First draft discussed as chairs warn of 30 July ‘drop dead’ deadline

WTO members broadly welcomed the first draft of a package of “framework” agreements when they met on 19–20 July, although they had reservations — sometimes serious — about some parts of the text. However, General Council chairperson Shotaro Oshima warned that agreement would have to be reached by the “drop-dead” deadline of Friday 30 July, and WTO Director-General Supachai Panitchpakdi urged delegations not to make too many changes at this stage, but to leave other concerns for the next phase of negotiations.

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The comments were made in an informal meeting of heads of delegations, the first opportunity for WTO member governments to react to the first draft of the package to be submitted to the end-of-July General Council meeting.

Speaking in the meeting and at a press conference afterwards, Ambassador Oshima stressed that the present text is a draft and not an agreed text, based on many months of consultations and negotiations.

He and Dr Supachai, who chairs the Trade Negotiations Committee, described the draft as the most accurate “approximation” of where consensus might be found.

It does not reflect the negotiating position of the chairs but the positions that members have conveyed in various meetings, Dr Supachai told delegates.

“Convergence must come from the membership,” he said. “There is no doubt that political leaders throughout the WTO membership want to agree on a July package that re-energizes the Doha Development Agenda.”

He reminded them that the draft is not for a final agreement of the Doha Round, but the basis for continuing negotiations after July.

“I think it is vital that delegations approach this text in a constructive spirit, seeing it not as an end in itself but as a means to help us move the Doha Development Agenda forward,” Dr Supachai said.

And he warned against making too many changes on questions that could be tackled later because that could lead to failure with devastating results.

“Let’s aim to minimize our disappointments,” he told the meeting, “and to wait post-July to live and fight another day.”

Ambassador Oshima said that for a number of reasons — including festivities planned in Geneva from 31 July — the talks cannot extend beyond Friday 30 July, which he described as a “drop-dead” deadline.

“We’ll have to ask the membership to really engage,” he told journalists afterwards.

> See the chairs’ opening remarks


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The discussion  

Altogether about 50 delegations spoke, including representatives of various groups. All welcomed the draft as a good platform for the coming two weeks of negotiations, but all also had reservations. On some issues, the comments pulled in opposite directions — for example where some found a part of the draft framework to be too specific others said it was not specific enough. Many delegates linked issues that cut across several subjects.

The discussion covered a considerable amount of detail. Among the key issues emerging:

Agriculture: A number of major net importing countries objected to the proposed ceilings (or “caps”) on tariffs, cuts on tariffs on all products and expansions on all tariff quotas. They considered the flexibility given to protect their sensitive products to be inadequate.

On the other hand a number of developing countries complained that the more specific “comfort” given to the richer countries for their sensitive products was not matched by the vaguer flexibilities to be given to developing countries. The agriculture negotiations chair, Ambassador Tim Groser, had suggested that it would be more appropriate to negotiate the flexibilities for developing countries (under “special products” and “special safeguards mechanisms”) after the developed countries’ flexibilities had been settled — several developing countries said the two should not be linked.

Some countries also said the text needed to be clearer on such issues as setting disciplines on indirect forms of export subsidies, the proposed principles for cutting tariffs and improving market access, and non-trade concerns.

Several refrained from going into detail on agriculture, preferring to wait for comments from their capitals, consultations within their groups and a meeting specifically on agriculture.

Cotton: Several countries underscored the importance they attach to this proposal. Some maintained that it should be handled on its own, outside the agriculture negotiations. One developing country said it does not matter how the subject is negotiated so long as the result is substantial in both the trade and developmental aspects.

Treatment for developing countries: A debate that cut across several topics reflected a division among developing countries themselves.

A number of these (particularly in Africa, the Caribbean and the Pacific) are strong advocates of special treatment, including exemptions and additional flexibilities for weaker and more vulnerable countries, and measures to deal with the erosion of preferences (for example, when duty-free access becomes less meaningful when the normal duty rate charged on imports from other countries is reduced).

On the other side of the debate are developing countries (particularly in Latin America and Asia) that are afraid that these proposals would create new categories of countries. This group also objects to preferences that are given only to selected groups of countries.

Non-agricultural market access (i.e. industrial products): The main debate was about the use of the draft from Cancún as an annex in this draft, as the basis for negotiations. Several developing countries objected to the use of what they described as a rejected text, even though a covering letter from the negotiations’ chair, Ambassador Stefán Jóhannesson, described the objections and explained why the text had been used — there was no acceptable alternative available. Several developed and developing countries supported negotiations based on this text.

Services: A number of developing and developed countries called for services to be placed more prominently in the main text, for example as a separate paragraph, to reflect the fact that they consider it to be important.

Trade facilitation and the other “Singapore issues”: Most members accepted the sections of the draft dealing with both subjects, although several wanted further clarification.

On trade facilitation, questions included: whether flexibilities (for example where developing countries’ obligations would be related to their capacities) would shield them from possible dispute proceedings in the WTO; and how firm the commitments on technical assistance would be.

On the other Singapore issues (investment, competition policy and transparency in government procurement), there was still some discussion of whether these should be dropped completely from the WTO, or only from negotiations under the Doha Development Agenda. One country proposed postponing a decision on this until the next Ministerial Conference.

Balance across subjects: Several countries said that if they are to agree to significant reforms in agriculture, they would need significant improvements in market access for non-agricultural products and services.

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The rest of the week will be spent in consultations in a number of formats, with another meeting for the heads of all delegations planned for Friday 23 July.

A special meeting, open to all members, to allow delegations to ask questions and discuss the agriculture annex was scheduled for the evening of Wednesday 21 July.