TWN Info Service on Trade and WTO Issues (Dec08/11)
5 December 2008
Third World Network

Trade: Key US Congressmen warn against hasty WTO Ministerial
Published in SUNS #6604 dated 4 December 2008

Geneva, 3 Dec (Kanaga Raja) -- A bipartisan group of four leading US Congressmen have sent a letter to President George W Bush urging him not to allow the calendar to drive the negotiations (at the WTO) through efforts to hastily schedule a Ministerial meeting, without adequate groundwork having been laid.

They warned that little headway has been made since the failure of the last WTO Ministerial meeting in July and that many critical issues remain unresolved.

The letter was signed by Finance Committee Chairman Max Baucus (D-Mont) and Ranking Member Chuck Grassley (R-Iowa), House Ways and Means Committee Chairman Charles Rangel (D-NY) and Ranking Member Jim McCrery (R-La).

The Finance Committee in the US Senate, and the Ways and Means Committee in the House of Representatives are the two key committees that would deal with any trade deal.

The letter, sent to Bush on 2 December, expressed concern that the proposals currently on the table will not provide new market access for US agriculture and industrial goods, and cautioned the US administration against making concessions to secure a deal this year.

"International trade flows and a strong rules-based trading regime can contribute to US and global economic growth, which is particularly needed at this challenging time. To win Congressional support, any outcome to these negotiations must serve to facilitate meaningful increases in international trade flows and further strengthen the rules-based system of international trade," said the letter.

The letter comes just as negotiations at the WTO intensified recently on both agriculture and non-agricultural market access (NAMA) with both the Chairs of the negotiations in these two key areas now expected to come out with new revised draft modalities texts by the end of the week.

(In an information note to all delegations on Monday informing them of the state of play in the work towards the establishment of modalities, Director-General Pascal Lamy said that his own sense is that in order to move to the next stage -- final closing of the gaps -- there is need for texts from both agriculture and NAMA Chairs.

(Lamy did not believe that the next stage can happen without texts. He therefore suggested that the next step should be texts in agriculture and NAMA by the end of this week. These texts should capture progress as the Chairs see it from last week's consultations and provide a vehicle to allow Ministers to close the final gaps before the end of the year. He said that his own sense is that "this course of action could allow us to have Ministers in town in a window of time somewhere around 13-14-15 December.")

Indian sources however are extremely doubtful that any Minister can come from India and participate and take decisions at this juncture, either at a restricted "G7" meeting of key members or at the Ministerial itself.

Indian media reports have said that this has been made clear to the WTO Director-General.

In a press release that came with the US Congressional leaders' letter to President Bush, Finance Committee Chairman Baucus said: "While I commend the G-20's (summit of world leaders on 15 November in Washington) efforts to resolve the financial crisis, their call for an agreement at the WTO by year's end was premature."

"The deal on the table at the WTO would not provide new trade flows needed to stabilize the global economy. The administration should not agree to any deal that does not deliver for US farmers and firms, regardless of timetable," he said.

"I appreciate Ambassador (Susan) Schwab's commitment to reaching a strong outcome. But it takes willing partners. If countries like India, Argentina, China and Brazil are finally ready to sit down and agree on ways to open up meaningful new trade flows, then that's a reason to meet. Otherwise, there's no point. No deal is better than a bad deal, and I have yet to see the outlines emerge of what I'd consider to be a good deal," said ranking member Grassley.

House Ways and Means Committee Chairman Charles Rangel said "We need an agreement that truly opens new markets for US workers, farmers and businesses, and raises standards of living. The current drive to establish negotiating modalities puts form over substance, and is driven by an artificial and ill conceived timetable focussed on achieving a deal regardless of its merit."

"The concessions the United States made in July still sit alone on the table, unreciprocated. While I still hope the Doha Round can be successful, this may not be the best timing for another Ministerial that produces little if any progress," said ranking member McCrery.

In their letter, the Congressmen said that since the WTO Doha Round was launched in 2001, "we have supported the administration's efforts to achieve a balanced outcome that would provide meaningful new market access for US agricultural products and industrial goods and services, particularly from developed and key emerging markets."

"Unfortunately, the negotiating texts currently on the table would provide little if any new market access for US goods, and important advanced developing countries are demanding even further concessions from the United States."

"In light of these circumstances, we have strong doubts that a ministerial meeting at this time can achieve the breakthrough that actually provides new trade flows needed to spur the global economy and help deliver on Doha's development promise."

They urged the president not to allow the calendar to drive the negotiations through efforts to hastily schedule a ministerial meeting, without adequate groundwork having been laid. Developed and advanced developing countries must commit to provide meaningful new market access opportunities if Congress is to support a deal.

"If key trading partners are unwilling to do so at this time, then negotiations on a modalities package cannot conclude," said the letter, noting that "achieving the necessary flexibility from our trading partners could require new thinking, including revisiting the modalities approach, and our negotiators should be given time to explore such options."

"Otherwise, the likely result will be a deal that Congress cannot support -- an outcome that would be detrimental to US farmers, workers and firms, the global economy, and the WTO itself," the letter warned.

Earlier on, a letter was sent to President Bush by the National Association of Manufacturers, the American Farm Bureau Federation and the Coalition of Service Industries warning that holding a WTO Ministerial meeting prematurely would carry a high risk of failure.

The three organizations said that they do not support the imposition of arbitrary timetables to reach modalities in agriculture and non-agricultural market access or agreement on services.

"We feel strongly that another WTO Ministerial meeting should only be held when there is sufficient evidence that WTO members are truly committed to opening their markets." +