Doha: Difficult Road Ahead for December Mini-Package

22 June 2011

WTO members are struggling to reach consensus on what the components of their December "Plan B" deliverables package might entail. Today's meeting of the WTO's Trade Negotiations Committee (TNC) saw delegations repeat similar positions to those presented at their 31 May gathering, showing little progress from three weeks ago.

Since the 31 May meeting (see Bridges Weekly, 1 June 2011), Director General Pascal Lamy has held a series of consultations with members, in the hopes of figuring out a way forward. He found that members' "level of political commitment to a successful conclusion of the Doha Round, including to our collective aspirations for this year and beyond, remain strong."

Lamy cautioned, however, that members "urgently need to have clarity about what we can and cannot do by the Ministerial Conference [MC8] in December so that we can get down to work without further delay." Various members echoed Lamy's concern, noting that a failed MC8 would have powerful implications for the credibility of the multilateral trading system.

Even prior to the 22 June TNC meeting, some delegations expressed concern about the months ahead. Speaking to Bridges, a Cairns Group delegate emphasised the uncertainty that members feel regarding the upcoming negotiations: "All the balls are up in the air. One, some or all the balls could hit the ground."

Today's TNC meeting had originally been scheduled for 9 June; however, the contrasting ideas of what the "plus" part of an LDC-plus package should include caused the meeting to be postponed, according to the Cairns group delegate.

At the meeting, Canada noted that members did not seem ready to co-operate amongst themselves, based on today's meeting results. They added that members need to realistically assess their current standings, and examine whether there is some space available for compromise.

Three main positions came up repeatedly at the gathering - that the Doha Round must continue, with a December deliverables package that has least developed countries (LDCs) at the core; that an LDC-only package would be unlikely to succeed; and that an LDC-"plus plus plus" package would have no success at all.

China was among several members that alluded to the latter issue, noting that the "rule of thumb is that the plus should facilitate rather than frustrate the LDC package."

Lamy urged that the following four key issue areas be considered for inclusion in an LDC package: duty-free, quota-free access for developing country products; improved rules of origin; a "step forward" on cotton; and a services waiver for LDCs.

Options on the table for December

Some countries, such as China, India, Egypt, and South Africa pushed for an LDC-only package at the meeting, as did Bangladesh on behalf of the LDCs and Mauritius on behalf of the Group of 90 (G-90) developing countries.

Brazil, while stating its preference for an LDC-only package, mentioned that it would be open to including additional components, i.e. export competition. This proposition was quickly rejected by the EU - a sign of the possible conflicts that may arise during future negotiations.

In a statement, the EU insisted that "the phasing out of EU export refunds was a major concession, and could only be on the table as part of a comprehensive, ambitious and balanced package." The EU called the export competition pillar a "key part" of the single undertaking, i.e. the notion that nothing is agreed until all is agreed.

Brazil was not alone in mentioning export competition as a possible component of the package, which proponents noted would rebalance rules in agriculture. In response, the EU insisted that this issue would have to be linked to the domestic support and market access provisions established in the December 2008 draft modalities, along with issues related to intellectual property rights, i.e. geographical indications (GIs).

The EU was also among several delegations pushing for "certain systemic components of the negotiating agenda, for example Regional Trade Agreements and review of the Dispute Settlement be given priority" when composing the "plus" part of a December package.

A developed country delegate, speaking to Bridges prior to the meeting, noted that the "US can't or won't do an LDC-only package." The delegate then added, "I trust the Americans when they say we'd never be able to sell a pure LDC package in Washington - yet this is problematic." The US confirmed at the TNC that they would indeed be pursuing an LDC-plus package, as did Australia, the EU, and others.

Cotton remained a hot-button issue at today's meeting, with the US insisting all of the major cotton subsidisers - such as Brazil and China - commit to reducing their distortions. An African LDC delegate told Bridges before the meeting that a deal on cotton is likely to be difficult until members have a clearer idea of what will happen on the wider agriculture front.

Sources note that, along with their hard stance on cotton, the US does have some concerns regarding the duty-free, quota-free aspect of the LDC-only plan. Specifically, providing this level of market access would mean exposing politically influential industries, such as t-shirts and other garments, to competition from some LDCs that had previously been the subject of high tariffs, such as Bangladesh.

Meanwhile, the US reiterated that fisheries subsidies reductions were ready for inclusion in the "Plan B" package - a suggestion that Japan, South Korea, and Taiwan rejected outright, on the grounds that the issue was not yet at maturity.

Some members have also been asking for a standstill on tariffs, which would involve members binding their tariffs at applied levels. These levels would be beyond what is being asked for in the context of the Doha negotiations. Various members expressed opposition to the idea, though proponents argue that this measure might prevent countries from slipping back into protectionist tendencies.

Several members also mentioned that, if plus issues are included in the package, then those additional components should still have a development component. Trade facilitation was presented as a possible option, within which the package could include special and differential treatment provisions, along with technical assistance.

Post-December path essential, but unclear

Despite the disagreements on the "plus" issues, members were in consensus on the need for a clear Doha roadmap after December's WTO Ministerial. The "Plan B" package cannot be a standalone agreement, especially with issues such as non-agricultural market access (NAMA), services, and agriculture still unresolved.

While Lamy plans to hold additional consultations with members in the upcoming weeks, a date for the next TNC meeting has not been set. Given the lack of clarity on the package's components, members worry whether the package can be delivered at all if views are not reconciled.

"I am well aware of the dangers of drifting towards the ministerial with a collection of unresolved issues," Lamy added. "The time for discussion is gone - you now need to negotiate."

ICTSD reporting.

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