Informal Meeting of Heads of delegations

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Speaking notes for the Director-General

Thank you for coming at short notice. I have convened this meeting to report to you on the intensive consultations I have been holding over the past few days.

As I noted in the fax I sent to all delegations on 17 November, our starting point was the instructions to their Ministers from the leaders of the G20 to reach modalities in Agriculture and NAMA by the end of this year. Coupled with the political impetus at the highest level which continued to be signalled throughout the last few months, including at the APEC meeting, this provided us with the first of the two elements necessary to achieving our common goal.

The second element I set out at that time was of course a focus on advancing the substance. Our efforts have been aimed squarely at this over the last weeks, as I set out in my faxes to you of 24 November, and 1 and 8 December. In the latest of those faxes, I was able to note that we had taken the important step of issuing new Chairman's texts on Agriculture and NAMA. The Chairs had worked hard in improving previous proposals, and the new texts were issued last weekend.

Those texts reflect the very real progress made in the last months. They were generally well received and brought us closer to our objective. We were not far away from that objective, but it was clear that some tough decisions needed to take place in the following days, if you were to get modalities done before the end of this year.

As I said in my fax on Monday, I have used this week to hold further consultations. The purpose of those consultations was, as you will remember, serious political testing of the chances of bridging the remaining substantive gaps in three key areas — sectorals, SSM and cotton. We should be clear: these are not the only issues still open, not even the most important for many delegations, but without advancing solutions to these three, we would not stabilise the modalities texts overall.

As I said, the outcome of these consultations would be crucial in establishing whether to convene a ministerial gathering to finalise modalities in agriculture and NAMA with higher chances of success than failure.

Since Monday I have conducted targeted consultations, together with the Chair of the GC and both Ag and NAMA chairs, with specific members on these three issues. Several rounds of them, in fact.

My first conclusion is that, from a technical point of view, the issues are not intractable. In fact, from a purely technical perspective, you are not that far from an agreement on those issues.

The bad news is that individual positions — and the position overall — have not changed significantly.

On sectors, the underlying issue is a different understanding of the value of the package on the table. Some understand sectorals as a top-up, a non-mandatory addition to the main package. It would be the cherry on the pie. For others, this is an essential part of the agreement, which can only be finalised if there is a guarantee of commitments. It would be the pie on the cherry. At this stage, these two positions are not reconcilable. My sense is that it would help if we could get a better collective appreciation of the value of what is on the table, and how much of the difference sectorals would make.

On the SSM, there remain differences as to the size of the flexibilities desired. The main architecture of the SSMs, as proposed in the latest Ag text, is basically there but key differences remain on the relationship between the duration of the safeguard and domestic prices.

On cotton, my sense is that both a technical solution as well as the political will was there.

Our assessment, I mean my assessment and that of the chairs, is that on sectors and SSM there continues to be a lack of political will to accommodate the demands from others, or to give comfort to those who cannot accommodate them. The bottom line is that I have not detected the political drive, from my interlocutors, to make the moves which would give the final push to the establishment of modalities on these two issues. My sense is that there was no readiness to spend the political capital needed to get to modalities now. The leaders have expressed a desire, but this has not translated into enough will at this stage. Unless this dramatically changes in the next 48 hours — which is a timeframe that some of your leaders have asked for — this is the reality seen from Geneva.

It has been a tough week, trying and trying again, which is, I believe, my responsibility. But at the end of the day, the responsibility to compromise lies with you. My other responsibility is to preserve our system and to be lucid. My assessment today is that the chances of success in the establishment of modalities in a Ministerial meeting are not greater than they were when I started these consultations on Monday.

In my view, therefore, calling Ministers to try to finalise modalities by the end of the year would be running an unacceptably high risk of failure which could damage not only the Round but also the WTO system as a whole.

Given the late time of the year, the political agenda in some parts of the world in the next weeks, and — I repeat — my conclusions from all the hours of consultations I have held — I do not think calling a Ministerial meeting next week would be wise.

This is of course not more than my own assessment of the situation, coming from my role as facilitator of these talks. Obviously I would not be discouraging any of you from trying to achieve agreement. If you so decide, I of course stand ready to keep consulting, to help you reach an agreement, if your collective view is that you are ready to try in the next few days.

I recognize that this is a disappointment for everyone, one that I fully share. And for many of you it is not just a disappointment; it is an economic setback since it delays much-needed good economic news. And we seriously need to have this in mind as we move forward. However, we need to face reality and act in a way which is consistent with the responsibility we all share for the well-being of the multilateral trading system.

In conclusion, my recommendation to you — again, unless this changes dramatically in the next 48 hours — is that we do not convene ministers to finalise modalities by the end of the year. We have two comprehensive texts on the table. It is the fruit of seven years of work. It puts us closer to the finishing line of modalities. This being so, my sense is that we should now focus on seeing how we gather the necessary political energy into the New Year.

I intend to continue my dialogue with delegations in various formats next week to reflect collectively on the next stages. For this reason I have decided to move the formal TNC to next Wednesday, and an airgram to this effect has been issued today.

Looking ahead, our aims should not change. I do not believe that either the political will to preserve the achievements so far or even the necessity to do so will go away, even more so with the deterioration of the economic situation. On the contrary, it will also become more and more important to reaffirm and defend the basic values of the multilateral trading system and to respect not only the letter but also the spirit of the rules.

That concludes my report to you today. I would suggest that you all handle this with restraint. We have a shared responsibility for the WTO system, and I suggest that what is needed now is some time for reflection and to develop our thoughts on the way ahead. You will all have the opportunity to place your views on the record at the TNC on Wednesday, so I would suggest that no delegation takes the floor this afternoon and that all delegations be given an opportunity to express their views and put them on the record on Wednesday.

Thank you.

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