14 September 2005

Lamy opens “new phase” in trade talks

Director-General Pascal Lamy, on 14 September 2005, opened his first Trade Negotiations Committee meeting by expressing the hope that it marks a new and more productive phase for the TNC. He urged intensification of work on the core issues in the run-up to the Hong Kong Ministerial, adding that the Round will only succeed if “the development dimension is at the centre of the negotiations”.

DG's statement

I would like to start by recalling my intentions regarding the procedures for our meeting today which I sent out in a fax received by all delegations on 6 September. We are all perfectly aware of the immediate challenge facing us — to prepare the basis for success at the Hong Kong Ministerial Conference — and we all know that we have very little time for those preparations, including the organization of TNC meetings which I hope will be brief, business-like, realistic and action-oriented, starting with today's meeting.

As I said in my fax, I intend to close this meeting at 1 p.m., and this means that every one of us, beginning with myself, but you as well, must avoid lengthy and repetitive statements. If you feel that I am talking too much and dwelling too long on general considerations, speak up please. I will gladly be called to order on one condition — that I be permitted to do the same if I see that any of you are going on too long on general considerations.

So I would like to open our discussions today by making a few brief points. For the sake of economy and to live up to what I have just said, I do not intend to engage in a general diagnosis of our current situation or to qualify it as good or bad, urgent or non-urgent. We can all do so ourselves, and that is not really our essential task. What we really have to do is to put ourselves back on course towards an objective for the Ministerial Conference, namely — and this is what I propose we adopt as a common goal — to ensure that Hong Kong takes us two thirds of the way. When I say two thirds of the way, I mean two thirds of the path that still remains to complete the round of negotiations by the end of 2006. We all know that Hong Kong is not the end of the round, but we also know that if we have not reached the two thirds mark by Hong Kong, the prospects of concluding the round by the end of 2006 will be seriously jeopardized. I think this is the target on which we should be focussing all of our efforts, and it is in that spirit that I shall now present you with a precise diagnosis of the essential key issues which, in my view, are those that we will have to resolve if we want to achieve a coherent outcome in Hong Kong. This list of key issues is not exhaustive — that is, it does not contain all of the issues that we will be settling. I am simply trying to identify those which are strategic, those which will have to be settled if we are to turn the current vicious circle into a virtuous circle.

I will start with Agriculture. Let me highlight some points where progress is needed urgently. In export competition, we need to prepare agreement by Hong Kong on an end date for the elimination of export subsidies, plus the issue of parallelism for exporting state trading enterprises, export credits and food aid.

On domestic support, we also need a clear understanding on what will be done, which in my view must include the reduction commitments and, in particular, a tiered formula for reductions of the final bound total AMS. As we all know, this presupposes agreement on the Blue Box and Green Box criteria.

On market access, we also need a solid package, which is of equivalent ambition. This means a tiered formula for tariff cuts together with certain flexibilities, in particular the selection and treatment of sensitive products and of special products.

I want to add to this list, all elements of the Cotton dossier.

This is a short list, but it is by itself a very tall order. The Agriculture Special Session has restarted its work this week, and I will give the floor to the new Chairman of that body, Ambassador Falconer, shortly. I want to thank him for having so rapidly taken up this task and with an energy and a level of understanding of the details of the issues which is really remarkable. As he knows, I will be giving very close and supportive attention to the group's work, along with all the others.

In NAMA, the core elements, as I see them, are (1) formula, (2) flexibilities and (3) unbound tariffs. The Negotiating Group will start on this in the coming days, after Agriculture. However, within these three core elements there are issues which are clearly going to require a lot of work, and we need to find the right balance between the formula and the flexibilities. Other elements, such as preference erosion, the sectoral component and non-tariff barriers, also need to be part of the Hong Kong picture in my view.

In Services, what is new, as compared to previous rounds, is the importance that a number of developing countries attach to it, which in itself should suffice to energize this part of the negotiations. From now until Hong Kong, Members should develop different approaches in services, leading to an increased number and to an enhanced quality of the commitments. What we must have are commitments which effectively open trade in services, with the corresponding improvements in the rule-making area.

In Rules, Members should in my view arrive as closely as possible to draft negotiated texts in anti-dumping, subsidies and countervailing measures and in fisheries subsidies. I think we also need third-generation proposals with clear drafting proposals as soon as possible, so that Members can focus on the improvements to the Agreements.

In the other sectors of the negotiations, we have yet to clarify what will be needed for Hong Kong, and this should be done as soon as possible.

