1st December 1999

BRIDGES Daily Update - 1 December 1999 (English)

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EU Reverses Position on Biotechnology Working Group, Ministers and Experts Disagree.
According to sources close to the negotiations, the establishment of a working group on biotechnology is a near certainty. Reversing its earlier opposition, the EU joined the United States, Canada and Japan in backing the initiative, although the US and EU still disagree on the group’s mandate. According to European Commission officials, the EU’s goal is to inject the real concerns’ of consumers and environmentalists into the debate, while the US seeks a much narrower mandate focused on securing timely, science-based and transparent approval processes. EU officials also stressed that the European Council of Ministers would not agree to anything that would undermine EU norms or jeopardise the early and successful conclusion’ of the Biosafety Protocol.

Meanwhile, the environment ministers of the UK, France, Denmark, Italy and Belgium issued a statement opposing the establishment of the working group. Biotechnology issues should addressed within the framework of the Biosafety Protocol, the ministers said.

The working group proposal has not received much attention from developing country delegations until recently. Northern and Southern NGOs, however, have increasingly insisted that the WTO is not the right venue to enhance coherence between trade policy and sound management of genetic resources. On Tuesday, the Expert Panel on Trade and Sustainable Development also expressed a preference for dealing with biotechnology through a strengthening of multilateral environmental agreements such as the Convention on Biological Diversity, and in particular through broad-based negotiation of the Biosafety Protocol, due to resume in January. In light of the lack of public trust and the reaction against the use of genetically-modified organisms, the panel strongly supported the incorporation of the Rio Declaration precautionary principle into the WTO in order to enhance coherence between trade rules and the Biosafety Protocol.

Ministerial Working Group Chairs Solidified

Following the withdrawal of Hong Kong from the Chair’s position for the Singapore Issues working group, further discussions among Members have solidified which ministers will be chairing which of the WTO’s five main working groups. Chairing the Market Access group will be Lesotho; Agriculture will be jointly chaired by Singapore and Bangladesh; Canada and Jamaica will jointly chair Implementation, New Zealand will chair the group on Singapore (or New) Issues such as environment, investment/competition, and (likely) biotechnology; and Chile and Fiji will together chair the group on systemic issues, including institutional reform and transparency. On Wednesday, 1 December, at least two of the groups are expected to meet formally. Following a Committee of the Whole session at 9am, the Agriculture group will meet at 10am, followed by a meeting of the Market Access group at 11am. Implementation will also likely meet tomorrow, though no time has yet been fixed. The Singapore Issues group is expected to convene on 2 December. All working groups will be open to all delegations.

LDC Initiative: Divide and Conquer?

Least-developed countries were the object of particular attention in the opening statements of the Seattle Ministerial Conference. The European Union, France, the UK, the United States and Canada all emphasised their wish to help least-developed countries (LDCs) use the multilateral trading system to their advantage’ and provide them with technical assistance so that they can fulfil their WTO obligations.

Many observers, particularly in developing countries, question the motives of this attitude towards LDCs in the tense context surrounding the launch of the conference. Some view it as an attempt to divide the Group of 77 and certain regional groups, such as the African group.

The EU had already announced that it would modify its General System of Preferences to allow LDC exports into the Union duty-free within five years. The EU and Japan also announced Monday night their initiative to provide duty-free access to essentially all products’ from LDCs by the end of the Seattle Round. EU officials seem confident that the U.S. and Canada will join the initiative shortly. Essentially all products’ is understood to cover 98-99 percent of LDC exports.

This initiative is problematic for economic and trade areas comprised of LDCs and middle-income developing countries, as it means different treatment for countries within the same trade framework, such as the West African Economic and Monetary Union.

U.S., EU on Sustainable Development and Environment

U.S. Trade Representative Charlene Barshefsky, in an effort to address some of the concerns of protestors massed in the streets of Seattle, emphasised in a press briefing that the world trading system should be guided by sustainable development. Sustainable development is an important model for many countries: poor countries need to have the financial capacity to take care of their environmental situations, and benefits deriving from trade can help make this happen,’ she said. Barshefsky’s comments point to a U.S. willingness to have sustainable development included in a Ministerial Declaration, though it is likely that this will materialise only as a general statement in the preambular ‘Objectives and Priorities’ section. The fact that we haven’t addressed these issues in the first 50 years of the GATT doesn’t mean that we shouldn’t over the next 50, not to mention right now,’ she added.

