MEMBERS 'RECALIBRATING' EXPECTATIONS FOR HONG KONG AND BEYOND

After admitting that they remain too divided to agree on a far-reaching, detailed framework for the Doha Round trade talks at the WTO's 13-18 December Ministerial Conference in Hong Kong, Members are attempting to determine exactly what would be in a deal that they might successfully conclude there.

WTO Director-General Pascal Lamy told a heads of delegation meeting on 10 November that "there is not a sufficient level of convergence among Members on the level of ambition in the key areas of the negotiations" for the chairs of the negotiating groups to put together "'full modalities,' meaning by that a text with numbers or parameters on all elements" of the 2004 July Package (WT/L/579). This did not, he emphasised, mean that Members wanted to lower their level of ambition for the Doha Round as a whole. (See BRIDGES Weekly, 9 November 2005)

If full modalities are impossible by Hong Kong, Lamy continued, Members must "recalibrate" expectations for the summit, and determine what would be necessary for them to be able to agree on full modalities soon thereafter. He urged them to give the chairs of the Doha Round negotiating groups guidance on how to develop a draft text for ministers to adopt at Hong Kong, one that would set the stage for going on to full modalities.

Musing aloud about what such a text might look like, Lamy said that an agreement would have to be "a step forward" from the July Package. He suggested that Members might be able to settle on "a range of numbers -- the outer parameters" of an agreement, along with "corresponding texts in the rule-making parts of the negotiations."

'Partial modalities' easier said than done

Even this, however, may prove complicated. Delegates suggest that they may find it difficult to agree to lock in some parts of the agenda while the rest remains undetermined, for fear of unbalanced results at the end.

Furthermore, delegates report that as things stand right now, no report on the agriculture and non-agricultural market access (NAMA) negotiations could be much more than a progress review. Agriculture Chair Ambassador Crawford Falconer of New Zealand told delegates at an 11 November informal meeting that he would circulate a draft report for the Trade Negotiations Committee (TNC) to them this week. The report will not be a negotiated document; Members will decide what to do with it in the TNC. Falconer said that the report would contain no binding commitments. He later said that the report would be more than a simple progress report, and would attempt to show ministers the areas where work is needed in Hong Kong.

One negotiator seemed content with Falconer's approach, telling Bridges that it was within his mandate "only to produce a factual report... to direct [ministers] to areas where they could provide direction." Many developing countries don't want the Chair to produce a text that points to conclusions, since they are wary of what these conclusions would be. The delegate said that it was better for Falconer not to try to force agreement where none exists.

With regard to the draft ministerial declaration text on agriculture, Members have made clear to Falconer that they do not want him to put together a compromise text at the moment. Instead, in line with their desire for a 'bottom-up' process, delegations are currently in the process of developing elements of a draft text and submitting them to him. Trade observers expect that Falconer would nevertheless be responsible for collating these into any eventual draft text.

Sources report that NAMA Chair Ambassador Stefan Johannesson of Iceland indicated to negotiators during consultations this week that he would essentially issue a status report describing the different positions taken by Members in the talks. He might indicate areas where there appears to be convergence or divergence, but will not provide recommendations about how gaps could be bridged. Johannesson is reportedly aiming to produce his report by 22 November.

Lamy: need to keep what is already on the table

Members risk losing the limited progress they have made thus far. The US has suggested that it may revoke its offer to cut domestic farm subsidies if the EU does not agree to make deeper cuts to its farm tariffs. The EU, for its part, has said that it would only consider doing so if it saw greater market access for industrial goods and services from G-20 developing countries such as Brazil and India, which in turn have been insisting that they will do nothing of the sort before the EU makes a more meaningful offer on agricultural market access.

Without naming any countries, Lamy alluded to all of these positions during the 10 November meeting. He told Members that if everything on the negotiating table "disappears, you will all have a problem. You all surely have an interest in preserving what has been achieved until now." He called on them to "try to capture as much as possible what has been achieved since July 2004" in a Hong Kong deal, urging them to address agriculture, NAMA, and services concurrently, in order to better appreciate how the trade-offs among the three might work out.

Looking ahead to a draft Hong Kong text

Lamy raised the possibility of an 'early harvest' agreement at Hong Kong on special and differential treatment for least-developed countries (see related story, this issue). Any resulting commitments would be implemented ahead of the deadline for other Doha Round obligations. Specifying that an "aid for trade package for the end of the round" would help translate its developmental potential into reality, he said that Members would also have to address other aspects of the mandate, such as cotton, preference erosion, and the problems faced by small economies.

One trade negotiator expressed the belief that at least some movement before Hong Kong would be necessary for Members to do more there than simply take note of progress made thus far in the talks. This was not out of the question, the delegate said, since ministers from Brazil, India, the US, and the EU were looking to hold informal discussions in upcoming weeks, as were their counterparts from the Africa Group.

Sources suggest that the negotiating groups are aiming to submit draft text to Lamy by 25 November, ahead of a potential TNC meeting on 28 November.

ICTSD reporting.