Director-General Roberto Azevêdo’s statement
Informal Trade Negotiations Committee meeting,
23 September 2013
Every one of you is aware that the most significant challenge facing us is the mere 10 weeks or so that we have left to prepare the basis for success at the Bali Ministerial. It is important therefore that most of our time and efforts are directed towards our substantive work to find convergence.
At the onset therefore, let me request that today’s meeting be brief and business-like. I would urge those that wish to take the floor today (and I hope there will be few), to avoid lengthy and repetitive statements. Many of you have been involved in the Room E/D process so you are already aware of the state of play and have had the opportunity to have your voices heard.
This meeting is above all a transparency exercise for the membership as a whole about what we have been doing since the General Council meeting of 9 September. My statement will be in three parts:
i. a report about the meetings over the last two weeks;
ii. an overview of where we are in the three Bali deliverables; and,
iii. the next steps in our process.
Let me begin with the Room E and D horizontal process. As I announced at the last meeting of the General Council, I started a process of intensive consultations at the “Ambassador plus one” level on the three potential deliverables for Bali: Trade Facilitation, Agriculture and Development. This is a joint effort that I have undertaken with the Chairs of the Agriculture Special Session; CTD Special Session; Negotiating Group on Trade Facilitation; the Facilitator for LDC issues and Friends of the Chair on the Trade Facilitation negotiations.
We had a first run of all three topics in 10 sessions. Specifically in agriculture we covered (i) the G-33 proposal on public stockholding for food security and domestic food aid purposes; (ii) TRQ administration and (iii) export competition. On trade facilitation, we covered both Sections I and II of the Rev 17 text. On development, we covered the Monitoring Mechanism, Cancún 28 proposals and LDC issues.
I am glad to report that these discussions have been focused, precise and business-like. Members were actually negotiating and interacting in a constructive manner. Delegations are in a solution finding mode and I am encouraged by the new tenor to the discussion. If we keep this mood and attitude in the upcoming weeks, I believe Bali will be within reach. This is a great and inspiring start but more, of course, will be required.
Inclusiveness has been a tenet of the process with the participation of close to 50 delegations. All major regional and group coordinators and Members most affected by the different issues are represented. And anyone with a very strong interest in the discussion has not been precluded from participation. I also expect that coordinators of respective regional and other groups consistently are keeping members of their groupings abreast of developments.
These large format meetings have been criticised frequently for being supposedly unmanageable. We are proving that perception wrong. Discussions have been focused and objective. Delegations are taking the floor only when they must and keeping their interventions short. We are avoiding repetitive or rhetorical statements. We are having productive meetings and covering a lot of ground with the short time available to us.
There will also, of course, be regular TNC meetings, which are essential for full and unrestricted transparency.
Let me now very briefly report to you about the discussions that we had with Senior Officials last Thursday.
The good news is that there was a positive indication by Members to get things done and find landing zones. We saw Members starting to move in that direction, although not as much and not as far, as we must. The clear message I delivered to Senior Officials was that their continued political leadership and direction was crucial. Capitals must be engaged.
Many of the issues still pending are political. There is a limit to what the Permanent Representatives in Geneva can do. The Senior Officials in capitals must help us unlock the key negotiating areas without further delays.
Let me now provide you a sense of where we are on the substance of the three key issues.
I will start with Trade Facilitation. We have covered all parts of the mandate:
i. new disciplines (Section I);
ii. flexibilities for developing countries and LDCs, and implementation plans (Section II); and
iii. customs cooperation, which is technically in Section I, but it seems to me to be a very specific pillar in the trade facilitation negotiations.
While we have been getting results, such as last week on Articles 1, 7 and 10, and while there are good prospects for further progress in the coming days, there are a number of topics where positions are not yet converging. They relate, in particular, to the areas of:
i. customs co-operation, where discussion is still less mature;
ii. flexibilities for developing & least-developed countries and implementation plans; and
iii. a number of difficult issues in Section I including — and this is an illustrative list:
- customs brokers
- pre-shipment inspection
- consularization, and
- certain transit issues.
