Trade Negotiations Insights • Volume 7 • Number 9 • November 2008

WTO Roundup

by Victoria Hanson, ICTSD

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Falconer pushes WTO farm talks as end of his term approaches

Attempts to reach an agreement on agriculture in the Doha Round resumed in October, as senior officials met with the chair of the WTO’s farm committee to exchange ideas. The chair, Ambassador Crawford Falconer, put a wide variety of issues on the table in a bid to revive the Round, stalemated since the collapse of the ministerial-level talks in July. Falconer conducted a series of discussions known as “walks in the woods,” designed to allow members to informally air their ideas and concerns on the most sensitive issues. So far, discussions have focused on tariff rate quota creation, tariff simplifi cation, sensitive products, cotton, green box subsidies and tropical products. Following two weeks of behind-the scenes talks, Falconer told negotiators that a draft agreement on ‘modalities’ would need to be fi nalised by the end of November if an accord is to be reached by the close of 2008. Falconer said that modalities need to be tied up by the time the WTO’s General Council meets on December 19, or risk being dragged on into next year. However, very little concrete progress has been reported. Although talks will continue, time is tight if Falconer is to find a solution before he returns to Wellington at the end of the year.

New text ‘desirable but unlikely’

Many delegates want to preserve the progress made during Falconer’s tenure as chair of the farm talks with the release of a new text. Such a document could “put things in perspective” and capture “what has been agreed so far.” (1) But Falconer has downplayed the likelihood of issuing a new modalities text unless Members make significant, swift, progress. Falconer’s replacement will most likely face significantly different circumstances in which to work. In light of the credit crisis and falling commodity prices, some countries will probably veer towards protectionism. But given the changing financial climate, together with the upcoming elections in the US, India and the EU, the negotiating positions of many countries in all areas of the negotiations stand to be signifi cantly changed next year.

Ashton upbeat on prospects for Doha deal

But despite the number of issues left to be resolved in Geneva, world leaders have continued to voice optimism and call for a prompt conclusion to the talks. According to Catherine Ashton, the newly appointed EU Trade Commissioner replacing Peter Mandelson, the Doha Round is still “very much alive.” (2) Following meetings in Geneva with WTO Director General Pascal Lamy and other trade chiefs to discuss Doha prospects on October 23, Ashton was upbeat about the chances of success. “My meetings in Geneva have confi rmed to me that Doha is still very much alive,” she said. “If this deal is to be concluded soon we all need to tackle the outstanding issues with urgency and determination. Europe will continue to play a central role in pushing these talks forward.”

World leaders continue to push for deal

Similarly, Brazilian President Luiz Inácio Lula Silva said in a radio address that he was confident that a deal to liberalise world trade could still be reached. “During this moment of international crisis it’s important to conclude the Doha accord so we can show the world something positive, something to restore optimism in humanity,” Lula said on October 21. (3) US President George W. Bush echoed that call at a White House summit on international development two days later. “The recent impasse in the Doha Round of trade talks is disappointing, but that doesn’t have to be the final word. And so before I leave office I’m going to press hard to make sure we have a successful Doha Round,” Bush said. (4) “In the midst of this crisis, I believe the world ought to send a clear signal that we remain committed to open markets by reducing barriers to trade across the globe,” he added.

Lamy calls for summit to tackle global financial crisis

Indeed, financial woes have renewed calls for progress in the trade liberalisation talks as a means to boost the world’s economy and imbue much needed confidence. WTO chief Pascal Lamy went one step further by inviting the heads of international fi nancial institutions, regional development banks and major commercial banks to meet at WTO headquarters in Geneva in November to discuss how the global financial crisis is affecting developing countries’ ability to participate in international trade. “The purpose of our next meeting will be to review how the international market for trade financing is fairing in view of the current very difficult conditions on international fi nancial markets,” Lamy said in a letter to the invitees, which was dated October 10. The meeting will also consider “how to maintain and improve the availability and accessibility of trade finance facilities at affordable rates for developing countries, especially low-income countries,” the Director General said. Meanwhile, the process for appointing a new Director General of the WTO is set to commence on December 1. Lamy has so far refused to disclose his intentions on reappointment. But speculation is rife that he is not yet ready to throw in the towel on the struggling Round, and may seek re-selection.

1 See: WTO farm talks sputter into action, Bridges Weekly Trade Digest, Volume 12, number 35, October 23 2008.
2 See: European Commission press release; Catherine Ashton determined on prospects for Doha success, October 23 2008 www.ec.europa.eu
3 See: Brazil’s Lula: crisis makes Doha deal more urgent, Reuters, October 21 2008.
4 See: Bush vows big push for Doha deal before leaving, Reuters, October 22 2008.

One response to “WTO Roundup”

gabriel ysebaert 30th November 2008 at 17:38
As far as agriculture is concerned the Commission estimate “a deal is possible in 2008″.