Pre Mini Ministerial Negotiations; Members Question Lamy-Driven Process

Geneva 28 June. The Chairs of the Agriculture and NAMA (Non-Agricultural Market Access) negotiating committees, NZ Ambassador Crawford Falconer and Canada’s Donald Stephenson, after an intense seven week process of continuous negotiations in Geneva, submitted their draft texts to the Membership on 22nd July.

These texts reflect a phenomena that has not been seen in the WTO in the past 6 years, where the Chairs actually faithfully reflected the positions of Members, capturing the existing divergences (in 750 brackets), and consensus where these exist. This is a welcome departure from the WTO’s modus operandi of the recent past – where Chairs have been manufacturing non-existent consensus, based on their own (often biased) judgments, and relying on manipulation by the powerful to ram these through. E.g. the draft texts that led to the inconclusive Cancun Ministerial, and Annex C before the Hong Kong Ministerial.

In submitting their texts, the Chairs said that the process is now in the hands of Director General Pascal Lamy as TNC (Trade Negotiations Committee) Chair.

Curiously, despite all the work which production of these texts entailed, and in spite of the anticipation, since 22nd July, there has been no real substantive discussions of these drafts.[1] Instead, Lamy has intervened this week with his own process, which essentially sidelines these Chairs’ texts.

Lamy’s Green Room Meetings (Ambassadorial level)

A series of Green Room meetings of about 30 Ambassadors, convened by Pascal Lamy since Monday 26 June have concretized plans for the Mini Ministerial the WTO Secretariat is convening later this week (starting 29th June). These were the issues discussed:

1) It is reported that according to Lamy, the Mini Ministerial and other informal meetings from the 29th June – 2/3 July is intended to conclude modalities so that Members can draft their schedules. However, the plans seem to be headed towards resolving only partial rather than full modalities at least in June, focusing mainly on the triangle of issues the Director General seems to think are the most critical: i) market access in agriculture (requiring movement from the EU needed) ii) domestic supports in agriculture (awaiting movement from the US); iii) tariff cuts in NAMA (from Brazil and India).

A “sequence” of issues to be discussed in agriculture and NAMA in the Mini Ministerial has emerged from the Green Room. (See annex). In April this year, many Members were vehemently opposed to Lamy’s suggestion of partial modalities for an April Mini Ministerial. This led to the cancellation of the Mini Ministerial. Today therefore, there is careful wording to justify this “sequencing” – that these are not priority issues, but is a sequence of issues to be discussed. Some issues, it is reasoned, unlock others.

In the Green Room of 27 June, there was no consensus on what the partial list of issues should be. Some African countries suggested putting preference erosion on the agriculture list, others wanted export competition and tariff caps to be listed. They were cautioned against ending up with a “Christmas tree”. The Director General said that he would revise the list and re-issue it on the afternoon of 27th June. However, it is not expected that there will be too many changes.

2) Lamy also talked about “arriving at a landing zone” of reaching real cuts in domestic supports and new trade flows (i.e. tariff cuts should really cut into the applied rates). He seems to have acknowledged that whilst “new trade flows” is not a reflection of the Doha mandate, these issues have emerged in the course of the negotiations.

“Real trade flows” raised many concerns. He was told by some Ambassadors in the green room that his “landing zone” was off target and that it should be “development” and “less than full reciprocity” (a concept used in the NAMA negotiations meaning that developing countries should take less percentage tariff cuts than developed countries). Others however felt that Lamy’s “landing zone” was a fair reflection of the mandate.

3) The EC said they hoped the “exchange rate between the issues” would become clear and would be the subject of discussions at the Mini Ministerial. That is, what are members willing to pay, what do they want to get, and what the price will be. (Developing country negotiators wonder if their Ministers will be familiar enough with the technical details to navigate such discussions.)

4) A tentative schedule of meetings from the 30th also emerged:

• The first Green Room meeting (at Ministerial level) will convene from 9 – 11 on Friday 30th.
• This is followed by an informal (i.e. off the record) TNC meeting from 11am
• Green Room to reconvene at 5pm on 30th, and will take place daily at this time
• Informal TNC on Sat 1st July at 10 am
• Informal TNC on Sun 2nd July at 10 am.

The issue of Green room meetings not going through the night was also raised. Lamy apparently only vaguely promised that he would not push them beyond a certain point.

Reactions from Developing Country Members

1) Sequencing of Issues Will Marginalise Developing Countries’ Concerns

In the corridors of the WTO, some developing country delegates have questioned if Lamy’s triangle of issues, which is essentially what the agreed sequencing amounts to, is the best approach for developing countries. Says one African delegate,

“In the triangle, more emphasis is placed on market access, and there is nothing on development. The Special Products (SP) and Special Safeguard Mechanism (SSM) issues are seen as “by the way issues”. This approach is not right. On preferences, Lamy has said that it would be easier to resolve preferences once the formula has been agreed to. But who will be there to listen to us once the formula is agreed?”

“If we hold up on SP and SSM, we are in trouble. We will be told that we are withholding consensus and we will be blamed. If we agree on partial modalities focusing on market access and leaving development issues behind, we will be kissing these development issues goodbye”.

2) Questions Around the Lack of Accountability in the Green Room Process

A whole range of issues around procedures and the lack of accountability of the process have also been raised in corridor discussions. The critieria regarding which members are invited to the Green Room is completely unknown to the entire Membership, arranged only by the highest echelons in the Secretariat. The co-ordinators of the developing country regions or groupings are usually included, as are co-ordinators of issue groups eg. Benin on behalf of the Africa Group; Zambia for LDCs; Mauritius representing the ACP;  Indonesia representing G33. Incidentally all the G6 Members are present (US, EU, Brazil, India, Japan, Australia). Some kind of regional representation is also part of the selection criteria. According to some, it works out to be about 7 from each key region. There were seven Africans in the 27th morning Green Room meeting.

