TWN Info Service on WTO and Trade Issues (Oct13/10)
23  October 2013
Third World Network  

Final countdown to Bali begins, WTO members told
Published in SUNS #7676 dated 17 October 2013

Geneva, 16 Oct (Kanaga Raja) -- The countdown to identify all landing zones in the three Bali deliverables (trade facilitation, some elements of agriculture and development/LDC issues) has begun, Director-General Roberto Azevedo told an informal meeting of the Trade Negotiations Committee (TNC) on 14 October.
 
In his capacity as TNC Chair, Mr Azevedo said: "In just a few weeks' time, we will have a clear idea of whether or not the Bali package can be done."
 
He further said that starting 14 October, he will be undertaking intensive consultations, which he said will cover specific key issues; key paragraphs and even key words which need urgent attention and focus to quickly find appropriate landing zones.
 
[In an interview with the Washington Trade Daily, USTR Michael Froman insisted that any Bali package must have a binding trade facilitation agreement at its core, but that given the US Congressional appropriation processes, the US could not commit itself (as part of the TF accord) to "capacity-building fund" guarantees for developing countries or propose "specific amounts" to such a fund. On this issue of ‘trade capacity-building', the US would be "happy to stand by our legacy of doing so." More on this below. - SUNS]
 
The informal meeting also heard reports from the Chairs of the Negotiating Group on Trade Facilitation, the Special Session of the Committee on Agriculture, and the Special Session of the Committee on Trade and Development, as well as the Facilitator of the LDC issues.
 
Speaking after the report of the TNC Chair, the ACP Group stressed that there must be balance within and across the three pillars of development/LDC issues, agriculture and trade facilitation.
 
Argentina noted that there has been no progress at all on the issue of export competition and said that it is not going to join a consensus unless there is a concrete outcome in Bali in this area.
 
In his statement at the TNC meeting, Mr Azevedo said that the meeting's main purpose was to hear reports from the Chairs with Bali deliverables and the LDC Facilitator on the consultations they have conducted over the past two weeks.
 
The D-G also briefly updated members on the most recent meetings he has undertaken, as well as set out the process for this final countdown phase.
 
He highlighted that he had been undertaking a number of outreach activities with Ministers to request their urgent personal and direct engagement in this critical countdown phase to Bali, including at the APEC meetings in Bali and at a meeting with (Indian Commerce) Minister (Anand) Sharma in New Delhi. Last week, Deputy D-G (Yonov Frederick) Agah, on his behalf, had delivered the same message to ACP Trade Ministers at their meeting in Brussels.
 
The D-G also noted that he was due to travel to the World Bank annual meetings last Friday and Saturday, but that he was not able to proceed with this visit due to flight delays and cancellations that kept him here in Geneva.
 
He was however delighted that despite his absence, the World Bank, the IMF and four regional development banks "followed through on what we had previously explored and proceeded to deliver a joint statement in which they offered their strong support for the Bali Ministerial meeting, particularly in the area of trade facilitation."
 
According to the TNC Chair, this statement recognises that concerns persist in the trade facilitation negotiations about access to and the coherence of assistance. "As such, the World Bank and its partners have committed to work with us to help ensure that the new trade facilitation commitments are supported, and that such backing will be properly coordinated with the support that they are providing for complementary infrastructure development."
 
Mr Azevedo added: "This is an extremely encouraging message and I think should help our Section II discussions where capacity to implement remains a key area of concern. Indeed the joint statement also calls for a more coordinated and effective response to requests for support on implementation - this is something on which I think we need ideas from Members."
 
The D-G then gave the floor to the relevant Chairs and the Facilitator of the LDC issues who then reported on the state-of-play on each of the Bali issues.
 
According to trade officials, the Trade Facilitation Chair said that members were still dodging the most difficult issues and that most of the tough decisions are yet to be made, but that there has been a massive acceleration in the work.
 
The ‘Friends of the Chair' process will continue, the TF Chair said, adding that he foresaw the need for more work in smaller groups to narrow differences in key areas. Specifically, there is more progress needed on Section II (of the draft text on S&D provisions for developing country and least developed country members) and how to find consensus on the provision of flexibilities.
 
According to trade officials, the TF Chair said that it is important to emphasise the need to enable members to implement the agreement rather than penalising non-implementation when capacities are insufficient.
 
On the question of the G-33 proposal on food security under the agriculture pillar, trade officials highlighted the key issues concerning the ‘peace clause': whether it would be a political or legally binding decision, whether it would be something that is automatic or not automatic or a hybrid, what would be the coverage in terms of products, transparency and reporting, safeguards, duration and review, and what happens post-Bali.
 
On export competition, trade officials said that there remain disagreements between members. Many developing country agricultural exporters from the G-20 have maintained that this is - if not the most important - one of the most important things on the Doha agenda.
 
What is being looked at here is some kind of message that would recall that export subsidies are highly trade-distorting but there is an acknowledgement that export competition remains a key, and that there be a reaffirmation of the Hong Kong Ministerial Declaration calling for the parallel elimination of all forms of export subsidies and disciplines.
 
According to the Agriculture Chair, there seems as well to be a growing convergence that members should acknowledge the decreased use of export subsidies subject to reduction commitments.
 
While it can be acknowledged as well the reforms that have been undertaken, countries in the G-20 are adamant that these not be seen as a means of replacing the commitment to eliminate these subsidies eventually, and that there should be some form of regret expressed that the 2013 deadline (for their elimination) cannot be met.
 
