Intensive talks to begin on WTO’s post-Bali work programme

Discussions to craft a work programme for concluding the Doha Round trade talks have commenced at the  WTO.

by Kanaga Raja

GENEVA: An intensive process of consultations is to begin at the World Trade Organization aimed at agreeing on a detailed post-Bali work programme for concluding the Doha Round.

This process was launched by WTO Director-General (D-G) Roberto Azevedo at an open-ended meeting of heads of delegation (HOD) that took place in a “Room W” setting at the WTO on 21 January.

In presenting its views at the meeting, the US (as also Norway, and the EU to some extent) did not think stress on the 2008 Rev.4 draft modalities text in agriculture and Rev.3 draft modalities text in NAMA (non-agricultural market access) would enable them to move forward, and wanted to know whether the big emerging economies would be doing things differently now than before.

India rejected the US effort to differentiate among developing countries and make it a “gateway” issue for a work programme to conclude the Doha Round.

The WTO General Council decision of 27 November 2014 on the post-Bali work has set a deadline of July 2015 for agreeing on the work programme that was mandated in the Bali Declaration.

The General Council decision states that: “Work shall resume immediately and all Members shall engage constructively on the implementation of all the Bali Ministerial Decisions in the relevant WTO bodies, including on the preparation of a clearly defined work programme on the remaining DDA [Doha Development Agenda] issues as mandated in paragraph 1.11 of the Bali Declaration.”

The decision adds: “As per paragraph 1.11 of the Bali Declaration, Members agree that the issues of the Bali package where legally binding outcomes could not be achieved, including LDC [least developed country] issues, shall be pursued on priority.”

According to information posted on the WTO website, at the 21 January HOD meeting, the D-G said: “We must maximize the time we have available to us before July – and maintain the momentum that we regained at the end of 2014. We need to have a detailed, substantive discussion that includes agriculture, non-agricultural market access, services and all of the other DDA issues, including development and issues of interest to LDCs. Today we are restarting our conversation on all of these issues. So be ready – and get involved.”

The discussions on the substantive issues will be convened by the chairpersons of the various negotiating groups as well as by the D-G, with meetings being held in a variety of formats and configurations.

A number of delegations spoke following the D-G’s remarks at the HOD meeting, where they reiterated their views on what priority issues they would like to see incorporated into the work programme.

In their interventions, developing countries, amongst others, stressed on the development dimension being the overarching principle of the post-Bali work, and that the core issue has to be agriculture. They also said that the Rev.4 draft agriculture modalities text and the Rev.3 draft NAMA modalities text should be the basis for the negotiations.

According to trade officials, D-G Azevedo told the HOD meeting that the work programme has to be delivered by July, and that it was important to have the open-ended “Room W” meeting early in order to maintain momentum.

The D-G informed delegations that he has already started his consultations, as have the chairs of the various negotiating groups, who have reported good engagement.

Noting that there are not too many working days left and that there is a need to step up the work, the D-G said that the goal is to prepare a detailed and precise modalities-like work programme with as much specificity as possible. This would mean that members would then be in a position to finalize negotiations in a more expedited way.

Azevedo said that some members say that they are ready and open to take a more creative and innovative approach to the negotiations while observing the mandate. Others are more keen on sticking as closely as possible to the draft modalities texts and are uncomfortable with the idea of doing things in a different way. And then there are some that have not as yet indicated which way they would like to go, he said.

The D-G called on members to recall the ingredients that will be needed in order to obtain a successful outcome: maintaining a sense of urgency; identifying and prioritizing the issues that are of the most substantive importance; targeting outcomes that are doable for all parties; maintaining a high level of engagement; and engaging on all issues at the same time.

He said these ingredients are essential if progress is to be made. This is especially true of the whole question of doability. And doability means being realistic, and that means what is doable not just for you but for everyone.

The development issue will be at the core of the negotiations and delivering for the LDCs is going to be essential, Azevedo said, adding that the three core areas of agriculture, NAMA and services are at the centre of the negotiations.

Fully committed

Following the D-G’s remarks, member state delegations voiced their views at the HOD meeting. According to trade officials, Saudi Arabia, on behalf of the Arab Group, said that it is fully committed to implementing the post-Bali work programme and to the 31 July deadline. The development dimension is the overarching principle of the post-Bali work programme, it said.

