Bridges Daily Update #3 | Will Chair's AG Text Warm Up Frozen Talks?

12 September 2003

After a frustratingly stagnant day two, the Cancun Ministerial negotiations may get a shot in the arm when a new agriculture draft is released on Friday. The text will not be agreed by Members, but will be issued by the Working Group Chair in an effort to break the logjam currently affecting all five Working Groups set up on Wednesday to seek solutions to the most contentious issues in the draft Cancun Ministerial Text. Meanwhile, WTO Director-General Supachai Panitchpakdi is facilitating negotiations on the cotton initiative, formally addressed in the plenary session of Wednesday 10 September.

Supachai Heads Discussions On Cotton

In a move designed to boost the profile of cotton subsidies concerns of four West and Central African countries (WCA), Conference Chair Ernesto Luis Derbez requested WTO Director-General Supachai to lead discussions in this area. WCA countries want the WTO to address rich country cotton subsidies - particularly in the US - that distort prices, negatively affecting the livelihoods of millions of poor African farmers. The talks were open to all interested parties, with the first meeting on Thursday evening attended by the WCA countries, the US, the EC and others. Delegations chiefly used the meeting to air their concerns, and talks will continue on Friday. Supachai met with the EC, Japan, Pakistan, India and China, asking each how they felt about cotton-related issues such as export subsidies and transitional compensation for affected countries. Reportedly, the WCA have been approached both by the G-21 group and the Cairns group, and are faced with the dilemma of whether or not to join; both G-21 and Cairns could add their weight behind the WCA position, but the overall priorities and positions of the WCA may not fully overlap with either. Further, the WCA countries do not want to jeopardise the status of the unique group headed by Supachai.

Cotton has emerged as a key potential development-oriented deliverable for Cancun (Bridges Daily Update No. 2). The US has refused to discuss any reductions in its subsidies, preferring instead to persuade the countries to accept a solution that would target the textiles and fibres sector more generally. The US has now tabled a paper in this respect. The WCA, however, are looking for a much more targeted solution that would solve the immediate problem and save small farmers from going bankrupt. To this end, they have suggested a three-year phase-out plan for cotton subsidies and a transitional compensation mechanism. One WCA representative noted that the money they were asking for in the interim to save their farmers would amount to only five percent of current cotton subsidies and, after all, "people pay a ten percent tip at the restaurant and we're asking for less". He also highlighted the benefits of preventing the problem rather than trying to cure it afterwards; if massive numbers of cotton farmers are driven to bankruptcy, measures such as emergency and food aid would have to be brought in later. A paper distributed yesterday by an advisor to Burkina Faso (one of the WCA countries) has added some specificity to the debate, indicating how the six types of subsidies practices in the US affect the global cotton market.

Agriculture

Little of substance transpired on the Working Group negotiations on agriculture. Although late on Thursday Minister George Yeo Yong-Bon of Singapore said he could perceive "some indications of flexibility", there appears to be no chance of a consensus. It is now expected that Minister Yeo will release - on his own responsibility - a new draft framework proposal for the agricultural negotiating modalities late on Friday. The text is likely to be a hybrid between the previous Ministerial agriculture draft and other proposals, but nobody would hazard a guess as to how far it would differ from its predecessor.

With the G-21, which represents half of the world's population, having tabled the only formal counterproposal to the Ministerial Text, the group's negotiations with other Members are at the centre of the process. In consultations facilitated by Minister Yeo on Thursday, the G-21 met separately for two hours with both the EC and the US, covering the entire ground of their divergent framework proposals for agricultural negotiating modalities. Brazil's Foreign Minister Celso Amorim, who acts as a co-ordinator of the G-21, said the meetings had "productive aspects" and "contributed to a better understanding of positions", but declined to provide concrete examples.

