Azevedo rebuffed at TNC by Brazil, India, G33 and LDCs

Speaking at the TNC session, representatives of several developing and least developed countries opposed moves that would result in an imbalanced, watered-down outcome for the Doha Round.

by D. Ravi Kanth

GENEVA: Brazil has delivered the strongest message yet to its former trade envoy Roberto Azevedo, who is now the Director-General of the WTO, and developed countries that Brasilia will not accept the current efforts to undermine strong disciplines for subsidy reduction commitments in domestic agricultural support, nor a truncated version of commitments in the agriculture package of the Doha Development Agenda.

The strong message from Brazil, and equally strong messages from India, the Indonesia-led Group of 33 coalition of developing countries and the LDCs, at the 31 July meeting of the Trade Negotiations Committee in effect served notice that they would not agree to the efforts of the WTO DG promoting the agendas of the US and the EU to somehow wind up the Doha Development Round and resile from their commitments (at Marrakesh in 1994) to reverse course on their highly protected agriculture sector and bring their agriculture trade under WTO-GATT trade disciplines.

Agriculture’s “disadvantaged position”

Speaking at the formal meeting of the TNC before the WTO’s summer break, the Brazilian Ambassador to the WTO Marcos Galvao said categorically that Brasilia will reject upfront any stratagem that aims to torpedo substantial reduction commitments in the domestic support pillar of the Doha Round agriculture negotiations.

“We will reject upfront any approach, formula, benchmark, schedule, modality or proposal the result of which could amount to maintaining or worsening the disadvantaged position of agriculture within the multilateral trade regime,” Galvao told the TNC chair and major developed countries.

Galvao made mincemeat of the Director-General’s common refrain that members must set their sights on what is “doable” and focus on “doability.” “The focus of ‘doability’ has to be not on WHAT we can do, but rather on HOW we can do what we ultimately HAVE to do,” he told the TNC meeting.

Without naming the United States and other developed countries, which are seeking to lower the level of ambition under the guise of “recalibration”, the Brazilian envoy said “reluctant though certainly well-meaning partners have to face reality and recognize, for example, that we will have to make progress vis-a-vis the status quo in the three pillars of agriculture – and also that we must have meaningful results on the development front.”

At a “green room” meeting two days before the TNC meeting, Azevedo had asked members why they cannot settle for a meaningful outcome in one pillar (see following article).

The US had suggested at the same green room meeting that the red lines of some members in domestic support are overlapping, indicating that it would be difficult for members to explore substantial reduction commitments in domestic support. The US also maintained that it can deliver on issues in the export competition pillar and the Blue Box domestic support.

Many members were surprised when Azevedo repeated the US statement at the TNC meeting when he said that “red lines are overlapping.” It is not clear why the Director-General had used the language of the statement that was made by the US first at an informal trade ministers’ meeting in Paris in early June and later at the green room, said a trade envoy familiar with the two meetings.

In sharp response to those countries seeking “recalibration” based on the Director-General’s “doability” strategy on domestic support, Galvao said “they will have to recognize that any viable outcome requires movement in domestic support as a necessary condition.”

“We all know that is one big issue that cannot be dealt with elsewhere,” the Brazilian envoy argued.

“I have seen no reference to disciplining domestic agriculture subsidies in the context of mega-laterals or plurilaterals ... And this despite the immense distortions such subsidies cause to global trade, in a way that is especially damaging to developing countries,” he maintained.

In response to the Director-General’s advice to members that they should all come prepared to discuss “substance” after the summer break, Galvao said: “The holidays should also serve to put an end to the apparent illusion entertained by a few that we could once again end up with agriculture left behind with close to zero progress, while on other fronts, including NAMA, services and rules, there could be broader movements, even if related only to policy space.”

“That is not going to happen,” he said emphatically. “Brazil, for one – and I know we are not alone – will not be part of any attempt to build consensus upon any kind of unbalanced outcome,” the Brazilian envoy argued.

Brazil “will continue to be engaged in discussions with a strong and permanent focus on balance, symmetry and fairness – working with the 2008 modalities as reference, particularly for any adjustment of ambition, and also, of course, taking up our more recent discussions.”

Galvao’s final suggestion for the summer to Azevedo and major developed countries was that “if there may be in this room, or outside, the notion that some of us need a meaningful result here in the WTO more than others, we should do our best over the vacations to let it vanish from our minds.

“I say this because such a misperception, that occasionally I sense here and there, could lead to serious, possibly consequential miscalculations. The only premise in a successful negotiation is that, despite naturally different perspectives, we all collectively need this.”

No common understanding

In a similar vein, India also served a powerful message to the Director-General and major developed countries who want to now proceed on the basis of “substance” without finalizing the work programme. “There is no common understanding yet on what recalibra-tion, simplification or lowering of ambition mean in practical terms or on the alternative approaches,” India’s Ambassador Anjali Prasad said.

