Info Service on WTO and Trade Issues (Sept08/05)
instead, the talks resume in
first agenda item, reportedly, is special safeguard mechanism, the issue
on which the July talks foundered. According to media reports,
The meeting starting this week appears to be a last-gasp attempt to salvage victory from the jaws of defeat. Most observers are understandably skeptical of the chances of a breakthrough, since so many "do-or-die" deadlines have previously been set and broken. The odds are that this will be another attempt that will end in another failure.
The meeting has been convened apparently under the impression that there is just one more very narrow "window of opportunity" to do something before the handover from President Bush to President Obama or McCain.
that something is, is not clear: Bush to sign on to a WTO modalities
deal and send it to Congress? Congress to approve it? Bush to sign on
and leave it to Obama or McCain to take the baton and run with it, and
submit to Congress? What is the use of this, when the present
What the organizers of this week's meeting hope to achieve, and how realistic that is, is clouded in great uncertainty.
Nevertheless, the show has to go on. Diplomats engage in diplomacy and negotiators do negotiating work. If there is no negotiation, the negotiators will be at a loss as to what to do with their time.
that time, many of the other key players may also no longer be in office,
and the new Commerce Ministers and their leaders may not be committed
to the basic elements in the emerging package of agriculture, non-agricultural
market access (NAMA) and services that have been worked out by their
predecessors. When the negotiations resume in earnest, in one or two
years' time, some of the aspects already agreed to may no longer be
acceptable or so acceptable. The
In the days immediately following the failure, many WTO members called for the preservation of the agreements already made, and for some technical work to be resumed in September, as a prelude to creating the conditions for another Mini-Ministerial that could perhaps still complete the "modalities" for agriculture and NAMA before the end of the year.
is now a desperate attempt to salvage the Doha Round from complete ruin.
If the modalities (not the whole deal, which is now impossible) can
be agreed to by all before year's end, then whoever is elected to the
US Presidency and the US Congress will face tremendous pressure to endorse
these, since going against the multilateral consensus would throw such
a bad light on the new administration and Congress. And if the WTO modalities
are incompatible with, for example, the 2008 Farm Bill, then the
So the argument goes. Others, however, believe that it is wishing for too much to expect a new President and a new Congress to simply agree to amending a Farm Bill that took so much political effort to draw up. Nor would the powerful agriculture lobbies simply keep quiet and accept the loss of the benefits they managed to gain, just so that the new administration will keep to the word of the previous administration, with which it has many disagreements.
some long-time observers of the WTO scene believe that the
that too is not certain, for
August, WTO Director-General Pascal Lamy visited
The new September negotiations will face a really uphill battle, given the many issues that are unresolved, and the many complex factors that led to the collapse. These issues and factors remain, and it is hard to envision how they can now be disentangled in so short a time.
The collapse of the July talks had many sources. The process was one factor. In the tradition of the WTO, the configuration of players and participants of the drama was ever fluid and ever changing, causing not only confusion and instability but also great frustration.
It was a roller-coaster experience of nine days. Only 30-40 Ministers (of an organization of 152 members) were invited to the so-called "Green Room" meetings. Until today, there is no publicly available list of which countries were in the Green Room, nor the criteria for their selection, nor how they were invited (by letter, or by phone call only?) or by who.
members were invited to the "informal Trade Negotiations Committee
(TNC)" meetings each morning, where views could be aired. However,
in the first two days, the real negotiations took place in the Green
Room of 30-40 Ministers. But then, Lamy controversially created an inner
group of seven members (the
For many days the non-G7 Ministers were simply kept waiting in frustration. The mini-Ministerial of 30-40 delegations had become a "micro-Ministerial" of 7 Ministers plus WTO Director-General Pascal Lamy, as some diplomats put it.
