TWN Info Service on WTO and Trade Issues (Mar10/09)
18 March 2010
Third World Network

WTO members prepare for “stocktaking exercise”

Geneva, 17 March (Shefali Sharma): As the Doha Round “stocktaking” nears, there is much discussion in Geneva about the purpose and outcome of such a meeting.   According to a WTO official, the meeting will take place from 22-26 March, the week that senior officials were already scheduled to arrive for the fifth Senior Official week.  These visits have been going on since October 2009. 

Director-General of the WTO, Pascal Lamy had told the WTO membership at the February 22 General Council meeting that the stocktaking would be conducted at the level of capital-based senior officials, rather than the Ministerial-level he had hoped for.  In the week prior to Lamy’s announcement to the WTO membership, the US had shot down the idea of a ministerial level stock taking, the only influential WTO member to do so.  At the General Council, Lamy had noted 29-30 March as possible dates for the stocktaking and the week of March 22 as the period for delegations and chairs of negotiations to prepare for the meeting.  However, given the deadlock in the negotiations, many trade diplomats have been wondering why prolong the meeting with senior officials for a week and a half.  

According to senior trade diplomats, Lamy still had hopes that the stock taking will provide enough clarity on the remaining gaps in the Doha Round.  And he had hoped that the Chairs of agriculture and NAMA (non-agriculture market access) negotiations could draft revised Doha texts after the stocktaking.  But as agriculture week got underway in the first week of March, discussions have been taking place on contentious and unresolved issues such as the agriculture special safeguard mechanism (SSM) and how many carveouts developed countries should be allowed to have for protection of their agriculture through “sensitive products.”  Delegations are stating that a new revised text will be impossible at this stage.  Many say that the gaps are widening rather than narrowing.

In the US last week, United States Trade Representative Ron Kirk told the National Press Club that Doha could progress if 'advanced developing economies such as Brazil, China, India and South Africa come to the table' with better offers.

Lamy visited United States Trade Representative (USTR)  Ron Kirk on March 10^th and met with Congress officials from the Senate Finance and House Ways and Means Committees.  After getting a sense of the political atmosphere from his US visit, Lamy is expected to consult with WTO ambassadors to decide how the stock taking will be conducted this week. 

In his statement to the WTO’s General Council on February 22, he said the stocktaking should, “identify progress made until now at the technical level and the outstanding gaps.  On the multilateral side this could be done by the Negotiating Chairs in factual reports to the TNC [trade negotiating committee] under their own responsibility…With respect to the work taking place bilaterally among a number of you, I believe that by the time of the stocktaking…we should have a clearer sense from the participants on the gaps in their positions as well as a clearer sense of a negotiating dynamic to address these gaps”

Most delegations are not very enthusiastic about the stock taking because they feel the non-presence of one of the key players:  the US.  Regardless, Lamy’s stocktaking exercise could go different ways. If the stock taking is done accurately in identifying all the areas of disagreement, then the cracks and disagreements in many parts of the texts in agriculture and NAMA could be exposed.  If he attempts to simplify and gloss over the differences as he has always done, then as Indian Ambassador Ujal Singh Bhatia said at the General Council on Feb 22: 

In the Davos meeting, South Africa’s Trade Minister Rob Davies quoted Einstein’s definition of insanity- doing the same thing over and over again and yet expecting different results. I am sure Einstein would find the WTO of today a very interesting place.

Some trade diplomats are now saying that the stocktaking should be about deciding what happens to the Doha negotiations during 2010.  And three possible options are being discussed:  to continue negotiating  “as business as usual” and hope for an eventual conclusion; to have an “early harvest” on some key issues, particularly for least developed countries (LDCs); to suspend the Round until the US is willing to accept the current texts as the basis of negotiations.

Early harvest elements include granting LDCs 97% duty free and quota free market access, another is a waiver for LDCs in services.  Some also talk about resolving the cotton issue and concluding trade facilitation negotiations in advance.  A fourth item that certain key countries are suggesting is ripe for action is the elimination of European export subsidies.  The EU has already committed to eliminating them by 2013 and other countries like Japan, Switzerland and Norway are also in a position to be able to do so, according to one senior trade diplomat.

“These are the worst type of subsidies, bad for development, not good for the world, especially when rich countries undermine local production in developing countries.  If we can’t make progress on some issues, this will give us some momentum and it will show that Doha at least has some life.  And we can come to the major issues when the US is ready,” said the diplomat.

But the US and the European Union have apparently rejected the notion of an early harvest, according to other trade diplomats.  And many developing countries do not see the trade facilitation text ripe for conclusion, particularly as other areas are lingering. And though the agriculture chair consulted on cotton on March 10, no sign of progress is there.  Early harvest is thus likely to make little headway given that a detrimental feature of WTO trade negotiations is “tradeoffs” between agriculture, NAMA and services. 

Increasingly, talk about “suspension” of the Round is also surfacing.  According to one senior diplomat, the reason to conclude the Round cannot be based solely on the notion that having no conclusion will weaken the multilateral trading system.  He said, “The main reason to conclude should be that it benefits our countries and whether it will be good for humanity.”

There is also uncertainty about how the “factual reports” by the Chairs of the various negotiating groups will be drafted and whether there will be a chance to comment on them before they are presented to senior officials at the stocktaking.  Also, there are questions about whether negotiations will take place when senior officials are in town to warrant revised texts in agriculture and NAMA. 

“Having another revised text really depends on whether there is anything new to add in the text —if no real negotiations take place, then how can it be possible to produce revised texts? It is risky for the secretariat to do so,” said an Ambassador from a developing country.

The agriculture chair has been asking diplomats about what a possible factual report could look like. 

“There are many perplexities all around right now.  This exercise is disastrous—no one knows how to conduct this [stocktaking].  There is no reasonable way of negotiating the text without pressurizing everyone’s position,” said one trade diplomat.