TWN Info Service on WTO and Trade Issues (May08/15)
14 May 2008
Third World Network

Trade: WTO does not foresee Ministerial meeting in May
Published in SUNS #6471 dated 9 May 2008

By Kanaga Raja, Geneva, 8 May 2008

The World Trade Organization on Wednesday acknowledged that it would be "extremely difficult" that a mini-ministerial meeting aimed at reaching cross-cutting agreements on agriculture and non-agricultural market access (NAMA) could take place in the month of May.

Asked at a press briefing following a General Council meeting about when the Ministerial meeting would take place, WTO spokesperson Keith Rockwell told journalists that "it would be extremely difficult under these time constraints, and given the importance of substance to this process, to have such a meeting in May."

As to the time constraints, the WTO spokesperson referred to the discussions on the issues of sensitive products, and tropical and preference products as well as the time that would need to be taken for the revised draft modalities texts on agriculture and NAMA, once they have been issued, to be considered in the respective negotiating groups and subsequently for senior officials to knock down the outstanding issues to a manageable number for the ministers to consider.

(While the ministerial-level "horizontal process" meeting to take up the issues of agriculture and NAMA in a cross-cutting manner was originally envisaged for the week of 19 May, the WTO has now appeared to state that such a meeting would not take place this month.

(Media reports and officials have been saying that the horizontal process at the ministerial level might take place sometime in June or in July. Even the month of June is now uncertain with the European football championships to take place in Switzerland in the same month resulting in hotel accommodations being fully booked and the Swiss police being fully occupied in handling the thousands of football fans that would descend on Geneva for some of the matches.)

At the General Council meeting, several developing countries (including India, China and Brazil) stressed the need to seriously negotiate the issue of disclosure of countries of origin and benefit sharing arrangements in patent applications involving genetic resources and associated traditional knowledge, as part of the next negotiating phase.

The EU led those countries that stressed the urgency of convening "cross-cutting" negotiations as soon as possible, as a bottom-up approach would now take too much time and the possibility of failure was real. Many developing countries emphasized the priority of having the correct substance of the outcome of negotiations.

In his report to the General Council, Director-General Pascal Lamy said that "if we are to meet the collective target we have of concluding the Round by the end of 2008... we have only a few weeks, not months or semesters, in which to establish modalities. This is a very tight schedule, but it is still doable."

"There is no choice to be made between substance and timing. Today, I believe it is fair to say that we have come a long way in breaching differences on substance. Putting the modalities in place very soon, therefore, is the only way to achieve our end-of-year target, since it would leave us just enough time for scheduling in Agriculture and NAMA and to wrap up the negotiations in the other areas," he added.

"We also know that it is the substance which drives the process, and that we must proceed step by step. The balance between these two key aspects of our work - urgency and substance - is what we must strive to fine-tune over the coming days," said Lamy.

Lamy also reported on the TRIPS/CBD issue, namely GIs and the TRIPS/CBD relationship. 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. In addition, Lamy said that he has a mandate from Ministers in Hong Kong to conduct consultations as the Director-General on the issues of GI extension and the TRIPS/CBD relationship.

"For these two issues, we will also have reports indicating the state of play in my consultations, which are currently being undertaken with the assistance of DDG Rufus Yerxa. On the basis of the consultations so far, I believe these reports are likely to factually set out the different positions, rather than to offer solutions. However, consultations are continuing and I reiterate my call today for continued efforts between the groups of Members concerned, so as to try to avoid a big clash during the modalities exercise."

The issue of the current food crisis plaguing a number of developing countries due to high food prices was also featured at the General Council meeting, with Lamy suggesting that the food crisis has added urgency to concluding the Doha Round.

"The reasons why we must conclude the Round this year are visible to all of us and they are becoming more critical by the day."

Pointing to his last report, where he mentioned what was happening in the world economy, in particular, the turbulent situation in the financial markets, Lamy said that "since then, we have also witnessed an unprecedented escalation in food prices worldwide which has had negative effects particularly on developing countries that depend on imports for their food security or are net food buyers. The result, as we have seen, has been unrest linked to these high food prices in a number of your countries."

