WAITING TO START MODALITIES PUSH, WTO MEMBERS SEEK CLARITY ON SCOPE OF DISCUSSIONS

As WTO Members kick off another push to conclude an accord in the troubled Doha Round talks, they face an unavoidable conundrum: how to strike a framework 'modalities' deal on agriculture and industrial goods trade (which they now aim to do by March or April), while other issues in the negotiations remain unresolved.

Can Japan, for instance, agree to politically contentious cuts to farm subsidies and tariffs, while running the risk that it may not get any of its eagerly sought reforms to WTO anti-dumping rules? Could the EU face down domestic opposition to agricultural reform without assurances that it would get new protections for geographically-linked foods like Parma ham and Roquefort cheese, or secured overseas opportunities for its services companies? How far could India go on agricultural and industrial tariff reduction without the promise of new concessions for its flourishing information technology sector?

But bringing too many issues onto the table at a 'mini-ministerial' meeting around Easter would lower ministers' chances of striking a modalities agreement, believes WTO Director-General Pascal Lamy. Many Members are calling for a clearer idea about what such a meeting would address, and what it would ignore.

Without a modalities deal by spring, countries would not have time for the six or eight months of technical work needed to finish the round by the end of 2008.

Even before governments can start confronting their respective dilemmas about tradeoffs, Members would have to give a relatively favourable welcome to the draft deals to be issued later this week by the chairs of the agriculture and industrial goods negotiating committees. These texts, if all goes to plan, are supposed to be the basis for starting cross-sectoral 'horizontal' negotiations.

US Trade Representative Susan Schwab last week warned against overcomplicating the agenda for a "modalities ministerial." Taking disciplines on fisheries subsidies as an example, she said that "we know that if you bring it into a modalities ministerial that you're never going to get out of the modalities ministerial." Instead, countries need to identify "the minimum necessary… to get done."

The US trade chief added that WTO chief Lamy was "quite firm" that he did not want the talks to grow into a "Christmas tree" of different issues.

Single undertaking not enough 'comfort'

In principle, the Doha Round negotiations have a built-in mechanism to deal with countries' fears about getting bilked after committing to some concessions. The 'single undertaking' principle that "nothing is agreed until everything is agreed" means that a government could veto an eventual Doha package that it found unsatisfactory, even after a modalities deal on agriculture and non-agricultural market access (NAMA).

In practice, however, several Members want progress on their various other priorities alongside any push for modalities on agriculture and NAMA.

"For many members including India, we cannot relinquish the leverage on agriculture and NAMA without in turn obtaining assurance that the issues of our interest will be favourably addressed," India's WTO ambassador told a 31 January informal session of the Trade Negotiations Committee (TNC), according to a report in the Economic Times. "A mere reiteration of the single undertaking principle or a process roadmap is not enough. We will have to get more concrete than that."

Lamy had acknowledged this in his introductory address to the TNC, which oversees all of the Doha Round negotiating bodies. "All Members need to have the assurance that all their issues are moving forward towards a broad and balanced outcome," he said, pointing to the need to afford each the "necessary comfort" to move forward.

Members raise range of issues

The gathering saw several delegations cite areas that they wanted to see addressed either prior to or as part of any 'horizontal' negotiation process.

The EU flagged services trade and 'geographical indication' protections. Argentina said it was willing to negotiate on regional food names - but only in the next round of WTO negotiations!

US Ambassador Peter Allgeier said that clear timetables are necessary for all of the issues on the Doha agenda. He said that some idea of the depth of future marketing-opening commitments in services trade would be necessary in order for Washington to agree on agriculture and NAMA modalities.

Both the EU and the US have expressed support for a 'signalling conference' around the time that agriculture and NAMA modalities are agreed, at which countries would indicate the kind of services commitments they might offer in market access negotiations. Several developing countries, notably the African Group, are opposed to the idea.

Canada and Japan, for their part, mentioned the rules talks. Both are among a group of over twenty Members that have expressed opposition to anti-dumping provisions in an existing draft rules text that would, under limited circumstances, legalise 'zeroing', a controversial calculation practice used by the US that they claim inappropriately inflates anti-dumping duties (see BRIDGES Weekly, 30 January 2008). They want zeroing explicitly banned - a notion to which the US is resolutely opposed.

Specifically citing zeroing, Canada said that both rules and services should be part of the horizontal process. It called for a revised version of the anti-dumping text that would reflect the views of the majority of WTO Members - an unsubtle euphemism for banning zeroing.

One negotiator suggested to Bridges that a new anti-dumping text from the chair of the negotiating group on rules - even if unendorsed by Members - might suffice to give countries demanding movement on anti-dumping the 'comfort' they need to proceed on agriculture and NAMA.

India told the TNC that Members need a solid common understanding about any horizontal process before it can begin - for instance, whether ministers would attend (or merely senior officials), and what issues they would cover. India noted that it too had specific areas of concern, such as services, a new anti-dumping text, and a proposal to amend WTO intellectual property rules to require patent applicants to disclose the origin of biological resources or associated traditional knowledge used in their inventions (see BRIDGES Weekly, 7 June 2006).

Calls for clarity on scope

The wide range of issues raised at the meeting prompted Brazil to warn that Members risked losing focus, stressing that agreement on agriculture and NAMA was the priority. Norway emphasised the need for clarity about precisely what ministers would discuss.

South Africa cautioned against having ministers try to solve every last issue in the agriculture and industrial trade negotiations.

"We're clear on a procedure but less clear on parameters," concluded Lamy at the end of the meeting. He reminded Members that the negotiating mandate from the July 2004 Framework and the December 2005 Hong Kong Declaration called for addressing agriculture and NAMA first.

Speaking a few days later to a session of the General Council, Lamy said that consultations on the "scope of the horizontal process" would take place "over the coming days and weeks."

Easter too soon for a resurrection?

Lamy told the WTO's top permanent decision-making body on 5 February that following the release of the agriculture and NAMA texts this week, there would be a "brief pause to allow delegations to reflect on the texts and consult their capitals." This would be followed by multilateral discussion in the respective negotiating groups, and finally a "cross-cutting discussion - a negotiation across both texts."

Trade negotiators say that the talks in the two negotiating groups will likely include so-called 'Room E' consultations with ambassadors from two dozen or so representative countries. Some raised the possibility that the texts would be amended before going into a horizontal process that would first involve negotiators and senior officials, and ultimately - barring yet another breakdown - ministers.

USTR Schwab last week said that a significant number of the 40-odd outstanding issues in the agriculture negotiations would need to be resolved before ministers can be expected to iron out the final tradeoffs.

The Doha Round has long been pronounced dead in circles beyond government trade ministries and WTO headquarters. One delegate said that Easter, which falls on 22 March, might be too soon for a mini-ministerial to resurrect it -- and that the first half of April seemed more likely.

Despite clear progress in the negotiations since last September, the official acknowledged that prospects for an agreement this year remained unclear, not least because of the US elections.

ICTSD reporting; "Don't push for premature deal, India tells WTO," ECONOMIC TIMES, 4 February 2008.