Members comment on new draft as chair warns of overload

Most delegations described the second draft of the July package decision as broadly an improvement, but General Council chairperson Shotaro Oshima said he was concerned about the “sheer number” of comments to deal with in the limited amount of remaining time.

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The discussion took place at an informal meeting of heads of delegations, shortly after the second draft was circulated at 7am on 30 July 2004.

Most speakers said the text was at least a step in the right direction, with several pointing out that the negotiations were radically different from the situation almost a year ago at the Cancún Ministerial Conference, in difficult subjects such as agriculture, the Singapore issues (trade facilitation, investment, competition policy, and government procurement), and cotton.

After the two-and-a-half hour meeting, delegates began consultations in a variety of formats, including within their own groups, and with their capitals. Chairperson Oshima warned them to prepare to work through the night and possibly into Saturday 31 July.


Introductions    back to top

The second draft arrived later than planned because of important consultations on cotton among ministers, which lasted until the early hours, Ambassador Oshima said.

He reminded them that the objective is to reach an agreement that will allow the negotiations to move ahead in the next phase. “We all know that this deal is intended to open the door to progress in our work programme, no more, no less,” he said.

Agriculture: Ambassador Tim Groser, who chairs the agriculture negotiations and is the agriculture “facilitator” in the “July package” talks, said the revision reflected a number of points where members had clearly felt changes were needed.

These included what delegations saw as a serious imbalance between the amount of detail on provisions for developed and developing countries, including “sensitive products” (for which developed and developing countries would be allowed some flexibility in increasing market access), and “special products” (available to developing countries for additional flexibility or exemptions). The latest version attempts to improve the balance.

Also new in the text are provisions on cotton, a downpayment of a 20% reduction in trade-distorting domestic support in the first year, and clearer provisions on ensuring that the elimination of export subsidies is matched by the elimination of subsidy components of export credit, food aid and the exports of state trading enterprises (“parallelism”), Ambassador Groser said.

Industrial products (NAMA): Ambassador Oshima reported that his consultations the previous evening had proved inconclusive (see below). “The only option left was to find a formulation which reflects the best approximation of the way to address the major concerns that have been raised by members,” he said. The solution has been to add a “headnote” to Annex B.

Development: The text on this issue has been re-arranged, with new headings including one on “other developmental issues”. The proposed compromise on how to deal with the concerns of more vulnerable developing countries and preferences, without creating new categories and privileges within these countries, is reflected in this section, Ambassador Oshima said.

In addition, the section on “implementation” issues, now expands on how the consultations held by the director-general should be conducted, including the possibility of holding dedicated consultations.

The part dealing with least-developed countries has also been strengthened, he said.

Trade facilitation: following constructive consultations, the revisions include stronger wording on technical assistance, capacity constraints and special treatment for developing countries, and other provisions reinforcing “the principle that members should not be obliged to commit themselves to measures beyond their means,” Ambassador Oshima said.

Recognizing that “this revision won’t make everybody happy,” the chairperson added that it is the result of genuine give and take, covering most concerns. “I do not believe we have compromised anyone’s fundamental interests.”

Ambassador Oshima added: “I would like to recall that your agreement here does not preclude you from shaping the end product, as all we try to do today is launch a process, with its final outcome being up to members to determine as we move forward. … The principle of consensus still protects all of you in the negotiations we will be launching.”

Director-General: Dr Supachai Panitchpakdi urged delegations to view the text from three perspectives: a broad view that recognizes that different people have different interests, and that these have to be balanced against each other; a longer-term view of using the document to move the negotiations up to a higher level; and the membership’s shared responsibility to avoid “the destructive influence of the status quo”.

“Let us together take the collective decision to move the trading system forward,” the director-general said.


The discussion    back to top

About 40 delegates spoke, some of them ministers, and including representatives of various groups. Most said their comments were preliminary since they were still discussing the text with their capitals.

Among the many issues raised were:

  • whether the text meets their concerns on agricultural topics such as flexibility for developing countries and the balance with the treatment for developed countries, the Blue Box, developing countries not having to reduce “de minimis” amounts of trade distorting domestic supports (they are currently allowed up to 10% of the value of production), provisions on export taxes (opposed by a number of countries), and discussions on setting ceilings on tariffs

  • the legal status of the “headnote” on non-agricultural market access, described as a “vehicle” or “vessel” (or by one mystified delegate as an “unidentified flying object”)

  • the provisions on developing countries

  • the wording on “implementation” issues, including the relationship with the Trade Negotiations Committee and such topics as geographical indications.

Concluding, Ambassador Oshima said he was concerned about the sheer number of issues. Unless delegations are willing to cooperate with each other, the talks could run out of time, he warned. He added that delegations should be prepared “to work through into Saturday.”


Before that: consultations on industrial products

The previous afternoon, 29 July, General Council Chairperson Shotaro Oshima convened a meeting open to all delegations on non-agricultural market access (NAMA), essentially industrial products. The purpose was to try to find wording that everybody could accept on the NAMA annex (B) in the draft agreement now under discussion.

He noted that there was progress in other areas of the “July package” but members were far from convergence in NAMA.

Several countries spoke. Some, mostly but not only African, said they could not accept a text that had not been agreed — Annex B of the draft, which is taken from the one submitted to the Cancun Ministerial by its chairman, Mexican Foreign Minister Luis Ernesto Derbez. They supported a negotiation on the annex itself. Some of them rejected the notion that there was too little time to renegotiate the text, and complained that this was creating undue pressure.

Others, both developed and developing, said that the annex is the best if not the only practical solution to move forward. It should not be interpreted as an agreed text, only as a platform for further negotiations, they said. Some described the text as a delicate balance, a product of almost three years of negotiations. To open it now could unravel the whole process, they said.

Between these two were countries ready to adopt the text for the July package but with some “legal qualification” — a legal clarification of the status of the annex, sometimes called “a vehicle” that could give them more political comfort.

The meeting was inconclusive and the chairman said he would reflect further with the facilitator (mediator), ambassador Stefan Johannesson of Iceland who has chaired the NAMA negotiations, to produce a revision.


Next    back to top

Consultations continue and the heads of delegations will meet again before an agreement can be put to the General Council, whose meeting is currently suspended.