TWN Info Service on WTO and Trade Issues (Jul13/09)
29 July 2013
Third World Network
 
Lamy reports on state-of-play on Bali deliverables
Published in SUNS #7633 dated 24 July 2013
 
Geneva, 23 Jul (Kanaga Raja) -- Chairing his fifty-third and final Trade Negotiations Committee (TNC) meeting before stepping down at the end of August, Director-General Pascal Lamy on Monday presented his report on the state-of-play on the three potential Bali deliverables, namely, Special and Differential Treatment (S&D)/Least Developed Country (LDC) issues, agriculture and trade facilitation.
 
"My overall assessment from this state of play is that the road to Bali is much clearer than two months ago. There has been a relatively good level of refuelling from all formats of consultations including in negotiating groups and facilitator/friends of the Chair processes," said Lamy.
 
"Also encouraging is the increased level of momentum in substantive engagement. I believe that today, we have a much sharper sense of the key issues that remain for urgent decision and the links between. I also believe that you are in a better shape to resolve these issues in the time between now and Bali. I would say that the glass is two-thirds full. You are on track to deliver concrete outcomes in the three deliverables at the year's end," he maintained.
 
He added: "But it would also be fair to say that you are not yet there. As we all know, the third part of the glass is no small beer! There remain only three months between now and Bali. You must make them count by sustaining this renewed momentum and remaining focused in your final stretch from the autumn."
 
A number of delegations spoke after the report by the TNC Chair at this last TNC meeting before the summer break here. (A full report on the various interventions will appear in another issue of SUNS).
 
According to trade officials, the mood among the membership was considerably better than it was in May in terms of the work that was needed to be accomplished by the end of July, but that the progress that has been made on many issues has not been sufficient so far.
 
Many delegations were of the view that the Bali ministerial conference this December must not be considered as a negotiating forum, and that any deal must be struck here prior to the Bali meeting. This means that the time available to negotiate is rapidly draining away, trade officials added.
 
In their interventions at the TNC meeting, developing countries including the LDC group said that any Bali package must be balanced and that the LDC issues must be given priority.
 
The African Group said that the LDC issues must be at the core and there must be a satisfactory outcome for the LDCs. Both S&D and food security are also central to the African Group.
 
The African Group also called for trade-related technical assistance and capacity-building in Section II (on S&D provisions for developing country and least developed country members) of the draft consolidated negotiating text on trade facilitation, and that both Sections I (on commitments) and II of the draft text must move together.
 
South Africa stressed that the key to success at Bali is to deliver a balanced package that is in favour of the poorest countries. "Yet, as we assess the state of play of the negotiations - with just 6-8 weeks of effective negotiating time available before Bali - we are all aware that we will need a miracle to deliver such a package!"
 
On trade facilitation, South Africa said that there are still many issues where the level of ambition of the proponents remains too high, adding that the proponent-led process, chosen for this negotiation, clearly needs to be reviewed. It further pointed out that Section II of the draft negotiating text which is intended to provide flexibility and capacity to the poorest countries, is still far from being resolved.
 
On the LDC and development issues, it said that the majority of members included in the ACP (African, Caribbean and Pacific countries), LDC and African Group "will measure the success in Bali on the extent to which we have been able to deliver any tangible and meaningful progress on this Pillar of the package. Too little has been done at this stage."
 
In his report at the TNC meeting, on the issue of special and differential treatment (S&D), Lamy said that in recent weeks, work in the Special Session of the Committee on Trade and Development has focused on the 28 Cancun Agreement-specific proposals and the Monitoring Mechanism. The Chair (of the Committee) has consistently engaged with experts in the Committee and elevated to the level of Ambassadors where necessary to unlock the issues on the table. This has proven valuable in resolving some issues and providing momentum to the work of the Committee.
 
Regarding the 28 Cancun Agreement-specific proposals, work is proceeding not only on the six proposals that had initially been identified as having been impacted, but also on the remaining 22. Members are continuing with "step one", an exploratory phase, to consider these proposals and better understand what they mean in a 2013 context. Members will then move to "step two", that is, take decision on whether to adopt these proposals.
 
While this work is on-going, Lamy believed that it needs to be fast-tracked to get the necessary traction, also reminding Members of the understanding that the stock-take of these proposals is about updates, and not renegotiation. These proposals enjoy an "in-principle" agreement.
 
