Global Policy Forum

By Martin Khor

Negotiations seemed to have been put "on hold" at the World Trade Organisation as delegates in Geneva awaited the outcome of a Ministerial meeting in London Monday involving the US, EU, India and Brazil. The meeting, to be held in the Indian Embassy, starts in the afternoon and was expected to continue to late night. Although agriculture is expected to still be the main focus, other issues especially services and NAMA (non agricultural market access) will also be discussed.

The EU is particularly insistent that these other issues be covered simultaneously, although the other members would like to focus on agriculture, according to a diplomatic source. This is because the EU has linked its 28 October agriculture offer to others accepting its demands on services and NAMA. Ahead of the meeting, the Indian Commerce and Industry Minister Kamal Nath has written a letter to Ministers of all WTO members, asking that they put development concerns ahead of market access concerns, and stating in brief the Indian position in some areas.

On Tuesday, the action will shift to Geneva. A "Green Room" meeting is scheduled to be held in the afternoon, with more than 20 Ministers expected to take part. Whether Ambassadors of some countries will also be invited is not known. Before that, the WTO Director-General Pascal Lamy is expected in the late morning to meet with the Chairs of the various negotiating groups, presumably to brief them on the London meeting's outcome.

Resulting from the meetings on Monday and Tuesday, which may also spill over to Wednesday, a clearer picture will emerge on whether there is enough "convergence" on the various issues for the Hong Kong Ministerial conference to deliver key decisions such as the modalities for negotiations in agriculture and NAMA. Hopes that Hong Kong will produce "full modalities" (with numbers attached to the formulae) have already faded, even for agriculture, where most of the negotiating energy has been spent in recent months. It is even more difficult to envisage full modalities for NAMA, where most issues remain unresolved.

If the London and Geneva meetings conclude that the "level of ambition" envisaged for agriculture cannot be fulfilled, or at least that a final agreement cannot yet be made, a decision has to be taken whether to intensify the agriculture negotiations until and at Hong Kong, or whether to have a so-called Plan B of lowering expectations on what Hong Kong can achieve. The agriculture talks are key to what will happen in the other areas. The EU has linked its present agriculture offer to extreme demands on developing countries to open up in NAMA and services. The agricultural exporting countries such as Brazil will not agree to the high demands unless the EU and US improve their agriculture offers.

The other developing countries that do not have offensive interests in agriculture are understandably worried that they will be asked to sacrifice themselves, to open up their markets in all areas (including agriculture) to satisfy the demands of the EU and US so that the latter can make the concessions in agriculture that will just about satisfy the agriculture demandeurs. In this scenario, they have nothing to gain and everything to lose. Their other concern is that they will be railroaded into accepting decisions made by others, including at Tuesday's Ministerial super-Green Room. Some have already voiced complaints (most recently at the heads of delegation meeting last Thursday) that the negotiating process is not transparent or participatory.

A major grievance is that Ministerial texts are being drafted by Chairs of negotiating groups "on their own responsibility" and that the views of many countries and groupings are consistently ignored, even after they have proclaimed themselves. This is particularly so in the services negotiations. Last Friday afternoon, a new revised draft Ministerial text on services was issued by the chair of the services negotiations, Ambassador Fernando de Mateo of Mexico.

Yet again the item "numerical targets and indicators" appears as one of the Approaches in the new draft, despite repeated calls on him at successive meetings to remove this item by a wide range of developing countries and their groupings, which made numerous statements objecting to this "benchmarking" concept being introduced at the Hong Kong Ministerial. In agriculture, such a "Chairman decides" method of drafting text is almost unthinkable, as delegations have such strongly entrenched positions. The chair of the agriculture negotiations, Ambassador Crawford Falconer of New Zealand, actually called a meeting just to ask about 20 of the Members if they wanted him to draft the Ministerial text or whether they preferred to do it themselves, a question that the services negotiations Chair never put to his group.

