TWN Info Service on WTO and Trade Issues (Mar08/22)
31 March 2008
Third World Network

Please see below an article in SUNS reviewing the latest situation in the WTO negotiations.

Martin Khor

WTO road from Easter to May is paved with uncertainties
Published in SUNS #6442 dated 27 March 2008

By Martin Khor, Geneva, 26 March 2008

Following the long Easter weekend, the WTO has got back to business this week, with meetings on WTO rules (starting with fishery subsidies), NAMA (on the LDC issue) and probably another Green Room meeting to continue discussing the process of the weeks ahead.

The most immediately important meetings taking place will be those of the "Data Group", or the 11 WTO members that are trying to agree on the methodology for calculating domestic consumption of some sensitive products, as the data will be key to determining the expansion of tariff rate quotas (and thus of increased market access) for the sensitive products.

Fixing the data methodology issue has become the "gateway" to further agriculture talks. It is also an important component of the new "materials" needed to draft a new agricultural modalities text.

And the revised text is itself the gateway to taking the Doha negotiations to its next stage, the "horizontal process", where agriculture and NAMA (at least) will be discussed in a cross-cutting way.

Not long ago it was thought that the senior officials of 25-30 countries would descend onto Geneva for the horizontal talks around mid-March, so that the mini-Ministerial can be held by mid-April, before the UNCTAD XII in Accra (20-25 April). This itself was late, as the mini-Ministerial was originally fixed (during Davos) for "around Easter".

The deadlines keep being pushed back as the group-level talks on agriculture and NAMA have not been smooth, and many bumps still need to be sorted out.

According to diplomatic sources, the "data group" has made some progress before Easter in their search for a compromise in the methodology, and there should be something to report on, although perhaps not a final solution yet, in the next few days. Without movement here, there can hardly be movement in agriculture overall, according to the plan of Ambassador Crawford Falconer, the chair of the agriculture negotiations.

Still, keeping a close look at the clock ticking away, Falconer has written to "Room E" agriculture participants that he will re-start Room E meetings on 31 March. He had two weeks ago told an open-ended meeting that he would convene a meeting on that date, whatever were to happen to the data discussions.

He had indicated, to journalists, that the Room E meeting would begin with the sensitive products consumption data issue (which would last more than 3 or 4 days in his estimate) and then move on to tropical products, tariff escalation and possibly special products, etc.

The impression given by him was that this next round of Room E meetings might last more than a week.

If it does go on for a fortnight, this would take till almost mid-April. Perhaps, Falconer will then issue his new paper in mid-April or soon after, in any case before UNCTAD XII?

A spanner in the works of this time-table is that the African Ministers of Trade and Finance, and the senior officials before them, are meeting in Addis Ababa on 1-3 April. Though the main topic is the Economic Partnership Agreements with the EU, the senior officials at least are also to discuss the current WTO Doha situation.

Several African delegations at the WTO want Falconer to postpone the start of his Room E meetings until the African diplomats return to Geneva. If Falconer agrees, his schedule will be put back several days. If he does not agree, he may let Room E discuss issues first that are not so important for the Africans. But then, every item is important to everyone.

The other group leader, Ambassador Don Stephenson, in charge of NAMA, told a journalist yesterday that he will be holding "confessionals" (one-to-one meetings at which the member is asked what his or her honest views and "bottom lines" are) with the countries affected by the Swiss formula and flexibilities.

Until he finishes the confessionals, he does not intend to re-convene Room E for another session on formula and flexibilities, he indicated. In any case, the revised NAMA paper will also come out only when the agriculture paper is ready.

If the two papers come out in mid-April, will there be some days for the Geneva diplomats to digest the papers after they are issued, and will they be given the chance to air their initial comments, at open-ended meetings, or at the Trade Negotiations Committee, as is the usual practice?

If so, this will take the schedule to just before UNCTAD XII. The corridor talk at UNCTAD XII. will then also be filled with discussions on the revised texts.

It is then likely, in this scenario, for the "horizontal process" to begin only after UNCTAD XII, say at the start of May. Even then, there must be an agreement of some kind by the members to shift from the group talks to the horizontal talks.

Many members may decide that more work needs to be done at the group level, and it is not yet time for the horizontal to start.

There will be at least a few (the European Union being the most likely) that will counter that time is really, really running out and if the entire Doha deal has to conclude by December, then a mini-Ministerial has to be held by May, and the senior-officials' horizontal must start at least by the beginning of May, with a short preparation time for the Ministerial itself.

The whole debate, by that time, may also be clouded by the underlying question as to whether it is useful or futile after all to have an end-of-2008 deadline, since there is no fast track authority for the present US President, and there is almost no chance that he can send on an entire Doha agreement to Congress, since Congress will be in recess for the Presidential elections before the end of the year.

In any case, the term of the present US Congress will be expiring and there will soon be a new Congress with a new President.

The difficult set of questions to ask and answer is, what would the new President do with a Doha agreement that is passed on to him or her by the previous President, and how will he/she deal with the new Congress on this?

Moreover, will he/she have to get a new fast track authority first before considering all this, and how long will it take to get this authority, and will new conditions (such as labour and environment) be put on this authority? How will all this affect the Doha deal and the other WTO members?

Without knowing the answers, it may get more and more difficult for countries to negotiate when the level shifts to the horizontal, and then from officials to Ministers.

The shape of the horizontal, the scope of the issues, and the hierarchy of these issues, are also not settled yet.

They are being discussed in the Green Room of ambassadors of some 20-25 members that is convened by Pascal Lamy, presumably in his capacity as chair of the Trade Negotiations Committee.