Work on the Monitoring Mechanism has continued to advance steadily, and there has been a good level of conceptual clarity, but work still remains to translate this into drafting language.
 
On the six Agreement-specific proposals, Lamy said the Committee believes these could be better addressed post-Bali.
 
On the four LDC issues of duty-free, quota-free market access (DFQF), rules of origin, cotton and implementation of the LDCs services waiver, Lamy said that Ambassador Smidt, the Facilitator for LDC Bali deliverables, began his consultations in June. A first round of discussion took place on all the four proposals forming part of the LDC Bali Package.
 
Lamy understood that more work is required to find common ground with regard to the proposal on the implementation of the Hong Kong DFQF Decision. In a few areas, the LDCs are continuing their own work to table operational proposals for Members' consideration, some of which he believed are to come during the summer break.
 
"So, the LDC Bali package is in the making, but at this point, the ball is in the court of the LDCs. I hope the LDCs will be fully prepared to take forward their proposals after the summer break, and that Members would be able to put forward a meaningful package for LDCs at Bali."
 
On agriculture, starting with the proposal concerning public stockholding for food security and domestic food aid, the TNC Chair said that consultations on this proposal have been held based on the four questions initially outlined by the Chair (of the agriculture negotiations) in April 2013. Debates have been very engaged and at a basic level some elements of potential convergence have begun to emerge. (See SUNS #7631 dated 22 July 2013 on agriculture chair's report on G-33 and G-20 proposals).
 
Overall, said Lamy, there seems to be some convergence emerging around declaration/communique language for Bali that would recognise, in general terms, that the policies and programmes mentioned in the first part of the G-33 proposal - with some suggested modifications - could be considered to fall within the scope of "General Services" of Paragraph 2 of Annex 2 to the AoA (Agreement on Agriculture), but with the proviso that the declaration makes clear that the chapeau contained in Paragraph 1 of Annex 2 would fully apply to such policies and programmes.
 
"The response to a political message to be delivered in Bali recognising the role played by public stockholding in developing countries has also been positive at a general level. However, differences remain between those who have expressed their readiness to start working without delay on a text for a possible Bali Communique or Declaration and those who consider that the debate on this issue should take place once the ‘contours' of the possible outcome on the other elements of the G-33 proposal are clearer," he noted.
 
Different opinions have also been expressed on a possible "due restraint" statement along the lines of the 2001 Implementation decision. The discussion in this area has also been in the minds of many members linked to the discussion on the other elements of the proposal.
 
"So, while no consensus has been reached on any specifics of the potential elements to be included in the Bali outcome text, I believe that as Members reflect further, a broader convergence becomes possible on this political messaging issue."
 
Regarding the question of a potential amendment or interpretation of existing WTO AoA disciplines, Lamy reported that the situation remains the same. "Members' opinions are still divided between those favouring a general systemic solution to the issue for Bali (through an amendment or interpretation of the existing rules); and those questioning whether such amendment or interpretation is either possible or desirable by Bali."
 
He further reported that the question of a possible interim mechanism that might provide for some additional flexibility for specific Members has been the focus of quite a lot of discussion. This question has made probably the most progress since May. Different positions on the threshold conditions and the main characteristics of a potential mechanism have been expressed more clearly and some elements of convergence have been starting to emerge.
 
For example, that the mechanism could: (i) cover public stockholding programmes of developing countries related to food security; (ii) be applicable to staple crops, given the food security focus; (iii) that its use could be subject to an on-going provision of information that would allow members to monitor the situation; (iv) that members could look at safeguards or guarantees aimed at avoiding potential spill-over effect on markets; and (v) that the Committee on Agriculture would be the appropriate home for the mechanism in terms of notification and monitoring discussions.
 
The TNC Chair said that there is also a general sense that any flexibility delivered under a mechanism should be time-limited and the mechanism itself should be an interim one, adding that among the threshold conditions to access the mechanism, it has been also generally suggested that the Member must find itself in a situation of near-breach of its commitments.
 
