Bridges Weekly Trade News Digest • Volume 10 • Number 15 • 3rd May 2006

Lamy To TNC: Members Must Step Up Intensity Of Negotiations

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Referring to WTO Members’ failure to meet a key end-April deadline as a "disappointment… but not a disaster," Director-General Pascal Lamy exhorted trade negotiators on 1 May to step up efforts to agree on modalities for subsidy and tariff cuts as soon as possible in order to conclude the Doha Round trade negotiations by the end of the year. "We must now focus our efforts on working intensively, continuously and in an effective manner on a text-based negotiating process," he told the Trade Negotiations Committee (TNC).

The WTO chief, who chairs the TNC, said that Members had rebounded from their recognition last week that they remained too divided to reach a framework deal on cutting agricultural tariffs, farm subsidies and duties on industrial goods, and were engaging constructively on how to move forward.

"We have already moved to convert disappointment into determination," Lamy said, pointing to the intensive negotiations underway on agriculture and non-agricultural market access (NAMA). "What is imperative now is to make significant progress on key issues as quickly as possible…We know that establishing modalities in agriculture and NAMA is necessary to unlock other issues," he continued, "our negotiations must move as a convoy, but some ships are in front." Although he mentioned no new deadlines, Lamy warned that "it is now a question of weeks rather than months." He reiterated his commitment to transparency, and said that the upcoming negotiations would be "solidly anchored in Geneva."

Lamy believes that progress in the negotiations would require the EU to lower farm tariffs further, the US to agree to deeper cuts in domestic farm support, and developing countries such as Brazil and India to move on industrial tariffs.

Ministers from Australia, Brazil, Japan, and the US came to Geneva this week, in part to demonstrate their continued commitment to the negotiations. They met with each other as well as with representatives from a variety of different Member groupings. A rare moment of optimism about the troubled talks came on 2 May, when US Trade Representative Rob Portman told journalists that Members were "relatively close" to agreement in most of the major issue areas. Later that day, he released a joint statement with Australian Trade Minister Mark Vaile saying "we know the essential elements for concluding the round," and that "a successful conclusion is within reach, with the right level of political will."

TNC sees some familiar positions repeated

In their reports to the TNC meeting, agriculture Chair Ambassador Crawford Falconer (New Zealand) and NAMA Chair Ambassador Don Stephenson (Canada) both stressed that Members needed political will and direction in order to bridge the well-known gaps between their positions.

Sources report that Australian Minister Vaile intervened to say that while Members seemed to have little appetite for a low ambition agreement, they should also not forget that what they currently have on the negotiating table is significant. Japanese Agriculture Minister Shoichi Nakagawa indicated that Japan was willing to do its part to contribute to farm trade liberalisation. Some trade observers believe that external pressure in the form of WTO obligations could make it easier for Japan’s government to promote reforms to its politically sensitive farm sector.

The US reiterated its commitment to a high ambition round. Developing countries "will be the biggest losers if we fail," said Ambassador Peter Allgeier. To emphasise the urgency of agreeing on framework agriculture and NAMA deals well before the end of July, he pointed to the months of work that negotiators would have to do even after an agreement on modalities, particularly with regard to ironing out details about market access flexibilities to everybody’s satisfaction.

EU Ambassador Carlo Trojan said that he was "personally convinced that a comprehensive deal can be made before the [August] summer holidays" but that this would "require a breakthrough on modalities by mid-June and sufficient progress on issues other than agriculture and NAMA." The EU has been seeking deeper industrial tariff cuts from the G-20 developing countries. It has also come under heavy pressure from the G-20 and the US to offer deeper cuts to its own farm tariffs. Trojan stressed that success in the negotiations would depend on "a preparedness to accommodate each others’ genuine political red lines," and that "much remains to be done to find the right exchange rate between market access in agriculture and NAMA."

Indian Ambassador Ujal Singh Bhatia said that "while on the one hand, we are yet to see meaningful progress on the central issues of effective cuts in agricultural subsidies and enhanced market access in developed countries, on the other the focus seems to have shifted to opening the markets of developing countries." He warned that "if this is going to be the tenor of discussions in the next few weeks, it will not require an astrologer to predict the outcome." South Africa made a similar point, on behalf of the NAMA-11 group of developing countries.

Speaking for the African, Caribbean, and Pacific (ACP) countries, most of which currently benefit from some sort of preferential access to developed country markets, Mauritius voiced concern about the lack of progress on addressing preference erosion. It warned that it would be hard for the group to accept modalities that did not adequately deal with the issue.

Notably, one source reported that India and Brazil suggested during the meeting that they were going to submit draft text for an amendment to the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) to require patent seekers to disclose the origin and legal source of genetic resources and associated traditional knowledge used in their invention. Several developing countries have been pushing for such an amendment in a variety of fora at the WTO (see BRIDGES Weekly, 22 March 2006).

Signs of potential movement?

While in Geneva, Brazilian Foreign Minister Celso Amorim said that he had seen signs of increased flexibility from the EU and the US. EU Trade Commissioner Peter Mandelson told a 26 April press conference that "if key partners put something on the table, the EU will be prepared to further enhance our current agricultural offer."

Amorim reported a sense that the G-20’s agriculture proposal — which calls for a level of tariff reduction roughly between what the EU and the US are seeking — would emerge as an acceptable compromise. The G-20 would have developed countries cut farm tariffs by an average of 54 percent, compared to the 46 percent sought by the EU (its trading partners claim that the real figure would be closer to 39 percent) and the US’ 75 percent. "The G-20 proposal combines realism with ambition," Amorim said. Vaile told the press that the G-20’s proposal reflected a somewhat disappointing "absolute minimum" of what Australia might be able to accept.

Lamy, for his part, believes that an agreement "remains doable." However, as he told delegates at the TNC meeting, it can only happen "if a sense of urgency — which I feel is not always shared by you all — starts appearing in each and every delegation."

ICTSD reporting; "Top trade powers say WTO deal still possible," REUTERS, 2 May 2006; "No time to spare in WTO Doha Round: Lamy," AGENCE FRANCE PRESSE, 1 May 2006.