ARDUOUS PROCESS YIELDS AGREEMENT ON S&D REPORT

On 24 July, WTO Members reached agreement on a report on special and differential treatment (S&D) to be presented at a 31 July General Council meeting. The decision, reached after many months of wrangling, comes close to the 31 July deadline for the special session of the Committee on Trade and Development (CTD) to report on its S&D review. The report (TN/CTD/3), which will be available shortly via http://docsonline.wto.org, is said to have settled on 31 December 2002 as the postponed timeline for the Committee to report back to the General Council with "clear recommendations for a decision" on the S&D review; other details were unavailable at time of press.

Leading up to the decision...

Following an informal meeting on the evening of 22 July, sources indicated that CTD special session Chair Ransford Smith (Jamaica) was preparing a third draft of the proposed report. Key last-minute differences primarily revolved around the issue of a timeline as well as how to reconcile the two tracks of agreement- specific issues and cross-cutting issues.

Initially, delegates were expected to adopt the report at a 17 July special session, however after informal meetings on 16 and 17 July, it became clear that this was not a realistic goal (see BRIDGES Weekly, 17 July 2002). In fact, after nine informal sessions of this body since 27 June, in addition to discussions on S&D in a high-level meeting with deputy US Trade Representative Peter Allgeier, the same core issues remain at the centre of the ongoing debate (timelines, and agreement-specific track versus cross-cutting track). One delegate speaking anonymously said that in the most recent informal, certain countries had resorted to threats of calls to superiors in country capitals.

Draft report number two -- close, but not close enough

The second draft report (TN/CTD/W/12/Rev.1, still restricted) contained a number of small changes that the Chair hoped would rally the necessary support that had so far evaded the process. A number of criticisms lobbied against the first draft were reflected in the second, including a more detailed paragraph dealing with the Paraguayan proposal on the Enabling Clause (TN/CTD/W/5; /W/5/Add.1; & /W/5/Add.2, searchable at http://docsonline.wto.org), explicit mention of the "utility of a clearer definition and understanding on [principles and objectives] in assessing the effectiveness of [S&D] provisions", and the explicit suggestion of giving "further consideration" to the Africa Group proposal (TN/CTD/W/3/Rev.1, still restricted) on criteria for technical and financial assistance.

The bulk of the changes -- and the contention -- lay in the final section, entitled 'The Way Forward." As reported in the 17 July edition of BRIDGES Weekly (see link above), two options had prevailed for postponing the mandate to "report back to the General Council with clear recommendations for a decision [...]". While Egypt, Kenya and India insisted on November 2002, the first two drafts only included December 2002 (Malaysia & Indonesia) and March 2003 (Australia, Norway, Colombia, New Zealand) as options. Others, such as Switzerland, suggested the Fifth Ministerial Conference (September 2003), while others (US & EC) were unwilling to specify a date explicitly. One African Ambassador speaking on condition of anonymity noted that he was confident that the December date would prevail, as it was "not negotiable" for developing countries. Other sources also indicated that those pushing for the November date had acquiesced to favour of the end of 2002 option in the spirit of wanting to move the process forward. Some developed countries, including Canada, are reported to have said that while the earlier deadline is impractical, they would not block it.

Which foot goes first - agreement-specific or cross-cutting issues?

The second major stumbling block is the issue of how, and in what order, to deal with the various agreement-specific proposals and the cross-cutting proposals. Some Members, including Switzerland, Japan, Norway, & the US, would like first to put the emphasis on principles and objectives. Other -- mainly developing country -- Members argue that the priority, as per the Doha mandate, must be placed on looking at the specific proposals. Others, such as Argentina, Egypt, Pakistan, Brazil and Malaysia, take this argument one step further, saying that an examination of principles and objectives does not even factor into the mandated review of S&D provided at Doha. Here the first CTD special session draft links the cross-cutting track to the 'best-endeavour' commitment on submitting responses to the agreement-specific proposals by 31 October 2002. The second draft, however, removes this link, taking the cross-cutting issue completely out of the paragraph outlining the agreement-specific October deadline, and removes explicit reference to the October timeframe.

While a number of developing countries were fearful that this link could lead to conditions being attached across subjects, one African source expressed concern that de-linking these two explicitly would allow industrialised countries to push only those cross-cutting issues that they were interested in, neglecting the others (many of which are contained in the least-developed country and Africa Group proposals). Numerous developed countries have noted their desire to re-instate the link so as not to subjugate this area to the agreement-specific proposals. Also relating to the deadline to respond to the agreement- specific proposals, Chair Smith bolstered the mandatory nature of the language slightly, replacing "Members will endeavour to provide responses [...]" with "Members should provide detailed responses [...]". Developing country delegates reiterated their dissatisfaction with what is still a non-mandatory provision, with one African delegate noting that if they were unable to achieve mandatory language here, they would push for a stipulation that said that discussions would move ahead on these items after that date regardless of responses.

Monitoring mechanism, experts & technical assistance bring up the rear

The support for the Monitoring Mechanism proposal can still be found in the second draft report, however rather than the special session of the Committee on Trade and Development (CTD) being responsible for elaborating on its structure and terms of reference, the new draft notes that it will be in the hands of the General Council itself. This, say some developing country delegates, is seen as an attempt to delay the only tangible gain that has so far come from this painstaking process.

Another nuanced change to find its way into the new draft concerns consulting experts on some of the agreement-specific proposals. Whereas the former draft simply noted the need to utilise expertise in other WTO bodies (and offered holding back-to-back sessions as one option), the latter draft is far more specific. It now places primacy on information exchange via requesting and receiving reports (viewed by some experts as a far longer process) over the holding of back-to-back sessions. Some have tied this issue into the overall deadline debate, saying that if a 2002 deadline is to be realised, consulting experts must be done in the most expeditious manner available.

Finally, in the area of technical assistance (TA), the former draft report stipulates that the special session should submit proposals on technical assistance, capacity building, and training programs before they are included in the 2003 Technical Assistance Plan. The new draft removes the reference to 2003, thus making this a standing order in the future. Differences remain, however, on how this should be handled, either by the special session or by the regular sessions. Speaking in support of the special session option, one delegate noted the current language, which recommends submitting the criteria for TA proposals to the regular session for "examination", is an invitation for further "foot-dragging" on behalf of developed countries.

More details on the agreed-upon report will follow in next week's edition.

ICTSD reporting.