DOHA ROUND 'PATIENT' SHOWS "SIGNS OF LIFE," AG CHAIR SAYS

Comparing the WTO Doha Round to a medical patient, Agriculture Chair Ambassador Crawford Falconer (New Zealand) indicated on 11 December that the negotiations seemed to be showing "signs of life," although it was possible that these amounted to little more than a minor "twitch."

Falconer was speaking at an informal 'transparency forum', open to all Members, at which he reported on his recent consultations with various delegations. These included "fireside chats" on 29 November and 6 December involving around two dozen ambassadors from key countries and groups.

While delegations have not substantially shifted their positions since the talks were suspended in July primarily due to divisions on farm trade, the chair indicated that he had been somewhat reassured by the general tone of discussions. In the month following the 'soft relaunch' of discussions, Members had demonstrated increased willingness to engage with one another and explore differences; it would therefore be worth continuing talking with one other, he indicated.

Nevertheless, Falconer made clear that he had not seen any progress that would lead him to seek to modify the 'reference papers' he had produced between March and June identifying areas of convergence and continuing disagreement on each issue in the negotiations. These documents formed the basis of the mammoth draft agriculture agreement text that he presented to Members in June, which largely served to highlight the wide spectrum of views on the central issues in the talks (see BRIDGES Weekly, 28 June 2006).

One negotiator agreed with Falconer's assessment, telling Bridges that "nothing has fundamentally changed since July."

Subsidies: less posturing

Members appeared less inclined to engage in empty posturing and more willing to engage in concrete discussions on domestic subsidies, Falconer suggested.

He said that his consultations had focused primarily on cuts to overall trade-distorting support and product-specific 'amber box' subsidies. Cotton subsidies, and moderately trade-distorting payments in the WTO's blue box, had also been touched upon. Overall trade-distorting support is made up by the sum of farm payments classified as 'amber box', 'blue box', and 'de minimis' at the WTO. The percentage reductions that rich countries should make to spending limits for such support has been a contentious issue in the Doha Round. Several Members, including the EU and India, insist that the US needs to deepen its offer of subsidy cuts.

In an attempt to probe Members' latitude for manoeuvre to break out of the deadlock, Falconer has been presenting negotiators with conditional scenarios asking them how flexible they might be if their partners also softened their bargaining positions. For instance, at his 29 November fireside chat, Falconer reportedly asked whether the US would consider lowering its cap on trade-distorting farm subsidies to USD 15 billion, if the EU agreed to raise its farm tariff cut to an average of 60 percent, each with rules to minimise the extent to which specific products might escape reforms. The EU said the hypothetical bargain demanded more of Brussels than of Washington, while the US said little about it (see BRIDGES Weekly, 6 December 2006).

Market access: more consideration for constraints

The chair reported that his consultations had dealt mainly with tariff cuts and 'sensitive products', which all countries will be able to shield from the full force of the tariff reduction formula in exchange for the creation of a new import quota. With regard to tariff cuts and sensitive product flexibilities for developed countries, he said that Members had not really changed their positions, but seemed more open to discussing each others' constraints.

Sources say that members of the G-10 group of net farm importers with heavily protected agricultural sectors, such as Switzerland, Japan, Korea, and Norway, stressed that an eventual deal on tariff reduction would have to somehow accommodate their concerns. The group wants tariff cuts even lower than those offered by the EU -- which Washington has already dismissed as insufficient. One delegate suggested that some importers as well as exporters are worried about the possibility that the EU and the US will strike a compromise that focuses heavily on average cuts -- the former because they may not be able to protect sensitive commodities, and the latter because they fear that they may be denied market access for particular export products.

Developing country provisions for sensitive products, as well as their ability to designate 'special products' for special tariff treatment based on food security, livelihood security and rural development grounds, were the subject of another 'fireside chat' the following day, on 12 December. According to sources, there was some recognition at the meeting that sensitive products needed greater definition.

Falconer indicated at the 11 December meeting that he was planning to continue his consultations at the end of January, and would schedule a further 'transparency forum' for all Members at that time. Responding to Cuba's concerns that the reliance on informal 'fireside chats' risked excluding some countries, he said that it remained difficult to schedule more formal meetings since fully-fledged negotiations had yet to resume.

The only other delegation to intervene was the EU, which asked about the feasibility of technical work continuing in the absence of political movement.

One trade official in Geneva suggested that real progress in the negotiations may now have to wait until the newly-elected US Congress gets 'settled' after taking power in early January, and sends some clear indications on trade policy. Little significant movement could be expected, the source said, until early February. Similarly, other officials suggested that little progress would be likely before the mini-ministerial scheduled to be held on the sidelines of the World Economic Forum in Davos at the end of January. Some suggested that this meeting could presage the formal relaunch of negotiations.

Another delegate said that the informal discussions, even though they had not given rise to any concrete changes, would help Falconer identify where potential trade-offs may lie in the event that he is ultimately called upon to produce a draft compromise text for an agriculture deal. However, during the meeting, Falconer emphasised that he was not seeking to impose a text "from above" onto Members.

WTO Director-General Pascal Lamy will report to Members on the state of the negotiations at a General Council meeting on 14 December.

ICTSD reporting