WTO Members Return to Geneva, Hoping to Bridge TFA Gap

10 September 2014

A flurry of meetings is scheduled for the coming weeks as WTO members – having now returned to Geneva following their annual August break – try to pick up the pieces after missing a key implementation deadline this past July.

The 31 July missed deadline was for adopting a “Protocol of Amendment,” which would have incorporated the WTO’s new Trade Facilitation Agreement, or TFA, into the global trade body’s legal framework. The step is crucial in order to allow WTO members to take the trade deal – agreed in Bali, Indonesia in December 2013 – back to their domestic legislatures for ratification, particularly given the end-July 2015 deadline to bring the deal into force.

The process of adopting this Protocol had stumbled after India said that it would not be able to allow TFA to move forward unless it saw signs of movement toward a “permanent solution” on the issue of public food stockholding, another issue from the Bali 2013 meeting.

An “interim solution” on the latter subject was adopted in Bali, effectively committing members to refrain from challenging subsidised purchases of farm goods under public food stockholding schemes, in return for more information on the scale and type of support being given to farmers.

The interim solution is set to last until at least 2017, in order to give members time to negotiate a permanent solution. However, India had asked in July to see a permanent solution by 31 December 2014, and refused to back the TFA Protocol without it.

The prospect of re-negotiating the Bali timelines – and thus potentially re-opening the hard-won deal – was deemed untenable for many WTO members, with the US being among the most vocal in this regard.

“We have not been able to find a solution that would allow us to bridge that gap,” WTO Director-General Roberto Azevêdo said shortly before midnight on 31 July, when it was clear that meeting the Protocol deadline was no longer possible.

“This will have consequences,” he warned at the time. “And it seems to me, from what I hear in my conversations with you, that the consequences are likely to be significant.”

Informal HoDs meeting next Monday

Before WTO members adjourned for the August break, the Director-General urged them to use the holiday as an opportunity to “think carefully” about potential next steps, asking them to “reflect long and hard on the ramifications of this setback.”

Negotiating group chairs, along with those of the regular WTO bodies, would also be directed to consult with members on what to do next, he said.

Little seems to have happened over the summer, sources indicated recently, with some noting that both sides appear to be awaiting the other’s next move. “It’s still a bit early,” one delegate acknowledged.

Since WTO members returned to Geneva earlier this month, ambassadors have reportedly been meeting one another in small groups to discuss the situation further.

All WTO members are then set to meet next Monday, 15 September for a meeting at the level of Heads of Delegations (HoDs), which is expected to serve as an opportunity to kick off the consultations process and review any discussions that have been held, informally or otherwise, over the August break.

The following day, an informal meeting of the Committee on Agriculture is scheduled, with sources confirming that the chair’s goal for those discussions is to “take stock of members’ positions on the implementation of the Bali outcomes and to exchange views on the way ahead.”

The “special session” of the Committee on Agriculture, which specifically deals with agriculture-related negotiations, is then set to meet the following Tuesday on 23 September, with the same stated purpose.

On 29 September, the Preparatory Committee on Trade Facilitation will then meet. While the same stocktaking exercise is planned informally, the meeting will also formally review the notifications that developing country members have sent in of their Category A commitments – in other words, those commitments that will take effect once the TFA does enter into force.

Trade sources say that 32 new notifications on Category A commitments have been received since the last meeting of the Preparatory Committee, which was held in early July.

Some sources have indicated that special sessions on all other negotiating issues could be forthcoming, and that the Trade Negotiations Committee – tasked with the Doha Round trade talks – may meet in early October, ahead of the scheduled General Council meeting later that same month.

Chair’s statement versus General Council decision

In the weeks since the 31 July deadline passed, more details have emerged about how close members actually were to a deal that day.

The difference, sources say, was between whether to adopt a chair’s statement, versus a formal General Council decision on the public food stockholding subject. While the US had wanted the former, unwilling to adopt anything that might potentially reopen the Bali deal, India had sought the latter, which ostensibly would have carried more legal weight.

Sources say that negotiators had also explored options for a clear process for moving towards a permanent solution. Dates for meetings of the Committee on Agriculture and specific topics had been mooted as part of a possible deal.

Meanwhile, the US had also effectively clarified that the interim agreement announced in Bali would be effectively “open-ended.” The issue had been “fudged” through constructive ambiguity at the Bali conference, leaving open the question of whether the interim solution was temporary – and thus with a 2017 expiration date – or if it would last for however long it takes to reach a permanent solution.

Meeting at the White House

One potentially pivotal event on the international trade calendar is a planned meeting on 29-30 September in Washington between new Indian Prime Minister Narendra Modi, who took office in late May, and US President Barack Obama.

According to a White House statement on the event, the two leaders will discuss “a range of issues of mutual interest,” such as ways to ramp up economic growth and improve cooperation on security issues.

Sources speaking to Bridges noted that some members are pinning their hopes on the leaders’ meeting as a chance to resolve the stalemate. Others, however, have questioned whether the WTO issue is likely be given priority within the much more wide-ranging agenda that the two leaders are set to address.

Work programme timeline

What effect the TFA situation will have on another key WTO front – that of preparing a work programme aimed at resolving the various outstanding issues in the Doha Round talks – is another significant question for negotiators as they resume their work.

Trade ministers had agreed in Bali that this work programme should be agreed by December of this year, and would build both on the decisions taken during last year’s conference as well as the other issues “under the Doha mandate that are central to concluding the Round.”

Furthermore, ministers said at the time, those issues in the Bali deal where legally binding outcomes were not possible must take priority, while work on issues not addressed during the end-2013 event would need to resume in the relevant WTO committees or negotiating groups.

However, various WTO members, particularly the US and EU, have made clear that unless the Bali deal is implemented, there is no point in trying to craft a post-Bali agenda.

“Many members, including developing country members, have noted that, if the Bali package fails, there can be no post-Bali,” said US Ambassador Michael Punke in July. “It is with regret that we agree with them.”

Whether these issues can be resolved in time to meet the upcoming deadlines is an open question, and has fuelled much speculation and commentary since 31 July. The WTO has already struggled for years to convince a sceptical public that it remains capable of reaching multilateral agreements on international trade, with the Bali package being seen as a potential turning point for the organisation’s troubled negotiating function.

ICTSD reporting.

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