Survey of the WTO negotiations

Some readers have accused me, offline, of describing a dead negotiation as ‘just resting’ (or, perhaps, “‘pining for the fjords'”:http://www.mtholyoke.edu/~ebarnes/python/dead-parrot.htm). I’m less pessimistic than many commentators about remaining opportunities in these negotiations; but I’m not a”‘ressurectionist'”:http://www.literaturepage.com/read/taleoftwocities-176.html. Fortunately, I don’t need to be. As I “predicted”:http://www.inquit.com/article/455/wto-agriculture-negotiations-gloom-abounds, the Director-General of WTO—tired of playing with an ‘alarm button’ that is connected to nothing but an alarm—has given us a more balanced overview of where we stand with the whole package of talks. A C+/-, I’d say I’ll limit this report to the salient extracts from Dr Supachai’s report to the Trade Negotations Committee, which is effectively his last act as Director-General (Pascal Lamy takes over from him in September). You can find the “full report”:http://www.wto.org/english/news_e/news05_e/gc_tnc5_e.doc [MS Word file, about 140k] on the WTO website. Also, I’ve obtained Tim Grosser’s final report as Agriculture Negotiations Chairman; you can download it “here(Groser July Report to TNC.pdf)”:http://www.inquit.com/file_download/7 from my site as a PDF file [about 20k]. h4. The goal for July 2005 bq. …we started the year with a high level of convergence on the need for a substantial breakthrough in Hong Kong in five key areas.  These areas had first been mapped out by a number of Ministers at their gathering in Davos in January, and my subsequent consultations across the broad spectrum of the membership confirmed the importance of such a focus.  The areas which I set out at the TNC meeting in February were: ** modalities in Agriculture
** modalities in NAMA
** 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. h4. The achievement in agriculture bq. …the negative side of the ledger outweighs the positive.  My frank assessment is that we have a long way to go to achieve the goals I recalled earlier.  The fact is that since July of last year, the progress made has been insufficient h4. The future of the agriculture talks bq. I wish to recognize that over the past couple of weeks major players have come forward with concrete and specific proposals in all areas under negotiation.  These are valuable inputs.  What has been hampering our work in Geneva is not so much a dearth of ideas but a certain reluctance on the part of key players to engage in real negotiations on the proposals put on the table.  This must change and it must change immediately … At this stage, market access is the area in most urgent need of movement.  In his recent Assessment the Chairman of the negotiations on Agriculture has clearly identified where, as an initial step, we must get convergence now: the structure of the tiered formula for tariff cuts coupled with further elaboration of certain flexibilities, in particular the selection and treatment of sensitive products and of Special Products. h4. NAMA negotiations better focussed He went on to acknowledge that “the developments of the last week” in the Non-agricultural Market Access (NAMA) negotiations had given him “some hope” of progress on the chicken and egg problem of separately agreeing on the related issues of the structure of access improvements and the scale of the improvements.  bq. One interesting aspect is that divergences [in NAMA] seem to be mainly related to the balance between the level of ambition and the flexibilities, rather than the structure of the formula itself [likely to be a ‘harmonizing’ or ‘swiss-type’ formula].  The Chairman has suggested that the way out of this situation is to engage as soon as possible on the actual numbers, and I fully endorse that.  A balance between ambition and flexibilities will only be found if we go deep into the numbers and engage in real discussions and trade-offs h4. Improvement in the progress on Services bq. …I am pleased to report that the pace of the services negotiations has shown moderate signs of improvement, which is reflected in the number of initial and revised offers submitted over the past two months.  So far, 68 initial and 24 revised offers have been submitted.  The May date for the submission of revised offers has motivated governments who had not submitted initial offers to do so.  During the two months of May and June, 16 initial offers were submitted.  Adding the 24 revised offers, the total number of all offers submitted during the last two months is 40.  Considering that the total number of offers submitted in the first two years was 50, it could be said that the pace of submitting offers has recently picked up…[but] the overall quality remains unsatisfactory.  Few, if any, provide new business opportunities to service suppliers.  Most Members feel that the negotiations are not progressing as well as they should (“Supachai”:http://www.wto.org/english/news_e/news05_e/gc_tnc5_e.doc) h4. Satisfactory progress on Rules, Trade Facilitation, Environment, Dispute Settlement and TRIPS The most controversial issue is possible changes in the rules on anti-dumping and the subsidies agreement bq. The process should be sharpened by limiting work to precise textual proposals to improve the Agreements on Anti-Dumping and on Subsidies and Countervailing Measures.  An intense and rigorous process is needed to ensure that in Hong Kong we will have a solid basis for the final stage of the Round.  In this regard, I have noted the call by the Co-Chairs of the Dalian mini-Ministerial for text-based negotiations to begin as soon as possible, at the latest from Hong Kong onwards h4. ‘Development’ and ‘Special and Differential’ arrangements are still (mostly) talk bq. What remains fundamentally important in moving forward on S&D is for Members to convert their commitment towards solving the problems faced by developing and least-developed countries into tangible and meaningful results.  Not making any progress in this area will give credence to those who question the developmental thrust of the Round and could set back our efforts to further integrate developing and least-developed countries into the multilateral trading system. h4. Steps to Hong Kong The Director-General concludes by offering some specific guidance for WTO member economies in the five months left before the Hong Kong Ministerial meeting. The points he makes are implied by the remarks excerpted above. He concludes with a statement that I think is right on the money—as you’ll see in the conclusion of my book on the first ten year of WTO, due to be published by Cambridge University Press in October/November: bq. There is no mystery to the substantive problems in these negotiations.  The technical issues have been exhaustively explored, the political choices have been identified and narrowed down.  However, being understood apparently does not make them easier to resolve.  I am seriously concerned that we are still seeing a tendency towards brinkmanship among negotiators who should know better.  Recent experience, most painfully at Canc√∫n, has taught us that a multilateral deal in today’s WTO cannot be pushed through by a few Members.  This lesson needs to be fully absorbed and acted upon.

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