Bridges Weekly Trade News Digest • Volume 9 • Number 7 • 2nd March 2005
‘Friends Of Environmental Services’ Communication Discussed
SERVICES, NAMA, DEVELOPMENT PRIORITIES AT KENYA MINI-MINISTERIAL
The second WTO mini-ministerial meeting of 2005 is underway in Mombasa, Kenya this week as 30 trade ministers have gathered for informal talks from 3-6 February to move forward the Doha Round negotiations in the run-up to the December Ministerial Conference in Hong Kong.
Host Mukhisa Kituyi, Kenya’s trade minister, urged the countries attending the meeting to "build more human considerations in the rules of world trade". Along with Rwandan Trade Minister Nshuti Paul Manesser and Jamaican foreign Minister Keith Knight, he called for fair trade and the consideration of development issues at the meeting. Although EU Trade Commissioner Peter Mandelson, said he wanted "serious inroads to a major policy package on development," the EU joined the chairs of the Doha Round negotiating groups and several Members in urging the meeting’s organisers to put strong emphasis on services and non-agricultural market access (NAMA) negotiations. A senior WTO official has described services as the "crisis item" on the agenda of the mini-ministerial.
The meeting, which includes a strong contingent of African participants, will consider these issues along with other negotiating topics such as agriculture, WTO rules and trade facilitation. Ministers are also likely to have informal discussions on the race to succeed Supachai Panitchpakdi as WTO Director-General.
WTO Members are aiming to arrive at ‘first approximations’ of a final package to be adopted in Hong Kong by the end of July. The next mini-ministerial is scheduled to take place on the sidelines of the Organisation for Economic Cooperation and Development (OECD) ministerial summit in Paris from 3-4 May. Another is planned for July in China. Japan is reportedly considering hosting an Asian mini-ministerial in April that would focus mainly on NAMA issues.
ICTSD reporting; "Developing nations prepared for battle at WTO talks in Kenya," AFP, 2 March 2005; "EU demands ‘greater ambition’ at Kenya trade talks," REUTERS, 1 March 2005; "Japan may host Asian ministerial on WTO," JIJI PRESS, 1 March 2005; "EU Commissioners Mandelson and Fischer Boel travel to Kenya for multilateral trade talks," EC MEDIA RELEASE, 1 March 2005; "WTO talks on services markets face ‘crisis’", FINANCIAL TIMES, 1 March 2005; "Kenyan Plans for WTO Mini-Ministerial to Highlight African, Development Issues", WTO REPORTER, 1 March 2005; "WTO ‘Mini-Ministerial’ to Be Held in China This July to Help Set Stage for Hong Kong", 25 February 2005.
MEMBERS OPTIMISTIC FOLLOWING INFORMAL AG TALKS
Delegates focusing on agriculture at the WTO met in informal consultations on 25 February to continue hashing out ways to convert tariffs based on quantities into ‘ad valorem’ equivalents (AVEs), i.e., tariffs based on the price of the product — a problematic issue left pending after the last ‘agriculture week’ (see BRIDGES Weekly, 16 February 2005). AVEs must be established in order for Members to agree on an overall formula for tariff reductions.
Members discussed AVE conversion in both straightforward cases — in which the conversion would be based on three years of notified import values in the WTO Integrated Database (IDB) and import volumes — and more complicated conversions. They offered examples of what these complicated cases could be, such as instances where preferences or tariff quotas are involved. In complicated cases, the IDB might not be sufficient for determining the unit value of products, and Members began discussing alternative methods of determination. This issue, however, still needs more work, as do the parameters for the verification process once the conversions are done.
While delegates did not reach a final agreement, they characterised the mood of the meeting as rather positive. Informal negotiations will continue; the next ‘agriculture week’ is scheduled for 14-18 March.
ICTSD reporting.
DIFFERENCES OVER SCOPE OF WORK PROGRAMME LINGER IN WTO COTTON SUB-COMMITTEE
The WTO sub-committee on cotton reconvened on 28 February to continue discussions on its work programme. The consultations that had followed its first meeting on 16 February failed to yield consensus on the scope of the sub-committee’s work (see BRIDGES Weekly, 23 February 2005). At the meeting, some Members indicated their willingness to be flexible on the work programme. This led Chair Ambassador Tim Groser of New Zealand to indicate he would restart consultations after his return from a 2-4 March WTO mini-ministerial conference in Kenya.
The 16 February meeting and the consultations that followed had been marked by differences on the scope of the sub-committee’s work programme. The group of African WTO Members and other least-developed countries had wanted the work programme to specify more clearly that negotiations would take place in the sub-committee. This was reflected in their 25 February proposal that referred to establishing "modalities" in all three pillars (market access, domestic support and export subsidies) among other issues. The US, on the other hand, opposed this specific work programme. Taking the middle ground, the EU urged members not to delay the work of the sub-committee but rather to start work on substantive issues under the chair’s guidance. The EU pointed out that as the sub-committee reported to the agriculture negotiations, cotton would be a negotiating item in any case.
In the meantime, the observership application of the International Cotton Advisory Committee (ICAC) remains blocked as the Chinese delegation is still in consultations with its capital on this matter. The next formal meeting of the sub-committee is scheduled for 22 March.
ICTSD reporting; "WTO Cotton Talks Stall as Africans Push for More Ambitious Work Program," WTO REPORTER, 1 March 2005.
Environmental services were discussed during the recently-concluded services cluster (see related story, same issue), when the ‘Friends of Environmental Services,’ a group including Japan, the EU, Australia, Chinese Taipei, the US and Hong Kong, submitted a joint communication (TN/S/W/28, still restricted) on three key issues related to environmental services. Colombia, the Philippines and Mexico supported the submission. The issues were the feasibility of cross-border provision of environmental services (through Mode 1) and the ability of Members to thus schedule liberalisation commitments in these areas; the classification of ‘environmental services’; and the scheduling of commitments in environmental infrastructure services, particularly with regard to public-private partnerships.
One delegate said that the submission raised more questions rather than it answered, but clearly highlighted the kind of issues that would need to be resolved during the course of the negotiations. The negotiator added that the submission, since it was based on the outcome of earlier informal discussions among the ‘Friends’ group, was also an exercise in transparency. The group, initially suggested by the EU, is an informal one comprising Members who have made submissions on environmental services at the WTO. It includes developing countries such as Colombia, China, the Philippines and Mexico.
ICTSD reporting.