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TWN Info Service on WTO and Trade Issues (July 07/17)

28 July 2007


Developing-country groups form common front at TNC meeting

Major groupings of developing countries put up a common front at the WTO on Thursday (26 July) on the process and broad substance of future negotiations of the Doha Round.

At the meeting of the Trade Negotiations Committee, which oversees the Doha negotiations, eight groupings of developing countries (the G20, the G33, the ACP, the LDCs, the African Group, the Small and Vulnerable Economies - SVEs, the NAMA-11 and the Cotton-4), comprising a majority of developing countries, presented a joint statement of their assessment of the current situation after the circulation of the texts of the draft agriculture and NAMA modalities, and of what they consider to be central principles to guide the future negotiations.

The G90 (comprising the ACP, African and LDC Groups) and the NAMA-11 also presented a joint statement criticizing what they consider imbalances in the draft text on non-agricultural market access (NAMA) and calling for corrections to it.

The joint G90-NAMA 11 statement is significant as it demonstrates that a majority of developing countries support the broad positions taken by the NAMA-11 as well as the SVEs and other vulnerable countries.

At the TNC meeting Thursday, individual groupings, such as the ACP Group, African Group, LDC Group, G20, G33 and NAMA-11 also presented group statements, and many countries presented their national positions.

All in all, it was a strong display of preparedness by the developing countries as they attempted to position themselves at a crucial juncture of the Doha negotiations.

Below is a report of the TNC meeting, which was published in the SUNS on 27 July.

Another report on the latter part of the meeting will be given in the next TWN Info. 

With best wishes
Martin Khor
TWN

Developing-country groups form common front at TNC meeting

By Martin Khor (TWN), Geneva 27 July 2007

Major groupings of developing countries put up a common front at the WTO on Thursday (26 July) on the process and broad substance of future negotiations of the Doha Round.

At the meeting of the Trade Negotiations Committee, which oversees the Doha negotiations, eight groupings of developing countries (the G20, the G33, the ACP, the LDCs, the African Group, the Small and Vulnerable Economies - SVEs, the NAMA-11 and the Cotton-4), comprising a majority of developing countries, presented a joint statement of their assessment of the current situation after the circulation of the texts of the draft agriculture and NAMA modalities, and of what they consider to be central principles to guide the future negotiations.

The G90 (comprising the ACP, African and LDC Groups) and the NAMA-11 also presented a joint statement criticizing what they consider imbalances in the draft text on non-agricultural market access (NAMA) and calling for corrections to it.

The joint G90-NAMA 11 statement is significant as it demonstrates that a majority of developing countries support the broad positions taken by the NAMA-11 as well as the SVEs and other vulnerable countries.

In recent weeks, there has been a controversy on what are the positions of a majority of developing countries. In what several trade observers see as a "divide and rule" attempt, the controversy was first stirred by the US and EU in their blame game following the failure of the G4 Ministerial in Potsdam (when they accused Brazil and India of not being representative of developing countries' views on NAMA.)

The controversy was further inflamed by the NAMA draft which implied that certain key positions of the NAMA-11were those of a very small minority, and that there was near unanimity in the WTO on the need for severe tariff cuts through the Swiss formula and its coefficients.

This attempted portrayal of the "real" developing-country view has been dispelled by the joint position taken on the NAMA draft modalities by the G90-NAMA 11 statement.

At the TNC meeting Thursday, individual groupings, such as the ACP Group, African Group, LDC Group, G20, G33 and NAMA-11 also presented group statements, and many countries presented their national positions.

All in all, it was a strong display of preparedness by the developing countries as they attempted to position themselves at a crucial juncture of the Doha negotiations.

The WTO goes on a summer break after the General Council meeting on Friday, and intense negotiations will begin on 3 September on the modalities on agriculture. Negotiations on NAMA modalities are scheduled to begin a week or two later.

Although there is no "deadline" this time - maybe because there have been too many broken deadlines in the past many years and another unfulfilled deadline would add to the Doha Round's already poor record and image - in fact, some WTO members are of the view that at least some key modalities have to be agreed on by the end of September or the beginning of October, otherwise the process will lose steam altogether and be put in "cold storage" for at least a few years.

In recent days, countries like Japan and Singapore have warned at meetings that this is the "last effort to save the Round" and the "last chance for this negotiation."

The draft modalities texts of the Chairs of the agriculture and NAMA negotiations, respectively, Ambassador Crawford Falconer of New Zealand and Ambassador Don Stephenson of Canada, have drawn criticisms from a range of developing countries, when separate meetings were held on Tuesday and Wednesday to hear initial reactions to the drafts.

But these criticisms have been clearly differentiated. The developing countries have found the agriculture draft to have incorporated many points made by them, although not adequately, and thus they regard it as a document that can facilitate future negotiations.

However, a broad range of developing countries have severely attacked the NAMA draft for being biased, precluding negotiations, imbalanced against them, and as polarizing positions, rather than facilitating future work. The strong criticisms on the NAMA text continued at the TNC today.

