Bridges Weekly Trade News Digest • Volume 9 • Number 28 • 3rd August 2005
WTO Members Look To Autumn After Failure To Reach Preliminary Accords
WTO Members have failed to meet an end-July target date for interim agreements in key negotiating areas of the stalled Doha Round trade talks. A 28 July meeting of the Trade Negotiations Committee (TNC) followed by a General Council (GC) meeting the next day confirmed that a series of last-minute intensive consultations and meetings failed to produce any major breakthroughs in farm trade liberalisation, the issue which many countries feel is blocking progress in the rest of the talks. The eleventh-hour appearance in Geneva of several ministers had little effect. Delegations played down the importance of the July meetings, and focused instead on what they could do after the August-long holiday to increase their chances of reaching agreement at the WTO’s Hong Kong Ministerial Conference in December. A number of Members complained that developmental concerns had been marginalised in the "Doha Development Round" negotiations.
The lack of agreement is unsurprising, in light of fact that the chairs of three key negotiating groups had previously indicated that Members were unable to come to any substantive agreement during the intensive consultations they held prior to the 27 July meeting of the GC (see BRIDGES Weekly, 27 July 2005).
Addressing the TNC, WTO Director-General Supachai Panitchpakdi characterised the state of the talks as "disappointing but not disastrous." In the report to the GC that he prepared in his capacity as TNC Chair (TN/C/5, available online at http://docsonline.wto.org), Supachai said that Members’ progress since July 2004 has been "insufficient." However, he did say that as a result of the "useful work [that] has been done to clarify options and build understanding," the "political choices" that Members will have to make in areas such as agriculture and non-agricultural market access (NAMA) have become clearer. Some thirteen-odd weeks separate the resumption of formal WTO talks in September from the Ministerial Conference, scheduled for 13-18 December.
Supachai outlines gaps in negotiations, suggests procedure for autumn
Supachai told the 29 July GC that Members urgently needed "not just a change of gear… [but] a change of attitude and approach." He said that "the time for identifying options is gone… the time for choosing them is here." With this in mind, he reminded Members of the goals they had set out in February for the Hong Kong meeting: modalities in agriculture and NAMA, a "critical mass" of market-opening offers in the services talks, significant progress on WTO rules and trade facilitation, and a "proper reflection" of the developmental aspects of the talks. Members remain divided on virtually all of these issues, with the possible exception of trade facilitation.
Drawing from the assessments provided by the chairs of the relevant negotiating groups, Supachai identified key problems in each of these areas that he said that Members must urgently solve upon their return.
With regard to agriculture, Supachai’s report urged Members to agree on the structure of the tiered formula for cutting tariffs on farm products, as well as on how to go about reducing trade-distorting domestic subsidies (see related articles, this issue). He also called for commitments on food aid and cotton.
On NAMA, Supachai’s report echoed the comments made by NAMA Chair Ambassador Stefan Johannesson of Iceland at the 28 July TNC. He said that Members should move beyond simply debating the structure of the tariff-reduction formula, and discuss actual numbers in order to assess how they might strike an "acceptable balance between ambition and flexibility."
Repeating the issues raised by services Chair Ambassador Alejandro Jara of Chile in his announcement of a post-summer work programme for the services talks (see related story, this issue), Supachai asked Members to agree by Hong Kong on what must be done in order to promote deeper liberalisation in services trade.
Supachai urged Members to make progress on special and differential treatment (S&D) for developing countries, especially with regard to the proposals from least-developed countries for greater flexibility, market access, and capacity building.
His report also said that greater convergence was needed in the discussions on WTO rules in order for Members to assess how those negotiations were fitting into the overall balance of the talks.
In his last address to the GC — he will leave the WTO at the end of August — Supachai made some suggestions about how Members should organise their work after talks resume in September. He asked them to institute "a close and continuing review of progress and rapid corrective action where necessary." He proposed the mid-October for the first such "checkpoint." This roughly coincides with a GC meeting scheduled for 19-20 October. Supachai also called for all remaining preparatory work for Hong Kong to take place in Geneva, with greater involvement by and informal contact among ministers and senior capital-based trade officials.
Members turn focus to September
In their interventions at the TNC meeting, numerous delegations reiterated their commitment to reaching agreement by Hong Kong, and stressed their willingness to continue the talks. They generally downplayed the importance of the now-missed July benchmark and focused on getting the negotiations started again in September on the basis of what they have learned about each other’s positions over the past month. Some Members did not hesitate to criticise those they saw as principally responsible for the lack of progress.
Ambassador Ransford Smith of Jamaica was highly critical in his assessment of the negotiations, saying that the development dimension was "sadly lacking." The US countered that the opening of new markets was one way to development.
The Africa Group (which includes 41 African WTO Members) observed that developed countries were not matching the pragmatism shown by developing countries. They also expressed concerns about transparency, especially recently, as most discussions have taken place in informal meetings to which not all WTO Members are invited.
Kenyan Trade Minister Mukhisa Kituyi told Reuters on 29 July that India, Brazil, and China should do more to push forward the Doha Round negotiations, saying that "developing countries should not always automatically assume that a shoe which fits the foot of India, China, and Brazil will fit the foot of Kenya, Burundi, and all." Some trade observers have questioned whether developed countries might try to exploit this potential fault line among different developing countries at the WTO.
Calls for a shift in the pattern of negotiations
As in the wake of the collapse of the September 2003 Ministerial Conference in Cancun, there were several calls for changes to the way in which WTO negotiations are conducted. EU Trade Commissioner Peter Mandelson, in Geneva for the meetings, told the press that a "paradigm shift" was necessary, and that "instead of negotiating piecemeal, attempting to negotiate one incremental step at a time, we need to lift a series of difficult logs at the same time."
Supachai, for his part, called for an end to the brinkmanship that has marked WTO negotiations in the past, in which governments have tended to announce concessions only at the last minute, such as during Ministerial Conferences. He said that the WTO’s Membership was too large, and the issues too complex, for negotiations to be successfully driven by last-minute bargaining. Pointing to the urgent need to move to "text-based discussions," he asked Members to dedicate themselves "to a politically engaged, results oriented, decision making mode of operation immediately after the recess."
ICTSD reporting; "WTO Envoys Rethink Deal Strategies," WALL STREET JOURNAL EUROPE, 1 August 2005; "Kenya wants special trade deal for poorest states," REUTERS, 29 July 2005; "Hope for farm deal fades as WTO talks break up," THE TIMES, 30 July 2005; "WTO Doha Round Now ‘Disappointing But Not Disastrous," Supachai Says," WTO REPORTER, 29 July 2005; "WTO’s General Council Meeting Concludes Without Outcome; 4 Deputy DGs Announced," THIRD WORLD NETWORK, 29 July 2005.