Amid reports from many non-governmental sources that the US and the EC are actively discouraging countries from joining the G-21, the Trade Minister of Ecuador denied her country's participation in the group had led to pressure regarding Ecuador's free trade agreement (FTA) negotiations with the US. She and four other G-21 ministers also refuted the notion that the diverse group would disintegrate in the course of the negotiations. Instead, the ministers said many more countries had expressed either sympathy or a desire to join the group. The G-21 has established a contact group to explore common ground with African countries and Turkey has reportedly joined the ranks.

In a memorandum to reporters, Senator Chuck Grassley, Chairman of the US Committee on Finance, expressed disappointment with the eight G-21 Members that are in the process of seeking FTAs with the US. "This makes me question their […] interest in pursuing the strong market access commitments required to conclude free trade agreements with the United States," he noted.

Other countries revealed no significant changes in positions already expressed in Geneva, but sources said the EC had proposed starting discussions on products of special interest to developing countries on which export subsidies should be eliminated as a priority. The draft Ministerial Text proposes an (as yet unspecified) list of such products, while the G-21 draft would commit developed countries to an across-the-board elimination of export subsidies to "products of particular interest to developing countries".

Singapore Issues

Significant distance was evident yesterday among countries on the four Singapore issues of investment, competition, transparency in government procurement and trade facilitation. Following open-ended meetings with Members on Thursday morning, the group's facilitator - Canadian Trade Minister Pierre Pettigrew - noted that some countries were vociferously opposed to launching negotiations on any of the Singapore issues, while others remained equally insistent that negotiations be launched on all four. A group of developing countries including Bangladesh, China, India, Malaysia and Nigeria announced that there was not, and would not be, an explicit consensus at Cancun on modalities for negotiations on the Singapore issues.

Speaking on behalf of the group, Malaysian Trade Minister Rafidah Aziz suggested that the group of over 70 Members would oppose efforts to launch negotiations on modalities, and instead seek to refer these talks back to Geneva for further discussion and clarification. Aziz condemned attempts to characterise the Cancun negotiating process as a single undertaking subject to trade-offs between issue areas. "Each issue should be considered on its own merits," she noted. In any case, "there will never be explicit consensus on this issue in Cancun, so they should move on to other issues such as agriculture and services where agreement is possible." She also argued that opposition to launching negotiations on the Singapore issues should not be an excuse to stall progress on agriculture, which she insisted must remain decoupled from other areas.

While the group of developing countries said they were not ready to launch negotiations on the Singapore issues, they stopped short of suggesting that developing countries were categorically opposed to future negotiations. Rather, they called for more time to increase understanding of the impacts of negotiating new issues and for further capacity building for developing countries.

Not all developing countries object to launching negotiations at Cancun, however. At yesterday's meeting, some Latin American countries including Colombia, Peru and Chile said they could support developing modalities provided there was movement in other areas, particularly agriculture. Morocco also signalled its support for the Singapore issues. The US will be outlining its position when the group re-convenes on Friday at 1 pm.

For its part, the EC, which is the main demandeur on these issues, outlined three goals on the Singapore issues for Cancun. First, it was determined to launch negotiations and complete them by January 2005; second, it wanted agreement on the scope of the negotiations, and third, it wanted all countries included in an agreement.

When asked about his plans for breaking the deadlock and bridging the distance between the opposing positions, Pettigrew noted that meetings with other countries had provided suggestions for possible avenues for compromise. These could include negotiating some of the Singapore issues now and delaying action on the rest; negotiating some Singapore issues with an explicit assurance that dispute settlement would not be included in the modalities; brokering trade-offs across issue areas; or allowing countries to opt-in to the issues in a plurilateral-type of agreement. However, Pettigrew cautioned that it was simply too soon to speculate about the way forward.

Development

Facilitated by Kenya, the Development Working Group convened on Thursday in small-group and open-ended meetings. Members agreed to address a broad range of development-related issues, including special and differential treatment (S&D); implementation; commodities; least-developed countries; small economies; and the WTO working groups of trade, debt and finance and trade and transfer of technology. Sources close to the negotiations said that S&D took up the bulk of the discussion time, though it appeared that there was little progress at this stage, with talks moving to 'confessional' sessions between the facilitator and groups of 4-5 countries at a time on Thursday evening.

