TWN Info Service on WTO and Trade Issues (Apr08/10)
23 April 2008
Third World Network

Trade: Senior officials to meet week of 5 May on services
Published in SUNS #6458 dated 18 April 2008

Geneva, 17 Apr (Kanaga Raja) -- The Chair of the Trade Negotiations Committee of the WTO on Thursday has proposed holding a round of bilaterals in the week of 5 May among senior officials to prepare for a "signalling" conference aimed at moving forward the services negotiations in the WTO.

The TNC Chair, Pascal Lamy, who is also the WTO Director-General, announced this move at an informal meeting of the TNC at the level of heads of delegation, where he outlined to members how the current negotiations process should move forward to the next stage.

Speaking at the informal meeting, the TNC Chair said that "time is coming soon to take our work to a higher level and to begin drawing together the threads both within and across the two modalities issues (agriculture and NAMA) as mandated in Hong Kong".

Lamy said that the "horizontal process will start at Senior Official level, in order to prepare properly for the Ministerial involvement which is likely to be needed at a later stage".

On the issue of the signalling conference on services, Lamy said that the outcome of the conference, which he is expected to chair, would be in the form of an oral report by him that would be placed on record in the minutes of a subsequent meeting of the TNC.

The main elements of such a report would include a description of the sectors and modes of delivery discussed and the signals exchanged regarding new/improved commitments which participants would be ready to undertake in response to the requests they had received from other members.

According to media reports, the one-day signalling conference at the level of Ministers would be convened at around the same time as the horizontal process - envisaged for the week of 19 May - where the issues of agriculture and NAMA will be taken up in a cross-cutting manner.

Trade officials said that while the suggestion has been made that 5 May be the date for senior officials to come and discuss services, by no means would that week be exclusively open to services. If there are senior officials here (in the week of 5 May) to discuss agriculture and NAMA, that is obviously a good thing, said trade officials, adding that the nature of those discussions would be very much determined by where members stand with respect to the modalities texts.

Speaking at the informal TNC meeting Thursday, Lamy noted that intensive work has been taking place over the last few weeks in the negotiating groups on agriculture and NAMA, building on the revised draft modality papers in these two areas circulated by the respective Chairs in early February. He believed that "we have made solid progress and that we are now much closer to the finish line."

He said that time is coming soon to take "the work to a higher level and to begin drawing together the threads both within and across the two modalities issues as mandated in Hong Kong." It also means giving sufficient reassurance that all the other negotiating issues are advancing as they should, said Lamy, adding that this is what is being called a "horizontal process".

Pointing out the need to demystify the term "horizontal process", Lamy said that similar processes have taken place in the recent past, notably in 2004 and before Hong Kong. The substantive objective is to prepare the formal establishment of modalities in agriculture and NAMA in the context of sufficient reassurance that other issues are also advancing within the Single Undertaking.

The basic principles to which members are all committed will continue to apply, said the TNC Chair, pointing out that transparency and inclusiveness are fundamental; modalities can only be established by the full membership; informal consultations in various smaller configurations are essential to narrow differences but they must feed into the multilateral arena in a continuous loop.

To give effect to these principles, Lamy said that he would hold frequent informal TNC meetings throughout the duration of the horizontal process. He will supplement them with continuing dialogue with the regional and other groups as well as with Green Rooms as required.

The horizontal process will start at Senior Official level, in order to prepare properly for the Ministerial involvement which is likely to be needed at a later stage. It will be important to allow Senior Officials sufficient time to narrow down the range of issues for Ministers. This is essential if Ministerial involvement is to be productive.

The starting point for the process will be the Agriculture and NAMA Chairs' revised texts which are expected for later this month; the end product should be sufficient convergence on key points in Agriculture and NAMA to enable final draft modalities texts to go forward to the TNC for establishment of those modalities.

It remains clear that the primary focus of the next weeks has to be on modalities in Agriculture and NAMA. On the other hand, it is also clear that issues such as Trade and Environment, the S&D Work Programme, and Trade Facilitation are advancing and need not be taken up in detail at the time of the modalities. Therefore, on these issues the respective Chairs will make reports to the TNC on progress and set out road-maps for further work in their respective areas.

This leaves a middle group of three issues where it has become apparent that more clarity is needed, namely Services, Rules and the TRIPS-related issues. These issues have been the principal focus of the consultations he has held most recently, said the TNC Chair.

On Services, Lamy said that the signalling conference would focus on market access issues, and that this would be a parallel track to the question of a multilateral text, on which the Services Chair is currently holding consultations. The political objective of such a signalling conference would be to give a credible signal that the services negotiations are moving forward, but it would not define the final outcome of the services negotiations.

"The conference should be a two-way street and those involved must avoid it turning into a finger-pointing exercise, but I think the spirit in which they are preparing it is positive," said Lamy.

Participation in the signalling exercise would be, more or less, among Members participating in the plurilateral request/offer negotiations plus representatives of regional groupings (all in all, similar to the format of the Ministerial Green Room.)

"With regard to its preparation: my sense is that to adequately prepare this the next step should be a round of bilaterals involving Senior Officials. Given the timeline of our current process involving Senior Officials and eventually Ministers, it seems to me that the week of 5 May might be the most appropriate time for those bilaterals," said Lamy.

On Rules, Lamy underlined that there is wide agreement that this is not an issue for ministerial negotiations at the time of modalities in Agriculture and NAMA, though of course it is not excluded that some discussion may take place. This question has been linked to the question of the text. Many participants have made it clear that they expect to see a new document from the Negotiating Group Chair before the opening of the horizontal process. For some, this should be a fully-fledged revised text, for others perhaps something else, but there is a widely-shared view that in any case it should be more than just a report and not just a compilation either.