"Although the WTO cannot provide anything immediate to help solve the current crisis, it can, through the Doha Round negotiations, provide medium to long term solutions," he said, adding that alongside other efforts by governments and international organisations, a WTO deal could help soften the impact of high prices by tackling the systemic distortions in the international market for food.

"We all aim to substantially lower barriers to trade in agricultural products and diminish levels of trade distorting subsidies, particularly in developed countries that have hampered food production and investment in agriculture in many developing countries. This is doable and we are nearly there. As you are all aware, the overall outcome would be less distortion in world markets and increased international trade, leading to more rapid and efficient adjustment by supply to changes in demand."

"This food price issue is obviously bad news for many countries today. But if the declining trend in prices of agriculture commodities which we have witnessed in the last decade is to be reversed, which I believe must be, it can also mean good news for the future, provided the necessary policy responses are given. The WTO can provide part of the solution," he added.

"For this reason, and it is a compelling one for you all, the conclusion of the Doha Round is more urgent today than it was yesterday."

According to WTO spokesperson Rockwell, every delegation that spoke began their statement by talking about the food crisis, and said that this makes the resolution of the outstanding issues in agriculture in the Doha Round all the more urgent.

Several countries spoke at the General Council meeting where they voiced their views and positions on the various issues in the Doha negotiations.

China said that negotiations during the previous months have made some progress but are "still far from satisfactory". "It would be difficult for us to succeed in the negotiating process if Members fail to bridge the gaps in the key areas of agriculture and NAMA," said China.

It looked forward to the revised texts from Chairmen of Agriculture and NAMA as soon as possible. These texts should be complete and reflect positions of the broad Members in a balanced way so as to facilitate the intensive negotiations in the coming weeks.

"This is a development round and development dimension is the core element in the negotiations. The outcome of the Doha Round negotiations must be conducive to the more effective participation of all developing countries in the global economy and their sustainable development," said China.

To fulfill the mission of this Round, developed countries should be willing to consider sufficient policy flexibilities for developing countries. Development issues such as Special Products, Special Safeguard Mechanism, cotton, specific concerns of LDCs, Small and Vulnerable Economies and Recently-Acceded Members must be dealt with earnestly, comprehensively and effectively.

On the issue of Rules, China shared the statements by ASEAN Economic Ministers and many other Members that it is important for the chair to provide a new text that reflects the reality of the negotiation and adhere to the Doha Development Agenda (DDA) mandate.

On the issue of CBD, China supported the statements by Brazil, India and African Group, and would like to emphasize that the Disclosure Proposal has gathered the clearest and the broadest co-sponsorships of a vast majority of WTO Members, and also an even wider range of support from others.

It believed that, among the outstanding implementation issues, this issue of the relationship between the CBD and the TRIPS Agreement has matured both politically and technically. "In this regard, China, together with many other developing countries, would strongly urge to start immediately text-based negotiations, and the outcome should be an integral part of the final single undertaking of the DDA."

According to trade officials, Argentina said that it was important to take up the food crisis. It was also very important that agriculture and NAMA are sufficiently comprehensive for members to have a truly effective horizontal process. It also referred to the importance of balance between the agriculture and NAMA modalities, and in this respect cited paragraph 24 of the Hong Kong Ministerial Declaration.

Referring to the specific discussions on sensitive products being undertaken by six countries in an effort to broaden the consensus on this, Argentina said that this was not satisfactory in relation to what has been negotiated so far particularly with respect to market access.

India, noting the Director-General's assessment on the TRIPS-CBD issue, said that support for this issue has been increasing consistently since the Doha ministerial. Today, the Disclosure proposal is co-sponsored a by majority of the membership. The breadth and depth of support enjoyed by the Disclosure proposal is now well established. Numerical support cannot be the sole determinant.

