WTO members resigned to missed deadlines as week of talks ends

23 April, 2006
The World Trade Organisation's April 30 deadline for attaining 'modalities' in agriculture and non-agricultural market access (NAMA) will be missed, it became clear Friday as delegations wound up a week of negotiations on the two subjects.

By Friday afternoon, it was also looking most unlikely that a 'mini-Ministerial' meeting of about 30 Ministers, which had been planned for by WTO Director-General Pascal Lamy, would be held.

The missing of the deadlines for agriculture and NAMA means that a new work schedule will have to be set.

A 'Green Room' meeting of a few Ambassadors with Lamy is to be held late Friday afternoon, which is expected to discuss whether the 'mini-Ministerial' will be cancelled, and whether there is to be a new plan to hold it at a later date.

The WTO announced that a 'heads of delegation' meeting will be held starting 3.00 p. m. on Monday, presumably to discuss the latest situation regarding the missed deadlines and a new work schedule.

Meanwhile, a meeting of senior officials of the 'G6' countries has been taking place at the sidelines of the WTO's plenary meetings, where one of the developments was a discussion on a US proposal on treatment of sensitive products.

The mood at some of the WTO meetings on Friday was grim, especially at the NAMA meeting, during which it became clear that there had been no progress made at the week's talks.

At the conclusion of the meeting, the Chairperson of the NAMA Negotiating Group, Ambassador Don Stephenson of Canada, reportedly said: 'We did not have a good week.' He expressed regret that on the most difficult issues such as core modalities for the formula (implying the tariff reduction formula and coefficients that determine the rates of reduction), the Group could not even start a discussion.

Stephenson said that members had a great week in terms of small victories but the main substantive issues remain blocked.

Stephenson added that there is a need to intensify the negotiating process, and what is needed is not only a 'text based' but also a 'numbers based' negotiation.

Some members gave gloomy assessments of the status of the NAMA talks. The EU said it was a gloomy and very negative week, in which the members had failed in their mission to meet the Hong Kong deadline. It claimed that there was instead a 'backsliding' in a grand way.

Canada also expressed deep disappointment that the group was totally unable to discuss the core issues.

At Friday's meetings on agriculture and NAMA, the chairpersons of the negotiations practically admitted that there was no possibility that modalities could be achieved by the end of April.

The Chairperson of the Committee on Agriculture (Special Session), Ambassador Crawford Falconer of New Zealand, indicated that it was clear that the deadline for modalities would not be met. He suggested plans for an intensive work schedule, involving three cycles of a fortnight each of negotiations, to start on 26 April.

He also reaffirmed his earlier stated view, that the agriculture negotiations would aim to produce full modalities, as finalizing modalities on only some of the issues first was not acceptable to many members. [On Thursday, the Group of 33 sent a letter to Lamy and Falconer stating that they cannot join a consensus on agriculture modalities that did not include modalities on special products and a special safeguard mechanism for developing countries. Last week, a Nairobi conference of African Ministers declared that they could not accept an approach that involved only 'partial modalities'. They were referring to the proposition by Lamy that modalities on a few key aspects be settled as the first stage in a sequence, and that other issues be settled later.] Falconer suggested that in the next six weeks, there would be three fortnightly cycles of multilateral (i. e. involving all members) and transparent meetings in Geneva that were designed to allow regular political inputs from officials based in capitals and from ministers.

In each of the fortnightly cycles, the first week will consist of ultra-informal meetings on specific subjects followed by the more normal informal meetings in the second week. At the end of each week, a meeting will be held to report on the consultations and assess progress.

According to Falconer, this schedule would allow capital-based officials to return to their capitals in the first week of each fortnight if they have to, and to attend meetings in the second week.

This would also allow ministers in their capitals to follow developments and supply political input week by week. And the cycle can be reviewed at the end of the first six weeks, he said.

Members agreed with him that setting a new deadline would not be useful (one called it 'irrelevant'), and that the end of July, before the summer break, 'is not a deadline'. But some stressed that 'full modalities' should be agreed well before the end of July.

The cycle will start next week with meetings from Wednesday, 26 April to Friday, 28 April. Among the topics to be discussed are the special safeguard mechanism for developing countries and 'special products'.

Falconer also announced that the talks will increasingly be based on 'reference papers' which should eventually evolve into draft texts, with transparent negotiations and input from members. These papers will eventually cover all areas of the 'modalities.'

He added that it is clear that members do not want partial modalities (i. e. modalities in only some areas such as reduction formulas for tariffs and domestic support) so that issues that concern them are not left aside.

This position by the Chairperson was supported by many Members, including the African-Caribbean-Pacific (ACP) group (represented by Mauritius), the African Group (represented by Benin) and the EU.

The agriculture meeting held on Friday morning and afternoon also finished its discussion on export competition, and moved on to discuss issues relating to domestic support.

The remaining issue on export competition (other issues of food aid, state trading enterprises and export credits having been discussed on Thursday) was the plan and schedule for eliminating all forms of export subsidies in parallel.

New Zealand proposed 70% of the elimination be completed by the mid-point of the elimination period. [This is widely assumed as 2010.] These progressively made cuts would be from legally bound ceilings, would be by product and would be in terms of both value (dollars, etc) and volume (tonnes, litres, etc). New Zealand also proposed a 'standstill' on the applied subsidies so as to avoid an increase in subsidies that are below the legal ceilings.

The New Zealand view had support from Argentina, Australia and Brazil. The EU said it could not discuss this properly without seeing how it would be applied in parallel with the three export-competition issues (food aid, export credit, and state trading enterprises).

In response, Argentina proposed that the export subsidy component of credit, which would be defined by the parallel negotiations, would be counted under countries' commitments on direct export subsidies. The treatment of state trading enterprises would be up to the demandeurs (the EU is a leading demandeur) to propose, and since disciplines on food aid would be difficult to quantify, parallel treatment would be achieved by phasing in the rules, Argentina suggested.

Brazil called for the chairperson to produce a reference paper on this; the EU said it has hardly been discussed, so the paper should wait until the chairperson has received more input from members.

(* Inputs were provided for this report by Kanaga Raja.)