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Doha Round nears moment of truth, as Lamy calls make-or-break ministerial
WTO Director General Pascal Lamy has called for a crunch meeting of ministers in Geneva on July 21, in a bid to salvage a deal in the troubled Doha Round of trade talks. Speaking to chief negotiators on June 27, Lamy said that his bold plan to wrap up so-called ‘modalities’ before the traditional summer break was “not without risks.” But he added: “my sense today is that the chances of getting there are today over 50%. This fits with my own appreciation that if there are no modalities in July, the chances of concluding the Round this year are much less than 50%.”1
Lamy urged delegations to look for convergence on both agriculture and non-agricultural market access (NAMA) ahead of the ministerial, to enable the chairs of each negotiating committee to produce new draft texts that would leave fewer issues to debate during the ministerial. These texts, which will reflect progress on technical details, are expected to be published on July 10.
New draft farm text to simplify options
It is hoped that the new draft text to be circulated by the chair of the agriculture talks, Crawford Falconer, will simplify options and act as a blueprint for ministers ahead of the ministerial. The draft accord will update previous versions released in February and May but is not expected to contain major changes in the most controversial core areas: the size of cuts in agricultural tariffs and the ceilings to be placed on domestic support.
Falconer told WTO Members on July 7 that his informal consultations (dubbed ‘walks in the woods’) had been constructive. He said the new text will set out clearer options on the ‘special’ products that developing countries will be able to shield from tariff cuts. It will also streamline reductions on in-quota tariffs, tariff ‘caps’ on unusually high tariffs and on the special safeguard mechanism (SSM) that will alow developing countries to raise tariffs temporarily in the event of import surges or price depressions.
Many NAMA issues unresolved
The chair of the industrial goods talks, Don Stephenson, will release a new NAMA text at the same time as Falconer. However, Stephenson told WTO members on July 8 that he had achieved “some success” in his recent consultations but regretted that “we have too many issues still unresolved.”2 While some of the differences are fundamental, such as the size of overall tariff cuts, Stephenson said some gaps were”absurdly small” and that it was “insane” to leave these for ministers to deal with.
Differences in the NAMA discussions have proved especially stubborn. Stephenson suspended talks in early June, after delegates failed to make sufficient progress. Since then, however, some gaps have narrowed, albeit modestly. Stephenson reported that delegates have moved forward on a number of issues, including implementation periods, the structure and flexibilities of formula cuts, unbound tariff levels, non-tariff barriers and special treatment for South Africa. One of the most contentious remaining issues relates to the number of tariff lines and share of manufacturing imports that developing countries will be allowed to shelter, either partially or wholly, from standard tariff reduction obligations. 3
Internal EU squabbles
European sentiments over the Doha Round have been running particularly high in recent weeks, with a series of scathing public outbursts from leaders. At the inauguration of France’s presidency of the EU Council on July 1, President Nicolas Sarkozy confirmed his earlier threats to scupper a Doha deal, claiming it would mean a 20% decline in EU farm production. “That would be 100,000 jobs lost, I won’t let it happen,” Sarkozy had told a French television channel.4 France, along with a host of other EU member states, is critical of EU Trade Commissioner Peter Mandelson, blaming him for ‘selling out’ EU agriculture in the interests of a deal. The Commission quickly hit back, with Mandelson’s spokesman arguing that Sarkozy’s figures were based on what would happen if Europe gave in to demands from developing countries. “He is basing his figures on false assumptions,” Mandelson’s spokesman Peter Power told journalists in Brussels on July 2. “Sarkozy’s figures would only be valid if the EU had agreed to the full demands of the large developing (G20) countries,” he said, adding: “we have not agreed, we will never agree to the full demands of the G20.” EU trade ministers will now meet during a special pre-WTO General Affairs Council in Brussels on July 18. This will make sure everyone “is singing from the same hymn sheet come July 21,” one EU official told TNI.
G8 leaders urge action
EU leaders put on a show of unity during a G8 summit in Japan on July 7-9, giving strong political backing to strike a Doha deal.5 EU Commission President José Manuel Barroso told leaders that failure in Geneva in July would undermine the global fight against climate change and other collectivechallenges. “The failure of Doha would be a political failure of our capacity to conduct in the international system,” he said.6 UK Prime Minister, Gordon Brown, warned the talks were at “a minute to midnight” and issued a joint statement with Brazil’s president, Luiz Inácio Lula de Silva, stressing the need to boost the flagging global economy by opening markets.7 “President Sarkozy was clear that he wanted to see a breakthrough in the talks,” Brown claimed.8
Failure could spell the end
In private, WTO delegates are voicing doubts that the July ministerial will succeed. Without a breakthrough before the traditional summer holidays in August, many fear the Doha Round will collapse. Not only is the US heading towards presidential elections and a change of administration, India will hold elections in 2009 and a new European Commission team will take office.
1 To read Lamy’s full speech, see: Lamy urges “maximum effort” for July meeting of ministers, trade negotiations committee, June 27 2008, www.wto.org
2 See: WTO members still apart on industrial goods trade, Jonathon Lynn,Reuters, July 8 2008.
3 For full details on this topic and the question of the ‘anti-concentration’clause, see: Bridges Weekly Trade News Digest, Volume.12, Number 25, July 9 2008. www.ictsd.org/weekly
4 See: Sarkozy-Mandelson tensions flare as WTO talks loom, Agence France-Presse, July 2 2008.
5 G8 countries are: US, Japan, Germany, Italy, Canada, UK, France and Russia.
6 See: President Barroso’s press conference at the G8 summit in Toyako, Hokkaido, Japan, July 8 2008, www.ec.europa.eu
7 See: G8: Gordon Brown expects world trade deal to save British families £200 a year, The Telegraph, July 9 2008, www.telegraph.co.uk
8 See: G8 backs ‘make-or-break’ global trade deal to ease flagging economies, The Guardian, July 8 2008.
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