TWN Info Service on WTO and Trade Issues (Aug08/10)
13 August 2008
Third World Network

Trade: Lamy and Lula trying to create mood to re-start WTO talks
Published in SUNS #6532 dated 6 August 2008

Geneva, 5 Aug (Martin Khor) -- WTO Director-General Pascal Lamy is making efforts to get the Doha negotiations going again, with visits to political leaders in India and the United States planned in the next few weeks.

Lamy will be in India on 12-13 August for a private seminar and will meet with Indian Prime Minister Manmohan Singh and Commerce Minister Kamal Nath, according to media reports from Delhi.

Lamy also told the Business Standard (India) that he will be visiting the United States the week after his trip to India.

Meanwhile, Brazilian President Luiz Inacio Lula da Silva has announced that he is taking initiatives to re-start the Doha negotiations. After speaking to US President George W. Bush last Saturday, he will soon speak to the Chinese President and the Indian Prime Minister in an effort to bridge the gaps between the three countries.

Lamy, speaking about the impasse over a special safeguard mechanism (SSM) in agriculture which broke the WTO talks in Geneva last week, said that he remained "convinced we can find a compromise" and that he would discuss this with Indian officials in Delhi next week and with the US the week after that.

Mr. G. K. Pillai, India's Commerce Secretary, confirming the Lamy visit, said that he presumed that the Director- General will discuss India's participation in the sectoral initiative in NAMA (non-agricultural market access), while an unnamed official source said that the SSM was on the agenda.

The refusal of the United States to budge on wanting to have stringent conditions for the use of the SSM, while India and the G33 among about 100 developing countries fought to have an effective SSM mechanism, was the immediate cause of the talks' failure.

Another bone of contention was the insistence of the US, European Union and Japan that key developing countries such as India and China take part in "sectoral initiatives" in NAMA whereby they agree to eliminate tariffs in some sectors such as automobiles, chemicals, electrical and electronic products, and textiles.

While one Indian newspaper said that the Lamy visit "may break the ice on WTO", the realistic view is that it would be very difficult to create the conditions for another WTO Ministerial-level meeting anytime soon, especially since so many of the 30-plus Ministers who came were frustrated with their not having an active involvement, being forced to wait for days while the seven WTO members held their own negotiations.

On 4 August, Mr. Pillai told journalists in Delhi that a consensus on the WTO talks may take two years, according to a Bloomberg agency report from Delhi. "There are a lot of issues to be sorted out," he said. "I expect it will take at least one year for discussions and another year for completion of the round." He added: "We must address the issue of SSM to move forward."

Another report quoted Pillai as saying that an agreement on the Doha Round was likely only around 2010, given the impending US presidential elections.

He added that Indian industry feels that the current NAMA proposals would result in a disproportionate impact on certain key and relatively labour-intensive sectors, which are dominated by small and medium sized businesses. He reiterated the government's concern on NAMA proposals such as the anti-concentration clause and sectorals.

Brazil's President Lula has meanwhile embarked on efforts to bring the US, India and China back to the WTO's negotiating table. In his weekly radio broadcast, Lula said that he spoke with US President George W. Bush last Saturday and told him "it is not possible that two countries as important as the US and India, which are negotiating a nuclear agreement, can't find the conditions to make a deal on the issue of food, because there is very little remaining differences between them."

Lula said that he would also speak to Chinese President Hu Jintao this weekend at the opening of the Olympic Games in Beijing, and by telephone to the Indian Prime Minister. He said that there was still hope of fanning the embers of the negotiations back to life.

A diplomat in Geneva today questioned the extent of Lula's effectiveness, pointing to how Brazil was perceived to have broken ranks with India over agriculture and with Argentina over NAMA during the Geneva July talks. Brazil had endorsed the "Lamy package" of 25 July, which India found unacceptable over several issues, especially SSM.

France is sceptical whether there can be resumption of serious negotiations anytime soon. French Trade Minister Anne-Marie Idrac said on 4 August: "There could be new technical meetings in the autumn, but it seems implausible to me that they can re-launch the process."

"It is difficult to imagine a rapid restart of the negotiations. Global ambition is missing. One should expect a longer, more fragmented process," she told La Croix newspaper.

Australia and New Zealand are split on this issue. The Australian Trade Minister Simon Crean (who was one of the Ministers in the inner G7 group at Geneva) said it is still possible to conclude the Doha Round, and that an agreement could be struck before the end of the year.

According to Lamy, the Australian Prime Minister and the Brazilian President have indicated that they would help to re-start the talks.

The New Zealand Trade Minister Phil Goff, describing the talks' collapse as "intensely disappointing", said an agreement won't be finalised until at least the second half of 2009. +