Progress had been made on a number of issues, but on several of the key issues in agriculture and NAMA the talks had been stuck. A draft by Lamy on Friday 25 July to the G7 had a fragile status. While it was presented to the Green Room as having emerged from the G7, the ownership and authorship was always in doubt. Indian Commerce Minister Kamal Nath told a G33 meeting on 26 July that he had objected to the language on special safeguard mechanism (SSM) and was walking out of the G7 meeting when he was persuaded to stay so as to avoid the impression that the talks had failed.
had always been understood that
Meanwhile, frustration was building up among the 30-plus non-G7 Ministers who were specially invited by Lamy to the Green Room, only to find themselves waiting for days in the wayside, while the G7 kept meeting at odd hours of the day and night, and with hardly a trickle of news on what was happening.
of the Ministers complained strongly at a TNC meeting that they had
been invited to
the end came, the major developed-country players, especially the
The SSM was seen by the developing countries as essential to protect their food security and farmers' livelihoods from import surges that in the past had already damaged the local agriculture sector as local products ranging from tomato and onion to rice and chicken lost out to cheaper imports. What was more galling was that many of the imports are artificially cheapened by the huge agricultural subsidies granted by developed countries.
Under the normal safeguard (the WTO's Agreement on Safeguards), a country has to prove serious injury or threat of serious injury before it is allowed to take action (raise the tariff above the bound level). For agriculture, this is inappropriate; once damage is done, it is difficult to get farming going again, unlike industry. Thus, the need for a special safeguard, where action can be taken before there is serious damage.
There is already a special agriculture safeguard (SSG) set up in the Uruguay Round, but it is mainly used by developed countries as the condition is that it can be used only for products that underwent a "tariffication process" in that Round. The developing countries wanted the use of a special safeguard to be extended to them, through the SSM.
all the WTO members have agreed to the principle of the SSM, most developed
countries led by the
call by the G33 was thus for an "effective SSM", with fair
rather than absurd conditions. The G33 proposed a set of triggers and
ranges of tariff increases above the bound rates. In their latest compromise,
they were even willing to set limits to the degree to which the extra
tariff could exceed the bound levels of the previous Round (i. e. the
Uruguay Round, or the levels when countries like
The US Trade Representative Susan Schwab tried to take the high ground by proclaiming that it was preserving the past 5, 10, 30 years' gains of the trading system from the protectionists led by India and China which it accused of wanting to hike up agricultural tariffs above what they had already agreed to in the Uruguay Round.
was part of a concerted attempt by the
cater to the
Lamy tried to break the SSM deadlock in the G7 (between US-Australia and India-China) by proposing a new set of principles, which threw out the SSM model and replaced it with what seemed similar to the normal safeguard (the existing WTO Agreement on Safeguards).
The Lamy text required "demonstrable harm" to food security, livelihoods and rural development before the SSM could be used, which undermined the rationale of a special safeguard (that action can be taken before serious harm occurs). Its fast-track binding dispute procedure of 60 days also makes the new SSM far less attractive than the usual dispute system (which would take much longer than 60 days to complete) under which the normal safeguard operates.
these major negative elements, the Indian Commerce Minister Kamal Nath
told the media that he had accepted the Lamy text (at least as the basis
for negotiations), but that the US had rejected it. The next morning
(29 July), officials of the G7 laboured for three hours to produce an
alternative SSM model, which they agreed to, and presented to the G7
Ministers. According to Nath, it was Schwab again who rejected the new
draft. That final rejection by the
Ministers, officials and diplomats have been speculating that the SSM
was not the real issue that was irreconcilable. In the most widespread
The 2008 US Farm Bill having planned that cotton subsidies be maintained or increased in the next five years, it would have been difficult politically or diplomatically for Schwab to offer a plus-70% cotton subsidy cut.
The failure of the Geneva talks would then have been placed squarely on the United States, and it would really have been seen as a villain protecting the wealth of a few thousand cotton farms while millions of African cotton farmers would continue to languish in poverty under the continuing unfair rules of the trading system epitomized by the US Farm Bill.
This suspicion that the US wanted to avoid the cotton embarrassment is the backdrop to the comments made by several Ministers of developing countries in their press conferences that SSM could not have been the real cause of the talks breaking down, but rather the scapegoat picked on by a major player in an attempt to shift the blame on to another issue and on other countries.
all, despite Schwab's portrayal of the protectionist potential of the
EC in the same period used the SSG on 296 tariff lines. Fewer than 30
developing countries qualify to use the SSG and they hardly make use
of this facility. Neither
top of this, the
(* This is the first part of a two-part article analysing the issues and factors that led to the failure of the "Mini-Ministerial" Doha talks at the WTO at the end of July. The second part will appear in the next issue of SUNS.) +