WTO Trade Negotiations Committee hears assessments on state of negotiations

By Martin Khor (TWN), Geneva, 28 July 2005

The Trade Negotiations Committee heard assessments from members on 28 July 2005on the state of play in the negotiations, with many members expressing disappointment that there had not been as much progress as scheduled, and urging that negotiating momentum pick up from September, after the summer break.

When the TNC resumed its suspended session on 28 July, the TNC chair, Dr. SupachaiPanitchpakdi, who last week had opened the TNC meet and said he was pressing the'alarm buttons' that the Doha talks were in trouble, toned down his assessment today,and said that 'the situation is disappointing but not disastrous.' With nobreakthroughs at this July meeting, the situation made success in Hongkong 'harderbut not impossible,'he said. (See separate article on Supachai's statement).

The meeting heard the updated reports on the agriculture negotiations (by the chairof the agriculture committee special session, Tim Groser) and on the non-agriculturemarket access negotiations (by the NAMA negotiating group chair, StefanJohannesson of Iceland), as well as other reports including the state of negotiationson proposals on special and differential treatment, SDT (by Faizal Ismal of SouthAfrica) and on trade facilitation (by Ambassador Muhamad Noor Yacob of Malaysia).

The status reports had taken the place of the original target of concluding texts of'first approximations' that the TNC would then have transmitted to the GeneralCouncil for adoption.

At the morning session, several delegations, including the G20, G33 and the AfricaGroup, made statements on their views on the state of affairs, with most of themreiterating known positions, and some expressing short and preliminary views on thereports on agriculture and NAMA.

The G20 said its proposals on agriculture had occupied the middle ground in recentnegotiatons. Interestingly this was supported both by the European Communities andthe United States which welcomed the G20's role.

The statements of the EU and US contained veiled references to each other, in anattempt to brush off the burden of blame that each had seemed to try to place on theother - for lack of progress in the agriculture negotiations over the past several days.

The Group of 20, represented by Brazil, thanked the agriculture special session chair,Tim Groser, for his 'outstanding work' but said that 'unfortunately results continueto elude us.' No one is encouraged by the current state of affairs in agriculturenegotiations and a lot of impetus and political commitment is needed in Septemberwhen negotiations resume, Brazil said.

The G20 considered Groser's report (presented to the TNC today) favourably, saying there may be differences of opinion on certain points but that his report had made animportant contribution. By identifying the causes for the state of affairs and the keyissues for more work, his report should help jumpstart the negotiations in the fall.

The G20 said the non-result in July clearly indicated that things were not moving asexpected and the TNC chair's wake up call should prompt early work in September. The work done so far should be the platform for future negotiations. Too manydecisions were postponed but the level of ambition remained intact. The G20 stillexpects an agreement on modalities for Hongkong.

The G20 said it remains committed to the Doha mandate and its proposals on allthree pillars reflect consensus building through accommodating different interestswithin the Group as they strike a balance between offensive and defensive interests. The G20 proposals are widely recognized as a genuine middle ground, are technicallyconsistent and provide a basic structure on which to make progress and buildconsensus, Brazil added.

It called for the process of informal and formal meetings to continue, but under abottoms-up approach. The G20 Ministerial in Pakistan in September will help itprepare the ground for Hongkong. 'We have put our cards in the centre of thenegotiating table and it is time for others to do the same.'

The Group of 33, represented by Indonesia, said it was disappointed with the lack ofprogress in agriculture but added it would be counter-productive to impose technicalsolutions to deeply unresolved political issues. A political commitment from all wasnow needed. Groser's report will allow members to focus discussion in September,Indonesia added.

The G33 reiterated that guaranteeing food security, livelihood security and ruraldevelopment consitituted the core foundation of the development agenda andreflected the right to development of developing countries. 'Hence we urge thatbalanced solutions in all three pillars should be achieved to deliver effective SDT fordeveloping countries.'

The G33 said it was now developing indicators on the three criteria forself-designation of special products and expected others to respond constructively.

The Africa Group, represented by Ambassador Naela Gabr of Egypt, said it may betoo early to conclude 'we are in crisis' or to convey pessimism. The Group hadshown significant flexibility and pragmatism. 'While we remain committed to thisspirit, we fail to see our partners providing similar flexibility,' said Egypt. Further,recent consultations indicated a large portion of divergence among the developedcountries, not just between developed and developing countries.

The Africa Group expressed unhappiness at the process. Reiterating the crucialimportance of transparency and inclusiveness, it said its representatives were notinvited to some of the recent consultations. 'This may eventually lead to manyproblems, as it will be difficult to endorse the results if we have not taken part in allstages of negotiations,' Egypt declared.

On substance, the Africa Group's main interest was development and the term'development' was losing its meaning in the course of the negotiations. 'Developmentis not merely the agreement-specific SDT proposals, but is a main integral part of allnegotiating tracks,' Egypt said.

On SDT, there was a good start by addressing LDC proposals first, but a consensuswas not reached. A further push is needed in September.

On NAMA, the Africa Group noted the NAMA Group chair's 8 July report statingmovement to convergence on members and support for a Swiss formula. 'The AfricaGroup shares his belief if what is meant is support for a non-linear Swiss-typeformula, with a predetermined coefficient for each member qualified by its currentaverage.'

The Group stressed the critical importance it attached to all elements of NAMAnegotiations, of which some were not included in recent consultations.

On trade facilitatiton, the Africa Group believed time will be needed for developingcountries to digest all the proposals and evaluate their impacts and costs, and theperiod from September to HongKong should primarily be an educative one.

The Group also expressed concern that progress had been made in tracks where theAfrican countries had a defensive position (where there are the highest costs andcommitments) whilst tracks where they hold an offensive position (with hopes ofmarket access) are lagging behind or stagnating.

For example, in agriculture there has been little progress. The cotton issue, of vitalimportance to 32 African states, was yet to achieve results. The Group reiterated themodalities it suggested last April, and expected extensive negotiations after thesummer break.

On services, it expressed concern on the quality of offers in sectors and modes ofexport interest of African countries, which undermined the objectives of GATS andthe Doha mandate.

'We re-emphasise that the services negotiations should continue to be based on theexisting mandate and negotiating guidelines.' Consultations should be pursued onSDT and implementation of LDC modalities.

The European Communities said a main problem is the uneven speed of progress indifferent issues. It called on major players to make difficult political choices betweennow and September and for a change in working methods.

On agriculture, the EC largely agreed with Groser's assessment. It welcomed the G20proposals on all three pillars, and said it was a 'good and solid basis' to work on. TheEC saluted the work done in the G20 to table this proposal as it succeeds to steernegotiations to the middle ground. It said the negotiations on market access after thesummer break could resume 'centred on the G20 proposal.'

The EC was however deeply disappointed with the virtual lack of progress since July2004 on trade-distorting domestic support. Though both cuts and disciplines were tobe addressed, little if any progress had been made, despite the G20's useful ideas. Some early political decisions were needed in key developed countries. The EU hadcarried out reform and did not ask anyone to pay for this, 'nor did we ask others toreform or open their markets in exchange.' Reform is long overdue in many marketsand should be done for its own sake and not linked to progress or payment by othersin this or other areas.

Much also needed to be done on export competition. There was limited progress onexport credits but little if any on STEs (state trading enterprises) and food aid.

On NAMA, the EC welcomed the NAMA chair's reports, and called for ambition. A NAMA deal would include: new market access for all; developed countries shoulddo most, developing countries less; poorer developing countries (LDCs and others ina similar situation) should not be asked to make any tariff reduction; developingcountries who had made efforts to open their markets should get recognition of this;tariff and quota free access by LDCs to all developed country markets.

The EC said the start in September should be on the basis of 'one or the other of theSwiss formula proposals that seem to have attracted large support.' It proposed asimple Swiss formula, with one coefficient for all developed countries and a highercoefficient for developing countries, modulated according to the degree and kind ofadditional flexibility that each of them required.

On services, the EC termed it a 'very serious' situation with hardly any progress. Thenumber of improved offers fell far short, and in most cases they did not even reflectexisting liberalization levels in some developed members. The situation was'unsustainable and must be corrected by Hongkong.'

The EU proposed modalities for services for Hongkong with a similar level ofspecificity as for agriculture and NAMA. The request-offer method has not generatedmeaningful results and complementary approaches should now be explored. The ECasked the services negotiations Chair to pursue this so that Ministers in Hongkong candecide on 'a set of modalities on services.'

The United States, said that approval by the US Congress of CAFTA was 'very goodnews for US participation in WTO negotiations.' (The House of Representativesapproved CAFTA by a majority of just two, 217 against 215, and US media reportsindicated that the administration had made many concessions to its domestic textilesand other industries).

The US was disappointed that 'we have not made more progress in moving the DohaDevelopment Agenda forward.' In agriculture, the market access talks signalled theneed for a middle ground between the Swiss formula and Uruguay Round approachand the G20 had offered useful suggestions to focus the discussions.

On domestic support, the US recognized a strong outcome required important changesin its own farm programmes, but changes could not be made by just one country. Forsome reason, those who subsidised the most still sought reassurance with respect todomestic support, the US said.

The US was committed to domestic support reform in all counties, includingsubstantial reduction in allowed level of trade-distorting domestic support,product-specific caps on amber box, a cap on partially decoupled payments under theblue box, and new criteria to ensure that the partially decoupled support payments ofall countries were less trade-distorting than amber box payments.

On NAMA, the US said the path ahead was 'much clearer'due to recent work, withsignals of flexibility from all sides on the formula and use of coefficients. Work onsectors and non tariff barriers must intensify.

The Cairns Group, represented by Australia, said it was disappointed with the littleheadway on agriculture. Time was now seriously short. Recent consultations haveunderscored that without progress on agriculture, 'we cannot move on other issues.'

The TNC meeting is to resume Thursday afternoon, with many more delegationsslotted to speak.