Report by the Chairman of the Trade Negotiations Committee

The 8th WTO Ministerial Conference will be an occasion for us to review the entire breadth of WTO work and for Ministers to provide political guidance for our future work. 

We all know that these are not ordinary times.  The outlook for the global economy has worsened considerably in recent months.  After the encouraging signals of recovery seen at the end of 2010, risks and uncertainties are now increasing.  Global activity is slowing down, economic performance continues to be uneven across countries, debt levels and financial markets ’volatility are rising, high unemployment persists in many countries, and confidence is falling sharply. 

These risks are aggravated by perceptions that governments’ responses to these challenges have so far been insufficient to provide opinions and markets with a convincing exit strategy framework.  This is the reality that we face as a backdrop against which our meeting will be taking place.  As a result of that, world trade has grown more slowly than expected in recent months.

I believe it is therefore important for our Ministerial Conference to send signals that trade openness can remain a stable trade anchor to the world economy.  The last thing the world economy needs is more cacophony.

You will recall that at the 26 October General Council meeting, I reported in extenso on the elements I had heard from Members at that time on the current and next steps in the DDA.  In reporting on those elements, I indicated that they had been built upon on the basis of incremental convergence and a bottom-up approach, following our well established principle of no surprises.  I also indicated that they were work in progress. I detected broad convergence on these elements.

Since my last report to the General Council on 26 October, I have continued my consultations whose focus has been on part three of the matrix proposed by the Chair of the General Council – elements for political guidance under the DDA.  In my consultations, I have met with a large number of individual delegations, with Group coordinators, and with delegations in various group formats including a focus green-room like group of Members covering a broad range of the membership on Sunday, Monday and Tuesday.  We also had the informal HoDs meeting where the combined elements for political guidance, including on the DDA were shared and discussed with the wider membership.  As always, I have coordinated this work with the Chairs of negotiating and regular bodies and with the Chairman of the General Council.

The elements for political guidance under all three themes were circulated after yesterday’s HoDs in document JOB/GC/15.  I do not intend to read out the elements today as delegations have already had a chance to look at them.  I would only wish to outline a few elements to provide clarity on some of the questions and concerns expressed by some delegations during yesterday’s informal HoDs. 

First, in my consultations I did not hear any signals or proposals to give up on the objectives you set when the Doha Development Round was launched.  What I heard in my consultations is that all Members remain committed to working to deliver on the Doha mandate.  So, the Doha mandate and all the principles enshrined in the Doha Ministerial Declaration, including the single undertaking, transparency and inclusiveness continue to guide our work forward. 

I also sensed in my consultations convergence emerging around the idea that Members advance negotiations in areas where progress can be achieved, in line with our existing provisions that allow Members to reach agreements based on consensus earlier than the full conclusion of the single undertaking.  Obviously it is for the Membership to see which are these areas as it is for the Membership to negotiate and reach agreement.

Lastly, I wish to clarify that in my consultations there was convergence that work should continue on the basis of progress already made and that any agreement reached at any time will have to respect fully the development component of the mandate.  The strong language used in this respect provides clarity on the importance of the development component of our work, which is not relegated in any way simply because it appeared as the last paragraph of the elements for political guidance. 

Let me be very very clear on this point, this is not about re-interpreting the Doha mandate, or re-interpreting the principles included in the Doha mandate.  I hope that these clarifications help dispel concerns that were expressed by some during our meeting yesterday.

Looking ahead, we heard yesterday that one of the sessions during the Ministerial Conference will be devoted to discussing the Doha Development Agenda.  The elements for political guidance provide us with a shared sense of direction. What is needed now is to operationalize these elements.  I would therefore encourage Ministers to use their interventions at the upcoming Ministerial to provide guidance in this respect to ensure that real progress can be achieved in 2012.  Guidance is needed both in respect of where and how progress can be achieved in the shorter term as well as on how to overcome the stalemate in areas where convergence has proven challenging.  In doing so, I believe that Ministers need to address the essential question which in my view is behind the current impasse:  different views as to what constitutes a fair distribution of rights and obligations within the global trading system, among Members with different levels of development.  This is a political question to which a political response will be required.

