Bridges Weekly Trade News Digest • Volume 16 • Number 3 • 25th January 2012

WTO Members Look to Davos for Post-Ministerial Way Forward

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The annual World Economic Forum kicked off earlier today, bringing together policymakers and business leaders against the backdrop of renewed fears of a global economic slowdown. With the 2011 WTO Ministerial Conference now in the rear-view mirror, trade ministers are regrouping informally this weekend to discuss the way forward for the global trade body in 2012.

The World Economic Forum, which is taking place in the Swiss mountain resort of Davos from 25 to 29 January, comes on the heels of pessimistic economic forecasts from both the World Bank and International Monetary Fund (IMF), thanks to debt problems in the eurozone and weakening growth in emerging economies.

In advance of the Davos meet, various chiefs of the world’s multilateral and regional institutions issued a “Call to Action” with suggestions on how the global economy can “regain momentum” in light of decelerating global growth and fears of growing protectionism - taking a particular focus on the opportunities that could come from transitioning to a greener economy.

The eleven signatories of the 20 January letter included, among others, WTO Director-General Pascal Lamy, IMF Managing Director Christine Lagarde, and World Bank President Robert Zoellick.

With preparations well underway for the June 2012 meeting marking 20 years since the Earth Summit in Rio de Janeiro, Brazil, the signatories urged that the upcoming Rio+20 Conference “consider a comprehensive policy strategy for green growth that encourages innovation and diffusion of new technologies, and makes efficient use of economic and regulatory instruments.”

“Low-carbon, climate-resilient growth offers potentially greater employment opportunities,” they added, cautioning that “environmental pressures are putting a significant strain on growth.”

Leaders also urged countries to shirk protectionist pressures, and to develop a “comprehensive action plan” in advance of the Mexico summit of the G-20 group of leading economies in June.

Trade ministers to gather on Saturday

This year’s informal meeting of trade ministers - hosted by Swiss economy minister Johann Schneider-Ammann - is meant to provide ministers a chance to discuss ways to move forward after the ministerial conference, especially with the Doha Round of trade talks now entering its eleventh year.

Trade ministers have regularly held these informal Davos meetings in years past, usually with the goal of assessing the progress of the Doha negotiations and making plans for the year ahead. However, with trade ministers having already gathered in Geneva for the WTO ministerial just over a month ago, there is little expectation that the landscape since then might have changed.

Right now, members appear to be taking a “wait and see” approach in terms of finding issue areas that might gain traction in the new year, one official commented, noting that political cycles in the US and elsewhere are likely to prevent any major leaps forward in 2012.

“Everyone realizes that it is a difficult year,” one developing country official said.

Regardless of what comes from the ministers’ discussions at Davos this weekend, “nothing will emerge that applies to the entire WTO membership,” another delegate emphasised, given that not all of the global trade body’s membership will be involved in Saturday’s talks.

“People might be expecting to see some light at the end of the tunnel,” the delegate added, “but I don’t think anything will actually be resolved at Davos.” Instead, the meeting is intended to serve more as an opportunity for a “frank and open discussion” that is both practical and political.

“It’s after Davos, perhaps, that things will move in a more significant way to establish some sort of work on some sort of process in the WTO,” another official explained.

Items on Saturday’s agenda currently include a summary of the post-ministerial state of play from WTO Director-General Pascal Lamy and a discussion among ministers to identify priorities for the global trade body in the year ahead.

These talks are expected to focus on current global challenges facing the WTO, development issues, and the Doha negotiations, along with identifying issues where there might already be convergence among members.

However, “in the wake of the ministerial, it’s clear that there’s not a consensus on an agreed way forward,” one trade official told Bridges.

NAMA negotiations to resume; other negotiating groups to meet

Back in Geneva, negotiators on non-agricultural market access (NAMA) held their first meeting of the year yesterday, also with the goal of developing a post-ministerial game plan for Doha.

At the meeting, chair Luzius Wasescha of Switzerland told members that he will be holding consultations on all aspects of the NAMA talks, after which he will present members with different options for debate.

While the chair noted a general readiness to take steps to advance the talks, he stressed that “I don’t think that we have a consensus on what to do and how to do it and when.”

At yesterday’s meeting, several members underscored the need to discuss not only non-tariff barriers, which have been the main focus in the last few years of the negotiations, but also the tariff component of the Doha mandate. Others, meanwhile, stressed that balance needs to be achieved both in the NAMA discussions and in the overall Doha negotiations.

With the next meeting of NAMA negotiators set to be held in a month’s time, the chair suggested that members finish what they can, and then put it on hold until there is a clearer direction on how to resolve the other remaining issues.

Meanwhile, sources note that the chair of the Committee for Trade and Development Special Session is also planning to convene various informal small group consultations between February and March. Chairs of other groups are also calling members together to see where progress can be made, officials told Bridges.

ICTSD reporting.