Lamy announces full resumption of negotiations, but real talks elsewhere

Full resumption of negotiations (under the Doha work programme) in all negotiating groups was announced Wednesday (31 January) at an informal heads-of-delegation meeting at the WTO by Mr. Pascal Lamy, Director-General and chair of its Trade Negotiations Committee (TNC).

Lamy, who was reporting to the informal HOD on the recent 'mini ministerial' held at Davos, told members that the "best way to re-energize the negotiations is to go back to full negotiating mode in the Negotiating Groups, while also maintaining the intensified political input."

The ministers at the Davos meeting, Lamy added, without any real explanations on why and how he had in July recommended suspension (after a meeting in Geneva of key trade ministers, following on the St. Petersburg G-8 summit, failed to agree on the issue of agriculture and US cutting back its domestic subsidy programs), were now calling for "a quick resumption of full scale activity in the different Negotiating Groups."

Lamy, who during his tenure since August 2005, has built a reputation of a WTO head wanting to deal only with ministers of key countries (while ignoring ambassadors in Geneva) and setting his own agenda, told the informal HOD that he was already working with all the Negotiating Group chairs to make this happen.

However, the Lamy announcement at the informal HOD of full resumption of negotiations while maintaining what he called intensified political input, as well as the informal HOD agreeing to Lamy's announcement left unclear as to what will be discussed in the WTO negotiating groups, and whether the core issues will be dealt with there, some trade diplomats said after the meeting.

Some of them noted that the real negotiations appear to have been taking place elsewhere.

It is reported that US Trade Representative Susan Schwab, EU trade commissioner Peter Mandelson and Brazilian Foreign Minister Celso Amorim have been meeting bilaterally and together over the last weekend, and early this week to try to work out how a deal could be struck, within this short window of opportunity between now and the end of April.

These meetings were followed by a meeting on Monday morning at the Brazilian mission between the G20 and the EU organized by Amorim, the Brazilian foreign minister. That meeting was also attended by the coordinators of the G33, LDC, Caricom and the Cotton Four groups.

At the meeting, Mendelson had told the developing countries that the EU was willing to go to the G20 proposal of 54% average cut to the developed countries' farm tariffs, so long as the US was willing to come down to $15 billion on its domestic support accompanied by strong disciplines in Amber and blue boxes.

Mandelson, who had been in discussion with the US near Zurich (after the Davos conclave) for 7 hours on 28 January, said at the meeting at the Brazilian mission that he thought that there was a good possibility that the US could go to $15 billion. This was subsequently denied by the US Trade Representative Susan Schwab in her press conference on Tuesday (30 January).

[According to a report in the Washington Post, President Bush and his agriculture secretary have proposed cutting out payments to farmers with a gross farm income (income less than farm expenses and adjusted for inflation) more than $250,000 annually, cutting back on loan deficiency payments and increasing direct payments (for environment protection, ethanol etc). All these will add up over 10 years of a net reduction of $4.5 billion annually. These are just administration proposals, and much depends upon Congress and how it deals with the farm bill, according to US civil society groups. According to other reports, about 39% of income of US rice farmers come out of subsidies, enabling dumping of US rice in India, Indonesia etc, and they will remain untouched.]

Mandelson also told the developing countries that a deal for the EU would require dramatic industrial tariff cuts by the developing countries. More specifically, he suggested a coefficient of 15 for the Swiss formula, and to ensure that the flexibilities provided do not end up removing the benefits accrued. For the developed countries, they would use a coefficient of 10.

[His proposed tariff cuts for non-agricultural market access or NAMA, would result in massive de-industrialization and/or preventing industrialization in several developing countries, including in India and some other Asian countries, in South Africa, and several of the Mercosur countries, including Argentina and even Brazil, though the last is said to be willing to yield on NAMA, according to civil society groups and studies, including simulations done by the ICFTU.]

On the issue of sensitive products (in agriculture), Mandelson said that it should not remove completely the benefit from the market access tariff reduction formulas. He urged the developing countries to consider the US suggestion that their Special Product (SP) measure should not apply to a whole chapter or all tariff lines of certain products.

He also said at the meeting that it would be easier for the EU to secure a deal during Germany's presidency of the EU which is to end in June. For there to be a breakthrough there should be agreement in the top line numbers by March, he added.

Mindful of the bilateral and small group meetings that have been taking place, Lamy said at the informal TNC meeting, that "it is important that they continue over the coming weeks."

However, he also pointed out that "we need more clarity, as to the direction they are going both in terms of substance and of process, especially of timing."

Indonesia, speaking on behalf of the G33 group of developing countries, said at the informal TNC, that any development in these bilateral and small group meetings be brought into the multilateral process as soon as possible in a transparent, inclusive and bottom up approach.

"These aspects are important to create the right scene for the negotiations and to build confidence among the developing countries that the negotiations will indeed address their development concerns," the G33 pointed out.

Benin, speaking on behalf of the African Group, said that they were happy with the full resumption of the negotiations, pointing out that the longer the delay, the greater the risk for the multilateral process.

WTO members that took the floor such as the Philippines on behalf of ASEAN and Jamaica on behalf of the ACP welcomed the resumption of the negotiations.

According to some trade diplomats, though India did not speak at the informal HOD, it too preferred resumption of negotiations at the WTO in a multilateral process at Geneva.

There have been some media reports, from out of the frenetic activities and meetings at Davos, that while USTR Schwab, EC's Mandelson, Lamy, and perhaps to some extent Brazil's Amorim too would have preferred India to join the other three for some intense talks and perhaps strike a deal that others could then be persuaded to accept, Indian trade minister Kamal Nath has preferred negotiations in a multilateral framework.

While sounding upbeat about the negotiations resuming, Lamy however warned against the idea of setting "new explicit deadlines" as to when a deal could be done.

In other interventions, the USTR spoke about the Bush administration efforts to get extension of 'fast track' or the Trade Promotion Authority (under which Congress can vote yes or no to an agreement, but not change it.)

Lamy in his remarks at the TNC also spoke of everyone wanting to take advantage of the 'window of opportunity'.

Added Lamy at the informal TNC: "So, back to full negotiating mode, in Geneva, with Chairs of the negotiating groups steering the process and with the bottom-up, inclusive and transparent involvement of members." He asked the members to be prepared for intensification of work in the negotiating groups in the weeks to come at the initiative of the chairs of the negotiating groups, and also to engage constructively in this phase "with full convictions that a deal is doable".