Bridges Daily Update #4 - As Clock Runs Down, WTO Nairobi Talks Kick Into Gear

17 December 2015

Negotiations at the WTO’s ministerial meet have gained pace, sources say, with Thursday’s talks set to run through the night as members search for common ground that enables them to advance on contentious areas while setting the stage for the organisation’s future work.

Agriculture: countries stake out positions

All-night talks on Wednesday led by a small group of approximately ten countries produced a new agriculture text by early on Thursday that was circulated by the talks’ facilitator, Lesotho minister Joshua Setipa. While many countries said they welcomed the draft as a negotiating basis, others told a ministerial-level meeting at 4 PM that they were unhappy with the result. The facilitator was expected to issue a new draft text on Friday morning.

Thursday’s draft would commit members to eliminating export subsidies - but with little of substance on a proposed new safeguard that the G-33 developing country coalition has said is needed to protect farmers from sudden import surges or price depressions.

Farm exporting countries have warned they could only agree to the safeguard as part of a broader deal to cut tariffs. India issued a statement noting dissatisfaction with the talks’ progress, later indicating plans to table a revised text with Indonesia and Turkey.

Eliminating export subsidies

The draft texts would commit developed countries to eliminating their export subsidies by 2020, with most developing countries doing so three years later. An exception would be made for transport and marketing export subsidies, which developing countries could provide until the end of 2028. Least developed countries (LDCs) and net food-importing developing countries would have another two years to phase these payments out.

Australia has argued that the clause covering these payments has expired. The US told Thursday’s meeting it was unhappy with the proposed extension.

On cotton, the draft provides for an immediate end to export subsidies provided by developed countries, and grants one more year for developing countries to do the same.

Despite a push from the EU and others to secure similarly constraining language on the agricultural export credits used by the US, sources said this section of the text remained relatively weak.

Maximum credit repayment periods could be as long as eighteen months, the new draft says - although the previous negotiating text in this area, tabled in 2008, stipulated no more than six.  The EU, Brazil, and other members recently proposed nine month repayment periods under certain conditions. China told today’s meeting that this part of the text should be improved, while Canada, Norway, and Switzerland sought additional concessions.

One source told Bridges that while current US legislation allows repayment periods of up to 24 months, actual practice is 18 months.

A separate section of the text, on agricultural exporting state trading enterprises, would simply instruct members to continue negotiations in Geneva. The US had previously proposed effective commitments in this area, based on the draft 2008 texts.

Food aid: “best endeavour” commitments

New disciplines on food aid would seek to ensure that humanitarian assistance does not serve as a disguised export subsidy by undercutting otherwise viable farmers in the recipient region.

However, Lesotho and Zimbabwe were among those expressing concern at this afternoon’s consultation. Sources told Bridges that the draft text would place few real restrictions on donor countries’ ability to provide in-kind aid, or to discipline “monetisation” – the sale of food aid to raise funds for development projects.

“The proposal does not move away from tied food aid programs and would not exert any pressure to reform the status quo,” said Oxfam America’s Gawain Kripke in comments to Bridges.

Froman: Development “too important to leave to Doha”

Thursday morning, US Trade Representative Michael Froman gave a highly-anticipated speech in which he reiterated his call for members to free themselves “from the strictures of the Doha framework.”

“Moving beyond Doha doesn’t mean leaving its unfinished business behind. Rather, it means bringing new approaches to the table. Development is too important to leave to Doha,” he said.

Sources say bilateral and small group meetings are now likely on how the ministerial declaration should address the future of the long-running Doha Round – as well as potential language on “new” trade-related issues. The subjects have not yet been dealt with in a large-room format, trade officials said.

An updated version of the draft ministerial declaration was released earlier today, following discussions yesterday. Though a handful of brackets had been removed, according to a version seen by Bridges, notably those paragraphs in Parts 1 and 3 relating to the reaffirmation of the Doha Round and subsequent ministerial declarations and decisions remained bracketed.

Following an evening meeting at the level of heads of delegation, trade officials confirmed that the talks on the ministerial declaration and potential Nairobi deliverables would go through the night. At this stage, some trade sources have suggested that the conference could drag on into Saturday, despite hopes expressed by key officials that the meeting could still finish by the scheduled close of Friday.

