Bridges Weekly Trade News DigestVolume 16Number 29 • 25th July 2012

Time to “Change Gears” on Doha, Lamy Urges WTO Members


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The first half of this year has seen “meagre progress” in moving the Doha talks forward, WTO Director-General Pascal Lamy told delegates on Wednesday, reiterating his earlier call that 2012 “not be a wasted year.” During today’s meeting, WTO members also formally signed off on revised accession guidelines for least developed countries (LDCs), and welcomed the announcement that Vanuatu will become the organisation’s 157th member in August.

“Paralysis” still a risk, trade chief warns

Speaking to the General Council - the WTO’s highest decision-making body outside of the ministerial conference - on Wednesday 25 July, Lamy stressed to delegates that the second half of the year should be focused on operationalising the instructions given by ministers at last December’s ministerial regarding the Doha negotiations, adding that “we have to recognize that prolonged and dogmatic discussions about whether or not to deliver on everything or a few things or nothing at all have not and will not take us very far.”

“The only thing we know is that an ‘all’ or ‘nothing’ does not work. A ‘my way or the highway’ is the best way to ensure paralysis,” Lamy cautioned. “I believe that after the summer break, we need to change gears at various levels so as to ensure that we use our time in the most efficient manner possible.”

“Those of you who believe that, as time passes, inexorably, the Round might lose all its remaining steam may be right, whether we like it or not,” the Director-General warned. “Credibility lies in the capacity to produce results, not statements. We should all face up to this reality and accept that there is no individual clever escape from this collective responsibility.”

Delegates speaking to Bridges before the event noted that the mood headed toward this year’s July General Council was markedly different from previous years, when July was often set as a goal date for concluding proposed breakthroughs in the Doha negotiations.

“This is the first month of July where there is no window of opportunity, or no one claims there is one,” one developed country official remarked to Bridges prior to Wednesday’s meeting.

“Normally we’re asked to stay here to the end of July in order to do whatever is necessary for a side deal,” the official added, noting that this year it was already clear from the beginning of July that this would not be “a breakthrough month.”

“2012 is clearly a transition year, with many leadership transitions around the world,” one delegate said, noting that members are avoiding putting any deadlines or targets on a particular topic. “However, 2013 is another year, and we might be living in another world, depending on the [leadership] changes.”

Trade facilitation as a Doha deliverable?

In light of the current impasse of the nearly eleven-year Doha negotiations, discussions among members since last December’s ministerial conference have largely centred on whether or not an agreement on trade facilitation could be an early deliverable from the Round.

Debates as of late have focused broadly on the question of whether trade facilitation can indeed be a “self-balancing pillar,” or whether it should be paired with another Doha deliverable so that developing countries are not just “giving away the issue for free,” as one delegate commented ahead of the General Council meeting.

The trade facilitation subject took centre stage at Wednesday’s gathering, with Lamy noting that various delegations had told him during informal meetings that “any paragraph 47 outcomes, whether it be trade facilitation or something else… does not imply the end of the Round.”

The trade chief also noted that the principle of the single undertaking - where nothing is agreed until everything is agreed - “remains the guarantee that all mandated issues need to be addressed.”

This comment was reportedly picked up by many developing countries in their interventions, including the African Group, Mauritius on behalf of the Africa, Caribbean, and Pacific (ACP) country group, Brazil, Chile, India, Nigeria, Pakistan, and South Africa, among others, who largely voiced their concerns regarding treating trade facilitation as a stand-alone outcome of the Round, arguing instead that other developing country issues on the table must also be addressed and that the single undertaking principle should not be forgotten.

Speaking to Bridges ahead of the meeting, some developing country delegates raised similar worries. “There needs to be a clear understanding that trade facilitation is something that benefits everyone, and not just a few members,” one developing country official commented ahead of Wednesday’s gathering.

“This isn’t just an area of interest for developing countries, which do have a lot to gain,” the official said, noting that areas such as special and differential treatment need to be clarified in order for countries to have the capacity to take on commitments. “If this is understood, and if there are clear commitments, I think there is the possibility for us to conclude a deal.”

“We are convinced that a trade facilitation agreement will bring benefits,” a delegate from a large developing country commented. “Some have said that from here to [the next ministerial] it would be good to have a deliverable, but those are mainly hopes right now. I don’t think that anyone will want to put too much pressure on a deadline, though, in case it doesn’t work out.”

