ICTSD reporting | Azevêdo extends WTO negotiating deadline in bid to secure Bali deal

15 November 2013

Director-General Roberto Azevêdo announced that he would be extending their original 12 November deadline to allow negotiators reach a “Bali package” ahead of next month’s ministerial Conference.

The trade chief was originally expected to announce on 12 november at the trade negotiations Committee (TNC) meeting whether a deal in Bali would actually be achievable. While members are far closer to a deal than they were a few months ago, Azevêdo confirmed, they are still toeing a dangerously fine line between success and failure, with the outcome of the past two months of negotiating too close to call.

Instead, the Director-General announced that he would be giving negotiators an additional few days to sort out their differences, which traverse all three areas of the proposed Bali package - trade facilitation, agriculture, and development.

Sources say that meetings over the next few days are likely to take place in a range of configurations, from the recent "room W" meetings of ambassadors led by the Director- General to informal TNC gatherings and small group consultations.

A meeting of the WTO's General Council, which is the organisation's highest decision- making body outside of the ministerial conference, has now been set for 21 November, at which point it should be clear whether or not Geneva-based officials will have a package to transmit to their ministers. A formal TNC is likely to be held before then, in line with WTO procedures.

Race to the finish

The Bali package, as proposed, includes a small subset of the Doha agenda. Its key feature would be an agreement on trade facilitation, a topic that was formally added to the Doha negotiating mandate in 2004. The proposed Bali deal would also include select elements relating to agriculture, along with a few issues of relevance to the organisation's developing and least developed country members.

As the December meeting has drawn closer, however, difficulties have emerged, leading the so-called  "Bali  package" to be  slowly whittled  down  over the past few months as negotiators try to put together a "realistic" - though potentially less ambitious  - outcome. Proposals relating to special and differential treatment (SDT), such as the "Cancun-28" and six Agreement-specific SDT proposals, were eventually dropped from the proposed deal. Meanwhile, other topics that initially looked easily resolved have met with unexpected hurdles, while long-standing disagreements in other areas have proven difficult to overcome.

Customs cooperation "closed," though broader TF difficulties remain

Negotiators have been working late into the evening, and through weekends, in an effort to reduce the myriad brackets remaining in the trade facilitation (TF) draft text, which has been billed as the pinnacle of the Bali package. Some of those efforts, sources say, have lately paid dividends, with members able to close the controversial issue of customs cooperation early this week.

Customs cooperation involves how to exchange information between importing and exporting authorities of member countries, in order to address fraud. The topic has been difficult because of concerns such as how to handle the increased volume of requests for such data. Given its sensitive nature, it has lately been treated as its own "pillar," even though it falls under the broader "section I" heading of the trade facilitation draft text.

"It is not perfect, but the core of an agreement is there," Azevêdo said earlier this month in announcing the result. "This achievement is all the more notable for the fact that it was achieved so quickly." Various other hurdles remain in section i, he added, though section ii - which deals with implementation flexibilities for developing countries - remains the "hardest nut to crack."

Developing countries have long said that they need definite assurances that they will receive the support needed to implement some of the new commitments being negotiated in section I. Otherwise, they say, putting these into practice could prove both difficult and costly.

Developed countries, meanwhile, have stressed that section i commitments must be binding in order for the deal to provide the hoped-for increases in trade flows.

Agriculture

The agriculture dimension of the Bali package involves three proposals: two from the G-20 coalition of developing countries, and one from a separate developing country group known as the G-33. With regards to the G-33 proposal, which deals with allowing food purchases at administered prices in developing countries as part of public stockholding programmes, members have spent the last several weeks fine-tuning the details of a so- called "peace clause." This legal mechanism would commit members to not bring legal disputes in this area against countries that wish to use the above-mentioned flexibility.

Though  there has  been  a  level of  "constructive  engagement"  in  recent discussions, Azevêdo said, questions  remain  over how long this  "interim  solution"  will be in place and what safeguards other countries would be able to use in order to protect their own producers from trade distortions. A term of four years has been discussed by members, while others insist that this is too long, sources close to the talks told Bridges.

However, the G-20 proposal on how members manage their tariff rate quotas (TRQ) - which are used by some countries to charge higher tariffs on goods being imported after an initial quota has been filled - is "a different story," Azevêdo reported.  The TRQ  proposal had initially been welcomed as one of the more "calibrated" agriculture proposals on the table.  Since  then, a stand-off  between the us and China has emerged on the special and differential treatment (SDT) provisions for developing countries outlined in this proposal, specifically on how reforms will be enforced.

Members remain divided on the ambition sought by the G-20 in a proposal on export competition. The group has called for an elimination of export subsidies as envisioned in earlier Doha round documents, while those providing the payments insist that these need to be dealt with as part of a broader trade deal.

Development issues

The  Director-General  had  reported last  month  that  convergence  had  emerged  on two draft decisions regarding least developed countries (LDCs), specifically on how to "operationalise" the services waiver agreed at the previous ministerial conference in 2011, and on rules-of-origin.

Despite these advances,  discussions on  the C-4 cotton proposal  are  reportedly still ongoing, sources say, while the impasse on duty-free quota-free market access remains.

Negotiations have also continued on the Monitoring Mechanism, Azevêdo said, with only one or two paragraphs still left outstanding. Some delegates have cautioned privately, however, that whether the Mechanism will ultimately make it into the Bali package is still unclear, with some raising the possibility of it being treated instead post-ministerial, along with some of the other SDT issues that did not make it into the package.

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