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In late March, WTO Members are set to decide whether the Doha Round can be wrapped up this year. Given the stalemate on substantive differences in agriculture and industrial market access, the answer is likely to be no. What will happen in that case is uncertain.
At the time of writing, information on what the ‘stock-taking exercise’ would entail was extremely sketchy. WTO Director-General Pascal Lamy told the General Council on 17 December that his sense was to “keep open the format and exact content of the stock-taking while keeping in mind that, at this stage, the aim of such an exercise is to assess whether 2010 remains doable.”
Several options are reportedly under consideration. The most ambitious one, a ministerial gathering in Geneva, has been all but discarded. A postponement of the stock-taking has also been evoked, but the chance of that happening appears remote.
Another, more realistic, option is that the chairs of the negotiating groups on agriculture and industrial market access will produce overviews of the state of play, or perhaps some partial texts to supplement the draft modalities released in December 2008. However, no revisions of the entire negotiating drafts are expected.
Whatever comes out of the exercise will feed into the G-20 meeting in Toronto next June (the group requested in September that trade ministers take stock of progress early in 2010; see page 20).
The question is what will happen once the stock-taking is done. If there is a sense of insufficient progress, senior officials, or the WTO membership as a whole, could just acknowledge that the talks will not conclude this year. A new ‘deadline’ could be set, possibly for mid-2011.
Some, including the head of the American Farm Bureau Federation Bob Stallman, have suggested that the negotiations be suspended for a while, but sources say this is unlikely even if many delegates are increasingly frustrated about spending so much time on slow technical work while nothing happens on the substantive issues that divide the membership. This is particularly true for the capital-based senior officials who have come to Geneva once a month and departed with no concrete results.
As has been case at previous times of crisis, the idea has resurfaced of requesting Mr Lamy himself to draw up a comprehensive negotiating draft that would clearly show trade-offs across different sectors. The WTO chief has rejected the similar suggestions in the past, and sources close to the negotiations said it was highly unlikely that he would agree to take on the task at this point.
Agriculture Update
WTO negotiations on agriculture made scant progress in 2009 despite the involvement of capital-based officials in the talks. Much time was spent on the preparation of ‘templates’ that Members would use to calculate their new tariffs and subsidy cuts once a modalities agreement has been reached on the overall shape of the deal. The main focus of this highly technical work in 2009 was on what base data would be needed and how it should be presented. In early 2010, delegations are expected to start designing the actual templates that will be used for scheduling commitments.
Technical work advanced on the special safeguard mechanism (SSM), under which developing countries will be able to temporarily raise tariffs in order to protect farmers in the event of import surges or price declines. Exporters Australia, Brazil, the US and Uruguay, which tend to view the SSM with suspicion, presented simulations on how the mechanism would affect trade in specific products. While welcoming the studies, the SSM’s proponents emphasised that the mechanism would need to be simple and easy to use. Chair David Walker said the presentations highlighted the need for further ‘analytical contributions’ from Members.
In early February and March, Ambassador Walker will hold two weeks of consultations on substantive outstanding issues in the December 2008 modalities draft in preparation for the stocktaking exercise. Among major points of contention are ‘sensitive’ products, the SSM and tariff quota creation.
If Members decide to push ahead with the Doha Round, future negotiations on tropical products and preference erosion may be less contentious following the agreement reached between the European Union, Latin American banana exporters and ACP countries, which have preferential access to the EU (see page 7).
NAMA Update
Work on non-agricultural market access (NAMA) proceeded on two tracks. In formal and informal sessions of the negotiating group, delegates inched forward in considering proposals on reducing/eliminating non-tariff barriers submitted by Members. This process is continues. According the DG Lamy, ‘one, or even a few’ of the NTB proposals are “almost ripe for a text-based discussion.” In contrast, no progress was made on the most divisive issues, including the size developing country tariff cuts and linking the depth of those cuts to the use of flexibilities.
The other track consisted of bilateral and plurilateral discussions among Members on tariff elimination (or deep cuts) in certain sectors, including chemicals, electrical appliances and industrial machinery. Participation in such initiatives is voluntary, but developing countries are under great pressure to join as many developed countries consider that standard formula cuts, and the flexibilities associated with them, will not result in enough new market access. None of the 14 sectoral liberation proposals is anywhere near to garnering the support of a ‘critical mass’ of WTO Members.
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