[DEBATE] : (Fwd) No WTO deal in '07

[Patrick Bond]

(Riaz, do we read correctly that SA's rep is providing friction not 
lubrication to NAMA and these negotiations? Alec E. must be seething...)


TWN Info Service on WTO and Trade Issues (Nov07/20)

15 November 2007

Third World Network

www.twnside.org.sg

 

 

Chances of a WTO December deal dim further

 

 

The chances of an agreement by the end of this year on the agriculture 
and NAMA have dimmed even more, with the revised texts now expected to 
be issued only at the beginning of December.

 

Moreover, the revised draft modalities for agriculture may not be a text 
containing the full agriculture modalities (as earlier anticipated) but 
may still leave open the options for some key and controversial issues, 
such as special products (SPs) and special safeguard mechanism (SSM) for 
developing countries.

 

This was the impression of some developing-country diplomats after 
having a consultation at the end of last week with the Chair of the 
agriculture negotiations, Ambassador Crawford Falconer of New Zealand.

 

The report below was published in the SUNS on 13 Nov 2007 and is 
reproduced here with permission from SUNS.  Any reproduction requires 
permission from

SUNS (sunstwn at bluewin.ch).

 

 

With  best regards

Martin Khor

TWN

 

 

 

Chances of  WTO December deal dim further

Published in SUNS #6364 dated 13 November 2007

 

 

Geneva, 11 Nov (Martin Khor) -- The chances of an agreement by the end 
of this year on the modalities for agriculture and NAMA in the WTO's 
Doha negotiations appear to have dimmed even more, with the revised 
texts now expected to be issued only at the beginning of December.

 

Moreover, the revised draft modalities for agriculture may not be a text 
containing the full agriculture modalities (as earlier anticipated) but 
may still leave open the options for some key and controversial issues, 
such as special products (SPs) and special safeguard mechanism (SSM) for 
developing countries.

 

This was the impression of some developing-country diplomats after 
having a consultation at the end of last week with the Chair of the 
agriculture negotiations, Ambassador Crawford Falconer of New Zealand.

 

According to a diplomat, Falconer had indicated that his revised draft 
would not be the final one and would probably not have his final version 
of text on the difficult SP and SSM issues, as there was no agreement 
among members on these two issues.

 

It is thus possible that further small group negotiations will take 
place after Falconer issues his revised draft, now expected in early 
December. Feedback from members to this revised draft, and possibly more 
consultations, are to be expected.

 

In this scenario, it would not be possible to see a final deal on 
modalities in December. Another paper may be prepared in the new year, 
possibly January or February.

 

Another factor weighing against a December deal is the impasse in the 
negotiations on non-agriculture market access (NAMA). Not only have old 
divisions remained, but in some areas the divisions seem to have widened 
instead of narrowing.

 

This was evident in the series of NAMA meetings held last week. On most 
issues discussed, the Chair of the NAMA group, Ambassador Don Stephenson 
of Canada, admitted that there had been no movement and he was not sure 
how to proceed.

 

The clashes were sharpest last Thursday when the Swiss formula and 
flexibilities for those affected by it was discussed. Several 
developing-country groupings and individual countries asked for extra 
flexibilities either for themselves (SACU, Mercosur, Venezuela) or for 
developing countries as a group. (See SUNS #6363 dated 12 November 2007).

 

These requests were countered by developed countries as well as about 
ten developing countries (that named themselves a "non group of 
developing countries") that focused around a statement by Costa Rica. 
They demanded that the flexibilities proposed in the Chair's July draft 
be retained instead of being expanded as demanded by the other 
developing countries.

 

A day earlier, China had expressed strong opposition to any attempts to 
discriminate against it in the flexibilities to be provided to recently 
acceded members (RAMs). There was a sharp exchange between China (which 
said it would veto or block a NAMA paper that was unfair to it) and the 
EU (which said that RAMs was an outdated category in the WTO, implying 
that China and other RAMs should not be asking for extra flexibilities). 
(See SUNS #6362 dated 9 November 2007).

 

The NAMA meetings concluded on Friday afternoon with the Chair 
confirming that his revised text would have to be delayed for as long as 
the text on agriculture is not ready.

 

Stephenson told the meeting that he would hold more consultations in all 
formats (such as with individual countries and with small groups) from 
this week onwards, according to a trade official who was at the meeting. 
>From time to time, said the Chair, he will also hold meetings for all 
members to inform them of developments, according to a trade official.

 

Stephenson was to have issued his revised draft in mid-November but 
early last week, he announced that his paper would be postponed by two 
weeks or more in line with the decision by Falconer to delay his draft.

 

Stephenson also stressed that the process he is conducting is very much 
tied to the process in agriculture. He added that he would try to close 
the gaps on issues that remain wide open but he said that he was not 
sure if he could close any of the issues before the start of the 
"horizontal process".

 

[The "horizontal process" is a term used to refer to talks that include 
several issues simultaneously, where the overall situation and the 
balance between issues can be assessed and negotiated, and is often used 
to refer to informal Green Room meetings of selected Ambassadors or 
informal Trade Negotiations Committee meetings and sometimes to 
mini-Ministerial meetings.]

 

Nevertheless, he said that he will continue to give opportunities to 
members to close the gaps in these issues. He said a lot of work remains 
to be done on NTBs and other areas. He said that when the present series 
of agriculture meetings ends, he would convene another "NAMA week."

 

Acknowledging that his road map for a further process seemed vague, he 
explained that his NAMA process has to follow agriculture, which itself 
was a "moving target."

