TWN Info Service on WTO and Trade Issues (July08/01)
3 July 2008
Third World Network

Trade: Developing countries stress on substance-driven process for mini Ministerial
Published in SUNS #6507 dated 1 July 2008

Geneva, 30 Jun (Kanaga Raja) -- A number of developing countries, at an informal meeting of the Trade Negotiations Committee (TNC) on Friday (27 June), stressed the need for a substance-driven process, and greater convergence on key issues before the upcoming Ministerial meeting that has been proposed by WTO Director-General Pascal Lamy for the week of 21 July.

The informal TNC meeting was called by Director-General Lamy, who is also the Chair of the TNC, to discuss the situation in the Doha negotiations and the next steps in the process.

At a "Green Room" meeting on 25 June, Lamy had announced his intention to convene a Ministerial meeting from 21 July for selected Ministers aimed at finalizing some critical aspects of the Doha negotiations.

At the informal TNC meeting Friday, developing-country groupings such as the G33, the African Group, the ACP Group and the Least Developed Countries as well as individual countries outlined their respective views and positions on various issues and the process.

The African Group called for the stabilization of the agriculture and NAMA draft modalities texts before the Ministerial meeting and for minimizing the number of square brackets remaining and giving Ministers clear options.

The G33 said that to succeed, it will only be possible if most of the several pending issues in Agriculture and NAMA are agreed before the final stage. "In other words, it shall always be substance and members' driven and not by artificial datelines on political considerations."

At the informal meeting, Lamy urged "maximum effort from everyone over the next weeks" to ensure a productive meeting of a number of ministers scheduled for the week of 21 July. He said that the immediate challenge is to make progress that "will provide a basis for improved texts in Agriculture and NAMA".

Lamy reported that his own consultations have shown that issues such as Trade and Environment, the S&D Work Programme or Trade Facilitation are advancing and need not be taken up in detail at the time of the modalities. Therefore, on these issues, the respective Chairs will report to the TNC to be held in July on progress and set out road maps for further work in their respective areas.

On the middle group of three issues, he said that "we need more clarity, namely Services, Rules and the TRIPS-related issues."

On the Signalling Conference on services, Lamy said that the purpose of the Conference is to provide Members with comfort regarding progress in the market access pillar of the services negotiations at the time of adopting the Agriculture and NAMA modalities.

As that point approaches, he said that he will consult in the week of 30 June on the preparations for this exercise, to be followed by a meeting of Senior Officials on 14 July which he will chair ahead of the Signalling Conference to take place at the time of the Ministerial engagement on Agriculture and NAMA modalities.

On Rules, Lamy said that "there is wide agreement that this is not for negotiation by Ministers but rather for discussion if they so wish." Over the coming days, the Rules Chairman will continue his informal consultations with delegations on how they intend to move the negotiations forward.

On TRIPS-related issues, Lamy said that "judging by the reactions to our reports, my sense is that these issues necessitate a real engagement on substance among delegations, and this has not yet taken place, at least to my knowledge."

On the process, Lamy said that it is important that "we get greater clarity on process now", and in his view a good reason for that is to use it as a means to focus work on the target of establishing Agriculture and NAMA modalities.

"While substance drives process, I also feel that substance - although more work is needed over the next couple of weeks - has reached a point where lack of clarity on process and sequence risks preventing us from making the last mile to prepare Agriculture and NAMA modalities."

The focus now is to create convergence on Agriculture and NAMA so that the Chairs can prepare texts for ministerial consideration, either with areas where full convergence has been achieved, or with straight choices for Ministers. This means a very intensive phase of work in these areas which should culminate in the circulation of the revised texts, said Lamy.

"Obviously, once the texts are out, you and your capitals will need some time to consider them. There will also be an opportunity for the full membership to react to them before we move to the final intensive phase of preparing issues for consideration by Ministers."

On timing, Lamy said "We need a timeline to manage expectations if we are to do the deal in July, and in my view, we have to plan on a number of Ministers meeting here in the week starting 21 July. I would recommend that they be here a couple of days before in order to warm up, have bilaterals and prepare the ground."

