Bridges Weekly Trade News Digest • Volume 11 • Number 17 • 16th May 2007
Lamy Warns Members: Compromise Soon Or Face Failure
WTO Member governments "will be forced to confront the unpleasant reality of failure" in the Doha Round negotiations if they do not compromise soon, Director-General Pascal Lamy said on 9 May. Speaking to a meeting of the General Council, the WTO’s top permanent decision-making body, he highlighted the steps countries must take during the coming months in order to meet their stated aim of concluding the talks by around the end of the year.
Lamy focused primarily on the ongoing efforts to step up the intensity of discussions in Geneva, where the chairs of the various Doha Round negotiating groups are seeking Members’ input to draft papers that will become the basis for finalising agreements. Although he said that concluding the round by the end of the year was possible, the WTO chief shied away from commenting on whether or not he was hopeful that this would actually happen. "My life would be absolutely terrible if I were optimistic or pessimistic," he said.
The Director-General did, however, report that the EU and the US had taken an important step in narrowing their agendas on agriculture, although he emphasised that this was not enough to signal an imminent conclusion. One of the main questions now is "whether they are doing this fast enough to meet the sort of time constraints we have," he said. Furthermore, added Lamy, all Members need to reach agreement on every issue area of the negotiations, and not just focus on the contentious agriculture and industrial tariffs discussions.Praising agriculture Chair Ambassador Crawford Falconer’s (New Zealand) recent "challenges paper" for provoking Members into an active discussion about what an agreement should ultimately look like, Lamy said that such engagement was a "prerequisite for moving to the next phase, which will be convergence." He also pointed to the efforts of industrial goods negotiations Chair Ambassador Don Stephenson (Canada) to draft a new text based on Members’ inputs.
As for the other issues in the talks, Lamy added that in services, rules, and fisheries, discussions were moving from "the theory of what we should do" to a "to do list," indicating "more serious engagement in line with more serious commitments."
Yet again, the head of the WTO stressed that political leadership and compromise would be essential for reaching a deal. "Saying yes sometimes needs a bit more leadership than saying no," he said.
Lamy concluded his address by reiterating that letting the negotiations fail would not only mean losing significant deals on trade opening, but would also entail "breaking the commitment for a more developing-friendly world trading system" made when they were launched in 2001. After a litany of missed deadlines - the round was initially scheduled to conclude in time to be implemented in 2005 - delegates are not openly setting specific new target dates. Nevertheless, they are focusing on concluding the talks by the end of this year, and sources report that it is widely believed that doing so would require a framework deal on formulae and numbers for tariff and subsidy cuts before the WTO’s August holiday.
Notably, Lamy directly addressed the issue of the US presidential administration’s soon-to-expire ‘trade promotion authority’ (TPA), the unmentioned elephant in the room during trade talks in recent weeks. Unless Congress agrees to renew the mandate after the end of June, the White House will lose its ability to force lawmakers to vote yes-or-no to trade agreements without the possibility of changes. Without TPA, countries are reluctant to sign commercial accords with the US, since they risk being picked apart by Congress. Lamy openly acknowledged that "there is no way you can conclude trade agreements without trade permission authority." However, he admits that this will be an internal US decision.
Peter Allgeier, the US’ ambassador to the WTO, has reiterated the view that Congress would be more likely to agree to a new TPA mandate if talks in Geneva appeared likely to produce an agreement that substantially increases market access. At the centre of developments over the next month will be discussions among the US, India, Brazil, and the EU — otherwise known as the G-4 - which have promised to make some sort of joint contribution to the multilateral talks by mid-June. Allgeier suggested that convergence was not out of reach. "I certainly believe that within the next 50 days it’s possible to narrow the differences and to reach a convergence on the fundamental issue in agriculture, but obviously that depends on trading partners beyond the United States," he said.
Representatives from several WTO Member governments will be present at the Organisation for Economic Co-operation and Development’s (OECD) 16-18 May ministerial gathering in Paris. Officials from the G-4 are expected to meet in Paris as well as in Brussels soon after to discuss the Doha Round negotiations. They have also scheduled meetings in mid-June.
At a press conference following the General Council session, Lamy rebutted suggestions that developing countries were being left out of the negotiating process, pointing out that they made up two-thirds of the WTO’s Membership, and it would be up to them to agree to a conclusion. "I am not going to decide, you’re not going to decide, NGOs are not going to decide, they are going to decide," he asserted.
ICTSD reporting; "Key Players At Crucial Stage In Salvaging Stalled WTO Talks," THOMAS FINANCIAL, 15 May 2007; "G4 To Meet In Brussels To Review Trade Talks," PRESS TRUST OF INDIA, 15 May 2007.