Non-agricultural Market Access

Henry Tang Ying-yen (Hong Kong), facilitator of the Working Group on Non-agricultural Market Access (NAMA), said that Members disagreed in particular on whether to use a formula or a linear approach; if following a formula approach, what the formula should be; and on an initiative to focus on opening up certain key sectors. Discussions were mostly conducted in bilateral sessions, with Swiss Ambassador Pierre-Louis Girard - who chairs the NAMA Negotiating Group in Geneva - reportedly heavily involved. Many developing countries have been pushing hard to have the Working Group focus on the issue of erosion of trade preferences, and this is now receiving a great deal of attention in the talks.

Miscellaneous

The Chair of the Miscellaneous Group, Clement Rohee of Guyana, identified two sets of issues that he thought reflected major concerns of Members: environment ('invitee'/observership issue and eco-labelling) and intellectual property rights (multilateral register for geographical indications and non-violation - the extension of geographical indications is being discussed in the Development Group under 'implementation'). Chair Rohee advised countries to negotiate bilaterally if they wanted to discuss other issues - such as services, as proposed by Venezuela. No progress was made on any of the issues. The Working Group, which was attended by 20-25 Members, will reconvene when the Chair feels he has made sufficient progress to report back.

As expected, the EC - supported by Norway, Switzerland, Eastern European countries, Canada and Korea - pushed for discussions on environment, which Robert Madelin of DG Trade described as the EC's "No. 2 issue" after agriculture. The EC also called for the re-inclusion of language to encourage the special session of the Committee on Trade and Environment (CTE) to "accelerate its work". This had been dropped in the second draft Ministerial Text. New Zealand was open to discussions on the 'invitee' issue and eco-labelling while Chile, the US and Australia only supported the former. Brazil and India rejected any discussions on environment-related issues. Renaming observership to 'invitee' was seen as an attempt by the EC to de-link the CTE-related discussions under para. 31(ii) from the broader observership debate in the General Council, thereby accommodating Egypt's and other Arabic countries' concern that a decision here might preclude the broader debate. The relationship between multilateral environmental agreements and WTO rules, negotiated under para. 31(i), was not raised in the Group, but would be covered by the EC's demand for accelerated negotiations.

Cambodia, Nepal Set To Join WTO

Ministers approved Cambodia's and Nepal's membership agreements, putting them in line to become the WTO's 147th and 148th Members and the first least-developed countries to join the WTO through the full working party negotiation process. WTO Deputy-DG Rufus Yerxa, speaking on behalf of the Chair of the working party that negotiated Cambodia's membership, stressed that "the terms of this accession do not preclude access to the benefits under the Doha Declaration on the TRIPs Agreement and Public Health to Cambodia as an LDC".

NGOs Banned From Briefings

A number of NGOs staged a demonstration at a US press briefing to draw attention to the entry into force of the Cartagena Protocol on Biosafety on 11 September. After heated verbal clashes with journalists, all NGOs have been banned from press briefings at the Convention Centre. NGO briefings will be held in the Fiesta Americana Coral Beach Hotel across from the Centre.

On the Agenda

The five facilitators will report back to Members at 10:00. The groups will continue to meet in the afternoon.  ICTSD and El Colegio de Mexico are co-convening a Cancun Trade and Development Symposium (CTDS) at the Grand Melia Hotel from 11-12 September 2003. Over 25 groups have come on board as organisers and co-sponsors. The CTDS is open to the public, with no WTO accreditation required. Spanish and French translations are provided.

12 September 2003
Nach einem frustrierend schleppenden zweiten Tag könnten die Verhandlungen in Cancun endlich ins Rollen koemmen, wenn am Freitag ein neuer Agrarentwurf veröffentlicht wird. Der Text ist nicht von den...
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13 September 2003
Following intensive bilateral and plurilateral consultations on Friday, WTO officials said an updated draft Ministerial Text would emerge around noon today. Facilitators of the five Working Groups on...
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