TWN Info Service on WTO Issues (Dec03/10)
17 December 2003
Third World Network
Dear friends and colleagues
WTO GENERAL COUNCIL MEETING ENDS WITH NO BREAKTHROUGH
The special meeting of the WTO General Council ended on 16 December with a statement of the Chairman that there has been no breakthrough, and delegations not saying anything new.
He repeated his proposal that work on modalities should continue in the new year on two Singapore issues, but did not mention what would happen to the other two.
The meeting only “took note” of the Chairman’s report and statement, as well as other statements made by the delegations.
Many statements made developing countries called on the stopping of further work on three Singapore issues. Many countries criticised the Derbez text on agriculture and NAMA, saying that other texts should also be taken as starting points or reference points for future negotiations. And many developing countries asked that the working groups on Singapore issues do not resume work, but that the political question of what to do on these issues be resolved at the General Council level.
Below is a second report of the General Council meeting. An initial report was provided earlier.
With best wishes
GENERAL COUNCIL MEETING ENDS WITH “NO BREAKTHROUGH”
TWN Report by Martin Khor, Geneva 17 December 2003
The WTO General Council finished its discussions on the follow up to the Cancun Ministerial Conference this morning with the Council chairman admitting that there has been no breakthrough, with delegations not saying anything new, and positions among members still wide apart.
Making his concluding remarks on this agenda item, the chairman, Uruguayan Ambassador Carlos Perez del Castillo, said members seemed to accept his proposal to restart work of the Trade Negotiations Committee and its subsidiary bodies.
On the contentious Singapore issues, he repeated his proposal that work towards possible modalities will continue on a multilateral basis on trade facilitation (TF) and transparency in government procurement (TGP) at the level of the General Council.
He did not mention whether work would resume on the other two Singapore issues, investment and competition, or at what level.
“A chairman cannot take this any further, given the lack of agreement among the members on this issue,” he remarked.
Several developing countries had earlier raised the issue that working groups on the Singapore issues should not resume work, as there had been proposals by many members that further work be stopped on at least some of the issues.
Castillo said the meeting did not represent a breakthrough, and the Round is not yet back on track. But he was happy the members are in a pragmatic mood, ready to work. Although there was a good sense of engagement, he regretted he did not see any new proposals.
He added the positions are still wide apart, and he had hard nothing new from what he had heard the past many weeks. The meeting seemed more of an occasion for members to put on record what they had been saying before.
On process, he said restarting the negotiating bodies would allow for more transparency and inclusiveness and also to hold more detailed technical discussion.
He asked that the meeting take note of his report and statement, and of what all the members said.
“Taking note” does not imply any agreement or endorsement, and each member is free to interpret and view the Chairman’s statements as it deems appropriate, according to trade officials and diplomats.
The two-day meeting heard statements from 52 delegations, some of them on behalf of groupings of countries.
Many developing countries that spoke had reservations or objections to some of the points and suggestions presented at the start by Castillo in his report on the post-Cancun consultations held under him.
The strongest disagreement was on the Singapore issues, with 45 countries asking for three issues to be dropped altogether, in contrast to Castillo’s “2 plus 2” approach of undertaking work on modalities on two issues while deciding later what to do with the other two issues.
Several countries also suggested that the working bodies dealing technically with all the Singapore issues not be re-convened until the political question of what to do with eah of and all the Singapore issues is settled, at the general Council level.
Many developing countries also objected to using the Derbez text as the main basis for negotiations in agriculture and NAMA, stating that other texts were just as relevant.
Some countries also reminded that the post Cancun consultations had not covered the development issues (implementation and special and differential treatment), which should now received prominence in the next phase.
The Botswana Ambassador, Charles Ntwaagae, on behalf of the ACP Group, said the Group believes not only the Derbez text but other contributions made before, at and after Cancun should be the starting point of negotiations. It said cotton should be treated as a stand alone issue and not part of the agriculture negotiations.
