Bridges Weekly Trade News Digest • Volume 12 • Number 40 • 26th November 2008
Geneva Schizophrenic as Possible WTO Ministerial Looms
Discuss this articleShare your views with other visitors, and read what they have to say
Negotiators in Geneva veered between cautious optimism and gloom as preparations for a proposed mini-ministerial meeting in December rapidly gathered pace.
WTO Director-General Pascal Lamy has moved quickly to organise a series of intensive invitation-only ‘Green Room’ meetings with senior negotiators this week to try to thrash out unfinished details of a possible trade package. But while the chair of the agriculture talks has also carried out parallel consultations with negotiators, he told a meeting of the full membership last Friday that he had heard “nothing new” from negotiators.
The farm talks chair, Ambassador Crawford Falconer (New Zealand), said that he had hoped to be able to report on a “tsunami of flexibilities” after the “earthquake in Washington” – referring to a meeting in the US capital the previous weekend at which 20 countries agreed to strive for an outline deal on tariff and subsidy cuts by the end of the year. Falconer has emphasised that Members must quickly show signs of new flexibility if an accord is to be reached in time (see BRIDGES Weekly, 19 November 2008, http://ictsd.net/i/news/bridgesweekly/34108/).
Delegates said that the Washington statement had provided a “political impetus” to the troubled Doha Round talks, which have lurched from one breakdown to another since they were started seven years ago. One nonetheless warned that a failure in December, hard on the heels of a July collapse, would be “a severe blow” for the WTO and the multilateral system. Another glumly noted that a mini-ministerial meeting was now “inevitable.”
Twin-track talks
Twin-track talks have been held by Lamy and Falconer in a final bid to conjure the elusive flexibility required for a final accord. While Falconer has generally held small informal meetings, dubbed ‘walks in the woods’, with around ten or twelve ambassadors in the afternoons, Lamy has conducted ‘Green Room’ meetings from 6pm onwards with a larger group of around 20 senior officials. The invitees, and the number of participants, at each gathering appeared to vary depending on the issue, said sources.
In particular, Lamy has highlighted four key issues which he believes must be resolved if a blueprint deal on a global trade accord can be clinched in the weeks ahead. These include the special safeguard mechanism, which would allow developing countries to raise tariffs temporarily when import volumes surge or prices fall suddenly; the number and treatment of ‘sensitive products’, of particular concern to importers such as Japan; and sectorals and preference erosion for industrial goods.
Falconer has scrambled to tie up loose ends on a wider array of unsolved questions, including tariff simplification, tariff rate quota (TRQ) creation, preference erosion, tariff caps, and the ‘special products’ that developing countries will be allowed to shield from the full tariff cut on the basis of food security, livelihood security and rural development criteria. Like Lamy, he is also consulting with Members on sensitive products and the special safeguard mechanism, with talks on the latter due Thursday.
As recently as today, negotiators familiar with the talks echoed Falconer’s comments from Friday, warning that “wide gaps” in positions remained.
Preference erosion: clarity on implementation periods
Talks on preference erosion have pitted Latin American exporters against African, Caribbean and Pacific countries: while the former have emphasised the mandate for liberalising trade in tropical products, the latter, which currently benefit from trade preferences on many of the same goods, have emphasised the need to address the erosion of these preferences. Bananas and sugar have proved particularly controversial, with an outline banana deal withdrawn from the table by the EU when a broader Doha package collapsed in July.
Falconer told negotiators on Friday that his talks that week had sought to clarify the extent to which Members still stood by concessions they had made in July – at least for those products that were not on the list of tropical products that are slated for faster and deeper tariff cuts. Preference recipients and importers (primarily the EU and US) appeared still to share an agreement they had reached at that time, he said. However, they were reluctant to share details of which products would be affected, on the basis that any such deal would depend on concessions made elsewhere in the talks.
But the chair did suggest that Members seemed to agree on the extended time period that developed countries would be allowed in order to cut tariffs for these products: it was likely to be the same as the implementation period for developing country tariff cuts (probably either eight or ten years).
