TWN Info Service on WTO Issues (June03/6)

Third World Network 

16 June 2003

Dear friends and colleagues

REPORT ON WTO’S TRADE NEGOTIATIONS COMMITTEE MEETING 10 JUNE 2003:  Developing Countries’ Paper on Approach to Cancun

The WTO held a meeting of its Trade Negotiations Committee (TNC) on 10 June.  One of the highlights was the presentation of a paper by 27 developing countries setting out their basic approach to the preparations for the Cancun Ministerial Conference.

The TNC meeting  also received reports from the chairs of the special sessions of the Dispute Settlement Body (DSB), services, trade and environment and the negotiating group on market access.

Below is a report on these aspects of the TNC meeting.  This report was published in the SUNS (South North Development Bulletin) of 12 June 2003.

The meeting also heard an address by the President of Burkina Faso on the need to eliminate cotton subsidies.  This will be the subject of another report.

Please check our website for previous reports in the TWN Info Service series and other information on WTO.

With best wishes

Martin Khor

Third World Network




By Martin Khor, Geneva, 11 June 2003

A large grouping of developing countries have set out their strategic approach to the Doha work programme as the WTO members prepare for the final stretch before the Cancun Ministerial meeting in September.

In a paper presented on 10 June at the tenth session of the Trade Negotiations Committee (TNC), 27 developing countries put forward three general elements they say are essential to concluding the negotiations, and briefly laid out key points on eight specific issues (development issues, agriculture, non-agricultural market access, services, rules, Singapore issues, dispute settlement understanding, and TRIPS and public health).

The paper, entitled “The Doha Agenda: Towards Cancun” (dated 6 June), was jointly submitted to the TNC by Argentina, Bolivia, Botswana, Brazil, Chile, China, Colombia, Cuba, Dominican Republic, Ecuador, El Salvador, Gabon, Guatemala, Honduras, India, Malaysia, Mexico, Morocco, Nicaragua, Pakistan, Paraguay, Peru, Thailand, Uruguay, Venezuela and Zimbabwe.  South Africa later joined the group.

The paper starts by recalling three elements that it says enabled success at Doha and are still essential to bringing the negotiations to a fruitful conclusion:

·        The centrality of the development dimension to the Doha package.

Development concerns cut through all areas of the multilateral trade system and are at the heart of the work programme.  We need to ensure the Doha commitments do indeed help to better integrate developing countries into the trade system and into the benefits accruing from it.

·        The delicate overall balance of the package.  Doha agreed on a single undertaking that can potentially provide gains for all Members, and balance has to be sought across the entire undertaking, without isolating specific sectors.  All members should abide by the commitments made, without attempts to dilute or reinterpret any one, if the final package is to be acceptable and of benefit to all.

·        The importance of a transparent process.   It is essential that all Members participate in the decision making process in order to bring the Doha agenda to a successful conclusion.

On specific issues, the developing countries put forward the following positions:

Development issues:   It is essential to resolve implementation-related issues and the strengthening of special and differential treatment before Cancun, instead of calling into question the basic principles underlying them.

Concrete results on these will bolster confidence in the process and have a positive impact in other areas. The paper also underscored the critical importance of technical assistance and capacity building in addressing developing countries’ constraints.

Agriculture:  Given its importance and the need for significant results, agriculture cannot be taken as a self-contained issue.  Agricultural trade reform is of central importance to developing countries.  There is a “strong commonality” on the need to substantially reduce or eliminate export subsidies and domestic support, including tighter criteria for the green box domestic subsidies.  It is equally important to deal with market access questions in a way that guards developing countries’ legitimate concerns.  The developing countries underscored that they expect the establishment of modalities by Cancun which should include all developing countries’ interests and further stressed that “this has to be an essential ingredient of the negotiations and its outcome.”

Non-agricultural market access:  The developing countries expect establishment of modalities by Cancun, which should include the interests of all developing countries. Less than full reciprocity should be a central element of the approach to be agreed. There should be additional emphasis on eliminating non-tariff barriers.

Services:   Progress has been moderate, says the paper.  There is need to increase the number of requests and offers and to resolve the horizontal issues.  The pace of work in this field can be boosted by positive results in other areas.

