TWN Info Service on WTO and Trade Issues (Dec13/02)
2 December 2013
Third World Network
 
Azevedo reports to General Council on Bali issues
Published in SUNS #7705 dated 27 November 2013
 
Geneva, 26 Nov (Kanaga Raja) -- Following weeks of intensive negotiations on a potential package of Bali ‘deliverables', the WTO Director-General on Tuesday reported that the Bali Ministerial Conference will not have a set of finalised documents "that could allow the ministers to announce to the world a set of multilaterally agreed outcomes - the first since the WTO was created."
 
At a General Council meeting, D-G Mr Roberto Azevedo said that he will inform the ministers (at Bali) that "we have failed to find convergence. I will tell them that we came truly close to a successful outcome, but that, once more, the finish line eluded us."
 
He said that his recommendation in light of the nature and shape of the documents before members, "is that I would recommend that the General Council takes note of the documents which I would simply use to brief ministers on the state of play as of now - but not as agreed texts for adoption."
 
Speaking to journalists at the General Council meeting, Ambassador Faizel Ismail of South Africa was of the view that (the Bali meeting) was not a conducive environment for ministers to negotiate because it's a politically charged environment with the whole glare of the public and "if we can't solve problems here, we're even more unlikely to solve problems in a ministerial setting such as Bali."
 
He further said that there are a complex set of issues that members are dealing with here. Some have to do with the impasse that has been continuing for so many years and these have to do with both objective and subjective factors.
 
According to a trade diplomat, members that spoke at the General Council meeting had differing views as to whether negotiations on a Bali package should continue among ministers at the Ministerial Conference.
 
At a media briefing Tuesday, D-G Azevedo said that members managed to make progress in a large number of very difficult areas and there are ten texts that cover the three pillars - trade facilitation, development and agriculture.
 
He said that it is his assessment, that he gave to members at the General Council, "we have good news and we have bad news. The good news is that we came really close to fully agreed texts. As far as the Geneva process is concerned, we managed to get convergence in almost all areas."
 
He said that the bad news, however, "is that over the last few days, we've stopped making the tough political calls, positions got more entrenched and flexibilities virtually disappeared. And this prevented us from getting to the finish line. We're close but not quite there."
 
According to the D-G, what remains to be negotiated is not something that can be easily managed by the ministers in Bali. "Holding negotiations in the short time that we're going to have in Bali would be simply impracticable with over 100 ministers around the table."
 
Moreover, he added, many members had, even before the General Council meeting today, expressed the view that they don't see Bali as a place for negotiations.
 
"Not for Ministerial negotiations in the traditional sense. And I agree with them. It would not be feasible. It would not be successful. We're not going to Bali with a set of finalised documents that could allow ministers to announce to the world that the WTO finally delivered. At this point in time, we cannot tell the world that. I will simply inform the ministers that we have failed to find convergence in Geneva. I would tell them that we came truly close to a successful outcome but once more the finish line eluded us," he said.
 
The reality is that "... we have proved that we can't cross the final yard here in Geneva. The process here is over. We are in a new stage now. I will be consulting members. I would do everything I can do to facilitate the discussions of the members. But now it is up for them to find the solution that we all want. It is for the ministers to decide. They will be in Bali. If we are to get this deal over the line, we will need political engagement and political will. Ministers will have to decide what kind of future they want to see both for the issues which are on the table today and for the WTO."
 
In response to a question, Mr Azevedo said that the process here in Geneva is over. "If we had more weeks here in Geneva, we would not do it. If we are to find an outcome - if members want to find an outcome for Bali - it will have to have political will, and it will have to have a different way of engagement other than the traditional negotiations in Geneva. So, this has to go to a higher level. At the ambassador level - the technical level - this is as good as it gets. At this point in time, it requires political calls..."
 
In his report to the General Council, as Chair of the TNC, Mr Azevedo noted that in recent weeks, members have completed over 150 hours of negotiations in rooms W, D and E meetings alone.
 
