WTO members eye new negotiating landscape

19 February 2016

The head of the WTO told ambassadors last week that they need to “acknowledge their differences,” during the first informal meeting of top Geneva-based negotiators since the global trade body’s ministerial conference last December.

“The fact is that members don’t see eye-to-eye on some issues – and this is not likely to change in the short term,” WTO Director-General Roberto Azevêdo told officials.

The Director-General said that ministers had nonetheless delivered some “specific guidance” on trade talks when they met in the Kenyan capital of Nairobi two months ago.

For the first time since the Doha Round of trade talks was launched in 2001, ministers agreed to disagree on whether to reaffirm the negotiating mandate – with the US particularly adamant that a different approach is needed if negotiations are to deliver a successful outcome. (See Bridges Daily Update, 19 December 2015)

At the same time, the Nairobi ministerial declaration reaffirmed the strong commitment of “all members to advance negotiations on the remaining Doha issues” – including the domestic support, market access, and export competition components of agriculture, as well as manufactured goods, services, development, intellectual property, and rules.

Trade negotiators acknowledged that they were still struggling to find their bearings in this new negotiating landscape.

“I don’t have a sense of where we are,” said one official, in comments to Bridges.

Meetings of the full WTO membership on the overall Doha negotiations have in the past been held under the Trade Negotiations Committee, or TNC. The fact that the 10 February meeting was called at the level of informal heads of delegation – and was not clearly dubbed a TNC – was remarked upon by some trade watchers as an indicator of the uncertainty surrounding the negotiating landscape.

An inclusive process?

Trade sources said that several officials at last week’s meeting had expressed disappointment that the negotiating process in Nairobi was not more inclusive.

Negotiators told Bridges that African countries in particular felt that the final stage of talks had been dominated by five major trading powers – Brazil, China, India, the EU, and the US.

But governments also needed to become better at closing gaps in the negotiations before ministers became involved, one African official said.

“If you realise it’s very difficult, brief your minister,” the source said.

Another negotiator said that the importance in world trade of the five major players meant that it was inevitable that their agreement was needed before any deal could be clinched.

Farm trade talks: four interconnecting circles

In a related development, the chair of the WTO’s farm trade talks told officials that he had begun consulting governments on possible ways forward.

Speaking at a meeting for around a dozen coordinators of negotiating groups and coalitions last week, Vangelis Vitalis – the New Zealand ambassador chairing the negotiations – said he will structure his consultations around four interrelated areas.

The first of these areas responded to clear instructions in two of the Nairobi ministerial decisions. These mandate further talks on a new “special safeguard mechanism” that developing countries would be able to use to raise tariffs temporarily in order to protect domestic producers from sudden import surges or price depressions. They also instruct negotiators to agree on a “permanent solution” to the problems that some developing countries face under WTO farm subsidy rules when buying food at government-set prices as part of their public stockholding programmes for food security purposes.

As the ministerial declaration also specifically instructs negotiators to move ahead on the remaining Doha farm trade issues, Vitalis also plans consultations on domestic support, market access, and export competition, sources said.

A third area of attention is the continuation of the reform process initiated under the Uruguay Round. Article 20 of the organisation’s Agreement on Agriculture commits members to continue talks in this area.

Finally, Vitalis was expected to look into other “new issues” that some countries have said they want to address. The Nairobi declaration says that while some of the organisation’s members wish to identify and discuss these issues, others do not, and that any decision to launch multilateral talks on these topics will require the sign-off of the full membership.

Brazil was among those countries interested in looking into these issues, sources said, having recently expressed concern about the impact on trade of sanitary and phytosanitary requirements, which are those that affect food safety and plant and animal health.

Prioritising domestic support?

Sources told Bridges that unresolved issues on agricultural domestic support and market access were likely to remain high on the WTO agenda. Meanwhile, the progress at Nairobi on export competition could mean that this topic receives less attention in the months ahead.

Some negotiators suggested that an outcome on domestic support should be a target for the organisation’s next ministerial conference, scheduled to be held in late 2017.

But others remained sceptical about how feasible this might be, with a number of officials suggesting that the US presidential elections in November 2016 could limit how much progress could be achieved in the short term.

“It’s very hard to move forward this year,” one source told Bridges.

Negotiators said that the US remains unlikely to accept any cap on its own farm subsidies unless China did so too, while Beijing has been unwilling to accept more onerous commitments than those outlined in the 2008 draft Doha deal.

Domestic policy reforms could see China and India reshape their own support schemes more closely around the type of crop and revenue insurance model adopted in 2014 by the US under the latest Farm Bill. (See Bridges Weekly, 21 January 2016 and 4 February 2016).

A rich dialogue

Despite the continued uncertainty, negotiators told Bridges that they were hopeful the organisation’s members could chart a path ahead.

“Most of the members are looking for a pragmatic way to move forward,” an official from one large developing country said.

The WTO’s General Council – the highest decision-making body outside of the ministerial conference – is set to hold its first meeting of the year on 24-25 February. Furthermore, Vitalis is reported to have already scheduled an informal meeting for all WTO members on 8 March, back-to-back with the regular meeting of the trade body’s committee on agriculture.

Azevêdo told last week’s meeting that “a rich dialogue” was needed in months ahead about how the organisation can best move forward.

“Faced with this situation, the worst thing we could do would be to allow these differences to seize-up WTO negotiations — and push activity towards other forums,” he said.

A proliferation of regional and bilateral deals has already seen major trading powers increasingly push for market opening and regulatory coherence in talks outside the multilateral system.

However, the conclusion of the Nairobi package has raised some negotiators’ hopes for further progress in the WTO.

“We managed to have ‘a something’,” one African negotiator observed.

ICTSD reporting.

 

This article first appeared in Bridges Weekly, Vol 20 Number 6.

 
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