Diplomats of some countries are anxious about the changes that will take place when the groups' Room E process (accompanied by the open-ended transparency meetings) shifts to the horizontal.

For one thing, the membership will change as not all the Room E participants are invited to Lamy's Green Room. There will be a reduction in participation of members. Who is in the Green Room, how they are invited there, and how to get invited if one is not, are questions that are politely avoided, for the time being at least.

Second, diplomats are now used to the style of the two group Chairs, and their drafting and redrafting practices, and their tabling of texts. It must be said that developing country delegations are more comfortable with Falconer's methods, and many of their diplomats (especially in the NAMA-11 group) are unhappy with Stephenson's style and paper-writing, which has not reflected their views in his text.

They are not used to Lamy's drafting, and there has been quite a lot of apprehension about the possibility or even a push for a "Lamy text", which may be similar in function to a "Dunkel text."

Lamy himself has tried to soft-peddle the question of a "Lamy text", but without discounting it. The impression is not that Lamy is against such a text, but that the timing and the atmosphere must be right to have it proposed.

In any case, once Lamy chairs the horizontal Green Room, he will be in charge of whatever Chairman's drafts are proposed to be produced. How will the Green Room or horizontal Chair's texts be like, and what will his process and practice be like?

Third is the question of the link between the Green Room and the negotiating groups. The EU has proposed that they do their work in parallel processes. Each is to feed into the others, presumably.

How will that work in practice and in principle? Will the bottom-up approach be the main one, as it has been so far, with the groups' work being the primary means of negotiations? Or will the top-down approach take over, with the Green Room instructing that sticky problems that crop up be solved by the groups, while the design as a whole is kept at the Green room and led by its Chair?

Fourth is the question of participation and transparency. Will the Doha Round be concluded only by an exclusive club of a few members in an unelected Green Room? What will be the relation between the Green Room of horizontals and Ministerials, and the membership of the whole, who may have little clue or knowledge of what happens inside, and who fear that the real job given to them is to rubber stamp what the Masters of the Trade Universe have agreed on?

These larger issues will loom more and more as the process goes on. At the moment, however, the immediate unresolved questions have to do with the timing of the horizontal and the scope of issues it will cover.

Two Green Room meetings, chaired by Lamy, and attended by 25 or so delegations, have been held on the scope, on 13 and 18 March.

The meetings agreed that agriculture and NAMA are at the core of the horizontal. But there has been no agreement on what to do with the other issues that are important to one group of Green Rom participants or other, including services, rules, geographical indications (GI) and the TRIPS/CBD interface.

At the 18 March meeting, most of the discussion was on how to treat services, according to diplomats.

Here, there are two aspects or tracks. One is the question of a Chair's paper. The developed countries want it to be made into a "multilateral text", to be agreed to by all members. The Chair of the services negotiations, Ambassador Mateo, has prepared a Chair's Report, which he hopes to transform in due course to a members' text.

The US, EU and other developed countries insist on a multilateral text that includes points to their liking (especially the binding in GATS of present levels of market opening and national treatment, and additional market access) but these points are opposed by many developing countries that want a simple text reflecting what has been agreed on already (principally, Annex C of the Hong Kong Declaration).

Second is the desire of the proponents of the plurilateral negotiations (mainly the developed countries) to get the key developing countries from which they seek fresh market access to put their cards on the table and reveal what they are willing to give in revised offers.

The holding of a Signalling Conference is the event that will achieve that goal. The Green Room discussed the timing and form of the outcome of this conference, and its relation to the text (if any) and who will participate.

According to diplomatic sources, the developed countries argued that services are very important, and they need a balance in the market access pillars, and for them the Chair's text is important to influence the revised offers.

They also wanted the Signalling Conference to be held before or at the same time as the agriculture and NAMA negotiations. They asked for some written report of the "signals" being given of offers. They wanted Lamy to chair the conference, and at least the 27 members involved in plurilateral negotiations to take part.

Some developing countries had a different view of the "text." They wanted the Chair's document to only report on the progress made after the Hong Kong Ministerial. They argued that the Annex C of the Hong Kong Declaration had already laid out the services ambition level. They opposed the developed countries' insistence of comparability between services and agriculture/NAMA ambition levels, and the binding of the current levels of market openings.

According to diplomats, Lamy concluded that there was a feeling the Signalling Conference would be at around the same time as the agriculture and NAMA meeting, that he would chair the conference, and would give a written report on the conference to the Trade Negotiations Committee.

On the IPR related issues, the proponents of geographical indications (mainly the EU) wanted Ministerial involvement, while the developing countries advocating the TRIPS/CBD issue reminded that a majority of developing countries were now co-sponsors of the disclosure proposal.

According to diplomats, there was no agreement on how these two issues would be treated, although Lamy was of the view that the issues were not yet ripe for discussion at that level, and that a report should be prepared (by him) on the status of the negotiations on these issues in the various bodies in which they are being discussed.

The other contentious issue is how the issue of rules (anti-dumping, fishery subsidies, etc) should be treated. Many countries, including Japan, India, Brazil and the ASEAN countries are upset with the Chair's draft text which proposes changing the rules to legalise types of the zeroing practice in the calculation of dumping margins, although the WTO dispute bodies have ruled that the practice is illegal.

The opponents of the Chair's text want a change in the rules negotiating text before the start of the horizontal talks. The US (the main practitioner of zeroing) wants the text to remain as it is for now.

The Green Room meeting did not discuss the rules issue due to lack of time, and it will come up in the next Green Room meeting which is expected this week. +