"However, the geographical spread and the socio-economic profile of co-sponsors are a barometer of importance and urgency attached to the issue. There is also wide convergence on the issue, the minimum of which are the shared objectives of strengthening mutual supportiveness between TRIPS and CBD and taking measures to counter bio-piracy, erroneous patents and misappropriation of genetic resources."

The proponents have been engaging constructively on the issue both in the meetings organized by Deputy Director-General Rufus Yerxa as well as informally with other delegations, said India, adding "we see a clear evolution of positions in the direction of convergence."

There is a groundswell of support for this critical deliverable. This is an idea whose time has come. Efforts to brush this issue under the carpet is fraught with the risk of endangering the horizontal process, India cautioned.

Talking of the TRIPS-CBD issue, "you (Director-General) had prophesized in the informal TNC meeting held on April 16 of a 'big clash during the modalities exercise'. You mentioned the possibility of a big clash even today. With such wide support, we do not see the possibility of such a clash," said India.

"Therefore, we strongly feel that text-based negotiations, based on the draft modalities text submitted by the proponents, must begin immediately. If other Members wish to bring something on the table, they are most welcome to do so. Let me reiterate my willingness to walk the extra mile in search of an effective solution to meet our shared objectives."

According to trade officials, Brazil said that a successful outcome on agriculture and NAMA modalities is both feasible and desirable. There is need for texts on agriculture and NAMA that are comprehensive and balanced, and must reflect the Doha mandate and special and differential treatment. It said that there is need to have stronger disciplines on trade-distorting support. This would be helpful in terms of food supply. It is essential to have deep cuts in overall trade-distorting support, and the linkage between trade-distorting domestic support and product-specific disciplines is very important.

On NAMA, Brazil said that the text must reflect the concerns of the NAMA-11. The level of ambition cannot be prejudiced. On services, Brazil was of the view that the multilateral text must reflect Annex C of the Hong Kong Ministerial Declaration, and must include LDC modalities. The signalling conference on services could be useful provided that the industrialized countries take on board the concerns of developing countries with respect to sectors and modes of interest to them.

Brazil further said that there must be a balanced text on rules that removes reference to zeroing. A positive result on anti-dumping is essential. On fisheries subsidies, Brazil said that the outcome must not run counter to the development dimension.

On the question of the relationship between the TRIPS Agreement and the Convention on Biological Diversity, Brazil pointed out that more than half of the membership is supporting this. The issues of cotton and duty-free quota-free market access for LDCs are important.

On the process, Brazil agreed with the Director-General's assessment. The revised texts must be comprehensive and balanced. If there is no convergence in the negotiating groups, the texts should reflect that there are differences of opinion. We must move to the horizontal process as soon as possible, and the Chairs should determine when that is the case.

Cote d'Ivoire, on behalf of the African Group, said the process must be driven by substance, and that there must be full modalities in agriculture and NAMA, and must follow the mandate of the Hong Kong Ministerial Declaration. In agriculture, what was important for the Group was sensitive products, tropical products, preference erosion and the special safeguard mechanism. Partial modalities would not be appropriate and would not be acceptable to the African Group. There must be significant level of ambition in agriculture and NAMA. There must also be a high level of ambition in the elimination of export subsidies and reductions in trade-distorting domestic support.

The food crisis has made it an obligation for us to speed up our work. A successful outcome will have a positive effect on curbing rising food prices, according to Cote d'Ivoire. It supported Brazil on the TRIPS/CBD issue. On services, it noted that the Group is not a demandeur but that it will be carefully following the signalling conference because any bilateral or plurilateral consultations or agreements will have a most-favoured-nation impact.

Venezuela said that there must be sufficient time for delegations to study the proposals and to review with capitals to see if it meets the objectives. We should not mystify the horizontal process but there needs to be prerequisites and adequate papers are key to this. It welcomed the international organization action on the food crisis. The food crisis is a complex problem and we need to make sure that we don't apply simplistic solutions.

