NO RESULTS ON S&D DESPITE MARATHON NEGOTIATIONS

WTO Committee on Trade and Development special (negotiating) session (CTD-SS) Chair Faizel Ismail (South Africa) announced on 27 July that "several issues remain unresolved" on special and differential treatment (S&D) for developing countries, rendering it "impossible... to make specific recommendations" to the General Council (GC) meeting at the end of the week.

The statement, made at an informal CTD-SS meeting that day, came in spite of near-daily discussions on S&D between 19 and 27 July. Ismail said he would nevertheless tell the GC and the Trade Negotiations Committee (TNC) that Members had "engaged constructively and intensively" and made "some" progress towards bridging the numerous gaps between their negotiating positions.

Dalian momentum not enough

Ismail started the current round of consultations after the 12-13 July 'mini-ministerial' meeting in Dalian, China, during which S&D concerns received more attention than they had at previous gatherings of trade ministers from selected WTO Member countries. At the time, negotiators reported a strong sense among some delegations that the Membership must reach agreement on five least-developed country (LDC) proposals in order to demonstrate a commitment to the concerns of the WTO's poorest Members.

Waivers, duty-free access and TRIMs hold up agreement

During the week of negotiations, which included both informal consultations and meetings of the CTD-SS in informal mode, delegations worked on five agreement-specific proposals for S&D put forward by LDCs. Selected from the 88 such agreement-specific proposals that are currently in front of Members, these five are: proposal 23 (Understanding in Respect of Waivers of Obligations), 36 (Duty and Quota-Free Access for LDCs), 38 (On Coherence of IMF, WB and WTO Measures), 84 (Exemption from Agreement on Trade-Related Investment Measures, or TRIMs), and 88 (Measure in Favour of LDCs) (see BRIDGES Weekly, 18 May 2005). Particularly problematic were proposals 23, 36 and 84.

Paraguay, Costa Rica and several other Latin American countries were reportedly reluctant to approve certain provisions in the most recent version of proposal 23, which calls for Members to accord "special consideration" to requests from developing and LDC Members for waivers of WTO obligations.

On proposal 36, which demands that WTO Member states grant binding duty-free and quota-free market access to LDC exports, the US said it opposed binding language on the issue within the WTO, suggesting that bilateral agreements would be better suited for the task. The US delegation added that it would be a challenge to gain Congressional approval for such a provision. Many other developed countries as well as some Latin American Members also expressed concern about adopting binding commitments on market access in the WTO.

Wide disagreement persists with regard to proposal 84, in which LDCs have asked for broader, more open-ended language granting them an exemption from the TRIMs Agreement. Developed countries, on the other hand, have argued for specific language that describes the exact parameters of a possible exemption. As negotiations came to a close, however, LDCs complained that the most recent version of language discussed not only failed to deliver substantive gains for LDCs, it actually detracted from their existing flexibilities under the TRIMs agreement.

Chair outlines next steps

Attempting to end the meeting on a positive note, Ismail said he was planning to tell the TNC and GC that following the WTO's August-long holiday, the CTD-SS should resume work on the remaining agreement-specific proposals, while continuing to prioritise LDC proposals. Members should aim, he suggested, to make recommendations to the GC before the Hong Kong Ministerial Conference in December, as well as at the summit itself. The CTD-SS should continue to monitor and coordinate work in other WTO bodies to which relevant S&D proposals have been sent. He also urged Members to continue to address outstanding topics such as cross-cutting issues (including differentiation among developing countries and graduation from eligibility for certain forms of S&D) and the monitoring mechanism.

Some delegates expressed frustration after the meeting over the lack of progress on the 88 agreement-specific proposals as well as the S&D negotiations in general. "We are back to square one," one delegate lamented. "There is nothing, not even agreement on the five LDC proposals." Another said that "I'm glad they called a spade a spade" in recognising the lack of convergence, suggesting that it would not make sense to force through the five proposals -- which LDCs have said they will only accept as a package -- in the absence of agreement. Some other observers said that the lack of progress was unsurprising in light of work in the S&D talks in recent months. The failure to agree on the five proposals, sources suggested, may also have reflected the lack of movement in other issue areas, and the fact that there is no reason why S&D negotiations should move forward when talks in agriculture, non-agricultural market access, services and other key issue-areas are blocked.

ICTSD reporting.