Nairobi meet can’t end Doha Round without “credible” developmental outcomes

Meeting with trade diplomats from selected countries on 1 July, the Kenyan foreign minister, who will chair this December’s WTO Ministerial Conference in Nairobi, said the Doha Round talks cannot be wrapped up without “credible” development-friendly results.

by D. Ravi Kanth

GENEVA: Kenya’s Foreign Minister Amina Mohamed said here on 1 July that the Doha Development Agenda (DDA) negotiations cannot be concluded without “credible” developmental outcomes at the WTO’s 10th Ministerial Conference in Nairobi later in the year, several trade envoys told the South-North Development Monitor (SUNS).

During a closed-door luncheon meeting of select trade envoys of developed and developing countries hosted by Japan on 1 July, Mohamed delivered the strongest message yet to the United States trade envoy Ambassador Michael Punke and other major developed countries that the Round will not be concluded unless there are credible outcomes for the developing and least-developed countries as promised in the Doha negotiations over the last 14 years.

In response to Punke’s pessimistic assessment that the Doha Round must be concluded at any cost at the 10th Ministerial Conference because of its failure to make progress, the Kenyan minister said pointedly that “people like Punke have lost the hope but this is war and we have not lost it,” a South American trade envoy present at the meeting told SUNS.

Mohamed said African countries will blame Kenya for hosting the ministerial meeting in Nairobi if all their developmental demands are swept under the carpet in order to conclude the Round.

She said the situation was much more negative before the Hong Kong Ministerial Conference in 2005 but she had turned it around as the then chair of the WTO General Council.

Trade envoys from the US, the European Union, China, India, Brazil, South Africa, Indonesia, Canada, Colombia, Mexico, New Zealand, Norway, Switzerland and Jamaica were among those present at the meeting.

The chair of the agriculture negotiations under the Doha Round, Ambassador John Adank of New Zealand, the chair of the industrial goods or non-agricultural market access (NAMA) negotiations, Ambassador Remigi Winzap of Switzerland, the chair of the services negotiations, Ambassador Gabriel Duque of Colombia, and the chair of the rules negotiations, Ambassador Wayne McCook of Jamaica, gave their respective assessments of the state of play in the negotiations.

Adank admitted that there is no progress yet in the agriculture negotiations due to the continued standoff on the new approaches for market access negotiations based on the average formula framework.

The chair of the NAMA negotiations said members still remained divided on the new approaches, adding that without progress in the agriculture negotiations it is difficult to bring convergence in the market access for industrial goods, according to participants present at the meeting.

Hurdles

The Kenyan minister also held earlier in the day one-on-one meetings with the representatives from India, Indonesia, Brazil and China, among others.

Trade envoys of these countries conveyed to Mohamed that they are facing hurdles to attaining convergence because of the US which is blocking progress in agriculture by refusing to negotiate on domestic support based on the Doha Round mandates, including the 2008 revised draft agriculture modalities, said a trade official familiar with the meetings.

Mohamed was apprised in graphic detail of how all the previous Doha Round mandates – the 2001 Doha Ministerial Declaration, the 2004 July Framework, the 2005 Hong Kong Ministerial Declaration and the 2008 revised draft modalities – are being set aside to satisfy the US demands to conclude the Round by hook or by crook.

“One trade envoy during the meeting with Minister Mohamed made a persuasive case on how the negotiations are being stalled through disruptive tactics by a major industrialized country,” an African official told SUNS.

After the one-on-one meetings, Mohamed took part in the luncheon meeting, during which the US Ambassador Punke called for concluding the Round because of lack of progress over the last 14 years. The US envoy suggested that the Round must be concluded on a low level of ambition based on what is doable and “recalibration”. He said there is no appetite among members to continue with the negotiations, in line with a statement that he had delivered at a ministerial meeting in Paris in June.

In contrast to the American envoy’s pessimistic assessment, South Africa’s trade envoy Ambassador Xavier Carim said it is possible to work out a credible developmental package if all members chose to adopt common standards across all areas of the DDA.

He suggested, for example, that “recalibration” and lowering the level of ambition must be symmetrical in all areas, and not by raising the level of ambition in one area and lowering it in another. He argued that there cannot be cherry-picking by some members who are keen to conclude the Doha Round, according to participants present at the meeting.

After listening to the chairs and members such as South Africa, the US and Norway, the Kenyan minister told the participants that they will be blamed for not working “constructively” and “positively” towards credible outcomes with which all members can be comfortable.

She said that African countries will not accept the closure of the Doha Round at Nairobi without realizing the “developmental” outcomes for which they have waited all these years.

Mohamed, who is to chair the 10th Ministerial Conference, said that there is still time to work out a “package” in the coming months based on “constructive” and “positive” engagement. She said that when she was the chair of the General Council in 2005 before the Hong Kong ministerial meeting, she had worked round the clock to bring progress despite an utterly negative environment.

There is room to turn around if one or two major countries adopt constructive positions for achieving results at Nairobi, she said, according to a South American trade envoy.

Mohamed also suggested the need to host an informal ministerial meeting of select countries sometime in October to finalize the “developmental” deliverables at the Nairobi meeting.

Call for clarity

Meanwhile, in a separate development, several developing countries on 26 June challenged the chair of the Doha Round agriculture negotiations to prove how the average formula framework will tackle specific and non-ad valorem tariffs and zero tariffs in several industrialized countries.

During a specially convened technical session by the chair and the WTO secretariat to explain how the variations of the average formula framework will work, agriculture officials of India, Argentina, Korea, Pakistan and the EU raised several issues.

Several countries pressed for clarity as to how specific, mixed and compound tariffs in various countries’ agriculture tariff schedules which are not converted into ad valorem equivalents can be subjected to either a cut of the overall tariff average or applying an average cut of tariff lines.

Since a 2005 informal ministerial meeting in Paris, attempts to convert special and compound agriculture tariffs into ad valorem duties have been stalled by major developed countries. Consequently, the agriculture tariff schedules of many developed countries include tariffs in specific and compound duties.

Given the large presence of non-ad valorem duties which are not expressed in percentage terms in various members’ agriculture schedules, there is no clarity yet as to how they can be accommodated in the so-called average approaches, said a participant familiar with the meeting.

India and Argentina asked the chair and WTO secretariat to explain how the non-ad valorem tariffs are being treated in the average formula framework. But neither Adank nor the secretariat provided a credible answer on how this issue would be treated, the participant said.

The chair had suggested three approaches to replace the 2008 revised draft modalities that called for a tiered-formula approach with specific flexibilities for the industrialized and developing countries. The three approaches mooted were: (i) a modified version of the 2008 revised draft modalities with different cuts and possibly different bands, (ii) applying a cut of the overall tariff average, and (iii) applying an average cut of tariff lines.

Korea asked the chair to indicate the proponents of these three approaches. China maintained that members must adhere to the 2008 revised draft modalities. Pakistan asked the chair how the in-quota tariffs will be addressed in the average formula framework.

India showed that the average formula framework would deliver an unbalanced outcome where developing countries would undertake higher commitments without flexibilities than the industrialized countries which maintain several barriers to agricultural market access.

The EU sought to know how the average formula framework would work for countries that have a large proportion of zero tariffs.

The chair and secretariat were unable to provide any convincing answers during the meeting, according to a participant.

In short, it is proving difficult for the chair and the WTO secretariat to convince members to replace the 2008 draft modalities with average tariff cuts in the market access pillar, a South American trade official said. (SUNS8055)           

Third World Economics, Issue No. 596, 1-15 July 2015, pp8-9