"I know that this is not without its risks, and my sense today is that the chances of getting there are today over 50%. This fits with my own appreciation that if there are no modalities in July, the chances of concluding the Round this year are much less than 50%."

"I also know that we need serious and intensive negotiations among you over the coming days so that we can increase the chances from above 50% to somewhere around 75%. My sense is that this is doable and I also believe that with dark clouds on the economic horizon everyday, we must shelter what we can now," said Lamy.

According to trade officials, in his report to the informal meeting, the Chair of the agriculture negotiations, Ambassador Crawford Falconer of New Zealand, said that he saw two basic options, one is that Members feel that the existing text is okay as the basis for decision-making by Ministers. He said that it is just conceivable that this would work, but he would prefer to narrow the differences.

Falconer said that he will continue his "walk in the woods" process where he will focus on issues such as tariff capping, and Special Products/Special Safeguard Mechanism. He said that he would also be consulting on tropical and preference products. He said that there has been some good progress on tropical products, but not yet ready for the "Room D" process.

According to trade officials, Falconer told the informal meeting that he plans to hold a meeting of 37 representative delegations (in Room D at the WTO) on Thursday afternoon and possibly Friday morning, followed by an informal meeting of the full membership on Friday afternoon.

(Speaking to journalists later, Falconer referred to the presence of Ministers in Geneva on 19 July, and said that you would have to have a revised text early in the week of 7 July. He said that his revised text "will only be reflective of whatever changes they (Members) make to their positions in the course of next week."

(Based on where he is now, he said that he can probably make "a few tweaks here and there", but nothing that he would say is a "materially different outcome" than what is presently there. What members will have to do is make materially significant moves next week. If they don't, he said that he can only presume from that, that "you want to go to ministers with the existing text." He said that he thinks that the existing text is something that ministers could deal with.)

According to trade officials, the Chair of the NAMA negotiations, Ambassador Don Stephenson of Canada, told the informal meeting Friday that he had meetings on unbound tariffs, non-reciprocal preferences, small vulnerable economies, and LDC issues. He said that there has been some good technical work done. He added that from this point on, the NAMA process will be exclusively his process. In the last few days, he has been holding small group and one-on-one consultations on anti-concentration, sectoral agreements, preference erosion, small and vulnerable economies and LDC issues.

Stephenson believed that it would be useful to reconvene the negotiating group in the latter part of next week (week of 30 June). It's possible that members might give clear responses to the new proposals that have come forward. And if members can achieve real convergence on the things that are put on the table, we would like to see senior officials from Monday and have them participate throughout the week, said the NAMA Chair.

With respect to a text, Stephenson said that if there is explicit convergence, he can revise the text. If not, the text that will go to ministers will be the text that he presented last month.

According to trade officials, Stephenson said that there was very significant convergence on the implementation period, the sliding scale as pertaining to flexibilities. On the coefficients to the formula, there is very significant convergence on the architecture of the three options, but not on the numbers.

He said that Members had made progress over the last two weeks but there are too many unresolved areas, in his view, to have a successful ministerial meeting at this point. It is up to members to be able to move the process forward, said Stephenson.

Mauritius, speaking for the ACP, said that it could only agree to the establishment of the modalities if they take fully into account the development concerns of the ACP Group. There is need for substantial engagement if we are to adhere to the provisions of the Doha Development Agenda. But in our haste for a breakthrough, we should not forget that this is a substance-driven process.

The ACP said that it is committed to an intensified process. It expressed some concerns on the issue of sequencing, as to how things would happen between now and the Ministerial meeting. The ACP said it is very important that we get back to the small group and Room D process as soon as possible. It is important that the negotiating groups review the revised texts before they go to the horizontal process. The ACP wanted to make sure that the revised texts would be issued well in advance, and there was precision with respect to the issues that would be taken up in agriculture and NAMA modalities. There were a large number of developing countries that are concerned that this be a transparent and inclusive process.

With respect to agriculture and NAMA, the ACP said that the issues that were important to the group involved the LDC issues, the Small Vulnerable Economies (SVE) issues, commodities, the Net Food Importing Developing Country issues, longstanding preferences, SP and SSM.

