Bridges Weekly Trade News DigestVolume 16Number 6 • 15th February 2012

2012 Should Not be a “Wasted Year,” Lamy Urges WTO Members

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“2012 cannot and should not be a wasted year,” WTO Director-General Pascal Lamy told delegates in Geneva on Tuesday 14 February. Instead, WTO members should use this year to try taking “small steps” in their efforts to move the Doha talks out of their current stalemate, and avoid setting “unattainable targets or packages.”

After over ten years of negotiations, the eleventh year of the Doha Round seems unlikely to see major movement at the global trade body, with members recognising that 2012 will be a year of small advances and managed expectations rather than a repeat of previous large-scale pushes to finish the trade talks.

Reporting on meetings with individual ministers and business representatives - along with the informal meeting of trade ministers at last month’s World Economic Forum in Davos - the trade chief stressed at Tuesday’s meeting of the WTO General Council that there was a collective sense among members to use 2012 to focus on “issues where consensus exists.”

Given the economic crisis, Lamy cautioned members not to expect “any major breakthrough any time soon, whether on trade, on climate change, or on macroeconomic co-ordination.”

“The current political environment dictates that the most realistic and practical way forward is to move in small steps, gradually moving forward the parts of the Doha Round which are mature, and re-thinking those where greater differences remain,” he added.

The WTO chief has repeatedly made clear that concluding a Doha deal in 2012 will not be possible, telling audience members at last month’s Davos meet that members lack “the necessary political energy to compromise.” The tone marks a sharp turn-around from last year’s push to make 2011 a “make or break year” for the Doha talks, which failed to lead either to a full Doha deal or to a smaller mini-package.

The Doha Round talks have hit repeated snags over their ten-year run, with the talks stalled over disagreements on agricultural support policies and industrial sector liberalisation. At December’s ministerial conference - the WTO’s highest decision-making body - members acknowledged openly that the talks had reached an impasse.

Summing up the general “wait and see” plan, 2012 will be a “cool, calm, and pragmatic year,” Singapore predicted at the General Council meeting.

US industry pushing to sideline Doha?

Given the limited movement in the Doha negotiations, the US is reportedly discussing the idea of a plurilateral services pact with Canada, Chile, Colombia, the EU, Japan, and about a dozen other nations. However, Assistant US Trade Representative Carol Guthrie told Reuters last week, there is “no timeline set for negotiation.”

“There is a broad and growing interest in this concept among a group of developed and developing country WTO members,” Guthrie said.

The proposed services pact has been backed by US business groups, notably the National Foreign Trade Council (NFTC) and the Coalition of Services Industries.

“After more than a decade of negotiations that have not led global trade negotiators to an outcome, it’s time for fresh ideas to break the diplomatic logjam and find ways to move global trade liberalisation forward,” said NFTC Vice President for Global Trade Issues Jake Colvin in making the plug for the services agreement.

However, trade sources note, a number of members are comfortable with the idea of countries moving toward plurilateral agreements in the absence of a multilateral deal.

Agriculture, trade facilitation

A couple of areas that could see movement this year are trade facilitation and least developed country issues, the Director-General told members, noting that there seems to be an “emerging consensus” in this area. The Negotiating Group on Trade Facilitation has already met once this year.

Prior to the General Council meeting, one developing country delegate argued that moving trade facilitation forward would be a “win-win” for all members. “There is no reason to leave it back on the drawing board when it benefits everyone,” the delegate told Bridges.

However, the ensuing three-hour discussion at Tuesday’s meeting on what “new negotiating approaches” could be pursued this year led some country groupings to remind members that the focus should not shift away from the topic that had helped launch the Doha Round - agriculture.

Brazil, speaking on its own behalf at the General Council meeting, stressed that, while there has been progress in the area of trade facilitation, the area should not be a “self-balancing pillar.” Rather, progress must also be made elsewhere, specifically with agriculture.

The G-33, which supports granting developing countries’ greater market access flexibilities, the G-20, which favours reforming developed country agriculture, and the Cairns Group of developed and developing country net agricultural exporters, also stressed that, while they agreed with the Director-General’s call for pragmatism, members must still make sure that agriculture remains one of the main issues on the table.

Without solutions in agriculture, pursuing solutions in other areas will not lead anywhere, they added.

The Cairns Group is reportedly interested in pursuing an ‘early harvest’ on the export competition pillar of the Doha agriculture talks - the most advanced of the three areas affecting farm products that are under negotiation.

According to the current draft text, developed countries are due to eliminate agriculture export subsidies by 2013, with developing countries doing the same three years later. With discussions on the EU’s post-2013 Common Agricultural Policy and the US Farm Bill currently under way, many countries are keen to capture the progress in this area to date.

The next meeting of the WTO’s General Council is slated for early May of this year.

ICTSD reporting; “U.S. businesses urge new agenda at World Trade Organization,” REUTERS, 8 February 2012.

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