TWN Info Service on WTO and Trade Issues (Nov13/02)
13 November 2013
Third World Network  

Azevedo cites "significant progress" on Bali issues
Published in  SUNS #7684 dated 29 October 2013
 
Geneva, 28 Oct (Kanaga Raja) -- "Significant progress" has been made in all three areas - trade facilitation, some elements of agriculture, and development/LDC issues - of the proposed Bali package and the finish line is "clear and it is in sight," WTO Director-General Roberto Azevedo said in his latest report to the Trade Negotiations Committee (TNC).
 
At the informal TNC meeting on 25 October, Mr Azevedo, in his capacity as TNC Chair, reported that Members are now in the final countdown to identify all landing zones for the three Bali deliverables.
 
"We still have a lot to do. But let me be clear. When I say that, I don't mean that we won't get there, or that progress is slow. Compared to what we had before, progress is anything but slow. Compared to what we had before, we are breaking the sound barrier. The degree of engagement is now several orders of magnitude higher," he said.
 
He added: "When we started this process Members were still very tentative in some areas. Instead of seriously exploring landing zones, Members were marking their territory. Now we are defining landing zones. We have made significant progress in all three areas. It is a transformation. And the process has accelerated in the past few days."
 
According to trade officials, the meeting also heard that two draft decisions (so far) will be transmitted to Ministers at the ninth Ministerial Conference this December (via first the General Council): one on preferential rules of origin for the LDCs and a second on an LDC services waiver.
 
Speaking following the TNC Chair's report, Nepal, on behalf of the LDCs, said that while the texts on the LDC services waiver and on rules of origin were not the optimal outcome for the LDCs, in the spirit of compromise, they agreed to have these issues put forward in this way.
 
Morocco, for the African Group, wanted the 28 Cancun Agreement-specific proposals to be taken up as part of the post-Bali process.
 
Argentina again voiced concern that there is too little progress on agriculture, while the ACP Group, on the issue of trade facilitation, felt that any process should respect the understanding that no Member will be required to implement a Category C obligation when that Member has not acquired capacity.
 
In their own reports at the informal TNC, the Chairs on the Bali issues and the LDC Facilitator gave their respective assessments on the work to date to the membership.
 
The LDC Facilitator, Ambassador Steffen Smidt, pointed out that the draft decision on rules of origin contains a set of multilateral guidelines for rules of origin requirements that Members apply to their non-reciprocal preference schemes for LDCs.
 
For the first time, governments will have a set of multilaterally agreed guidelines which should help make it easier for LDC exports to qualify for preferential market access to both developed and developing country markets.
 
On the operationalisation of the LDC services waiver, he said that this agreement would say that Ministers would instruct the Council for Trade in Services to initiate a process aimed at promoting the expeditious and effective operationalisation of the LDC services waiver.
 
A high-level meeting is foreseen for Members to indicate where they intend to provide preferential market access to LDCs' service suppliers. The meeting will take place six months after LDCs table a collective request identifying the sectors and modes of supply of export interest to them, he further said.
 
He added that Members in their individual capacities are encouraged at any time to extend preferences to LDCs' services and service suppliers consistent with the waiver decision. It is also recognised that there are capacity constraints in many services sectors and that work needs to be done through Aid for Trade and other technical assistance and capacity building programmes to help these governments to move forward.
 
On Duty Free Quota Free (DFQF) market access for LDC products, the Facilitator said that there has not yet been a proposal from the LDCs.
 
Reporting on his consultations on the development issues, Ambassador Kwok Fook Seng of Singapore, in reference to the S&D Monitoring Mechanism, said that there are three remaining issues to be resolved.
 
On agriculture, trade officials said that on the G-33 proposal on food security, what is being seen now is a general agreement on the shape of the due restraint measure.
 
There is basic convergence relating to this, in that this would apply to certain staple crops (the precise number not being known yet), they said, adding that Members are getting close to an agreement on transparency.
 
There are some concerns with regards to safeguards and how they will be implemented, as well as how to deal with grains that spill over into internal or international markets, said trade officials, adding that other areas where there are differences of view are the duration of the measure and what would be the post-Bali work programme in terms of addressing this issue.
 
On export competition, trade officials said that there is agreement that there should be a reaffirmation of the Hong Kong Ministerial Declaration, i. e, that all forms of export subsidies will be abolished.
 
On transparency in Tariff Rate Quota (TRQ) administration, trade officials said that the issue here is that developing countries have a wide latitude in terms of S&D, and that there are countries that are pushing to have this S&D provision in many respects disciplined so that large emerging countries don't carve out this area and that they would have to put in certain disciplines under an agreement that emerges.
 
However, developing countries are saying that being developing countries, they have S&D which has been agreed. For some developing countries, this (the moves to discipline) would be a ‘red-line'.
 
The Chair of the Negotiating Group on Trade Facilitation reported that Members are now in the final phase of the negotiations to create a new Trade Facilitation Agreement.
 
