Nairobi MC can't end DDA without "credible" developmental outcomes

Third World Network
Published in SUNS #8055 dated 3 July 2015

Geneva, 2 Jul (D. Ravi Kanth) -- Kenya's foreign minister, Ms. Amina Mohamed, said here on Wednesday (July 1) that the Doha Development Agenda (DDA) negotiations cannot be concluded without "credible" developmental outcomes at the World Trade Organisation (WTO)'s tenth ministerial conference in Nairobi later in the year, several trade envoys told the SUNS.

During a closed-door luncheon meeting of select trade envoys of developed and developing countries hosted by Japan at the Inter-Continental Hotel on Wednesday, Minister Mohamed delivered the strongest message yet to the United States trade envoy Ambassador Michael Punke and other major developed countries that the Round will not be concluded unless there are credible outcomes for the developing and least-developed countries as promised in the Doha negotiations over the last 14 years.

In response to Ambassador Punke's pessimistic assessment that the Doha Round must be concluded at any cost at the tenth ministerial conference because of its failure to make progress, the Kenyan minister said pointedly to the US envoy that "people like Punke have lost the hope but this is war and we have not lost it," a South American trade envoy present at the meeting told the SUNS.

Minister Mohamed said African countries will blame Kenya for hosting the tenth ministerial meeting in Nairobi when all their developmental demands are pushed under the carpet for concluding the Round.

She said the situation was much more negative before the Hong Kong Ministerial Conference in 2005 but she had turned it around as the chair of the General Council.

Trade envoys from the United States, the European Union, China, India, Brazil, South Africa, Indonesia, Canada, Colombia, Mexico, New Zealand, Norway, Switzerland and Jamaica were among those present at the meeting.

The chair for Doha agriculture negotiations Ambassador John Adank of New Zealand, the chair for industrial goods or Non-Agricultural Market Access (NAMA) negotiations Ambassador Remigi Winzap of Switzerland, the chair for Doha services negotiations Ambassador Gabriel Duque of Colombia, and the chair for Doha rules negotiations Ambassador Wayne McCook of Jamaica gave their respective assessments of the state of play in the Doha negotiations.

The chair for agriculture negotiations Ambassador Adank admitted that there is no progress yet in the negotiations due to the continued standoff on the new approaches for market access negotiations based on the average formula framework.

The chair for Doha NAMA negotiations said members still remained divided on the new approaches, adding that without progress in the agriculture negotiations it is difficult to bring convergence in the market access for industrial goods, according to participants present at the meeting.

The Kenyan minister also held earlier in the day one-on-one meetings with India, Indonesia, Brazil, and China among others.

Trade envoys of these countries had conveyed to Minister Mohamed that they are facing hurdles to bring convergence because of the United States which is blocking progress in agriculture by refusing to negotiate on the domestic support based on the Doha mandates, including the 2008 revised draft modalities, said a trade official familiar with the meetings.

Minister Mohamed was conveyed in graphic detail as to how all the previous Doha mandates - the 2001 Doha Ministerial Declaration, the 2004 July Framework, the 2005 Hong Kong Ministerial Declaration, and the 2008 revised draft modalities - are being set aside to satisfy the US demands to conclude the Doha Round by hook or by crook.

"One trade envoy during the meeting with Minister Mohamed made a persuasive case on how the negotiations are being stalled through disruptive tactics by a major industrialized country," an African official told the SUNS.

After the one-on-one meetings, Minister Mohamed took part in the luncheon meeting during which the US envoy Ambassador Punke called for concluding the round because of lack of progress over the last 14 years.

The US envoy suggested that the round must be concluded on a low level of ambition based on what is doable and "re-calibration".

Punke said there is no appetite among members to continue with the Doha negotiations, a statement that he had delivered at the Paris ministerial meeting last month.

In contrast to the American envoy's pessimistic assessment, South Africa's trade envoy Ambassador Xavier Carim said it is possible to work out a credible developmental package if all members chose to adopt common standards across all areas of the DDA.

Ambassador Carim, for example, suggested that "re-calibration" and lowering the level of ambition must be symmetrical in all areas, and not by raising the level of ambition in one area and lowering it in the other.

The South African envoy argued that there cannot be cherry-picking by some members who are keen to conclude the Doha Round, according to participants present at the meeting.

After listening to the chairs and members such as South Africa, the United States, and Norway, the Kenyan minister told the participants that you will be blamed for not working "constructively" and "positively" towards credible outcomes with which all members can be comfortable.

She said that African countries will not accept the closure of the Doha Round at Nairobi without realizing the "developmental" outcomes for which they have waited all these years.

Minister Mohamed, who is to chair the tenth ministerial conference, said that there is still time to work out a "package" in the coming months based on "constructive" and "positive" engagement.

She said that when she was the chair for the General Council in 2005 before the Hong Kong Ministerial meeting, she had worked round the clock to bring progress despite an utterly negative environment.

There is room to turn around if one or two major countries adopt constructive positions for achieving results at Nairobi, she said, according to a South American trade envoy.

Minister Mohamed also suggested the need to host an informal ministerial meeting of select countries sometime in October to finalize the "developmental" deliverables at the Nairobi meeting.

Meanwhile, in a separate development, several developing countries last Friday (June 26) challenged the chair of the Doha agriculture negotiations to prove how the average formula framework will tackle specific and non-ad- valorem tariffs and zero tariffs in several industrialized countries.

During a specially convened technical session by the chair for Doha agriculture negotiations and the WTO Secretariat to explain how the variations of the average formula framework will work, agriculture officials of India, Argentina, Korea, Pakistan, and the European Union raised several issues.

Several countries pressed for clarity as to how specific, mixed, and compound tariffs in various country agriculture schedules which are not converted into ad-valorem equivalents can be subjected to either a cut of the overall tariff average or applying an average cut of tariff lines.

Since the informal ministerial meeting in Paris in 2005, attempts to convert special and compound agriculture tariffs into ad valorem duties had been stalled by major developed countries.

Consequently, the agriculture tariff schedules of many developed countries include tariffs in specific and compound duties.

Given the large presence of non-ad valorem duties which are not expressed in percentage terms in various members' agriculture tariff schedules, there is no clarity yet as to how they can be accommodated in the so- called average approaches, said a participant familiar with the meeting.

India and Argentina asked the chair and WTO Secretariat to explain how the non-ad-valorem tariffs are being treated in the average formula framework.

But neither Ambassador Adank nor the Secretariat provided a credible answer on how this issue would be treated, the participant said.

The chair had suggested three approaches to replace the 2008 revised draft modalities that called for a tiered- formula approach with specific flexibilities for the industrialized and developing countries.

The three approaches mooted by the chair include (i) a modified version of the 2008 revised draft modalities with different cuts and possibly different bands, (ii) applying a cut of the overall tariff average, and (iii) applying an average cut of tariff lines.

Korea asked the chair to indicate the proponents of these three approaches. China maintained that members must adhere to the 2008 revised draft modalities. Pakistan asked the chair how the in-quota tariffs will be addressed in the average formula framework.

India showed that the average formula framework would deliver an unbalanced outcome where developing countries would undertake higher commitments without flexibilities than the industrialized countries which maintain several barriers in the agriculture market access.

The European Union sought to know how the average formula framework would work for countries that have a large proportion of zero tariffs.

The chair and Secretariat were unable to provide any convincing answers during the meeting, according to a participant.

In short, attempts to replace the 2008 draft modalities with average tariff cuts in the market access pillar are proving difficult for the Chair and the WTO Secretariat to convince members, a South American trade official said. +