> July 2008 package

The two documents are revisions of drafts previously circulated in July 2007, and May, February and July 2008. They are the result of WTO member governments’ latest positions in the discussions since September 2007, one of the most intensive periods of negotiations since the Doha Round talks began in 2001.

The latest drafts also try to capture agreement reached tentatively on some subjects when a group of ministers came to Geneva in July 2008 and tried but failed to reach agreement on these issues.

The texts are agriculture negotiations chairperson Ambassador Crawford Falconer’s and non-agricultural market access (NAMA) chairperson Luzius Wasescha’s latest draft “modalities”.

The papers are the chairs’ assessment of what might be agreed for the formulas for cutting tariffs and trade-distorting agricultural subsidies, and related provisions. After these “modalities” have been agreed, members will apply the formulas to their tariffs and agricultural subsidies.

The two papers were circulated at about the same time because members link the two subjects. Members now intend to move to a new phase where these areas of the Doha Round can be negotiated in comparison with each other with the hope that agreement can be reached later in December 2008, when a representative group of ministers could be in Geneva.

As well as reaching agreement within each subject, members also want to negotiate an acceptable balance between the depths of cuts (the “level of ambition”) in agricultural and non-agricultural tariffs and agricultural subsidies as well as the size of cuts that they desire in each area.

Drawn from WTO member governments’ positions over several months of the negotiations, these are not “proposals” from the New Zealand and Swiss ambassadors in the sense that “proposals” are normally understood. In other words, these are not the chairs’ opinions of what would be “good” for world agricultural and non-agricultural trade, but what might be accepted by all sides in the negotiations.


Excerpt: agriculture draft
From chairperson Crawford Falconer’s introduction

I think we have made progress since July, and the attached text, together with the separate papers, are an attempt to capture that.

Within the text itself there are a number of square brackets that have been deleted. It is clear that on a number of those, there cannot be said to be formal agreement. But, in earlier versions of the drafts where there were no square brackets, there was not always formal agreement either. Everything is conditional in the deepest sense in any case. But the changes made at this time now represent a best estimate of where there is additional good reason to believe there would prove to be consensus if everything was to come together as a modalities package.

Negotiations and discussions that took place during the July meetings have been a strong input in arriving at that estimate, particularly as regards square brackets dropped in the section on domestic support and in certain parts of market access. But in these and in other areas, negotiations and discussion subsequent to July has also generated or confirmed that sense. Indeed a considerable part of the time devoted to consultations over the last few weeks has been in checking whether things that might have hypothetically worked in July would still work now.

By and large that has been the case, and some other issues have come somewhat closer also since even in July. But, clearly, there is still not formal agreement on any or all of this. Indeed, there is still certain divergence where even the device of square brackets has been dropped, and I have felt it was both instructive and fair to highlight within the text itself a few points where there is still very real divergence (sensitive products being a principal example) or where there is, to say the least, somewhat more heat detectable than on some others (tariff simplification being an example).

Of course, that conditionality remains, as always, paramount. Certain things are manifestly not yet agreed. And, depending on where we end up on these matters, other areas that seem relatively “stable” may well be revisited. That is an undeniable reality in any negotiation. It has been made pretty clear to me in consultations generally, and on a subject like Special Products in particular where Members concerned would, I suspect, be able to go with what is in the text at a pinch. But whether or not that actually happens will be contingent on overall balance — including not just other parts of the agriculture text but elsewhere in the negotiations. And that balance can be decisively affected by where elements that are still not settled end up. The same can be (and has been) said for any issue you choose: domestic support; export competition; etc. But it is still more responsible in the present circumstances, I believe, to describe the glass as (albeit conditionally) half-full rather than half-empty. We are, after all, trying to get to an agreement rather than to find additional reasons why we cannot.

There are other areas where progress has been made since July, but it has not made it to the point where there is a basis to incorporate fully defined wording within the four corners of the text at the moment.

This has been the case with certain elements regarding Sensitive Products, tariff quota creation, non-Sensitive Products with tariffs higher than 100 per cent, tropical and diversification products, preference erosion and the SSM.

While Members have at last been prepared to step (albeit tentatively) outside their comfort zones, they have not been prepared to get as far as a real convergence. As always, one cannot invent consensus where it does not exist. Indeed it is utterly counter-productive to do so because, lacking any real basis in the negotiation, it simply provokes a counter-reaction that sends us back to square one.

But it would have been selling short the progress made to simply have nothing new on the table on these matters. So what has been done in such cases is to provide certain working hypotheses which, if the political will to conclude is genuinely there, could become a platform to get us to closure. I have taken some liberties here as it is, but, hopefully, not to the point of pure invention.

Some of those forms of words are being seen for the first time, albeit that they have not emerged in a vacuum: they are there because they reflect, hopefully, emerging elements of convergence. But even in these areas there is an inevitable unevenness because some things are, unavoidably, somewhat better developed than others.

