Bridges Daily Update #5 | Revised Ministerial Draft to be Issued Today

17 December 2005

The first revision of the draft Hong Kong declaration, due to be released Saturday midday, will not contain any surprises, according to Ministerial Conference Chair John Tsang. He has requested the six facilitators of the different issues under negotiation to hand in their draft texts, based on Members' input, by 6 a.m.

At the time of writing, Members were still furiously drafting and redrafting text on most issues in the negotiations to submit for possible inclusion in the forthcoming comprehensive draft declaration before the early-morning deadline. Sources report that sessions of the Chair's consultative group (i.e., the 'Green Room') met Friday night to discuss the ideas that Members had put forward. These included, for example, a paper from the group of African, Caribbean and Pacific (ACP) countries that proposed modifying the draft declaration's text to specify that "there shall be no conditionality attached" to aid for trade money. It also put forward new language containing dates and references to least-developed country (LDC) concerns on special and differential treatment (SDT), anti-dumping, and dispute settlement.

An interim draft of the declaration text on agriculture suggests that ministers have taken a distinct step beyond what was present in the final pre-Hong Kong draft text. For instance, the 'working hypothesis' on three bands for classifying trade-distorting domestic subsidies for the purposes of reduction has been replaced by text specifying that "there will be three bands," with similar language for structuring tariffs into four bands for making tariff cuts.

Sources indicated that the late-night talks were acrimonious, as disagreements persisted over issues including an end-date for agricultural export subsidies. This was in spite of the draft agriculture text's provisions for developing disciplines on export credit schemes and state trading enterprises, and on ensuring that food aid does not lead to commercial displacement - central aspects of the EU's demands for 'parallelism' with regard to the elimination of export subsidies. During the early hours of Saturday morning, ministers were presented with a draft text on non-agricultural market access (NAMA) containing a bracketed provision that would make the level of ambition in NAMA commensurate with that in agriculture. At press time, ministers were just starting their examination of the text.

The State of Play on Friday

WTO Director-General Pascal Lamy and Chair Tsang reported to Friday's heads-of-delegation (HOD) meeting on their 'Green Room' consultations of the previous evening, pointing in particular to the stalemate on the end-date for the elimination of export support. They indicated that "no breakdowns or breakthroughs" had occurred in NAMA, which was confirmed by facilitator Humayun Akhtar Khan, Pakistan's Commerce Minister. Director-General Lamy and Minister Tsang suggested that further negotiations might succeed in bridging positions on cotton, as well as on duty- and quota-free market access for LDC exports.

Agriculture

The facilitator of the agriculture negotiations, Kenyan Minister of Trade and Industry Mukhisa Kituyi, told the heads of delegation that he had completed his consultations with the different groupings of WTO Members. He urged ministers to redouble their efforts with regard to cotton, where a deal seemed possible -- though unlikely to meet West African producers' demand for a total elimination of all developed country export subsidies by the end of this year, with trade-distorting domestic support phased out by 2008.

Mr Kituyi called for increased emphasis on Special Products and the Special Safeguard Mechanism, two instruments of particular importance to the G-33 group of developing countries, members of which have made clear that no 'development package' would be complete without some sort of understanding on how to proceed with them. He also noted that no significant progress had been made on how to address the effects of the erosion of long-standing market access preferences, a primary concern for ACP countries.

Development Issues

The great white hope of the Hong Kong ministerial rests on Members' adopting a binding commitment to provide duty- and quota-free access to exports. Guyanese Foreign Minister Clement Rohee, who leads consultations on this and other development issues, was cautiously optimistic that consensus would be reached on this long-standing LDC request. The version under discussion at the time of this writing would have developed country Members grant "on a lasting basis" duty- and quota-free access to products from all LDCs, although they would be allowed to exclude a yet-to-be-agreed 'limited percentage' of tariff lines. This reservation would be progressively reduced, with some suggesting 2010 as a possible end date.

Sources close to the negotiations also said that ministers were discussing the possibility to increase the number of beneficiary countries under the Integrated Framework for Trade-related Technical Assistance from 33 to 51. The increase would encompass developing country WTO Members that are recipients of official development assistance (ODA).

Services

Services remained at the forefront of the talks on Friday, as Members began to react to the rewritten version of the services annex of the draft declaration text circulated by the G-90 the evening before. The proposal's weakening of the mandatory and prescriptive language of the draft declaration's initial services annex did not, however, sit well with the EU or the US, which had wanted the provisions of the annex to be strengthened rather than watered down. Venezuela, for its part, said the original annex was totally unacceptable as a basis for further services liberalisation. Summing up the proceedings at the 'open-ended' meeting he convened that day, facilitator Kim Hyun-Chong, Korea's trade minister, reportedly told delegations that 15 delegations had intervened to ask for revisions to the text, while 26 wanted to preserve it. He encouraged them to work out their differences among each other, and indicated that he would continue his consultations with them as well.