 

A highlight of the NAMA meetings last week was a lengthy statement by 
the NAMA-11, presented by its coordinator South Africa, on Thursday when 
the issue of flexibilities for developing countries was discussed.

 

South Africa's Ambassador Faizel Ismail urged the Chair to avoid the 
mistakes of the past and ensure that the sequence of the negotiations 
respects the overwhelming view of members that agriculture is the engine 
of the Doha Round and must lead the level of ambition of the Doha Round 
as a whole.

 

In this regard, said South Africa, the developed members have a major 
responsibility. However, the NAMA-11 will play its part.

 

The NAMA-11 urged Stephenson to co-ordinate his efforts very closely 
with the chair of the agriculture negotiations. It asked for the NAMA 
text to follow three principles.

 

Firstly, the revised NAMA text should strive to ensure that it is 
comparable in its completeness with that of the Agriculture text.

 

Secondly, the revised NAMA text should ensure that the ranges and the 
parameters that are critical to the level of ambition in NAMA should be 
comparable to that in Agriculture.

 

Thirdly, the revised NAMA text should ensure that there is sufficient 
internal balance within the NAMA text between the efforts that are to be 
made by developed countries and the efforts of developing countries.

 

The NAMA-11 said that in this regard the issue of the coefficient is an 
important aspect for further discussion and negotiation between the 
members. The NAMA-11 has very clear positions on this issue, expressed 
in several proposals and it was willing to discuss this further.

 

On flexibilities for those developing countries having to make formula 
cuts, the NAMA-11 has also made proposals since November 2005, and in 
the past few weeks its members have elaborated on these proposals of the 
NAMA-11, in an effort to explain their particular situation and 
development needs.

 

The NAMA-11 was of the view that these development needs should be 
accommodated by the flexibilities to be provided for in the NAMA 
modalities text.

 

The NAMA-11 said that its members have very different objective 
realities and situations that they have set out in the various proposals 
referred to above, including:

 

-- Low applied rates and low unbound tariffs, as a result of very 
significant unilateral liberalization;

 

-- Concentration of trade in a few tariff lines;

 

-- Similar bound and applied rates in their most sensitive sectors, 
resulting in little water and deeper tariff cuts in these sectors;

 

-- Customs Unions that will need to share the flexibilities provided in 
paragraph 8 among members at different levels of development, including 
SVEs and an LDC;

 

-- Low Uruguay Round bindings as a result of being classified as a 
developed country in the Uruguay Round;

 

-- Low share of world trade and volatile commodity markets.

 

The NAMA-11 said that these objective realities create the need for 
these members to carefully manage their adjustment processes in their 
most sensitive sectors.

 

It is for these reasons, said the NAMA-11, that it was proposing that 
the flexibilities provided in paragraph 8 (i. e. of the July 2004 
framework for NAMA) be extended to accommodate the development needs of 
the NAMA-11 countries.

 

In this regard, the NAMA-11 urged Stephenson to also consider the manner 
in which the Chair of Agriculture has extended flexibilities to a large 
number of developed countries in Agriculture, to accommodate their 
particular needs.

 

"All we ask is for the flexibilities that are requested by the NAMA-11 
to be considered and provided for in a manner that is appropriate to 
address the different needs of our members," said Faizel on behalf of 
the NAMA- 11.

 

In this regard, the NAMA-11 proposed the following:

 

1. The trade volume limitation in paragraph 8 (of the July 2004 
framework for NAMA) should be relaxed. This is an anomaly in NAMA. There 
is no such restriction for developed countries to protect their 
sensitive products in agriculture.

 

2. The percentages of tariff lines provided for in paragraph 8a and 
paragraph 8b should be expanded in line with the needs of developing 
countries.

 

3. A combination of paragraph 8a and paragraph 8b should be provided for 
to assist those countries that require this to address their development 
needs.

 

Added Faizel: "We are aware that the current process of the negotiations 
is unclear and that this is a cause of some frustration. We urge you to 
keep the discussion of flexibilities open until you need to begin 
drafting your revised text.

 

"We also urge all members to exercise restraint and responsibility in 
the manner in which they react to our proposals in the press, just as we 
have with respect to their proposals. We are involved in a serious 
negotiation. The views of all should be respected and engaged with in 
these negotiations."

 

[Faizel was apparently referring to media reports of comments by US 
Trade Representative Susan Schwab and other senior US officials as well 
as EU Trade Commissioner Peter Mandelson, who have been attacking NAMA- 
11 members such as Brazil, Argentina, India and South Africa for 
allegedly undermining the conclusion of the Round because of their 
criticism of Stephenson's July draft.]

 

At the same meeting, India (represented by Ambassador Ujal Singh Bhatia) 
supported South Africa's statement on the need for additional 
flexibilities. It said that the demand for additional NAMA flexibilities 
for developing countries has a parallel in the agriculture negotiations 
where a number of such flexibilities are proposed for developed countries.

 

"Special and differential treatment for developed countries can surely 
not be allowed to exceed those for developing countries in this 
Development Round," said Bhatia. "The demand for additional 
flexibilities in NAMA should thus be viewed as an effort to balance the 
ambition between agriculture and NAMA texts to enable a reasonable 
horizontal discussion between the two areas."

 

Unlike the EU, India did not support customized solutions for 
flexibilities. In NAMA, there has been enough peeling of the onion, said 
India. Only a minority of members remain who will apply the formula.

 

Further fragmentation of solutions and outcomes will fracture the 
mandate itself, warned India. +