Within the actual trade facilitation negotiations, discussions have been ongoing both informally and formally throughout the year, with facilitators at the most recent negotiating cluster - held from 9-13 July - reporting limited progress in their work. Sources note that at this latest meeting, facilitators described that discussions as of late have focused on topics such as special and differential treatment of developing countries, customs brokers, pre- and post-shipment inspection, and freedom of transit, with a few members submitting new proposals in some of these areas.

Given the few changes that have been reported by facilitators, the chair of the trade facilitation talks - Ambassador Eduardo Ernesto Sperisen-Yurt of Guatemala - has suggested that the next revision of the negotiating text be issued at the upcoming group meeting in October.

Other negotiating topics

Meanwhile, other Doha topics are seeing limited progress, with the contentious areas of agriculture and non-agricultural market access (NAMA) seeing little movement forward. In the agriculture talks, there is yet to be any consensus on what topics might serve for an early harvest, Lamy told members at an informal meeting of heads of delegation last week.

The lack of progress in the agriculture talks was raised at today’s General Council meeting, with Australia, speaking on behalf of the Cairns Group of developed and developing country net agricultural exporters  saying that it was “deeply disappointed” over the lack of engagement on the subject. ASEAN made a similar point during its intervention, stressing that agriculture is one of the core issues at the heart of the negotiations.

In NAMA, there is “no activity to report,” Lamy told delegates last week during an informal meeting; outgoing chair Luzius Wasescha of Switzerland, also speaking to the NAMA negotiating group last week, has said that he has seen little enthusiasm among members to pursue a reform agenda, and urged members to keep an open mind in exploring new negotiating approaches.

LDC accession guidelines

While the future of a possible “early harvest” for trade facilitation still remains unclear, members at Wednesday’s General Council gathering did formally sign off on a non-Doha outcome, specifically revised accession guidelines for the world’s poorest countries.

Least developed countries have long complained that their trading partners routinely ask them to take on commitments beyond what they are capable of during their bidding process to join the WTO, as seen in the cases of the five most recent LDCs to accede, despite the existing LDC accession guidelines from 2002. These commitments, they argue, were also well beyond those that were required from LDCs that had previously joined the Geneva-based trade body.

With that in mind, ministers at the December ministerial conference had directed members to “further strengthen, streamline, and operationalise the 2002 LDC accession guidelines,” with the inclusion of benchmarks, particularly in the area of goods. Members were also urged to explore benchmarks in the area of services, with July’s General Council meeting set as the deadline for finalising the new guidelines.

Late last month, WTO members in the LDC Sub-committee provisionally agreed on a set of recommendations, including quantitative benchmarks in goods, and qualitative ones in services. The revised guidelines also include provisions regarding transparency and technical assistance. (See Bridges Weekly, 4 July 2012)

While the difficulty of the LDC guidelines discussions had raised questions in some quarters over whether concluding the talks ahead of the July General Council deadline would be doable - and the possibility of a delay was suggested by some - “July was always the goal,” one developing country official commented to Bridges.

“At least for our part… we always believed it would be possible, although I can’t deny that there were difficult moments in the talks - and this was something that we had to accomplish, not just for LDCs, but also for the credibility of the WTO.”

Others noted that, had members been unable to reach agreement ahead of today’s meeting, the result would have cast a pall over the 25 July gathering, given the potential questions that would have been raised over the virtues of the system.

Vanuatu to become 157th member

The 25 July meeting also saw Vanuatu notify the WTO that it had ratified its accession protocol, setting the stage for the small Pacific island country to become the 157th member of the global trade body on 24 August, two days after Russia’s membership takes effect. (For more on Russia’s accession, see related article in this issue.)

While Vanuatu had been formally invited to join the global trade body last October, the Pacific island nation was unable to ratify the accession accord domestically ahead of its 31 December 2011 deadline, due to domestic difficulties.

“[Vanuatu's] WTO membership will facilitate Vanuatu’s integration in the global economy,” Lamy said. “This is crucial for a least-developed country such as Vanuatu, since trade can be an engine for growth and poverty reduction.”

Bali expected to be site of next ministerial

Throughout the last several months, General Council chair Elin Johansen of Norway has been consulting with members regarding Indonesia’s offer to host the WTO’s ninth ministerial conference (MC9), which is slated to be held at the end of 2013.

Though the agenda item regarding the venue and dates for the ministerial had not yet been discussed during the General Council meeting as Bridges went to press, it is widely expected that members will formally accept Indonesia’s offer to hold MC9 in Bali before the end of this week’s meeting.

ICTSD reporting.

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