So, there are a number of areas in which we need work done.
To break up the blockages in those areas, several things have to happen. We need the proponents to come up with really improved proposals, manageable proposals, and opponents to equally move towards the middle ground. Some issues also need to be addressed in bilateral or smaller group settings to help the efforts in the larger format, which will remain as our primary negotiating approach.
On Agriculture, intensive consultations have continued on the G-33 proposal. Consultations have also taken place on the G-20 proposals on export competition and on TRQ administration.
On the G-33 proposal, the important development has been the agreement by Members to explore a due restraint provision as a possible interim solution, and that is very important in itself. Before I took office and in my first few days in office, I was extremely concerned with this issue because we did not even have a conceptual understanding of what kind of solution we were going to explore. I am happy that in the Room E process, at least we agreed that what is doable between now and Bali is an interim solution, without prejudice to whatever we can do in the long-term. Different elements of the solution were identified and discussed:
i. firstly the nature of such an instrument i.e. whether it is to be political or legally binding;
ii. secondly, its character, i.e. is it to be automatic, non-automatic or some kind of hybrid. There was some brief discussion and I think some convergence is shaping up on this particular issue;
thirdly, its coverage;
fourthly, transparency and reporting issues. I think we already had a very good conversation on this particular element and I do not think that any Member disagrees that these issues are going to be critical if we are going to find an interim solution;
fifthly, the safeguards that might be appropriate to minimize distorting effects. We all agreed that this is also going to be an important element of the discussions, but we have not yet had a deep conversation on this;
sixthly, its duration and how it would be reviewed. But, as in the case of safeguards, the conversations have not gone deep enough yet; and
finally, we also need to have some work focusing on the post-Bali longer term solution.
Of course, all these elements are interlinked. We have been discussing them and there is no clear convergence so far on any of them. Common ground on some concepts is beginning to emerge, but very intense work is still needed in the coming weeks.
Some Members made clear that they want to seek, not only an interim solution, but also a more permanent solution to the concerns that led to the G-33 proposal. Other Members are mindful of the potential market-distorting consequences of any solutions sought, whatever their nature and duration. As far as the interim solution is concerned, it is my view that the discussions on transparency and safeguards will probably frame the outcome in the other elements of the potential due restraint solution. There is no time to waste in moving to a solution in these critical areas.
Regarding other aspects of the issue, there seems to be convergence around declaration/communiqué language for Bali recognizing that public stockholding and food aid programmes in developing countries are important and legitimate policies and that the G-33 concerns need be addressed in a focused post-Bali negotiating effort.
On export competition, the discussions that took place in recent days confirmed the sensitivity and seriousness of this issue. All Members agree that the parallel elimination of all forms of export subsidies for agricultural products and disciplines on all export measures with equivalent effect is a key objective, and for some Members one of the priorities, if not the priority, of the Doha Round.
This helps explain why I detected that everyone is increasingly prepared to accept the concept of some kind of outcome on this issue in Bali. Of course there are differing views on what that appropriate outcome might be, as Members have expressed clearly very divergent views.
What has been encouraging has been that all the participants expressed, in our recent discussions, a clear willingness to search for a landing zone. Not prejudging what that landing zone would be, we heard some useful suggestions emerging from the debate including, for example, elements like:
i. the reaffirmation of the final objective to be achieved on export competition;
ii. the recognition of the fact that the use of export subsidies significantly has decreased in recent years;
iii. some type of engagement to maintain this positive trend; or
iv. the need to improve transparency as regards the use of some export measures with equivalent effect to export subsidies.
Finally, on TRQ administration, many Members continue to see this proposal as one that can realistically be part of a balanced outcome in Bali. However, the S&D aspects of the proposal continue to prevent the membership from taking this issue forward for agreement.
I want to repeat what I said to Senior Officials and in the Room E process — namely that if this issue cannot be resolved then we really have little hope for Bali. This is a simple and straightforward proposal that most Members tend to find well calibrated and achievable. I would hope that this could be done quickly so we can concentrate on the more complex agriculture issues.
