WTO Ministerial Section • Volume 5 • Number 33 • 2nd October 2001

Implementation - Finding New Ground Or Grounding To A Halt?

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Implementation - Finding New Ground Or Grounding To A Halt? On 26 September, the WTO released its first draft Ministerial Declaration and draft Decision on Implementation-Related Issues and Concerns to a swell of mixed reactions. These drafts aim to provide a framework for negotiations in the six-week leadup to the Fourth Ministerial Conference in Doha, Qatar (9-13 November) and set the stage for a new round of negotiations on a wide variety of issues (the documents are available on ICTSD’s website at: http://www.ictsd.org/ministerial/doha/relevantdoc.htm; for background see BRIDGES Weekly, 25 September 2001). The Implementation text has been drafted as a basis for a potential Ministerial Declaration on Implementation to be adopted at Doha. It is a compilation of elements from developing countries, the "Group of Seven" countries (Argentina, Morocco, New Zealand, Norway, Switzerland, Thailand, and Uruguay), as well as a ‘Quad’ (Canada, the EC, Japan and the US) report submitted last week to Stuart Harbinson, Chair of the WTO General Council (GC). Harbinson and WTO Director-General (DG) Mike Moore stated that the text "represents [our] best judgment of the possible basis at this time for reaching agreement to address the outstanding implementation-related issues and concerns…" and that "[it] represents a credible effort to move the implementation debate to a new level of understanding." The Moore/Harbinson Implementation proposal is grouped into three categories: 1) those that can be agreed to before Doha - ideally at the 3 October special GC session on Implementation; 2) those for agreement at Doha (which potentially could be tied to launching a new round); and 3) those that would be incorporated into the new round agenda, or ‘future work programme’ as it is referred to in the text. Before Doha Annex I of the proposal outlines issues primarily related to sanitary and phytosanitary measures, technical barriers to trade, and subsidies and countervailing measures. Most of the items outlined here had been made in a previous Moore/Harbinson Implementation proposal in July this year. One trade source noted that this would appear to indicate that the recent Quad proposal (submitted last week) likely did not make many concessions in these areas. On substance, the draft Decision does make some headway on the issue of subsidies and countervailing measures (SCM). A number of trade sources mentioned that the loosening of the criteria for which poor countries are exempted from a prohibition on export subsidies was one, "if not the only" positive gain in the first Annex. At Doha Annex II outlines some of the more contentious issues currently facing the negotiations - primarily those on textiles and anti-dumping. With respect to textiles, the Implementation proposal would give developing countries, inter alia, accelerated expansion rates on quotas that currently restrain textile exports. With respect to anti-dumping, the proposal provides stronger language than sources say the Quad was looking for, even though it was placed in Annex II rather than the reportedly ’softer-worded’ clause the Quad had sought for Annex I. Specifically, regarding successive anti-dumping investigations, the Moore/Harbinson package proposes that where previous investigations within the last 365 days had resulted in negative findings, "special care" shall be taken in re-initiating an investigation and that "[u]nless this pre-initiation examination indicates that circumstances have changed, the investigation shall not proceed." The aim here, sources say, is to prevent anti-dumping investigations from being used as a form of harassment. After Doha Most of the sensitive issues for developing countries have been postponed until after Doha — including agriculture, intellectual property rights, the environment, key anti-dumping issues not addressed in Annexes I or II, issues relating to small economies, and several others. As such, one factor trade sources say is creating a great deal of insecurity among developing countries is the lack of specifics on how implementation issues will be handled in negotiations that may be launched at Doha. Would they come under a special negotiating area for remaining implementation issues or given to working groups to study? These crucial questions remain to be answered. Reactions The reaction from developing countries varied somewhat, but it was more a range of how dissatisfied they were with the package. With the text touching on only 40 tirets (points) of an original 97 outlined in the pre-Seattle Draft Declaration of 1999 (available on the ICTSD website at: http://www.ictsd.org/ministerial/seattle/index.htm#documents), India’s Ambassador, Srinivasan Narayanan, expressed "profound disappointment" with the draft, while another South Asian delegate indicated that there was "virtually nothing encouraging". Similar sentiments were echoed by a number of delegations, including Malaysia, Zimbabwe, and Honduras. One Like-Minded Group delegate at a weekend agricultural symposium pointed out that the real problem was not Doha, but rather the credibility of the trade system (see In Brief, this issue). Others such as Brazil and Morocco opted for a more moderate stance, describing the text as a step in the right direction, although Brazil did propose some of Annex II items to be moved to Annex I. The proposal of moving some key items from Annex II to Annex I was echoed by a number of developing countries, including India, which further proposed that "best endeavor" clauses be made mandatory and that a "well-defined road-map" be established for addressing remaining issues within a specified time frame. One Quad delegate noted that this package was "a good start "and was "a solid basis to proceed". They indicated that while there were elements they were not in complete agreement with, they were "willing to go ahead with it in order to help move the negotiations to the next stage." With respect to many of the demands being made by developing countries, one US trade official was quoted as saying, "[a]nything that involves attempts to renegotiate something really belongs in a new negotiation, not something that can be just decided now." Inside sources indicate that one issue of contention for the US in particular was the provisions for a review of anti-dumping procedures. In response to the Quad’s position on the draft, one trade source said, "[The Quad] are simply not getting the point. Most developing countries are not interested in a new round and thus developed countries need to go beyond the minimum requirements to make that happen; and the minimum is not even present in the current package." Moving ahead on these critical issues will require at minimum the next six weeks of intensive negotiations in the lead-up to Doha. One the positive side, a consensus does exist that this text can constitute the basis for further negotiations. The 3 October informal GC Special Session on Implementation is expected to provide some insight into the direction this will take — although an inside source noted that a deferral on this Special Session is likely to be requested. "Draft Decision on Implementation-Related Issues and Concerns," WTO JOB (01)/139, 26 September 2001; "US: WTO Proposals ‘Good Basis’ for Deal," REUTERS, 27 September 2001; "WTO Draft Declaration Draws Mixed Reactions Among Trade Diplomats," INTERNATIONAL TRADE DAILY, 28 September 2001; "WTO Implementation Proposal Pushes Controversial Concessions," INSIDE US TRADE, 28 September 2001; "Developing Countries Criticize Doha Draft on Implementation of Existing Agreements," WTO REPORTER, 2 October 2001; ICTSD Internal Files.