G6 Ministers hope for "flexibilities" - but what and how much?

"Flexibilities" was the new key theme and indeed the key word after a short meeting of the G6 Ministers held at the WTO on Monday (17 July) night, to follow up on the lunch meeting at St Petersburg a few hours earlier that the G8 leaders had with the leaders of five developing countries.

But while the Ministers pointed to the new flexibilities that they expect (or rather hope) their political leaders will allow them to have in forthcoming negotiations, the key question (as Brazil's Foreign Minister Celso Amorim put it) is: "How flexible are the flexibilities?"

And as one WTO diplomat said on Tuesday: "Everyone is talking now of flexibility. But what flexibility - and how much? No one knows."

Meanwhile, developing country delegations that are not part of the G6 have been complaining of the lack of information on recent developments, either regarding the consultations held by WTO Director-General Pascal Lamy, or the outcome of the G8 Summit leaders' meeting with developing country leaders, or even about the G6 Ministerial.

"We are only sitting here and waiting for news," said one diplomat. "We don't know about the new deadline and we are worried about being presented with a fait accompli situation, or a deal prepared by a few others that we are asked simply to endorse."

About Monday's G6 Ministerial, there had been some speculation that the meeting might have been scheduled so that one Minister or more could have the opportunity to table a new offer and thus galvanise renewed talks, as a result of the G8 Summit meeting.

But this was not to be. The G8 Summit and its short "outreach" session with the five developing country leaders in the end did not produce any breakthrough. The only notable trade-related result of the G8 Summit seemed to be a call for an apparent extension of the deadline for concluding modalities for agriculture and NAMA to mid-August.

And out of the G8 meeting with the "outreach five" developing countries came only a promise at least by some of the leaders that they would ask their Ministers to show more flexibility in the negotiations.

The quickly arranged and brief (7.00-8.45 pm) meeting of Ministers from five of the G6 members (Trade Ministers of the United States, European Union, Brazil, India and the Trade and Agriculture Ministers from Japan, with Australia missing) subsequently also did not produce any substantive result.

The meeting only discussed process, and the main decision was that the G6 Ministers would meet again at the WTO for two initial rounds, on 23-24 July and on 28-29 July.

At these two meetings, the G6 Ministers will try to break the deadlock on substantive issues. Indian Commerce Minister Kamal Nath told journalists after the meeting that "the topics will be the same - market access, domestic support, sensitive products, special products, special safeguard mechanism in agriculture, and NAMA."

Nath, as well as Brazilian Foreign Minister Celso Amorim and US Trade Representative Susan Schwab, each in his or her post-meeting interview with journalists stressed that they would return to their capitals, consult with their political leaders on what "flexibilities" are possible, and return to the next meeting on 23-24 July to see what progress is possible.

Amorim gave perhaps the most interesting picture of this new-found impetus of flexibility. "I was there (at the St Petersburg summit), and in almost all the leaders who spoke I saw a sign of flexibilities. The question is how flexible are the flexibilities?"

Amorim said of the G6 meeting that there was a lot of engagement with a positive atmosphere, but there was no substantive discussion, only discussion on procedure. While the G6 Ministers had agreed to the two new dates for their next meetings, he expected other consultations to go on.

At the G8 Summit, there was a signal from the leaders of the wish to "engage and make progress."

Nath said that after the G8 Summit, hopefully there would be more flexibility and determination. "We haven't given up the deadline of end of July, but it may spill into August. How much that will take away from the vacation we don't know. It can spill into August as there is a lot of work to do."

Asked if there was any move from the US at the meeting, Nath said "we didn't talk substance, only procedure. Between now and the next meeting, everyone will consult their leaders and see what flexibilities are possible."

He added that at the G8 Summit Pascal Lamy had explained the existing roadblock, so there is now a sense of urgency. Asked when the "moment of truth" was going to be, Nath said "we will know in the next couple of weeks."

USTR Susan Schwab said there was a "desire to do our utmost. The next step is to head back to our capitals to see what flexibility each of us have to bring back to the table."

She said that the next G6 meetings would be "punctuated by visits to capitals to enable us to move if the flexibility is there." The leaders at St Petersburg wanted progress as soon as possible, so that the Doha Round could end at the end of 2006.

Japan's Agriculture Minister told journalists that he had asked at the meeting if it was realistic that anything could be achieved in August (since it was the European vacation time), but Brazil and India said the vacation could be taken later.

He added that everyone was asking for flexibility and Japan can show flexibility but someone is only just cutting water and not shedding blood, and thus must move first. [He was apparently referring to the US and its current offer on agricultural domestic support.]

Between now and 23 July, the G6 Ministers need to talk to their constituencies to see if there is any room for manoeuvre.

Meanwhile, some developing country diplomats who met today (18 July) to review the current situation said it was their understanding from participants in Monday night's G6 meeting that "flexibility" is now the key word - but that "no one knows what it means".

It is also understood that the meetings that Schwab would be having with key members of the US Congress later this week would be important to determine if the US would be able to move. "If the US cannot move, and if there is no movement at the next G6 meeting on 23 July, then this is it," said a senior diplomat.

Meanwhile, many developing country delegations are frustrated that they have little information on what was happening in the Lamy consultations, at the
G8 Summit, and at Monday's G6 meeting.

"We are just sitting and waiting for news on what others are doing," said an African diplomat.

"We are also told through the newspapers that the G8 decided on a new deadline for modalities of mid August instead of end of July, but this has to be decided by the WTO membership as a whole. No one asked us our views. And we have made our plans for August."

What worries the diplomats from smaller countries is that their delegations are small and will be unable to cope with intensive negotiations requiring quick decisions on matters that are highly technical but substantively vital to national interests.

A diplomat from another developing country delegation said: "The G6 might meet for days and weeks, and then make a decision, and then ask the rest of us to look at it for only two days because the deadline is due.

"And we will be faced with a fait accompli situation. And we will be asked not to raise objections, or we will be blamed for the failure."