TWN Info Service on WTO and Trade Issues (April07/05)

18 April 2007

As a WTO deadline expires, new deadlines are bandied around

On 1 April, the deadline for American President George W Bush to inform the US Congress of his intention to sign trade agreements under his present fast-track authority expired. 

Thus, a major deadline for the WTO has passed. It marked a major blow to hopes that the Doha work programme will conclude in the near future.

It is also the latest in a series of missed deadlines in the Doha programme's troubled history. 

Below is an article on the implications of the missed 1 April deadline.

With best wishes
Martin Khor
TWN

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As a WTO deadline expires, new deadlines are bandied around

Published in SUNS #6226 dated 5 April 2007 

By Martin Khor (TWN), Geneva, 4 April 2007

On 1 April, the deadline for American President George W Bush to inform the US Congress of his intention to sign trade agreements under his present fast-track authority expired. He was unable to send any such intention regarding the World Trade Organisation's Doha negotiations.

Thus, a major deadline for the WTO has passed. It marked a major blow to hopes that the Doha work programme will conclude in the near future.

It is also the latest in a series of missed deadlines in the Doha programme's troubled history. Indeed, when the Doha programme was launched in November 2001 at the WTO's fourth Ministerial conference, the initial deadline was that the negotiations would conclude overall by 1 January 2005.

Since then many new deadlines have been set, have expired, and new deadlines have been put in their place, each more urgent than the previous ones.

Most likely, Bush will no longer have trade-policy fast track authority after 30 June, when the present Trade Promotion Authority (TPA) expires.

Theoretically, the Congress can pass a new bill giving Bush a new fast track authority to start on 1 July, and that would give his administration a "seamless" passing over from one fast track authority to another.

But that the Democrats, who control both Houses, would go out of their way to rush through a new fast track authority for Bush, is most unlikely. The Democratic mood in Washington is reportedly one of eroding or removing power from the President, and not of re-empowering him.

It is thus more likely that Bush will have to live out the rest of his term without having a fast-track authority. After all, Bill Clinton did not have this authority in the last six years of his Presidency.

However, Bush will still try hard to get an "extension" of his fast track. Technically, there cannot be an "extension" as a new TPA would be required. Bush would need to get a new (not an extended) TPA, and he has already asked for it.

On 28 March, he urged Congress to "renew" the TPA saying that the only way that the WTO talks can be completed is for Congress to extend the TPA. He said that no other country will negotiate with the US if the President lacks the fast track authority.

It is quite important for the US administration to have a "seamless" transition from one TPA to another, because it would be more difficult for Congress to allow the President a new fast-track authority once there is a clean break away from the existing one. If there is a break when the present TPA expires, there can no longer be a pretence that the fast track has been "extended."

For negotiating partners, it would be uncomfortable to negotiate with a US administration that has no fast-track authority, because the partners would not have the confidence that what the US offers would be endorsed by Congress.

The US is now likely to intensify its argument that in order to get a fast-track "extension" or "renewal" before 30 June, that its trading partners have to make very significant offers (in agriculture, NAMA and services), so that the President can sell the outlines of a good deal to Congress, which might then agree to a "renewal" so that a TPA will be in place on 1 July.

However, the trading partners cannot be sure that even if they put up good offers, that the Congress will actually "renew" the fast-track authority. The offers would then prove premature, the US could pocket these offers, and still not guarantee its own offers can stand because the TPA may not be "renewed."

The situation will be worse if there is no "seamless" passing over to a new TPA. After 30 June, the United States' trading partners will have even less cause to make concessions to the US, because without a fast-track authority, the US negotiators will be even less likely to be able to live up to its own offers.

Why then reveal one's cards, and allow them to be pocketed by the US, when the US itself may not be able to stand by its positions?

It is of course possible at any time after the present TPA expires on 30 June, that Congress can choose to provide a new fast-track authority to Bush under a new TPA.

However, as the possibilities are much narrower, those proponents who are eager to conclude the Doha negotiations as soon as possible, have given themselves (and presumably the rest of the world) new tight deadlines, seen as windows of opportunity that may close very soon.

The new deadline is the end of April or the first days of May. This is when the "Group of 4" large members of the WTO - the US, European Union, Brazil and India - have to quickly get their act together and make a deal among themselves.

The EU Trade Commissioner, Peter Mandelson, has said that a deal at least among the four have to be made by the end of April, as it takes two months for the multilateral process to convert a G4 agreement into a WTO full-membership agreement. And this WTO deal presumably means "full modalities" at least for agriculture and NAMA.

The deadline for a "multilateralised deal" is thus before the end of June. There are a number of reasons mentioned, at least by some trade diplomats and analysts, for this.

Firstly, this is when the present TPA expires, so a good WTO deal is needed before 30 June, if Bush is to have a new TPA that starts on 1 July, so that there is a "seamless" pass-over to a new fast-track authority.

