Let me welcome you to this informal meeting of the Trade Negotiations Committee.

As mentioned in the convening fax of 21 May, the purpose of today’s meeting is to report back to you on my recent consultations and contacts and to continue our review of progress on the three Bali potential deliverables — trade facilitation, agriculture and S&D/LDC issues.

At our last meeting, we collectively faced up to the reality that the pace of substantive engagement to successfully deliver in Bali was wanting.  In realization of the heavy responsibility that confronted us all, not only for Bali, but also for the future of the DDA and the WTO’s negotiating function, we all committed to a set of prescriptions — changing course; urgently engaging substantively; seeking necessary political will and flexibility from capitals and displaying mutual trust and realism.

Since our April meeting, the continuous intensive process in negotiating groups has started to bear some incremental progress. My sense is that there is comfort with the process of negotiations in groups led by Chairs.

But on the negotiating mode, we are yet to see the kind of flexibilities that are needed in an endgame negotiation.  We all know that process, however good, is not enough to deliver.  It is substantive engagement that holds the key. And here time is turning against us.  We are entering the red zone.

Let me briefly share with you the state of play on the three areas for Bali deliverables starting with agriculture.

Intensive consultations have continued on the G-33 proposal concerning public stockholding for food security and domestic food aid on the basis of the four questions posed by the Chair to facilitate the search for convergence.

Some progress has been made on elements of political convergence which have begun to surface such as willingness to work on declaration/communique language that would recognize in general terms that the policies and programmes mentioned in the first part of the G-33 proposal could fall within the scope of “General Services” of Paragraph 2 of Annex 2 to the Agreement on Agriculture. Together with a political message on the role of public stock holding in developing countries.

On amendment or interpretation of existing agriculture disciplines, the views on this issue span a range of different options, none of which is the subject of any consensus at this stage.  The main concerns expressed regarding an amendment or interpretation have been: (i) the unfeasibility of the “one-solution-fits-all” approach given the differences in the situations the proponents find themselves in and ii) the complexity of the issue which many see as only resolvable as part of a much broader agricultural negotiation, which cannot happen in the short time left before Bali.

Some Members have indicated an openness to consider a mechanism/process that might provide for some additional flexibility for specific members on the basis that this would be time limited, non-automatic, and create no or minimal trade or production distortions. Such flexibility should not be at the expense of economic reforms and transparency - notably through timely notifications - would be an important element in monitoring any flexibility.  Some Members also stressed that whatever the temporary solution, it should be an operational one and should not be a substitute for a broader solution.

So, on the key outstanding issues raised by the proposal we have made progress towards framing the debate appropriately. This is just at conceptual stage and let me stress that obviously none of this is agreed or even accepted as the possible avenue to solve this matter. So you can see on this point, what is needed is to explore further a possible landing strip working out the specifics. This will be the focus of the Chair’s continuing consultations.

The G-20 proposal on export competition was circulated on 21 May 2013 (Job/AG/24). The preliminary and varying reactions to this proposal indicate that a more in-depth exchange of views to seek to identify the way forward is urgently required and the Chair will be working in this direction.

Finally, further to the discussions held over the proposal on TRQs administration, it seems to be in a reasonably good shape.

On Trade Facilitation, further progress has been made on improving the draft Trade Facilitation agreement through negotiations conducted by the four Friends of the Chair.  This allowed Members at the NGTF meeting on 24 May to eliminate a further batch of square brackets from the text. It also produced convergence on other parts of the text that can hopefully be turned into consensus during the new phase of negotiations by the Friends of the Chair that has just begun.

But the progress that is being made is still not fast enough to provide assurance that we are on track to produce a good result for MC9. What is needed now is more signals of flexibility of the kind displayed at the Senior Officials meeting in May. The key issue is how to build consensus, especially on those areas which require a higher level of political intervention such as customs cooperation and transit, as well as on other issues such as pre-shipment inspection, customs brokers and consularization fees.

There is also the issue of Section 2, which provides flexibility for developing countries to implement the binding disciplines in Section 1. These flexibilities are about developing countries scheduling commitments under categories A, B and C, according to their ability to implement them, coupled with technical assistance based on needs assessments. The key now is to synergise both parts of the agreement so that the flexibilities in section 2 are used constructively to move the substantive disciplines in Section 1.

