WTO Ministerial Section • Volume 9 • Number 15 • 4th May 2005

Supachai: Negotiations Behind Schedule for July, Hong Kong

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WTO Director-General Supachai Panitchpakdi warned Members at a 28 April meeting that the ongoing Doha Round trade negotiations were well behind the pace they had set out to achieve earlier this year, potentially threatening the chances of an agreement at the December Ministerial Conference in Hong Kong.

Speaking to the WTO Trade Negotiations Committee (TNC), which he chairs, Supachai described overall progress in the ongoing Doha Round trade talks as "rather worrying," and called on Members to display a "greater sense of urgency" and be more result-oriented.

Members had agreed in February on an end-July target for ‘first approximations’ of an eventual Hong Kong deal that would set the stage for concluding the Doha Round within a year. At the time, Supachai told the TNC that in order for the Round to be finished in 2006, Members would need to agree at Hong Kong on modalities for the agriculture and non-agricultural market access talks, "a critical mass of market opening offers in services, significant progress in areas such as rules and trade facilitation, and a proper reflection of the development dimension." The July approximations would have to "already provide a sufficient level of confidence" to assure Members that their different areas of interest were being addressed in the negotiations (see BRIDGES Weekly, 16 February 2005).

Problems in agriculture, NAMA, services

In his recent speech, however, Supachai said that he had "certainly toned down the optimism" that he had earlier this year, warning that if the talks continued to progress at the current rate, Members would be unable to meet either deadline. "Despite some initial signs that we were about to start really negotiating on substance [as opposed to simply technical work]," he continued, "we seem to have stalled at the first difficult issue confronting us."

To support these assertions, Supachai pointed to problems in virtually every area of the negotiations. He specifically drew attention to the "fairly serious setback" posed to the agriculture negotiations by Members’ recent failure to agree on a way to convert specific tariffs and other duties not based on the value of the imported good into ‘ad valorem’ equivalents (AVEs). Declaring that "it is simply not credible that this issue could torpedo the Round," he urged Members to work with Ambassador Tim Groser of New Zealand, the Chair of the agriculture negotiations, to find a solution to the issue that has brought the talks about market access for farm products to a standstill (see related story, this issue).

Supachai also urged Members to start substantive discussions based on the existing proposals in the deeply divided negotiations on non-agricultural market access (NAMA), arguing that "we simply cannot afford to wait for agriculture to move forward" before doing so. He said that the services negotiations, too, had not "gathered the much needed momentum," calling on Members to table initial and revised offers of market access to foreign services providers before the end of May.

Referring to the recent impasse in the negotiations on special and differential treatment for developing countries, Supachai asked Members to be more flexible in accommodating each other’s interests. (See BRIDGES Weekly, 13 April 2005)

Some Members lowering expectations for July, Hong Kong

Trade sources indicate that a wide number of Members agreed with Supachai’s gloomy prognosis, and admitted to significantly lowered expectations for July and December. Though some delegations had initially hoped that the ‘first approximations’ would be agreed preliminary versions of negotiating modalities in areas such as NAMA and agriculture, many now suggest that the July talks are likely to produce little more than progress summaries prepared by the Chairs of each of the negotiating bodies. At best, these reports would indicate potential areas of convergence in their respective negotiating areas. Moreover, they are likely to remain unadopted by Members.

On the other hand, some negotiators have noted that WTO negotiations tend not to progress except when Members are under pressure to make deals, and that consistent movement over the course of the entire year was an unrealistic expectation.

A developing country negotiator accused agriculturally-protectionist developed countries of lowering ambitions for July because they want to trade off a low level of agriculture liberalisation against milder commitments on NAMA, rules, and other areas, according to trade news reports.

Supachai: Members cannot leave everything to the last minute

Supachai concluded his statement by emphasising that "we simply cannot leave too much to the autumn," explaining that "consensus cannot be built overnight, and if we do not kick start the process towards it rapidly, we could be facing serious problems." He later told journalists that "there was too much on the plate at Cancun," which contributed to Members’ failure to reach an agreement at the Ministerial Conference held there in September 2003.

Although Supachai did tell Member delegations "I am not pushing the alarm button now," he warned that his "finger is hovering over it." He appealed to them to show a "greater sense of urgency" and to "not waste any of the limited time ahead of us."

Part of the urgency to complete the Round springs from the mid-2007 expiry of US President George W. Bush’s ‘Trade Promotion Authority,’ after which the Bush Administration will no longer be able to negotiate trade agreements without clause-by-clause approval from the US Congress. This would almost certainly complicate WTO negotiations.

Ministers and senior trade officials from several influential WTO Member countries are meeting in Paris from 3-4 May on the sidelines of the Organisation for Economic Cooperation and Development (OECD) ministerial gathering to discuss how to bring the Doha Round talks back on track.

ICTSD reporting; "Supachai Sounds Alert on Doha Round, Warns of Failure at Hong Kong Ministerial," WTO REPORTER, 29 April 2005; "Supachai pessimistic on HK ministerial," BUSINESS STANDARD, 3 May 2005; " Skirt Cancun to reach Hong Kong," ECONOMIC TIMES; 3 May 2005.