Let me now turn to Development and LDC issues. I am happy to say that on the Monitoring Mechanism we have started to close some of the gaps. Members are much more clear about what the Mechanism is, what it should do, and how.
There appears to be agreement on three characteristics of the Monitoring Mechanism, which do not exist in practice today: First, it should conduct regular reviews of existing S&D provisions. Second, it should have the ability to make recommendations to the appropriate technical body if a shortcoming is detected in the Monitoring Mechanism’s evidence-based deliberations. And third, that the recommendation could include the launching of negotiations on S&D provisions in the appropriate WTO body.
However, more work still needs to be done to find an appropriate landing zone on a number of issues, in particular with regard to the relationship and interface between the Monitoring Mechanism and the relevant WTO technical body under whose remit an S&D provision falls.
We also considered the Cancún 28 proposals. During the Room E consultations, Ambassadors were asked the specific question whether they could agree to adopt some of these proposals on which agreement was possible, in the event that Members were not in a position to adopt all 28 in Bali.
At this meeting, the African Group and the LDCs reiterated their position that they could only agree to the adoption of all the 28 Cancún proposals as a package, and in case this was not possible, it would be better that these proposals are taken up in the post-Bali work programme, within the overall framework of the mandate of paragraph 44 of the Doha Ministerial Declaration.
As far as I am concerned, this issue is not necessarily closed, but this is where we are at this point in time.
We have also had a round of discussions on the LDC Bali package. A promising development last week was the revised submission from the LDCs on preferential rules of origin. It is very encouraging to note that most considered the revised submission as a step in the right direction. I would urge Members and LDCs to make the most of the time available before Bali so that we can come to an agreement in this area.
In two areas, namely cotton and the services waiver, we are awaiting detailed proposals from the LDCs. I need not underline that it is only on the basis of concrete proposals that we can make progress for Bali, and certainly time is not on our side. Concerning DFQF market access, we need to find a solution that can be acceptable to all stakeholders involved. Some realistic compromises are required here from all sides. But our collective responsibility is clear — we have to ensure a meaningful package for the weakest and most vulnerable members of our family. I can assure you I am strongly committed to this.
This concludes the overview of the state of play in the three Bali deliverables and takes me to the last part of my report — the next steps.
I believe that we must aim to conclude the main part of our negotiations in Geneva by the end of October. By then, we should be able to see the landing zones for Bali.
So we will not be standing still — we have to roll up our sleeves for more focused work. Tomorrow, we will resume the intensive Ambassadors plus one consultations in the Room E/D process through to Friday, covering all three Bali deliverables. This phase will be slightly different from the past two weeks. The focus will be to make advances where we can on the critical issues requiring more concentrated attention. We have scheduled two half-day sessions for agriculture and development issues, and two full days for trade facilitation. We will conclude this second phase of consultations with a TNC on 30 September at 3 p.m.
Work will need to continue after this second cycle of consultations and I will ask that Chairs continue meeting to look for convergence. I will probably be away from Geneva for brief periods in the first half of October for outreach meetings with Ministers and other commitments that I believe will assist our efforts to get a successful Bali Ministerial. The Chairs will intensify their work whenever I am absent.
When I am back in Geneva, delegations will need to be on notice in case there is a need for me to convene meetings at short notice and at unusual hours.
From the week of 14 October onwards, we will be in final countdown mode to the end of the month. A frank assessment of the progress that has been made will be required — as well as setting the course for the final stretch of our path towards Bali.
So, to sum up, the Bali Ministerial meeting is in about 10 weeks — yes, only 10 weeks. The good news is that I am a lot more optimistic about where we are now than two weeks ago. But that is just the start, an inspiring start, but there is a long way to go and the distance between positions in some of the issues is still very large. We have to expedite our negotiations and work more intensely. The absolute need for close and more political effort cannot be understated. I want capitals to continuously engage and I will be delivering this message to Ministers as well in the near future. As you all know, looking at developments across the world and more importantly for the credibility of this Organization’s negotiating function, we cannot afford to fail.