Trade Negotiations Insights • Volume 7 • Number 3 • April 2008
WTO Roundup: Rare movement in NAMA talks, but Doha deal still uncertain
After months of virtual deadlock, some hints of flexibility have emerged in the Doha Round talks on trade in industrial goods, officials in Geneva said. Although it remains unclear whether governments will be able to bridge their differences, many countries are now reportedly willing to consider some potential ideas circulated by the chair of the WTO negotiating committee Don Stephenson in March.
According to one delegate, countries showed an “increased level of engagement,” following a session of the non-agricultural market access (NAMA) negotiating committee on March 14. According to another, Stephenson sounded less frustrated than he had in recent meetings.
For the past few weeks, members have been negotiating on the basis of draft texts circulated on February 8 by the chairs of the negotiating committees on NAMA and agriculture.1 In theory, discussions on the two texts are supposed to lead to a ‘horizontal’ process during which senior officials will thrash out cross-sectoral tradeoffs between NAMA and agriculture, ultimately culminating in a ministerial-level meeting to hammer out an accord on a limited number of high-profile issues.
Sliding scale gets the thumbs up
Members have long been divided on two crucial issues in the NAMA talks: the ‘formula’ that will determine the future tariff levels of developed and many developing countries and the ‘flexibilities’ that will determine the extent to which the latter will be able to shield some products from the full force of global competition. Progress on these two issues is deemed necessary for any compromise deal in the coming weeks.
Of all the options set out in Stephenson’s February text, Members seemed most willing to discuss a limited ‘sliding scale’. Under this option, developing countries willing to accept a lower formula coefficient (which become future tariff ceilings) will be accorded higher flexibilities to protect sensitive sectors from those very tariff obligations – and vice versa. Stephenson gave Members three separate options which ‘pivoted’ on a range of coefficients around 8 or 9 for developed countries and 19-24 for developing countries.2
Sources said that the increased willingness among Members to discuss the sliding scale might have been facilitated by NAMA talks in London among officials from the EU, the US, and Brazil in early March. However, India, Argentina and South Africa have expressed their opposition to the sliding scale option, arguing that it goes against the central principle of less-than-full reciprocity.3
Sensitive product data thwarts agriculture talks
Progress in the Doha Round agricultural talks is continuing to be bogged down by technical details affecting ‘sensitive’ farm products which will be eligible for gentler tariff cuts. According to Chair Ambassador Crawford Falconer, a logjam has occurred over how to estimate so-called domestic consumption data. This is important because the expansion of tariff quotas for ‘sensitive’ products will be set as a percentage of domestic consumption.
As part of a potential Doha round deal, all WTO Members will be allowed to make smaller-than-normal tariff cuts on some ‘sensitive’ products, in exchange for expanded import quotas.
WTO Director General Pascal Lamy said that the issue of sensitive farm products was one of the key questions that must be solved in order to move to the ‘horizontal’ negotiating process. Falconer urged a handful of competitive farms exporters (Argentina, Australia, Brazil, New Zealand and Uruguay) to reach a compromise with a similar number of importing countries (Canada, the EU, Japan, Norway, Switzerland and the US) during a negotiating committee meeting in Geneva on March 14.
‘Green room’ meetings tackle problems
As the agriculture and NAMA negotiating committees work towards producing new texts - possibly to be issued by the chairs in the first week of April, or even the last week of March - Lamy has been holding a series of invitation-only ‘green room’ meetings with some 30-odd delegations in an attempt to determine the scope of a potential ministerial decision to be taken in April or May.
The first ‘green room’ meeting, on March 13, agreed that new texts would be necessary on both agriculture and NAMA before ‘horizontal’ negotiations could begin.
The second, on March 18, looked at how a ‘signalling’ conference on services trade might function. Such a conference, where major target markets would indicate how much they were willing to open up their services sectors to foreign competition, has been a major demand of the US and the EU. Sources suggest that such a conference could be chaired by Lamy, held back-to-back with a ministerial-level meeting, and that the outcome should be communicated to all Members. The LDC group is also reportedly pushing for a ‘signalling’ conference to address its own priorities, including a collective request for allowing LDC service-sector workers to go to other countries on temporary work visas (Mode 4).
During these ‘green room’ meetings sources said that Lamy warned once more that overloading the agenda for a ministerial-level meeting could lead to a “train wreck.”
WTO ministerial still on the cards
For a third year in a row, WTO Members have aimed to strike a framework deal on agriculture and NAMA by spring. For the third year in a row they are in serious danger of failing to do so. Although Members are now better equipped to agree subsidy and tariff cuts than they were two years ago, unresolved issues remain numerous and it is unclear whether the much-awaited ministerial will take place in the near future.
Following bilateral talks in London in early March, Indian Commerce Minister Kamal Nath and EU Trade Commissioner Peter Mandelson both expressed hope that ministers could strike a modalities deal in April. Nath cautioned that the number of unresolved issues must be “brought down to 15 or so [from 130] for ministers to sit down and take a decision.” Mandelson said that making the “progress required in Geneva for a ministerial meeting to take place” was “doable.”4
For more details on the state of play in the Doha Round, see Bridges Weekly at www.ictsd.org
1 For fuller details of the texts see WTO Roundup, Trade Negotiations Insights, March 2008, Volume 7, No.2.
2 For a detailed discussion of coefficients and flexibilities, see: NAMA talks budge slightly, as WTO members look forward, Bridges Weekly Trade Digest, Volume 12, Number 10, March 19 2008.
3 India against Doha chair`s offer on market access, Business Standard, March 16 2008.
4 EU and India hope for key trade meeting soon, Reuters, March 8 2008.
Volume 7. Number 3 / April 2008