TNC: LAMY SAYS HORIZONTAL PROCESS "COMING SOON," BUT WHEN?

WTO Director-General Pascal Lamy said last week that "solid progress" since February meant that governments were "now much closer to the finish line" in the troubled Doha Round talks. Nevertheless, it remains unclear whether ministers from around the world will be in a position to hammer out a framework global trade deal by the second half of May.

Tentative plans had started to take shape to bring ministers to WTO headquarters in Geneva during the week starting 19 May. Trade diplomats are now suggesting that this might be too soon for countries to resolve enough of their differences to give ministers a reasonable chance of agreeing on controversial cuts to tariffs and subsidies, particularly due to slow progress in the agriculture negotiations.

A summit that week is "still possible," said one delegate, though it would "not [be] very easy." For it to happen, the official explained, the chairs of the negotiations on agriculture and industrial goods trade would have to issue new draft deals in "the very first few days of May." Moreover, these texts would have to meet with a relatively favourable response from the Membership, with no sharp opposition - an even bigger if. Late June or even July seem more likely dates for a ministerial gathering, sources suggest.

Lamy told the WTO Trade Negotiations Committee on 17 April that "the time is coming soon" to start what delegates call a 'horizontal process' - negotiations involving trade-offs across agriculture and non-agricultural market access (NAMA) in an attempt to satisfy countries' respective interests.

While cross-sectoral comparisons have long featured in the negotiations, this has generally taken the form of countries complaining about the level of farm trade liberalisation versus manufacturing tariff cuts on offer, or vice versa. These horizontal talks, similar to final-stage negotiations in the past, would openly look for a consensus-winning balance between the two. The discussions would start at the level of senior trade officials, with ministers likely to step in to take the ultimate decisions if a deal seems within reach.

The WTO chief did not mention any specific dates for a ministerial-level gathering. He did, however, suggest that senior officials could start meeting to discuss services trade from the week of 5 May. Over the weekend, at the UN Conference on Trade and Development summit in Ghana, Lamy said that a ministerial meeting could take place "by the end of May."

During the meeting of the Trade Negotiations Committee, which oversees the Doha Round talks, several delegations, including Mauritius and the African Group, stressed that the talks must be driven by substantive progress, rather than by artificial deadlines. However, some, such as Singapore, also stressed the need for urgency.

In his address to the committee, Lamy described the process he would follow while attempting to shepherd Members towards an accord. He also focused on how the agenda of the upcoming talks might be kept manageable, while simultaneously assuring countries that their concerns in areas other than agriculture and NAMA would not fall by the wayside.

Lamy repeatedly sought to allay concerns expressed by some smaller countries such as Bolivia and Cuba about being left out of the negotiating process while the real bargaining happens in invitation-only 'green room' meetings to which many WTO Members are not invited.

"Modalities can only be established by the full Membership," he said, referring to the formulae, figures, and exceptions that will determine countries' future subsidy and tariff levels. "Transparency and inclusiveness are fundamental."

While informal consultations among smaller groups of countries "are essential to narrow differences," he stressed that "they must feed into multilateral arena in a continuous loop." He also emphasised that the countries invited to the green room meetings would represent "the full spectrum of Members' views and interests."

Aside from the need to reconcile these smaller groups with the WTO's entire 151-nation Membership, Members have faced another conundrum in their ongoing push for a modalities deal on agriculture and NAMA: how to "provide sufficient reassurance," as Lamy said, that their other priorities are advancing as well.

The issue is delicate: Lamy has warned that bringing a 'Christmas tree' of complex demands onto the table now would decrease ministers' chances of agreeing on agriculture and NAMA (see BRIDGES Weekly, 20 February 2008).

Lamy told the meeting last week that his discussions with Members had revealed that they particularly wanted "more clarity" on services, rules, and two intellectual property-related issues.
In order to provide countries "a certain level of comfort" regarding services market-opening, Lamy described how a "signaling conference" held at the same time as an agriculture and NAMA modalities deal would function.

Developed countries and the larger developing countries that have sponsored or received plurilateral requests for market access would 'signal' the sort of binding liberalisation commitments they were prepared to undertake. Lamy would then report on these signals to the entire WTO Membership in the Trade Negotiations Committee. He said that such indications could "give a credible signal that the services negotiations are moving forward," while falling short of the revised final offers detailing specific liberalisation commitments that would be the end-point of the services talks.

Lamy warned Members against turning a signaling conference into a "finger-pointing exercise." Governments have been accusing each other of seeking far more access than they themselves are willing to put on offer.

As for the rules talks, the head of the WTO said "there is wide agreement that this is not an issue for ministerial negotiations" at the time of agriculture and NAMA modalities, though he did not rule out that "some discussion may take place."

Several countries have heavily criticised a draft anti-dumping text that Chair Ambassador Guillermo Valles Games (Uruguay) issued last November, objecting to the fact that it would, under certain circumstances, explicitly legalise 'zeroing', a controversial calculation methodology used by the US that they claim inflates anti-dumping duties (see BRIDGES Weekly, 30 January 2008). Some of them, such Japan and Canada have even called for the text to be comprehensively revised before the horizontal process starts.

Lamy said that many countries want the chair to produce "a document" - more than a report of positions though not necessarily a fully-fledged text - "which would give reassurance to domestic stakeholders." He said that Valles Games was determining how to proceed.

One delegate told Bridges that although several Members are firmly opposed to the chair's text, many can "more or less can live with a statement and a commitment to negotiate." Anti-dumping rules were too complicated for ministers to negotiate anyway, the source observed.

A "fundamental divide" exists between Members on whether to extend additional intellectual property protections to geographically-linked foods such as Roquefort cheese, as well as on whether patent applicants should be obliged, on pain of patent revocation, to disclose any biological resources or traditional knowledge used in their inventions. The former issue divides 'new world' countries such as Argentina and the US from the EU and Switzerland. The latter pits many developing and least-developed countries against the US, the EU, and some other industrialised nations. Lamy warned the different camps that the issues had the potential to lead to "a big clash during the modalities exercise."

Many Members stressed that complete modalities texts on agriculture and NAMA should be issued before the horizontal process starts. India said that the text should reflect the concerns of all, saying that in the farm trade talks, there were too many unresolved issues on flexibilities for developing countries to shield some products from liberalisation for the horizontal process to start.

If a ministerial meeting cannot be held before the end of May, sources suggest that it would not be possible until late June or even July, due to reasons unrelated to the Doha Round talks. Trade ministers from Asia-Pacific Economic Cooperation countries are set to meet for two days in Arequipa, Peru starting 31 May. Ministers from the industrialised world and major developing economies will attend the Organization for Economic Cooperation and Development's annual summit in Paris from 4-5 June. And finally, the European football championship taking place in June in Switzerland and Austria will make both security arrangements and hotel rooms in Geneva hard to come by.

ICTSD reporting.