TWN Info Service on WTO and Trade Issues (Sept08/11)
26 September 2008
Third World Network

Trade: G7 agriculture meeting ends without agreement
Published in SUNS #6553 dated 23 September 2008

Geneva, 22 Sep (Martin Khor) -- A meeting of the so-called G7 members of the WTO aimed at achieving a breakthrough in the Doha agriculture negotiations ended without agreement on Saturday (20 September), after failure to make progress on the thorny issue of special safeguard mechanism (SSM) for developing countries and other topics.

"It is not sure whether there will be another G7 gathering," said a diplomat who was involved in the meeting, which ended one day earlier than scheduled. "There was no plan to meet again."

The G7 meeting was seen as an attempt to revive the WTO's Doha negotiations which suffered a serious setback after the failure of the mini-Ministerial process at the end of July.

In August, WTO Director General Pascal Lamy met with leaders in Delhi and Washington to try to get political commitment to get another meeting going to see if a breakthrough was possible. This resulted in last week's G7 meeting on agriculture.

However, the G7 process now seems to be over, at least for now. Further talks on agriculture will now shift to the multilateral process, with the Chair of the Doha agriculture negotiations, Ambassador Crawford Falconer of New Zealand, convening a meeting of some 25 WTO delegations on Thursday to "get their collective take on where we are and how we should best structure our future work."

The lack of agreement at the G7 meeting, which took place on 17-20 September, makes the chances of a breakthrough at the multilateral level even more slim.

The G7 - comprising the United States, European Union, India, China, Brazil, Japan and Australia - met at the level of capital-based senior officials.

According to a senior diplomat involved in the talks, the US Trade Representative Susan Schwab had stated in Washington that the talks were to enable the senior officials to take stock of the failed July mini-Ministerial, to try to "lock in" the progress made then, and to see if they could make progress.

The participants from India and China in particular were waiting to see if the US would be willing to make compromises as against their hard-line position on SSM taken in July, when Schwab stuck to a demand for a trigger of 140% (i. e. that the volume of an import must increase by 40% before the SSM can come into effect).

The other delegations were in turn waiting to see if the two developing countries were willing to relax their positions on having what they consider an effective SSM.

At the G7 meeting, the agriculture-exporting countries (US, Australia and Brazil) reportedly proposed that a "growth factor" be taken into account when deciding on the volume trigger.

Normal growth due, for example, to population or increased income and consumer demand should be discounted when considering the trigger, so that only "abnormal growth" in an import surge is counted, they argued.

This was one of the ideas that were thrown up at the meeting, together with other ideas on a structure of different triggers. However, there was no agreement on the various ideas, with India and China against having a weak SSM that would render the mechanism ineffective in practice.

Other issues on the G7 agenda were tariff simplification, creation of new tariff quotas, and disciplines on the "blue box" domestic support.

A trade diplomat involved in the G7 process said that the meeting had been "suspended" on Saturday as there was no agreement on the issues. "Members had difficulties to see eye-to-eye on various issues," he said. "Many ideas were floated, including on the SSM trigger. But there was no consensus.

"We are not sure if there will be another G7 meeting. There was no plan to meet again. Instead, the process will now shift to the multilateral level at the WTO next week."

Another diplomat, commenting on the multilateral process under Falconer, said that having a schedule of meetings at the WTO does not mean that there are now conditions for a breakthrough.

"It is just an exercise to demonstrate that members have not given up, no one is declaring that there is a total failure, and delegates are committed to continuing to work," he remarked. "Whether there can be a breakthrough before the US election or the end of the year is another matter.

"As far as we are concerned, the re-starting of the multilateral talks does not signify an intention to have a breakthrough, but to take stock of what happened in July and to see if there is any possibility of progress." +