Tuesday, 28 March 2006

“The moment of truth is fast approaching” — Lamy

Director-General Pascal Lamy, in his introductory statement to the Trade Negotiations Committee on 28 March 2006, reminded members of the end-April deadline for establishing modalities in agriculture and industrial products, and stressed that “the moment of truth is therefore fast approaching — we do not have time to waste”.

Statement by Pascal Lamy

I would like to welcome delegations to the twenty-fourth meeting of the Trade Negotiations Committee.
Since our last meeting on 7 February, intensive activity has been taking place at various levels across the whole spectrum of the DDA. Our work here in Geneva has been complemented by a number of initiatives among some Members aimed at trying to take our work forward. This work is both useful and necessary, as I think all participants understand. However, it is also clear that progress made in these informal contacts must be brought back to the multilateral forum for all to consider.

One such initiative was the exercise in simulations of the effect of different formulae and coefficients in Agriculture and NAMA which was undertaken by a number of Members. I understand that these simulations have now been shared with the wider membership. I believe they are an important contribution to clarifying the impact of the choices that we face. As I have said in the past, we in the secretariat stand ready to help any country conduct similar kind of simulations provided we are given the numbers.

Just over two weeks ago I was invited to attend an informal gathering in London, where Ministers from six Members were meeting to look at some key issues — the harder nuts to crack, if you like — to try to help progress in our work here.

As I always do in these cases, I made it clear that I was accepting the invitation only on the basis that this meeting was in no way a decision-making forum, that only the entire membership in Geneva could take decisions, and that I had a duty to report back to the wider membership following the meeting in the interests of transparency.

The focus of the meeting was mostly on narrowing gaps in numbers and some elements of disciplines in three key elements of the modalities — Agricultural Domestic Support, Agricultural Market Access and Non-Agricultural Market Access. My feeling is that it was useful in terms of discussing numbers and seeing how to narrow them, as well as testing zones of possible convergence. You will all be aware that no major move was made on any side — not that this was the purpose of the meeting — but I believe the picture of what a final deal could look like is starting to appear.

The key question is how to reach the right level of ambition on the triangle of issues, which will serve as benchmark for the remainder of the issues on the agenda. This level of ambition is the result of both the cuts and flexibilities in all three elements. On the cuts, the question is how much should it affect applied rates over and above cuts at bound level, both on domestic support as well as on market access and how should this affect developed as well as developing countries. On flexibilities, it is a question of precision on parameters such as the new blue box, de minimis, sensitive and special products, the special safeguard mechanism, paragraph 8 flexibilities as well as possibly other specific cases, and how should this affect developed as well as developing countries.

In sum, the question is how to make sure that the cuts, both in subsidies and in tariffs, are a multiple of the Uruguay Round results, it being given that the flexibilities must not water down these multiples.

The intense activity which has taken place since our February meeting has allowed us to move from generalities, to talking numbers and texts, which is exactly what we need right now. For the texts, we are getting closer to real textual negotiations. A good example of this is the new paper on Food Aid submitted to the Agriculture Special Session by the African and LDC Groups, the recent G-33 paper on the special safeguard mechanism or the G-20 paper on green box just to cite some examples.

On the key numbers, we are nearing a more clearly delineated range of possibilities and their implications. But some very big decisions remain to be taken, and that is the challenge facing us now.

As you know, meetings took place last week in the negotiating groups on Agriculture and NAMA, and we will be hearing reports from the respective Chairs very shortly. First, though, it would be useful to take a broader look at progress across the DDA beyond the triangle. As we heard at our last TNC meeting, our aim is now to move “in concert”, so it is important to keep our eyes on the perspectives for the work in all areas over the next few weeks.

In the Services negotiations, since our last meeting plurilateral requests have been tabled following the calendar adopted in Hong Kong. These requests provide a good basis for the preparation of offers to be presented by 31 July. In the meantime some Members believe it would be useful to hold a cluster of meetings mid-May to ensure a rhythm between tabling of plurilateral requests and preparation of offers.

On Rules, in the RTA area of these negotiations, the Chairman's papers on both RTA transparency and systemic issues have provided some good impetus to the work. In the Anti-dumping/Subsidies area, we are should have proposals with draft legal text on all issues on the table in the near future. A number of proposals have also been recently tabled on fishery subsidies which have given an impetus to this part of the rules negotiations.

Similarly, we must quickly develop a more complete picture of the issues that could be the basis of a final agreement in the negotiations on Trade Facilitation, Trade & Environment, TRIPS and Dispute Settlement, although we know dispute settlement is not part of the single undertaking. In some of these areas, this will involve the rapid tabling of proposals, or revisions of earlier submissions.