Rules, fisheries proposals

Several ministerial statements in Thursday morning’s plenary session identifying fisheries subsidies disciplines as a desired Nairobi outcome had raised hopes among some trade watchers of potential news.

However, uncertainty mounted as night fell around next steps for proposals made this week as part of the WTO’s overall rules negotiations, of which fisheries subsidy disciplines are a part.

At press time, sources said that bilateral and small-group consultations have been held with the “proponents” as well as with other countries that have expressed concerns, in a bid to identify a path towards consensus on a rules text. Several members also reportedly commented on a revised draft decision by the African, Caribbean, and Pacific (ACP) Group of countries looking to complete negotiations within two years of the Nairobi meet for disciplines on two types of fisheries subsidies.

Some countries reportedly expressed reservations to a paragraph in the ACP document that would aim to prioritise these disciplines. Another suggestion was to expand language in a subsequent paragraph on how these were defined, with the draft currently specifying these as subsidies provided to vessels engaged in illegal, unreported, or unregulated (IUU) fishing, as well as subsidies to any fishing activity negatively affecting fish stocks that are in an “overfished condition.”

In addition, some members were reportedly uncomfortable with a paragraph saying members should “aim to refrain” from providing capacity enhancing subsidies to fishing fleets insofar as these affect the sustainability of fish stocks, undermine development, and threaten food security. The ACP Group met late Thursday afternoon to consider these comments.

Questions remained on Thursday evening as to whether the issue facilitators would draft a text trying to reconcile different approaches and divergent views.

In a side event outside the rules negotiations, a group of 28 WTO members released a ministerial statement on fisheries subsidies, aiming to reinvigorate the organisation’s work on ambitious and effective fisheries subsidies disciplines including, but not limited to, prohibitions on those linked to overfishing and IUU fish activities.

The group also commits to not provide any such subsidies, reaffirms a series of other international commitments, refers to transparency, and special and differential treatment. A footnote indicates, however, that adjustments may be made to the final text in order to account for eventual MC10 outcomes.

“The WTO has a central role in fisheries subsidies reform. It is the only place where binding rules can be established, something that is essential,” said New Zealand trade minister Todd McClay, joined by others on the dais.

Eyes on services waiver, S&DT

Discussions on special and differential treatment (S&DT) proved divisive, sources say. Those talks are now being facilitated by WTO Deputy Director-General Yonov Frederick Agah.

At press time, the latest updates on this issue indicated that members are keen to have an outcome in this area, with support emerging on the bulk of the proposals, though divisions remain on sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT).

One source said during the course of the day that the sticky point is whether the non-LDC specific provisions among the nine proposals in play should apply to all developing countries and how binding the language should be. 

One LDC delegate mentioned that talks on S&DT will necessarily have to be taken up after Nairobi, while referring to the text which contained a set of LDC-specific decisions. Another source explained that given the G-90 attempt to refocus discussions on proposals, which they say are based on their need, some countries were trying to bring the Group back to the Chair’s text tabled a few days ago.

According to a G-90 communiqué, any development outcome in Nairobi could not be achieved without concrete responses in the form of decisions which “add value,” and which include key proposals advanced by the group in order “to recalibrate and galvanise their industrialisation and investment initiatives.”

G-90 ministers expressed concern that “the spirit of compromise sought by predominantly developed members of the WTO is so far lacking. “There is a growing impatience among some members and not just OECD countries,” said a trade delegate.

Work to reach a compromise on the preferential conditions provided under the services waiver for LDCs is also underway. At press time, the facilitator on this issue, Rwandan Minister of Trade and Industry François Kanimba, was expected to shortly release a draft which would extend the waiver until 2030, encouraging countries who have not done so to notify their preferences. The text no longer refers to LDC requests to facilitate administrative procedures via work permits and qualification requirements, according to a copy seen by Bridges.

“I am confident that this draft decision can enjoy members' consensus,” reads the draft text.

Afghanistan joins

Amid the frenzied negotiating climate, ministers were able to celebrate the expected entry of a new WTO member - the Islamic Republic of Afghanistan, an LDC - after eleven years of talks, during an official welcome ceremony which took place today.

ICTSD reporting.

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