Anticipating Resumed DDA Negotiations

Geneva * Incoming World Trade Organization Director General Pascal Lamy is preparing to go 'full steam ahead' into an intensive negotiating phase of the Doha Development Agenda by directing the chairs of the agriculture and industrial market access negotiations commence text-based negotiations without delay, sources told WTD (WTD, 8/1/05).

Despite the failure to finalize the 'first approximation' in agriculture and nonagricultural market access last week, the chances for an agreement on full modalities by the time of the mid-December Hong Kong ministerial meeting seem 'doable', sources added.

In a meeting with Indian trade minister Kamal Nath last week, US Trade Representative Rob Portman * who similarly said he is anxious to get re-started on the stalled talks * is understood to have suggested that text-based negotiations should be started at the earliest date given the clarity brought about in both agriculture and NAMA.

In his meeting Saturday with Mr. Lamy, USTR Portman suggested some perspectives on breaking the logjams in agriculture * particularly market access and trade-distorting domestic support.

The 'step-by-step' approach to moving the agriculture talks along as outlined by negotiations chairman Tim Groser is seen as the best route to take, according to some envoys. Indications are that members are likely to settle for the Group-of-20 'middle ground' proposal on market access after conceding some room for sensitive products through 'constrained flexibility,' trade sources said. But members are likely to reject the capping of high tariffs as suggested by the G-20.

The final deal in market access will not be as ambitious as mandated in the Doha agenda, but, instead, would resemble more the former Harbinson framework with a linear formula, sources told WTD.2013

Participants speculated that agreement on export competition would point to 2013 as the year for complete elimination of export subsidies. There also will be stringent disciplines * and the possible removal * of export credits. 'Soft' treatment for genuine emergency food aid and tougher rules for state trading enterprises are likely to finally emerge.

Regarding trade-distorting domestic support, the next phase of negotiations will focus on three bands * a 70-percent reduction for 'amber box' programs based on the aggregate measurement of support for the European Union; 60 percent for Japan and 50 percent for the United States.

On the controversial US counter-cyclical payments, some new language is expected to emerge that will attempt to strike a balance with the high-income payments made by the European Union * and contained in the 'blue box,' sources said. In all probability, there also will be a price ceiling for counter-cyclical payments, sources said.

In NAMA, negotiators are expected to converge around two coefficients * one for industrialized countries of between 10 and 13 and one for developing countries between 28 to 30, with special credits for Caribbean and subSaharan African countries.