Cote d'Ivoire, on behalf of the African Group, took note of the proposal for the Ministerial gathering. There are some central issues of importance to the group if the Ministerial meeting is to be a success. The African Group shared the view that the process should be substance-driven. If there were to be a successful Ministerial conference, we have to have the process driven by substance; a process that is transparent and inclusive.

On agriculture, the issues of importance to the African Group are SP, SSM, tropical products, preference erosion, cotton and bananas. On NAMA, it is non-reciprocal preferences, the formula and flexibilities. It stressed the importance of revising the texts to reflect the development dimension. The draft modalities need to be stabilized and there is need to minimize the number of square brackets remaining and give Ministers clear options.

Lesotho, on behalf of the Least Developed Countries, said that we cannot go to Ministers without more convergence on key issues. Substance is very important for the group. It mentioned the issues of cotton and duty-free, quota-free market access for the LDCs, the TRIPS/CBD linkage, and preference erosion.

Indonesia, on behalf of the G33, said that "with the proposed course of action that you (Lamy) have set out today, the Doha Round of negotiations enters its moment of truth in the next couple of weeks. In light of the decisive, watershed' moment, we all have to first ask ourselves - whether we are indeed ready to transcend to the next level."

An impression is being created that only NAMA issues now remain to be resolved and the agriculture text is more or less stabilized. The fact is quite contrary to this. Severe imbalances continued to remain within and between the three pillars of agriculture and a large number of issues, including the G33 issues, are far from settled, said Indonesia.

The G33 said that it has always been supportive of transparency, inclusiveness and the bottom up approach in the negotiations. The G33 was of the firm belief that all outstanding issues in agriculture and all other aspects of negotiations in the single undertaking, would have to be dealt with in a balanced manner.

"It is clear that if we are to successfully conclude the DDA negotiations, the necessary groundwork must be finalized during the next couple of weeks," said the G33. To succeed, it will only be possible if most of the several pending issues in Agriculture and NAMA are agreed before the final stage - with the participation of all Members. "In other words, it shall always be substance and members' driven and not by artificial datelines on political considerations."

Thus, if any successful outcome of the proposed Ministerial is to be achieved, it is absolutely critical towards creating the right conditions for the horizontal and the Ministerial process so as to impart confidence among developing Members that their development interests will not be subverted in any manner. The Group reiterated that it is committed to ensuring that the final outcome does not put at risk the livelihoods of the vulnerable and disadvantaged section of the population of its Members.

The revised draft texts issued by the respective Chairs should be followed by sufficient and reasonable time for Capitals' consideration. Further discussions shall be conducted in the negotiating group with the participation of the entire membership.

For the two important issues of SPs and SSM, the G33 said that it has, over the course of the negotiations, clearly outlined the basic ingredients for a workable architecture. The Group has reiterated the importance of this issue on countless occasions. "However, we are yet to see genuine movements and flexibilities from our negotiating partners. Instead, the G33 is still faced with a situation in which these two issues are labelled 'hot spot' issues that requires further negotiations, with unclear prospects."

"From the point of view of the G33, all elements of SPs and SSM conveyed by the Group over the years - must be incorporated in the next revised text for submission to Ministers. And furthermore, it must be a part of the final outcome."

Any suggested formulation that does not include the treatment of SPs with zero cuts and the remedies for SSM beyond the pre-Doha Bound tariff rates, coupled with more flexible triggers than the SSG, cannot constitute a solution for the G33 and therefore will not be acceptable to the Group under any circumstances, said the G33.

Under the weight of heavy distortions in the global food market arising from the agriculture policies of the developed countries, many developing countries have been converted from being net food exporters to net food importers. The deepening global food crisis has clearly demonstrated that indeed the principle of food security, livelihood security and rural development are fundamental and must indeed be a part of the equation in discussing the optimal solutions to this Development round, said the G33.

Their legitimate interests and needs must therefore rightly be placed at the heart of the Round, so that the development dimensions of the Doha Round is appropriately delivered, the G33 added.

India said that now that there is clarity on the dates for the Ministerial Meeting, "we have to collectively ensure that it produces a successful outcome. For this to happen, we need to be in agreement on critical aspects of both substance and process for the next three weeks."

