WTO Doha Round: Despite Calls for Acceleration, Differences Persist

9 March 2011

WTO members need to step up their efforts to reach an agreement in the Doha Round of trade talks by the end of the year or else risk missing a key ‘window of opportunity', senior trade diplomats said Tuesday. But their comments during an informal session of the Trade Negotiations Committee underscored that major differences of substance and perception continue to stand in the way of an accord.

In calling for accelerating the negotiations, members backed the assessment made by Director-General Pascal Lamy in his statement to the meeting. The WTO chief, who chairs the committee that oversees the Doha Round negotiations, warned members that the progress achieved in the various negotiating groups and in meetings of smaller groups was insufficient for the timetable they were targeting."We should not fool ourselves," he said. "Our current process - at each and every level - remains too slow and continues to fall short of the tangible substantive breakthroughs to be captured by negotiating chairs in the revised texts which they will bring out around Easter."

Updated draft texts, Lamy reminded members, were necessary both as a stepping-stone towards an agreement and to establish a common basis for negotiations among the entire WTO membership, particularly for the sake of small delegations who do not take part in most informal groupings. "For those texts to really move the negotiations forward, though, there need to be more substantive inputs from negotiators," he said, calling for "a serious acceleration of the pace of work."

"We need to see delegations move from extreme positions towards the middle ground, with compromise proposals starting to emerge," he added, suggesting that bilateral and plurilateral work on market access issues also needed to move faster.

Ambassadors from several countries, such as Pakistan, Colombia, Canada, Korea, and Australia agreed that the window of opportunity was shrinking for a Doha Round breakthrough this year.

The TNC meeting saw some members voice concern about the negotiating process. While many recognised that smaller groups had an important role to play in the search for compromise, they stressed that bilateral and plurilateral talks were no substitute for the multilateral forum. Mexico, for instance, warned that no one could negotiate in its name - and cautioned that a bilaterally negotiated deal might prove not to represent everyone. On behalf of the group of least-developed countries, Bangladesh asked for access to small group meetings when issues of importance to LDCs were being discussed. The African Group stressed that bilaterals should not replace the multilateral track.

Brazil: Problem of substance, not process

Process is not the reason the talks are not moving forward, argued Roberto Azevedo, Brazil's ambassador to the WTO.

"We do not have a problem of process," he said in his intervention. "We have a problem of substance. No process, regardless of how representative, inclusive, or transparent it may be, will cure this fundamental substantive problem."

Calls for speeding up the talks and expressions of optimism were well and good, he said, but some "the size of the actual existing gaps" between members' positions remained considerable.

Like China, India, and other large developing countries, Brazil has faced demands for greater market-opening for manufactured goods and in its services sector, particularly from the US. Brazil has been more vocal than others in rejecting these demands, calling them unreasonable and disproportionate to the agriculture trade reform that developed countries have put on the table in the negotiations.

In a clear rebuke to the US, Azevedo said that Brazil had tempered its expectations for agricultural subsidy and tariff reform, and worked to reconcile unhappy domestic interest groups to "what is actually achievable." He criticised "a few developed members" for seeking new concessions on NAMA and services, while leaving agriculture "off the table" with the possible exception of cuts to unused farm subsidy spending allowances ("water," in the language of trade negotiators).

"Additional concessions from any member have to be compensated with gains for them," he said. "Real market access can only be exchanged for equally real market access."

US officials say that the parameters for industrial tariff cuts set out in draft negotiating texts dating back to 2008 do too little to provide "real market access" - i.e., force down applied tariffs, rather than simply lower bound ceiling rates that can be far above the duties being levied - in major developing economies. They have argued that in order to provide such market access, China, Brazil, India, and others must sign on to initiatives that would deeply cut tariffs across entire industrial sectors, such as chemicals, auto parts, and forestry products.

Azevedo said that Brazil had "emptied [its] pockets" during the July 2008 attempt to reach a deal. The parameters in the draft texts, he argued, would cut Brazil's applied manufacturing tariffs by 33 percent in "strategic and vulnerable sectors" such as automobiles, textiles, footwear, and toys - even when using the flexibilities afforded to developing countries to shield some products from the full force of tariff cuts.

US officials have argued that large developing countries need to assume responsibilities in the Doha Round negotiations commensurate with their economic weight. Azevedo countered in the TNC that "every study done so far - by Brazil, by the WTO secretariat, or by independent entities - shows that, in this round, Brazil will create more trade than any developed country." He called attempts to downplay Brazil's contribution "disingenuous to say the least."

The Brazilian ambassador warned that if participation in "sectorals" comes to be seen as the main vehicle for manufacturing trade liberalisation, with nothing offered in return, "then we have not reached the ‘endgame'; we have reached the ‘end of the game'."

Azevedo argued that Brazil's latitude to make market-opening concessions had been constrained by the appreciation of the real versus the dollar in recent years, which he attributed to ultra-loose monetary and fiscal policies in developed economies. Between 2006 and 2010, he said, Brazil went from a $9.9 billion trade surplus with the US to a $7.8 billion deficit, with the $17.6 billion swing attributable entirely to manufactured products. "Given this scenario, it is simply unrealistic to expect further significant and unilateral NAMA contributions by Brazil," he said.

In his own intervention, US Ambassador Michael Punke did not address the possibility of a fundamental mismatch in expectations among members. He simply pointed to constructive engagement on NAMA sectorals and services, and called for further work, reiterating the US's view that bilateral talks were necessary for "serious discussions of possible gives and takes on a ‘what if' basis."

"Each of us is looking for a balance so that each of us can go home and say that the final deal, while not perfect, is reasonable," Punke said. "It will require the active involvement of all of us to find that balance."

Members highlight priorities, call for compromise

A number of groups and individual members highlighted specific concerns. For instance, the LDC group asked about what market access they were likely to receive as a result of a Doha Round agreement, and called for more work on a ‘waiver' that would allow members to give preferential access to LDC services suppliers. The African Group noted that beneficiaries of longstanding trade preferences would be hurt if major markets reduced tariffs - and with them, preferential margins - to zero or very low levels, and called for products in preference schemes to be excluded from sectorals. The group also called for progress on a monitoring mechanism to ensure that special and differential treatment provisions for developing countries are effective.

Several delegates called on members to abandon maximalist positions and accept that they would not receive everything they wished for. Australia pointed to a recent exploration of alternative ‘hybrid' approaches to identifying and liberalising trade in environmental goods as an example of the flexibility needed.

ICTSD reporting.

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