TWN Info Service on WTO and Trade Issues (Dec08/14)
10 December 2008
Third World Network

Trade: Gaps on key issues forces delay of possible WTO Ministerial
Published in SUNS #6607 dated 10 December 2008

Geneva, 9 Dec (Kanaga Raja) -- The efforts to conclude modalities in agriculture and non-agricultural market access (NAMA), by holding a mini-Ministerial, appear to have received a setback, with the dates for a possible Ministerial being pushed back from the original suggested date of 13-15 December to possibly 17-19 December.

This change is to enable WTO Director-General Pascal Lamy to hold intensive consultations to try to bridge the gaps among members on three key issues of sectorals (in NAMA), Special Safeguard Mechanism (SSM) for developing countries and on cotton.

This emerged at a Green Room meeting of some thirty delegations convened by Lamy on Monday afternoon to discuss the next steps following the release of the new revised draft agriculture and non-agricultural market access (NAMA) modalities texts late Saturday evening.

According to trade officials, the Director-General will be spending the next few days engaged in intensive consultations with senior officials and Ministers via telephone. He will be trying to gauge the political will to overcome differences on these three issues.

The Director-General did not indicate precisely when the decision to call a Ministerial or not would be made.

Trade officials said that the Director-General had received some unambiguous political signals recently that said that there were risks associated with having this Ministerial meeting.

According to trade officials, at the Green Room meeting, there were differences of view among participants as to which was the riskier approach. Is it riskier to have a Ministerial meeting which fails, with damage to the WTO and Doha Round being greater, or is it riskier to not give it a go, with the knowledge that the economic situation of next year will be worse, and that it would be even harder to conclude the deal then.

Trade officials said that the differences on these points were split pretty well down the middle among the participants.

In an information note sent to all delegations after the Green Room meeting, the Director-General, referring to both the agriculture and NAMA texts issued over the weekend, said that these texts consolidate the very real progress that has been made in the last few months.

"In my view, we can now clearly see the contours of the final package with much greater clarity."

He said that he had spent the weekend in internal consultations with the Chairs and with several Ministers on the preliminary reactions to the new texts and the possibility of convening a meeting at ministerial level here in Geneva before the Christmas break.

According to Lamy, the texts have been generally well received. Members to whom he had spoken feel that the texts give them a frame within which solutions can be found to issues which remain open.

"It is clear that we are closer to modalities today than last July. At the same time, the risks if we do not get there are higher today than they were last July. The potential cost of a second failure in less than six months and a deteriorating economic situation call for prudence; for a step by step approach in trying to minimise the risks while enhancing the chances of success," the Director-General said.

He said that this is why he believed that there are three areas - sectorals, SSM and cotton - where there needs to be some serious political testing before a ministerial meeting can be convened.

"These are not the only issues still open; not even the most important for many delegations, but without advancing solutions to these three, we will not stabilise the modalities texts overall," said Lamy, adding that his sense is that "we must now focus on testing the political resolve to address these three issues, while the Chairs and I continue working on the other issues which still remain open."

In his information note, Lamy told delegations that he will be holding consultations, together with the Chairs, with a number of delegations and also with a number of Ministers starting Monday. At the same time, the Chairs will continue working on closing the gaps on the remainder of the issues in different configurations, as necessary.

"Depending on the outcome of these consultations, a ministerial gathering could take place here in Geneva from 17 to 19 December."

"Let me be clear about what this means: I am ready to call Ministers to come to Geneva at the end of next week, provided that the consultations we hold in the next days yield positive results and that we get the sense that a deal is more likely to fall into place than not," Lamy said.

Lamy was of the view that Members have moved a long way in trying to establish modalities in Agriculture and NAMA. The latest Chairs' texts help bring Members closer to their objective.

Members are not far away from that objective, but they need to take some tough decisions in the next days, if they want this part of the job done before the end of this year, he said.

"We can still try to work out a compromise, if some key Members show resolve in finding solutions to the remaining problems. Knowing how close we are to the end result I do not think that it would be sensible to give up now without trying," said Lamy.