According to trade officials, Cuba agreed with the Director-General's assessment of the role of the WTO in alleviating the food crisis. It said that the un-level conditions in agriculture trade between industrialized and developing countries have contributed to this. There is need for more investment for aid in agriculture. There also needs to be careful consideration given to the way in which bio-fuels are used and the land allocated to this.

Singapore, on behalf of ASEAN, said that it was important to have balanced revised texts on the table. Senior officials are needed to prepare for the Ministerial meeting. It is vital that all areas of the single undertaking are taken up so as to give comfort to members.

Mexico said that it was time for everyone to show the flexibility that is needed to find an agreement. We must move to the horizontal process as soon as possible. There are many causes to the food crisis but there are man-made causes as well such as trade-distorting domestic support, non-tariff barriers, and bio-fuels. The WTO is a very good place to apply measures that would provide incentives to resume food production in certain countries. Trade liberalization is not a cause but part of the solution to the food crisis. A high level of protection would make the food crisis even more acute.

According to trade officials, the EU hoped that there would be a manageable process for the senior officials and ministers. We need to move as soon as possible into the cross-cutting negotiations. It is doable but failure is also a possibility, said the EU. There is a possibility that the bottom-up approach would take too long. If we are going to make the 2008 time-frame, we need to clarify at the time of the agriculture and NAMA modalities what the scope of the Doha Development Agenda would be in the other areas.

The EU also mentioned the issue of the GI register and GI extension. There is need for agreement on a binding road map for the work programme before the close of 2008. On the food, crisis, the EU said that we need a coherent response to it. Restrictions on exports will only exacerbate the food crisis. The Doha Development Agenda has a role to play in terms of fixing this.

Jamaica for the ACP welcomed what the Director-General said about rising food prices. It asked for its statement made at the informal meeting of the TNC on 17 April to be put on the record. It supported the African Group and the LDCs.

Chinese Taipei said that there was need to narrow the differences on sensitive products, tropical products and preference erosion if we are to finalize texts. It was supportive of the signalling conference on services.

The United States said that there is need for revised texts as soon as possible to move to the horizontal process. The WTO has been accused of lagging behind the world economy in the past, but today the Doha Development Agenda offers a solution to the problems of the world economy and high food prices.

According to the US, overall trade-distorting domestic support, high tariffs and export restraints are issues if addressed effectively in the Doha Round can help alleviate the food crisis especially if it is coupled with an Aid for Trade programme. It agreed that agriculture and NAMA modalities are central. There should be solid reassurance in other areas, but that does not mean taking decisions in other areas, let alone adding new issues to the mandate. If we start down that road, we will be unable to move promptly to the scheduling stage, and we will be unable to conclude the round in 2008.

Japan said that it is committed to concluding the Doha Development Agenda by the end of the year.

Barbados, on behalf of the Small, Vulnerable Economies, said that it fully agrees that there is need to find a solution and reach agreement by the end of this year.

Switzerland agreed on the urgency of concluding the round in the context of the food crisis. It also wanted a revised text on rules.

Korea said that it wanted to go to a horizontal approach with senior officials, but it is important that senior officials have the time to fully and comprehensively reduce the number of issues required for ministerial decision. The senior officials must have sufficient time. The ministerial meeting should take place only when the time is right. A failure of the ministerial meeting would put the talks in great jeopardy.

According to trade officials, Uruguay, citing the FAO, said that by 2050, there will be a need to double food production to meet the needs of nine billion people. There are a variety of things that need to be done including creating a more stable, equitable and transparent trading system.

According to Uruguay, if there is failure to get that in place this year, we could be waiting up to 20 years to get this done because of the fact that there are new issues coming on board and we will have a very different set of political circumstances and the result may be that we will have to wait that long until this is done.

It said that there is need to tackle the question of subsidies for inefficient production. There is need to eliminate export subsidies, and reduce high tariffs and non-tariff barriers in order to increase trade flows. This means that there is need to conclude the modalities before the summer. +