Lamy: “Clearer” road to Bali ministerial, though work remains

9 September 2013

A sum-up of the discussions that took place at the end of July in preparation of the Ministerial Conference in Bali later on this year.

Negotiations for the WTO's upcoming Ministerial Conference in Bali have recently picked up the pace, WTO Director-General Pascal Lamy reported this summer, keeping hopes alive for potentially achieving a successful outcome in December. However, many members have warned, much more work remains if the WTO wishes to harvest an ambitious set of Doha Round deliverables in time for this winter's high-level gathering.

"The road to Bali is much clearer than two months ago," Lamy told members in July during a meeting of the Trade Negotiations Committee, which was tasked with the Doha Round talks. However, despite the "encouraging progress" seen over the past two months, members are "not yet there."

"I would say that the glass is two thirds full," the Director-General said at that time.

July's meeting was meant to be a crucial stocktaking point in the ministerial preparations, with Lamy warning in June that this would be the last "petrol stop" on the road to Bali. (See Bridges Weekly, 6 June 2013). From September onward, members will have less than three working months to finalise a package for the December ministerial.

September is also the beginning of new Director-General's mandate, former Brazilian Ambassador Roberto Carvalho de Azevêdo, after Lamy stepped down from his post last 31 August. Whether a new global trade chief will have enough time to affect the pace of the Bali process, however, remains to be seen.

Members' interventions broadly echoed the idea that this summer's efforts have been "just enough" to keep the Bali preparations moving forward, a sentiment that delegates speaking to Bridges confirmed.

"If WTO members have not exactly shrouded themselves in glory, they have at least kept the ship afloat for the fall, and in some cases, managed to steer it away from obvious shoals," US Ambassador Michael Punke said in July. "We've probably done enough over the past months to give us one last shot at a meaningful package."

China also acknowledged movement in a direction that "recognised the natural linkage among various issues of the Bali package." However, Ambassador Yi Xiaozhun also warned that the speed of negotiations is still far from what is necessary. "We have to soberly admit that the current pace of work remains too slow to guarantee a harvest at [the ministerial]," he said.

Trade facilitation: need for more political engagement

The anticipated centerpiece of the planned Bali package would be an agreement on trade facilitation, which would, among other things, ease customs procedures and reduce time at border crossings.

Negotiations on this front, however, have repeatedly hit snags in recent months, particularly over disagreements regarding the level of flexibility, technical assistance, and capacity building that will be accorded to developing and least-developed country (LDC) members for implementing the proposed agreement.

Many of these developing country members are wary of taking on "onerous commitments" that could prove difficult to put into practice. However, some developed countries, such as the US, have stressed that obligations must be "clear and binding" in order for the agreement to have any impact, and have highlighted the proposals on flexibility that are currently on the table.

"The value that the WTO adds to global trade is binding rules," Punke said on the US' behalf two months ago. "If we don't create binding rules, our WTO negotiations add no value, and frankly, that type of outcome is of no interest to the United States."

The negotiating group tasked with the trade facilitation talks met in Geneva in July in an effort to resolve some of these differences, with discussions ending on a "positive note," according to Lamy. However, the Friends of the Chair - four senior officials who have been helping facilitate discussions in recent months - have reported only some progress, with many difficult issues and technical aspects remaining unresolved.

Members had hoped to remove half of the remaining square brackets in the draft text - which had numbered over 500 in June - by July's TNC. However, sources report that only a fraction of these have been eliminated. "We have not even come close to achieving this [50 percent] target," EU Ambassador to the WTO Angelos Pangratis commented during the July's meeting.

Ambassador Eduardo Sperisen-Yurt of Guatemala, who chairs the trade facilitation talks, said last week that the lack of flexibility shown by members has been "the real problem," according to sources present at the meeting. The Guatemalan ambassador has therefore called for more political, senior-level engagement in order for delegates to have the mandate to negotiate the necessary compromises, suggesting also the possibility of a "Signalling Conference" where members openly submit definitive proposals for finalising the text.

The next meeting of the negotiating group will be the week of 7 October.

Agriculture: no consensus

In a separate meeting in July, farm talks chair John Adank, the New Zealand ambassador, poured cold water on hopes that members might have reached agreement on agricultural trade issues that could be part of the "small package" deal for December.

"I'm not in a position to announce today that we have consensus in any area of our work in relation to Bali," he told an informal meeting of farm trade negotiators.

However, he did tell members that some progress had been achieved on proposals tabled by the G-33 group of developing countries with large numbers of smallholder farmers. (See Bridges Weekly, 20 June 2013)

Negotiators had moved ahead in talks on the wording of a possible new clause that would exempt a list of developing country farm subsidy programmes from the ceiling on trade-distorting support at the WTO, so long as they caused no more than minimal trade distortion.

Adank told the meeting that the G-33 had proposed deleting some programmes from this list - such as payments for the "provision of infrastructure services" and "nutritional food security" - as these are already considered as green box programmes under existing rules. "Some elements of convergence" have also emerged in talks over proposals to allow developing countries more flexibility to purchase food at subsidised prices when providing domestic food aid or building public stocks, said  the chair.  Negotiators had made particular headway on a possible interim mechanism that could provide greater flexibility to countries at risk of breaching their WTO commitments, he said.

However, they remained sharply divided over whether farm export subsidies should form part of a Bali deal. (See Bridges Weekly, 30 May 2013) "Clearly, we have some way to go in this area to locate any convergence," Adank warned.

Development talks "least  advanced," members say

The third area where WTO members are hoping to achieve outcomes in time for Bali involves development-related issues, which many say is the least advanced area of the talks. Some sources have commented that members appear to be waiting to see what comes from the other areas of negotiation before attempting major advances on these issues.

These discussions have been focused on three tracks. One of these involves the 28 Cancún proposals, which are part of a group of 88 proposals aimed at strengthening the special and differential treatment (S&DT) provisions in the various WTO agreements that were agreed, but not harvested, ten years ago.

Lamy reported in July that talks on these 28 proposals have continued advancing, with members currently exploring what these decade-old proposals mean in the 2013 context. Members will next review whether to adopt some or all of these, he said.

"While this work is ongoing, I believe it needs to be fast-tracked to get the necessary traction," he urged, reminding members that such proposals had already been agreed "in- principle." The process, he added, is about updates and not renegotiation.

The second area of discussions involves the so-called Monitoring Mechanism, which would review the functioning of provisions in WTO rules for S&DT treatment in favour of developing countries and potentially suggest improvements. While talks in this area have continued, the "conceptual clarity" that has emerged must now be turned into drafting language, Lamy said.

The  third  area,  regarding  the Sanitary  and  Phytosanitary  Measures and  the Import Licensing  Procedures Agreements,  has been put on hold until  after Bali, with talks  on these Agreement-specific proposals having hit an impasse earlier this year.

Meanwhile, the four LDC proposals tabled earlier this summer still require more discussion, Lamy said, particularly with regards to finding "common ground" on duty-free, quota-free market access - a topic that has created some internal disagreements within the LDC Group, sources told Bridges.

The 9th WTO Ministerial Conference (MC9) will be held in Bali, Indonesia from 3-6 December 2013. As in all past Ministerial Conferences, Bridges reporters will be on- site covering the negotiations as they unfold. Bridges Daily Updates will be published in English, French, Spanish, Portuguese, Russian, and Chinese. ICTSD will also be convening a Bali Trade and Sustainable Development Symposium on the sidelines of MC9. - See more at: http://ictsd.org/news/ministerial/mc9/

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