As a number of delegations, especially the ACP, African Group and the LDCs have pointed out, there are a large number of unresolved issues which have to be addressed if we are to approach the Ministerial with confidence, said India.

It is necessary to recognise that while the Ministerial Meeting should result in Agriculture and NAMA modalities, that will not be its only objective. Other equally important issues will be raised by Ministers and they will expect decisions on them. These include Services, Rules and the TRIPS issues.

It is essential that a structured process is instituted from now on to develop these issues for Ministerial consideration and, where required, decision making. The agenda for the Ministerial Meeting should provide for a discussion on these issues. Not preparing for them would add significantly to the chances of failure, said India.

On Services, while the Signalling Conference has been agreed to as an integral part of the Ministerial Meeting, its structure and objectives are still not totally clear, said India. The Signalling Conference, India said, has to be a Conference "of a negotiating nature" with clear deliverables in terms of the requests that Members have made of each other. For India, the outcome of the Signalling Conference will be a major input in determining its approach to the Agriculture and NAMA modalities.

Regarding Rules, the concerns of a very large number of Members on the proposals in the Rules text have to be taken on board. The issues of anti-dumping and fisheries subsidies are too important to be simply taken note of by Ministers.

On the TRIPS issues, there has been a significant shift in dynamics with about 110 Members agreeing to the inclusion of the issues of TRIPS disclosure requirement, GI Register and GI Extension as part of the horizontal process in order to be considered for Ministerial guidance. This support base is clearly a critical mass of WTO Membership, said India. In WTO, at this stage, it implies that the issue cannot be brushed under the carpet any more and has to be taken up positively in the horizontal process if a negative fallout is to be avoided.

With the majority of the Membership co-sponsoring the TRIPS disclosure proposal and additionally, several proposals by developed countries and support for "shared objectives" from the entire Membership, the growing convergence on this issue cannot be ignored at this critical stage of our negotiations. Any effort to disregard this issue any longer is fraught with the risk of endangering the horizontal process, cautioned India.

On Agriculture, we expect the text to show us a clear landing zone on SPs and SSM based on the positions articulated by the G33, which can then be negotiated by Ministers. On NAMA, India said that it is concerned about the approach of some members seeking to redefine the mandate on coefficients and flexibilities.

On the one hand, efforts are being made to further constrain the limited flexibilities available to developing countries through new and creative anti-concentration measures. On the other hand, linkages are sought to be established between Sectorals and coefficients and flexibilities. "Introduction of such proposals at this late stage can only create further logjams in the negotiations and make our task of reaching convergence even more difficult."

Regarding the process in general, it is important that the Agriculture and NAMA texts are released well in advance of the Ministerial Meeting. After the release of the texts, there has to be a process for senior officials to prepare the texts for Ministerial decisions. The texts cannot go directly to the Ministerial Meeting without such a process, said India.

Brazil said that the G20 laid down its views on the agriculture negotiations in a statement last week. The G20 welcomed the progress that has been made, but noted that a significant number of very important issues remain unresolved. On NAMA, Brazil acknowledged that recent discussions and consultations have allowed for some progress. "As in agriculture, important issues remain."

On services, Brazil said that there is a basis for the text to be adopted by Ministers. Further discussion is also needed for preparation of the "signalling conference", especially with regard to its structure, timing, format, process and outcome. Rules will also require some decision by Ministers. They will have to provide an assessment of the state-of-play and issue instructions for the process forward.

On the TRIPS/CBD issue, Brazil said that it was worth recalling that two-thirds of the membership supports dealing with the TRIPS issues as part of the horizontal process. Over 80 members have co-sponsored a TRIPS and CBD modality text. These issues must be adequately prepared for decision-making by Ministers in July.

On the process, Brazil said that it has consistently stressed that it must be substance-driven, transparent and bottom-up. "Our focus should remain on agriculture and NAMA. We need to substantially reduce the number of alternatives and brackets for consideration by Ministers. It is important that the drafts be balanced, and there must be time for multilateral discussions after the texts are issued." Brazil added that the G20 will hold a ministerial meeting immediately before 21 July.