On Cotton, the establishment of modalities for the Agriculture negotiations is, of course, key. I probably do not need to remind you that Ministers have instructed that Cotton be treated ambitiously, expeditiously and specifically, within the Agriculture negotiations and through the Sub-Committee on Cotton. On the development assistance aspects of cotton, I convened a meeting of my Informal Consultative Framework on 16 February and reported on the progress made then to Members at the Sub-Committee on Cotton on 2 March. A further report on progress was made at the Sub-Committee meeting which took place yesterday.

In the area of S&D, we must start to move towards points of convergence very soon, including on the implementation of the Hong Kong decisions for LDCs, where we have a first paper on the table on rules of origin to be applied in the duty free quota free context.

On preference erosion and in light of the discussions we had at our last meeting, the Secretariat is organizing a seminar on the erosion of preferences in the areas of Agriculture and NAMA which will be held on 3 April.

I would also like to review progress in some of the other areas of our work under the DDA, even if they are not strictly speaking under the TNC, so that we can develop a good overall picture of where we should be in the coming weeks and months.

On issues related to Small Economies, it is important that we continue to monitor progress in other areas of negotiations, in particular Agriculture and NAMA, with aim of providing responses to these issues.

On Aid for Trade (A4T), our work is progressing well. In my consultations on securing additional financial resources for A4T, there are some good ideas on the table and we are working towards convergence on common positions. The Task Force has now met twice, and discussed definitional issues, the scope of A4T, current flows and future trends. The Task Force will move on to discuss needs and available mechanisms for operationalizing A4T.

On the Integrated Framework (IF), the work is very much on track. The Task Force will shortly finalize its report containing the recommendations on an enhanced IF. Once these recommendations have been considered by the IF managing body, they will be submitted to the membership in the IF Steering Committee in early May.

On all of these fronts — the issues within the Single Undertaking and those outside — I am continuing my consultations with delegations here, including with the various groupings, and with officials in capitals. I am also continuing to work in close cooperation with the General Council Chairman and the Chairs of the negotiating groups to ensure coordination across our work. Let me underline the need to offer our Chairs all the support we can over the coming weeks. But let me also repeat what I said at the last TNC — this remains a negotiation among you, the participants.

I would encourage you to step up contacts among yourselves, at every level. You all know you will have to move, and now is the time to explore with your partners the margins for manoeuvre which you all have. We have 33 days to go to establish modalities. The moment of truth is therefore fast approaching. We do not have time to waste.

Before Hong Kong I recommended and you all agreed that we recalibrate our ambition for the Ministerial Conference, without compromising the overall ambition of the round. Today I believe we would be making a huge collective mistake if we thought we could postpone the establishment of modalities by the end of April. Backloading the three key areas of agriculture domestic support and market access in agriculture and industrial products is in my view a recipe for failure. These three areas hold the key to open the door to the many other issues which also need to fall into place to conclude this Round by the end of the year: remember 279 days to go to the end of 2006.

And let us not forget that the decisions to be taken are multilateral ones in which all the membership must share, and that the process of consideration at that level takes time. All participants must factor this into their planning. We need significant progress among key players on key issues, but it will not be enough for a small number of Members to suddenly arrive with a piece of paper in their hands on 30 April. The no surprises principle remains as valid as it was before Hong Kong.

I will now report on my work on Implementation. As requested by Ministers in Hong Kong, I have intensified my consultative process on all outstanding implementation issues under paragraph 12(b) of the Doha Ministerial Declaration, without prejudice to the positions of Members. In this process, I have been assisted by a number of the Chairpersons of concerned WTO bodies acting as my Friends and two of my Deputy Directors-General, Valentine Rugwabiza for TRIMs issues and Rufus Yerxa for the issues of GIs and TRIPS/CBD.

Overall, I think the process has been reinvigorated with a good level of engagement by delegations. In some areas there seems to be growing clarity on the interests of Members and better identification of key issues for progress. I will now provide an update on where we are in each area.

As you are aware, on the issues of GI extension and TRIPS and CBD, Rufus Yerxa has been holding intensive informal consultations on my behalf. He held open-ended meetings on 17 February and on 15, 16, 21 and 23 March, as well as meeting with delegations in other formats. In each area, a list of points and questions has been drawn up, on Mr. Yerxa's own responsibility but on the basis of inputs from delegations. They have served to facilitate what has proved to be an organized and intensive exchange of views. Notwithstanding differing positions on the mandate, delegations have actively engaged on the substance of the issues and of the proposals and approaches put forward.

On the issue of GI extension, the consultations have only covered half of the questions and issues identified by delegations as requiring attention, and further time will be required to complete this process. Although I believe the discussion has enabled a deeper understanding of the concerns of delegations, the positions of the more active participants in the discussion remain essentially unchanged and polarized, between those who support GI extension and those opposed. There are also a fair number of less active delegations following the work closely with a view to assessing their own national interests in the matter. Among the key issues on which positions remain divided are: whether the current level of protection for GIs for products other than wines and spirits under Article 22 of the TRIPS Agreement is or is not sufficient for protecting such GIs; the implications of extension for other producers that have been using the terms in question in their own market and in third country markets; and the extent to which extension of the exceptions provisions of Article 24 would meet concerns on this count. One of the aspects mentioned as making it difficult to make progress is the interrelationship perceived by some delegations between the GI extension initiative and other initiatives on the table on GIs elsewhere in the WTO.

