TWN Info Service on Trade and WTO Issues (July08/53)
31 July 2008
Third World Network

Trade: Developing countries' call to reassess Doha priorities after talks fail
Published in SUNS #6529 dated 31 July 2008, and updated

Geneva, 30 July (Martin Khor and Sangeeta Shashikant) -- Many developing countries called for a reassessment of the Doha negotiations following the failure of the past fortnight's Geneva talks. In particular, they said that one major failure of this week was that development issues, concerns and perspectives were not taken into account at the various meetings.

These views were projected at the formal Trade Negotiations Committee meeting at the WTO this morning.

India said that during the nine days' negotiations, it remained convinced that we can resolve the remaining issues in NAMA and agriculture and to address services, TRIPS and Rules. At the end, "we found it difficult to understand how we could not come to terms with an issue that reflects the livelihoods of millions of the poor around the world", clearly referring to special safeguard mechanism (SSM).

India said it is pertinent to note that the issues on which we could not make much progress are issues central to the development mandate of the Round - trade distorting support and disciplines, special products, SSM, cotton, duty free quota free (DFQF) treatment for LDCs, etc.

"This has to be a cause for serious introspection. We have to ask why we cannot resolve the main issues which concern developing countries in the WTO. An answer to this is relevant for the future credibility of the WTO... If we are to strengthen the WTO, a way will have to be found to enable it to address the aspirations of the bulk of its membership."

India suggested that a dialogue be initiated to consider how to take forward some issues with deep development implications on a fast track basis, such as DFQF for all LDCs, aid for trade, and enhanced integrated framework.

India said we are disappointed but not disheartened. As a first step, it is important to capture the understandings on a number of issues, and the cumulative understandings constitute very substantial corpus of work that can be the platform for future engagement. They are too important to be consigned to memoirs. After a period of introspection, we need to engage on how to build a programme to bridge the gaps.

South Africa, represented by its Trade Minister, said the failure is a missed opportunity. In particular, it regretted that there was no early resolution of cotton, DFQF access for LDCs, the banana issue and tropical products and so on. "We therefore support the proposal for an early harvest on DFQF, cotton and bananas."

While there will be varying assessments of the causes for the failure, we need to reflect seriously on the systemic implications for the WTO and the fuller integration of developing countries on equitable terms into the global trade system.

To prepare for re-starting the talks, important lessons from the last 10 days should be taken. The development agenda must remain at the centre of the talks, with the core aim of strengthening the system to support development aspirations.

"For negotiations to succeed, we must ensure the development objectives are given greater weight than narrow mercantilist objectives. Development and increased trade are not synonymous... A single minded focus on trade and market opening can also be detrimental to broader development considerations. The construction of the agenda and the negotiation process must take this into account.

"A second lesson from the last 9 days is that pursuing rigid formulas and frameworks that ignore the specific situations and concerns of particular members can be a recipe for failure. The system must respond and accommodate specific concerns of particular countries.

"We have to reaffirm and implement principles of SDT and less than full reciprocity in favour of developing countries, while taking into account real differences among developing countries."

China said after 10 days of hard work by ministers, China is disappointed as many others with the setback we are confronted with in the negotiations. On the substance in general terms, China reiterated the importance of the development dimension that the round should deliver, without which it could never come to a successful conclusion.

In this regard, the major developed Members need to exercise genuine leadership in the negotiations rather than engage in any unhelpful activities with a view to shifting responsibilities onto others, including through the media, said China.

For the sake of strengthening the multilateral trading system, Members should not give up our efforts, said China. All the progress made should be preserved instead of being wasted and we should resume our work as early as possible on those issues still outstanding.

Indonesia, on behalf of the G33, said that it shared the deep disappointment expressed by many that we are unable to achieve the objective of our meeting.

The G33 has been here to engage constructively. We have showed flexibility to move as we know the concerns of some members. The G33 was prepared to compromise and negotiate an acceptable balance. But it regretted that the compromise could not be reached.

The G33 continues to take a positive and constructive approach. It hoped the process will continue, whilst keeping the positive results achieved.

Argentina's Minister was deeply disappointed and said the problems were on substance and process. On the process, the senior officials should have tried to reduce differences and let, if possible, the main controversial issues to be left to Ministers.