On Singapore issues, the ACP “does not consider these issues to be fundamental to our interests” , he said. “We urge our developed country partners to build on the discussions that took place in Cancun by agreeing to remove some, if not all, of these issues from the Doha Work Programme altogether.”
Of paramount importance to the ACP Group are development issues such as S and D, implementation and special situation of LDCs and small economies, where the primary focus of work must be placed.
The ACP noted the chair’s proposal to reactivate bodies created under the Doha programme but said this would be done cautiously in respect of some bodies that had specific time period. The General Council will need to come up with a clear mandate on some of the issues before reactivation of the bodies.
The Nigeria Ambassador, Matthew Nwagwu, said in efforts to revive the negotiations, future texts of the WTO should be produced by Members who will have ownership and responsibility for such texts. Efforts by Chairmen of the General Council or bodies to produce text on their own responsibility have not helped our work much.
On agriculture, Nigeria was concerned with many aspects of the Derbez text since it does not address major issues of interest to it, and does not contain figures. “In our view it is not a suitable roadmap for further agriculture reform. The fact there is little progress in the consultations is an indication that relying on this text will not yield desired results.”
The text should only be a reference document and other documents including the G20 proposals should be used in future, and also the concepts of special products, special safeguard mechanisms and S and D should be given due attention.
On NAMA, Nigeria was concerned about several aspects of the Derbez text. The non-linear approach is not acceptable as it will lead to drastic tariff cut in developing countries and loss of badly-needed revenue. Nigeria also did not support the mandatory approach to sectoral tariff elimination, and wanted flexibility to determine the scope of tariff bindings.
Nigeria added that no agreement has been reached to negotiate any of the Singapore issues since the modalities are yet to be agreed on. “Your proposal on the Singapore issues therefore is not accepted by my delegation,” said Nigeria. “My delegation would like three Singapore issues to be dropped from the WTO work programme, while trade facilitation is referred back to the working group for clarification.”
Nigeria also said it was imperative that development issues (implementation and S and D) in the Doha agenda be given more attention.
Kenya said the results of the consultations have been disappointing and and such “we have betrayed the trust bestowed on us by our Ministers” who expected convergence on key issues. Kenya also decried the fact that the development issues had not made any significant progress.
On agriculture and NAMA, Kenya said it did not agree with the Chairman’s assessment that the elements and structure of the Derbez text
was generally acceptable. “We do not share that view because if that was the case we would have completed our work by now.”
The framework approach was agreed on for the Cancun Ministerial since deadlines for modalities were missed. Kenya questioned the wisdom of continuing with the framework approach, and asked whether it would be better to embark on modalities.
On Singapore issues, Kenya said there is no agreement by members whatsoever on how they should be dealt with. Proposals by some members to drop some issues from the single undertaking should not be seen as a concession since they were never part of the single undertaking.
“While you have proposed that we could explore the possibility of coming up with modalities on TF and TGP and reflect further on the other two, we think this is a set back to the positive development in Cancun to drop investment, competition and TGP from the WTO work programme.
“The proposal at Cancun should be the basis for any further reflection on Singapore issues,” said Kenya.
It added cotton should be a stand alone issue. If problems facing the poorest members are not addressed promptly, the WTO “will continue getting an A-plus for efforts and F for achievement, thus exacerbating global inequalities.”
It proposed a negotiating group be created to take up all implementation issues. On other bodies under the Doha agenda, we need to reflect further on the legal implications on certain mandates that had specific time period.
Ambassador Ransford Smith of Jamaica, referring to the use of the Derbez text, said other texts on the table before and at Cancun should also be used, for example Caricom states had made proposals on agriculture and NAMA that are not reflected in the Derbez text.
In NAMA, Jamaica opposed the mandatory sectoral approach and the use of a non-linear formula for developing countries, which are in the Debrez text. Both in agriculture and NAMA, the problems of preferences, tariff revenue dependence and vulnerability of small producers must be effectively addressed.
Jamaica reiterated the joint position of 44 countries to cease work on three issues and continue clarification on trade facilitation. It was however not persuaded that there is any need for binding obligations on TF.
