Lamy Cites Need for Two-Track Approach For Concluding Doha Round of Trade Talks

27 May, 2009

GENEVA -World Trade Organization director-general Pascal Lamy said May 26 that WTO members should consider a two-track approach towards concluding the troubled Doha Round of trade talks, an idea already floated by the United States for breaking the deadlock in the negotiations.
In a speech to a meeting of the WTO's ruling General Council May 26 outlining the state of play in the Doha talks, Lamy said that he believes WTO members could continue multilateral discussions on so-called "modalities" setting out the framework on cutting tariffs and reducing farm subsidies while at the same time engaging in bilateral talks to clarify how flexibilities from the agreed cuts will be applied.
"My own sense is that there is scope to work on these two areas along two simultaneous tracks," Lamy declared. "One would see technical engagement in the negotiating groups move to a higher gear to cover a number of technical issues.Simultaneously, members would start some sort of "outcome testing," through bilateral or plurilateral discussions, where they would provide each other with greater clarity on the use of flexibilities and through it, on the value of the deal."
"This is, in my view doable, provided we see serious political engagement on the part of members (and) ministers give the necessary instructions for substantive work to happen on these two tracks," he added.
Lamy said that while he was "well aware" that for some WTO members the modalities approach "is sacrosanct," concerns about the flexibilities among some WTO members "make it difficult to ascertain what new market access opportunities may emerge."
"If governments could indicate what products would be accorded more flexible treatment in the scheduling stage, whether on sensitive products, on special products, on Duty-Free-Quota-Free or on NAMA flexibilities, some countries believe it would lend greater clarity to the process," he added.
Kirk Stresses Need for Alternative Approaches
U.S. Trade Representative Ron Kirk said during a visit to Geneva May 13 that WTO members must consider alternative approaches for concluding the Doha talks to successfully conclude the negotiations, now entering their eighth year (91 DER A-1, 5/14/09).
"We should all be willing to consider changes to the process that could put the negotiations on a more direct path to success," Kirk declared, although he stressed the United States "does not believe that we should start the Doha Round over or change its underlying mandate."
U.S. officials had earlier floated the idea of shifting the focus on securing modalities agreements in the Doha talks on agriculture and non-agricultural market access (NAMA) and entering into bilateral talks among key members on specific tariff concessions.
The latter approach would address U.S. complaints that the draft modalities texts now on the table do not provide clear indications what the United States can expect in terms of new market access opportunities- particularly in emerging markets such as Brazil, China, and India-in exchange for U.S. concessions, mainly because of an array of exceptions primarily benefiting developing countries.
For example, the United States has complained that India has given no indication which farm goods it will designate as special products, a designation allowing these products to be subject to much lower reduction commitments than under the agreed formula or even exempted from any cuts. India and other developing countries insist on the right to self-select special products at the time they are preparing their Doha tariff schedules based on an agreed modalities framework.
Some Insist on Modalities Agreement First
However, officials said many delegations Kirk spoke with on his Geneva visit-including the major developing countries-made it clear that the idea of moving into bilateral negotiations on tariff scheduling commitments without a prior modalities agreement was not acceptable.
A number of delegations at the May 26 meeting said they continued to oppose any approach other than a deal through a modalities agreement, while others said they were open to suggestions on new approaches provided that it did not mean renegotiating agreed parts of the modalities texts, particularly the flexibilities for developing countries.
Argentina expressed the most skepticism, arguing that it was a large majority of WTO members, not just some, who considered the modalities approach sacrosanct. It also indirectly criticized the United States by declaring that those now expressing second thoughts about the proposed flexibilities for developing countries were the ones who agreed to the idea in the first place.
Speaking for the African Group of countries, Egypt said the group favored a multilateral approach and did not see the need for changing the negotiating process. China also said it favored a multilateral approach based on modalities for agriculture and NAMA.
Other developing countries took a more nuanced stand, with Brazil saying it favored a multilateral approach but was open to a discussion on the way forward. Mexico said negotiators needed as many tools as they can to bring the talks to a successful conclusion and that there may be other ways than the modalities approach for moving forward.
The European Union said it was open to other negotiating processes but emphasized the importance ofconcluding the agriculture and NAMA modalities. The EU added that some indication from developing countries on how they intend to use their flexibilities would be helpful to the process.
Japan described the two-track approach as "interesting and useful," with Australia and Switzerland also indicating different degrees of support.
U.S. ambassador to the WTO Peter Allgeier said the idea of the alternative approach was not to renegotiate modalities, adding that the United States was open to any suggestions on the way forward. What was not acceptable, he said, was for WTO members to be in the dark as to what concessions were offered and what was not on the table.
By Daniel Pruzin