Referring to his discussions in the Green Room meeting, Lamy said that there was a general appreciation of the Chair's texts, which delegations viewed as fair and objective and which captured the current status of the negotiations, both the progress and the remaining gaps.

According to Lamy, everyone also agreed with the suggested course of action outlined above, although there remain a range of different views as to the balance of risks and possibilities.

"This is precisely what I will be aiming to get greater clarity on through the exercise of political testing that I will be embarking on over the next few days," Lamy said in his information note to all delegations.

According to a participant in the Green Room meeting, after talking to a number of Ministers, Director-General Lamy had not gotten positive political signals for a successful Ministerial meeting.

The participant said that a number of issues are not yet resolved and there would be high risk involved if a Ministerial meeting is undertaken now. The Director-General needs additional time to address the issues of sectorals, SSM and cotton.

Speaking to journalists after the Green Room meeting, Ambassador Ujal Singh Bhatia of India, in reference to the fact that no date has been set for the Ministerial, said "there is some more work required to narrow some gaps this week, and then we'll see."

The Indian envoy said that "The immediate priority is to address the gaps which remain, so hopefully, we have to do that within the next couple of days."

Ambassador Sun Zhenyu of China told journalists that the "cautious approach" by the Director-General is good. He said that it was important to test whether there is a possibility for a successful Ministerial meeting.

Asked if China could accept a sector or two (demanded by the US) in the sectoral initiative in NAMA, Ambassador Sun said that there is need for a balanced result. Everybody is in a difficult situation because of the financial crisis.

Asked if it would be possible to bridge the gaps, Argentina's chief negotiator, Mr Nestor Stancanelli said that it would depend on the major countries and the flexibilities they would show. "If we get substantial flexibilities, [it's] possible to get an agreement."

"Today, what is important is substance, and that we have to work hard in order to see if [it's] possible to bridge the gaps we have," said Stancanelli, in reference to what he had told participants in the Green Room.

As to whether it is possible to bridge the gaps, the Argentine negotiator said: "We only have to bring Ministers if we are sure of success. If not, we have to continue working till the moment we can bring Ministers for a success."

He noted that there are perhaps around ten points where the differences need to be resolved.

Ambassador Roberto Azevedo of Brazil told journalists: "The fact is that there is a big difference between the high risk of failure and guaranteed failure. I think that's what we're grappling with right now. Most people can stomach risk, but the question is if we are facing guaranteed failure, is that worth having Ministers here."

According to the Brazilian envoy, this is what the Director-General is testing. The Director-General certainly "got negative signals from certain members." He is now testing the degree of the risk - whether this is a risk which is acceptable or whether "we are talking about a virtual guaranteed failure."

Ambassador Azevedo said that the Director-General talked to delegations and he found out that there were gaps, and that those gaps were wide. The question is whether he can sense flexibilities from at least some key members that would be enough to close those gaps.

Asked as to what Brazilian Minister Celso Amorim told the Director-General, Ambassador Azevedo said that Amorim told Lamy that Brazil is ready to contribute and try to close the deal by the end of the year.

(Amorim is scheduled to arrive in Geneva on Thursday where he is due to attend a commemorative session at the Human Rights Council on Friday to mark the sixtieth anniversary of the Universal Declaration on Human Rights. He is also expected to hold consultations with WTO Director-General Lamy.)

"What we also believe is that in July, we had a very delicate package, we had a very delicate balance, and if you try to tilt that balance in one direction and one direction alone, our chances of success diminish considerably," said the Brazilian envoy.

Meanwhile, according to a report in the "CongressDaily PM", a bipartisan group of senators from some 22 predominantly farming states are planning to send a letter to US President George W Bush, calling on him not to succumb to calls for a Ministerial meeting in the absence of concessions from other countries. The letter cautioned that the draft modalities text in agriculture was not balanced, and that an agreement lacking the "necessary balance" will not gain the support of Congressmen.

The letter by the 22 senators is just another in a growing chorus of views being expressed by key Congressmen, and farm and industry organizations in the United States warning of a hasty WTO Ministerial.

Last week, a bipartisan group of four leading US Congressmen sent a letter to President 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.

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. +