DOHA ROUND: LAST-DITCH EFFORT TO FIND AGREEMENT ON PACKAGE DEAL UNDERWAY

On 16 July, WTO Director-General Supachai Panitchpakdi and General Council Chair Shotaro Oshima circulated a first draft Framework Text on the Doha Round trade negotiations, which Members are expected to adopt by the end of July. Following the release of the text, Members met in a number of formats, including a heads of delegation meeting called by Supachai on 19-20 July, informal meetings on agriculture and industrial market access on 20 July, and a video conference among the Five Interested Parties' (FIPs) group -- the US, EC, Australia, Brazil and India. The G-20 group of developing countries comprising, inter alia, Brazil, India, China and South Africa also met on 20 July. Negotiations continue on all issues and in different configurations.

The end-July deadline represents the WTO's attempt to put the Doha negotiations back on track following the collapse of talks at last September's Ministerial Conference. Members are working towards the deadline in order to keep the momentum up in the Doha round of trade negotiations. Should they fail to agree on the outline for negotiations by the end of the month, trade talks are likely to stall for months, if not for years, with US elections and leadership changes in the European Commission coming up towards the end of the year. The draft Framework Text covers all areas currently under negotiation, including agriculture, industrial market access, development issues, services and trade facilitation (one of the controversial Singapore issues, which also include investment, competition and transparency in government procurement).

Members see draft Framework as an acceptable point of departure

Introducing the draft Framework in a heads of delegation (HODs) meeting on 19 July, Supachai said it represented "a first draft whose purpose is to provide a basis for further negotiation among Members," and called on countries to compromise during the two intense weeks of consultations left before the end-July deadline. He stressed that the paper was "not an agreed text but a negotiating document. We expect it will evolve over the course of the coming days. However, it is important to remember that this text is based on consultations and negotiations stretching back many months".

The cover letter to the draft Framework Text states that the text is intended to ensure the continued progress of the negotiations, rather than serve as a Ministerial Declaration. The text itself, in the form of a draft General Council decision, agrees on action in the areas of agriculture, industrial market access, development and other negotiating bodies. Under the draft decision, Members would also launch negotiations on trade facilitation.

For an outline of the text on agriculture -- the centrepiece of the negotiations -- and discussions around it, see the following story in this issue of BRIDGES Weekly.

While seeking a number of changes to particular parts of the text, Members agreed that it formed an acceptable basis for negotiations. Several countries cautioned that the text was complex, and said they needed time to consult with their capitals. Both the US and EC said that they wanted to see more balance between the different areas of the draft, especially agriculture, industrial market access and services. A number of developing countries also called for a more balanced text overall, emphasising the need for stronger and more operational text on development issues.

Industrial market access stirs controversy

On non-agricultural market access (NAMA), the Framework Text includes the draft negotiated but never adopted in Cancun -- the so-called Derbez text -- as a 'platform for further negotiation' in an annex. According to Chair of the industrial market access group Stefan Johannesson, the text remained in annex form because real negotiations had never taken off on industrial market access, with Members waiting for an outcome in agriculture first (see BRIDGES Weekly, 16 June 2004). Johannesson sent a letter to Supachai and Chair Oshima on 9 July, forwarding the Derbez text and identifying areas of concern.

At the 19-20 July heads of delegation (HODs) meeting, Nigeria, speaking for the African Group, said the Group could not accept the Derbez text as a basis for negotiations, and asked for clarification of the legal status of the text, including the letter by Chair Johannesson. Brazil asked how the discussions would proceed, given that a number of countries opposed the Derbez text. Both the EC and US felt that the text represented a bottom line, and negotiations should be based on it.

Development issues under-developed?

The Framework Text specifies that all developing countries shall benefit from special and differential treatment (S&D). The text goes on to say that the specific concerns of preference-dependent, commodity-dependent countries and net food-importing developing countries should be taken into account, as should the concerns of small, vulnerable developing economies, "without creating a sub-category of Members".

The Framework Text further instructs the Committee on Trade and Development special session to send recommendations to the General Council on agreement-specific proposals, and to address all other outstanding work, including cross-cutting issues. Deadline dates are left up to negotiation.

A number of developing countries raised concerns regarding the treatment of development issues in the text. Brazil, echoed by other Latin American countries as well as some Asian countries, opposed differentiation between developing countries and called for a stronger focus on actual substance. The African Group said it was concerned about lack of progress in the area more generally, and felt the text lacked ambition. The group wanted a clear roadmap and an accelerated process on S&D, and asked for issues such as commodities, intellectual property protection and public health to be included in the text. Indonesia called for more specificity on S&D, and a balance between this area and the overall text.

Negotiations on trade facilitation to be launched

The Framework Text, in its current format, launches negotiations on trade facilitation, while the other three Singapore issues will be left out of the Doha Round. The modalities for negotiations on trade facilitation are included in an annex, which spells out the need for technical assistance, capacity building and S&D for developing countries.

The African group said the remaining three issues should be dropped not just from the Doha Round but from the entire WTO work programme. The group cautioned against putting trade facilitation on a fast track, calling for clear decisions first on issues such as technical assistance and the applicability of dispute settlement. Bangladesh called for balance, stressing that work on trade facilitation seemed much further ahead than other areas under negotiation. India supported more clarification of trade facilitation at this stage.

Other reactions to the text

A number of countries said services should be given more prominence in the draft. India expressed general dissatisfaction with the text on implementation issues, which states that Members will "renew their determination to find appropriate solutions". Brazil asked why the extension of geographic indications had been singled out among implementation issues. The EC said all implementation issues should be negotiated, with geographic indications being an EC priority.

The race towards the end

In order to reach agreement on a July Framework, Members will continue to work in various formats to find an acceptable compromise. A HODs meeting will be called on Friday, 23 July, and a revised draft will likely be released following the weekend. The final meeting of the General Council is scheduled for 27-29 July, although Chair Oshima indicated that 30 July was the "drop-dead" deadline. A number of trade ministers -- including those from major Members such as the EC, US and Japan -- are tentatively planning to attend the General Council meeting.

ICTSD reporting.