TRADE COMMUNITY SEARCHES FOR WAY FORWARD IN DOHA TALKS AS LAMY TAKES HELM

Pascal Lamy formally took over as Director-General of the WTO on 1 September. The former EU Trade Commissioner faces a formidable challenge: goading increasingly recalcitrant WTO Members into reviving the faltering Doha Round negotiations. Speaking to the press after taking the helm of the global trade body, Lamy reminded them that "Member states have the decision-making power" in the WTO, and that he had no "magic wand" to ensure success. "We can catalyse, we can broker," he continued, "sometimes, sometimes we can lead, but at the end of the day, they take the decision."

Trade negotiators and observers are searching for potential ways to move forward in the ongoing Doha Round trade talks after Members' failure to meet an end-July target date for reaching agreement on pivotal negotiating issues (see BRIDGES Weekly, 3 August 2005).

Negotiators: agriculture will determine progress

Geneva-based trade diplomats are girding themselves for what promises to be an intensive three months of discussions in the run-up to the WTO's Hong Kong Ministerial Conference in December. Several delegates said that progress in the talks would be impossible without a breakthrough in the deadlocked farm trade negotiations -- a breakthrough that would depend entirely on the US and the EU working out some sort of agreement between themselves on export subsidies, support to domestic production, and market access. The EU would have to come out in writing with their ideas on market access and domestic support, one delegate suggested, and the US would have to put forward some suggestions on food aid as opposed to merely defending its existing policies. An indication of meaningful progress on agriculture, it was thought, would spur progress on non-agricultural market access (NAMA) and services.

In one negotiator's view, progress on agriculture must be incremental, "step-by-step," in order to give developing country governments, with their limited capacity, enough time to make complex assessments about how they would be affected. 'Big bangs' of eleventh-hour concessions delivered in a take-it-or-leave-it fashion would likely end up being detrimental to the interests of poor countries.

Expert group, Blair underline importance of aid-for-trade

Opinions on how to achieve success in the Doha Round negotiations have not been limited to trade diplomats. British Prime Minister Tony Blair wrote in the 5 September edition of the Financial Times that "it should be possible at Hong Kong to set a deadline of 2010" for the end of agricultural export subsidies. He also called for more aid to build African countries' capacity to take part in international trade, and for "allowing them to determine their own economic policies."

A more detailed set of proposals of how the talks could successfully respond to developmental concerns came from a group of trade experts convened by the UK Department for International Development (DFID), and chaired by former Mexican President Ernesto Zedillo. The paper, which was circulated on 6 September to the ministers and Geneva missions of all WTO Member states, warns of a looming impasse in the Doha Round talks. It suggests that governments must "openly recognise and explicitly address" domestic adjustment costs, and garner support for substantial multilateral liberalisation on the basis that it would yield global gains that far exceed the losses that it would inflict. Subsequently, countries would need to set up mechanisms -- within and outside the multilateral trading system -- to enable 'loser' groups to adjust, in order for liberalisation to yield benefits across the world.

The panel suggested that a potential crisis resulting from conflicting interests could be averted if rich WTO Members substantially increased and institutionalised 'aid-for-trade' to boost their poorer counterparts' competitiveness and productivity. Developed countries would also have to agree to compensate developing ones outside the WTO for costs resulting from multilateral trade liberalisation, both financially and in terms of broader support to help developing countries identify and attain their trade-related objectives.

The group proposed that the uncomfortable issue of preference erosion could be addressed by having preference-granting countries provide beneficiary countries with additional bilateral development assistance equal to the "assessed value" of their preference schemes. They also urged governments to make data on trade policies, such as applied tariffs, antidumping measures and product standards, openly available free of charge, arguing that it would facilitate the analysis of the potential developmental impacts of different policies.

Agriculture week moved forward by two weeks

Six major business groups from the US, the EU, Canada, Mexico, Japan, and Australia issued a joint statement on 6 September warning that the Doha Round talks were "on the verge of collapse. A failure to reach a deal at Hong Kong, they say, "may have serious consequences for worldwide economic growth and development and has the potential of striking a critical blow to the heart of the current round." The organisations suggested that sectoral approaches could speed up liberalisation in both NAMA and services, and called for "deep and comprehensive tariff reductions" on industrial goods. Echoing the sentiments of several Member delegations, the business leaders' statement said that "the failure to resolve key issues in agriculture is seriously stifling progress in other areas."

In response to this sense of urgency around the farm trade negotiations, the group's new chair, Ambassador Crawford Falconer of New Zealand, brought forward its first session of the autumn by almost two weeks. The special (negotiating) session of the Committee on Agriculture will thus meet from 13-16 September, instead of 26-30 September as originally planned.

Meanwhile, Lamy announced that he was starting consultations with members of the WTO Secretariat, the chairs of the negotiating groups, trade envoys and regional groupings. He has promised to make a statement with "more precise views" about the negotiations at the 14 September meeting of the Trade Negotiations Committee.

Documents for the Project on Development and the Global Trade Architecture are available at http://www.ycsg.yale.edu/core/global_trade_architecture.html.

The business groups' statement is available at http://www.businessroundtable.org/pdf/20050905003WBLGJointStatement.pdf.

ICTSD reporting; "Alarm bells raised over WTO talks," GLOBE AND MAIL, 6 September 2005; " Dates for Next Round of WTO Agriculture Talks Moved Up by Chairman," WTO REPORTER, 2 September 2005; "Gleneagles must be one step in a longer campaign," FINANCIAL TIMES, 5 September 2005; "A test of Pascal Zorro," FINANCIAL TIMES, 1 September 2005.