TWN Info Service on WTO and Trade Issues (Dec05/28)

21 Dec 2005

Below is a report of the four press conferences that were held after the closing session of the WTO's Ministerial Conference.

With best wishes
Martin Khor


Lamy, Tsang upbeat at post-Conference press conference

By Sangeeta Shashikant (TWN), Hong Kong, 19 December 2005

After the closing session of the WTO's Hong Kong Ministerial on 18 December, four separate press conferences were given by the Chairman of the Conference, John Tsang (Trade Secretary of Hong Kong) and the WTO Director-General Pascal Lamy; by the US Trade Representative, Rob Portman; by European Commissioners Peter Mandelson (trade) and Marianne Fischer Boel (agriculture); and by two Japanese Ministers.

A highlight of the Lamy-Tsang briefing was the presentation of a "roadmap" of future negotiations by Tsang who said that by 30 April 2006 there should be consensus on modalities on agriculture and NAMA.

At his briefing, Portman revealed that he had assured Ministers from developing countries that with regard to the services text, it would not be a mandatory requirement that they participate in plurilateral negotiations, and thus they could accept the text.

The press conferences also revealed the products that are intended for exclusion from the offer of duty- and quota-free market access for LDCs. For the US, the products would include sugar and textiles and for Japan they would include rice, fisheries and dairy products and leather products.

Tsang and Lamy were both upbeat at their joint briefing.

Tsang claimed that the meeting had achieved his aims of a roadmap for a development agenda in this round. He said that it was a "breakthrough" that there was an end date of 2013 for export subsidies. On NAMA, there is a direction towards the Swiss formula so those with higher tariffs face greater reduction and there is parallelism between Agriculture and NAMA liberalization. In relation to Services, there was an agreement that there will be intensification of negotiations which will be instrumental to help achieving the Doha Development Agenda in 2006, he said.

He added that after intense negotiations, there was a package for the LDCs. They expect to gain from duty- and quota-free access in 2008 and export subsidies eliminated by developed countries by 2006.

On the roadmap, he said that there should be consensus on the details of Agriculture and NAMA by 30 April 2006 and national schedules proposed by 30 July 2006. For Services, negotiations before 31 July, 2nd round of amended offers should be submitted and final draft national schedules by 30 October 2006.

He further added that injecting 'new substance' into the talks had instilled more confidence in members. The success of the Ministerial, he further claimed, was obvious and a clear win for development.

In his remarks, Lamy claimed that the negotiations were back on track after a period of hibernation. Handing out marks, as he put it to assist those assessing the negotiations, Lamy gave the organizers of the conference a perfect score.

He gave the "process" of the negotiations a score of 18/20, and insisted that it was a bottom-up approach, and inclusive and transparent. He further gave the "politics" aspect of the conference 17/20 as the conference placed the interests of developing countries more at the heart of the negotiations. Lamy also believed there was enough fuel in the tank to cruise at the right negotiating altitude.

On the technical details of the negotiations, he said it was a modest step forward. Members had left Geneva with 55% of the round completed, but in the week (at Hong Kong), another 5% was completed.

He said that he would refrain from giving any marks to the involvement of civil society.

His general sense of the negotiations was that of progress in the right direction. He claimed that Seattle was about shrinking the WTO, Cancun was about sinking the WTO and Hong Kong may be about rethinking the WTO.

In response to a question, he said that there was political energy to reach a deal on modalities before April 2006. This will was not there before and had Members tried to reach a deal on full modalities, members would have missed it.

The EC Trade Commissioner, Peter Mandelson, at his press briefing, said there was now a commitment to eliminate export subsidies by 2013. In his view, this was a genuine advancement for agriculture and the development round and "Europe made it happen and we are pleased to have done so".

He welcomed commitments by others to what Europe has done since 2001, i. e. duty-free, quota- free market access for LDCs as this is the key to poverty alleviation. He however saw the outcome on this issue as disappointing, since it fell short of delivering for all countries and products. He called the results "a modest follow up" from the July framework agreed to in August 2004.

EU Agriculture Commissioner Marianne Fischer Boel said that their main interest was to defend European interests, but because this was a development round, they also considered the interests of the poorest countries in the world as well.

She said that the date of 2013 was important as it was linked to the final year of CAP reform and phasing out and so to stay within the mandate was essential.

She added that with two major reforms in the agriculture sector, the EU was fit to participate in these negotiations. When decisions are made for the US to really cut down on their domestic support, this will influence world market prices.