Secondly, Germany's presidency of the EU ends at the end of June. Germany is a keen supporter of the Doha programme, and may have clout enough to discipline France (which is not a keen Doha supporter). When Portugal takes over the EU Presidency from Germany, the opportunity would have passed.

Thirdly, it is said that Mandelson may also not be on sure footing after June, since his good friend Tony Blair is expected to leave office as British premier. It is no secret that Blair's likely successor Gordon Brown is no friend of Mandelson's.

The pressure to meet up to these deadlines is prompting the proponents of an early end to the Round to make April the new do-or-die month for a breakthrough in the G4.

On Monday, after his weekend talks at Camp David with Bush, President Lula da Silva of Brazil (which is one of the strongest proponents for concluding the Doha programme) told journalists in Brasilia that Bush told him that a Doha agreement could be reached in 30 days.

Elaborating on this, Brazil's Foreign Minister Celso Amorim said "the time frame of one month for a deal, a global accord, was mentioned several times" by the two political leaders in their talks. "They've hit the fast-forward button, they're signalling political will and possibility."

This very clear and very ambitious 30-day target - which set end-April as the deadline for multilaterally ending the Doha talks - seemed to however be also clearly disowned by Sean Spicer, a spokesperson for US Trade Representative Susan Schwab. He was quoted in the same Reuters article (as the one quoting Lula) as "denying that such a timeline had been set, and suggested there may have been a misunderstanding in the weekend meeting."

The G4 members are in any case intensifying talks in a busy April schedule. On 2-4 April, they held negotiations at senior-official level in Paris. Around 11-13 April, a Ministerial meeting involving G4 Ministers and possibly Ministers also from a few more countries is scheduled to take place in New Delhi.

The Indian Commerce Minister Kamal Nath will host what is expected to be a crucial meeting, crucial in terms of whether the new deadlines can be met, now that the 1 April deadline has come and gone.

But Kamal Nath does not take the deadlines game in the same obsessive mode as do Amorim or Mandelson, or WTO Director-General Pascal Lamy.

On 13 March, closing a seminar on the Doha Round in Delhi, Kamal Nath remarked that "June 30 is not a fixed deadline in a formal sense but a target set by the WTO. There is no commitment by India on this deadline but we will try our best to conclude by then. If the content of the Doha Round is acceptable we can accept it."

The same message, that content is key and deadlines are secondary, was put clearly by India's Ambassador to the WTO, Ujal Singh Bhatia who told SUNS last week that the focus of the present Doha talks cannot be to meet deadlines established by the TPA imperatives, or to meet the demands of any one country because it has to satisfy its Congress.

If there is to be any breakthrough, it must be based on the content of the issues, and not because there is a need to meet the requirements of the TPA deadlines or its extension, he added.

An Indian trade expert also told SUNS that while the US and perhaps Brazil may try to apply influence on India to be "more flexible" and to give more concessions in order that the US may be able to move on agricultural domestic support, it is politically almost impossible for India to give way on agriculture because of the strong feelings of Indian farmers and their organized groupings, and of the political parties.

"If the government is seen to be giving in for example on special products or special safeguard mechanism, it faces strong risks of being thrown out in the next elections," said the expert. "Thus, India is likely to stand its ground on agriculture, although it may think it can consider compromises in industrial tariffs or services."

Diplomats of many other developing countries are also not putting priority on rushing negotiations to meet new deadlines, whether these be the end of April or the end of June. On the contrary, their main concern is that they are left out of the supposedly "real" negotiations, which are taking place among the G4.

They do not want to be presented with a "fait accompli" deal thrashed out non-transparently in a "G4 process", and asked to endorse it within 24 or 48 hours, under the intense pressure that they have no choice because there is a very crucial deadline to meet.

Many diplomats from smaller developing countries still remember (without any fondness) how the July 2004 framework agreement was reached. Ministers had been called from 25 to 30 countries, but were kept waiting for days for the "Group of 5" (the present G4 plus Australia) to complete their talks on agriculture.

When they reached an agreement, the so-called Mini-Ministerial of 30 members was called to order and rushed through an agenda that included agriculture, NAMA, services and other issues in two days. Then a meeting of the General Council was called within a few hours of the end of the Mini-Ministerial, and it endorsed the conclusions of that mini-Ministerial.

The July 2004 meeting adopted only a "framework agreement", albeit an important one. The present talks are on modalities, which are more serious, as they contain the flesh and bones of structures, formulae and numbers.

The majority of WTO members believe that the July 2004 model of doing business is doubly or trebly inappropriate and unfair, as they would again be left out of the main decision-making process, the issues are complex and cannot be understood within hours or even days, and the decisions that will be made are far more important than the ones made in July 2004.

A senior African diplomat told the SUNS this afternoon: "New deadlines are being bandied around, because old ones have died. The deadlines are like a moving target. They don't excite us any more.

"The only thing that really matters is the content of what we are discussing and what we will agree to. Not the deadline."