Rules:  Negotiations here are a crucial element of the Doha package and work should proceed in tandem with that in other areas.  Results here will impact positively on effectiveness of the market access improvements in the respective bodies.

Singapore issues:   In spite of intensive discussions, says the paper, “a large number of differences still exist on many of the subjects identified for clarification in the Doha Declaration.  In several areas, there is need for further analysis”.

The paper adds that progress varies significantly across the four Singapore issues and each issue should be treated separately.  “Any modalities to be decided, by explicit consensus, in Cancun, would need to provide certainty on the structure and precise content of negotiations.”

Dispute settlement understanding:  The end result should strengthen the WTO dispute settlement mechanism’s role of guaranteeing balance between Members’ rights and obligations, with particular emphasis on developing countries’ needs.

TRIPS and public health:   One of Doha’s most important achievements was the Declaration on TRIPS and public health, which has huge humanitarian implications. The implementation of the last outstanding part of the Declaration, paragraph 6, needs to be solved before Cancun and all Members were urged  to reach a consensus on this issue as an important measure to build trust.

By putting forward the above broad strategic approach, it is apparent that the developing countries are hoping to set the framework and priorities for the preparatory work for the Cancun Ministerial.  Their paper takes the development high ground by reminding that development concerns are supposed to be at the heart of the Doha programme, and tries to inject a development dimension in the specific ssues and into the need for maintaining a “delicate balance” in the package.

The reference to the importance of a transparent process and the need for all Members to participate in decision-making seems to be preparing the ground for a continuation of the battle to reform the WTO’s non-transparent decision-making processes, which had been initiated by proposals put forward last year by several developing countries to set guidelines and rules for the processes and decision-making at WTO Ministerial Conferences and the preparatory work before them.

On the specific issues, the paper is calling for the resolution of many issues of special interest to developing countries which had been mandated by Doha but the deadlines for which have been missed.  Thus, the countries ask that implementation issues, special and differential treatment, agriculture modalities, non-agricultural market access modalities, and TRIPS and public health be settled by Cancun, and that developing countries’ interests be protected in all these areas.

The section of the paper on Singapore issues is also significant in that so many of the developing countries acknowledge that many differences still exist on many subjects and they recognize the need for “further analysis”, which can be taken to mean reluctance or opposition to the launch of negotiations.

The paper also says that progress in the clarification process varies across the four Singapore issues and thus each issue should be treated separately.

In her statement to the TNC, the US Ambassador seemed to be in agreement with this “separate treatment” approach.   She said the US expected Ministers at Cancun to give directions on how the negotiations should proceed individually on each of the four issues: trade facilitation, transparency in government procurement, investment and competition.

“As we have said from the start, each of these issues needs to be treated on its merits, and the progress recorded to date. Modalities are to be agreed in all areas but they need not  necessarily be identical”, she said, adding that there was a need to customize the approaches in all four areas, and noting that “the issue will be how to do this in a way that does not pre-negotiate issues”.

She also made the point about “forging common ground on substance in the time available between the end of our meeting in Cancun, and the conclusion of the negotiations at the end of 2004”.

She also said that she concurred with the plan of the Chair of the General Council, Ambassador Carlos Perez del Castillo of Uruguay, to begin consultations on modalities for the Singapore issues.

It appears that at an informal meeting of the Heads of Delegation last week, it was announced that the General Council chair would begin consultations with Members on the Singapore issues in preparation for Cancun. It had also been announced that the chairs of the four working groups on the Singapore issues would assist in the consultation process as “Friends of the Chair”.

The EC Ambassador was in agreement with the US on start of the consultations by the Chair of the General Council. He said that the process of consultations was both important and timely. On the question of the “unbundling” of the four Singapore issues as favoured by the developing countries as well as the US, the EC Ambassador chose not to highlight the EC’s previously stated position that the four issues should be considered as a whole. Instead, he expressed confidence that the process would allow Ministers in Cancun to adopt such modalities for all four Singapore issues by explicit consensus. “We remain convinced that a multilateral framework on all four issues is of great systemic interest to the WTO”, he said.