The US supported the process and said that it was essential to have modalities by the end of July. They were happy with the 14 July senior officials' meeting for the Signalling Conference on services. The US said that it was ready to work to narrow the differences.

Mexico supported the process and stressed the need to get a resolution of the agriculture and NAMA issues as soon as possible. It supported the 21 July timetable.

Peru stressed the need for full modalities and that it would like to see the process become more multilateralised.

The EU supported the Director-General's road map. It said that the time is right to bring Ministers to Geneva. There is need for agriculture and NAMA modalities by the end of July. It is also important to make progress on the question of services, rules and the TRIPS-related issues. The process in the weeks to come needs to be transparent and inclusive.

Japan welcomed the proposal for ministers to come to Geneva on 21 July. The ministerial will be vital to the fate of the Doha Development Agenda. There is need for progress in all areas of the single-undertaking. In addition to agriculture and NAMA modalities, it wanted to see progress on services and rules. It called for the early release of a revised rules text based on the Hong Kong Ministerial Declaration.

Turkey said that it needs to see more convergence. It also wanted to see a transparent, inclusive and bottom-up approach.

Argentina said that there were a number of issues where the gaps need to be reduced and clear options need to be provided to ministers. On agriculture, it mentioned sensitive products, saying that it did not know which products will be included, and the size of the quota expansion. It also did not know the level of subsidies that will be extended in the Blue and Amber Box for specific products. There needs to be greater clarity in order to understand what each of these proposals mean.

On NAMA, Argentina said that the process, as it is now, is not conducive to a successful outcome in the ministerial process. The architecture does not permit less than full reciprocity. There is also the introduction of issues that can create even greater imbalances like the anti-concentration clause. It said that it requires flexibility in NAMA. It did not want to be penalized because it is a member of a customs union. Without a revised NAMA text that takes into account special and differential treatment, less than full reciprocity and paragraph 24 of the Hong Kong Ministerial Declaration, it would not be possible to get agreement in NAMA at the ministerial level, said Argentina.

Korea was of the view that it was not necessarily the case that the agriculture text is more advanced than the NAMA text, as special products and SSM issues have not been taken into account. There needs to be a comfort zone in these areas and that it is a precondition for a successful meeting of Ministers. It said that much work needs to be done in NAMA. The Chair's text is not ready for Ministers. There needs to be a new text on rules.

Switzerland said that members are at a critical juncture, and it supported the 21 July date for the Ministerial. There has been progress in agriculture but nothing on NAMA. It said that services, rules and TRIPS-related issues must be part of a horizontal modalities package.

Venezuela said that beyond the conclusion of the Round, "we must guarantee that it produces a real welfare of the millions of human beings who in one way or another would be affected by the Agreements we're reaching here. Today, the international situation requires more than ever that the process be directed by the substance, and not by artificial deadlines."

On the process, it said that as the others have expressed, "we must weigh whether conditions are actually given to convene a Ministerial Meeting, since differences in several key issues remain very wide." For that reason, Venezuela said that it does not believe that the Draft Modalities in Agriculture and NAMA are established, as it has been reflected in some print media. Moreover, in the recent months, new variables have been added to the agricultural negotiations, which should be assessed thoroughly before taking rushed decisions.

Cuba expressed its support for the statements and concerns expressed by Indonesia for the G33, Mauritius for the ACP Group, Cote d'Ivoire for the African Group and Lesotho for the LDCs.

El Salvador said that it wants a transparent and inclusive process. It must be substance-driven. It wanted the revised texts to be brought out in plenty of time.

Ecuador said that it has not received details of what has happened in the G12 NAMA talks. When it goes to the multilateral process, it would like to see the details of any convergences explained clearly to it.

Bolivia said that the Hong Kong Ministerial Declaration says that only the agriculture and NAMA modalities should be dealt with in the first step. It could not support the other issues. It said that it does not see clear leadership from the industrialized countries.

The rules of the WTO are that all members must have a say, and that this should not be in any way adversely impacted. Revised texts must be submitted early. Content should not be sacrificed for artificial time limits. Perhaps, we should reconsider the need for a Ministerial, said Bolivia. +