Azevêdo calls on WTO members to set sights on Nairobi, with July deadline likely to be missed

10 August 2015

The 31 July deadline for inking a Doha Round “work programme” will very likely be missed, WTO Director-General Roberto Azevêdo said on Tuesday, urging delegations to come prepared this autumn to redouble their efforts toward reaching “substantive outcomes” ahead of their December ministerial conference in Nairobi, Kenya.

“In a scenario where there is no work programme by the Friday deadline – and this is not the only scenario, we all may yet be surprised – there will certainly be a sense of disappointment that we would have missed an opportunity to establish a clear roadmap to move forward,” Azevêdo acknowledged at a 27-28 July meeting of the WTO’s General Council.

“But we should not allow this to lead to inaction. It cannot become an obstacle,” he continued, urging instead that members ramp up their work and prioritise substance over process when they resume negotiations in September.

Sources familiar with the trade talks say that a work programme by 31 July is indeed highly unlikely, despite the move to reschedule a meeting of the Trade Negotiations Committee (TNC) from 24 July to the end of this month in order to gain more time.

Limited progress

Since the start of this year, WTO members have been reviewing ways to break the long-running deadlock in the Doha Round negotiations, which began nearly 14 years ago and have stumbled repeatedly in the years since.

The 31 July deadline is itself an extension of a previous December 2014 deadline for this work programme. This was pushed back after a months-long impasse over the pace of implementing some of the decisions reached at the 2013 Bali ministerial conference, which in turn led to an overall stall in the WTO negotiations. (See Bridges Weekly, 27 November 2014)

In the months since the impasse was resolved, some proposals have been tabled in the main negotiating groups in a bid to advance the work programme. Meetings have also been held across various configurations, including in the “Room W” format used in the preparations for the 2013 Bali conference.

However, members have proven to be deeply divided over the level of ambition in the “core areas” of the Doha talks – agriculture, non-agricultural market access (NAMA), and services – and how much to rely on the draft Doha texts from 2008.

The disagreements in agriculture have particularly come to the fore, with various members reluctant to proceed in areas such as NAMA or rules as long as there is a lack of clear signals from the farm trade talks. (See Bridges Weekly, 16 July 2015)

“The reality is that despite willingness to explore different approaches and consider proposals or ideas, many members have still not been willing to move towards convergence. Progress has remained very limited,” Azevêdo said in his report to members on Tuesday.

Furthermore, he noted, the difficulty in reaching a work programme “was not a question of the time available,” but rather about making the necessary political calls.

Amina Mohamed, who serves as Kenya’s Cabinet Secretary for Foreign Affairs and International Trade, was also in Geneva this week to update WTO members on Nairobi preparations. The Kenyan official has repeatedly highlighted in recent months the importance of reaching substantive results at the ministerial, which is the global trade body’s first to be held in sub-Saharan Africa.

However, sources familiar with the talks say that the road ahead for the WTO talks is uncertain, given both the limited time between when delegations return in September to when the Nairobi conference kicks off this December, as well as the nature of the divides among members.

ITA update

Despite the sombre news on the Doha talks, reports were confirmed at the General Council of progress on updating a separate WTO deal, known as the Information Technology Agreement (ITA).

The tech trade deal, which was originally agreed in 1996 and entered into force the following year, includes 81 participant countries and eliminates tariffs on a wide range of information technology products. Of these 81 countries, 54 have been involved in negotiating an update to this product list, with this group announcing a tentative deal on Saturday 18 July. (See Bridges Weekly, 23 July 2015)

EU Ambassador Angelos Pangratis confirmed to WTO members this week that the final list has been agreed and that Thailand and Chinese Taipei – both of whom had sought more time to approve the deal – will indeed be signing on.

Whether Chinese Taipei, a major trader in information technology goods, would approve the deal was an open question last week, with sources noting that it was among the least satisfied with the final product list given the omission of flat-panel displays.

The EU official also circulated the product list, which features 201 items, and the associated declaration. These products include, among various others, semi-conductors, GPS devices, medical equipment, video game consoles, and blue-ray/DVR players.

“The figures provided by the WTO, US$1.3 trillion of annual trade, are already very telling by themselves,” Pangratis said, noting that eliminating tariffs on such goods will make global information technology industries more competitive and global supply lines more efficient.

The declaration outlines details such as the staging of tariff elimination on these products. These will take the form of four equal annual reductions, starting next year and ending in 2019, unless otherwise agreed by the parties involved. A draft schedule for these reductions should be provided by each party to all others by 30 October 2015, which will then be reviewed and approved by the group.

This process, the declaration says, should be finished by 4 December 2015, with sources saying that this is geared toward having these details approved by ministers in Nairobi. The deal will take effect once reaching 90 percent of world trade in the products involved, the document notes.

Notably, the declaration does include a requirement that parties meet periodically. Parties must also meet at least one year before changes by the World Customs Organization to the Harmonized System (HS) nomenclature and no later than January 2018 in order to review the ITA’s product coverage to see whether any updates may be necessary.

This provision, sources say, is particularly important to ensure that the list continues to reflect the ever-changing realities of international trade in information technology products, given the rapid pace of developments in this sector. Many of the products on the original ITA expansion list have long gone out of use, while new ones have emerged onto the market.

The declaration also includes an agreement to ramp up consultations on non-tariff barriers in this sector, along with supporting the possible development of an upgraded work programme in this area.

Three of the 54 countries involved in negotiating the expansion had not yet formally confirmed their acceptance of the list as Bridges went to press. Those missing from the list of participants provided in the declaration were Colombia, Mauritius, and Turkey, though their approval is expected.

Bali implementation

Another key question ahead of the Nairobi ministerial conference is where WTO members will be in implementing those outcomes they reached during their last ministerial nearly two years ago, held in the Indonesian island province of Bali.

One possible outcome that has been pushed by many, including the Kenyan hosts of the conference, is the ratification and entry into force of the Trade Facilitation Agreement (TFA) reached in Bali.

To date, only eight WTO members have submitted their instruments of acceptance – far below the 108 needed to bring the deal into force. These eight are Hong Kong, Singapore, the US, Mauritius, Malaysia, Japan, Australia, and Botswana.

Other countries, such as China, South Korea, and Montenegro reportedly said on Tuesday that they will be submitting their instruments of acceptance in the near-term.

Another outcome from the Bali ministerial meet had been a decision to “operationalise” a waiver to grant preferential treatment to services and services suppliers from least developed countries (LDCs).

Earlier this year, various WTO members presented at a meeting of the Council for Trade in Services (CTS) indications of areas where they intend to provide such preferential treatment, while committing to endeavour to present formal notifications on the subject by 31 July after completing their necessary domestic legal procedures.  (See Bridges Weekly, 12 February 2015)

However, as Bridges went to press on Thursday only nine WTO members have formally notified their preference offers. These are Norway, South Korea, China, Hong Kong, Chinese Taipei, Singapore, New Zealand, Canada, and Australia.

ICTSD reporting.

This article originally appeared in Bridges.

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