She said “despite intensive engagement, the stark reality is that we do not have a clearly defined post-Bali work programme as mandated, which is disappointing.” In short, “the consequence is that we neither have a narrowed down list of issues central to the conclusion of Doha nor a direction for further negotiations,” she argued.

In the absence of a work programme, said Prasad, members must follow 10 important parameters which should form the “bedrock” of work from September. The 10 points are:

l     First, we should not lose sight of the centrality of the “development dimension” as enshrined in all the Ministerial Decisions starting with the Doha Declaration.

l     Second, less than full reciprocity and special and differential treatment within and across all negotiating areas are non-negotiable.

l     Third, we need to respect all Ministerial mandates and Decisions relating to the DDA, and not ignore the work done by members at various stages since the Round was launched. Relying on mandates where convenient and disregarding them where not, would not be the way to go.

l     Fourth, agriculture remains central to any outcome in the Round. It would be the bellwether in calibrating the level of ambition across all negotiating areas. Frontloading of discussion on all its three pillars with equal priority is therefore necessary to move us forward and ensure balanced outcomes in all other areas of negotiations.

l     Fifth, we believe that the Rev. 3 and Rev. 4 texts provide a good basis for further work in NAMA and agriculture. We have been open to looking at new ideas and alternative approaches but do not see the possibility of a breakthrough unless there are clear and actionable proposals.

l     Sixth, recalibration with a lowering of ambition cannot happen if it leads to dilution of the development quotient and is not symmetrical across all areas of the negotiations. Retention of ambition or even raising it in some areas while lowering it in others would not be helpful.

l     Seventh, doability and realism cannot imply the dropping of issues and elements. All issues must remain on the table. Cherry-picking of issues has to be avoided.

l     Eighth, we should avoid bringing in issues that may be divisive and counter-productive in our search for credible outcomes. Prasad referred here to suggestions made by some members that question the existing WTO legal framework of treating developing countries as a homogenous category.

l     Ninth, it is important that we maintain transparency and inclusiveness in the run-up to the Ministerial Conference, and follow a member-driven and bottom-up approach. It should be our collective endeavour to complete work on Nairobi outcomes in Geneva itself.

l     Lastly, we do not subscribe to a Nairobi “make it or break it” narrative or conclusion of the Round at any cost or in any manner whatsoever. India believed that the Round cannot be completed without a credible outcome on the development dimension.

Prasad criticized the outgoing chair of the Doha Round agriculture negotiations, Ambassador John Adank of New Zealand, on his concluding statement. Disagreeing with Adank’s argument that there is policy space for countries to undertake new commitments, India said emphatically that “the availability of policy space cannot be a metric for undertaking commitments which, as has been the practice in WTO, [are] based on bound levels.”

“Moreover, it is anomalous to equate the policy space of developing countries – the need for which is recognized by the relevant S&D provisions of WTO law – and that of developed countries,” she told the meeting.

Prasad argued that the outgoing chair’s report “appears to equate the elements of market access such as tariff peaks, escalation etc. with special and differential treatment.” “I would stress that S&D is an abiding principle that informs all elements and pillars of the negotiations and is not to be treated as just another element,” she argued.

She also chastised the chair’s statement for linking the alternative approaches to tariff reduction and the Special Safeguard Mechanism (SSM). “As my delegation has repeatedly pointed out with the support of several developing countries, the inclusion of SSM is a given that flows from the mandate. The inclusion of SSM in the final package is not contingent upon the type of tariff reduction modalities that are adopted and is a standalone,” she said categorically.

Prasad disagreed with the chair’s assessment of potential solutions to the issue of public stockholding for food security inasmuch as there is no convergence on devising a permanent solution on the basis of elements from the Bali decision.

“The only proposal on the table is that submitted by the G33,” she said, adding “we are deeply concerned that members are not engaging meaningfully on that proposal and instead asking for alternatives to be explored.”

“As India has repeatedly pointed out, a permanent solution to this problem is an essential deliverable at Nairobi,” Prasad emphasized.

On the report by the chair of the NAMA negotiations, India said it does not share the perception that the division of substance into smaller bits would facilitate progress as the NAMA elements enumerated by the chair are closely interlinked. In India’s view, it is only on the basis of wholesome proposals covering all elements that meaningful discussions are possible.

On behalf of the G33 countries, Indonesia called for a robust outcome on Special Products and Special Safeguard Mechanism.

Australia said the Cairns Group wants credible outcomes in all three pillars of the agriculture negotiations, while Brazil, on behalf of the G20, said agriculture will remain as the engine of the Nairobi outcomes.

Bangladesh, on behalf of the LDCs, called for credible outcomes on preferential rules of origin for LDC products, duty-free and quota-free market access, and cotton.

In sum, Brazil, India, and developing and least developed countries remain skeptical about efforts by the Director-General and major developed countries to proceed on “substance” in September without regard to previous ministerial mandates. (SUNS8076)   

Third World Economics, Issue No. 598/599, 1-31 August 2015, pp7-8, 16