27-28 July 2006

“It's time for serious thinking on what's at stake here” — Lamy

The following is the report of Director-General Pascal Lamy, as chair of the Trade Negotiations Committee, to the General Council on 27 July 2006:

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Report by the Chairman of the Trade Negotiations Committee

Since the last meeting of the General Council, the TNC has held one formal meeting on 1 July, and four informal meetings on 30 May, 28 and 30 June and 24 July. Today, my focus will be very much on the events of the last few days.

Following a period of rather intensive activity at the end of June, at the 1 July formal TNC meeting I was requested to conduct intensive and wide-ranging consultations with the aim of facilitating the urgent adoption of modalities in agriculture and NAMA. I was also asked to report as soon as possible, and as I stated at the time, my aim in these consultations would be to facilitate and catalyze agreement among Members, who continued to remain the main actors of the process.

I started consultations with members of the G6 and then progressively widened the circle of my contacts with individual delegations and with groups.

I also attended the outreach session at the G8 Summit in St. Petersburg, where a number of Heads of State and Government were present, and I told them that they needed to revise their instructions to you and give you more flexibilities in two ways: one, that they improve the numbers on the table, and two, that they agree to adjust what they are ready to pay with what they can reasonably expect for that price. During this meeting there were some encouraging signals of additional flexibility at this highest political level.

However, these flexibilities failed to materialize in significant changes in the negotiators' positions and this is why at the informal TNC meeting on Monday, 24 July, I had to report to you bad news — that the gaps remained too wide and the situation had become very serious.

The full text of my statement on Monday is available to delegations in JOB(06)/231. In my statement, I stressed that, without the modalities in Agriculture and NAMA, it was clear that it would not be possible to finish the Round at the end of this year. The time necessary to prepare and finalize the schedules of concessions was just not there, and too many outstanding issues remained to be addressed. The timing had always been very tight, but the continuing blockage on a few points meant we had simply run out of time for the rest.

Faced with this persistent impasse, I recommended that the only course of action available was to suspend the negotiations across the Round as a whole to enable the serious reflection by participants which was clearly necessary.

I did not propose any new deadlines nor any date for resumption of activity in the Negotiating Groups, nor do I think that this is possible today. This can only come when conditions exist to permit renewed progress, and this means changes in entrenched positions. The ball is clearly in the court of the Members.

Suspending the negotiations means that the progress made to date on the various elements of the negotiating agenda has been put on hold, pending the resumption of the negotiations when the negotiating environment is right. Significant progress has been made in all areas of the negotiations, which can be seen from the written reports of the state of play in their respective areas which the Chairs of the negotiating groups have just issued, and we must now ensure that this progress does not unravel.

At our meeting on Monday, where a number of Ministers were present, my recommendation was accepted. It was accepted with regret but it was accepted. There were many expressions of disappointment that negotiators had failed to find the necessary convergence, but delegations also reaffirmed the reasons why the Round is important for growth and development and many Members also stressed the sort of systemic importance of the WTO and the contribution that these negotiations can make to strengthening the multilateral system as a whole.

From Monday's discussions, as well as from the various discussions I've had since Monday, I think it is clear that no-one wants to give up on our collective effort here. My sense is that there remains widespread determination, despite this setback, despite this deadlock, despite this crisis, to try and bring the Round to a successful conclusion. How do we do that? How you do that can only appear after a bit of hard thinking and deep reflection, which is why this time out is in my view necessary. It's the time for quiet thinking as opposed to megaphone diplomacy, which is why I would like to urge all Members to avoid the well-known blame game and instead use this period of reflection for serious and sober reflection on what is at stake here. Everyone knows that what's on the table is already quite important, and the package risks to be lost. For my part, I will pursue my contacts, as I've done in recent days. I will remain available to you all, as will the Chairs of the Negotiating Groups, for any contacts you may want to have with us. My priority will remain to continue to defend the integrity of the WTO system, which has served us quite well in the past decades, and to continue to assist the membership to reach agreement.

I will conclude in saying that you can count on me to do everything I can to keep up the pressure for the political movement which would permit a resumption of the negotiations. A resumption of the negotiations is not with a little bit of time, or a little bit of this and a little bit of that. A resumption of the negotiations will only come in the right conditions after some political decisions have been taken. I believe this is possible. I'm not sure it's going to happen, but I think we have to keep on trying, probably quietly during some time and this is what I will try to do and I hope that this time of reflection will be fruitful so that at the end of this period, refreshed, revamped, re-thought positions on the few, but very important issues which remain at stake, can be possible.

That concludes my report and I thank you, Mr. Chairman.

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