He believed that Members are making good progress on all of the three pillars of the negotiating mandate, adding that he is confident that a good result for Bali on Trade Facilitation is now very much within Members' grasp.
 
Recalling that at last week's Negotiating Group meeting, Members agreed on consensus language to clean up several parts of Section I of the draft text (on commitments), he said that he feels at last that this Section is now looking more bracket-free than bracketed.
 
He noted that in this final stage of the negotiations there is a particular responsibility on the proponents to broaden support for their proposals, and said he is pleased to see that they are bringing additional flexibilities to the table in an attempt to identify solutions that can hope to find consensus support.
 
Negotiations on Section II of the draft Agreement (on S&D provisions) are making progress under the chairmanship of Mr Michael Stone in a small group that is representative of the ACP, African and LDC Members as well as donor Members, he said, adding that finding an accommodation for Section II is crucial for Members reaching an agreement on Trade Facilitation.
 
Meaningful S&D flexibilities can help developing countries and LDCs accept more readily and confidently the implementation challenges that are posed by the provisions of Section I, he said.
 
He further said that Section II also contains the heart of the development dimension of a Trade Facilitation agreement - the DNA of the DDA.
 
The economic benefits of better trade facilitation will accrue from a sustained period of reform and implementation by developing countries and LDCs.
 
Not surprisingly, they want assurance that they will receive, where necessary, equally sustained support from their development partners throughout that period, he said, adding that he does not believe that there is any disagreement among Members that this describes the landing zone for Section II.
 
The challenge Members are facing is finding the right language to express this so that it can become part of the binding legal text of the agreement.
 
"Members are making progress towards this, particularly over the past week or so, and I do believe that we have a possible solution now in sight."
 
Good progress has also been made in the past couple of weeks on customs cooperation, the third pillar of the TF mandate, the TF Chair said, adding that this is an area that remained blocked in the negotiations for a very long time, so it is particularly welcome to see flexibility on all sides of this issue starting to bear fruit.
 
On the cross-cutting issues in the TF agreement, he said that there too, there is serious engagement and "I feel we can be confident that a good solution is in reach."
 
The TF Chair also stressed that all of the results of all negotiations, in whatever format they are taking place, will be brought back to the full membership for consideration before anyone declares that there is a consensus.
 
In his statement at the informal TNC meeting, D-G Azevedo reported on his own activities since the last TNC meeting on 14 October.
 
Since then, he had undertaken a process of intensive consultations with delegations in recent days.
 
"My aim is to facilitate agreement among the main concerned Members on key points. So my consultations have focused on specific issues, paragraphs and even words, which the Chairs and Facilitator for LDC issues have identified as requiring urgent attention."
 
The issues covered in his consultations with delegations were: the implementation of the Hong Kong DFQF Decision; the Cancun 28 proposals; cotton; a number of specific issues in Section I of the draft Trade Facilitation text; Section II of the draft Trade Facilitation text; customs cooperation; some elements of the G-33 proposal on food security; export competition; and TRQ administration.
 
Overall, he said, the delegations he consulted understood that this is now the endgame, and there was a constructive attitude and an encouraging degree of willingness to find convergence.
 
Mr. Azevedo said there are essentially two types of work that Members need to do:
 
"First, in those areas where we are at an advanced stage, we need to solve the remaining brackets quickly. The options are all on the table. Trade-offs and commonalities are becoming more evident. We need to move rapidly to reach final agreement on these issues.
 
"The second type of work is in those areas where we have made great progress in identifying conceptual landing zones, where divergence was still very wide just 10 days ago. Now we need to accelerate our work by translating this progress into text and locking it in."
 
No matter which of these two categories an issue falls into, the goal is the same, he said.
 
He added: "We should be aiming to bring all areas of work up to the same level of finality over the next few days. We have made significant advances in areas where, for months, negotiations were intractable. We are very close to a final deal in many. But there is no hiding the fact that, in other areas, there are still some very hard negotiations ahead."
 
As Members move closer to a conclusion, they are finding that: unexpected issues come up; Members scrutinise issues more closely; and capitals are actually getting involved, "as we asked them to. And they are asking legitimate questions that we must answer."
 
"All issues must be worked out in just a matter of days. We are approaching zero hour. There is simply no more time to keep engineering new and complex solutions."
 
He added: "I think we can build upon the excellent momentum from your work on LDC issues, where things are moving strongly in the right direction. As we have just heard, there is convergence on the text for preferential rules of origin and the operationalization of the services waiver. Both will soon be put up to Members for onward transmission to Ministers for their consideration in Bali."
 
Like Steffen Smidt, the other Chairs are also making very significant progress.
 
"I believe you still want Bali to succeed. And therefore I urge all delegations to show the political will that success will require. In the coming days we will also be starting informal conversations with Members, both individually and collectively, on how we should frame the ministerial outcomes for Bali."
 
According to the TNC Chair, this involves, among other elements, the format and the substance of the documents issued. They will broadly cover: the on-going work of the WTO; the Bali deliverables; DDA issues; and non-DDA issues that are not yet regular components of our work.
 