Indonesia, on behalf of the G-33 grouping, stressed the importance of public stockholding for food security purposes and called for negotiations on this issue to begin immediately. It also wanted to see progress made on the issues of Special Products (SP) and the Special Safeguard Mechanism (SSM). The development dimension is crucial and the Rev.4 draft agriculture modalities text of 2008 should be the basis for the negotiations.

Guatemala, on behalf of the small and vulnerable economies (SVEs), stressed that the development dimension should be at the centre of the negotiations. It wanted the flexibilities in the Rev.4 draft agriculture modalities text and the Rev.3 draft NAMA modalities text to be preserved for the SVEs. There should also be recognition of the special circumstances of the SVEs.

Brazil, on behalf of the G-20 grouping, said that the core issue is agriculture and that all three pillars of the agriculture negotiations – market access, trade-distorting domestic support and export competition – need to be addressed. The Rev.4 draft agriculture modalities text is the basis for the negotiations.

On its own behalf, Brazil said that it is prepared to engage in multiple formats but that it wants a transparent and inclusive process. The level of ambition in agriculture will determine where members go in other areas.

Balance

The European Union said there will have to be a balance between the various negotiating areas and within them; an ambitious outcome in agriculture will only be possible with an equivalent effort in NAMA; and in agriculture, it will be difficult to envisage an outcome in market access if export competition and domestic support do not follow.

What can be achieved on each of the issues under negotiation, the EU said, needs to be considered in a realistic way and carefully in view of today’s global economic landscape and taking account of the development objectives of the Doha Round, which need to be adhered to.

It is clear that agriculture is a central element of these negotiations and the EU will certainly not shy away from engaging constructively as long as others do the same, it said. Indeed, the EU has undertaken strenuous internal reforms to ensure that it can contribute to a comprehensive deal based on the overall principles of simplicity, realism and doability.

On export competition, the EU said it will be able to consider a far-reaching outcome, but only within a comprehensive DDA package and if there is full parallelism regarding all export competition measures.

Similarly on domestic support, the EU is ready to advance, but again “we all need to ask what exactly do we want, what can we contribute and what will help strengthen the multilateral system. We also need to constantly have in mind our obligation to find a permanent solution on the public stockholding issue, which for all practical purposes will have a close link to this pillar of negotiations.”

On agricultural market access, the EU said that beyond tactical positioning, “we all understand that new ideas will be necessary. We tried and failed in 2008 to reach agreement on the basis of a highly complex approach, which combined very demanding commitments with numerous flexibilities and exceptions. Rather than embarking on a path which is sure to lead us to failure again, it would be preferable to explore simpler, more realistic approaches, which could also more easily be reflected in the level of ambition of NAMA.”

The focus of the efforts should be on finding an approach to tariff cuts which reflects today’s realities and prepares the ground for further liberalization in the future, said the EU. Having listened to numerous interventions on this subject in the past months, it appears that the only feasible way of proceeding is to search for a solution which provides enough flexibility for members to cater for their sensitivities, it added.

Nevertheless, what is crucial is that those members who demand far-reaching concessions on agriculture market access are ready to put forward equally substantive concessions on NAMA. A proper balance and correlation are key, it added.

A services outcome also needs to be negotiated in the coming months, the EU stressed, adding that the expected results on agriculture and NAMA set the benchmark: the outcome of the request-and-offer process signalled at the 2008 Ministerial Conference will not work. According to the EU, the world has changed, and with multiple services-oriented efforts concluded or underway, including the LDC services waiver process, “we should agree upfront on elements or principles of the outcome we want to collectively achieve.”

As to the remaining DDA issues, not much activity has been undertaken so far, which all the more exemplifies the urgent need to restart technical work. An outcome on geographical indications of origin will have to form part of the package if the EU is to ultimately support it, it said.

According to trade officials, Chinese Taipei said that there needs to be parallel progress on agriculture, NAMA and services. There is a need to respect the flexibilities that were extended to the recently acceded members (RAMs) in the Rev.4 draft agriculture modalities text and the Rev.3 draft NAMA modalities text, it said.

Australia, on behalf of the Cairns Group, said that the issue of agriculture is lagging behind and that an ambitious agriculture package is indispensable to the outcome. It must include the three pillars of market access, domestic support and export competition.

