TWN Info Service on WTO and Trade Issues (Mar10/10)
19 March 2010
Third World Network

Positions remain unchanged on substantive issues
Published in SUNS #6884 dated 16 March 2010

Geneva, 15 Mar (Kanaga Raja) -- Small group consultations on substantive issues held during the past week by the Chair of the agriculture negotiations at the World Trade Organization (WTO) revealed no real changes in positions.

This was reported by Chairperson Ambassador David Walker of New Zealand to an open-ended informal meeting of the Special Session of the Committee on Agriculture on 12 March.

The Chair's report has come just as the Committee held it last session of open-ended meetings (3-12 March) just before senior officials are due to arrive in Geneva in the week of 22 March in preparation for the Doha stocktaking exercise on 29-30 March.

On his small-group consultations on the issues of the Special Safeguard Mechanism (SSM), sensitive products, tariff caps, Blue Box "head room" for the US and cotton, trade officials said that positions on these issues remained unchanged.

According to trade officials, some Members also took the opportunity to voice their views on the upcoming stocktaking exercise, with most commenting on the process.

Trade officials also said that some developing countries complained about developed countries trying to seek more flexibilities as well as trying to avoid cutting their own large subsidies.

Regarding the Chair's consultations on the issue of the SSM, trade officials said that there was no narrowing of gaps, although a number of questions were discussed.

The consultations were based on two papers from the G33 dealing with the "price and volume cross check", and on the safeguard triggered by a price fall, Ambassador Walker reported to the membership.

Two more papers -- on flexibility for small and vulnerable economies and "pro-rating" -- were circulated recently and some Members said that they did not have enough time to study them.

In a statement at the informal meeting, Indonesia, the G33 coordinator, said that its impression about the process that took place during the last two weeks had been that it was fruitful, although it did not see much progress.

Indonesia added that the process of the consultations on the SSM - based on the technical contributions that the G33 had presented - has made interested Members engage in discussions on several elements of such issues as seasonality, price-based SSM and cross-check.

It stressed that the discussions on these few issues certainly need to be developed further to examine more closely the relevant technicalities.

Indonesia further said that its members have therefore expressed hope that future consultations on the SSM will include more intensive and detailed discussions about its technical aspects, as well as discuss the G33 papers more intensely.

The aim is for Members not only to better understand each others' position but to find the ideal format for the SSM that - as one Member put it - "serves its purpose and does not go beyond that," said Indonesia.

"Once that stage of mutual understanding on the finer points of the SSM architecture is reached, we can then make more meaningful efforts to establish common ground and compromise. To this end, I would very much encourage other Members to put forward their own technical contributions," added Indonesia.

According to trade officials, Paraguay, Argentina and Costa Rica reiterated their concerns that if the SSM is too flexible, it would hamper South-South trade.

They further voiced concern that some aspects of the proposed mechanism that had seemed to be "stable" when a group of Ministers negotiated in Geneva in July 2008, were now being re-opened.

On the issue of sensitive products, the Chair reported that positions again have not changed. Canada and Japan are still seeking flexibility (i. e., to be able to designate more products as sensitive than the general rule) and the resulting questions are whether that will be allowed, and if so, what the two countries would have to give in return.

Members are also still sharply divided on the issue of tariff caps, the Chair said.

The Chair further reported that positions remain unchanged in relation to the Blue Box "head room" for the United States. Essentially, this requires political decisions -- there are no technical issues to discuss, he said.

There were no new technical contributions with regards to cotton, although all participants remain committed to a solution consistent with what they had agreed at the 2005 Hong Kong Ministerial Conference, Ambassador Walker said.

According to trade officials, the Chair added that he understood that there had been some contacts at a higher political level, which was helping to move towards a political understanding.

According to trade officials, Ambassador Walker also summed up two meetings of the full membership (held on 3 and 4 March) on templates and data. He stressed that the objective has never been to focus on these subjects at the expense of substance.

Brazil, on behalf of the G20, voiced its views on the current state of discussions on templates.

The G20 said that after seven months of templates discussions, it seems essential to put the exercise in its proper context.

There is no substitute for the completion of modalities in agriculture, the G20 stressed.

Concluding the current draft modalities in agriculture (TN/AG/W/3/Rev. 4), Brazil said, is the primary objective of the negotiations. The templates exercise was conceived to be an ancillary process to the main effort of completing modalities, it added.

In order to move the templates discussions forward at this stage, the G20 considered that the Chairman of the Special Session of the Committee on Agriculture should be mindful of the following points:

-- Pace of the process: It is essential that an adequate rhythm and sequencing be respected. The G20 took note of a significant number of documents circulated since September 2009. The Group is pleased that delegations have committed themselves to the exercise.

However, said the G20, the quantity of documents does not necessarily translate into progress. The many documents, some with conflicting priorities, raise questions that need careful consideration. Delegations need time to study and engage properly. "Otherwise, there is a risk that in the quest for progress, we may end up having a discussion centered in a small number of delegations, losing the rest of the membership."

"We emphasize the need for comprehensive discussion and understanding, systematic consolidation and multilateral agreement. Progress will only occur when dialogue involves all members," said the G20.

-- Data obligations: A significant number of meetings was dedicated to the development of templates for base data in Export Competition, Domestic Support, and Market Access (Step1). Step 1 requires Members to develop templates for base data and not to present data at this stage.

The G20 emphasized that the provisions of the draft modalities text remain the only source in terms of the requirements and timing of submitting, verifying and annexing data. The special and differential treatment for developing countries is an integral part of these provisions.

The G20 said that its members will present data exclusively in observance with the current draft modalities requirements.

-- Work ahead on Step 2 [designing the forms for spelling out the commitments]: The G20 believed that there is technical work to be done on Step 2. The pillar of Market Access is a case in point. Instead of rushing into developing new templates, there is need to take a step back.

Initially, there is the need to develop a "scheduling road map" in market access, out of which the individual scheduling templates and supporting tables for specific elements in that pillar should be developed. The draft formats of scheduling templates and supporting tables shall be based on the draft modalities TN/AG/W/4/Rev. 4 provisions and accurately reflect them.

"In this light, we must also bear in mind that many key specific elements in Market Access are still pending on decision in the current draft Modalities text (e. g., the creation of new Tariff Rate Quotas for Sensitive Products)."

-- Political issues raised by technical discussion: Throughout the process of templates discussions, a number of interpretative issues on the draft modalities provisions has arisen. The clarification of these issues is of a political nature as they may reflect balances reached in the last eight years of negotiations.

The G20 said that they should be noted and flagged for separate political discussion when appropriate and should not be confused with a technical exercise as part of the templates discussion. A case in point is the situation of the LDCs with respect to the Domestic Support pillar.

-- Fundamental principles: As Members move into Step 1 and Step 2, the G20 recalled the fundamental principles which should guide the process from the perspective of the developing countries: The pace of discussion must ensure full transparency and understanding among Members; the discussion must involve all Members in a multilateral setting and in a bottom-up, Member-driven approach.

Pending on decisions to be reached by the end of March, the G20 believed that the template discussion should continue in April at an adequate rhythm that meets the pace of substantive discussions in agriculture. +