TWN  Info Service on WTO and Trade Issues (Feb08/07)

11 Feb 2008

Below is an article on the General Council meeting held in Geneva on 5 February.

Besides reporting on what Pascal Lamy said on the situation of the Doha negotiations, the article also reports on criticisms by Brazil, India and others on how the EPAs of the EU with  ACP countries can adversely affect South-South preferential trade.

This article was published by SUNS on 6 Feb 2008.  Reproduction requires permission from SUNS (sunstwn@bluewin.ch).

Best wishes
Martin Khor
TWN

SUNS #6408 Wednesday 6 February 2008
south-north development monitor SUNS
"On the last lap" and "final sprint" to set modalities, says Lamy
By Kanaga Raja, Geneva, 5 Feb 2008

The Director-General of the WTO, Pascal Lamy, told the General Council  Tuesday that the political conditions for reaching a deal on the agriculture  and NAMA modalities have clearly improved, and "we are, I believe, on  the last lap and we have started the final sprint towards establishing modalities."

Lamy was reporting to the General Council on the Doha negotiations in his capacity as Chairman of the Trade Negotiations Committee (TNC).

The General Council is holding its first meeting (5-6 February) of the new year.

Among the items on its agenda are the annual appointment of officers to the various WTO bodies as well as the election of the Chair of the General Council.

Also on the agenda are the report of the working party on the accession of Ukraine, a request for accession by Equatorial Guinea and a communication from Brazil on the ACP-EC Economic Partnership Agreements.

On Equatorial Guinea, trade officials said that a working party was established to take up its request for accession to the WTO.

The agenda item of Ukraine's accession to the WTO is being discussed on Tuesday afternoon, while the agenda item on the appointment of officers to the WTO bodies and the election of the General Council Chairman is being taken up on Wednesday morning.

(A full report on these two items will appear in the next issue of SUNS.)

A highlight of the Tuesday morning meeting was the issue of the ACP-EC Economic Partnership Agreements (EPAs), which was placed on the agenda of the General Council at the request of Brazil.

In its communication to the General Council dated 25 January (WT/GC/W/585), Brazil said that it is concerned that the new agreements may include clauses that require the extension to the EU of any preferences, on a line-by-line basis, made to other parties under regional agreements or under arrangements made between developing countries.

Brazil believed that this would be contrary to the Enabling Clause and would, therefore, have systemic implications that justify its discussion in the General Council.

According to trade officials, at the meeting, Brazil voiced concern that South-South trade would be seriously impacted. It requested that this item be kept on the agenda of the General Council.

Trade officials said that several Latin American countries supported Brazil.

In its statement on this issue at the General Council, India shared the concerns expressed by Brazil. If indeed, the EPAs include clauses that oblige the ACP countries to extend to the EC, on a line by line basis, any preferential treatment they may negotiate with other countries, such provisions would raise serious systemic concerns, said India.

India also said that such provisions would add a new dimension to the challenge of preference erosion. "Only in this case, we would be dealing with the preference erosion of a developed member," said India.

The implications of such provisions on the meaning and intent of the Enabling Clause would need to be carefully assessed, India added. The Enabling Clause is an important pillar of the multilateral trading system and of the WTO acquis.

It cannot be allowed to be undermined in any way, India stressed, adding that a major objective of the Enabling Clause was the need to enhance trade between developing countries.

To the extent that such provisions would deter ACP members from negotiating preferential arrangement with other developing countries, the EPAs would prevent the Enabling Clause from meeting that objective.

Pointing out that its comments were preliminary as the specifics of the EPAs have not yet been intimated to the members, India urged the European Union, in line with the recently negotiated Transparency Mechanism for Regional Trade Agreements, to table the EPAs at the earliest.

The EPAs are a major event as they involve more than 100 countries from both sides and a review of the EPAs in the WTO will provide fresh meaning to the mandate for "clarifying and improving disciplines and procedures under the existing WTO provisions," said India.

According to trade officials, the EC tried to allay fears that EPAs would affect South-South trade. The EC was of the view that the EPAs will be notified to the WTO once they are completed.

Meanwhile, in his report to the General Council, Lamy recalled that in his report to the General Council last December, he had suggested that "we were getting closer to achieving the major goal we all share - establishing modalities in Agriculture and NAMA."

He said that "Today, I would like to report that the political conditions for reaching a deal on the modalities have clearly improved."

"We know that the task ahead of us is a big one, and that the time available for it is tight, but we have never been nearer to achieving it. We are, I believe, on the last lap and we have now started the final sprint towards establishing modalities."

Referring to the informal TNC meeting on 31 January, Lamy said that from the discussion at that meeting, "I think we are clearer about the process ahead... From the statements at our meeting, I think we have broad agreement on the urgency of what we are doing, and on the basic steps we need to take to reach a deal."

Delegations repeated that substance must drive process, and that the process must remain a multilateral one, Lamy said, adding that there was strong support for proceeding step by step and making the transition from one phase to another in the light of progress on the substance.

On the other hand, said Lamy, "we have to factor in the need for urgency. We have to reconcile these two considerations as we move forward." Lamy noted that the TNC meeting "provided less clarity on the scope of the horizontal process. This is a matter on which further consultation will be needed over the coming days and weeks."

"However, I believe we have to work within the mandates agreed in 2001 at Doha, in 2004 by the General Council, and in 2005 at Hong Kong," said Lamy, noting that "many delegations have indicated the view that we must ensure strict compliance with the mandates."

"We should also bear in mind that we are working under the principle of the Single Undertaking, and that the establishment of modalities is not the end of the Round," he added.

"We all know what is happening in the world economy right now. I think we are also aware of the need for a successful outcome to the Round by the end of this year."

"The coming weeks will be an extremely intensive period for all of us, but I believe the potential results of the Round, and the benefit they can provide across the membership, are worth fighting for, and I will keep helping you doing that," he concluded.

According to trade officials, several countries asked for their statements made at the informal TNC meeting on 31 January to be put on record at the General Council meeting.+