The need that has been identified is to have a document which would give reassurance to domestic stakeholders. The Negotiating Group Chair is reflecting on how best to respond to these needs.

On TRIPS, Lamy said that for the mandated negotiations on a GI register, the TRIPS Special Session Chairman will be making a report to the TNC on the work in his area.

"I have a mandate from Ministers in Hong Kong to conduct consultations as Director-General on the issues of GI extension and the TRIPS/CBD relationship. In my consultations, wide gaps remain between Members. For these two issues, we will also have reports indicating the state of play in my consultations..."

"In sum, we are looking at the establishment of modalities in a TNC, which will also have before it reports and road-maps from other negotiating groups, and a report from the Services signalling conference, so that Members can situate the modalities agreement in the context of the Single Undertaking, which remains the fundamental underlying principle of this negotiation, and we know that principles sometimes need to be incarnated," said the TNC Chair.

Pointing to his recent contacts at every level both in Geneva and in his travels, Lamy said that everyone he has met has underlined with more vigour than ever the need to conclude the Round successfully this year.

"This is no surprise - we have all seen the recent growth projections by the IMF. And we have all witnessed the financial turbulence we are in and the hikes in energy and food prices that are affecting severely many of your countries."

"At a time when the world economy is in rough waters, concluding the Doha Round can provide a strong anchor. One more reason to redouble our efforts," concluded Lamy.

According to trade officials, everyone at the informal meeting said that the process should be transparent, inclusive and bottom-up. Developing countries stressed the importance of the development dimension. They also attached great importance to the issues of special and differential treatment and the agreement-specific proposals.

According to trade officials, Mauritius, on behalf of the ACP, supported the process outlined by the Director-General. It said that there are a series of issues that are important to the ACP and other developing countries that need to be addressed as part of the process. They would like to see these issues achieve the degree of ripeness required before members go on to the horizontal process.

In agriculture, the ACP said that the issue of long-standing preferences is one of great importance to the group. The tropical products and preferences issue is one that needs to be resolved satisfactorily for all members. The ACP also cited the issues of sensitive products and special products which also need to be resolved.

On NAMA, the ACP highlighted the issue of preference erosion. Concerns were voiced that sectoral agreements on items such as fish and jewellery may cut into preferences that have been enjoyed by the ACP members. On services, the ACP stressed that the integrity of Annex C of the Hong Kong Ministerial Declaration must be preserved. Development issues are extremely important to the group. The ACP also said that there should be no artificial deadlines and that substance should be the driver of the process.

Singapore, on behalf of ASEAN, said that in many ASEAN countries, the recent economic and financial crisis is beginning to hurt and that this makes even more important getting an agreement as soon as possible. The horizontal process must show the way forward. On services, the signalling conference must be balanced and must reflect the position of all members. It also needs to be in line with the mandate of the Hong Kong Ministerial Declaration. Singapore said that it would like a revised text on rules before the horizontal process begins.

Cote d'Ivoire, speaking for the African Group, said that there is need for transparency and inclusiveness in the process. The Chairs should lead the process. The horizontal process negotiations should focus on the agriculture and NAMA modalities, which are the engine for this process. There is a need to be guided by substance and not by artificial deadlines. Key issues to the group are long-standing preferences, tropical products, sensitive products, special products and the special safeguard mechanism. It is very important that these issues are reflected to the satisfaction of the Group in the revised texts.

Bolivia said that since they are a small delegation, it is difficult for them to attend all the meetings. It expressed concern over the issues of transparency and inclusiveness. The TNC should not be simply a rubber-stamp. To move to the horizontal and ministerial process is something that members must endorse, and there should be clear criteria for each stage of the process.

Hong Kong-China supported the process outlined by Lamy. It wanted agriculture and NAMA to be at the centre. It had serious concerns about the lack of balance in the current rules text, and wanted to see this redressed through a revised text. It also supported the Director-General's suggestion for a signalling conference.

Switzerland said that substance must supersede the time-frame. It said that it had difficulty selling the Doha package unless it got something on NAMA and services, as it was being asked to do a lot on agriculture. It also wanted something concrete on the issue of GI extension, as well as a revised text on rules before the horizontal process.

Costa Rica said that the tropical products group had held a number of discussions, and substantial progress had been made on the question of tropical products with some developed countries.

According to trade officials, India said that it is essential to prepare a solid platform for the horizontal process. The revised texts need to reflect the interests of all members. We need to give sufficient time and not be a prisoner to artificial deadlines. There are still many gaps in agriculture that need to be settled in the negotiating group, including sensitive products, special products and SSM. These are not subject to being traded off. On rules, it is important that the voice of the majority be heard. On the TRIPS/CBD, India said that it is important that the depth of support for disclosure be recognized.

Chinese Taipei, for the Recently Acceded Members (RAMs), said that there is a sense of urgency to bring the round to a conclusion by the end of the year.

Barbados, for the Small and Vulnerable Economies (SVEs), mentioned that this was a very interesting moment in the global dynamic, highlighting in this respect the upcoming UNCTAD-XII conference, and that rising food and fuel prices have a potentially devastating impact on developing countries, especially the SVEs, the Least Developed Countries and the net food importing countries.

China hoped that the Chairs will reflect the interests of developing-country members. On the signalling conference, it said that the major players should give indications up-front about what they can give to developing countries. On rules, China wanted a revised text before the horizontal process. On TRIPS, the importance of the link to the CBD is something that needs to be reflected. +