Bridges Weekly Trade News Digest • Volume 10 • Number 28 • 2nd August 2006
Doha Round Suspension Receives Support Of General Council
WTO Director-General Pascal Lamy’s recommendation to suspend the Doha Round trade negotiations because of persistent differences received the support of the General Council at its 27-28 July meeting. However, the WTO’s top permanent decision-making body did not formally vote to freeze the talks, which means that a specific decision by Members will not be necessary to restart them.
Lamy told the meeting that he would do everything in his power to "keep up the pressure for the political movement which would permit a resumption of the negotiations." Such movement, however, would require Members to make "changes in entrenched positions," he emphasised. Lamy said that recent conversations had left him convinced that "no one wants to give up" on the negotiations. Press reports from the US and India suggest that he has remained in contact with governments since the talks disintegrated.
The WTO chief recounted that on 24 July, the day after ministers from the EU, the US, Australia, Brazil, India and Japan (the so-called G-6) failed once again to reach a deal on cutting farm subsidies and tariffs, an informal heads of delegation meeting had accepted his recommendation to freeze the negotiations (see BRIDGES Weekly, 26 July 2006).
An agreement would have been necessary for Members to finalise a Doha Round package of legal agreements in time for the mid-2007 expiry of the Bush administration’s mandate to negotiate trade agreements and submit them to Congress for a take-it-or-leave-it vote.
Formal vote not needed to resume talks
Members did not take a formal decision to suspend the talks. Instead, General Council Chair Ambassador Eirik Glenne (Norway) simply ‘took note’ of Lamy’s remarks. This means that it will be possible to restart the negotiations without a separate formal decision to do so, which would have given each Member a veto over their resumption.
Echoing his earlier speech, Lamy urged Members, particularly the G-6, to reflect upon what stood to be lost if the talks ultimately failed. He believes that existing proposals would make the Doha Round at least two to three times more commercially significant than the previous round of negotiations.
Several delegations intervened during the meeting to deplore the breakdown and call for a quick resumption of negotiations, though most conceded that the ‘timeout’ was appropriate in light of the circumstances. Many pointed to the often-scarce negotiating capital they had expended on the round thus far. Benin, on behalf of the African Group, said that least-developed and developing countries would be worst hit. Bangladeshi Ambassador Toufiq Ali, speaking for the group of least-developed countries (LDCs), said that while many Members might be able to afford an indefinite suspension in the talks, LDCs cannot. Both groups asked for the talks to resume in September, after the WTO’s August holiday.
Venezuela and Cuba asked for clarification about precisely what the suspension would entail.
Brazil urged Lamy to hold consultations with Members and report regularly to the General Council on any progress. Brazilian Ambassador Clodoaldo Hugueney stressed the G-20’s readiness to start negotiating again at any time.
Sources report that delegations engaged in fairly little fingerpointing, instead stressing that all countries needed to demonstrate flexibility for the negotiations to get going again. A handful of primarily Latin American countries specifically asked developing countries to reconsider the extent of the various flexibilities they were seeking to shield both farm and industrial products from tariff cuts.
Aid for trade work likely to continue
Members including the Philippines and the Group of African, Caribbean, and Pacific (ACP) countries were emphatic that specific issues on the Doha agenda should not be carved out of the single undertaking. Mandelson has called for the negotiations on special and differential treatment (S&D) and trade facilitation, among others, to continue even while the overall talks remained frozen (see BRIDGES Weekly, 26 July 2006).
However, work on trade-related assistance — which arose out of the negotiations but is not technically part of the single undertaking — may continue. Swedish Ambassador Mia Horn af Rantzien, who chairs of the Aid for Trade Task Force, presented its final recommendations to Members at the meeting — one of the few deadlines in the Hong Kong Ministerial Declaration to be successfully met. The Task Force’s nine-page report (WT/AFT/1), circulated to Members on 27 July, makes a series of policy recommendations for donors and recipients aimed at helping developing countries better integrate into the multilateral trading system, in part through support for boosting their ability to produce and trade goods and services (see related story, this issue).
Horn said that while Task Force’s thirteen members agreed that aid for trade is necessary and should move forward irrespective of the state of the overall negotiations, they also believed that it could not replace the developmental benefits that would arise from a successful round.
Members ‘took note’ of the report. Several countries, including the EU and the US, praised the Task Force’s work, and echoed the call for carrying out the recommendations in spite of the suspension of the negotiations.
Some LDCs called for the implementation of the recommendations submitted in July by a separate task force charged with determining how to enhance the Integrated Framework, a programme for trade-related technical assistance to LDCs.
Political leaders call for restarting talks
In an open letter to the world’s trade ministers published in the International Herald Tribune on 27 July, Lamy warned that the recent failure had "already given rise to two phenomena that threaten the multilateral system: a shift in priorities to bilateral or regional agreements that all concede fall far short of a global deal both in the depth and scope of their coverage, and a surge in threats to achieve through our highly effective dispute settlement system what could not be achieved through the negotiations."
Trade ministers and heads of state from several countries have called for the talks to be restarted, and are discussing how this might be accomplished (see related article, this issue).
ICTSD reporting; "Lamy Vows to Maintain Doha Pressure; Africans Seek Assurances on Cotton Deals," WTO REPORTER, 28 July 2006; "Lamy wants India to return to negotiation," NDTV.com, 28 July 2006; "WTO General Council only "takes note" of suspension of the Doha negotiations," THIRD WORLD NETWORK INFORMATION SERVICE, 27 July 2006.