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Chairman’s opening remarks


Good morning and thank you for coming to this informal meeting of Heads of Delegation.

A piece of good news to start the meeting: Today we welcome the Republic of Cape Verde as the 153rd Member of this Organization. Cape Verde is the third LDC and first country from Africa to have completed the accession procedures under Article XII of the Marrakesh Agreement. Membership will provide a stable and predictable basis for the growth and development of Cape Verde. They have worked very hard to achieve this, knowing it will give a welcome boost to the economy, and their efforts serve as an example to us all.

The purpose of our meeting this morning is to report in this open-ended format on the second round of consultations I had yesterday afternoon with a number of delegations.

These consultations involved as before a broad range of the membership, including representatives of regional and other groupings, with the aim of ensuring that the full spectrum of Members' views and interests was represented.

Let me stress that, in this process, I am counting heavily on the coordinators of the various WTO Groupings to assist in maintaining transparency and inclusiveness. I know that Group coordinators face a big burden, but I do ask that you continue to ensure the flow of information and maintain consultations with your constituencies from smaller consultations so that they are kept informed and involved, as well as to convey your groups' positions to other Members, the negotiating group Chairs and myself.

I also want to emphasize that the work being undertaken by myself, the negotiating group Chairs, and among delegations bilaterally or plurilaterally, is aimed at facilitating consensus in what is an urgent collective task before us all. Let me repeat once again that any decisions can ultimately be taken only by the membership as a whole.

We all have the responsibility to provide a launching pad, that is, a clear workable basis, for finishing this development round by the end of this year. The outcome of our meetings here this week should be able to provide the much awaited green light that both the developed and developing world expects from us. This is a heavy responsibility and we must not let this chance slip away.

Let me turn now to my report.

The consultations involved a full run-through of the revised Agriculture and NAMA draft modalities texts, focussing on AG subsidies and AG and Non-AG market access, with the aim of finding possible solutions to outstanding issues that could be presented to the membership as a whole for consideration.

In Agriculture, we addressed the following six key elements:

(i) Overall Trade-distorting Domestic Support (OTDS) for developed countries, including AMS and Blue Box;
(ii) Cotton;
(iii) Market access formula for developed countries;
(iv) Sensitive products (number and quota expansion);
(v) Special products; and
(vi) Special Safeguard Mechanism.

We also ran through the following three issues in NAMA:

(i) Formula and Flexibilities;
(ii) Anti-concentration; and
(iii) Sectorals.

I fully recognize that these are not the only open issues, but the negotiating group Chairs are continuing to consult on a number of issues on which I do not believe it would be efficient to focus now. These include: in Agriculture, preferences, tropical products, in-quota rates, tariff simplification, tariff capping and export competition; and in NAMA, preference erosion, including those disproportionately affected. These issues are there, but I organized the discussion so that we first addressed the main pillars.

There is also the issue of SVEs which in my view is technically stable but in need of a final political decision. The DFQF issue for LDCs is also being taken up as part of the negotiating group Chairs' processes.

Overall, I would characterize the consultations as constructive, with a strong commitment to engaging directly and in good faith. However, I must emphasize that the progress has been modest as yet.

On the Agriculture issues, there was positive engagement on the OTDS cuts to be made by Members. The new US offer to reduce its OTDS to $15 billion — conditional on the contributions from other Members — was seen as a welcome step. Several Members urged the US to consider further reduction.

On AMS, Members focussed on two main issues, namely the base period for product-specific cuts and whether the US should be given headroom for the starting point. The US indicated that it could accept the base period proposed in the draft modalities text. Regarding Blue Box support, discussion was on the headroom issues.

On Cotton, there was a renewed sense of engagement. The proponents of the sectoral cotton initiative challenged Members to respond in detail to their existing proposal. There was greater clarification of the specific concerns and possibilities of Members on different sides of the issue. The Chair of the negotiating group is now retaking it from here.

With respect to tariff cuts for developed-country Members, the emphasis was on the cuts in the top band as expected.

Regarding sensitive products, discussion focussed mainly on three main issues, namely (i) the number of tariff lines to be designated as sensitive; (ii) the treatment to be afforded to these products in terms of quota expansion; and (iii) whether the creation of new tariff rate quotas should be allowed.

As for special products, Members narrowed their discussions to whether there should be a single or a two-tier system under which a certain proportion of the designated tariff lines could be exempted from tariff cuts and the other lines subjected to an average tariff cut.

Finally, on the special safeguard mechanism, discussion focussed mainly on the question of whether pre-Doha bound rates could be exceeded.

On the NAMA issues, while Members mostly restated their well-known positions on the formula and flexibilities, I did nonetheless detect a willingness to go further towards convergence.

On the anti-concentration clause, there remains a marked difference of views but there were also efforts to move towards a mutual understanding and some ideas were floated which can be followed up.

On sectorals, all present recognized that these are not to be mandatory but differed in the emphasis they would put upon them. In particular, there was an exchange of views on whether sectorals should be seen as part of the overall balance in NAMA. Some suggestions were made as to how this issue could be resolved, and these also deserve to be followed up.

My overall sense from yesterday's meeting was that while progress is being made, it is unevenly distributed across the issues discussed. It is clear that we need to move into a more intensive mode of consultations, including smaller configurations.

Starting from today, I plan to put more emphasis on variable geometry, working on these key issues in Agriculture and NAMA in smaller groups, together with the negotiating group and General Council Chairs. The issues will be the ones I have listed earlier, and I will report back to you tomorrow morning.

In order to allow this intensive series of consultations to bear fruit, it will be necessary to move the Signalling Conference on Services from Thursday to Friday.

In my capacity as Director-General, I would also like to inform you that, at my request, Minister Jonas Støre of Norway has very kindly accepted to help me as a “Friend” by holding informal contacts with delegations on the TRIPS-related issues of GIs and the TRIPS/CBD relationship. I am very grateful for the assistance of Minister Store in this process. He will report to our HODs meetings on developments.

This is where we are at this stage. I would invite all delegations to engage each other over the next few days with a greater sense of urgency, with the focus very much on the development of compromises. Success or failure depends very much on how far all are prepared to cooperate with each other on the fundamentally important issues, and whether we are each prepared to act with the interests of the broader membership, and of the benefits to the system as a whole, uppermost in our minds.

From my engagement with delegations so far, I believe the membership is steadily but slowly ascending the Mont Blanc. My sense is that we would need to accelerate the pace to make it to the top.

With these words, I will ask now those delegations who wish to speak at this HODs meeting to take the floor. Let me request once again that you keep your remarks as brief and focused as possible.

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