S&D REVIEW COMING DOWN TO THE WIRE -- MEETING ALMOST DAILY

As Members quickly approach a 31 December deadline on the review of special and differential treatment (S&D) provisions, special sessions of the Committee on Trade and Development (CTD) have met almost daily in hopes of finding agreement. Various formal and informal sessions have taken place on 20, 21, 25, 26, 27, and 28 November - ranging on agreement-specific and cross-cutting issues, the monitoring mechanism, and 'the way forward'. A first draft of the report that Members hope to present to the 10-12 December General Council meeting is expected to be available before the end of the day on Friday, 29 November. This would give Members the weekend to consider the draft report before reconvening on 2 & 3 December to determine whether sufficient convergence on positions could be achieved. Initial reactions on what is allegedly going to be found in the report indicates that much ground remains to be covered in a short period of time, and that both political will and flexibility will have to come from all Members if a deadlock is to be averted.

The 31 December deadline, being an extension of a missed 31 July deadline earlier this year, is to report to the General Council, with clear recommendations for a decision, on a review of "all special and differential treatment provisions [...] with a view to strengthening them and making them more precise, effective and operational" (see BRIDGES Weekly).

Where lies the current impasse?

The crux of the divergence between mostly developed countries and most of the developing countries is how to deal with the 85-plus proposals that have to-date been submitted to the special sessions of the CTD (searchable under document symbol TN/CTD at http://docsonline.wto.org). A related element is to what degree should Members proceed with the monitoring mechanism, which was the only item approved in principle in the report that went to the General Council at the initial 31 July deadline (see BRIDGES Weekly, 6 August).

Dealing with the 85+ proposals

Most of the sessions during the week of 25-29 November were consumed with the issue of how to categorise the proposals into baskets, so as to facilitate progress in those areas where agreement was possible. They also considered which proposals could potentially go into which baskets and what timelines would apply to any post-31 December basket (s). Both Kenya and India expressed discomfort in moving ahead with a 'basket' approach as they felt it was a "re-adjustment" of the mandate given by Ministers at Doha. One source in attendance noted that India said they wanted clear recommendations on almost all the agreement-specific proposals -- indicating, continued the source, their tacit acceptance of the approach.

Supported by most African and Least-Developed Country Members, one African delegate indicated on a few occasions this week that if there was no political will on the part of developed countries to carry out the mandate as given, then the best solution was to end the special session discussions now and transmit a factual report to Ministers at the Fifth Ministerial meeting in Cancun (September 2003) for their input and clarification. The delegate explained that the CTD special sessions had been an extremely arduous process over the last year (having been extended already once for six months) and consumed a disproportionate amount of human resources from the small delegations relative to the benefits it was bringing. Consequently by attending these meetings, his delegation had sacrificed attendance at other important committees, and thus had suffered a net loss, rather than gain. Another extension (into 2003), he concluded, would impinge on important work required in agriculture, services, and market access -- as well as the preparations for Cancun.

'Basket' approaches offered

Despite these reservations, two (informal) proposals were put forward on basket approaches -- by Canada and Switzerland respectively. The Swiss proposal, which was responded to favourably by some developing countries, suggested a first basket where consensus appeared possible, a second for those requiring more work, and a third that had impacts on the 'rights and obligations' of Members (and thus would be difficult to find consensus on). Canada's proposal envisaged a first basket of proposals that could be "addressed by fleshing out plans of action, or allowing respective committees the opportunity to properly address the concern and report back to the CTD." The second were those proposals that addressed cross-cutting issues found in paragraph 12.1 of the Decision on Implementation (i.e. improved information flows, incorporating S&D into the architecture of WTO rules, etc.). The third basket would be for proposals that Canada felt "the issue or problem [had] not been clearly demonstrated or articulated," requiring further analysis and likely being sent to relevant bodies for clarification.

At the 26 November meeting, a basket approach came into view that would potentially see developed countries accept an initial basket of agreement-specific items before the end of the year (with some developed countries allegedly tying this to the acceptance of a monitoring mechanism to begin immediately, see below). The remaining proposals could be dealt with in a number of ways, including keeping some or all of the proposals in the CTD for continued negotiations (under a new deadline), and/or sending a third basket to subsidiary bodies for further discussions. This third basket, speculated one source close to the negotiations, would likely contain all of the more controversial items (i.e. those of highest value to developing countries), and could potentially have a deadline aligned with the conclusion of the round (i.e. 2005). One developing country delegate said of the items that might go to the different bodies, "they would go the way of implementation issues and become just impossible to follow."

According to a Latin American delegate, the initial list prepared by Chair Ransford Smith (Jamaica) of potential items for the first basket - which were discussed orally at the 26 November session and circulated in paper on 27 November - were of little or low commercial value. Despite this, he continued, developed countries were still responding negatively to most of them, and were not providing concrete suggestions on how to improve upon them so as to make them feasible. He noted that personally, he felt the mood in the committee was getting worse.

Monitoring mechanism becomes a condition

One item that could prove to be a stumbling block in finding agreement before 31 December is the monitoring mechanism. Initially proposed by the Africa Group, and agreed upon in principle in the 31 July report, it has gone from being the one concession granted by developed countries in the first report to a condition (for some developed countries) for moving ahead.

Developing countries envisage it as a mechanism to monitor the outcome of the Doha mandate on reviewing S&D provisions. It would monitor all Members, analysing and making recommendations on how to best improve the capacity of developing countries to make use of S&D provisions (including measures to be taken by developed countries). As such, they view it as the final step in this review process, and do not want to proceed with outlining its functions, structure and terms of reference until the appropriate time.

Most developed countries on the other hand, view the mechanism, or "monitoring procedure" as termed in the latest US proposal (TN/CTD/W/19), as an all-encompassing instrument that would take on a large number of roles that otherwise fall into the domain of the CTD (including dealing with information exchange between different WTO bodies on S&D and facilitating greater coherence with relevant international organisations). In addition, the US proposal sees it as a venue to assess the implementation and utilisation of S&D provisions by developing countries, which most developing countries view sceptically. One trade expert, commenting on the number of tasks given to the mechanism in the US proposal, speculates that it is an attempt to paralyse the mechanism by giving it too many duties.

The last regular scheduled special sessions of the Committee on Trade and Development (CTD) before the 31 December deadline are 2 & 3 December, where Members will attempt to find agreement on the report that is to go to the General Council at its 10-12 December meeting.

ICTSD reporting.