WTO shifting gear from “modalities” to “framework”

Geneva, 19 August (Martin Khor) - The World Trade Organization appears to have given up hopes of achieving a set of agreed modalities for agriculture before or at the Cancun Ministerial Conference, but instead will attempt in the days ahead for an agreement on a “framework” without data, for adoption by Ministers at Cancun.

This emerged from an informal heads of delegation meeting on Monday evening, which was meant for members to be briefed on the results of informal consultations held in recent days on agriculture, non-agricultural market access (NAMA) and S and D Treatment.

At the same meeting, the chairman of the NAMA negotiating group, Amb.Piere-Louis Girard of Switzerland, said that he would distribute a revised text of his earlier modalities paper. He also indicated that it would be in the shape of a framework paper, with no numbers.

Thus it would appear that there will be no attempt now to conclude modalities for negotiations and commitments either on agriculture or NAMA before or at Cancun. The key word “modalities” will now be displaced by the new buzz word, “framework”, at least for these two market access issues.

It was also made clear that the US-EC draft on agriculture modalities has been unacceptable to most developing countries as well as members of the Cairns Group as the basis of further negotiations on modalities. Many countries have said it should be treated as only another input into the negotiations, and they want the negotiations to revert to the Harbinson revised March draft (now termed “Rev 1”, in WTO negotiation language).

It is known that India and Brazil, together with a few other countries, have been attempting to jointly draft their own version of modalities. A paper coming from this initiative is expected to be distributed informally on Tuesday or Wednesday and is eagerly awaited by many delegations.

At Monday evening’s HOD meeting, Stuart Harbinson, chair of the special sessions on agriculture, briefed members on the agriculture consultations he had been holding since the HOD on agriculture last week. According to trade officials, Harbinson said that there is a widespread feeling that what is required for Cancun is a “framework” that would set out a format on domestic support, market access and export subsidies. It would not contain any figures.

Harbinson is reported to have said that there was a feeling that there may be further discussion of the EC-US paper as an input, but that it should not be the basis of the negotiations or even a framework. Many members said that “Rev 1” should be the basis.

On reactions to the US-EC text, Harbinson said there was concern that it had not dealt much with S and D, but the US and EC said this was because they had run out of time. He said there was some support for the “blended approach” in market access but some thought it was contradictory. Many developing countries supported the inclusion of “strategic products” and were concerned by its absence in the US-EC paper.

Harbinson added that on export competition, there was concern that the US-EC text did not have an end-date for eliminating subsidies. On domestic support, there was concern about the extension of the blue box and that there were no disciplines on the green box subsidies.

Developing countries were also upset by the US-EC proposal to introduce a new category of net food exporting countries which they saw as an attempt to divide and distinguish between developing countries. There was also concern expressed that there was not much mention of LDCs and acceding countries.

Harbinson said he sensed members felt what is now required is a “framework” containing the elements of domestic support, market access and export competition, but without putting figures in it.

He suggested that three principles would have to be adhered to in such a framework: it would be faithful to the Doha mandate, it would incorporate key concerns of members and it would constitute a clear step forward in the negotiations.

In reactions to Harbinson, several developing countries raised their concerns.  Uganda said the issue of LDCs should be highlighted, Kenya said S and D treatment should be at the core of the framework proposals. The Philippines, India and Morocco (for the Africa Group) said that the focus of negotiations should be the Rev 1 document.

Cuba wanted special safeguards mechanism for developing countries to be a key aspect, China highlighted the position of newly acceding countries, while Barbados called for S and D treatment to be a core element.

Some developing countries were critical of the move to a framework agreement.  Nigeria wondered why there would be no data in the proposed framework, when the Harbinson texts had contained data. Indonesia was disappointed that there now seemed to be a move from modalities to only a framework. It wanted Rev 1 to be the basis, and sought assurance that S and D treatment would be a key element.

In response, Harbinson said on LDCs there seemed to be a consensus to have special treatment such as that they need not be subjected to tariff reduction.

On his proposal that there be a framework without figures, he said the framework would be a step towards modalities and it was the best way to go ahead.

Outside the meeting, one developing country Ambassador remarked that it was clear from their joint paper that the US and EC had lowered their levels of ambition, and had shown that they are not prepared to reduce their high levels of protection.

“So the level of ambition for the whole agriculture negotiations is being adjusted downwards to suit them,” he said. “And we are asked to accept the downgrading of the Doha ambition from modalities to a mere framework that is essentially meaningless if it does not contain the figures of commitments.”

It is not known whether the “framework” paper that is to be prepared will take the format of the Harbinson draft (“Rev 1”) or the format of the joint US-EC paper. Harbinson himself seemed to indicate that a US-EC format may be adopted, although the details may be different. He is reported to have said of his own draft: “The status of Rev 1 is grey.”

The HOD meeting also heard a report from the chairman of the NAMA negotiating group, Ambassador Girard, on the group’s meetings last week.

Girard said he would circulate a revised text of his Draft Elements of Modalities on Tuesday, indicating there would not be numerous changes. The text would also be in the form of a framework paper, like that for agriculture. There was, he said, no need for precise numbers but it would contain elements in terms of a formula, sectoral initiative and non tariff barriers.

Several countries, in response, said they would comment only after seeing the new paper. Several developing countries, including Mauritius, St Lucia, Morocco, Cuba, and Kenya stressed the need for the new paper to adequately treat S and D treatment and erosion of preferences.

The HOD meeting also discussed S and D treatment issues, and agreed to adopt one of the proposals in the following language:

“GATT 1994 - Article XVIII:C: The General Council instructs the Council on Trade in Goods to develop and adopt procedures for recourse to Article XVIII:C. The concerns raised by developing countries, especially the least-developed countries, including those related to the suspension of concessions or other obligations under Article VXIII:C, shall be addressed.”

Another 15 proposals were also discussed but there was no agreement reached on any of them. A new version of the proposals is expected to be circulated Tuesday for further consultations.

As far as one could gather from Third World trade diplomats, another priority area for developing countries, the implementation issues, at the moment is like an orphan baby - but may suddenly bawl for attention. – SUNS5400

[c] 2003, SUNS - All rights reserved. May not be reproduced, reprinted or posted to any system or service without specific permission from SUNS. This limitation includes incorporation into a database, distribution via Usenet News, bulletin board systems, mailing lists, print media or broadcast. For information about reproduction or multi-user subscriptions please contact: