TWN Info Service on WTO and Trade Issues (Dec09/09)
16 December 2009
Third World Network

US reiterates its demands on WTO members, advocates bilateral talks
Published in SUNS #6829 dated 7 December 2009

Geneva, 4 Dec (Kanaga Raja) -- The United States wants other Members of the World Trade Organization to move outside their "comfort zones" to move the Doha Round forward, but gives little indication of its own willingness "to move out of its comfort zone."

The US demands on other members were spelt out by the US Trade Representative (USTR), Ron Kirk, at a media briefing after the conclusion of the seventh WTO Ministerial Conference on Wednesday. Kirk claimed that in the past several months the US has been working with its trading partners on new approaches to move the Doha talks into the "endgame", and for this the US has "strongly advocated" direct bilateral engagements to obtain clarity and close the gaps.

On whether the US would be capable of going into the endgame without fast-track authority, Kirk said that both he and President Barack Obama are "comfortable" that if a Doha deal is reached that meets the objectives laid out by the President, namely, providing meaningful market access for the US that helps create jobs, they will be able to work with Congressional leaders to get Trade Promotion Authority.

Kirk also said that the US position on the issue of cotton subsidies had not changed, and believed that it "will best be addressed in the fullness of completion of the Doha Round." He expressed a similar view on the question of duty-free, quota-free market access for the Least Developed Countries.

As for the stock-taking exercise in the first quarter of next year, as outlined by the Chairman of the Ministerial Conference in his Summary, Kirk said that the substance of the work in the bilateral and multilateral forum will determine success, not arbitrary setting of dates and time-lines. Energy is best served in continuing to stay at the negotiating table and try to close the gaps, Kirk said, adding that "it will be valuable to see where we are in March and we will then make that determination."

[In some caustic comments posted on the International Economic Law and Policy Blog, a blog site by mainly US trade lawyers, Tomer Broude highlighted Kirk's comments on Trade Promotion Authority (namely, that both he and President Obama are "comfortable" that once a deal is reached resulting in greater market access, they will be granted fast-track authority) and said that at first this sounds good, "but when you think about it a little, it translates into if we get what we want, we will agree to it, maybe'."

[Broude is a senior lecturer in the Faculty of Law and Department of International Relations at the Hebrew University of Jerusalem. But the WTO, according to his earlier post at the IELP blog, gave him media accreditation, and he has been blogging on the meeting and side events.

[While the US wants others to move their "comfort zones", Broude said, "there is little indication that US can move outside of its own comfort zone'". And anyway, "it's unclear to me how Kirk's comfort' that authority will be received some time in the future fits in with the March stock-taking exercise and the mid-term elections in November 2010," he added.

[On Kirk's remarks that there is no policy change on cotton in that it can only happen as part of the final Doha agreement, Broude noted that Kirk had offered four justifications for this: (1) the formal argument that the single undertaking is a principle of the Doha Development Agenda -- not convincing, said Broude, noting that any party can take unilateral steps towards reform if it wants to, but the US doesn't/can't; (2) the US can't make such a concession without assessing whether it will get what it wants in other areas, i. e., services, rules, etc. Taken at face value, Broude said, this ties the concession that the Cotton-4 are asking for to concessions that other members have to make to the US - " the ugly side of multilateralism"; (3) the Cotton-4 aren't yet ready to benefit from a removal of cotton subsidies, on the supply side, that will benefit other members before them (with reference to high tariffs on cotton elsewhere). "I don't know what the empirical basis is for this claim," said Broude; and, (4) Kirk said that with all the aid the US is providing these countries (specifically mentioning the Millennium Challenge Account), he can't go to Congress asking for a move like "cotton first".

[On Kirk's comments that the Cotton-4 have not used the aid they got into assisting the cotton farmers, Broude said "This strikes me as a bit disingenuous. I haven't looked into the specifics, but are these states free to do what they want with the aid they receive? Unlikely."]

At the media briefing, Kirk commended WTO Members for avoiding the kind of major protectionism that had exacerbated and some say prolonged the Great Depression.

"This week, we have recognized the need to strengthen and build on our rules-based trading system and cooperative foundation and consider the potential of a balanced and ambitious conclusion to the Doha Development Round," he said.

"In the wake of the recent financial crisis, the world needs a meaningful outcome in the Doha Round that provides new and real economic opportunities for all... we need not just [have] any agreement, but an agreement that will open up markets and increase exports around the world," Kirk said.

"This," he claimed, " will create the widespread economic opportunity necessary to meet the developmental promise of the Doha Development Round. In the last several months, the United States has sought to work with our trading partners on new approaches to truly move these talks into the endgame."