Mr Azevedo reported that he has started, together with the Chairman of the General Council and the Secretariat, internal technical work with a view to identifying the options available to Members.
 
"We have few working days left to produce concrete results for Bali. This means that work has to intensify even further at all levels, every day and every night, in contacts amongst delegations, consultations by Chairs, Friends, the LDC Facilitator, and in my own consultations."
 
By the end of this final push, said the TNC Chair, "we have to make a collective determination about whether the Bali package will be achieved. And we will have to prepare our report and any recommendations to the General Council in November."
 
"The finish line is clear and it is in sight. I believe we can get there," he further said.
 
Several delegations took the floor following the TNC Chair's report.
 
According to trade officials, Morocco, on behalf of the African Group, said that they are still encountering difficulties with respect to the trade facilitation negotiations, and highlighted the importance of paragraph 4.5 (of Section II of the draft negotiating text on implementation of provisions notified under Category C by developing countries and LDCs being conditional on the provision of adequate and effective technical assistance and capacity building measures by developed countries and/or other donors.)
 
It also highlighted the 28 Cancun Agreement-specific proposals, and wants this taken up as part of the post-Bali process. The post-Bali process itself is very important, it added.
 
Nepal, on behalf of the LDCs, said that while the texts on the LDC services waiver and on rules of origin were not the optimal outcome for the LDCs, in the spirit of compromise, they agreed to have these issues put forward in this way.
 
Nepal hoped that DFQF and cotton will be treated in a similarly constructive manner by the rest of the membership.
 
Argentina was concerned about too little progress on agriculture, and that there is no agreement as yet on the question of export subsidies. A political statement with a very low level of commitment is what Members are looking at, and that is not satisfactory.
 
Argentina said that this makes it doubt the commitment of certain Members.
 
On trade facilitation, Argentina was of the view that the push by the developed countries for the technical provisions in Section I (of the draft consolidated negotiating text) is going to stretch the capacity of the developing countries.
 
Burkina Faso, on behalf of the Cotton-4, introduced the cotton proposal, pointing out that there are three elements to it - the trade element, the development element and the follow-up.
 
According to trade officials, on the trade element, there is a market access provision, which would say that duty-free quota-free importation of LDC cotton exports would be implemented by developed countries and those developing countries in a position to do so with a target date of 1 January 2015.
 
On domestic support for cotton, Ministers would urge their negotiators to accelerate their work, to work hard to try and reach agreement (on substantial reductions) by end of 2014. There would be a reaffirmation of the Hong Kong Ministerial Declaration and the Secretariat would compile a database of the cotton subsidies that are being extended by Members.
 
There would have to be reference of cotton in Aid for Trade programmes, and that on monitoring, there needs to be a careful examination including the link between the trade elements and the development elements of the proposal.
 
Bolivia said that the outcome is not encouraging and that it is shaping up to be a minus Ministerial Conference. There are no adequate outcomes on cotton, DFQF or the G-33 proposal on food security.
 
It said that it is not too interested in the Trade Facilitation negotiations, adding that it is not an urgent need. It also did not like the notion of expedited shipments.
 
Jamaica, on behalf of the ACP Group, welcomed the reports of progress in relation to LDC issues and on aspects of the Trade Facilitation (TF), Development and Agriculture pillars.
 
On TF, the ACP Group felt that real further progress can be achieved on section 2 understanding that time is of the essence.
 
"ACP members in keeping with our efforts throughout this process to be constructive and solution oriented will make further inputs in this regard. We will continue to consult on the approaches and options for resolving outstanding issues, with interested delegations especially our G90 partners."
 
Jamaica added: "... our members feel that any process should respect the understanding that no member will be required to implement a Category C obligation when that member has not acquired capacity. At the same time, we recognize that this must remain consistent with the legal nature of the TF agreement and that this is not a matter for a member's unilateral determination."
 
Accordingly, it said, "we will continue to explore the appropriate means for having a member's assessment of its capacity or lack of it being taken properly into account in determining the final assumption of its obligation to implement."
 
The ACP Group emphasised the position expressed by its Ministers in which they made clear the ACP's determination to work assiduously to help secure a meaningful outcome in Bali.
 
The Ministers have said: "We consider a successful outcome in Bali and a clear commitment to a post-Bali work programme that places development at its core to be of vital importance to our Member States and the WTO as a whole".
 
"We will spare no effort to pursue this clear objective and remain hopeful that we together with all members will achieve the goals that we set in our collective decision to pursue a meaningful Bali outcome," said Jamaica.
 
According to trade officials, in concluding, the Director-General said that there are significant challenges ahead of Members but this does not mean they have not made progress. "We have made significant progress."
 
"We all know when there is a mood of disbelief, when people say we're not going to make it. And clearly, this is not the case now. There is a common view that we can make it," he said, adding, "remember this, we are not talking about Bali, we're not taking about the DDA, we're talking about the future of the multilateral trading system."