General Council meets amid gloom of 'no outcome'

Martin Khor, TWN, 27 July 2005

The WTO General Council started its meeting today in an atmosphere of anti-climax as well as general gloom that its long-touted objective of coming up with 'first approximations' of modalities on key issues to give a boost to the preparations for the Hongkong Ministerial in December would not be fulfilled.

The Council meeting dealt with eight regular agenda items. The main item,discussion on a report from the Trade Negotiations Committee (TNC), will take placeFriday. Before that, the TNC will meet on Thursday.

The failure of the WTO to meet yet another deadline had already been predicted inthe past few weeks, and was finally confirmed when two meetings held Tuesdayafternoon were told that wide differences remained in agriculture and non-agriculturemarket access (NAMA).

As a result, the General Council will not adopt any agreed texts that could haverepresented 'additional convergence' to add to the General Council's FrameworkAgreements of July 2004 (adopted on 1 August 2004).

Some trade diplomats and officials put on a brave front, saying that although therewas no new agreement, there had been significant progress. The EU chief negotiator,Peter Carl, said that real advances had been made in agriculture. The chair of theNAMA negotiations, Stefan Johannesson of Iceland, remarked that a lot of groundhad been covered and 'all we need is to walk an extra mile.'

But there is no hiding the fact of a major setback to the schedule, set early this year,of reaching concrete agreement on some key aspects in agriculture, NAMA, servicesand 'development issues' by end-July, so that after the August break there would bea good chance to settle the detailed 'modalities' before Hongkong.

A significant new uncertainty is that although he is reluctant to do so, the formerNew Zealand ambassador, Tim Groser, will almost certainly have to give up at theend of July his post as Chair of the Special Session of the Committee on Agriculture- where agriculture negotiations take place.

Whoever takes over (and the names mentioned are the new New Zealand ambassador,Crawford Falconer, and the Chilean Ambassador, Alejandro Jara, who now chairs theservices talks) will find it difficult to quickly get to grips with the complex issues andestablish relations of confidence with various delegations and negotiators.

This, say some diplomats and officials, might enable the incoming Director-General,Pascal Lamy, to take on (or offer to take on) a more prominent role in the agriculturenegotiations than his predecessor, Supachai Panitchpakdi. How various delegationswill react if this happens is uncertain.

The NAMA Chair, Amb. Stefan Johannesson is also reportedly scheduled to leave hisGeneva post before the Hongkong Ministerial.

However, other observers of the WTO negotiations argue that there are still more thanthree full months after the summer break before Hongkong, and that traditionally themajor decisions are taken at the last minute, just before the Ministerial or at theMinisterial itself (or in the case of Doha in 2001, at 'extra time' on an extended dayafter the scheduled end of the meeting).

The real intense negotiations can be expected to take place between mid-October andthe end of November, according to this view.

It became clear Wednesday, that besides the lack of any outcome on agriculture andNAMA, there would be no result either at the General Council on the 'developmentissues' - such as special and differential treatment, implementation issues, and TRIPSand Public Health.

The July 2004 framework had set a deadline of July 2005 for a review of alloutstanding agreement-specific SDT proposals, with clear recommendations for adecision.

That ambition had been whittled down to settling just five proposals relating to LDCs. In the past week, several meetings had been held in an attempt to reach agreement onthe issues. But this morning, senior diplomats admitted that it would not be possibleto reach agreement this week on these five proposals.

On implementation issues, the July 2004 framework says that the General Councilshall review progress and take appropriate action no later than July 2005. Last week,the Director General reported to the TNC meeting that there had not been progress onseven major implementation issues.

At today's General Council, he also reported that no agreement had been reached ongeographical indications, one of the major implementation issues.

On TRIPS and Public Health, the General Council dealt with this issue, with theChair of the negotiations, Ambassador Choi Hyuck of Korea, reporting that there hadbeen no agreement on finding a 'permanent solution' to the question of ensuringsupplies of affordable medicines to countries with no or inadequate manufacturingcapacity. Choi hoped there would be some results soon after the summer break.

According to para 11 of the 30 August 2003 decision of the General Council on thisissue, the TRIPS Council was to have adopted an amendment to the TRIPS agreementas a permanent solution, by end-June 2004. This and several other deadlines havebeen missed.

At the General Council meeting, after the Chair of the TRIPS negotiations hadreported failure to find a solution, several developing countries spoke of their concernand disappointment.

Kenya expressed deep disappointment that two years after the August 2003 decision,no progress had been made. The main problem, it said, is that some countries wantto transpose the August 2003 decision into the agreement (with which Kenya did notagree), whereas other countries wanted an amendment to the TRIPS agreement.

Kenya said the WTO members had to be faithful to paragraph 11 of the August 2003decision, which clearly stated that there would have to be an amendment to the TRIPSagreement.

As the proposal by the Africa |Group was the only one on the table, it must be usedas the basis for further work, concluded Kenya.

Cuba agreed with Kenya, adding that millions of people were dying of HIV-AIDS dueto lack of access to medicines, and thus it was urgent that a solution be found.

Brazil stated that a statement of the Chairman of the General Council (just prior to theadoption of the 30 August 2003 decision) should not be part of the solution and askedthat a reference to this statement (in a footnote of the Decision document) be dropped.

The US on the other hand said that the any movement on this issue should incorporatethe August decision as a whole, together with reference to the Chairman's statement.

Thus, the three main manifestations of specific 'development issues' (i.e. SDT, implementation, and a permanent solution to an important aspect of TRIPS and PublicHealth) have made no progress, and have suffered through many missed deadlines.

These are also casualties of the failure of the July General Council meeting to makeheadway on the Doha agenda.

The Council dealt with eight items; besides implementation issues and TRIPS andPublic Health, it also discussed six other issues, including small economies, specialand differential treatment, aspects relating to rules of origin, waivers under Article IXof the WTO agreement, and the budget committee.

On waivers under Art.IX of the WTO agreement, the waiver requests for AGOA,Caribbean Basin Economic Recovery Act, and Andean Trade Preference Act wereapproved.