Director-General Pascal Lamy’s statement
Formal Trade Negotiations Committee meeting,
22 July 2013

At the last TNC meeting in June, many of you looked to July as a marker in the process of preparing Bali. There was a general sense that in this month of July, Members should be able to evaluate whether they would realistically be on course to deliver significant outcomes in December in the three areas that have been the focus of your work — trade facilitation; agriculture and S&D/LDC issues. And let me be clear about what I have heard consistently from all of you: Bali is about delivering results negotiated in Geneva, not about negotiating results.

We are now at the point I referred to previously as “the last petrol station on the Bali highway”. So today, the question needs to be asked: are Members on track to deliver on their DDA objectives for Bali? To assist you in formulating your assessment, I will begin by providing a factual state of play in the three potential Bali deliverables and then share my overall sense of the situation. My hope is that our discussion this afternoon will assist your reflection during the summer recess as you intensify your efforts in the autumn, looking to MC9.

First, Special and Differential Treatment. In recent weeks, work in the Special Session of the Committee on Trade and Development has focused on the 28 Cancún Agreement-specific proposals and the Monitoring Mechanism. The Chair has consistently engaged with experts in the Committee and elevated to the level of Ambassadors where necessary to unlock the issues on the table. This has proven valuable in resolving some issues and providing momentum to the work of the Committee.

Regarding the 28 Cancún Agreement-specific proposals, work is proceeding not only on the six proposals that had initially been identified as having been impacted, but also on the remaining 22. Members are continuing with “step one”, an exploratory phase, to consider these proposals and better understand what they mean in a 2013 context. Members will then move to “step two”, that is, take decision on whether to adopt these proposals. While this work is on-going, I believe it needs to be fast-tracked to get the necessary traction. Let me also remind Members of the understanding that the stocktake of these proposals is about updates, and not renegotiation. These proposals enjoy an “in-principle” agreement.

Work on the Monitoring Mechanism has continued to advance steadily. There has been a good level of conceptual clarity, but work still remains to translate this into drafting language. I encourage you to maintain the signs of flexibility that have emerged, continue to be pragmatic at the technical level and devote the remaining time to delivering a good quality outcome.

Finally, on the six Agreement-specific proposals, the Committee believes these could be better addressed post-Bali.

Let me now turn to the four LDC issues — duty free, quota free market access; rules of origin; cotton; and implementation of the LDCs services waiver. Ambassador Smidt, the Facilitator for LDC Bali deliverables, began his consultations in June. A first round of discussion took place on all the four proposals forming part of the LDC Bali Package.

I understand that more work is required to find common ground with regard to the proposal on the implementation of the Hong Kong DFQF Decision. In a few areas, the LDCs are continuing their own work to table operational proposals for Members’ consideration, some of which I believe are to come during the summer break. So, the LDC Bali package is in the making, but at this point, the ball is in the court of the LDCs. I hope the LDCs will be fully prepared to take forward their proposals after the summer break, and that Members would be able to put forward a meaningful package for LDCs at Bali.

Since we are on LDC issues and although this is not within the TNC framework, I would like to welcome the Decision adopted by the regular session of the Council for TRIPS on the extension of the transition period for LDCs under Article 66.1 of the TRIPS Agreement. It shows that Members are able to surmount their differences and negotiate to close gaps.

Turning now to Agriculture, starting with the proposal concerning public stockholding for food security and domestic food aid. Consultations on this proposal have been held based on the four questions initially outlined by the Chair in April 2013. Debates have been very engaged and at a basic level some elements of potential convergence have begun to emerge.

Overall there seems to be some convergence emerging around declaration/communiqué language for Bali that would recognize, in general terms, that the policies and programmes mentioned in the first part of the G-33 proposal - with some suggested modifications - could be considered to fall within the scope of “General Services” of Paragraph 2 of Annex 2 to the AoA. But with the proviso that the declaration makes clear that the chapeau contained in Paragraph 1 of Annex 2 would fully apply to such policies and programmes.

