TWN Info Service on WTO and Trade Issues (Oct15/10)
15 October 2015
Third World Network

Credibility and balance of Nairobi package essential, says India
Published in SUNS #8110 dated 12 October 2015

Geneva, 9 Oct (Kanaga Raja) -- The credibility and balance of the package will be essential for the success of the tenth ministerial conference of the World Trade Organisation (WTO), to be held in Nairobi, Kenya this December, India told a meeting of the General Council on Thursday.

Noting that as of now there are indications that convergence may be feasible only on a small set of issues, India nevertheless stressed that there should be no presumption on what this small set will constitute.

"That there is convergence on a certain set of issues as being mentioned should not be taken for granted," India emphasised.

India's statement, and that of a number of other delegations, came following a report by WTO Director-General Roberto Azevedo on a range of consultations that was held recently as well as his assessment of the current state of play in the negotiations.

In their interventions, developing countries, including the Arab Group, the African Group and the informal group of developing countries, stressed that the development dimension must be at the heart of any outcome.

Many developing countries also called for a balanced outcome and for the Doha mandates to be maintained. It was also important to deliver something for the Least Developed Countries, they said (see separate story below).

In his report as Chair of the Trade Negotiations Committee (TNC), the DG told the General Council that through the various consultations over recent weeks, "I think members have identified a road to success in Nairobi. Clearly there are many obstacles along the way, but none in my view are insurmountable. We have very little time remaining."

He spoke of the potential deliverables for Nairobi as including, but not necessarily limited to: development issues with a particular focus on LDCs, export competition in agriculture, and a set of possible outcomes to improve transparency in a number of areas.

The DG said that "we have a general sense of what may be on the table in terms of substantive deliverables (though it is not a closed package, or a sure package) - and I think we should recognize that agreement on the elements we are talking about would represent real progress."

But it is now very clear that the post-Nairobi conversation must take place at the same time, and these two elements need to move in parallel, he said (see below).

In its intervention, India (represented by Ambassador Anjali Prasad) said that the WTO is holding its ministerial meeting for the first time in Africa, and it should be "our collective effort to make it a successful Ministerial and to fulfill the development promise of the DDA [Doha Development Agenda]."

Noting that "we are now in a critical phase of the negotiations", and the countdown to the Nairobi Ministerial has begun, India said that it has consistently held that a comprehensive and balanced outcome in all the three core negotiating areas viz. Agriculture, NAMA (non-agricultural market access) and Services, as well as internally on all three pillars of Agriculture, even if with a downward re-calibration of ambition, is a necessary condition for fulfilling the development mandate of this Round.

"We believe that we should continue our efforts to reach as close as possible to that result at Nairobi," India underlined.

However, as of now there are indications that convergence may be feasible only on a small set of issues, said India, highlighting that, "Credibility and balance of the package will be essential for the success of Nairobi."

According to India, another critical success factor for Nairobi would be the terms on which "we decide to advance the remaining DDA" issues, should it be difficult to achieve consensus on a comprehensive set of outcomes.

"Nairobi, in such a situation, cannot be either the conclusion or the end of the DDA," India stressed.

India believes that multilateral negotiations such as those envisaged under the DDA are an ongoing process, especially when they are aimed at addressing existing inequities in the trading system.

The framework provided by the DDA is a valuable component for attaining this goal, and should continue to anchor the deliberations on the remaining DDA issues, it said.

India also underlined that special and differential treatment is an integral component of all pillars of the negotiations.

"Any calls for changing the existing WTO legal paradigm and seeking further stratification among developing countries will not be conducive for advancing our work, and could complicate the negotiating process immensely," it cautioned.

The WTO stands for a rule-based multilateral trading system. The rules, needless to say, derive their legitimacy from ministerial mandates, which are the WTO's highest legal governing structures.

"Any attempt to undermine the mandates and the rules in totality or selectively would not be in the interest of the system nor would it be helpful in the journey to Nairobi," said India.

"We realize that the time remaining for MC10 is very short. As we move towards Nairobi, India is ready to engage constructively. We collectively should not be found wanting in our quest for a meaningful and balanced package on DDA issues."

In this context, India believes that the suggestion for a drafting group or whatever form the drafting process takes on the Nairobi outcome documents needs further deliberation.

"Clearly, at this stage, there is no convergence on the substantives. As such, complete clarity and agreement will be necessary on the precise task of the said group."

