Bridges Weekly Trade News Digest • Volume 8 • Number 16 • 5th May 2004

Members Appear To Converge Around Trade Facilitation Talks

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At an informal Heads of Delegation meeting on 29 April, Members reportedly began to converge around the idea of including trade facilitation as part of the Doha round of trade negotiations. According to trade sources, Members considered making a formal commitment to begin negotiations on modalities for trade facilitation as part of a negotiating framework ‘package’ they are hoping to achieve by July (see related story, this issue).

The emerging consensus on modalities on trade facilitation was not a sudden development, but has been building up gradually over the months since the Cancun Ministerial Conference in September 2003 (see BRIDGES Weekly, 4 December 2003). The four Singapore issues investment, competition, trade facilitation and transparency in government procurement have been controversial since they originally were introduced at the WTO Ministerial in Singapore in 1996.

What happens to ‘explicit consensus’ on modalities and what do modalities imply?

While many developing countries, including African, Caribbean and Pacific (ACP) states as well as a ‘core’ group of countries opposed to launching talks on the Singapore issues (such as India and Malaysia), appear to have warmed to the possibility of talks on trade facilitation, they have not dropped their insistence on ‘explicit consensus’ on modalities for trade facilitation before negotiations can be officially launched. A number of developing country delegates stressed that agreeing to discuss modalities on trade facilitation did not imply the ‘automatic’ launch of negotiations, but was conditioned upon ‘explicit’ consensus being reached on the nature and scope of the negotiations, particularly substantive aspects such as the applicability of dispute settlement. Many also called for assurances on technical assistance as a precondition for talks (see BRIDGES Weekly, 8 April 2004).

Demandeurs, such as the EC, previously stated that this was best left for the negotiations to work out and ‘modalities’ implied only ‘procedural modalities’ surrounding the negotiations. These positions emerged well before Cancun (see BRIDGES Weekly, 21 August 2003) and have not yet been resolved.

No apparent shift in EC stance on ‘plurilateral approach’

Despite earlier indications, most recently by the European Commission’s spokesperson in Washington, Anthony Gooch, that the EC was willing to drop the Singapore issues from the ’single undertaking’ (See BRIDGES Monthly, April 2004, pp1), the EC has made no such formal commitment. The EC has, since Cancun, been pushing for negotiations on the Singapore issues, particularly the more controversial ones, on a ‘plurilateral basis’ among willing WTO Members outside the context of the Doha negotiations (see BRIDGES Weekly, 11 December 2003).

Most developing countries, on the other hand, appear uncomfortable even with a ‘plurilateral approach’ and prefer investment, competition and transparency in government procurement to be dropped entirely from the WTO. However, attitudes appeared to have softened at the informal Heads of Delegation meeting where only Indonesia openly called for the issues to be dropped. Mexican Ambassador Carlos Perez de Motta stated that it was "important to be careful" with the wording in the July package on how to address the remaining three issues, noting that delegations might agree to continue clarification discussions within the respective working groups on the Singapore issues, but only if this did not imply a commitment for eventual plurilateral negotiations. In his address to the informal session meeting, General Council Chair Shotaro Oshima (Japan) stressed that major issues remained to be resolved, particularly questions regarding which issues, if any, should be within the single undertaking, and how to treat the issues to be put outside the single understanding.

Informal consultations on trade facilitation to continue

In his address to the informal Heads of Delegation meeting, Chair Oshima said he had noticed some evolution in the positions of Members since the December and February General Council meetings. This, he said, offered the strong possibility — although no certainty — that Members could resolve their differences over trade facilitation. Second, he pointed out that several countries — both developing and developed — actively supported such negotiations, and had expressed support for modalities previously set forth by Cancun Chair Luis Ernesto Derbez. Third, he said a substantial number of delegations had significant questions and concerns that they felt needed to be clarified and addressed in order for them to agree to negotiations. Many of these were set forth in a paper submitted by the Core Group of developing countries at Cancun (WT/MIN(03)/W/4, available at http://docsonline.wto.org). These delegations needed a clearer picture of what the negotiations sought to achieve and how the burden of assuming these new obligations would be addressed. Fourth, the Chair emphasised the need for a more systematic discussion — with full transparency and contribution from all Members — in order to achieve explicit consensus.

The Chair also stated that at his request Deputy Director General Rufus Rufus Yerxa was holding technical consultations in order to consider how to proceed with the issue of trade facilitation and the parameters for possible negotiations. He also encouraged Members, particularly those with divergent views, to talk amongst themselves with the aim of reaching some degree of convergence.

"Ministers vow to overcome obstacles to Doha," FT, 3 May 2004; "Zoellick to host ’select’ dinner in attempt to meet Doha round target," FT, 30 April 2004; "Trade Officials See Improvement In WTO Impasse Over Singapore Issues," WTO REPORTER, 30 April 2004; Report on consultations on trade facilitation modalities Deputy Director General Rufus Yerxa, WTO NEWS, 29 April.