Bridges Weekly Trade News Digest • Volume 13 • Number 41 • 25th November 2009

Chair Urges Rules Group to Take up RTAs

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The chair of the WTO’s Negotiating Group on Rules convened a meeting of senior capital- and Geneva-based officials on 25 November to offer a run-down of the state of play in the talks and try to build some momentum for the group’s negotiations. The one-day meeting marked the first such high-level gathering devoted to the rules talks since the chair of the group, Ambassador Guillermo Valles Galmés of Uruguay, released a full draft text in late 2007 (see Bridges Weekly, 5 December 2007, http://ictsd.org/i/news/bridgesweekly/7645/).

The rules group is charged with negotiating disciplines on a range of topics: fisheries subsidies, anti-dumping, horizontal subsidies, and regional trade agreements, or RTAs. The latter topic, though, has fallen by the wayside recently; members have not officially broached the subject since early 2007. Delegates ‘have no appetite’ for butting heads over the very sensitive questions related to RTAs, the chair has said. Now, though, he is hoping to get the issue back on the agenda.

Chair Valles Galmés reportedly spent half an hour on Wednesday morning outlining the status of the rules talks, and devoted a significant amount of time to explaining the history of the group’s discussions on RTAs. In 2002, Valles Galmés noted, members created a ‘roadmap’ for the work of the Committee on Regional Trade Agreements, which was founded in 1996. A decade later, members agreed on a transparency mechanism for RTAs, which sets out a series of notification requirements for members that sign on to such deals (see Bridges Weekly, 5 July 2006, http://ictsd.org/i/news/bridgesweekly/6343/). Since then, though, the RTA talks have languished, despite the urging of the chair.

Regional trade agreements, along with their bilateral counterparts, have flourished in recent years, even as multilateral trade talks have continually stumbled. Some say that the preferential trade deals do more harm than good. Columbia University professor Jagdish Bhagwati dubbed the deals ‘termites in the trading system’ in his book of the same name; he blames the pacts for clogging and confusing the rules that govern cross-border commerce.

RTAs remain a politically touchy subject at the WTO. Members are reluctant to define the nature of the relationship between RTAs and the WTO, and to give a precise definition for many of the terms - such as ‘substantially all trade’ and ‘neutrality’ - that could have far-reaching implications for their economies.

But despite any underlying tensions, senior officials at Wednesday’s meeting largely steered clear of any potentially inflammatory statements.

“The tone will be very polite” in such high-level meetings, one delegate said.

Asked whether Wednesday’s meeting might lead to any breakthroughs in the negotiations, the official was pessimistic.

“Personally, I’m quite doubtful about that,” the delegate told Bridges. “You will not see any result, any outcome [on rules], until [members] see the outcomes of agriculture, NAMA, and other areas” of the Doha talks. The most pernicious disagreements in the rules discussions will likely not be resolved until “the last stage of the Doha Round,” he added.

The next set of rules meetings is slated for mid-December.

ICTSD reporting.