geneva on 22 June a day after the Potsdam G4 meeting collapsed.

Below is a report of his press conference.

Best wishes
Martin Khor

"The G4 as such is dead", says Amorim

Published in  SUNS #6278 dated 25 June 2007

By Kanaga Raja (SUNS) Geneva, 22 June 2007

"The G4 as such is dead and we'll see what we can do in the multilateral level (in Geneva) and in other formats," declared Brazilian Foreign Minister Celso Amorim Friday, following the collapse the day before of a crucial meeting between the United States, the European Union, Brazil, and India in Potsdam, Germany.

The Brazilian Minister was speaking to the media in Geneva following the Potsdam meeting. At Geneva, Mr. Amorim met with the G20 developing countries as well as with Director-General Pascal Lamy in order to give them his evaluation of what happened in Potsdam.

In his meeting with Lamy, Amorim said that he expressed his disappointment with the result in Potsdam, and also with the procedures and attitudes present there.

(Reacting to the collapse of the Potsdam talks, Lamy had immediately announced the convening of an informal meeting of the Trade Negotiations Committee for Friday afternoon, and had said that there would be negotiations at multilateral level in what he called "chair-driven" process, with chairs tabling compromise texts. Last evening, Lamy also reportedly conferred with the USTR Mrs. Susan Schwab, and chairs of various negotiating groups. This morning, the chairs of agriculture and NAMA talks advised delegations of an informal meeting on both agriculture and non-agricultural market access for Monday, 25 June.)

At a separate media briefing later in the day, US Trade Representative Susan Schwab said that the US was quite optimistic going into Potsdam in that there was finally a chance to achieve convergence among the G4.

However, the US was disappointed when they got to Potsdam. Schwab put the blame for the failure of the Potsdam talks squarely on India and Brazil, saying that both the countries had extremely rigid positions on NAMA, market access in manufactured goods, market access in agriculture, and on domestic support (see her comments below.)

At his media briefing, Amorim was asked as to whether there will be another meeting in the G4 or even G6 (G4 plus Australia and Japan) format. While not discounting anything, Amorim said that personally, he did not look forward to meeting in a G4 Ministerial in the near future.

He said that he did not think that it was the most productive format in the short run, adding that some sort of small format might be useful, because it is impossible to discuss all the subjects around the 150 members of the WTO at the same time.

He also did not think that the G6 "would do the job either. Actually, the G6 would be more tilted against developing countries."

"If you have to go to another format, it will certainly have to include other countries such as China, South Africa, Argentina and maybe other developed countries as well." He thought that a meeting of 12-14 members might be useful.

Asked as to whether Brazil will not be talking to the US again on agriculture, Amorim said that Brazil has an ethanol program with the US, and thus it would be talking to the US on agriculture. He also said that at this stage, he did not see very much purpose in bilateral meetings about the Round.

Asked as to the situation in the coming months, the Brazilian Minister said that it was "very much in the hands of the Director-General", and pointed to combining a multilateral process with the Chairmans' text and possibly some Green Room meetings.

Referring to the talks in Potsdam, Amorim said that Brazil has always felt, and this was true for India as well, that they were there not only to represent their interests, but also those of the G20, and to some extent, if not representing, trying to express the views and perceptions of developing countries.

While Amorim said that he did not think that the Doha Round was dead, it was a setback. "It was a setback... now it is for the membership as a whole to see how it can deal with that setback."

As to criticism about the G4 trying to make a deal on the back of the membership, Amorim stressed that has never been the case.

"It might not be impossible for Brazil or India behind in a closed door to defend our specific interests... but we did not do that. We were really attached to the figures, the facts and formulas that the G20 and other groups of developing countries presented and that is what we defended" in Potsdam.

He said that both he and Indian Commerce Minister Kamal Nath were thinking of the G20 and G33 in the meeting. They were not only thinking of products of interest to them but also products of interest to their colleagues.

In response to another question on not being able to reach agreement in Potsdam, Amorim said that it was a "Cancun Act 2" in many respects.

The US and the EU have already found levels of mutual comfort and they would not budge from these areas of mutual comfort. In this respect, he referred to supposed lower levels of ambition both on domestic support and in market access in developed countries.

They (the US and EU) have already found their basic level of comfort and they have already established among themselves what was the "exchange rate" from their point of view that they wanted from Brazil and India in NAMA and Special Products, he said.

"As usual, as it has always been, what they agreed they consider is the agreement."

He said that what was on the table was very little, both in terms of overall trade distorting support, tariff caps and also in the area of market access.

There was also a repetition (presumably by the EU and the US) that India and Brazil were trying to change the goalposts in the area of market access, which Amorim stressed was not the case.

The US and the EU became a bit angry when he wanted to know what would be the effective cut in sensitive products, Amorim said, pointing out that 50% of Brazil's exports to the EU are declared sensitive.

Amorim expressed hope that the round could be completed by the end of the year, saying that a lot will depend on the ambassadors here in Geneva.

Asked his reaction about the EU and the US blaming India and Brazil for the Potsdam failure, Amorim said that he was not worried at all that the US and the EU blamed him. He said that he would be very worried if the G20 members were to say that he betrayed them or did not represent their views, or if the Brazilian industry were to say the same.

(According to media reports, the US and the EU accused Brazil and India of backtracking on NAMA, by demanding concessions from the US and the EU in exchange for cuts in industrial tariffs that would not result in any new market access.)

"I really don't worry at all that the US and the EU blame me. I would not expect them to do anything different because that is what they have been doing all the time," he said.

Asked as to why there was no joint G4 statement at the end of the meeting, Amorim said that while there was a proposal for a joint statement, both he and Indian Minister Nath thought that it was not correct, and would be a misrepresentation of the facts to give the impression that the G4 are agreed.

Instead, since both his and Nath's visions were identical in the basics, they decided to do a press conference together in Potsdam, Amorim said.

A joint communique would be a joint communique on procedures only to just give an impression that did not correspond to the facts, added Amorim.

At a separate media briefing, USTR Susan Schwab, who was also joined by Agriculture Secretary Mike Johanns, said that the US felt optimistic going into Potsdam that they finally had a chance to achieve convergence among the G4. It was the first time in over a year since the talks broke down last July that we really felt hopeful that there was a chance, she said.

However, the US was extremely disappointed when it got to Potsdam. "We started down the road on what we thought was a full fledged negotiation that would last the whole week," she said, adding that the US came prepared to deal, to stretch and do its share and then some, to help convergence happen.

She said that the US was however taken aback that having made as much progress as they have been making on the senior officials' level in agriculture, to discover that India and Brazil had extremely rigid positions on NAMA, on market access in manufactured goods, and even on market access in agricultural products and domestic support.

"We have been making progress... getting some traction," she said, adding that "it was almost as though two legs of this four-legged stool showed up unwilling to deal, unwilling to negotiate, with extreme rigidities.. with red-lines about everything."

"You can't reach an agreement if one side of the equation is saying 'I won't deal', or is saying 'take it or leave it'. It really was take it or leave it," Schwab said.