Let me end this short list by saying a few words about Development. Most importantly, this is integrated across the various sides of the negotiations. Substantial results must be achieved in each particular area of negotiations, so that the sum of all areas delivers on the Development Dimension of the Doha Round. The challenge is to maximize the development value of every sector and of the Round as a whole. This in my view is the bulk of what we have to look after and negotiate about development. We also have a number of separate issues which are labelled “development-related”, some of which come under the aegis of the General Council. Concerning the work on Special and Differential Treatment, where the TNC has been overseeing Faizel Ismail's strenuous efforts, there is still a clear need to define an acceptable outcome for Hong Kong. I also believe that, on TRIPS and Health we need to intensify work in order to reach agreement on the amendment to the TRIPS text.

We all know that the DDA will only succeed if this Development Dimension is at the centre of the negotiations and I am convinced that an “Aid for Trade” window can help us translate the development package of the round into reality. The IMF and the World Bank — which will hold their annual meetings in less than two weeks — have started focusing on this issue, as has the recent G-8 Summit in Gleneagles.

So much for substance. As regards procedure, I think we should consider our meeting today as marking the start of a new and, I hope, more productive phase for this Committee, which must now fulfil its intended purpose of being the focal point for progress in the different negotiating sectors. I think we all need to remember that this Committee was set up by Ministers in Doha to, and I quote, “supervise the progress of the negotiations”. While detailed work must take place in the negotiating groups, it is here in the TNC that we look at progress across the board, within the single undertaking. We shall certainly be meeting in formal mode later on, but I also intend to hold informal TNC meetings at the Heads of Delegation level as a guarantee of transparency and inclusiveness in our negotiations. I will, of course, also be reporting to you all on my other informal consultations — and there will be many — through this channel.

I have no intention of announcing, today, the date of the next meeting of the TNC. We already have the schedule of meetings of the negotiating groups in place for the next couple of weeks, and it is only after they have met that we will be able to see more clearly the way ahead. Thus, in the days to come, I would like to give priority to the meetings of the negotiating groups.

I would simply like to recall, on the procedural front, that yesterday was 13 September, and the Ministerial begins on 13 December. The calculation is easy: three months — and three months does not necessarily mean three full months of work. I think we should be looking at mid-October and mid-November as marking two intermediate stages along our path. Obviously, we shall soon have to determine what needs to be done in order to achieve our goal, and I think that mid-October will be a good time to assess the progress made and to come up with a clearer picture of our ambitions for Hong Kong. Then, in about mid-November, that is one month before the Ministerial, the negotiating groups will have to have produced substantive and specific results. It goes without saying that all of us will be reviewing the progress as we go along, and I would see this continual review, rather than fixed benchmarks — which is why I speak of approximately mid-October and mid-November — as the best way to keep ourselves on track. Today we are entering a three-month period of permanent negotiations — and when I say permanent, I mean a bit like a football team confining itself to a training camp for the few weeks preceding a decisive match.

Still on the subject of procedure, I would also like to stress that the Geneva process is the central process in the Round. Nothing else, in my view, can replace it, and any events outside this central forum must be organized in such a way as to reinforce what we are doing here, in terms of both timing and subject-matter. In other words, any such events must also feed back into the Geneva process, and contribute to it rather than detracting from it.

As far as I, personally, am concerned, I shall obviously be fully hands-on, and I shall encourage whatever cross-collaboration we need. I have already established a very close working relationship with the General Council Chairman and with the negotiating group Chairs. I have also started an intensive series of contacts with delegations here, including the coordinators of regional and other groupings. Together with my frequent meetings with the negotiating group Chairs, I think that constant contact with Ambassadors here in Geneva is the best way for me to keep my finger on the pulse, and to play the role of honest broker that you have entrusted me with.

Ultimately, we will need to bring together the work currently taking place in the negotiating groups — in other words, stop working in “silos” and join up the dots. We will do this from the bottom up, and not from the top down, and in saying this, I realize that I am addressing a number of concerns that have been expressed from time to time. I know that this will not be done overnight, and my intention is to ensure a smooth transition between a vertical approach by subject and a more integrated approach, which is what will be submitted to the Ministerial Conference. It will be done in close cooperation with the General Council Chairman and the negotiating group Chairs. If all goes well, this process should enable us to have a consolidated text in about mid-November, leaving sufficient time for you to prepare your ministers before the Ministerial — while some of them are permanently at the heart of the negotiating process, others are less so, and experience has shown that you need time.

Let me end by applying the principle of economy mentioned earlier on, and trying to confine myself to what is essential, as I trust you will all be doing now, bearing in mind the two concerns that should be at the centre of our attention during the weeks to come if we want to succeed in Hong Kong: the first is to join together in resisting the temptation of the lowest common denominator — in other words, we must not give in to the temptation of reducing our ambitions, and I am convinced that it is not by doing so that we will achieve success in Hong Kong. Secondly, we must — as I have just tried to do under your scrutiny — properly target each one of the crucial subjects and focus on the proper sequence of those subjects in order to move forward and continuously assess our own progress.

These are the few ideas on the substance of the negotiations and on the actual process that I wanted to share with you today.

Highlights from the 14 September 2005 press conference
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