No Artificial Deadlines - USTR Schwab

Geneva - "Content" and "substance" - not artificial deadlines - will set the stage for a breakthrough in the precarious Doha Development Agenda trade negotiations, US Trade Representative Susan Schwab said here on Friday after a face-to-face meeting with World Trade Organization Director General Pascal Lamy (WTD, 1/12/07).

Mr. Lamy has insisted that a breakthrough in negotiating modalities must come before the end of March to conclude the five-year-old talks by the end of the year. European Union trade commissioner Peter Mandelson expressed similar thinking after a bilateral meeting with the USTR in Washington a week ago.

Following her three-hour session with Mr. Lamy, the USTR told a press conference that Washington is committed to a successful outcome of the long-stalled talks, adding that progress is being made in every aspect of the negotiations - including "special products," "sensitive products" and flexibilities for developing countries, not just the "bumper sticker" issues of US domestic supports and EU market access. She denied the validity of recent reports that Washington and Brussels are close to a bilateral understanding - which would then be used to move the other parts of the negotiations forward. There is a long way to go before such an agreement is reached, she commented.

Nevertheless, the USTR said there is considerable "momentum" in the ongoing technical discussions that is leading to "optimism" that progress can be made soon.

Davos

Ms. Schwab said the WTO informal ministerial set for Davos on January 27 will provide a platform for some key trade ministers to share notes on how different members are progressing in their various bilateral and regional sessions. "Let's take advantage of that and see if we can parlay that ultimately into a breakthrough," she told reporters. The time has come to "juxtapose" what is happening at the bilateral and group level contacts into a broader multilateral process.

On the need to essentially conclude the Doha negotiations before the middle of the year when special Presidential Trade Negotiating Authority lapses, Ms. Schwab noted that the Uruguay Round concluded without "fast track" authority in place. She said the expiry of the TPA by the end of this July will not constitute a problem - saying "it would not be the end of Doha."

USTR Schwab said there still is no clarity on the number and treatment of "special products" - compared to progress made on "sensitive products" by the so-called farm defensive industrialized countries. "Treatment of special products by developing countries is critically important in terms of getting to a breakthrough," the USTR stated. She said there is a great deal of technical work that needs to be done.

The USTR's visit contributed to optimism and increased expectations of a possible turn-around in the talks, but failed to provide clarity or any "creative answers," trade diplomats told WTD. Neither did members gain any better understanding on what is happening at the bilateral level between Washington and Brussels - or how the bilateral progress could be integrated into multilateral consultations.

"It is encouraging to know that there is hard bargaining" among the United States, the EU and Brazil, said one diplomat. But to integrate bilateral progress within the Geneva consultations must include the sharing of "details" - at least with those overseeing the Doha negotiations, some trade diplomats commented to WTD.

Given the optimism shown by Ambassador Schwab, one official suggested that the Davos meeting will further raise expectations among members. "What we do not need to have are more platitudes or statements at Davos. The US has to tell the broader membership and the ministers there about the underlying elements of progress, said another negotiator. Otherwise, the negotiations will be further undermined by the continuing game of raising expectations by key members while keeping the larger membership in total darkness," the official said.

It is clearer now - after the Schwab visit - that Congress will move ahead with writing a new multi-year farm bill without guidance from negotiations in Geneva, WTD was told (see related report this issue). House Agriculture Committee Chair Collin Peterson (D-Minn) repeated recently that he wants a new farm bill essentially in place by the end of this summer.

There is mounting concern here that some difficult issues in the services negotiations - such as the temporary movement of professionals across border (Mode 4) and disciplines in domestic regulations, including the improvement of the WTO antidumping agreement - will be put on the "back burner" because of the inevitable difficulties they will cause in Congress during consideration of TPA renewal, trade diplomats said.
Germany's Presidency

In Washington, German Ambassador Klaus Scharioth told reporters that as President of the European Commission during the next six months Chancellor Angela Merkel will press hard to reach an understanding between Brussels and Washington on the Doha round - so a successful conclusion of the negotiations can be had this year. The ambassador suggested that chief EU negotiator Mandelson had sufficient residual authority to reach such an accommodation. He said it did not look as if the EC Council has to expand that authority. He also suggested settlement has to be in hand by the end of March if the round is to avoid a final collapse. Resurrecting it, he suggested, would take at least another five years.

Meanwhile, Mr. Mandelson met with his harshest EU critics on Friday in Paris to discuss his recent talks with USTR Schwab. According to a EU statement, the chief EU trade negotiator met with French Prime Minister Dominique de Villepin, Foreign Minister Philippe Douse-Blazy and Europe Minister Catherine Colonna along with Trade Minister Christine Lagarde and Agriculture Minister Dominique Bussereau.

Mr. Mandelson stated - "We share the objective of reaching an ambitious, balanced conclusion to the Doha Round in 2007. Such an agreement should advance Europe's economic interests across-the-board, while remaining within the mandate the Commission has been given in agricultural trade defined by the 2003 CAP reform."