At a brief informal meeting on agriculture open to all members on Monday, Falconer reported that the 20 Members said they wanted to produce their own draft text and asked him not to do so. He told the meeting that on 3 November he consulted with a group of about 20 representative delegations on one key question: whether he, as chairperson, should produce a chair's text. The reply was a solid "no". "I don't think I've seen so much unanimity in a meeting like this in a long time," Falconer remarked.

The response confirms the members' desire for the process to be "bottom up" (i.e. coming from the members themselves). With ministers meeting in various places this week, delegations said they would rather wait for the outcome before considering this question again, he reported. Falconer said he will hold another information meeting on 11 November. He alerted them to some "practical consequences". If they do decide to ask the chair to produce a text, he would not be able to complete the drafting until 21 November at the earliest if the text is to have "some air of legitimacy to it". The time would be needed for a week to 10 days of intensive consultations on the draft, allowing time for comments as well, he said. He repeated that he would not draft by hiding himself away and producing a text out of thin air.

Meanwhile, ahead of the London meeting, the Indian Commerce and Industry Minister, Kamal Nath, has written a letter to all other Ministers of WTO member countries, which he also released at a press conference in London. The letter emphasised that development must occupy the centre stage in the trade talks, as barely a month remains for the Hong Kong Ministerial, yet the real issues remained clouded or are being pushed into the background.

The Minister cautioned that the negotiations launched at Doha were called the "Development Round" and not a "Market Access Round" and hence, "our endeavour should be to ensure success at Hong Kong without glossing over the critical aspects - aspects which form the very basis of a Development Round or else there will be no success". The WTO is not about free trade alone, he stressed. Underlining that agriculture in developing countries like India is not commerce and criticising the demand of some members for "real" market access in agriculture, Mr. Kamal Nath said it undermined the policy space for developing countries and the agreement to make special and differential treatment for developing countries integral to all aspects of the negotiations, as a result of the Doha mandate and the July framework.

They would also distract from the real need to ensure a level playing field for developing countries. "Tariff reduction is not the only pre-condition for market access. For real market access to accrue, it is also necessary that export subsidies, domestic support and non-tariff barriers are eliminated", he said. Nath said India remained committed to the G-20 offer of 12th October 2005, which called for proportionately lower commitments by developing countries than those by the developed countries, and full satisfaction on the effectiveness and operational content of Special Products (SPs) and Special Safeguard Mechanism(SSM) to enable developing countries to meet their food security, livelihood security and rural development needs, without restriction or limitation. Mr. Nath also welcomed the proposal of the ACP countries who had come forward with a generous offer despite their known capacity constraints.

On NAMA, he expressed concern over some recent proposals suggesting norms for tariff reduction from applied rates, saying that these were totally extraneous to the mandate and again rejected any single co-efficient formula for developed and developing countries as a complete non-starter. Commenting on the slow progress of the services negotiations, he noted that the architecture of the GATS (General Agreement on Trade in Services) provided flexibility to developing countries to undertake commitments in services according to their ability and needs. The Minister said the proposals based on quantitative targets on a one-size-fits-all basis was not acceptable.

Mr. Nath indicated that developing countries had sought amendments in the TRIPS Agreement to prevent bio-piracy of biological material and to prevent misappropriation of their traditional knowledge. "We also need to ensure that the flexibilities that were agreed to for arriving at a decision to address public health issues in August 2003 are observed in letter and in spirit to deliver development goals, and for that we support an amendment in the TRIPS Agreement to bring in these flexibilities", he said.

Substantive progress must also be made on the constructive proposals put forward by developing countries on development and implementation issues, he said and urged that members agree on a special and differential treatment (S&D) package for the LDCs, especially duty-free and quota-free access to LDC exports in developed country markets. He cautioned against "divisive" attempts to disrupt the basic structure of the GATT/WTO by creating a new category of WTO members called "advanced developing countries", which he said could derail the negotiations.

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