With regard to the current state of play in each area of the negotiations, my intention is not to read this out at today meeting.  I will circulate the latest developments in all areas of the negotiations as an Annex to this report in a JOB document immediately after this meeting so that it will form part of the records of this meeting.  That concludes my report, Mr Chairman

 

Annex
State of Play in Negotiating Groups

 

In Agriculture, Ambassador John Adank was confirmed as Chair of the Special Session in a formal meeting of the Group on 18 November.  I welcome Ambassador Adank and wish him every success in his tenure.

It is my understanding that the last report (TN/AG/26) dated 21 April 2011 by the previous Chair, Ambassador David Walker, remains an accurate assessment of the status of work on the outstanding issues in the negotiations on agriculture.  Since that report there have been a number of informal consultations as well as bilateral and plurilateral meetings among Members.  On 30 May 2011, in a Room E format, some Members reported on their bilateral and other contacts, including clarification meetings on domestic support and market access.

There have also been recent consultations on cotton, following a proposal from the C-4 contained in document TN/AG/SCC/GEN/11.  These consultations confirmed the commitment of Members to on-going dialogue aimed at progressing the mandate contained in paragraph 11 of the Hong Kong Ministerial Declaration to address the issue of cotton “ambitiously, expeditiously and specifically”.  Consultations also highlighted the value Members continue to place in on-going and regular periodic reporting on the Cotton issue, including through my Consultative process on Cotton.  The consultations have also highlighted the useful work being undertaken within the Consultative process to advance development assistance aspects of the issue.  However, these consultations have confirmed that not all Members are in a position to agree to the C-4 proposal, particularly the interim measure to freeze trade distorting support for cotton at current levels.  When the Chair reported back to the Group many Members expressed support for further efforts to determine whether cotton could be advanced at MC8.

The Chair of the Group has indicated his intention to consult with Members on the organization of future work in the Group, consistent with the outcome of MC8.

On NAMA, the Negotiating Group met in the context of open-ended transparency sessions, Room D sessions and in small-group meetings.  The objective at these sessions was to make progress on the working documents concerning the Ministerial Decision on Procedures for the Facilitation of Solutions on Non-Tariff Barriers (Horizontal Mechanism);  Understanding on the Interpretation of the Agreement on Technical Barriers to Trade with respect to the Labelling of Textiles, Clothing, Footwear, and Travel Goods (textile labelling); and  TBT‑related Transparency issues (transparency) contained in respectively Annexes A, B and C of TN/MA/W/103/Rev.3/Add.1.  The discussion on textile labelling and transparency was based on a list of open issues which the Chairman had circulated in early July.  On the Horizontal Mechanism, apart from a general Room D discussion, no further work was done on the working text.

On textile labelling some progress has been made on the question of scope insofar as there was an understanding reached among the Members of the small group that intermediate products would be covered by the Understanding.  Some outstanding issues remain including country of origin.

On transparency, some progress has also been made and the group has focused on the existing format for the notification of draft measures under the TBT Agreement and examined possible additional elements drawn from the working text on transparency.  Some of the issues which remain include whether or not there is need to identify any parts of the proposed technical regulation or conformity assessment procedure which deviate from the relevant international standard on which the proposed technical regulation or cap is based.   Another issue is who should be able to provide comment and thereby influence the development of draft regulations.  The questions of special and differential treatment and technical assistance also need to be addressed at the appropriate time.

Lastly, the tariff component of the negotiation still represents a challenge and the situation has not changed since the Chair’s April report and my report on my consultations on the NAMA sectoral negotiations.  The future work of the negotiating group will depend on the direction given by Ministers on the DDA at MC8.

