Trade: USTR says no clear landing zone in sight for agreement

Coming from the mini-ministerial meeting at Davos, the US Trade Representative, Ms. Susan Schwab, told reporters at a media briefing that there was palpable optimism and a sense of urgency to have a breakthrough in the negotiations.

However, she admitted that ''I don't think we know where a landing zone is. If the G20 proposal, or the US proposal or the EU proposal had been the landing zone, we would have figured that out last July.''

The best way forward as far as she is concerned is to continue with the quiet consultations and the bilateral meetings that have taken place over the last few months. ''I suspect that the next several months will be characterized by much of the same." The G6's focus on top-line numbers as they have done last year had failed to produce results, she added.

According to media reports from Davos, where some 30 trade ministers had met on the sidelines of the World Economic Forum meeting, the ministers had agreed to resume the Doha talks, which had been suspended by Director-General Pascal Lamy last July following the failure by major powers to bridge their differences mainly over agriculture.

The media reports cited Lamy as saying that ministers had concluded that the time was ripe to get back to ''full negotiating mode'' after the seven-month delay.

Schwab's remarks left some doubts whether she did or did not favour resumption of talks in "full negotiating mode" at the WTO.

There have been some reports out of Davos that Schwab (and Lamy) would have preferred consultations and negotiations among the US, EC, Brazil and India, and cooking up some deal that Lamy could present to others. However, it was reported, India and other WTO members wanted the talks to be brought back to Geneva and conducted in a multilateral context.

While in Geneva (after Davos), Schwab had spent a number of hours meeting with Brazil's Foreign Minister Celso Amorim, and Mandelson and his team. She also met with Director-General Pascal Lamy as well as with some of the Chairs of the negotiating groups. She is next due to meet with British Chancellor of the Exchequer Gordon Brown in London.

Asked as to whether she thought that the G6 (the US, EU, Japan, India, Brazil and Australia) framework was an effective way of continuing the negotiations, Schwab said that what characterized the events last July (when the WTO Director-General 'suspended' the Doha talks) was the failure of the G6 to reach any kind of an agreement that might have led to a breakthrough in the Doha Round.

There are no formal plans to reconvene the G6, she stressed.

''Unfortunately, the G6 focus on top-line numbers had failed us as an approach,'' Schwab said, adding that right now, the focus is on a series of bilaterals and small group meetings.

According to Schwab, the bilateral meetings would focus on key sensitivities and priorities which can then be reverse engineered into the top-line numbers.

"It is a bottom-up approach where we look at sensitivities, flexibilities and priorities in conjunction with the statistics and the formulas. While the initial part of this takes place on a bilateral and small group basis, we clearly have to multilateralize it," she said.

''We are aware that no two, three, five, six, eight countries can declare a breakthrough in an organization like the WTO, which is an organization that is a bottom-up enterprise. There are 150 countries and we operate by consensus.''

Schwab agreed however that universalizing them would be a challenge and it remains to be seen how this could be done.

Nonetheless, she did suggest that this can be done in two ways - one, an informal expansion of the concentric circles, where the circles of discussion are widened, and the other is using the more formal mechanisms of the WTO including the negotiating groups.

At what point the more formal mechanism comes into play depends on how far along we are in terms of substantive discussions than any specific timing element, Schwab argued.

Asked to comment on EU Trade Commissioner Peter Mandelson's remarks in Geneva on Monday with respect to a closer convergence between the G20 and EU positions, Schwab said that it was that level of detail that is the focus of a lot of the bilateral dialogues going on. She asked what is the treatment of sensitive products and Special Products going to be and how do we ensure that the treatment addresses critical red-lines and key priorities, both offensive and defensive interests of the membership.

In terms of a 'landing zone' for agreement, she said ''I don't think we know where a landing zone is. If the G20 proposal, or the US proposal or the EU proposal had been the landing zone, we would have figured that out last July.''

The US would subscribe to the piece of the G20 proposal that limits sensitive products to no more than 1% of tariff lines. Other countries might subscribe to the part of the G20 proposal that says that the top band should take a 75% tariff cut, or another part of the G20 proposal where the treatment of sensitive products should be at minimum 6% of domestic consumption, she pointed out.

''You can claim to subscribe to any number of pieces of the G20 proposal. As a landing zone, clearly we have a lot of work to do to find a landing zone where we have convergence because we haven't identified that,'' she said.

In also referring to the EU's talk about an average tariff cut of 54%, Schwab said that ''has no meaning until we know what all the other pieces of the puzzle are.''

When asked about NAMA, she said that the US position has been very consistent in terms of wanting the most ambitious market-liberalizing outcome when it comes to the entire range of negotiating areas in the Doha Round, whether it is agriculture, NAMA, services, trade facilitation and so on. The lower the coefficient in NAMA, the happier the US would be.

The US is also interested in sectoral agreements in NAMA, she said, such as if we can see a global elimination of trade barriers in environmental goods that contribute to lowering emissions.