"I believe we achieved a lot and we did so hearing all voices and allowing for a process where everyone knew what was happening and where the trade-offs were accessible to all. More than that, each one of you had a chance to defend your national interests to the fullest extent."
 
He added: "As a result of your effort and engagement, we managed to conclude negotiations in a large number of difficult and sensitive areas."
 
Referring to the set of documents that was circulated to the members in the morning, the D-G said that these ten texts were negotiated as a package, and that members made compromises and showed flexibility with the understanding that their contributions would be reciprocated in other areas of the negotiation.
 
The ten texts are Agriculture General Services, Public Stockholding for Food Security Purposes, Export Competition and Tariff Rate Quota Administration under the agriculture pillar; the Draft Trade Facilitation Agreement; and five documents under the Development/LDC pillar: Monitoring Mechanism on Special and Differential Treatment, Duty-Free and Quota-Free Market Access for LDCs, Preferential Rules of Origin for LDCs, Cotton, and Operationalisation of the Waiver Concerning Preferential Treatment to Services and Service Suppliers of LDCs.
 
"As you know, we have not finished our work in all negotiating areas and, therefore, none of these texts could be understood to be fully agreed. Each one of them has a square bracket at the beginning of the text and another at the end," said Mr Azevedo. "These documents before you are simply a snapshot of where we are at this point in time. They consolidate the progress we made so far..."
 
"Since we will not have further open-ended meetings between now and Bali, the documents will not be revised," said the D-G.
 
"I nonetheless encourage Members to continue seeking convergence wherever this is possible. Any further results will be taken to Bali and may be incorporated in the consolidated texts at the appropriate time."
 
He said that in his assessment, "after the hard effort we put into the negotiations, we have good news and bad news."
 
"The good news is that we came very close to fully agreed texts. As far as the Geneva process is concerned, we managed to get convergence in almost all areas. Except for the Trade Facilitation text, the other documents are entirely or mostly clean of square brackets. They are not agreed texts but they are ‘stable'."
 
"Even in Section II of the Trade Facilitation text - our largest iceberg until a couple of days ago - is now virtually ‘clean'. We still need to conclude work on some of the provisions for LDCs, but otherwise we have a stable and finalised text," he said.
 
"I'm afraid the same cannot be said of Section I. We cleaned much of the text but some issues remain unresolved. I don't think the challenges in those issues are insurmountable, On the contrary, I believe the landing zones are discernable to us."
 
The bad news however, said the D-G, "is that over the last few days, we stopped making the tough political calls. And this prevented us from getting to the finish line. We are indeed close, but not quite there," he said.
 
What remains to be negotiated is not something that can be easily managed by the ministers in Bali. "Although we can discern the landing zones in most - if not all - of the pending issues, the bracketed areas are too many and too technical in nature."
 
"Holding negotiations in the short time we'll have in Bali would be simply impractical with over 100 ministers around the table. I don't believe that small negotiating meetings behind locked doors would do the trick either. Anyway, they are not an option. Even at this critical juncture, I don't believe Members would be ready to abandon the transparent and inclusive nature of our negotiations."
 
Moreover, he said, many Members expressly stated that Bali must not be a negotiating Ministerial Conference.
 
"I agree with them. It would not be feasible. It would not be successful. We are not going to Bali with a set of finalised documents that could allow the ministers to announce to the world a set of multilaterally agreed outcomes - the first since the WTO was created."
 
He added: "At this point in time we cannot tell the world that we've delivered. And I will inform the ministers that we have failed to find convergence. I will tell them that we came truly close to a successful outcome, but that, once more, the finish line eluded us. Failure in Bali will have grave consequences for the multilateral trading system."
 
Above all, said the D-G, "we should not accept the inevitable simplistic assessments that will show up over the next few days about why we are at an impasse. This is not about developed versus developing countries. This not a North -South divide."
 
He added: "This is also not about lack of time. If we had a few more weeks, we would still not make it. Over the last few days I began to see signs of backtracking and inflexibility. Time would not remedy this situation."
 