"Despite this good progress, some issues remain. These include notably the question whether the flexibility delivered under such a mechanism should be i) automatic; ii) non-automatic; or iii) a hybrid arrangement that would involve some degree of automaticity as well as case by case elements. A related question here is the nature of the flexibility delivered under any self-executing or automatic mechanism. Some Members have also highlighted that any such mechanism would need to provide legal certainty to ensure that members were not challenged under the Dispute Settlement mechanism."
 
In summary, said the TNC Chair, the discussions in this area have moved into serious consideration of the parameters of possible solutions. Moving towards convergence is doable, but remains to be done.
 
On the G-20 proposal on export competition, Lamy noted that the Chair (of the agriculture negotiations) had consultations in various formats to get a better sense of where Members stand.
 
On one hand, the G-20 and a group of other Members clearly want a step forward in Bali on export competition, including in terms of legal commitments. This position is presented as in keeping with the 2013 deadline agreed in Hong Kong in 2005 for the elimination of all forms of export subsidies, which was of course also incorporated in the Rev. 4 draft modalities text.
 
On the other hand, some of the Members with the largest export subsidies commitments have underlined that, while they remain committed to the elimination of export subsidies and ready to reaffirm this commitment, the conditions under which they could modify the legal commitments in the field of export competition are in their view not met.
 
"And this notwithstanding the fact that their actual use of export subsidies has significantly decreased in recent years. For them, the text agreed at Hong Kong in 2005 and the Rev 4 text was conditional upon the overall conclusion of the Doha Development Agenda, as was the implementation of the Rev 4 text overall. A partial implementation of the export competition pillar - or even the full implementation of the export competition pillar without accompanying delivery of other key elements of the Doha package - is therefore not seen by these Members as a viable option for the Bali meeting."
 
Lamy noted that there is also another group of Members with export subsidy commitments who point out that the G20 proposal would have real practical impacts for their use of export subsidies rather than just "cut water" out of their scheduled commitments.
 
While not ruling out a discussion, these members have pointed to the additional difficulty this would cause and highlighted, along similar lines to the previous group of members, that any move in the direction of the G20 proposal would only be possible in the context of a wider package of reform both across and beyond the agriculture pillar of Doha.
 
"This topic now urgently requires in-depth reflection by Members on the various options available, so that the discussions can restart immediately after the summer break. In my view, this is a political issue which will require political input," he stressed.
 
Regarding the G-20 proposal on TRQ Administration, Lamy said that Members continue to see this as a useful one to explore for possible decision in Bali, and that the Chair (of the agriculture negotiations) intends to return to this proposal after the summer break.
 
On Trade Facilitation. Lamy was of the view that last week's meeting of the Negotiating Group on Trade Facilitation ended on a positive note.
 
Further progress was made in cleaning up the text of the draft agreement, including some narrowing of the gaps on Section 2 of the draft text that deals with implementation flexibilities for developing countries and LDCs, he said.
 
Plans were made for finalising the negotiations in the autumn, in time to present the results to Ministers in Bali.
 
According to the TNC Chair, the Chairman of the Negotiating Group has set out a three-track programme for the negotiations:
 
• First, further technical scrubbing of the text.
 
• Second, a more political, negotiating process engaging capitals to resolve differences that go beyond (or lie behind) technical issues. More involvement from capitals will be required in the negotiations in the autumn to inject the authority to negotiate compromises and work out solutions at a faster pace than Members have been managing so far.
 
• Third, technical and legal work on parts of the draft Agreement that have been left to one side for the time being, such as pre-amble language, cross-cutting issues and institutional arrangements. In order to get that work off to a quick start in the autumn, Members have been asked to submit proposals by the beginning of September on the matters covered by Articles 13 and 15 of the consolidated draft text.
 
"When you resume after the summer break, you will need to be fully focused on the sensitive areas where consensus is not yet there: customs co-operation; transit; PSI [pre-shipment inspection]; Customs brokers, consularisation fees, which were already mentioned in the last TNC, as well as sharpening section II, if you are going to arrive at the finishing line in time," Lamy stressed.
 
[Speaking later on conditions of non-attribution, some trade diplomats said that progress towards a Bali package may only emerge after the new WTO D-G, Mr. Roberto Azevedo, takes over and his consultations, and the parallel process that has been under way for some time now of an informal group of key and representative group of ambassadors who meet among themselves weekly, without any WTO officials, discuss both procedural and substantive issues. - SUNS]