In Agriculture, the work was evidently made before the meeting with broad participation and in the text the positions and options were clearly identified. On the other hand, NAMA was problematic because of how the texts were presented and how a consultation group was formed (referring to the G12 that met at the US Mission).

The lack of success of the Geneva meeting was due to the wrong insistence by developed countries to put pressure on developing countries. The level of commitment for developing countries exceeds that of developed countries, violating para 24 of Hong Kong Declaration.

It is clear that amendments must be made to the text especially on NAMA, and this requires structural changes so that it can be a basis of negotiations. Only once there is compliance with the principles of the round will it be possible to make progress in NAMA, said Argentina.

In a brief statement, the US Trade Representative Susan Schwab said that this is not the time for long speeches but rather a time for reflection. It is not a time for name calling but for constructive leadership.

She said it is a huge disappointment that we did not reach the goal, and assured partners and the Director General that "what you have put on the table is still on the table." There is always room for improvement and managing the process. The difficulties of this negotiations were not on process but on substance.

Peter Mandelson, EC Trade Commissioner, said we have to face up to the consequences of our failure. We did not fail for lack of time. We failed because we lacked the political will to close the final gaps. He said we had agreement on 90-95% of the issues at stake in modalities. This was a deal within reach. I believe that people will look at the question on which this round broke and shake their heads in disbelief.

The EC had tabled ambitious offers including a 60% average cut in the EU's farm tariffs, 80% cut to trade distorting subsidies, cuts to industrial tariffs that would have left us with an average tariff of barely 2% and no tariff over 6%.

Only Doha could have delivered these things in a single package. What would have been a huge collective success, must now be counted a massive collective failure. We have just lost the insurance policy that would have bound in the openness of the global economy.

In the autumn, after a summer of reflection, we must renew our dialogue, nurture our relationships, said Mandelson, and talk like adults about where we go from here. None of the politics in our countries will get any easier. He said his team would return to Geneva, not to take up where we left off, but to make sure what we have is not entirely lost.

Switzerland said even if negotiations have not succeeded, a lot of useful work was done even if some important issues are open. The first priority is the stabilization of all the texts, the Chair's reports, report of the services signalling conference, report of TRIPS consultations, this will be the basis for future work. It said that August should be for internal reflection, and the DG has many tools to work with, such as quiet diplomacy, technical work on issues that are not ready for decisions, plurilateral discussion on how to improve the process.

Colombia said that all the agreements achieved should be reflected in a Chairman's text.

Guyana (speaking for the Caribbean Community) said that we cannot avoid the use of the word failure because some leading members cannot secure convergence on SSM. As members of the G33, the Carribean Community is of view that a satisfactory outcome of SSM is a sine qua non.

Despite the importance of this issue, it is inconceivable and beyond our wildest imagination that at a historic moment, we could not construct the bridge between the legitimacy of using the SSM and possible abuse of SSM. Something else must be at work here (to prevent an agreement).

Surely we have treated cotton again in a shabby fashion, said Guyana. There are clear instructions of how to deal with the C4's proposals, to avoid the shame the world will heap on us on this issue. Let us try and carve out some arrangement that will allow an early harvest for cotton producing countries, said Guyana.

Indeed, since we are on early harvest matter, it is necessary to note that as this round becomes comatose, we in the Caribbean are exposed to an early harvest on bananas. We cannot and will not subscribe to the terms of a deal on bananas in whatever form, since that agreement seeks to drive the final death nail into the banana industry.

The EC has said that it will compensate the farmers but how it intends to compensate for the loss of entire livelihoods is yet to be seen.

Venezuela's Trade Minister said the WTO should take into account the demands of developing countries and the negotiations should have the participation and approval of the entire membership. It strongly affirmed that any results that arise from small groups of countries or their efforts to reach conclusion of the Round cannot and should not represent a basis of future discussion.

Noting that the negotiations (of the past days) did not involve the full participation of developing countries nor reflect the interests of all members, Venezuela said we should go back to having the negotiations in negotiating groups and that proposals made by members that are not included should be included, so that the reports can be credible.

On services, Venezuela reiterated that the Chair of the group should limit himself to having a factual report given on his own responsibility, since there is no consensus on a new text.

If these discussions have not led to a successful outcome, this is due not to developing countries or any topic but to the lack of real political will on the part of developed countries which would like to impose their wishes and interests on the rest of the membership.

