Informal meeting of the General Council to discuss the draft decision on implementation related issues and concerns

Monday, 1 October, 2001

Mr. Chairman,

My delegation would like to thank you for organising the informal consultations as a prelude to the special session on implementation convened for 3rd October.  This informal mode will surely enable delegations to express their views freely and frankly.

My delegation would also like thank you and DG for coming out to a draft decision on implementation related issues and concerns as contained in Job (01/139 dated 26 September 2001).  In the next few minutes I will outline my delegation reaction to this document.  Notwithstanding our profound disappointment and dismay over the fact that even at this late stage our major trading partners are unwilling to show the required degree of political will and flexibility, my delegation fully recognises and appreciate the enormous efforts yourself and the Director General have put into the exercise of finding meaningful solutions to implementation related issues and concerns.

Viewed from the perspective of number of concerns which are said to have been addressed or would be addressed at the Ministerial Conference, the results should have beenimpressive.  The reality is:

(i)   Core concerns in certain of the implementation proposals; have not been effectively addressed; and/or

(ii)  Text of the decision in several cases being once more in the nature of best endeavour clauses; and/or

(iii) Several decisions being in the form of referral to subsidiary bodies whose consideration will stretch into well after Doha.

(iv) Crucial concerns not figuring, in either Annex I or II being, sought to be addressed in the course of a future work programme, whose parameters have not been defined.

Despite our best endeavour to try and be positive towards the draft that has been circulated, we are finding ourselves unable to do so.  Even so, we think it is important to be constructive.  It is in this spirit that I would like to comment on the various proposals offering specific suggestions for improvement for your consideration.

My remarks are structured in two parts, first the concerns and the scope for Resolution in the existing draft and second, the critical tirets which have not found place in the text.

Now let me briefly outline some of our main concerns with regard to the draft decision.

---- It is regrettable that the Annexe I of the draft decision does not even cover fully section 1 of the ‘G-7’ paper.  The ‘G-7’ has suggested specific immediate decisions in respect of a number of tirets as early as ------ This has come as a creat shock to us.

We find that there is no proposal for decision in Annexe I relating to either the agreement on textiles and clothing or the anti-dumping agreement.  Developing countries had highlighted for more than three years now specific concerns with regard to these agreements.  Even the G7 text envisaged the possibility of immediate decisions in respect of some of the tirets under these two agreements.  It is unfortunate that Annexe I does not cover any tiret relating to these agreements.

---- We note that some of the proposed decisions in Annexe I are either reference to the decisions already taken or items which are not directly relatable to the implementation package.  I have in mind tiret 36, Article 20.1 of Customs Valuation Agreement.

---- We also note that there are some proposals in Annexe I which are not attributable to the proposals made under the rubric of implementation.  Though we are happy with the approach to technical assistance developed by the Customs valuation committee, we are not clear as to why this has been included in the draft decision.

---- The draft decisions proposed in respect of some of the tirets in annexe I are further dilutions of the compromise language proposed earlier like November 2000/December 2000 text of the Chairman, July 13 text of the Chairman or the G-7 text.  Let me without trying to be exhaustive, give some examples;

(a)  In respect of tirets 9 and 10 a new phrase “while continuing to achieve the importing members appropriate level of protection” has been added now as compared to the text of 13 July.

(b)  Similarly, in respect of tiret 13, a new sentence which dilutes even the language of 13 July text, has been introduced.

(c)  Tiret 35 contains an additional language as compared to 13 July text of the Chairman and the G-7 text and there is no clarity as to what this language means.

(d)  In respect of tirets 67, 82 and 83, the proviso contained in the Chairman’s text of November 2000 as well as G-7 text has been deleted.  The reasons for this are not clear to us.

(e)  We accepted the language in the Chairman’s text of 13 July in respect of tiret 85; this has been diluted further in the present text.

---- In respect of Tiret 80, India has submitted a detailed proposal.  While there seems to be a recognition in the Subsidies Committee that India’s proposal is reasonable, there is unwillingness to act on it.  It is not clear how the proposal in this tiret that the Subsidies Committee should report to the Fourth Ministerial Conference will be operationalised.

---- As regards Annex II, it is not clear to us as to why the decisions proposed in Annex II should wait till Doha and as to why these decisions cannot be taken quickly at Geneva.

---- As regards tirets 16 and 24 under the Agreement on Textiles and Clothing, there is no operational content in this decision.  Even the G-7 Group had proposed operational decisions with regard to providing improved access.

---- As regards tirets 18 23 and 27 the proposed language is much weaker than the language of the G-7 Group, which itself was a compromise language and used the word “should” rather than shall.  Incidentally, tiret 26 dealt with a different subject and the proposed decision does not cover tiret 26.