Just before the lunch break, Argentina electrified the meeting by stating that the proposals in the NAMA draft created an excessive burden for developing countries, ignored the positions especially of the NAMA-11, constituted a biased document, and "we cannot accept it as a basis for negotiations."

In the corridors, many WTO members were discussing how to deal with a situation in which they could envisage the agriculture negotiations to proceed from the beginning of September, using the Falconer draft, but in which there had also been a serious loss of confidence in the draft of Stephenson and thus indirectly, in his role as Chair.

The Joint Statement of the eight developing-country groupings was presented by Brazil in the early part of the TNC meeting. "At this moment, when we are entering a new phase in the negotiating process, it is important to reaffirm some of the central principles accepted by all to guide the Doha Round," said the statement. The principles are that:

-- This is a development round and our groups will be assessing any outcome of the negotiations on the basis of the commitment undertaken in Doha to put development at the heart of the multilateral trading system;

-- Agriculture remains the engine of the negotiations, for it is central to delivering on the development dimension of the Round, especially through the substantial reduction and elimination of trade distorting subsidies in developed countries;

-- Commitments undertaken in the Doha Ministerial Declaration, the July Framework and the Hong Kong Ministerial Declaration must be fully respected;

-- Our objective must be to arrive at full modalities in both Agriculture and NAMA, addressing all elements of the mandate, in particular, as special and differential treatment for developing countries;

-- Only through a genuine multilateral process that is transparent, inclusive, bottom-up and Member-driven can we achieve results in which all members have a sense of ownership;

-- We are committed to maintaining our unity and cooperation, and to remain constructively engaged in a process of intensive negotiations among all Members that leads to final drafts of full modalities in Agriculture and NAMA that are complete, balanced and development-oriented.

The joint statement by the G90 and the NAMA-11 (representing a majority of developing countries in the WTO), said that their members are committed to a successful outcome in the Doha Round but that they are deeply concerned that the Chair's draft NAMA text suffers from substantial imbalances that will need to be addressed.

The joint statement outlines the following as the imbalances:

-- The draft text prejudges the outcome of the NAMA negotiations before members have had an opportunity to negotiate these outcomes in the multilateral process. This is in sharp contrast with the agriculture draft text where members' positions are substantially preserved allowing them significant scope to negotiate further.

-- The draft text changes what has become the principle of the Doha Round, that Agriculture should lead the ambition of the Doha Round, with the developed countries making the greatest reforms in their trade distorting policies. Instead, the draft text makes developing countries pay first in the NAMA negotiations and requires them to make severe cuts in their industrial tariffs.

-- The draft text seeks to re-interpret the mandates of the Doha round, that has called for taking fully into account the special needs and interests of developing countries including through less than full reciprocity in reduction commitments by developing countries; by asking developing countries to contribute disproportionately compared to the contributions requested from developed countries.

-- The draft text has called for contributions by developing countries that is not consistent with their development needs and levels of development.

-- The draft text has also undermined an agreement reached in paragraph 24 of the Hong Kong Ministerial Declaration to ensure that the level of ambition of the NAMA negotiations shall be comparable to that in agriculture.

The G90-NAMA 11 statement concludes that the above substantial imbalances in the draft text must be corrected to secure a fair, balanced and development oriented outcome in the Doha round. This can be achieved through a genuine bottom-up and inclusive process that allows for genuine negotiation and engagement in September.

The statements of various groups such as the G20, G33, African and LDC Groups reiterated the main points made by them in the informal meetings on agriculture and NAMA on the previous two days (24 and 25 July).

In contrast to the views of developing countries, the United States, represented by Ambassador Peter Allgeier, said that both draft texts underscore the basic and still unmet challenge of the Doha talks - "securing a strong market-opening outcome that results in meaningful new economic opportunities and trade flows worldwide, in agriculture, industrial goods and services."

[The Doha Declaration, in para 2, uses the words "enhanced market access", in the context of the pledge to make positive efforts designed to ensure that developing countries, especially the least developed among them, secure a share in the growth of world trade commensurate with the needs of their economic development, thus implying that the developing countries are to be provided "enhanced market access".]

The US repeated that a better offer by the US on agricultural domestic support depends on securing significant real increases in market access.

Ambassador Allgeier strongly hinted that the US is demanding a new "peace clause" (i. e. a constraint on taking up WTO dispute cases on agriculture subsidy and domestic support) when he said: "It is only logical that Members who are in compliance with their domestic support obligations should not be subject to dispute settlement actions over such measures."

On NAMA, the US repeated that the proposed range (19-23) for developing countries' coefficient "falls short". It was also opposed to the 8-9 coefficient for developed countries, saying that this is "not realistic, given that many rapidly growing advanced developing counties are offering little beyond binding currently applied tariff rates."

(As the SUNS went to press, the TNC meeting was still proceeding. The next issue of SUNS will provide a fuller report of the meeting.)

 


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