TWN Info Service on WTO and Trade Issues  (Feb08/01)

2 February 2008

Please see below an article on scenarios on what will happen next in the Doha negotiations of WTO.

This article was published in the SUNS of 31 Jan 2008.  Any reproduction requires the permission of SUNS (

Best regards
Martin Khor

Options and scenarios float around on way ahead for Doha
Published in SUNS #6404 dated 31 January 2008

Geneva, 30 Jan (Martin Khor) -- Although news reports from Davos have painted an optimistic scenario of a "Ministerial" meeting in March or April, presumably to finalise modalities of negotiations (and clinch a Doha deal during the Bush presidency), many WTO diplomats in Geneva are sceptical about the scenario and doubt that the new "deadline" can be met.

Since its launch in Doha in November 2001, the Doha talks is littered with many broken deadlines, and there are still many obstacles to be overcome in the talks on agriculture and NAMA, as well as deep differences in services, rules and the issues of intellectual property and bio-diversity as well as geographical indications.

To be able to bridge these differences by March or April would be more than an uphill task, especially since there have been few signs of shifting of positions in any of these areas since negotiations re-started in the first week of January.

On Thursday morning, there will be an informal meeting of the Trade Negotiations Committee at the WTO, where Director-General Pascal Lamy (who is also TNC chair) is expected to report on the meetings in Davos; some trade diplomats also expect him to give his view on the "roadmap" of how events are to develop over the next few months.

According to some diplomats familiar with the lunch meetings in Davos among trade Ministers and senior officials of several countries, discussions at the meeting did not cover substance but were confined to process.

Two options or scenarios emerged on how to proceed with the negotiations over the next weeks, according to the diplomatic sources.

The first option is for the revised draft agriculture modalities, to be issued by the Chair, Ambassador Crawford Falconer of New Zealand, after the 5-6 February meeting of the General Council. And then, after a week or so have a process of further consultations around issues on which differences remain or which have not yet been well developed. The consultations could be in the small-group Room E format or in open-ended sessions or both.

After these consultations, Falconer would then issue a second revised draft - the final one from him - which would then be brought up for negotiation in the so-called "horizontal process", in which the agriculture and NAMA modalities would be discussed together, presumably in a "Green Room" process chaired by Lamy. In this option, the NAMA revised paper would also be issued after the first revised agriculture paper.

The second option, according to the sources, would be for Falconer to delay releasing his paper in early February, but hold further consultations on sticky issues and try to close the gaps. The revised paper would then be issued, with no more consultations or another paper after that; and this revised paper would be the basis for the agriculture component of the "horizontal process."

According to the sources, there was recognition that there is "not enough material" at this stage for the agriculture Chairman to present a final document, and therefore he would either have to issue a first document, to be followed by discussions towards a second document; or else he would take more time with the consultation process in the next weeks, before issuing a final paper later in February or beyond.

One senior developing-country diplomat said that the second option would be worse for developing countries in general because it meant that there would only be the single paper, and developing countries would not have the chance to influence a revision of parts they are not satisfied with before the paper goes to the "horizontal process."

The "horizontal process", when the agriculture and NAMA papers are ready, would first involve Ambassadors and senior officials, and then a mini-Ministerial, to be called when there is sufficient agreed substance, according to these scenarios.

Geneva diplomats agreed that the "Ministerial meeting" at around Easter that was talked about by some Ministers in press conferences in Davos must have referred to a "mini-Ministerial", and not a full Ministerial, which would take much longer to prepare.

Several developing-country diplomats said they are not convinced that a deadline of a March/April mini-Ministerial could be met, since there are still so many major differences to be settled, in both agriculture and NAMA, unless an attempt is made to have a top-down and non-participatory process in which a majority of developing countries are pressurised to accept what are in the Chairs' texts on agriculture and NAMA. Such "strong-arm" tactics, used previously in the WTO, cannot be expected to succeed at present.

It is also not clear what issues are to be covered in the "horizontal process" and in the mini-Ministerial, in particular whether it is to be confined only to agriculture and NAMA or whether services, rules and other issues like IPRs are also to be brought up even at this stage.

There are already so many "hot issues" in agriculture and NAMA, that bringing in services and rules also would muddy the waters even more.

There are major differences in services (see SUNS #6403 dated 30 January 2008). The developed countries are pushing for a "Chair's text" containing a level of ambition in services to be "comparable" with the ambition level in agriculture and NAMA, as well as a controversial proposed provision that existing levels of market access and national treatment be "bound" through GATS commitments in this Round.

A majority of developing countries are opposing the "comparability" concept, as well as the binding of existing services market openings, and are instead asking that the Chair's text reaffirm existing services modalities, such as Annex C of the Hong Kong Ministerial Declaration, and that it stress the need for developed countries to commit significantly to modes and sectors of export interest to developing countries.

In the rules area, there are still many deep differences in anti-dumping and particularly on the "zeroing" issue, as well as in fisheries subsidies. And on the two IPR issues of disclosure in patent applications involving genetic resources, and geographical indications, the differences are still wide apart.

Many developing-country diplomats are also against what they see as the pressures by a few members, and by the Secretariat leadership, to rush through an agreement on agriculture and NAMA modalities, services and rules, by the unrealistic deadline of March/April.

In the past, similar pressures were applied on the argument about the need to conclude the Round within the period of the US President's fast-track authority. This has now ended in June last year, and the fast-track deadline has been thus already missed.

Applying the same logic that necessitated that deadline, the Doha negotiations should now be suspended or at least be kept at a low level of activity, until a new fast-track authority can be obtained. Most people in the know believe that a new fast track authority is possible only under a new Presidency in 2009 or later.

Negotiating partners of the US are in the position of extreme uncertainty as to whether the US negotiators are able to deliver the positions they put forward or which they agree to from others; for, absent fast track authority, various pieces of a Doha agreement can be pulled apart, changed and tampered with by the US Congress. In fact, without fast-track authority, any agreement or draft agreement could be bottled up in relevant committees by the committee chairs.

On Tuesday, speaking to journalists in Washington, the US Trade Representative Susan Schwab said she would try in earnest to win renewal for fast track trade authority as soon as there is a breakthrough in the Doha negotiations.

"As soon as we have a breakthrough, if we have a breakthrough, I intend to go up to the Hill and seriously pursue trade promotion authority, recognizing at that point any vote on (the authority) becomes de facto a proxy for the Doha development agenda," Schwab said, according to a Reuters report.

From the perspective of the trading partners, this is a loony idea, and there are at least two problems with this. Firstly, it means the United States' partners would have to make sufficiently deep concessions to meet the demands of the US in order that the US administration can "tempt" Congress to provide a new fast-track authority for the President.

But if the United States' partners do not have confidence that what the US offers and what they themselves offer will ever be accepted by the US Congress, why should they show their hand and make concessions which will probably be seen as insufficient, and which they would then be called upon to "top up" by Congress, or in renewed negotiations at the WTO?

It is a chicken-and-egg problem. Without fast track, why should the US partners, especially the developing countries, negotiate to the point of making significant concessions, while on the other hand, the US administration can only say that "if you want us to get fast track authority, you must give us the concessions we demand."

Secondly, there is just no way that the USTR can promise that the Democrat-controlled Congress will give Bush a new fast track authority in the dying days of the Presidency (with the most recent poll showing 29% approval rating from the public).

In all likelihood, a new fast track authority will only see the light of day, if at all, under a new President. With the US politicians in the throes of elections campaigning, with the US facing financial crises and an economic slowdown or recession, and with a new anti-free trade mood among politicians, it is hard to envisage members of Congress being in a mood to rush through a new Trade Promotion Act as a farewell gift to the Bush presidency.

The scenarios for the next weeks of intense WTO negotiations are being planned and discussed in this shadow of not having and wanting to have fast track.

As Chakravarthi Raghavan put it, in his commentary in SUNS #6403 dated 30 January 2008: "Since March 2007, USTR Susan Schwab, as well as Lamy and his officials, have been suggesting that if there is an attractive enough market access package that the US cannot refuse, Congress would quickly grant even limited TPA to conclude the Doha talks. And on this basis, Lamy has been pressing major developing countries to make market access concessions to the United States.

"It is difficult to believe that trade negotiators, trade officials, the media and the civil society groups involved in the process believe in this spin'. Anyone outside this group, and with modern Internet, following the course of the US Presidential elections, knows there is no chance of any TPA being granted to the Bush administration, nor even to any new Administration until perhaps well into end of 2009 or 2010." +