---- In respect of tirets 19 and 29 relating to Rules of Origin, certain crucial elements are missing.

In respect of tirets 45, 49 and 55 under the Anti Dumping Agreement, the proposal is basically to refer the matter to the Committee.

---- In respect of tiret 56, the proposal is based on the watered down compromise proposal given by India.  However, by changing the word “shall” to “should”, the value of the decision is being lost.

---- Regarding tiret 63 on Rules of Origin, we do not see any need to talk about interim arrangement now when there is a decision of the General Council that the harmonisation work should be completed by the Fourth Ministerial Conference and in any case latest by December, 2001.

After having referred to some of the specific concerns relating, to Annex I and Annex II, I would like to point out that a number of tirets relating to implementation related issues and concerns are not covered either by Annex I or Annex 11.  A quick study shows that about 55 tirets are not covered by Annex I or Annex II.  The Chairman appears to recognise this reality by saying that “the draft decision addresses elements of more than 40 tirets in addition to the dozen or so previously addressed in one way or another”.  It appears that the intention of the Chairman with regard to the tirets not covered by Annex 1 and Annex 2 is, as seen from the draft declaration, that the remaining, implementation issues should be fully addressed in accordance with appropriate guidelines to be developed under the work programme Ministers would be establishing.  I am afraid that this is contrary to the letter and spirit of the May 3, 2000 decision of the General Council which envisaged that all implementation issueswould be resolved not later than the fourth ministerial conference.  We would like to point out that a number of priority issues are not covered by Annex I or Annex II.  Some of these priority issues are: (a) Lesser duty rule, increase in de minimis margins for dumping, and increase in the threshold volume of dumped imports under the Anti Dumping Agreement; (b) Expansion of the scope of nonactionable Subsidies from the perspective of development interests of developing countries, recognition of aggregate and generalised rate of duty remission as a permissible duty draw back scheme; (c) Inclusion of capital goods in the definition of inputs consumed in the production process under the Subsidies Agreement; (d) Appropriate uplift in quota levels at the end of second stage of integration process for identified categories, elimination of all restrictions at aggregate or group level of imports and elimination of restrictions on children’s clothing upto size 164 under the Agreement on Textiles and Clothing; (e) non-grant of patents inconsistent with Article 15 of convention on biological diversity (TRIPS Acreement).

Summing up the position, allow me to say, Mr. Chairman, that the draft decision on implementation continues.  All the same in a constructive spirit we have suggested specific improvements broadly on the following, lines:

1.   Language to be tightened particularly in respect of decisions relating to SPS, Customs Valuation and on improving investigation procedures

2.   Best endeavour clauses should be made mandatory.  Also, developed countries should demonstrate best endeavour, in the form of immediate concrete action such as on advance integration.

3.   To generate more immediate confidence and credibility, many tirets of Annex 11 should be moved to Annex I including those relating to textiles, back to back antidumping investigation, article 15 of Antidumping Agreement, Customs Valuation etc.

4.   At least some of the residual tirets not appearing in Annex I or II, should be immediately addressed, in particular those relating to textiles, anti-dumping and subsidies need to be brought forward.

5.   A well defined road map with specific time frame for addressing remaining issues should be immediately prepared.

Mr. Chairman, we would urge you to intensify your consultations with regard to implementation issues with a view to improve the language in some of the tirets in Annex I and Annex II, with a view to bring forward some of the proposals in Annex II to Annex I and with a view to identify possible decisions in respect of tirets not covered by the draft decisions currently on the table.  In brief, our efforts should be to implement May 3 decision of the General Council in letter and spirit.

Mr. Chairman, before I conclude, I would like to make a brief reference to the covering note attached to the draft decisions.  The covering note to the draft decision on implementation related issues and concerns states inter alia that “the Chairman and the Director General believe that this draft represents a credible effort to move the implementation debate to a new level of understanding”.  The significance of this sentence is not clear as far as my delegation is concerned.  May 3, 2000 decision envisages resolution of all implementation related issues and concerns latest by the fourth ministerial conference.  It is a bit surprising that we should at this point of time “moving the implementation debate to a new level of understanding”.  The proposals of the developing Countries have been on the table for more than three years and any number of formal and informal meetings as well as consultations have been organised regarding these proposals.  Therefore, there cannot be any question of lack of understanding about these proposals. While the Indiandelegation can agree that the Chairman and DG have made extraordinary efforts (much more than what the phrase “credible effort” would indicate) to achieve results in this area, one cannot escape the conclusion that the results achieved so far are farfrom credible.  It is necessary to do further intensive work in the next few days to improve the proposed draft decisions and achieve credible results and thereby build the confidence of the developing countries in the system.