The process of consultations by the Chair of the General Council seems to be a matter of concern for some developing countries. An African negotiator said that his delegation had decided not to make a statement on the Singapore issues at the TNC or the working groups because, “it will not get any attention now” since the consultations under the aegis of the General Council will now decide the issue. “We’ll make our views known at the General Council”, he said.

A negotiator from an Asian country said that he was also concerned that the process may not take into account the divergence of views seen in the working groups.

“There seems to be an assumption made by some Members that the clarification process has ended, and therefore, we should simply proceed to the next stage of discussing the modalities (for negotiations). But in fact many issues have not been satisfactorily clarified in the working groups”, he said.

It is understood that a number of developing countries had not signed on to the developing country paper, as it had not been as clear as they would have liked on the question of not starting negotiations on the Singapore issues.  The paper states in paragraph 16 that “any modalities to be decided, by explicit consensus, in Cancun would need to provide certainty on the structure and precise content of negotiations”.

However, a number of developing country negotiators said they would speak, from the floor, in support of the general thrust of the paper. As pointed out by another negotiator from a Latin American country, that paragraph should be read in the context of the clearly expressed positions of a number of countries that had jointlysubmitted  the paper and which had been vocal about their opposition to the launch of negotiations on the Singapore issues.  “These countries have not changed their positions, so we need to read this sentence in that light”, he said.

The TNC meeting  also received reports from the chairs of the special sessions of the Dispute Settlement Body (DSB), services, trade and environment and the negotiating group on market access.

On the DSB, the report of the special session chair, Ambassador Peter Balas, included the latest Chairman’s text of proposed amendments to the dispute settlement understanding (DSU).  The deadline for resolving the issue had passed (on 31 May). It was decided by the meeting that the draft Chairman’s text of proposed amendments to the DSU would be on the agenda for discussion at the next TNC meeting in July.

On  market access, the chair of the negotiating group. Ambassador Pierre-Louis Girard of Switzerland, reported on the responses to his draft elements of modalities (including the formula, sectoral approach, and S & D treatment).   On the formula, he said there was general consensus on the need for one formula applicable to all but delegations deliberated on whether the formula proposed could  meet all of their needs, especially as to how the parameters of the formula were defined.

On the sectoral approach, Amb. Girard said there were diverging views by most participants, with some questioning the mandatory aspect and preferring a voluntary one.  On the S & D treatment provisions, he said there was a lot of discussion with their relationship with the formula, and the flexibility of allowing developing countries to keep 5% of their tariff lines unbound.

On non-tariff barriers, the discussions were not as developed as the tariff discussions and further work was needed.  Some delegations raised the importance of the erosion of preferences which was not included in the draft text.

Amb. Girard concluded by saying that Members are “not yet in a negotiating mood” in relation to his modalities text.  The Group will continue its work on modalities at its next meeting on 9-11 July, followed by another meeting in August.

On services, the chair of the special session, Amb. Alejandro Jara of Chile, informed the TNC that there had been 26 initial offers to date, of which 11 were from developing countries and two from transition economies, with the rest from developed countries. On assessment for services trade, members noted its importance for developing countries, that information could be lacking, that there was a need for a broader range of information sources to be used, and that developing countries need technical assistance to conduct assessments.

Amb. Jara said a revised draft on modalities for special treatment for LDCs had been presented by the LDC group and priority will be given to discussing this. Also, members had agreed that an evaluation of the results obtained in the negotiations in terms of the GATS Article IV objective of “increasing participation of developing countries” would be included as a permanent sub-item on the agenda under the item “review of progress in negotiations.”

The report on the special session of the Committee on Trade and Environment mainly covered the status of work, especially on the discussions on specific trade obligations (STOs) contained in multilateral environmental agreements (MEAs). Discussions had been focusing on issues such as the definition of STOs, how decisions of the Conference of Parties of MEAs should be treated, and the degree of discretion given to MEA parties in taking a trade measure.  On how to proceed in the future on STOs, whether to follow an MEA-by-MEA analytical approach, or the conceptual/definitional approach, or a mixture of the two, no decision had been taken.