Kirk reiterated the US demand for direct bilateral engagements "as a way for key partners to achieve needed clarity and close gaps with regard to market opening contributions by advanced developing economies." The question now is the willingness of our partners to engage in a meaningful way. said Kirk.

Arguing that WTO Members have repeatedly committed this year to moving the Doha Round forward, Kirk said "we believe now is the time to act on those commitments and move outside of our comfort zones and make the hard, the necessary choices required of those who seek to lead at the WTO."

"Success requires a change from the old approaches that have led us to three successive dead ends - The mourning period for what happened in July 2008 must come to an end. It is time to look ahead and to do what we need to do to bring this Round to a successful conclusion."

"This Ministerial may be over, but our work will not stop," he said.

Asked about the issue of duty-free, quota-free market access for the LDCs (DFQF), Kirk said that the US has made it plain that it will honour its commitment relative to DFQF, but "in the context of the fullness of completing the Doha Round."

As for the stock-taking exercise at the end of March, and whether it should be a Ministerial one, Kirk was of the view that it is absolutely appropriate, "but we continue to maintain that the substance of our work in these bilateral and multilateral forum is going to determine our success, not the arbitrary setting of dates and time-lines."

The US, he said. is serious about completing the Doha Round, but "the worst thing we can do is to convene a session just for the sake of convening one." He thought this was what happened in 2006-2007 and July 2008.

"For our part, I believe our energy is best [in] continuing to stay at the negotiating table and try to close the gaps," but "it will be valuable to see where we are in March and we will then make that determination."

On the draft agriculture and NAMA texts of December 2008 and the US position on this, he said that the texts are called drafts for a reason, and it is because they haven't been completed. He maintained that not everyone agreed to those texts, including South Africa, which rejected them.

"Now, we have never advocated that we start over. We had eight very good years of hard work that have brought us to this point of being in a place that if we can augment what's been done, if we can build on those texts, if we can fill in the gaps, that we think we have a better chance of being able to get the clarity, not just for the US but for every country, that we need to go back to our constituencies and explain to them the benefits of the deal."

"If we really want to deliver on the promise of Doha, we have to be willing to open ourselves to moving beyond our comfort zones in order to close this deal."

"Anyone that advocates to you that they will not move beyond the comfortable position that they are in right now, they are someone that doesn't want to make a deal. A deal only gets done when everyone has to move to some level of discomfort in order to get to a greater place of promise. And that's all that we're advocating."

Asked again about the need for a stock-taking, he said that first of all, it is a process. "It took us five months just to get everyone to the recognition that we needed to supplement the multilateral engagement along with bilateral... This is a very time-consuming challenging process and there are very intense negotiations."

Asked if the US is capable of going to the endgame without fast-track authority, Kirk said that both he and President Obama are comfortable that "if we get a deal that meets the objective that the President has lain out... that provides meaningful market access for us and helps us to create and open those jobs in the United States just as we seek to for other countries, we are very comfortable that we will be able to work with our leaders in Congress to get the Trade Promotion Authority to move forward on this."

On the bilateral consultations, Kirk said that the US was making progress in these bilateral meetings. "We've had a number of bilateral engagements with some countries - some that have been more productive than others - but we will continue to push those engagements over the next several months."

On the cotton subsidies, Kirk said that the US position on the cotton subsidies issues has not changed, and claimed that at the US meeting on Tuesday with the African countries, and with the Cotton-4, "they fully understand our position, as well as we understand their anxiety about getting this issue resolved as soon as possible."

Kirk argued that no country contributed more in Aid for Trade through USAID and the Millennium Challenge Corporation than the US. It also continued to make contributions to the development needs of all of the C-4 countries (Benin, Burkina Faso, Chad, Mali) with the exception of Chad.

He said that it was difficult for him to go back to the US Congress and ask it to do more when the realities of all the development aid and the Millennium Challenge grants that the US had made to Benin, Mali and other members of the C-4, they have not directed one single cent toward cotton farmers.

"Notwithstanding that, we believe we've got to address their needs, but to do that, we're going to have to do it in the context of completing a Doha agreement with the meaningful market access and job-creating opportunities that President Obama has asked for."

Pointing to the issues of competition and infrastructure as it relates to many of the farmers in West Africa, he stressed that unless these issues are confronted, they will not be able to fully take advantage of whatever trade liberalizing opportunities come in cotton.

In response to another question, Kirk said that the challenge is because of all of the flexibilities in the Special Safeguard Mechanism and others and the reluctance to move beyond talking about NAMA and agriculture, it is almost impossible for the US to determine what the counter-balance to that is.

"We just think (that) in a very common-sense way, it also makes sense to take advantage to negotiate horizontally, which we have now realized is the right thing to do, not only in agriculture and in NAMA, but in services and rules, to see if that isn't a way to present a more balanced picture," he said. +