July General Council will most likely be for stock-taking and not make decisions

A heads-of-delegation informal meeting was held at the WTO on Friday 8 July.

At the meeting the WTO Director General Dr Supachai rang the alarm bell, to say that 'these talks are in trouble.'

The General Council chair, Ambassador Amina of Kenya, announced that it was now unlikely that the end-July General Council meeting would involve negotiation or adoption of texts as had been done in the 'July package' of 2004.

These speeches indicate a significant lowering of expectations as to what will be achieved in the General Council meeting of end-July.

On the other hand, the WTO officials could also be sounding alarm bells about a crisis in the hope that this will give an impetus to the Ministers attending the mini-Ministerial meeting in Dalian, China, to make comprimises and make political agreements on key issues.

The major deadlock is on agriculture. The developed countries that are unwilling or unable (or both) to make meaningful concessions on market access or domestic support or to give an end-date in export subsidies, would like to shift attention away from this basic left of offering anything meaningful in agriculture, by pointing to alleged crises in services and in NAMA, saying that developing countries (or key developing countries) are 'hardline' and not doing enough.

The mini-Ministerial in China is the last opportunity for the proponents of 'fast action by end-July', and also another forum in which the 'blame game' can be played out, especially by the major countries, to push the blame on to some developing countries, for there not being a result in July or after.

At the HOD meeting on Friday, WTO DG, Supachai, highlighted the line that the negotiations are very near to crisis.

He said: 'In April, I warned that we were very close to a crisis. I said that, at the current pace, we were not going to make it by July, and possibly not by December. I said I was still not pushing the alarm button, but that my finger was hovering over it. I asked you all to prove me wrong.

So where have we got to since then? Has the picture improved? I regret to say that the progress up until today remains far from sufficient, and I regret even more that my earlier warnings seem more valid than ever. Let me briefly review the state of progress in key negotiating areas:

• Some progress has been made in Agriculture. While the AVE issue has been unblocked, this has not yet sufficiently galvanized the negotiations on the most fundamental element of the market access package, the tiered formula for tariff cuts, although some progress has just been made on other aspects of the market access pillar. Some progress has also been made on domestic support and, to a lesser extent, on export competition. Of course, it remains important to advance work on all three pillars, although some sequencing is necessary for that to happen.
• In the NAMA negotiations, there were some hopeful signs in June, but now positions appear to be hardening. I fear that the obvious constraint here is still the lack of progress on Agriculture.
• In the Services negotiations, while the situation has improved since the May TNC in terms of numbers of initial and revised offers, the quality of the offers continues to be poor. It remains for the membership to see how to take these negotiations forward to Hong Kong.
• In the Rules areas, including Trade Facilitation, we still need to consolidate the wide range of ideas on the table to prepare the ground for further progress in most areas. That said, some useful progress has recently been made on Trade Facilitation and in the RTAs track in the Rules Group.
• In the work on S&D, there is some hope that progress is possible on the Agreement-specific proposals, starting with those submitted by the LDCs, and I certainly hope that some can be harvested soon.

It is true that some progress has been made in certain areas of the negotiations. But let us be clear: this progress is nowhere near sufficient in terms of our critical path to Hong Kong, and it is not being seen in the key issues which would help unblock progress across the board. Overall, there seems to be a renewed sense of blockage and frustration. We are also seeing a resurgence of sterile debate about process, rather than negotiations on substance.'-----------------------------------

The General Council chairperson, Ambassador Amina of Kenya, in her speech, said:

'It is unlikely that we will have agreed elements of text by the end of July in any of the main areas of the negotiations. It is my understanding that a similar situation prevails in other areas of the DDA work programme. As Chairman of the Council this situation is most regrettable...

Although July has understandably been seen as an important marker in our process leading up to Hong Kong, our main focus must remain on the Ministerial Conference itself.

I believe it is imperative that we keep the focus firmly on making progress on the substantive issues before us. With this in mind, I envisage that work ongoing in each of the individual areas of the DDA work programme will continue intensively through the remainder of this month, and that delegations as well as Chairs will continue to use every opportunity to advance our work on substantive issues. The informal Ministerial meeting in China next week will be one such opportunity.

The process this month will culminate with a meeting of the General Council scheduled for 27 July, which will be the opportunity to take stock and register progress on the basis of all work done since July 2004 and of the reports from various bodies