India noted that divergences in Members' positions persist not only on the post-Nairobi narrative but even on the shape and form of the issues that would constitute the package of deliverables at Nairobi.

"These differences are substantive and do not stem from the mere failure to find a commonly acceptable language to reflect decisions. It is only in the fitness of things that they are resolved in the respective negotiating bodies."

In India's view, a drafting group or process, however well intentioned, would lack the required institutional memory and bandwidth to forge consensus on substantives.

Further, on substantive areas, consensus building must be based on proposals of proponents. "We have heard time and again that any progress on an issue can only be proponent-led. This principle must be observed in all cases."

India also reiterated that transparency and inclusiveness in the run-up to MC-10 is crucial. "It is important that we follow a member-driven bottom-up approach, and ensure that the required work is completed at Geneva itself prior to the ministerial."

REPORT BY THE TNC CHAIR

In his report, DG Azevedo recalled the "Room W" (one of the meeting rooms at the WTO) meeting with heads of delegations on 17 September where he reported that progress on some key issues, like domestic support and market access in agriculture, NAMA and services was looking very difficult.

While continuing work on those efforts, he had said that it was time for members to start working more intensely on issues where there appeared to be more convergence and which might be potential deliverables for MC10.

According to Azevedo, these included - but not necessarily limited to: development issues with a particular focus on LDCs, export competition in agriculture, and a set of possible outcomes to improve transparency in a number of areas.

He said a range of consultations have taken place since that last Room W meeting which have further pointed things in this direction, "even though it is not the preferred outcome for many of you".

Reporting on the meeting on LDC issues, held on 29 September, he said that he had asked the LDC Group Coordinator, Ambassador Shameem Ahsan of Bangladesh, to give an indication of what their forthcoming proposals might contain.

According to the DG, the Ambassador gave a helpful overview of the potential issues, which included: some elements of S&D treatment; all issues of interest to LDCs in Agriculture, including domestic support; action on Non-Tariff Barriers, including a horizontal mechanism; binding DFQF market access through scheduling; a reflection of flexibility that has already been agreed upon in various decisions, guidelines and Ministerial declarations on trade in services; adoption of simplified procedures for taking anti-dumping action for use by LDCs and increasing the threshold on non-application of anti-dumping duties for LDCs; and strengthening of technical assistance.

Azevedo also reported on two meetings hosted by Australia on 28 September and 1 October in which he participated. It included representatives from Brazil, China, the EU, India, Japan and the US, and was joined by the Chairs of the General Council, the Special Session of the Agriculture Committee and the NAMA Negotiating Group.

In both meetings, he said discussions revolved around possible outcomes for Nairobi. In particular, participants discussed the possibility of agreeing on a subset of DDA issues in Nairobi, combined with a statement on post- Nairobi work. On the Nairobi package itself, participants mentioned again, export competition, a development and LDC package, and some transparency provisions.

According to the DG, they all agreed, however, that there would be challenges in negotiating these issues. These were promising issues, but not "sure outcomes". A key issue discussed was post-Nairobi work.

Here, said Azevedo, the views were quite divergent. "Some wanted to continue our work and reaffirm the Doha architecture and constructs. Others said they would be prepared to engage on issues we have been negotiating under Doha, but were not willing to pursue them under the current DDA framework."

Participants also acknowledged that it would be difficult to find common language on the post-Nairobi work, but no one disagreed with the importance of trying to work out a common message on the future, which would form part of the overall Nairobi outcome.

Participants explored their commonalities in terms of guidance for future work. No one disagreed that it would be a meaningful outcome, if members deliver the package that has been outlined for Nairobi, centred around development, transparency, and export competition, the DG maintained.

Participants also argued that such a package would not mean that it would successfully address the DDA single undertaking. After Nairobi, participants would be willing to think about how to make progress on issues that might not have been fully addressed by MC10.

The DG said that the same participants accepted Australia's invitation and met at the Ministerial level on the margins of the G20 trade ministers' meeting in Istanbul earlier this week. This time, Ambassador Amina Mohamed, as Chair of MC10, joined the meeting as well.

Azevedo said the conversation focused on what issues participants thought could be dealt with in Nairobi and what the approach should be to post-Nairobi work.

Participants were asked to say whether they were prepared to proceed on a package of issues which would be DDA-minus, along the lines of what he had already outlined. And they were asked if they were willing to evaluate whether and how we should start working on a final Nairobi document.