Progress in the area of Trade Facilitation is reflected in the 11th revision of the Draft Consolidated Negotiating Text (TN/TF/W/165/Rev.11).  It captures the state-of-play on the text-based negotiations and the progress achieved by the Negotiating Group.  

Based on Members’ views and the positive feedback the Negotiating Group Chair received to his suggestions in the Group’s meeting on 11 November, further negotiations will continue to be based on the bottom-up, transparent and inclusive process that has delivered considerable results and allowed Members to significantly improve the Draft Text and to reduce the number of brackets existing at the beginning of the year by over one-half.  The Group will continue to make use of the facilitator process that Members have developed as a complement to formal meetings of the Negotiating Group, and it will be expanded to cover all elements of the Draft Agreement. 

In order to allow all Members, including those with small delegations, to participate fully and effectively in this work and to ensure that the facilitator process can proceed smoothly without any overlap of activities, NGTF meetings will be held with reasonable intervals in between, leaving adequate time for Members to engage in the inter-sessional activities and to properly prepare for the negotiations in this Group.  Two meetings of the NGTF have been scheduled in the first half of 2012. An additional one-day meeting will be held on 31 January 2012 to organize further work in detail.

Overall, the status of the services negotiations remains largely unchanged since April, as described by the Chair of the CTS Special Session, Ambassador de Mateo, in his latest report (TN/S/34).  The picture with respect to LDCs and services is, however brighter.  The long-standing waiver proposal to cover special treatment granted to LDCs has now reached the final stage.  As outlined in Ambassador de Mateo’s Report (TN/S/37) issued this week, Members have now given their collective support to the draft text of a waiver, to be submitted for adoption at the upcoming Ministerial Conference.

During the past several weeks, Ambassador de Mateo, assisted by Ambassador Johansen of Norway, have put considerable effort into resolving the remaining differences between delegations arising from the draft text.  Credit must also be given to delegations, who exercised flexibility in moving toward their collective support for the text.  I am confident that the decision on the waiver at the Ministerial Conference, and the related granting of preferences by Members, will be effective in enhancing the development of trade in services for the least-developed countries.

On Rules, as you know, at a meeting of the General Council on 26 October 2011, the Chairman of the General Council reported a consensus among Members to appoint Ambassador McCook as Chairman of the Negotiating Group on Rules.  Ambassador McCook expects to call a meeting at an appropriate time so that the Group may confirm his appointment. 

There is little new to report on the Rules negotiations at this time.  On 21 April of this year Ambassador Dennis Francis circulated documents to all participants reflecting the work of the Group on antidumping, subsidies and fisheries subsidies (TN/RL/W/254) and regional trade agreements (TN/RL/W/252).  The documents reflected the efforts made by the Group in late 2010 and the spring of 2011 as well as the movement achieved in the negotiations.  Since that time, there have been no meetings, either formal or informal, of the Group.

As regards the negotiations on the establishment of a multilateral system of notification and registration of geographical indications for wines and spirits, the Chairman of the Special Session of the Council for TRIPS issued a detailed report in document TN/IP/21, dated 21 April 2011.  The report provides a comprehensive and factual representation of the various phases of negotiation, the concerns and interests at stake, the working methodologies used, and the dividing issues.  In particular, it describes the intensive phase of negotiations which took place from January to April 2011, culminating in a Draft Composite Text in treaty language.  This text emanates exclusively from delegations and is contained in JOB/IP/3/Rev.1, attached to the Chairman’s report. 

Since this report, the Chairman held two informal group consultations on 7 July and 27 October 2011.  The purpose of the group consultations was to hear delegations’ views on how best to proceed with future work, including any clarifications and reflections on technical aspects of the low-conflict elements of the Draft Composite Text.  The general view was that the text had laid down the foundation for future work.  On work of a purely technical character on the low-conflict elements of the text, the view was that it would be difficult to proceed with such work at this stage in the absence of greater clarity regarding the overall process.  Another view was that it would not be even be possible to work on low-conflict technical issues as long as the mandate, clearly limited to wines and spirits, was not respected. 

