WTO negotiations resume after summer break

5 September, 2007

Straight after its one-month summer break, negotiations resumed this afternoon at the World Trade Organisation at the start of a last big effort to conclude the "modalities" of agriculture and non-agricultural market access (NAMA) by the end of September or the beginning of October and thus save the Doha Round from a lengthy period of inactivity.

The urgency and the shortness of time left to save the Doha talks were emphasized by the tight schedule that has been set. Normally, the WTO takes a fortnight after its traditional August break before it gets down to business.

To give the sense that there is no time to lose, the Chair of the agriculture negotiations, New Zealand's Ambassador Crawford Falconer, deliberately scheduled the resumption of the talks on the first day following the break.

The open-ended informal meeting of the Special Session of the Committee on Agriculture kicked off at 3.00 p. m. on Monday, and the agriculture negotiations are scheduled to go on continuously for three weeks to cover "all the issues" in the paper - the "revised draft modalities" - that Falconer had issued on 17 July.

As the meeting ended, many diplomats said that there had been "nothing new" that was said, as it was only a kind of "welcome back" meeting. The members mainly discussed the logistics and time-table of meetings and the issues to be covered in the weeks ahead, and no delegation presented anything substantial.

A week ago, Falconer issued a fax to WTO delegations outlining the issues and types of meetings he will lead between now and 21 September.

However, this faxed schedule is to be changed slightly following Monday's meeting, since a planned open-ended meeting for Tuesday has been cancelled. The next meeting will be in a small-group format on Wednesday, and the first topic will be developed countries' market access, followed by developing countries' market access (See end of article).

The negotiations schedule for NAMA is much less clear. Before the August break, the chair of the NAMA negotiations, Canadian Ambassador Don Stephenson, indicated that he would re-convene the NAMA talks in the week starting 17 September, or a fortnight after the resumption of the agriculture talks.

In the intense last week of business at the end of July, developing-country delegations had attacked Stephenson's NAMA draft modalities paper for being biased against the developing countries and for not satisfying the mandates of "less than full reciprocity" and of attaining balance between the levels of ambition in NAMA and agriculture.

Many developing-country groupings and individual members made clear that they would not want to use the Stephenson draft to negotiate NAMA, while they could accept Falconer's draft as a starting basis for negotiations.

Diplomats of developing countries have generally indicated that they would like to see what happens first in agriculture - and in particular whether the United States is willing to improve on its offer on domestic support - before they can adequately assess their own responses to the demands made on them by the developed countries in NAMA.

In agriculture itself, the prospects for an agreement have been clouded by the passing (at the end of July) of the 2007 Farm Bill by the US House of Representatives, which has been described as a "setback" for the Doha talks by the Australian Trade Minister (see SUNS #6315 dated 16 August 2007).

The House version of the Farm Bill has been strongly criticized by the Bush administration itself for maintaining domestic subsidies. In the case of sugar, for example, the subsidies take on more and new forms.

A senior Indian Commerce Ministry official has also remarked that the 2007 Farm Bill would constrain the ability of the American negotiators to make a satisfactory offer on domestic support when the WTO talks resume.

This month, the US Senate will formulate its own version of the 2007 Farm Bill. The House and Senate will then have to reconcile their versions and come up with a combined version, which if adopted will have to be put to President Bush for his approval. Bush has already threatened to veto the House version, if put to him.

Several developing-country diplomats, as they were entering the agriculture meeting on Monday afternoon, said privately that the most significant aspect they would be watching for was whether the US would give a sign that it could improve on its offer on domestic support.

The official US offer is to cap its overall trade distorting support (OTDS) at $23 billion. Unofficially, it has mentioned that it could consider lowering this to $17 billion, if conditions (including satisfactory offers on various issues from other members) are right. The G20 demand is for the United States' OTDS cap to be $12 billion, while the African Group has asked for $10-12 billion.

The Falconer draft proposes percentage cuts that imply a cap for the OTDS of the US in the range of $13 to $16.38 billion.

Several diplomats, speaking privately Monday afternoon outside the WTO meeting room, had strong doubts that the US could make a new offer, especially since the 2007 Farm Bill has not been finalized, and since it is now clear that the fast-track trade authority for the US President that expired at the end of June would not be renewed anytime soon.

After the meeting ended at around 5.00 p. m. on Monday, Falconer told journalists that the next stage of the agriculture negotiations would start on Wednesday morning (5 Sept) on the issue of market access of developed countries. The meeting would last the whole day and be in a "Room E" format, i. e. informal consultations involving a small group of about 30 delegations.

Falconer will not convene any group meetings on Thursday or Friday (6-7 September). The meetings will resume on Monday (10 Sept) afternoon and after finishing with market access of developed countries, they will move on to market access of developing countries.

The next open-ended meeting, in which all members are invited, will probably take place next Friday (14 September), said Falconer. Following market access, the negotiations will then move to either domestic support or export competition, he added.

In his 24 August fax to delegations, Falconer said: "We will continue our consultations on the week of the 17th. We cannot predict at this point the speed at which we will work, but it is my intention to keep doing so to ensure that we cover all the issues in the Revised Draft Modalities."

Falconer told journalists Monday that at the meetings to be held, there must be more emphasis given to issues that had not been well developed yet in his draft modalities paper, such as special products, special safeguard mechanism, commodities, and tariff escalation.

He said that at the Monday meeting, the members indicated that they wanted to get down to real business - to avoid "speechifying" and instead come up with "concrete proposals."

According to trade diplomats, at the meeting, Brazil had said that there was little point in having more general open-ended informal discussions, and what is needed is a programme of work with dates and a list of issues to be discussed specifically.

The United States delegate apparently said that he would not say much, and added only that: "If we can sort this out on a rainy afternoon, then let us pray for rain."