Sources reported that the US and the EU were in the process of putting forward amendment proposals of their own on Friday. The US would like to strengthen the qualitative targets on Modes 1 (cross-border supply) and 3 (commercial presence). The EU was said to be pursuing a reference to ambitious sectoral coverage, possibly in the body of the declaration, as well as seeking stronger commitments on Mode 3, plurilateral market access negotiations, and sectoral liberalisation initiatives.

Mr Kim was set to hold small group consultations Friday evening, although it was not clear whether they took place because negotiators needed time to draft new text in other areas of the negotiations. Nevertheless, sources said that a 15-member committee with delegates from the US, the EU, Malawi, Rwanda, Hong Kong, and Chile was being put together to redraft Annex C. One negotiator suggested that the original text could eventually come to be viewed as a relative compromise position, since some Members found it too weak and others too strong.

G-20, G-90 Issue Joint Statement

Ministers representing the G-20, the G-33, the ACP Group, the LDC Group, the African Group and the Small Economies held a joint press conference Friday to proclaim their "shared interest in the development dimension of the round and their expectations for a comprehensive development outcome."

Describing the recent ministerial co-ordination meeting of every developing country group in the WTO as a first in the institution's history, they expressed their collective conviction that "the round must result in the removal of the distortions that inhibit the export growth of developing countries and the provision of adequate policy space to ensure their sustainable socio-economic development."

The group's common objectives are: to secure the elimination of agricultural export subsidies by 2010; to push for duty- and quota-free market access for LDC exports; to help some developing countries adjust to the effects of preference erosion; and to address the concerns of others on cotton. Brazilian Foreign Minister Celso Amorim was quick to note that despite the diversity of situations of developing countries, they were united in their pursuit of a bona fide development round.

The countries, which some have dubbed the G-110, also stressed the importance of special and differential treatment (SDT) and proportionality for developing countries, emphasising that developing countries could not be asked to do more on non-agricultural market access (NAMA) than developed countries were willing to do on agriculture.

Bananas

Honduras placed bananas on the Ministerial Conference agenda out of frustration over its exclusion from negotiations on the level of the EU's new banana tariff. On 2 December, the EU adopted a EUR 176/tonne tariff, due to enter into force on 1 January 2006. Latin American banana producers immediately condemned the tariff as far too high, and strongly condemned it at a special plenary session of the Hong Kong Ministerial Conference on 14 December. Pulling in the opposite direction, ACP countries on Friday put WTO Members on notice that they would withhold consensus on the final ministerial declaration on Sunday if their preferential access to the EU's banana market was not protected beyond 2006. Although Norway's Foreign Minister Jonas Gahr Store has been appointed facilitator of the conflict, no negotiations have taken place so far. Some observers think, however, that the issue could still flare up in the final hours of the summit.

CBD-TRIPS relationship

Peru, Kenya and India have submitted proposals for draft text on the relationship between the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) and the Convention on Biological Diversity (CBD). Peru simply suggested intensifying discussions on prior proposals made by a group of developing countries led by India, Brazil and Peru on requiring patent applicants to disclose the origin of genetic resources and associated traditional knowledge, as well as provide evidence of prior informed consent and benefit-sharing. The Kenyan text would narrow down work on the TRIPS-CBD relationship to "disclosure, prior informed consent and benefit sharing relating to inventions based on biological/genetic resources and/or traditional knowledge." This work should be completed by 30 November 2006. The most strongly worded proposal, put forward by India, would require the TRIPS Council to recommend an amendment to the TRIPS Agreement making it mandatory to disclose origin and provide evidence of prior informed consent and benefit-sharing. The US, Canada, New Zealand and Australia strongly resisted these proposals.

Given the lack of convergence, the facilitator, Chile's Foreign Minister Ignacio Walker, suggested retaining the text of the 7 December draft Ministerial Declaration which simply takes note of the work undertaken on the TRIPS-CBD relationship under Paragraph 12(b) of the Doha Declaration (on implementation issues). India expressed frustration that despite extensive discussions on these issues in the TRIPS Council, as well as its submissions of possible draft text prior to and during the Hong Kong summit, the issue had still not been taken up in the ministerial text.

Rules and Environment

With regard to the text on WTO rules (to improve disciplines on anti-dumping, subsidies and countervailing measures, including fisheries subsidies), Members appear to generally agree on not reopening the text in the current draft declaration. They are, on the other hand, said to be drafting new text on how to proceed with liberalising trade in environmental goods and services.

16 December 2005
Negotiations remain deadlocked on the third day of the Hong Kong Ministerial Conference. Nevertheless, efforts are underway to beef up the draft declaration. At WTO Director-General Pascal Lamy's...
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18 December 2005
WTO Director-General Pascal Lamy and Hong Kong Ministerial Conference Chair John Tsang released a revision of the draft ministerial declaration to Members at approximately 2 p.m. on 17 December...
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