There has never been a decision in the WTO that a co-ordinator negotiates on behalf of the group, yet in practice, this is assumed by the Secretariat, raising the following problems:

i) There is no detailed agenda of what the green room meeting will discuss prior to its occurrence, so that it is impossible for the co-ordinators to have carefully consulted with their groupings ahead of time, or speak on behalf of their group within the boundaries of a clear mandate provided by the group.

According to one delegate, “I had no idea on Monday morning (Green room meeting on 26 June), that we were going to develop a list of issues for Ministers to discuss. I could not tell that this was coming until I saw Mr Lamy”.

ii) There is no in-built structure of accountability in the Green Room process to facilitate such group representation.

One delegate lamented, “Who is in the Green Room? I never know if I will be in the Green Room this week or next. Where are the minutes of the Green Room? What is the agenda to be discussed in the Green Room?

“It is assumed that those inside will speak on behalf of others outside. But there are no minutes and no structure of accountability. How do others know that I am representing them inside? What is the structure of accountability? These issues are fundamental and they pertain to the structure, process and legitimacy of the organisation.”

Another delegate also questioned the issue of representation in the Green Room.

“I don’t know how the seven (Africans) are chosen. Why is it that (country x) used to be a part of the Green Room but is no longer there? On what basis was that decision made?

“It is not good enough to push for representation but with no guidelines as to how to be accountable to these groups. Since there are no minutes from the Green Room, I don’t accept what comes out because I do not know what my representative has said inside. My representative can also say that he/she had nothing to do with the outcome.”

The orchestration of the negotiations between the Green Room and the plenary is also seen as a deliberate attempt to force through decisions from the Green Room, by-passing the larger Membership.  There is usually insufficient time between the Green Room and the plenary for co-ordinators to consult with their groups (as was the case in Hong Kong). A delegate laments:

“How can the Green Room conclude at five to twelve, and the plenary take place at twelve?”

iii) Green Room: Effectively, the Decision-making Body in the WTO

The Green Room is not a formal decision making structure – as Lamy argues – and that in theory, Members can block a consensus in the TNC or General Council. However, developing country delegates have a different view:

“We know that a Mini Ministerial is not formal. But it does make decisions informally and in practice. Formally, the Green Room is not the ultimate decision making forum, but from the past, we have seen results coming out of this Green Room and taken to the formal TNC and rubber stamped.”

3) Lamy/ Green Room Texts

Lamy may refrain from issuing his own text, since there is so much opposition to this idea in Geneva. However, negotiators think that such texts are already being cooked by the Secretariat (and others), and will be high-jacked into the Green Room, emerging not as Lamy text/s but as Green Room texts.

An African delegate sums:

“This process is terrible. You know, those days when we used to say that this is a rich man’s club? I don’t think anything has changed since. The process in the end will decide the substance”.

If Pascal Lamy and the Secretariat imagine that they are conducting a bottom up, inclusive process (as they seem to think), they are deluding themselves. There are many that are deeply frustrated with this process: their inability to influence the decisions; the at best patchy information flows from the Green Room; procedures or the lack off these, calculated to make it impossible for group representatives to be effectively accountable to their groups. There may or may not be revolt in the ranks in June and July. But it does not take a rocket scientist to know that a non-inclusive process designed to ram through certain interests, undermining development, will eventually have a blowback effect.

ANNEX

AGRICULTURE SEQUENCE OF DISCUSSION (draft of 27th morning)

MARKET ACCESS

• Tiered formula for Tariff Reductions – Thresholds and cuts, developed and developing countries
• Sensitive Products – Designation, Treatment (Tariff Cut, Tariff Quota Expansion)
• Special and Differential Treatment – Special Products (Designation, Treatment), Special Safeguard Mechanism (Coverage, Trigger and Remedy).

DOMESTIC SUPPORT

• Overall Reduction of Trade Distorting Domestic Support
• Reduction in Final Bound Total AMS, Blue Box, De Minimis
• Disciplines – Product Specific AMS Caps, Other criteria for Blue Box
• Cotton

NAMA SEQUENCE OF DISCUSSION (draft of 27th morning)

ROUND ONE

• Formula and Coefficients
• Treatment of unbound tariffs (mark-up)
• Flexibilities for developing Members subject to the formula (Para 8)

ROUND TWO

• Flexibilities for developing Members with low binding coverage (Para 6)
• Small, Vulnerable Economies – Criteria, Treatment
• Least Developed Countries (LDCs) – Flexibilities for LDCs, Market Access for LDCs (Duty Free Quota Free)
• Recently Acceded Members (RAMs)
• Non-reciprocal preferences
• Implementation period

[1] In the agriculture open session of Friday 23rd discussing the draft text, convened by the Agriculture Chair, Falconer, the discussion was more focused on process. The US, however, did interject that they wanted the now expired peace clause (which protects their subsidies in agriculture from being brought to dispute) to be added to the text. This was strongly opposed by Brazil and India. The Chair said that he has no mandate to do this. The G33 also raised the issue of the designation of Special Products.  The current text reflects Falconer’s opinion that developing countries designating SPs should bear the burden of proof, should their designation be questioned. The G33 are arguing that those querying the SP designation should have to justify why a certain product has not met the specified indicator. The other issue of concern for the G33 is the entitlement to Sensitive products. They would like their entitlement to Sensitive products transferred to Special Products (since some tariff cuts and quota expansion are required for sensitive products). This point was included in the last market access reference paper of the Chair, but was not included in the present 22 June draft.