Bridges Weekly Trade News Digest • Volume 9 • Number 16 • 11th May 2005
Paris Mini-Ministerial Revives Optimism About July ‘Approximations’
Trade ministers from 30 influential WTO Member countries have once again cast their eyes on the end of July for coming up with well-developed ‘first approximations’ of a deal that Members may then flesh out and adopt at the WTO’s December Ministerial Conference in Hong Kong. This followed a 4 May breakthrough on a technical issue related to agricultural tariffs that had been effectively blocking the Doha Round trade talks, during the course of a WTO ‘mini-ministerial’ meeting in Paris (see related story, this issue).
The renewed optimism comes only a week after a 28 April WTO meeting during which Director-General Supachai Panitchpakdi warned Members that they were well behind the pace required to reach their July target for such an outline, endangering the chances of agreement at Hong Kong (see BRIDGES Weekly, 4 May 2005). In fact, only hours before the breakthrough on 4 May, Supachai had warned the ministers attending the meeting that the negotiations were not "on course."
Ministers reiterate commitment to July ‘approximations’
Although the compromise on converting specific tariffs on agricultural goods (those based on quantities imported) into value-based ‘ad valorem’ equivalents (AVEs) gave the ongoing talks a much-needed shot in the arm, participants at the Paris gathering agreed that a great deal remains to be done before July — in agriculture as well as the other negotiating areas.
According to the summary of the proceedings prepared by meeting chair John Tsang, Hong Kong’s Commerce Secretary, the five governments which hammered out the understanding that went on to be accepted by other attendees had "committed to work with the Chair of the Negotiating Group [on Agriculture] in building a consensus" around it in Geneva.
Progress on NAMA, services seen as crucial
Sources indicate that most of the meeting was taken up by the discussions on AVE equivalents, and that there was little time to discuss other issues in detail. Nevertheless, Tsang’s summary — an unendorsed informal document — also said that participants agreed on the need for expanded market access for non-farm products, and that "a substantial cut to tariffs, in particular tariff peaks, tariff escalation, and high tariffs… is desirable." It reported that ministers had encouraged their trade officials to "seek out the common elements" from the different proposals currently on the table in the non-agricultural market access (NAMA) negotiations in order to construct an acceptable tariff-reduction formula. This, however, may prove difficult, as Members have proved deeply divided thus far on both the structure of the formula and the flexibilities in its application afforded to developing countries.
With the regard to the services negotiations, the summary said that officials at the meeting reiterated the importance of tabling "a critical mass of high-quality initial/revised market opening offers" by the end-May deadline set out by the July Package. They also "agreed on the need for practical means of assessing the quality" of those offers. Trade news sources report that some delegations in Geneva are beginning to suggest that these benchmarks should establish targets for the overall negotiations, rather than simply serving as measures of the depth and coverage of offers.
Participants also called for progress on development issues, WTO rules, and trade facilitation.
Ministers react positively, look forward to July
"I think we made good progress," said Brazilian Foreign Minister Celso Amorim after the meeting, "and we made good progress thanks to the fact that everybody was able to show flexibility."
The new US Trade Representative, Robert Portman, said "I hope we’ve been able to jump-start the process in Geneva so that by the end of July we will have been able to make enough progress to be optimistic by Hong Kong in December." He turned his focus to the NAMA talks, saying that "it would be difficult to… make progress at the end of the year in Hong Kong" unless Members can develop "a formula that we can all work with" by July. EU Trade Commissioner Peter Mandelson asked the WTO Secretariat to start plugging actual numbers into the different formulae that have been proposed, in order to give Members a better appreciation of the tariff cuts that they would entail.
Other delegations expressed satisfaction that the AVE issue is "behind us," allowing the talks to move forward. Pointing to the complexity of the upcoming negotiations, a Geneva delegate from a developing country told BRIDGES that even with the AVE hurdle crossed, "We barely have enough time to do what is necessary by July. Members are charting a new course, especially on agriculture, where they are defining a number of issues, thus laying the foundation of a new agreement. We need to establish the modalities — lay the foundation properly — before negotiating the level of ambition, that is, specific numbers for tariff reduction." "We can make it if everyone is keen to work together and makes a political commitment to do so," the negotiator continued, "but even if there’s will, there’s not much time given the sheer complexity and breadth of the technical issues before us."
The next mini-ministerial meeting is set to take place in China in July. At that meeting, ministers expect to see draft ‘first approximations’ prepared by the Chairs of the various Doha Round negotiating groups. "While these will differ in form," concluded Tsang’s summary, "they should provide sufficient specificity to allow us to identify early the commonalities where agreement is close and seek movement and trade-offs in areas of difference, to ensure that we are on track for Hong Kong. There is no time to lose."
ICTSD reporting; "WTO ministers reach agreement on tariffs issue," AGENCE FRANCE PRESSE, 4 May 2005; "Key WTO Members Clinch Deal on Ag Tarif Conversions, Avoiding Setback to Doha Talks," WTO REPORTER, 5 May 2005; "Progress at last," THE ECONOMIST, 5 May 2005.