Again, this is not about a North-South divide. This is not about shortness of time, he said, stressing that this is about specific, localised difficulties. All of them perfectly workable if the will is there. The landing zones are reachable.
 
"But we have proved we can't cross that final yard with normal negotiating practices. No, we are in a new stage now. The final few steps must be taken together by members. You will need to talk to each other over the next few days, to figure out a way forward."
 
"If we are to get this deal over the line it will need political engagement - and political will. Ministers will need to decide what future they want to see - both for the issues on the table here today - and for the WTO."
 
"We have reached the end of the process in Geneva. We have come as far as we can," said Mr Azevedo.
 
Meanwhile, in its statement at the General Council meeting, South Africa (represented by Ambassador Faizel Ismail) said that it was disappointed that the Bali Package has not been concluded.
 
"Fortunately, we have not been part of the narrative that a failure to conclude such a package will be fatal to the organisation and the multilateral trading system. We were not part of the ‘all or nothing' approach adopted by some."
 
The reasons for this are simple, it said, adding that the WTO was and continues to be in crisis - due to the prolonged impasse in the Doha Round. The main reason for this, in its view, is the high and unrealistic demands of some members.
 
"The failure of the Bali package must also lie in its construction. In the wake of the prolonged impasse in the Doha Round, and LDC-plus approach to an early harvest favoured by the majority of members became substituted by a TF-plus approach. Whilst we agreed at several ministerial and TNC meetings to have balance between 3 pillars that made up the Bali package: Development and LDC issues; Agriculture issues; and Trade Facilitation; the final texts are clearly imbalanced."
 
According to South Africa, the LDC pillar remains weak, postponing the legitimate demands of the poorest countries into promises of delivery in the future; the Agriculture pillar contains temporal solutions that expire in a few years and create an opt-out clause for the largest economy; and the monitoring mechanism meant to provide creative solutions for developing country concerns may be more restrictive than the existing Committee on Trade and Development.
 
On the other hand, it said, the proposed TF text has become expansive and extensive containing many new obligations for developing countries and uncertainties on the delivery of assistance remaining in the text.
 
South Africa said that its instructions from its Minister Rob Davies are clear. "Don't bring these texts, especially the highly technically complex and heavily bracketed TF text to Bali for Ministers to negotiate."
 
It said that its past experience clearly indicates that Ministerial Meetings do not offer a conducive environment for negotiations: they are highly politicised forums, under the full glare of global attention. It is not the place where Members show flexibilities but positions harden under the pressure of stakeholders and NGOs.
 
In its intervention, (according to a text made available outside) Indian ambassador Mr. Jayant Dasgupta told the General Council that it shared the D-G's sombre assessment of the situation and the implications of the failure to deliver a Bali package.
 
As the D-G had said, India fully agreed with his view that none of the texts, quite apart from the incomplete TF final draft, has been fully agreed upon and that each of these texts has one square bracket at the beginning and one at the end.
 
As the DG has stated, many delegations have asked for adjustments to these texts and because of the shortage of time to engage with the rest of the members on these adjustments, these could not be discussed or incorporated in the draft texts. These adjustments to the draft texts would have to be taken up before they can be given final shape.
 
In this backdrop, India said, Members have to take a pragmatic look at the various options before us. Most members agreed that Bali should not be a negotiating Ministerial. At the same time, Members have to be pragmatic about what can be achieved in the few days remaining before Bali. Work still remains to be done and some divergences continue among members on important issues, and members must take a call on whether they would like to place the unresolved issues before our Ministers in Bali.
 
India has not given up hope, and would be willing to join in efforts to harvest at least those outcomes at Bali which benefit the poorest countries, and would also be more than willing to join in any effort before Bali, to close the gaps in the Trade Facilitation text.
 
Ambassador Dasgupta added: "An equal, if not more important issue which has been neglected in our work so far is that of the post-Bali agenda and work programme. The unfinished Doha Agenda must continue to be the main focus in the post-Bali phase and getting the Ministers to exchange ideas on how to make this possible, would be extremely valuable. India remains ready to engage constructively to ensure a successful MC9."