Widening divergences over July package

Geneva, 26 July (Chakravarthi Raghavan) - Consultations over the weekend showed widening divergences among the WTO participants on Agriculture, NAMA, as well as on modalities for launching negotiations on Trade Facilitation, developing country trade diplomats said Monday.

Not only have the divergences not been bridged, but in several areas may have widened, and there is now widespread dissatisfaction and opposition from the various developing country groups, not only on substance, but on the processes being adopted by the Chair of the General Council Shotaro Oshima of Japan and the WTO Director-General Supachai Panitchpakdi, the diplomats said.

In agriculture, the various groupings of the developing countries and key countries among them have forcefully and openly expressed disagreement on the Groser text and the way the text takes care of the concerns, issues and interests of the developed countries, while vaguely mentioning, but relegating to future negotiations, the issues of concern for developing countries.

The discussions at the consultations on Sunday showed that none of the differences in agriculture have been resolved and, in particular, the new blue box for the United States and the issue of imports of ‘sensitive products’ in market access in developed countries, Third World trade diplomats said.

The ministers of the Non-Group of Five (Australia, Brazil, India, the EC and the US) are due to meet Tuesday and Wednesday, but the chances of their agreeing on something, is become problematic.

So far the US and EC have shown no flexibility in meeting the concerns of developing countries, the G20 sources said. And in some aspects, the divergences between the US and EC have increased.

Some developing country trade negotiators said that it was possible the two were holding back their cards, and would make at the last moment some small concessions and attempt to use it to push through Annex A, which is completely in their favour.

Whether it will be sufficient to clinch a compromise and reach an agreement remains problematic.

Some trade diplomats said that Groser might put forward a new text to put on the same footing the concerns of the developing countries, and provide some specificities, or he might put forward a text of generalities (and this would have to be applied not only in Agriculture, but in other areas) or he might present the same text as in the Annex A of 16 July (and risk a rejection).

The EC Council of Ministers (Foreign and Trade Ministers) are holding an extraordinary meeting in Brussels Monday, at the instance of France. French President Jaques Chirac., has sharply challenged the mandate of the EC Commissioner Pascal Lamy, and his negotiating tactics.

The meeting could easily go into late night sessions before any decision, EC sources said.

While France so far is reported to be in a minority and isolated on the agriculture, Chirac raising a range of other objections (to the 16 July text), may be sufficiently unsettling.

[According to some unconfirmed reports from Brussels Monday afternoon, even as the meeting of the ministers was continuing, the Commission’s tactics have been agreed to, but the attitude of the EU to the Oshima-Supachai package would be decided, in the light of the revised text, by the Ministers at a meeting on Friday.

[Meanwhile, in an interview in the Financial Times (Monday), the USTR Robert Zoellick, has sharply attacked President Chirac and accused him of undermining the efforts to rescue the Doha talks.]

On Non-Agricultural Market Access, where the Derbez text has been made into Annex B, despite the objections of the African group of countries, as well as others, the Oshima-Supachai cover letter called it a ‘platform’ (rather than the basis for negotiating modalities), with a reference to the letter of the Chairman of NAMA, Stefan Johannesson, outlining some of the concerns of developing countries on various issues.

However, in the further consultations on NAMA, responding to questions on how his letter will be part of the annex, Johannesson appears to have said that it could be a ‘vehicle’.

This has received sharper objections, and a number of key developing countries and the African group appear to have objected to this, and have also questioned the process being adopted.

One trade diplomat said that Johannesson was calling in small groups of countries, showing them a paper with his suggestions, but without giving the delegations a copy, and asking for their comments. This means that the capitals have no time or opportunity to give their views and instructions, nor is there any ‘internal transparency’ over the positions of various countries.

On Trade Facilitation, where a modalities text (which had not received any consensus) has been included as Annex D, Malaysia on behalf of a core group of developing countries put forward Friday detailed amendments and changes. This has been sought to be countered by the United States, Costa Rica and a few others - suggesting that the issues raised by the Malaysia paper is covered by the modalities text in Annex D, and the issues could be pursued in actual negotiations.

While US, EC and the WTO leadership have been attempting to divide the developing country groupings, the coordinators of the various developing country groups have come together, as they did at Cancun. At Cancun, in the face of the unity of the G20, G33 and the G90, the US, EC found themselves unable to push through their agriculture framework, and as a result focussed on the Singapore issues and collapsed the meeting on this.

Since then both the US and the EC have been focussing on breaking up this unity, and this was most evident at Mauritius (meeting of the ACP countries and of the G90).

Meanwhile, the various developing country groups have decided to coordinate fully with each other, and hold meetings of the coordinators, both to exchange information, and counter the mis-information to which individual groups and delegations were being subject.

The African group, now coordinated by Nigeria (which has replaced Mauritius) appears to have taken the initiative, and as a result the coordinators of the G20, the G33 and the ACP went to the Africa group meeting, both to explain their view points, but also to listen to the African concerns - on Agriculture, NAMA and other issues.

As of Monday morning, there were many uncertainties. The US and EC might just not move and stick to their position, namely, that the present specificities remain in the annex and the July package.

This would leave the onus on Groser, who has to decide how to proceed: he could just not change anything, and thus run the risk of the annex being rejected or opposed; or have a framework annex on agriculture at a high level of generalities - which in turn would mean other parts of the package too would have to become equally general.

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