Barshefsky further remarked that the Clinton Administration was sensitive to the legitimate demands of the ‘peaceful protestors’, but distanced the U.S. from the violent disruptions that characterised some of the demonstrations.

The EU also cited its own push on environmental matters. Robert Madelin of the EU delegation gave a briefing for non-governmental organisations where questions on the EU’s position on environment were raised. On multilateral environmental agreements, Madelin outlined the developing country approach as one of if it ain’t broke, don’t fix it’. He indicated that the U.S. is not as committed to multilateralism as the EU would like, implying that this is not a priority issue for the Clinton administration.

U.S. goals are identified as a solidified role for the WTO’s Committee on Trade and Environment, environmental reviews of trade agreements and fisheries. Madelin informed the attendees that he was about to go for a meeting with the WTO Director-General, ostensibly to keep environment in the text.’ The EU is pushing to have references to the environment interspersed throughout the Ministerial Declaration text, as they want to ensure that it will remain on the final Declaration. Said Madelin, ‘We do not want to put all our environmental demands in just one paragraph, as the nature of the drafting process is such that entire paragraphs get deleted all the time, and we wouldn’t want to lose all our demands in this area in one fell swoop.’

EU and U.S. See ‘Eye to Eye’ on Environment and Labour

At a briefing for non-governmental organisations on Tuesday, Robert Madelin of the European Commission said that, in spite of slightly different approaches, on the substance of labour and environmental issues the EU and the U.S. ’see eye-to-eye’ but admitted that it was difficult to ‘get developing countries on board’.

The EU is also talking to number of key developing countries in an effort to drum up support for its proposals to launch negotiations on investment and competition policy. While there is resistance, Mr Madelin said there was not ‘as yet a definite yes or no’ to the issues. Japan, Korea and EU applicants support the launch of negotiations on investment and competition policy.

According to Mr Madelin, the EU is willing to go a ‘long way’ towards meeting developing countries’ demands both with regard to adjusting the current framework and with negotiating changes to existing Agreements, such as the Anti-dumping and Subsidies Agreements. With regard to agriculture, implementation problems will be dealt with within the new round

The next briefings are tentatively scheduled for 2.30 p.m. on Wednesday, 3.30 p.m. on Thursday and 10 a.m. Friday.

Agriculture: New U.S.-Cairns Draft Text

A draft text on agriculture originating from the U.S. and Cairns Group stakes its approach to the EU outside of the comparative safety afforded by the Agreement on Agriculture’s Article 20 approach of ’substantial progressive reductions’. By stating that negotiations should ‘take into account the concerns of Article 20 and the Preamble to the Agreement on Agriculture’, it provides scope for recognition of non-trade concerns while at the same time abandoning the measured reduction that is implied in the current language of Article 20.

The draft delineates the possible benefits of such a formulation for developing countries. It includes an extended section on special and differential treatment and commits to taking ‘fully into account all of [the developing countries'] development needs, including food security, and agricultural and rural development’ in a context which foresees the full engagement of developing countries in agricultural negotiations, including ‘undertaking commitments and providing concessions.’ The draft further focuses on the ‘elimination of all forms of export subsidies’ and on ’substantial reductions in domestic support’, but does not address any other mechanisms outside of this context such as certain subsidies favoured by the U.S.

According to Sophia Murphy of the U.S.-based Institute for Agriculture and Trade Policy, the U.S./Cairns text is lacking in many areas. In particular, it is missing ’substantive commitments on food security, operational measures to make the commitment to assist poor net-food importing countries meaningful, and mention of disciplining the heavy distortions in world agricultural markets created by the market power of food and grain trading multinationals.’
EU Mobilises Support For Draft Declaration

The European Union is leading the effort to come up with a ministerial declaration that would launch a new round of trade negotiations in Seattle.

Korea, Hungary and Japan have already expressed their support for the EU’s latest draft, but disagreement persists between the EU and the Cairns Group/U.S. on the whether the negotiations should be ‘based on’ Article 20 of the Agreement on Agriculture or only ‘take [the Article] into account’. The EU and its allies prefer the first option, as it would clearly indicate that the goal of the negotiations is ’substantial progressive reductions in support’ rather than terminating the special treatment of agriculture within the WTO (see related article on the US/Cairns draft text above).