Mandelson was asked whether the results - no full coverage of duty-free, quota-free access for LDCs, nothing much on cotton, and a late phase out of agriculture export subsidies - was a betrayal for the world's poor as has been stated by the NGOs.

The EC Trade Commissioner responded that there had been a breakthrough on export subsidies. If the agreement reached did not make the conference a success, it certainly saved it from failure. He said that his grumble was not that too much has been paid, but too little is changing hands.

At the US press briefing, USTR Rob Portman said that the negotiations had moved forward to a Doha Development Agenda which was a 'once-in-a-generation opportunity'.

He stressed that there was need for progress in other areas - industrial goods, services - but in order to see the round come together, the agriculture deadlock had to be unlocked.

He highlighted the agreement to eliminate export subsidies by 2013, pledges for aid and duty-free, quota-free access to all LDCs with coverage of 97% of tariff lines. However, he added, that for some products from LDCs, the import tariffs would continue. He said the decision on trade facilitation was an accomplishment, although many developing countries fear that the implementation of these trade facilitation rules will be financially burdensome.

He called the recent decision to amend the TRIPS agreement in relation to access to medicines an accomplishment.

This amendment though has been widely criticized by health organizations and development NGOs.

Portman claimed that the US had worked together with many countries to reach agreement on various issues. He said that for instance on services, the US had teamed up with India and Chile.

Asked to comment on the fact that some countries, particularly Venezuela, were upset with the Services text and the process with which this was dealt with, Portman said that there was concern that countries would be forced to open up their services markets in ways that they felt could harm some of their service industries.

The text, he said, did not establish mandatory targets or benchmarks. It did establish a so-called plurilateral system, which basically meant that like-minded countries come together and agree to reduce barriers to particular kinds of services. He said that a number of countries ended up accepting the text once they understood that it was not a mandatory requirement but rather one which would be voluntary. He added that he did not know what changed Venezuela's mind at the end of the day. There was an effort on behalf of the Director-General and others to ensure that there was a consensus at the end.

Asked to specify products which the US intended to protect from the duty- and quota-free market access for LDCs, Portman replied that for sugar the US has a program in place and the duty-free access could create a problem; hence flexibility was needed. The US also has a domestic textiles industry and it has serious concerns about globally competitive LDCs and their products. He added that there was enough space to be able to deal with sensitive products and with any concerns in the US Congress.

On NAMA, Portman said that the language did not preclude a Swiss Formula with two coefficients. The US is of the view that the overwhelming majority of countries do support the Swiss Formula which simply means you reduce the highest tariffs the most.

He added that progress in NAMA and Services are linked to agriculture and those countries that care most about agriculture want to see that there are true benefits in this round and they have indicated if this was so they would be willing to make what they view as some trade offs in the area of NAMA and Services. "That's how it comes together. That's the ultimate bargain in my view".

On Cotton, Portman said all members want to reduce and eventually eliminate subsides. The US has targeted assistance on the area of productivity and efficiency. He referred to studies that indicate that the impact on cotton prices by the US subsidy programs is between 2% to 12%.

However, the US would need a little help from the Europeans and others on market access to be able to put a package together that makes sense to get through its political system. In terms of market access, the US is not the most logical market for West African cotton. It would be, frankly, some of the bigger developing countries, particularly referring to China.

To a question on the impact of the results of Hong Kong on the US trade deficit, Portman replied that if an agreement is achieved through the Hong Kong outcome, it will result in more exports for the US as the WTO will reduce high tariffs. It will harmonize tariffs so that the US, not having a lot to reduce in terms of industrial tariffs in the first place, will see its tariffs reduced relatively less and other countries relatively more. This will increase exports and help in terms of the trade deficit.

At the Japanese press briefing, by the Trade and Agriculture Ministers, Agriculture Minister Shoichi Nakagawa said that the most important challenge was how developed countries can make a contribution to developing countries and LDCs and the results in this Ministerial had come close to fulfilling this objective. Asked as to which tariff lines will be covered by the 3% exception on quota-free, duty-free access, the Minister said that LDCs will now have duty-free, quota-free access to 98% of the tariff lines, an increase from the current 86%. He said Japan has 9,255 tariff lines, and 2% of these was 180 tariff lines. He indicated that Japan would exempt fisheries products, rice and dairy products and leather products.

He added that he had met with LDC ministers and given them documents showing why it was difficult to give them duty- and quota-free access for all products. He added that even if the LDCs had 100% duty- and quota-free access, they would still need capacity building on the supply side (to be able to benefit).