Azevedo said that the conclusion that he took from that meeting was that participants were willing to work on both fronts.

In addition to the arguments made at previous meetings, some other elements emerged more clearly this time, he added. Some participants said that reassurance regarding post-Nairobi was needed for a successful outcome in Nairobi. No one seemed to fundamentally disagree with this. Some stressed the importance of a balanced outcome even in the context of a package containing some issues only.

Some noted that the post-Nairobi agenda should be open to issues that are relevant to all members, and some made the point clearly that the DDA issues must remain the primary focus and cannot be forgotten. No one disagreed that development should stay central to our conversations after Nairobi and that principles like S&D treatment and less-than-full reciprocity should be kept in the post-Nairobi work, said Azevedo.

Differences still remained on the role of the DDA framework in the post-Nairobi agenda. In spite of that, there was no apparent disagreement on the desirability of a consensual document, a Ministerial Declaration, as part of the outcomes for MC10.

The DG also reported on the G20 trade ministers' meeting that he had attended in Istanbul on 6 October, where Amina Mohamed also joined.

He said that he set out the shape of the potential deliverables that had been discussed in Geneva and posed two key questions:

* First: was there a willingness to proceed on the basis of a package of specific issues which is DDA-minus - and therefore should we intensify our work on the more promising issues that he had outlined earlier, without prejudice to the other items already being negotiated?

* Second: should work start on a final Nairobi document immediately, without prejudice to the outcome of this exercise, either in terms of substance or format?

Azevedo maintained that there was "strong support" to begin working - in the negotiating groups - more intensively on a package of specific substantive outcomes for Nairobi, with a focus on areas where outcomes seem more likely to be successfully concluded.

Again, however, it was clear that work on these issues should not preclude work on other areas where some members felt consensus may still be achievable.

No one disagreed with the continuing central importance of development to this work - nor that core DDA issues which remain unresolved, such as agriculture, industrial goods and services, will continue to be an important part of the post-Nairobi discussion.

On post-Nairobi, the DG said that while there is a potential package on the table, it seems that, whatever "we deliver in Nairobi, it will not be viable or credible, to announce it as an agreed conclusion of the DDA single undertaking. This seems to be a consensual view."

In this scenario, the unavoidable question is: what to do with the DDA issues that are not properly addressed in the Nairobi package?

At this point, there are divergent views on what happens after Nairobi. Many say that if there is no consensus to end the Doha Round then it will simply continue - you would need consensus to end it - and that we should state this clearly. Others say that if we do not deliver Doha by Nairobi then that will be it - even without a formal statement affirming the demise of the DDA.

Clearly these views will be extremely difficult to reconcile, he said, adding, I think we all agree that:

* We want to deliver something in Nairobi and that it should be meaningful;

* Whatever we deliver will not be agreed to be the end of negotiations on the DDA issues.

* We are still ready to keep pursuing the core issues of the DDA and their development dimension after Nairobi - although there is no agreement on how to do this: whether under the DDA framework, or whether under a reformulated architecture.

"The question is whether we can - or whether we want - to capture these and other possible commonalities in a consensual text in Nairobi," he said.

The D-G highlighted a number of options in terms of the type of document that could result from the Ministerial: a Ministerial Declaration, which is the usual type of document that you get from these meetings; a non- consensual Chairperson's statement, which is something we have done before; or a hybrid of some sort - for example, it could be partly consensual text and partly non-consensual text.

"Then we arrive again at the question of how such a document can be produced - how do we get there?"

The D-G suggested, "we start working on the basis that we will have a Ministerial Declaration that would take stock of the decisions taken at MC10 and that gives us guidance on our future work. Of course, this would be without prejudice to what outcome we will have in Nairobi, but it is important to start somewhere and to aim for the highest possible result."

"My proposal to you therefore is to start a process that will lead us to text-based negotiations on an MC10 Ministerial Declaration," he said.

"There are still different views on what this process would look like and I will be informally consulting you about this," he told the members.

With respect to the process, the D-G pointed to some things that should be borne in mind: it must be progressive (for example, right now we still don't know what the Nairobi package will look like); it must be a bottom-up, transparent and inclusive process; it will not deal with substance - that will happen in the negotiating groups; and it should probably start with a focus on the post-Nairobi elements of the declaration. +