On the issue of TRIPS and CBD, all the points in the list drawn up have been covered in the consultations. While, once again, positions have remained essentially unchanged, the consultations have, I believe, facilitated a more clear cut identification of the points of divergence and convergence and of the key policy questions that remain to be decided. On this issue, there is perhaps a somewhat more discernible spectrum of views than on that of GI extension — with, on the one hand, the patent disclosure proposal put forward by a group of developing countries, with wide support from other developing countries, aimed at avoiding erroneous patents and facilitating compliance with national access and benefit sharing regimes and, on the other, the view that the case has not been made that a proposal of this sort is either necessary or appropriate and that these shared objectives can be most effectively realized in other ways without involving the patent system. In between these two positions, support has been expressed for a more limited patent disclosure requirement at the international level, restricted to the origin or source of genetic material and related traditional knowledge and without substantive implications for patentability. My sense is that, notwithstanding these different positions, there is a general willingness to continue to engage in fact-based discussions on how the shared objectives in this area could be most effectively realized.

The intensified consultations that have taken place have provided a good basis for making progress towards a narrowing of differences; but that progress remains to be made. It will take further work in good faith on the part of all delegations to do this. To this end, I am asking Rufus Yerxa to continue his consultations using various formats with a view to exploring how to move forward on the key policy issues, and I will report to you again in April on the progress that has been made.

On the other TRIPS proposals, I have previously reported that no Member had taken up the opportunity provided by the TRIPS Chair to pursue any of these matters. I now understand that the African Group has indicated that it intends to reactivate its proposals on the table and it is working on this.

On the Balance of Payments area, a further consultation has been held but there has been no change on this issue since before Hong Kong. There still remains a sizeable gap between the positions of the proponents and opponents.

The consultations seem to indicate that the gap cannot be closed through further technical level negotiations on possible compromise language, at least not without political input that would allow both sides to be much more flexible.

In the Market Access area, a paper aimed at providing precision to the original proposal made by Saint Lucia on a redistribution of negotiating rights is still awaited.

In the area of TRIMs, Valentine Rugwabiza has informed me that significant differences of view remain both on the substance of these issues and on the way to address them. However, both proponents and opponents agree that a procedural solution to this issue would not suffice. It therefore appears that rather than continue consultations at a technical level, what is needed now is political input to explore the possibilities for allowing greater flexibility in Members' positions. This would include more clarity from the proponents on concrete examples of issues at stake.

On all five proposals dealing with the Customs Valuation Agreement, the situation is still unchanged. There is no visible prospect for moving forward on these issues.

On the single proposal in the Safeguards area, the situation remains unchanged. The Committee reported in 2002, that it was not able to suggest a course of action on the issue due to a lack of convergence. I understand that since the proponent is not actively pursuing its proposal, it is difficult for the Committee to revert to it unless specifically requested by the proponent.

On Technical Barriers to Trade (TBT), in the context of the Fourth Triennial Review, both technical assistance and conformity assessment, which are relevant to the issues contained in the two tirets in the TBT area, are on the table as agreed elements which should figure in the Committee's report in November this year. However, no further substantive discussion of the implementation issues per se has taken place. In the light of the consultations he undertook, the former Chair was also unable to suggest a course of action to be followed on these tirets.

In sum, despite best efforts, we are yet to make concrete progress towards finding appropriate solutions to these issues. However, in most areas, there does seem to be a willingness to continue discussion on them. We all know that this exercise has gone on for a very long time, and we now need to work to bring it to closure. In short, we must be result-oriented in the very short timeframe we have for this process. I would suggest that our work should be focused on any deliverables for July, or earlier if possible. I would once again urge everyone to make every effort to allow progress to be made in order to respect the mandate in paragraph 39 of the Hong Kong Ministerial Declaration.

That concludes my report on Implementation.

Regarding process, I believe the establishment of modalities as foreseen by the HK Declaration will require some sort of Ministerial involvement during the last week of April, with a safety net beginning of May. For this to happen you will need to intensify your work between now and the start of the agriculture and NAMA weeks starting 17 April.
To sum up the mood today a strong sense of urgency as we get closer to end of April and a need to change gear on all areas of the negotiation, starting with the triangle of domestic support and market access in agriculture and in industrial products.

Statements by chairpersons of bodies established by the TNC (TN/DS/15, TN/IP/15, TN/MA/17, TN/RL/16, TN/S/25)

Statement by TNC chair Pascal Lamy at the 28 March TNC meeting
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Highlights from the press conference following the meeting
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