The response to a political message to be delivered in Bali recognizing the role played by public stockholding in developing countries has also been positive at a general level. However, differences remain between those who have expressed their readiness to start working without delay on a text for a possible Bali Communiqué or Declaration and those who consider that the debate on this issue should take place once the “contours” of the possible outcome on the other elements of the G-33 proposal are clearer. Different opinions have also been expressed on a possible “due restraint” statement along the line of the 2001 Implementation decision. The discussion in this area has also been in the minds of many members linked to the discussion on the other elements of the proposal.

So, while no consensus has been reached on any specifics of the potential elements to be included in the Bali outcome text, I believe that as Members reflect further, a broader convergence becomes possible on this political messaging issue.

Regarding the question of a potential amendment or interpretation of existing WTO AoA disciplines, the situation remains the same. Members’ opinions are still divided between those favouring a general systemic solution to the issue for Bali (through an amendment or interpretation of the existing rules); and those questioning whether such amendment or interpretation is either possible or desirable by Bali.

Finally, the question of a possible interim mechanism that might provide for some additional flexibility for specific Members has been the focus of quite a lot of discussion. This question has made probably the most progress since May. Different positions on the threshold conditions and the main characteristics of a potential mechanism have been expressed more clearly and some elements of convergence have been starting to emerge. For example, that the mechanism could: (i) cover public stockholding programmes of developing countries related to food security; (ii) be applicable to staple crops, given the food security focus; (iii) that its use could be subject to an on-going provision of information that would allow members to monitor the situation; (iv) that members could look at safeguards or guarantees aimed at avoiding potential spill-over effect on markets; and (v) that the Committee on Agriculture would be the appropriate home for the mechanism in terms of notification and monitoring discussions.

There is also a general sense that any flexibility delivered under a mechanism should be time-limited and the mechanism itself should be an interim one. The word “interim” meaning that the mechanism should provide some additional breathing space for Members having trouble respecting their commitments in respect of public stockholding for food security programmes while working to find a more lasting solution. Among the threshold conditions to access the mechanism, it has been also generally suggested that the Member must find itself in a situation of near-breach of its commitments.

Despite this good progress, some issues remain. These include notably the question whether the flexibility delivered under such a mechanism should be i) automatic; ii) non-automatic; or iii) a hybrid arrangement that would involve some degree of automaticity as well as case by case elements. A related question here is the nature of the flexibility delivered under any self-executing or automatic mechanism. Some Members have also highlighted that any such mechanism would need to provide legal certainty to ensure that members were not challenged under the Dispute Settlement mechanism.

In order to help to take the debates forward, Norway introduced a new idea in the last CoA Special Session on 18 July permitting some flexibility in the level of administered prices. No delegation rejected this idea and most expressed interest in working further on it.

In summary, the discussions in this area have moved into serious consideration of the parameters of possible solutions. Moving towards convergence is doable, but remains to be done.

Now, moving to the G-20 proposal on export competition, the Chair had consultations in various formats to get a better sense of where Members stand. On one hand, the G-20 and a group of other Members clearly want a step forward in Bali on export competition, including in terms of legal commitments. This position is presented as in keeping with the 2013 deadline agreed in Hong Kong in 2005 for the elimination of all forms of export subsidies, which was of course also incorporated in the Rev4 draft modalities text.

On the other hand, some of the Members with the largest export subsidies commitments have underlined that, while they remain committed to the elimination of export subsidies and ready to reaffirm this commitment, the conditions under which they could modify the legal commitments in the field of export competition are in their view not met. And this notwithstanding the fact that their actual use of export subsidies has significantly decreased in recent years. For them, the text agreed at Hong Kong in 2005 and the Rev 4 text was conditional upon the overall conclusion of the Doha Development Agenda, as was the implementation of the rev 4 text overall. A partial implementation of the export competition pillar — or even the full implementation of the export competition pillar without accompanying delivery of other key elements of the Doha package — is therefore not seen by these Members as a viable option for the Bali meeting.