Burkina Faso, which coordinates the Cotton 4 (the African cotton-growing countries) said that since the start of the talks it had shown patience but now all its hopes had been stalled.  "We feel betrayed", it said.  The SSM issue had hijacked the negotiations and a deadline must be given for completion of negotiations.
The C4 believes that the best place to discuss the cotton issue is the multilateral framework. The C4 will continue to fight because we have been denied the negotiation on cotton.

Brazil said it was a sad day for the multilateral trading system. As a true believer in the system it had tried to help the negotiations.  We tried to find solutions for issues beyond the G20.   The reform of the system especially in agriculture.has been the main objective of the G20.

Brazil said that the poorest countries will continue to be exposed to the continued subsidization (by developed countries in agriculture).  Without the continuation of the talks, we will see multiplication of disputes. Reform in agriculture remains key.

It has no illusion that negotiations can be quickly resumed in the future but it agrees that members will have to return to the table.  It also expects that developed countries will not provide agriculture subsidies beyond the levels previously agreed.

Uruguay asked for reflection but also for action. We need to consider the genuine risk caused by protectionism.  It is positive to hear that although the offers are incomplete, they continue to be current. It is not the time to conclude that there is something wrong with the process.  We need a clear list of areas where consensus has been achieved and where it is possible.

Mauritius, on behalf of the ACP, said it is a sad day but all is not lost. The presence of Ministers have closed gaps on a number of pending issues. How we capture this progress and chart a road map are concerns that we have to address.

Australia said we should recognize the enormous amount of work achieved. Our challenge is to ensure progress is not lost. We should reflect on the failure and on best way forward.

Nigeria said it had called on major players to exercise flexibilities to reach Mont Blanc. It regretted that this plea has not been heeded. The present difficulties are only temporary. It warned against a blame game.

Bolivia said for future talks, we should avoid setting artificial dates. It proposed a change in the mandate to enhance the development dimension. The Chairs' texts should not be considered the only basis for negotiations, but the formal and informal positions of members should also be considered. Various expressions of positions should be treated equally.

The problem where certain delegations felt that certain texts were not valid should be dealt with. On the TRIPS disclosure consultations, Bolivia had difficulty with the 9 July document as it does not cover concerns of Bolivia that there should be no patents on life.

Bolivia also requested that in the Rules negotiations the reform of Article 24 of GATT (on regional agreements) be included. It wanted to consider possibilities of including SDT and asymmetries as principles in bilateral trade.

On services, Bolivia said there is no mandate on a text although it supported areas where there is a consensus (such as treatment of LDCs). It also wanted the report to include that there should be an exclusion from GATS of services that relate to human rights, such as education, water, and telecommunications.

It supported an early harvest for cotton and LDCs. It said there should not be finger pointing on the failure. However, we should indicate that more than 100 developing countries face problems in truly achieving development in this round. The real problem is with mind-sets. We want positive results but we are not achieving beneficial results with the current package.

Cuba said the hollow rhetoric of the rich countries on development was shown up. We need to look at the new starting point, at how the new process will be conducted and at the participation of members. We cannot accept that what was discussed between a reduced number of countries can be taken as a starting point.

Criticising the process, Cuba said many members noted that this was a process favouring a few members. It called for changes in the direction of the WTO. It also supported what Venezuela and Bolivia said on services.

Ghana shared the disappointment of others.  It agreed with Guyana on the banana issue,  i.e. that the ACP proposal is still on the table. The window of opportunity for weak producers should not be abruptly shut.

Norway said that what we have achieved must be preserved.  The WTO is a key organisation and we must stay by it. There is nobody to do the job for us.

Barbados on behalf of the small vulnerable economies (SVEs) said there are a number of issues of importance to developing countries that were not fully resolved, including duty free quota free access for LDCs and cotton.  The importance of SSM cannot be overstated.  SVEs are anxious to know that we will preserve what has been achieved.

Honduras said the EC has a ruling against it (referring to bananas) but it refused to implement this over the last 16 years. It wanted the EC to honour the banana agreement that had been reached (between the EC and the Latin American producing countries) during this week.

At the end of the meeting, TNC Chair Pascal Lamy Lamy invited the TNC to take note of the statements, announced the date of the next meeting and closed the meetng.