DG Lamy: time out needed to review options and positions

Informal TNC meeting at the level of Head of Delegation

Chairman's Introductory Remarks

Thanks a lot for coming here today at a very short notice but events have precipitated in the last hours and I feel it is essential that we lucidly look together at where we are and what remains of our goal of concluding the Round by the end of the year. I cannot hide the sad truth: we are in dire straits.

On 1 July, the TNC requested me to conduct intensive and wide-ranging consultations with the aim of facilitating the urgent establishment of modalities in agriculture and NAMA. I was also requested to report to you as soon as possible. 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 in the process.

Since then I have undertaken this consultative process as requested, starting with the members of the G6 and then progressively widening 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 your Heads of State and Government were present. I was very frank with the Leaders, and told them that they needed to revise their instructions to you and give you more flexibility. My request for flexibilities was twofold: 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. I also warned them that failing this, they risked the very situation in which we now find ourselves. During the meeting there were some encouraging signs of additional flexibility at that highest political level.

To follow up on these signals, the G6 Ministers held a meeting here yesterday, chaired by myself with the assistance of the Agriculture and NAMA Chairs. This was a lengthy and detailed meeting, but at its conclusion, it remained clear that the gaps remain too wide.

From the discussions over this weekend, it is clear that the main blockage is on the Agriculture legs of the triangle of issues the G6 has been trying to address. Despite some improvement on numbers which were informally floated and in particular on market access for developed countries, the gap in level of ambition between market access and domestic support remained too wide to bridge. This blockage was such that the discussion did not even move on to the third leg of the triangle — market access in NAMA.

The situation is now very serious. Without the modalities in Agriculture and NAMA, it is now clear that it will not be possible to finish the Round by the end of 2006. For one thing, the time necessary to prepare and finalize the schedules of concessions is just not there. Furthermore, while discussions among the G6 on a limited number of key issues have been a precondition to further progress, we need always to remember that the G6 does not negotiate for the rest of the membership. There are also many other issues than the so-called triangle which would remain to be addressed in order to reach agreement on full modalities. The timing has always been very tight, but the continuing blockage on a few key points means we have simply run out of time for the rest.

Faced with this persistent impasse, I believe that the only course of action I can recommend is to suspend the negotiations across the Round as a whole to enable the serious reflection by participants which is clearly necessary. Time-out to review the situation, examine available options and review positions.

In practical terms, this means that all work in all Negotiating Groups should now be suspended, and the same applies to the deadlines that various groups were facing.

It also means that the progress made to date on the various elements of the negotiating agenda is 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, and we must try together to reduce the risk that it unravels.

This is what I will suggest at the General Council meeting on Thursday. I do not intend to propose any new deadlines or a date for resumption of activity in the Negotiating Groups. This can only come when the conditions exist to permit renewed progress, and this means changes in entrenched positions. The ball is clearly in your court. I have discussed this suggestion with the Chairs of the Negotiating Groups just before this meeting and they agree with me that this is the best course of action at this moment.

In the meantime, I urge you all to use this period of reflection for precisely that — for serious and sober reflection on what is at stake here. We all know that this is the most ambitious of all the trade rounds over the past 50 years. In fact, what is already on the table today is potentially worth two to three times more than previous rounds, whether for developed or for developing countries.

As I told leaders in St Petersburg, failure of this Round would be a blow to the development prospects of the more vulnerable Members, for whom integration in international trade represents the best hope for growth and poverty alleviation. This is why it is called “the development round”: it is intended to be a contribution to the Millennium Development Goals.

Failure, in my view, would also send out a strong negative signal for the future of the world economy and the danger of a resurgence of protectionism at a time when the pace of globalization is weighing heavily on the social and economic fabric of many countries and when geopolitical instability is on the rise. This is only too obvious if one looks today at the international situation out there, I mean, outside this room.

All your leaders and governments have repeatedly stressed their desire to conclude the Round, and it cannot be acceptable that this commitment is not acted upon. If the political will really exists, there must be a way. But it is not here today. And let me be clear: there are no winners and losers in this assembly. Today, there are only losers.

For my part, I will of course continue my contacts with participants at every level, and I will also remain available to all Members, as will the Negotiating Group Chairs, for any contacts you may wish to have with us. My priority as Director-General will continue to be to defend the integrity of the WTO system and to continue to assist the membership to reach agreement.

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. However, it should remain clear that this must come from you, the Members. It is how you can achieve this movement that I urge you all to reflect upon during this time out.