Last week’s negotiations showed that the key in this area is not so much whether assistance is available, which it is, but rather finding a way to better link needs with available assistance.

The Friends of the Chair have indicated that they will expect Ambassadors to become involved in the negotiating sessions alongside the technical experts, where they feel that this can lead to progress.  Members need to invest now in making the breakthroughs that we need to see before the end of July.  No-one can seriously expect that the many areas of disagreement that still exist in the text can be left until the autumn and can then be sorted out in time for Bali. We need to start removing less conflictual brackets now.

In my view, there are three ways of removing brackets: agreement on substance; agreement to disagree and papering over disagreement with ambiguous or with best endeavour language. Experience of GATT/WTO negotiations pleads, I believe, broadly, for the first two options.

On Special and Differential Treatment, the Chair has intensified work on the three clusters of work.  Ambassadors and Heads of Delegations are now being engaged.  In the two meetings held so far on the Monitoring Mechanism and the Cancún agreement-specific proposals, positive advances have been made which could potentially translate into concrete progress in the coming weeks.  Further such consultations are planned.  We need to show similar progress in the six Agreement-specific proposals, relating to the Sanitary and Phytosanitary Measures Agreement and the Import Licensing Procedures Agreement to present a credible development package to Ministers in Bali.

On LDC issues, the LDC Group submitted their proposal on an LDC Package for Bali which was circulated to delegations last Friday in document TN/C/W/63.  I would like to commend the work of the LDC Group.  The package that the LDCs are proposing to form part of a Bali outcome includes essentially four areas: implementation of the Hong Kong DFQF Decision; preferential rules of origin; cotton; and operationalization of the LDC Services Waiver. Ambassador Smidt acting as my Facilitator for the LDC proposals for Bali will now begin his consultations to advance the work needed for a meaningful LDC package for Ministers’ consideration at Bali.

This was the thrust of the message I delivered to Ministers last week, both at a small gathering of trade Ministers hosted by the Australian Minister in the margins of the annual OECD Ministerial meeting in Paris and during the bilateral meetings I held.

In Paris, I asked two questions of Ministers:

(i) Whether they were all ready to ensure that by the end of July, the contours of landing zones would be in sight. 

(ii) Whether in particular the so-called “majors” were ready to be more flexible in their positions by moving more to the middle and not simply asking others to move where they were.

From our discussions, it was encouraging to see the realism, focus and determination that Ministers displayed in their evaluation of the state of play, the immediate next steps and their expectations for MC9 and beyond.

They expressed concern that the negotiations were not on a path that provided confidence of success in Bali.  Ministers acknowledged that not making progress in Bali would have damaging implications for the future of the Round and the credibility of the multilateral trading system.  Therefore, something significant, substantive and credible had to be done as a building block for work after Bali to pursue the DDA.

Ministers acknowledged that holding up progress in one area over demands in another was not a productive approach. In order to unblock this situation, Ministers instructed their negotiators in Geneva to test various options and explore landing zones in a more focused, intensified manner on a “without prejudice” basis in all three areas.

Before I conclude, let me briefly mention the Dispute Settlement negotiations, where the Chairman of the DSB Special Session Ambassador Saborío, is now launching a new phase of the DSU negotiations on the basis of consultations he held last month with delegations.  As the first step of this new phase, the Chairman will now consult a group of delegations on essentially all outstanding issues in the DSU negotiations.  At these consultations, the Chairman will invite proponents and other interested participants to follow up with a focussed exercise among themselves to explore solutions on specific issues.  The Chairman intends to assist this exercise and ensure its transparency for all delegations.

This concludes the overview of the state of play.

We have about 40 working days left before the end of July, which I see as the last petrol station before the Bali highway. We must make substantive advances in this period if we are to have any chance of successfully delivering in Bali and preparing a post Bali roadmap.

As Bali host Minister, H.E. Gita Wirjawan stated in his letter of 15 May to all your Ministers, if we are to harvest tangible credible outcomes in Bali, we will need to find more flexibility, narrow our difference and adopt an approach centred on practical solutions.  In other words, there needs to be more direct engagement in negotiating solutions and moving closer to the middle.  This also implies not asking others to move to where you are.  Above all, compromise and a strategic commitment to safeguard the credibility of the WTO and its negotiating function are required.

Urgency is the word and trade-offs based on flexibilities are the means to fuelling our journey.