There is also another group of Members with export subsidy commitments who point out that the G20 proposal would have real practical impacts for their use of export subsidies rather than just “cut water” out of their scheduled commitments. While not ruling out a discussion, these members have pointed to the additional difficulty this would cause and highlighted, along similar lines to the previous group of members, that any move in the direction of the G20 proposal would only be possible in the context of a wider package of reform both across and beyond the agriculture pillar of Doha.

This topic now urgently requires in-depth reflection by Members on the various options available, so that the discussions can restart immediately after the summer break. In my view this is a political issue which will require political input.

Regarding the G-20 proposal on TRQ Administration, Members continue to see this as a useful one to explore for possible decision in Bali. The Chair intends to return to this proposal after the summer break.

Finally, Trade Facilitation. Last week’s meeting of the Negotiating Group on Trade Facilitation ended on a positive note. Further progress was made in cleaning up the text of the draft agreement, including some narrowing of the gaps on Section 2 of the draft text that deals with implementation flexibilities for developing countries and LDCs.

Plans were made for finalizing the negotiations in the autumn, in time to present the results to Ministers in Bali. The Chairman of the Negotiating Group has set out a three track programme for the negotiations:

• First, further technical scrubbing of the text.

• Second, a more political, negotiating process engaging capitals to resolve differences that go beyond (or lie behind) technical issues. More involvement from capitals will be required in the negotiations in the autumn to inject the authority to negotiate compromises and work out solutions at a faster pace than Members have been managing so far.

• Third, technical and legal work on parts of the draft Agreement that have been left to one side for the time being, such as pre-amble language, cross-cutting issues and institutional arrangements. In order to get that work off to a quick start in the autumn, Members have been asked to submit proposals by the beginning of September on the matters covered by Articles 13 and 15 of the consolidated draft text.

When you resume after the summer break, you will need to be fully focused on the sensitive areas where consensus is not yet there: customs co-operation; transit; PSI; Customs brokers, consularization fees, which were already mentioned in the last TNC, as well as sharpening section II, if you are going to arrive at the finishing line in time.

Let me now briefly mention DSU review negotiations. In the week of 10 June, the Chairman of the DSB Special Session consulted a group of delegations on essentially all outstanding issues in the DSU negotiations. The Chairman invited proponents and other interested participants to conduct a focused exercise among themselves to explore solutions on all outstanding issues. The Chairman’s report on work in the week of 10 June is available in document JOB/DS/15.

The Chairman will hold further consultations at the end of July to take stock of progress among participants and to discuss the way forward in the negotiations.

This concludes the overview of the state of play.

My overall assessment from this state of play is that the road to Bali is much clearer than two months ago. There has been a relatively good level of refuelling from all formats of consultations including in negotiating groups and facilitator/friends of the Chair processes. Also encouraging is the increased level of momentum in substantive engagement. I believe that today, we have a much sharper sense of the key issues that remain for urgent decision and the links between. I also believe that you are in a better shape to resolve these issues in the time between now and Bali. I would say that the glass is two-thirds full. You are on track to deliver concrete outcomes in the three deliverables at the year’s end.

But it would also be fair to say that you are not yet there. As we all know, the third part of the glass is no small beer! There remain only three months between now and Bali. You must make them count by sustaining this renewed momentum and remaining focused in your final stretch from the autumn.

This is the 53rd and last TNC that I chair. It is an occasion for me to thank all General Council Chairs with whom I have worked, as well as all thirty-three Chairpersons of the negotiating groups with whom we have tried to help advance the Doha Round negotiations.

Thanks also go to you, the Members. I hope that in the busy period ahead, you will keep in sight the real importance of what you are engaged in here — the completion of the first multilateral trade round since the creation of the WTO. The Doha Round must be completed. That is the real deadline. And Bali is a test of whether or not this final deadline will be achieved.