On Special and Differential Treatment, work in the Special Session of the CTD has progressed, albeit somewhat slowly, after April 2011.  Members have engaged constructively on the Agreement-specific proposals and although some movement has been witnessed, positions remain divided on certain aspects of the text that Members have been considering. 

On the Monitoring Mechanism text-based discussions have proceeded on the basis of Chair’s last non-paper. This work has been facilitated by textual proposals tabled by some Members on the preambular language.  In addition, some ideas with respect to other elements are also on the table that, in the Chair’s view, could help advance the work in coming months.  The Chair plans to continue his consultative process after the Ministerial Meeting. 

On Trade and Environment, the Chairman of the General Council reported a consensus among Members to appoint Ambassador Harun of Malaysia as Chairman of the Special Session of the CTE.

On 21 April of this year Ambassador Teehankee circulated documents to all participants reflecting the work of the Group since the intensified work programme in 2010 and early this year including draft texts.  His report also identified areas that would require further attention from Members to bring the negotiations to a successful conclusion on all three parts of the mandate in paragraph 31 of the Doha Ministerial Declaration.  Since that time, there have been no open-ended meetings, either formal or informal, of the Group.

The DSU negotiations, which are part of the Doha Work Programme but placed outside the Single Undertaking, have continued to move forward constructively.  As indicated in the Chairman’s Report to the Trade Negotiations Committee on 21 April 2011 (April Report)¹, the July 2008 text endorsed by participants as basis for further work has brought focus to the discussion and provided a unified basis for continued work²  Participants have engaged in recent work in a constructive spirit and measurable progress has been made in a number of areas.  Specifically, participants were close to an understanding on draft legal text on sequencing, had identified key points of convergence on post‑retaliation, and had conducted constructive work on third-party rights, timesavings and various aspects of effective compliance.³ 

Since the issuance of the April Report⁴, several further consultations have been held.⁵  In this context, participants further discussed flexibility and Member-control, panel composition, strictly confidential information, transparency and amicus curiae briefs, and mutually agreed solutions.  In this period, further consultations were also initiated on remand, effective compliance and developing country interests. During this time, the Chairman noted that participants made substantial progress in particular towards draft legal text on mutually agreed solutions, suspension of panel proceedings and the notification of retaliation measures.⁶  Revised draft legal text has also recently been introduced on strictly confidential information, remand and third party rights, building on recent work in these areas.

Based on the Chair’s recent consultations, he noted that participants appear to be fully committed to continuing to work constructively for the successful completion of this work, toward a rapid conclusion of the negotiations.⁷ The next meetings are scheduled for the week of 30 January 2012.  At that time, discussions will return to remand, strictly confidential Information, panel composition, flexibility and Member-control, third party rights, developing country interests and effective compliance.

Lastly, the two TRIPS implementation issues of GI extension and TRIPS-CBD have been the subject of the technical consultations I have been holding in my capacity as DG and not as TNC Chairman.  The consultations with a small group of delegations representing the various positions were, as mandated by paragraph 39 of the Hong Kong Ministerial Declaration, regularly reported to the TNC and the General Council.  My last written report, which covers the period from March 2009 to April 2011, is contained in document WT/GC/W/633 — TN/C/W/61, dated 21 April 2011.  It summarizes the process and the main points addressed by delegations.  Since this last report, there have not been any consultations.

 

Notes:

1. See TN/DS/25.Back to text
2. See Annex A to TN/DS/25.Back to text
3. See the Chairman’s summaries of work in Annex B of TN/DS/25.Back to text
4. See the Chairman’s report to the TNC in TN/DS/25.Back to text
5. Meetings were held in the weeks of 3-13 May, 20 June, 29 July, 26 September and 14 November 2011.Back to text
6. See the Chairman’s summaries of recent work in JOB/DS/1, JOB/DS/2, JOB/DS/3, JOB/DS/4 and JOB/DS/5 (to be issued).Back to text
7. See TN/DS/M/35.Back to text