TWN Info Service on Trade and WTO Issues (July08/41)
28 July 2008
Third World Network

Trade: After four days, the fate of mini-Ministerial on knife edge
Published in SUNS #6526 dated 28 July 2008

Geneva, 25 July (Kanaga Raja) -- WTO Director-General Pascal Lamy told an informal meeting of the Trade Negotiations Committee (TNC) Friday progress "remains painfully slow" after four days of Ministerial-level negotiations, and warned that if there was no additional progress in 24 hours, the deal may not happen.

At the meeting, four countries led by Colombia asked Lamy to prepare a compromise text. This was opposed by a few other countries, including Venezuela and Bolivia. Lamy himself said a text by him was not the way towards convergence.

At a media briefing Friday, WTO Spokesman Keith Rockwell said that Director-General Pascal Lamy began by explaining to members at the informal TNC meeting on what transpired in the G7 talks yesterday afternoon followed by the larger meeting of the Green Room, which ended around 10.00 pm.

Nine issues were discussed. The agriculture issues are overall trade-distorting domestic support (OTDS), cotton, market access formula for developed countries, sensitive products, Special Products and Special Safeguard Mechanism. The NAMA issues are the formula and flexibilities, the proposed anti-concentration clause and sectoral initiatives.

Lamy said that he considers these nine areas to be the most difficult and urgent, and they are therefore the key to possible progress in other areas as well.

Negotiating Group Chairs Ambassador Crawford Falconer of New Zealand (on agriculture) and Don Stephenson of Canada (for NAMA) are continuing their consultations on a variety of issues, many of which are very closely related to the nine issues.

Lamy said some convergences have been recorded but progress remains painfully slow after four days of ministerial-level negotiation. "We will need to change gears very quickly to turn things around in the limited time remaining."

On substance, Lamy said that there was agreement to work within the ranges in the draft modalities texts, but serious differences remain between the low end and the high end of many ranges.

On overall trade-distorting domestic support (OTDS) in the United States and the European Union, "we are not there yet", he said, adding, but there is a convergence around a 70% cut in the top band (in relation to the agricultural products with the highest tariffs).

On the cotton issue, this is linked inextricably with the cuts in trade-distorting domestic support.

With respect to tariffs that exceed 100%, members discussed the ranges in the agriculture Chairman's text but did not achieve any convergence.

On the question of sensitive products, members discussed both the numbers and treatment of these products. There was some convergence on the number of products which may be designated as sensitive by members, but there are still problems for some countries.

Differences also persisted in the size of tariff rate quotas as a percentage of domestic consumption that should be provided as compensation for sensitive products. There was limited discussion on whether members should be permitted to create new quotas of this nature as this issue is linked to the broader issue of the number of tariff lines that would be designated as sensitive.

On special products (SPs), Lamy said that we are not there yet on both the number of tariff lines and the exemption of a certain percentage of those lines from any tariff cut.

Special Safeguard Mechanism (SSM) is obviously a major issue, said Lamy. There was positive engagement and some ideas were floated with the Negotiating Group Chair Ambassador Falconer, who is following up on this. With respect to the existing Special Safeguard, there were some signs of flexibility.

On NAMA, the Director-General said that there has been limited progress in narrowing the ranges for formulas and flexibilities.

On anti-concentration, there was some limited signs of flexibility, with references being made to possible numbers of national tariff lines and the values of trade. There was some sympathy for the suggestion that small chapters containing very few tariff lines should be exempted from the application of this anti-concentration clause.

On sectoral arrangements, members explored the possibility of language that would make clear the non-mandatory nature of the sectoral proposal, while at the same time, allowing for its operationalization.

NAMA Chair Don Stephenson reported to members on his separate consultations involving non-reciprocal preferences, small and vulnerable economies, and treatment for Venezuela.

Lamy said there is still time to turn the talks around, but positions must move radically in the next round including in the small group. "If we do not see this rapid progress towards convergence, I am afraid that the deal you all came here to do this week, will not happen with all the attendant consequences."