Argentina emphasized that in agriculture, the issues of export competition and domestic support were more important than market access. It said that the Rev.4 draft agriculture modalities text was very balanced on market access. On NAMA, Argentina said that it cannot accept the “Swiss formula” for tariff reductions. It said that developing countries should be able to choose the tariff reduction method that best suits them.

Cuba expressed support for the G-20, G-33 and SVE statements. It wanted the Rev.4 draft agriculture modalities text and the Rev.3 draft NAMA modalities text to be the basis for the negotiations. On NAMA, it stressed on the principle of “less than full reciprocity” as outlined for developing countries in the Rev.3 text.

According to trade officials, the United States said that what members were discussing today seemed like it was from a time capsule in 2008. While interesting, it was not clear from what was heard today how they could move forward.

On using the Rev.4 and Rev.3 draft texts as the basis for agreements, the US asked whether the big emerging countries were going to do things differently than in 2008.

(Reflecting the US position apparently, a report in the Washington-based Politico magazine said that countries will have to agree on how much to excise from the 2008 texts that failed to garner agreement. For example, the report added, it probably wouldn’t be politically feasible for the US to cut agricultural subsidies below what is allowed in the new US Farm Bill. – SUNS)

Lesotho, on behalf of the African Group, said that it would like to see the Rev.4 draft agriculture modalities text and the Rev.3 draft NAMA modalities text as the basis for the negotiations. It also wanted to see the development mandate being adhered to.

LDC collective request

Uganda, on behalf of the LDCs, reminded members that it had submitted a collective request consistent with the Bali Ministerial Decision on the operationalization of the LDC services waiver, and that a high-level meeting was to be held on 5-6 February. According to Uganda, three things are critical: the first is for all non-LDC members in a position to do so to attend the meeting at a high level; secondly, to indicate sectors and modes of supply where they intend to provide preferential treatment to LDC services and service suppliers; and the third is for agreement to be reached on a timeline for submission of notifications of preferences indicated. In the LDCs’ view, this work should not be allowed to spill over into the 10th WTO Ministerial Conference (MC10, to be held in Nairobi this December).

Uganda said that the true test of the credibility of the WTO will be the extent to which members respond to the collective request of the LDCs. It therefore looked forward to a very successful high-level meeting, where non-LDC members shall indicate sectors and modes of supply where they intend to provide preferential treatment to LDC services and service suppliers, which have commercial value and promote economic benefits to them. In so doing, members may want to pay particular attention to both market access and what the LDCs have termed as the “non-tariff barriers”, in particular in Mode 4.

According to Uganda, the high-level meeting “will give us a sense as to whether it is useful to continue positively engaging in this house. For us, 5 and 6 February is when we flip the switch: Will the lights come on or shall we still be in the dark? We are in your hands!”

On the work programme, the LDCs shall be looking forward to harvesting tangible deliverables on their issues for MC10. In the LDCs’ view, the work programme alone as a deliverable for Nairobi will be perceived as a failure on the part of the membership.

“We have waited for far too long. We still have a bitter taste arising from the sour grapes of 2011. The numbers are bitter. 1% is all we have got as our contribution to world trade in goods, and less for commercial services; a high and increasing trade deficit; with a limited range of export products. This is not, by any means, an enviable situation.”

The LDCs therefore called for the conclusion of the Doha Round without including any new issues, with development at the centre. Agriculture will set the ambition. There should be balance between agriculture, NAMA and services.

The principle of the “single undertaking” in line with paragraph 47 of the Doha Ministerial Declaration should be preserved, Uganda said, adding that the modalities texts should be the basis of the negotiations and all flexibilities enshrined therein should be preserved and/or improved upon.

According to trade officials, China stressed the centrality of the development dimension.

Norway said that it wanted members to get as close as possible to full-scale modalities by 31 July. The development dimension has to be at the centre. Members have to be realistic about what they can do. Continued reference to the Rev.4 and Rev.3 draft texts will not get anywhere, said Norway.

According to trade officials, India endorsed the G-20 and G-33 statements. It was not acceptable to India to make the differentiation of developing countries a gateway issue in the negotiations. There is a need to focus on the issues and not on how much emerging countries must pay.

There is also a need to address the inequities and imbalances in the trading system, many of which date to the Uruguay Round, India said, adding that it does not support “cherry-picking” of issues. It believed that the Rev.4 and Rev.3 draft modalities texts are the logical starting points. (SUNS7946)                       

Third World Economics, Issue No. 585, 16-31 Jan 2015, pp4-7