WTO MEMBERS AIM FOR JULY 'APPROXIMATIONS,' HONG KONG DEAL

WTO Members must aim to agree by the December WTO summit in Hong Kong on the outlines of an agreement that would allow them to finalise the Doha Round of trade liberalisation talks in 2006, said senior trade diplomats and WTO officials at the 14 February meeting of the Trade Negotiations Committee (TNC). At the meeting of the TNC, which oversees the WTO's different negotiating bodies, Members generally agreed that the oft-vocalised political will to reach such an agreement must be translated into concrete progress in the Geneva-based negotiations.

Supachai: Members need 'first approximations' by July for result in December

WTO Director-General Supachai Panitchpakdi, in his capacity as TNC chair, told the meeting that if Members wanted to conclude the round in 2006, they would need to agree at Hong Kong on modalities for the agriculture and non-agricultural market access talks, "a critical mass of market opening offers in services, significant progress in areas such as rules and trade facilitation, and a proper reflection of the development dimension." He said that in order for Members to reach a result in Hong Kong that would take them "into the end-game of the round," they would need to see "elements of the potential outcome product... by early July." Members largely concurred with this timeline.

An end-July target for 'first approximations' of an eventual Hong Kong deal was first set out at a 'mini-ministerial' meeting of representatives from about 25 Member states at the end of January (see BRIDGES Weekly, 2 February 2005).

The TNC session was preceded on 12 February by a US-hosted informal meeting of senior officials from 13 key WTO Member countries, convened to discuss how the ongoing talks should be managed in the run-up to Hong Kong. The agenda for the gathering focused on the NAMA, agriculture, and services negotiations. According to senior Brazilian foreign ministry official Clodoaldo Hugueney, the day's discussions indicated a "clear commitment" on the part of the participants to conclude the round in 2006. Several of these senior capital-based trade officials attended the TNC meeting as well; Supachai hailed this for "helping the link between negotiators in Geneva and capitals."

Part of the urgency to finish the round by the end of 2006 arises from the fact that the 'Trade Promotion Authority' granted by the US Congress to President George W. Bush will expire on 1 June 2007 (it is highly likely to be automatically renewed this year). After that, the Bush Administration will no longer be able to submit a Doha round deal to Congress for a yes-or-no vote without the possibility of amendment.

US, Brazil differ on aims for July draft, Hong Kong deal

Speaking to the TNC, US Deputy Trade Representative Peter Allgeier's reiterated the US' desire to complete the Doha round "before the end of 2006."

However, statements by Hugueney and Allgeier indicated that they disagreed on what would need to be reflected in both the July 'first approximations' and what the latter described as a Hong Kong 'endgame document.' While both agreed on the need for modalities on agriculture and NAMA to emerge in December, the Brazilian stressed that progress was necessary in other areas of the negotiating agenda as well. He also emphasised that the July draft elements "must be balanced," saying that they would indicate whether Members were "on track for Hong Kong."

Allgeier, on the other hand, specifically emphasised that Members should not link progress in one negotiating area to that in another. He argued that in the 'endgame document,' "draft, bracketed texts... or guidance needed to negotiate clarification and improvements to existing agreements" would suffice for areas other than agriculture and NAMA -- including services, special and differential treatment (S&D) for developing countries, and trade facilitation. "We should not expect that each negotiation will move in lock step with the others," he told the TNC, "We all have to avoid the temptation to suggest that movement in one area for now isn't possible because we haven't seen enough in some other area. Each negotiation will have its own rhythm."

Linking progress in different negotiating areas has, however, been a hallmark of WTO negotiations. And indeed, EU WTO Ambassador Carlo Trojan said that "the linking up of the various elements of the package will be crucial," calling for intensified work in all sectors.

Although Supachai had mentioned in his opening remarks that the July 'first approximations' "are likely to differ across the different negotiating areas," and that equivalence would be addressed as work progresses, he said that they would have to "already provide a sufficient level of confidence so that each one of you knows that your areas of interest can move ahead and form part of the end result."

The group of African WTO Members stressed that a 'first approximation' should be a "fair approximation" -- one that takes developmental concerns into account. They would like to see early progress on the cotton issue.

Chair reports: Services talks in trouble

The meeting also heard reports from the Chairs of the WTO's different negotiating groups.

Agriculture Chair Tim Groser of New Zealand was quite positive about the progress that had been made in the area that is traditionally the laggard in WTO negotiations, saying that "we're at the stage where we want to be." He said that Members know what they want to give, as well as what they do not. He did express concern about the technical impasse in discussions on converting tariffs not based on price into 'ad valorem equivalents' (see related story, this issue), and warned that they could throw the talks off track.

In what is perhaps an attempt to emulate the success of the agriculture talks, NAMA Chair Stefan Johannesson of Iceland has proposed that the NAMA negotiations follow a similar model, with smaller meetings to address technically complex issues as well as plenary meetings attended by all Members. The African Group noted that multiple meetings posed problems for smaller delegations, but seemed to acknowledge that the approach had led to progress on agriculture. It underlined the particular importance of transparency when not all Members are inside the meeting room.

Notably, Services Chair Alejandro Jara warned that the failure of some Members to make initial market-opening offers posed a serious threat to the negotiations. Revised offers are due by May of this year (see BRIDGES Weekly, 2 February 2005), but 45 Members -- including larger developing economies such as South Africa, the Philippines, and Indonesia -- have yet to even make their first ones. Jara called for more political leadership on the matter.

In his concluding remarks, Supachai expressed his concern that some Members' stated negotiating positions were drifting further apart, rather than moving closer together. He also drew attention to the May deadline for submitting revised offers for services and the July deadline for the special session of the Committee on Trade and Development to put forward recommendations on S&D. He urged Members to move forward in all negotiation areas, and to be "transparent and inclusive," but also "effective."

The next TNC meeting is scheduled for 21 March 2005.

ICTSD reporting; "WTO chief says trade talks must get tough soon," REUTERS, 14 February 2005; "Trading nations play for 'endgame in December in Hong Kong," AGENCE FRANCE PRESSE, 14 February 2005; "US Official Calls for 'Endgame' Deal in Hong Kong, Conclusion of Doha in '06," WTO REPORTER, 15 February 2005; "Trade Negotiators Push for Treaty Target," ASSOCIATED PRESS, 14 February 2005; "Geneva WTO meet to draw up agenda for Hong Kong talks," FINANCIAL EXPRESS, 11 February 2005.