This is the blunt reality, he said. The situation is critical, edging between success and failure. "If you, the negotiators, show no further flexibility to deliver outcomes that take account of different interests in the next hours, you will face the serious consequences of failure. Time is running out and the next 24 hours are crucial."

Lamy said the formal TNC scheduled for Saturday as well as the services signalling conference would be postponed.

Norway's Minister Jonas Store, who is consulting members on the three TRIPS-related issues (GI register, GI extension and TRIPS/CBD relationship), said that his aim has been to understand better the concerns of members and to assess where areas of flexibility may lie.

There is a very close link between the issues he is discussing and the developments in the overall Doha negotiations. The major differences that have been dividing delegations remain.

On the multilateral register for wines and spirits, there are a few differences on the legal effects of any registration. On GI extension and the TRIPS/CBD link, important differences remain on mandate and process and on substance.

During the discussion, Colombia, supported by Peru and Chile, suggested that Lamy put forward a text of his own. This idea was however opposed by Bolivia, Venezuela and Cuba.

Complaining about the process, Bolivia said we have gone from 30 delegations in the Green Room (20% of WTO members) to 7 in the G7 (4% of members) when we should be having 100% participation. The Colombian proposal of a Lamy text was not a good idea as the participation would be reduced further from 4% to one person.

Venezuela's Trade Minister recalled he said he did not want to be confronted with surprises. Colombia's idea was not appropriate. We all need adequate time to review and respond to a text, he added.

Lamy himself said a text by him was not the way for convergence. There would be no surprises. What we have before us are texts that are the result of over a year's worth of work by all the members. These texts are the basis for discussion and the answer lies inside these texts, but revisions are required.

These revisions will be continuing in terms of efforts being made and that all members will have a say, and indeed all members will have to decide on whether or not an overall package is acceptable, said Lamy.

To a question on options in case of a failure of the talks, the WTO Spokesman said that the Director-General is not working on Plan B. He is working on Plan A and that is the only thing he will do as long as Ministers are prepared to keep working very hard.

Following the end of the informal TNC meeting, a trade diplomat said that Colombia had asked for a compromise text from the Director-General as a last option. This was supported by Chile.

The trade diplomat said that in the larger Green Room meeting yesterday, Lamy was pressed for a road-map, but he was non-committal. Canada had insisted that by the end of Friday there must be an indication whether progress is possible in the G7 meeting.

Speaking to journalists just before the start of the G7 meeting Friday noon, Indian Commerce Minister Kamal Nath said that this Round is not about perpetuating structural flaws in global trade.

Asked if this was the last chance for the Doha talks, Nath said that it's never the last chance - even last year they were saying it's the last chance - but it's a good chance.

On Thursday night, after the Green Room meeting, Indonesian Trade Minister Mari Pangestu said that "the mood is still positive. Everybody is still looking for convergence. There has been a bit of progress on convergence, but we are not quite there yet."

She said that "SP and SSM are not the only issues without convergence. There are many other issues which are still pending, including OTDS and sensitive products."

Brazilian Minister Celso Amorim said there is engagement. Noting that others may have a more pessimistic view, he said that he prefers to sound constructive. "I know there are difficulties all around. Everyone has to make concessions, and that applies to both defensive and offensive preoccupations if we want to conclude this.

"It is not as if some people can have the red-lines absolute and others, red-lines are relative. That's how we are working. So far, there was no break-up, there was engagement..."

However, there is not much time, he said, adding that "I think tomorrow (Friday) is the day in which we must know whether it's possible or not. Maybe we don't finish everything but we must have an idea if it's possible or not."

US Trade Representative Susan Schwab said that "we had a few things done. The US came here to make a deal. And we've been forthcoming. We will continue to stretch, do our share. There was some progress in the small room, not nearly as enough as we need. Not nearly as much as we had hoped.

"We put our offer on the table... some countries are stretching more than others and we'll see tomorrow (Friday)..." +