26 May 2005

Report by the Chairman of the Trade Negotiations Committee

Thank you, Madam Chair.

Since the February meeting of the General Council, the TNC has held two formal meetings, on 28 April and 19 May. I also held an informal TNC meeting at the level of Heads of Delegations on 21 March. These were all productive and businesslike meetings, although they have taken place against the background of an unsatisfactory level of overall progress in the negotiations.

The note of caution which I signalled in March — that we were not yet in a crisis mode, but did need more sense of urgency — did not seem to be fully heeded. At our meeting in April, I expressed concern that we were just not making the progress that we needed to be able to reach our July marker in good shape, despite the very hard work that had been taking place across the negotiations. I said I was still not pushing the alarm button, but that my finger was hovering over it.

The rather worrying overall picture at that time stemmed mainly from the fact that, in the Agriculture negotiations, we appeared to have stalled on the first difficult issue — ad valorem equivalents (AVEs) — which was having a knock-on effect in several other areas of negotiation.

I am pleased to report that our meeting last week took place against a somewhat brighter background than the April TNC, even though substantive progress since then had continued to be limited. Some gatherings at the Ministerial level prior to the meeting had renewed the impetus in some areas of our work, but I stressed that there was still very much a need for a greater sense of urgency.

At last week's meeting, I reminded Members that we had only some 30 working days left here before the July TNC meeting. This figure takes into account several important Ministerial gatherings which will take place over the next two months. I cautioned Members that it was very important that these make positive and immediate contributions to our work in Geneva and there is a great need for coordination between these two processes. I stressed to them that the Geneva process in which they were all involved, is and must remain the primary negotiating forum. However, it is also important that our work here gives Ministers meeting in other parts of the world a clear picture of where they need to focus their attention.

I asked Members to be clear now about what it was that we could realistically expect by July, and what was needed by then, keeping in mind the goal of the Sixth Ministerial Conference in Hong Kong this December. This of course, was without compromising the ambitions that governments have established for the Round. I pointed out that we are not obviously in the same situation as last July, and I do not think any of us envisages a package of decisions such as we had taken then.

I also informed Members that from my participation in various ministerial gatherings, it was clear that Ministers were expecting more than just progress reports. As Chairman of the TNC, I will have to provide Members in July with a very good idea not only of the progress we have made, but also of what will have to be done to ensure a successful Ministerial Conference . I informed Members that I am personally determined to do so as clearly and frankly as possible, but to enable me achieve this, negotiating groups have to narrow differences, so that the respective Chairs can provide me with their inputs and assessment by early July.

As much specificity as possible will therefore be required in some areas of the negotiations on the shape of the likely outcome at Hong Kong. In other areas, the level of specificity will, necessarily be lower. Overall, however, governments will need to be confident that their priority interests will be handled at the Ministerial Conference in such a way as to prepare for a successful concluding phase of the Round.

The substantive basis of whatever progress I will be able to report in July is being built right now in the negotiating groups. The further we can get by the summer break, the better the outlook for Hong Kong. This is why I have continuously stressed to delegations the need for a greater sense of urgency. We have made some ground, but we really do not have any time to lose. In this light, I have assured delegations that I will keep our work processes under review. It is my belief that it may be opportune to make greater use of informal processes in order to maximize the productive linkages among issues and to begin to develop a sense of coherence as we move ahead to Hong Kong.

I now wish to briefly highlight the status of progress in the negotiations in some specific areas. On Agriculture, some significant developments in resolving the AVE issue had preceded our meeting. Although there remain some aspects of this issue that still need to be settled, I think everyone hopes that the Special Session next week will be able to start discussion of the complex and difficult set of issues related to agricultural market access. My hope would be that the way will then be cleared for progress to be made in the other negotiating groups.

On the NAMA negotiations, although the five proposals have had a catalytic effect, there has been no convergence yet. I am hopeful that the momentum created by resolving the AVE issue will also have a positive knock-on effect in these negotiations.

The CTD Special Session has now started on the Agreement-specific proposals on S&D submitted by the LDCs, which is a good sign. As time is running particularly short here, my hope is that Members will allow the Chairman of the Special Session to find a way to move on to the other proposals as well.

On Services, I informed Members that I had written to Ministers in January about the state of torpor that we risked falling into if we did not get more offers on the table, as well as substantive improvements to those already submitted. I have sent another, stronger letter to Ministers of those Members that have not yet submitted an initial offer, asking them to do so without delay. This letter also serves as a reminder of the broader implications for the overall DDA negotiations.

In the other areas of the negotiations, discussions in the Negotiating Group on Trade Facilitation continue to move ahead on the basis of quite a number of new proposals, including from developing countries which is an encouraging sign. In the Negotiating Group on Rules, a meeting on RTAs concluded last week, and the Group will take up its other areas of work from next Monday, on the basis of informal papers submitted for consideration at that meeting.

Although there is now a brighter overall picture, it is still not good enough. We are still well behind where we should be, and time is not on our side. We absolutely must make concrete progress across the board. There continues to be a high level of commitment to achieving results at the Ministerial Conference which will take us into the end-game of the Round so that it can conclude in 2006. But if we are going to be able to judge whether we are on course for this in July, we will have to make progress very rapidly indeed.

I still remain hopeful that my report at that time will reflect solid progress, and that I will also be able to give Members a clear idea of what will have to be done in the autumn to ensure a successful Ministerial Conference. I will certainly do everything within my power to facilitate that. But, ultimately, this does not depend on me. Rather, it depends fully on you, the Members, and the convergence you are able to achieve.

This concludes my report. Thank you, Madam Chair.