On the issue of TRQ (Tariff Rate Quota) administration, there are two elements, one being the transparency in administration of these quotas, and the other, the underfill mechanism.
 
Trade officials pointed out that the sticking point has been that some countries are keen to see emerging markets do away with their S&D provisions on the underfill mechanism and be required to try and fill their quotas as well.
 
According to trade officials, on the development issues, the Chair of these discussions highlighted four areas in which the discussions have centred vis-as-vis the S&D monitoring mechanism: nature of the mechanism in terms of review of implementation, nature of recommendations, the relationship of the mechanism with other bodies, and the frequency of meetings.
 
On the LDC issues, the Facilitator of these issues said that with respect to preferential rules of origin, there has been very good progress made. A number of delegations have shown flexibility and a willingness to compromise.
 
If this continues at this pace, he has little doubt that members can find the landing zone by the end of October, he added.
 
Trade officials noted that the LDCs have also tabled a proposal on a services waiver for the LDCs and that members are waiting for a proposal from the LDCs on cotton while a proposal on DFQF (duty-free quota-free market access) is still not forthcoming from the LDCs.
 
The D-G and the Facilitator urged members to reflect on what is doable before Bali, trade officials added.
 
Following the reports by the Chairs and the Facilitator, the D-G said: "It is clear that, for a change, some very important advances have been made in all areas under discussion. Some of that convergence is of a conceptual nature and we still need to find language that captures such agreements. However, on a number of issues you are yet to converge. Like I have said before, this is now crunch time. Unless you show additional flexibility and work in a spirit of compromise, we will not make it for Bali."
 
In terms of concrete next steps, he said that starting 14 October, he will be undertaking intensive consultations.
 
"My consultations will cover specific key issues; key paragraphs and even key words which need urgent attention and focus to quickly find appropriate landing zones. I will meet with delegations, individually or otherwise to find workable solutions that could be acceptable to the membership as a whole."
 
Mr Azevedo said that he had met with the Chairs and asked each one of them to identify the absolutely necessary issues that will require his own focused attention and which delegations he should talk to. In addition, he had asked the Chairs to continue with their own consultations as appropriate and further narrow and close gaps.
 
"So, as we work through and finalize our countdown phase I will be calling on you from now on - on very short notice and possibly unexpectedly. This will also be the case for TNC meetings. Let me repeat what I said at the General Council, from today, every hour is a working hour, and every day a working day."
 
Finally, he said, members will need to start working on the outcome document to be issued at MC9.
 
"As you know, obviously, this document, to a large extent, will be framed by the achievements we can deliver for Bali which I hope will be very clear from our work over these next two weeks. Nonetheless, the General Council Chair and myself intend to soon start consultations about how Members feel about the MC9 final document and our work after Bali," the D-G concluded.
 
According to trade officials, three delegations spoke following the report by the TNC Chair.
 
Jamaica (on behalf of the ACP) recounted the ACP Ministerial meeting held last week in Brussels. It highlighted the importance of a successful Bali outcome and a post-Bali process - conducting the process in a way that puts fairness, transparency and inclusiveness very much in the frame.
 
It also said that the development/LDC issues, agriculture and trade facilitation are all important and that there must be balance within and across these pillars.
 
Argentina said that some progress has been seen on trade facilitation but not on development or LDC issues, and no progress at all on the issue of export competition. It noted that the G-20 wants a balanced and fair effort to try and move forward on the Hong Kong Ministerial Declaration commitments, while some members have been moving away from the Doha Round commitments.
 
According to trade officials, Argentina said that it is not going to join a consensus unless there is a concrete outcome in Bali in this area (of export competition).
 
Uruguay said that the two issues on which it cares the most are export competition and TRQ administration, and on each of these two issues, there has not been sufficient progress.
 
Members need to work very seriously on these issues, it said, adding that it has some concerns on trade facilitation as well.
 
[In an interview with the Washington Trade Daily (covering WTO and the TPP and US-EU FTA negotiations), USTR Froman said any agreement in Bali must be on a full package with a binding trade facilitation agreement at its core, something on agriculture and something on development. He was responding to a question about a ‘Norwegian proposal that the Bali package on TF being 70-80 percent complete, with balance to be worked over in Geneva.'
 
[Froman said that his understanding of the Norwegian proposal was that after reaching a full TF accord in Bali, there may be specific implementation details that need to get worked out afterwards "and my understanding is that's what the Norwegian proposal focuses on."
 
[If any WTO member, in the light of the current tussles between the administration and Congress resulting in a government shutdown and threat of a US government default on its debt, had any doubts, Mr. Froman made clear that there can be no firm US commitment in the TF accord about the US providing "capacity-building fund" guarantees for developing countries for trade facilitation before the Bali ministerial, and proposing "specific amounts."
 
[He was eloquent in citing in the interview "a long history" of the US providing assistance for "trade capacity- building, aid for trade", and exampling the US ‘Trade Africa' initiative and US initiative around the East African Community, focused on supporting their efforts to go to single border crossings, single customs systems, eliminating barriers on the way to the borders as well as on the border.
 
[However, he said, "We don't have the ability in the way that we do appropriations to guarantee appropriations for foreign assistance - let alone for any particular foreign assistance project. But we have a long history of doing this kind of work and we're happy to stand by our legacy of doing so." - SUNS]