TWN Info Service on Trade and WTO Issues (Aug08/04)
4 August 2008
Third World Network

Trade: Amorim, true believer of the Round, was the most disappointed
Published in SUNS #6530 dated 4 August 2008

Geneva, 31 July (Martin Khor) -- A few hours after the collapse of the Geneva WTO talks, Brazilian Foreign Minister Celso Amorim appeared a genuinely very disappointed man. He, probably more than any other Minister, had wanted a deal on Doha modalities for agriculture and NAMA (non-agricultural market access) to be closed this week in Geneva, and has been described as "the true believer of this Round."

He had accepted in full the draft of key figures on agriculture and NAMA which Director-General Pascal Lamy had given to the G7 Ministers last Friday. This was even though the figure for the United States' ceiling for overall trade distorting domestic support (OTDS) at $14.5 billion was far below expectations and when in fact a $15 billion offer by the United States (hardly different from the Lamy figure) had been dismissed by him and other developing country leaders as being inadequate (since it was double the actual OTDS of the US in 2007).

It was apparently Amorim's acceptance of the $14.5 billion that presumably led others in the G7 (including India and China) to implicitly also agree to this, since the G20 has been the leading group among developing countries to champion the reduction of the major developed countries' domestic subsidies, and Brazil is the leader of the G20.

Brazil's keenness to get a deal was also evident in its acceptance of the elements in NAMA in the Lamy draft, which were similar to the coefficients and flexibilities put forward earlier in the NAMA Chair's text of 10 July, a text which had been criticised by the NAMA-11 (for being unfair to developing countries which were being asked to cut their tariffs by more than the developed countries, thereby violating the mandated less than full reciprocity principle) and also by Brazil when the text was issued.

Indeed, the "rate of exchange" between what developed countries were asked to do in agriculture vis-a-vis what developing countries were being asked to undertake in NAMA were almost as imbalanced as what the US and EU were advocating at the Potsdam Ministerial meeting of the G4 (US, EU, Brazil, and India) in June 2007. At that time, Brazil and India protested against the deal insisted on by the developed countries, and the Potsdam talks fell apart.

At a press briefing on the night of 29 July, after the informal meeting of the Trade Negotiations Committee when the failure of the talks was confirmed, Amorim gave his perspective on the previous ten days' negotiations and on why the talks failed.

Said Amorim: "We had a good package. I am very disappointed we could not close the Round on an issue (special safeguard mechanism) that is important but which did not seem at the centre at the beginning."

He said that on the balance between opening of agricultural markets in developed countries and the opening of developing countries' markets in NAMA, the G7 meeting had by and large bridged the differences. "I could not imagine the whole thing hinged on some percentage points of a trigger in the SSM."

He said that many achievements that were attained in the negotiations had come from the proposals made by the G20, which had provided the structure and the main formula to deal with agriculture. The only issue the G20 could not agree on in the group itself was the one that took the Round to a halt, i. e. SSM.

"I don't want to over-dramatise," said Amorim. "It will take quite a while to get us back to the game. It may take new people, new negotiations. It is with profound disappointment I saw this collapse today. Even myself with my optimism, I am sceptical whether this appeal to the members to get together again will have any effect.

"I have a sense of achievement how much G20 achieved. Precisely on the issue we could not agree on (as members of the G20) was what brought the Round to a halt. Cotton was not even discussed in any serious manner (in the G7)."

Amorim was downbeat on the chances of the Round picking up again quickly. He said: "I hope they can pick up the pieces," recalling that in the Uruguay Round, after the then Director-General Arthur Dunkel issued his draft text, it took two years to complete the negotiations. "Now, it's a more complex organisation, and so extra time is needed."

Amorim also implied that the leaders in countries that matter would lose interest in completing the Doha Round, as their attention shifts elsewhere. He said: "Other people will concentrate on other things, like climate change, or look at bilateral deals. They will say WTO is their priority but they will probably focus their energy somewhere else."

To a question whether the US elections would delay the resumption of talks by two years, Amorim said: "These events have an impact. There will be a change in the team in the US. There will be elections in India, then Brazil, That's it... Elections don't prevent a deal from being made, but all these cause delay and a re-evaluation."

A journalist referred to Amorim's refernce to Dunkel and his text, and asked whether he thought Lamy should do a similar draft for the new players to consider, since he had embraced the Lamy text of last Friday. Referring to the comment that he had accepted Lamy's Friday draft, Amorim said: "I don't regret it. It was a decision that enabled us to have a breakthrough and to be on the verge of success. On whole, I made [the] right decision. We were not searching for the ideal balance, but what is possible." On whether he thought Lamy should do a Dunkel-type draft, he said: "I think I leave that judgment to Lamy."

Amorim was then asked what effects the WTO failure would have for the climate negotiations, where Brazil and other developing countries were asked to undertake mandatory cuts in emissions. Would the climate talks become more difficult? Amorim said that Brazil is not a great emitter of carbon dioxide. "The failure here will not necessarily impact on other negotiations. But if we could not agree on a trade deal with only numbers, it will be more difficult to agree on other things."

He was asked whether the delay in the WTO deal would be an incentive for Brazil to negotiate FTAs, since it had not wanted to negotiate the Free Trade Area of the Americas (with the US), preferring to focus on the WTO.

Amorim said the WTO had been "our absolute priority" as there are most important things that can only be solved in the WTO, especially agricultural subsidies. There is no way to negotiate that with the EU. The maximum possible is to put countervailing duties on products if they are subsidised. He indicated that he would pursue a Mercosur-EU agreement which he said would be different from the FTAA.

On whether the SSM was the real cause for the talks to fail, or whether there was some other issue or factor behind the deadlock, Amorim said: "I don't want to speculate on people's motivations, I take them on their words." He added that there were real difficulties. How important they were is a matter of judgment. I regret very much. It was not easy to accept the NAMA figures that were below our defensive expectations with things like anti-concentration.

"But is it worth it in light of the whole deal? My impression is that the same kind of evaluation was not made fully by others. Cotton was never discussed. Whether this was a reason (for the collapse) or not I don't know."

On whether the Doha gains would have been symbolic rather than real, he said that in NAMA, Brazil would have cut its applied rate by 30%, and that would have been real value.

Asked if he agreed with Mandelson that it was unrealistic for the US to get net gains in market access in agriculture in exchange of its subsidy cuts, Amorim said he agreed with Mandelson that the bargain was market access versus subsidies. "But of course, if you still keep subsidies after the cuts, you provide one of the justifications of those who advocated the SSM, that they need (the SSM) since they are opening their markets to subsidised products."

Asked whether the cotton issue was not taken up because the US didn't want to take it up, Amorim said it was not possible to take up this issue. +