The chair also conducted further talks on domestic support and export competition aimed at clarifying whether countries still stood by the concessions they had indicated they could make in July.
Japan and Canada seek larger sensitive product allowance
Both Japan and Canada were reportedly seeking to be allowed a larger number of ‘sensitive products’ than they are under the chair’s July draft text. Both developed and developing countries can slate these products for gentler tariff cuts in exchange for expanded import quotas.
According to trade sources, Japan wants to be allowed to shield a total of 8 percent of its agricultural tariff lines as ‘sensitive’, whilst Canada would like 6 percent. Both countries would currently be allowed only 4 percent. Exporters have demanded that import quotas for all sensitive products be expanded by one percent for each additional one percent of sensitive tariff lines: however, it remains unclear whether Japan or Canada could accept this requirement.
TRQ creation, tariff simplification remain divisive
Exporters, which have traditionally opposed allowing importing countries to create new tariff rate quotas for products for which these had not previously existed, told Bridges that clear rules would have to be agreed up front if any such flexibility were to be allowed. Exporting countries continue to argue that quotas should only be an option for products designated as sensitive, while importers argue that some other products should be able to benefit from them too.
In particular, the draft ‘modalities’ document (setting out formula and figures for tariff and subsidy cuts, and exceptions to them) would have to state explicitly the requirements on how such products would be treated and selected, how quotas would be allocated, and a range of other issues.
Members were also yet to reach agreement on tariff simplification. While exporters had earlier called for all complex tariffs to be converted into simple ones expressed as a percentage of a product’s value, some had more recently revisited this demand as studies showed that the conversion methodology agreed on previously might actually mean a reduction of market access. A new paper from Uruguay offers an olive branch to importers, by holding open the option of leaving some tariffs in a more complex form if these have not been simplified after a period of time has elapsed. However, some developing countries such as India were reportedly unconvinced by the proposal.
NAMA talks stuck on sectorals
Parallel talks on non-agricultural market access, or NAMA, did not register much progress at a meeting Monday evening, with Members caught up on the issue of sectoral agreements, a source said. Disagreement reportedly continues to centre on the range of products that should be covered in the sector-specific liberalisation initiatives, as well as on which countries should participate in the tariff-cutting schemes.
Major developed Members such as Canada, the EU and the US want firm commitments from countries such as Brazil, China and India that the emerging economies will take part in the sectoral agreements. But the deep tariff cutting that would be required by the deals might pose a challenge to some developing countries. Brazil reportedly said that it was open to discussion on how it could participate, but China expressed greater hesitation. Beijing has said that deep liberalisation in sectors such as chemicals and electricity would be especially difficult.
The chair of the NAMA negotiations, Luzius Wasescha of Switzerland, will brief Members on progress in the talks at a transparency meeting on Friday afternoon.
“Inevitable” ministerial closes in
The looming mini-ministerial is likely to force some tough choices in the days ahead. Lamy is expected to have to decide in the week of 1 December whether to invite ministers to Geneva for a meeting – to last an estimated three days – sometime between the 10th and 19th of the month. Members are keen to avoid a repeat of the July gathering, which saw many trade ministers shut out of small-group negotiations for several days on end.
A new draft text from Falconer, which as recently as last week was seen as a possibility if Members showed signs of flexibility, now appears unlikely in the immediate future. Delegates had earlier suggested that a text could be circulated as early as this Friday. If a new draft is to be released, the window of time for doing so is closing rapidly, as Ministers and policy-makers would normally want to be able to see a copy at least some days in advance.
Talks on the special safeguard mechanism are scheduled for this Thursday, with an informal meeting open to the whole membership planned for Friday 28 November. Beyond this, the schedule for the talks remains unclear.
ICTSD reporting.
One response to “Geneva Schizophrenic as Possible WTO Ministerial Looms”
Add a comment
Enter your details and a comment below, then click Submit Comment. We’ll review and publish the best comments.
[...] Published Wednesday 26 November 2008 WTO , linking Rumour has it that another WTO mini-ministerial is in the offing next month. This is somewhat hard to understand, [...]