With regard to the bodies dealing with Singapore issues, Jamaica said it may prove unnecessary to reactivate some of these bodies if a decision is taken to cease work altogether on some subjects.
Speaking on the Chairman’s proposal to reactivate the work of negotiating bodies, Indonesia said this was appropriate for agriculture and NAMA, but for Singapore issues, “a political agreement must first be reached on what to do for each of the issues before we can undertake further work on any of these issues.”
In deciding what action to take on Singapore issues, Indonesia firmly believed that developments in the last hours in Cancun must fully be taken into account.
“We feel your proposal to continue to hold consultations on possible modalities for TF and TGP as being premature. Many of the pre Cancun reservations and arguments on these issues are equally relevant today. Thus without a political decision on the action to be taken on each of the Singapore issues, consultations for modalities will only be in vain.”
In line with the 44-country paper, Indonesia said we should only be discussing what action to take on TF. And as for the other three issues, “given that the leading proponent dropped them out of the WTO in Cancun, they should no longer be discussed in the WTO. “
India cautioned against unwittingly agreeing to a framework in agriculture that would be against developing countries’ interests, such as a blended formula approach in market access. In view of the problems associated with frameworks, India proposed that some key numbers be negotiated along with the framework to make it more unambiguous.
On NAMA, India said the way forward is not a simple Swiss formula with a single coefficient nor the concept of harmonization of tariffs. If there is to be only a general reference to a formula, then proposals relating to the formula put forward by all members should still be on the table.
India said there had been hardly any progress on implementation issues after Doha. It called for the creation of a separate negotiating body under the General Council or the TNC exclusively for implementation and S and D issues, which could address the commodity issue.
India reiterated the 44-country paper’s position on Singapore issues, that further work on three issues be dropped. On trade facilitation, India elaborated on many issues that would have to be clarified.
“We need clarity on any aspect of the Singapore issues,” said India. “We need to know what issues remain on the WTO work programme, what structures would be put in place and what would constitute the terms of reference of any future work. More consultations would be needed at the level of the General Council to clarify these aspects.”
India noted a large number of countries, perhaps constituting the majority, have expressed their views clearly. “We must not repeat the Cancun experience and ignore their views any more.”
Malaysia, which coordinates the core group on Singapore issues, formally introduced the paper by 45 countries (with Jamaica being the latest co- sponsor). It reminded the Council that at Cancun, a major proponent dropped further work on two issues and there was a suggestion that further work on a third issue be also dropped.
“Today there continues to be significant divergence of views among members on the Singapore issues. We therefore submit that all further work on investment, competition and TGP should be dropped.” Work on clarification of various aspects of trade facilitation may continue, however on the basis of issues and procedures suggested by the group of 45 countries.
Malaysia asked members to step back and look at the big picture, to appreciate the greater importance that progress in agriculture, NAMA and services would make to expanding trade as compared to discussions on the Singapore issues.
China’s Ambassador Sun Zhenyu said China was prepared to build on the Derbez text but at the same time “we should keep our minds open for proposals from Members.”
On agriculture, China proposed that the work should include coming up with specific numbers, or else shift the work on framework directly to that on modalities.
On Singapore issues, China said: “Since our agenda for the round is already overloaded and we are far behind our negotiation timetable, further work including the initiation f negotiations on these issues will put the majority of developing countries on a more difficult position for them to participate in WTO activities and fulfil new commitments.
We therefore share the positions of many other developing members that three issues among the four should be dropped from the table and we continue the clarification only on trade facilitation.”
Mauritius, speaking for the Africa Group, insisted that development issues be made a priority area, to be addressed urgently.
The NAMA negotiations should take full account of African reality - dependence on tariff revenue, preferences and a weak industrial structure. S and D and less than full reciprocity should remain core features.
ON Singapore issues, this is not a priority for Africa, which is ready to continue with the clarification process. Referring to developments on these issues in Cancun, the Africa Group recalled the Ministers had stated in Cancun they would bring into this new phase all the valuable work that has been done at the conference..”