It also seems that the draft foresees a revision of the Agreement on Anti-dumping - a key demand of developing countries. The U.S. continues to oppose the reopening of the Agreement.

In the meanwhile, the United States is reportedly working on a short and general ‘fallback’ declaration that would essentially send the negotiations back to Geneva.

American Farm Group Joins Japanese and European Counterparts In Push For Multifunctionality
As informal talks on agriculture carried on in bilateral and plurilateral fora, representatives from three groups representing agriculture producers in the U.S., Japan and Europe put forward a common position on supporting the concept of multifunctionality in WTO negotiations. ‘We’re now seeing the acceptance of these issues, such as animal welfare and conservation measures, growing in the U.S.’, stated Leland Swenson, President of the U.S.-based National Farmer’s Union. ‘As in the EU and Japan, agriculture in the U.S. also serves a multifunctional role,’ he said. The three representatives further confirmed that the inclusion of language on ‘non-trade concerns’ in a Ministerial Declaration — as has been forwarded in the latest U.S.-Cairns group proposed text — would provide sufficient scope to push for multifunctionality in agriculture in subsequent negotiations. The two other organisations included the COPA-COGECA (EU) and JA Zenchu (Japan). The JA Zenchu representative stressed that a coexistence of the various types of agricultural models should be allowed so that the multifunctionality of agriculture is fulfilled in each country. The leaders also urged that a set of rules and disciplines that are genuinely fair and equitable for both food importing and exporting countries as well as for developed and developing countries should be established.

Deforestation and Forest Degradation Concern A Major Concern

The UN Environment Programme (UNEP), World Rain Forest Movement Uruguay, and Friends of the Earth on 30 November presented a session on addressing the underlying causes of deforestation and forest degradation. The meeting concluded that the WTO should not take forests and forestry on board at its negotiations. Non-governmental representatives from both North and South were fearful that forest negotiations at the international level will not yield a satisfactory result with respect to forest management. Of major concern was that no distinction has been made between planted forests and old growth forests. The Boreal forests of Northern Europe are in trade terms considered similar to planted forests. With a current world rate of deforestation at 12 million ha /year, forestry practices are clearly unsustainable. The group urged for revision and greater transparency in developing sustainable forestry practices. At a later briefing with staff of the U.S. Trade Representative, officials noted that there would be no advancement in the Accelerated Trade Liberalisation (ATL) initiative until at least mid-2000. The ATL is an arrangement that would potentially see early tariff reductions for a number of sectors including forest products, environmental goods and services, fishery products, automotives, civil aircraft, fertilisers, food, oilseeds, and rubber.

Transparency A Key Target Of Protests

Transparency and public participation issues took on a heightened sense of urgency among government delegates and NGOs as protests brought the first day of the WTO Ministerial conference to a halt for much of the day. In spite of the protests, which eventually led to the imposition of a curfew on Seattle, governments continued to meet throughout the day. Many delegates expressed frustration at the disruption of their very tight agenda and the short time frame available to forge consensus on a Ministerial Declaration. Nonetheless, the protests were viewed positively by some delegates as an opportunity to engage the broader public on trade issues.

Many direct encounters between protesters and government delegates, accredited NGOs, and press were tense and occasionally confrontational. Protesters consistently cited a lack of transparency in trade policy-making and the WTO, and an inability to influence trade policy as major concerns. Meanwhile, in a briefing for accredited NGOs hosted by the U.S. Trade Representative, one representative told participants that transparency and public participation issues were a very high priority for the U.S. government and would remain so in the coming round of negotiations in spite of resistance from other trading partners. A later press briefing given by USTR Charlene Barshefsky confirmed this, as Barshefsky noted: ‘I hope that the peaceful protests will prove a catalyst to the working group on transparency.’

WTO Law Centre to Be Launched

A signing ceremony will be held at 6 p.m. tomorrow on the Advisory Centre on WTO Law, set up by a group of developed and developing WTO Members to assist developing countries in defending and bringing cases to the dispute settlement system. The Centre responds to the need of developing countries to reduce the cost of litigation while maintaining access to legal expertise.