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WTO NEWS: SPEECHES — DG SUPACHAI PANITCHPAKDI

8 July 2005

Supachai: “These negotiations are in trouble”

Informal Meeting at the level of Heads of Delegation

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Introductory Remarks by the General Council Chairman


As you know, I have just returned from the G8 meeting in Scotland, so I would like first to give you some of my impressions of this important event. The leaders put much emphasis on the vital role of trade in development, especially — but not only — in Africa. This is what the Doha Round is all about, and this is what we are meant to be doing right now.

Frankly, it is sobering to pass from the high level of expectations and hopes that I have encountered in Scotland to the reality of the negotiating process here in Geneva. Against this background, let me now give you my assessment of how we are doing in the negotiations.

I would like to start by recalling the numerous warnings I have issued at successive TNC meetings about the state of play in the negotiations since the beginning of the year. In March, I sounded a note of caution — that we were not yet in a crisis mode, but that we certainly needed more sense of urgency. This message did not seem to be heeded, so in April, I warned that we were very close to a crisis. I said that, at the current pace, we were not going to make it by July, and possibly not by December. I said I was still not pushing the alarm button, but that my finger was hovering over it. I asked you all to prove me wrong.

The May TNC meeting took place against a somewhat brighter background, even though substantive progress continued to be rather limited. I said that this was still not good enough, and stressed that we absolutely had to make concrete progress across the board.

So where have we got to since then? Has the picture improved? I regret to say that the progress up until today remains far from sufficient, and I regret even more that my earlier warnings seem more valid than ever. Let me briefly review the state of progress in key negotiating areas:

  • Some progress has been made in Agriculture. While the AVE issue has been unblocked, this has not yet sufficiently galvanized the negotiations on the most fundamental element of the market access package, the tiered formula for tariff cuts, although some progress has just been made on other aspects of the market access pillar. Some progress has also been made on domestic support and, to a lesser extent, on export competition. Of course, it remains important to advance work on all three pillars, although some sequencing is necessary for that to happen.

  • In the NAMA negotiations, there were some hopeful signs in June, but now positions appear to be hardening. I fear that the obvious constraint here is still the lack of progress on Agriculture.

  • In the Services negotiations, while the situation has improved since the May TNC in terms of numbers of initial and revised offers, the quality of the offers continues to be poor. It remains for the membership to see how to take these negotiations forward to Hong Kong.

  • In the Rules areas, including Trade Facilitation, we still need to consolidate the wide range of ideas on the table to prepare the ground for further progress in most areas. That said, some useful progress has recently been made on Trade Facilitation and in the RTAs track in the Rules Group.

  • In the work on S&D, there is some hope that progress is possible on the Agreement-specific proposals, starting with those submitted by the LDCs, and I certainly hope that some can be harvested soon.

It is true that some progress has been made in certain areas of the negotiations. But let us be clear: this progress is nowhere near sufficient in terms of our critical path to Hong Kong, and it is not being seen in the key issues which would help unblock progress across the board. Overall, there seems to be a renewed sense of blockage and frustration. We are also seeing a resurgence of sterile debate about process, rather than negotiations on substance.

I am afraid we have to face the facts. These negotiations are in trouble. Very little of the political support which has been shown at successive Ministerial meetings has been turned into concrete progress in the negotiating groups. Everyone has a generalized commitment to progress, but when it comes to the specifics, the familiar defensive positions take over.

There remain some limited but important possibilities of renewing the momentum this month. The Chair of the Agriculture group has produced a paper which clarifies the areas where movement is needed, and the Chair of the NAMA group will also be issuing a similar paper today. A number of Ministers will be meeting informally in China next week, and they will be faced with some key questions. We look to them for clear guidance on crucial political issues, although we are all aware that it is only here, in a fully inclusive forum, that real convergence can be reached.

I have not given up hope of substantive progress in areas such as Agriculture and NAMA by the end of this month, though clearly we should not expect a package of formal decisions like last July. At the very least, there is a need to establish a good base for the intensive work that will surely have to be done in the last quarter of the year.

It is important to keep in mind that the Hong Kong Ministerial is not far away. From the beginning of September, we will have 13 weeks to prepare it. Ambitions remain high for significant results across a broad range of issues by then, and this is necessary if we are to have a chance of finishing the Round in good time. Hong Kong must take us into the last lap of the negotiations. This in turn means that Ministers have to be presented with a manageable set of key decisions to consider there. If we go to Hong Kong with a Christmas tree, no-one will be happy with what they get.

So we need to change gear in the negotiations, but even more to change our mindset and our approach. The time is long overdue to pass from identifying to solving problems; from the technical to the political level; and from generalities to specifics. Bearing in mind the principle of the Single Undertaking, where nothing is agreed until everything is agreed, negotiators need to show greater willingness to reach out to each other's needs. We need to apply less creative energy to deciding whose fault everything is and more to finding solutions that everyone can share in.

This change needs to happen now, not in September or October. It may well be too late by then. I began by reminding you of my warnings about impending crisis. The crisis that threatens is all the more menacing because it is not a crisis of dramatic divergences or headline-grabbing conflict — it is a crisis of immobility. I think there is still a slender chance of averting it, but every hour must be made to count.

This concludes my statement.