On Sensitive Products, the text is, on the surface, more clear than in July. That said, the fact remains that there appear to be effectively only two developed Members among the importers that are actually prepared to live with 4 per cent of Sensitive Products despite a seeming view that “4 per cent” was what was a source of quasi-consensus in July. I see no alternative, therefore, but to put that in the text unambiguously. But the reality is that others are not in agreement with that. There is no sign at this point of agreement to bridge that on the table. The best I have been able to do is to outline in a separate document some possibilities of how to “fix” this (if any fix other than applying 4 per cent without limitation will ever fly). But even these ideas are speculative to some extent because no-one has a common view on what uniform “payment” would work for going beyond 4 per cent.

On non-Sensitive Products above 100 per cent, battle-lines remain drawn. The text is accordingly still square-bracketed, albeit with a few minor changes. I do sense that, under the surface, progress is being made but, nothing that is as yet textually in the frame. I have also made a suggestion in the attached working paper, for what it is worth, as another angle of approach.

Because, tariff quota creation is such a sensitive issue, the text retains the two options. But consultations indicate that a strictly limited and transparent way out could be found. Because, however, transparency is demanded by one side but the other side says it cannot be done, the matter remains moot. But with good will there is at least an emerging structure for getting to closure.

On tropical and diversification products and preference erosion, the text remains the same. I had wanted to record in a separate paper the considerable progress that had been made in July. As of yesterday I had drafted that on the basis that, if everything fell into place — and bananas was key to that — there was a deal there for the taking. And it would have been useful for everyone to see how close we were to that. But I was advised yesterday that, on bananas certain material changes had occurred which, in the view of at least one set of Members, vitiated any assumptions abut what might even be hypothetically possible. I cannot ignore such a strongly held view so, yet again, all we get for the time being is the 10 July text.

It is a pity, in my view, but I cannot intrude on a bilateral negotiations of this intensity. All I would add is that the parties have been working on their bilateral lists as well. Clearly everything else is contingent on satisfaction being found here also. But there are Members that are uncomfortable about not knowing what would appear in importing Members’ lists based on the percentages canvassed below. The parties to discussions have developed, I believe, understandings on these matters among themselves to which I, among others, am not privy. If this remains a difficulty among Members I can only continue to urge those involved to consult in good faith with those concerned as soon as possible with a view to alleviating concerns about transparency.

On the SSM, we have made some progress. It is uneven, it is fragile, it has never been consolidated into a single structure. All previous informal efforts have failed. So, this is the first time this particular structure has seen the light of day. It is not, therefore, ready for inclusion in the text per se because it is utterly untested. But hopefully it can at least help materially in getting us to that. There appear to remain still subsequent issues to deal with as yet unresolved.

Then there is cotton. Here we have, since July, at least re-established a good dialogue and a sense of trust that had been seriously eroded by events at the end of July. We have also got a robust and common view on the numbers that need to be crunched to get a final decision. That said the fact remains that, textually, I regret that I can only report that neither I nor, as far as I can tell, anyone else involved in the consultations are any wiser today on what the deal will be than we were in July.


Excerpt: non-agriculture market access (NAMA) draft
From chairperson Luzius Wasescha’s introduction

Please find attached the fourth revision of the draft modalities for NAMA. After an intensive process of consultations, the degree of convergence on many issues allows me to present a text which is almost complete. There are some issues where, based on the discussions held, I have put forward what I believe are the landing zones (for example SVEs, preference erosion). I had identified preference erosion as one of the more difficult issues in the initial stage of my consultations, and would like to further note that a solution for some Members claiming inclusion in Annex 4 could not be found, and neither could satisfaction be provided to certain Members currently included in Annex 4. Therefore, the solution on this issue found after the July Ministerial appears to me the only viable one and is the one reflected in the text. Anyhow, everything is conditional in the deepest sense.

Nevertheless, two areas remain where further work is required:

(1) Sectorals (paragraphs 9 to 12): Even though the included text is accepted as a basis for further work, we are far from a consensus among Members. The main open questions in sectorals are:

  • An indication by some Members that their ability to finalize NAMA modalities depends on a commitment by those Members who took part in the negotiations on formula and flexibilities in July to negotiate an agreed list of sectors and to participate in the agreements that result from those negotiations. In this context, the language referring to a single undertaking in paragraph 9 meets resistance from the non-proponents.

  • How and when to define the commitment of Members to participate in sectorals without altering the non-mandatory character of these negotiations?

  • Annex 7: option 1 is the preferred option of the proponents, and option 2 the preferred one of the non-proponents.

(2) Consultations with Argentina, South Africa and Venezuela will have to be pursued next week. I would observe that the discussions on South Africa are rather advanced.

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