Cablegate: May 2005 Meeting of the Wto Trade Negotiations Committee

Published: Mon 23 May 2005 09:43 AM
This record is a partial extract of the original cable. The full text of the original cable is not available.
E.O. 12958: N/A
1. The 19 May 2005 meeting of the WTO Trade Negotiations
Committee lasted only one-half day, with most Members either
restating well-known positions or refraining from intervening
altogether (including the United States, Japan, European
Communities and Brazil). The limited engagement was primarily
due to the short time period since the last TNC meeting, which
was held on 28 April 2005, with only trade facilitation and rules
(regional trade agreements) negotiating groups having met during
the intervening period. While the meeting was brief, the tone
was more upbeat than the April meeting, reflecting Members'
relief that agreement had been reached, at the Paris mini-
ministerial meeting, on the ad valorem equivalents (AVE)
"gateway" issue for agricultural market access negotiations.
Many Members also welcomed that substantive discussion had begun
on certain "agreement-specific" special and differential
treatment proposals within the Committee on Trade and Development
Special Session. The Services Council Special Session Chairman
made a downbeat assessment of the state of his group'
negotiations, noting that 39 developing countries and 31 least-
developed countries still had not made initial market access
offers (now two years overdue). Notwithstanding the general lack
of progress in services, several Members expressed appreciation
to Canada for making the initial revised services market access
offer. Switzerland and several developing countries emphasized
the need to maintain a transparent and inclusive process leading
up to the July and beyond.
2. There were many comments on the likely form of the "first
approximation" for the July 2005 General Council meeting. There
seems to be a general acceptance that the Chairman will issue a
report that takes stock of progress in the negotiations in all
areas, but also identifies significant gaps that will need to be
overcome to serve as a "roadmap" for the negotiations leading up
to the December 2005 Hong Kong Ministerial Conference. Members
also seem to appreciate the need for greater specificity, at this
point, in some negotiating areas, notably agriculture and non-
agricultural market access (NAMA), than in others. The TNC
Chairman provided an oral status report on "implementation-
related" issues, pursuant to Article 12 of the Doha Declaration,
noting some positive signs, but continuing divergences of views.
He urged Members to "redouble" their efforts on these items. He
will report further on the items at the July 2005 General Council
meeting. The Chairman ended the meeting without scheduling a
date for the next TNC meeting, preferring to use informal
meetings and consultations to generate momentum through inter-
linkages across all negotiating areas. End Summary.
Chairman's Report on the
Status of Doha Negotiations
3. TNC Chairman Supachai's introductory comments were generally
upbeat, noting that the situation had brightened since the April
meeting as a result of renewed impetus received from ministers.
With only 30 working days remaining until the July 2005 meeting
of the General Council, it is important to coordinate work in
Geneva with ministerial gatherings taking place elsewhere.
Supachai does not envisage a package of decisions to be taken at
the July meeting, as was done in 2004, but there is a need to
provide ministers a clear picture of where to focus work in order
to make Hong Kong a success. The substantive basis for the July
report will need to be developed within the negotiating groups,
but it is already evident that there will be different levels of
specificity for various areas of the negotiations.
4. Supachai briefly summarized his perceptions of the
developments in the principal negotiating areas. Beginning with
agriculture, the agreement on ad valorem equivalents was seen as
a positive sign, although further technical work, notably in
verification, is required in order to enter into the hard work of
developing a market access methodology. Supachai is hopeful that
the agreement on AVEs will lead to a "knock on" effect in other
negotiating areas, particularly in NAMA. While there are five
formula proposals for NAMA, the divergences are considerable.
Supachai noted satisfaction that the Committee on Trade and
Development (CTD) Special Session is now discussing substance,
rather than process, with respect to agreement-specific special
and differential (S & D) treatment proposals. Supachai's
assessment of the status of the services negotiations was
downbeat, particularly critical of the Members that have not yet
submitted initial offers, now two years overdue. Supachai will
write a second, stronger letter to ministers of Members that have
not yet submitted their initial market access offers. Supachai
recognized that good progress was being made in the trade
facilitation negotiations, with quite a number of new proposals,
including many from developing countries. He noted that the
Rules Group had met earlier the same week to discuss regional
trade agreements and will meet end May to discuss other areas.
Supachai observed that while there has been good engagement in
Rules, "concrete progress is needed as soon as possible."
"Implementation-Related Issues"
5. In his capacity as WTO Director General, Supachai reported on
the consultative process for "implementation-related" issues. He
recalled that the consultations were taking place in two tracks,
one track for extension of geographic indications (GI), and
another track for all other proposals pursuant to paragraph 12 of
the Doha Declaration. Supachai summarized the status of the non-
GI items, as groups: relationship between TRIPS and Convention on
Biodiversity (CBD); transfer of technology; balance of payments
(with a focus on the tiret 3 review); services (where some
Barbados will provide greater precision to St. Lucia's proposal
on redistributing negotiating rights); TRIMS tiret 40; customs
valuation agreement (CVA) proposals; safeguards (where the
proponent has reserved possibility to return to the discussion in
the future); and TBT. Supachai described progress overall as
modest, but he is hopeful that some substantive results are
possible, without specifically identifying which items he had in
mind. He did indicate that for several items, including CVA,
safeguards and TBT, there does not appear to be any clear way
forward, and, in the case of TRIMS, that a political decision
would be required. For GI extensions, the Secretariat has
prepared a compilation of views on the relevant technical issues,
but it is clear that differing views remain on the desirability
of extending GI protection. He intends to propose, at the next
General Council meeting, that the process be continued on both
tracks, with a report to be made at the July 2005 General Council
Reports from Negotiating Group Chairs
6. The Council for Trade in Services Special Session Chairman
reported that only one new initial offer, from Brunei, had been
submitted since his last report, bringing the total number of
initial offers to 53 (with the EC counted as one). Seventy
Members, 39 developing countries and 31 least-developed
countries, still need to submit initial offers. He recalled the
May 2005 deadline for submitting revised offers and noted the
recent receipt of the first such offer from Canada. At the next
services meeting, the Chairman intends for the Group to assess
the number and quality of offers, consider the development of
analytical tools, consult on special and differential treatment,
and further work on modalities for least-developed countries.
7. The NAMA Chairman said work at the meeting to be held during
the week of 6 June 2005 will focus on unbound tariffs and AVEs,
in light of developments in the agriculture negotiations. There
will also be a brainstorming session on non-tariff barriers.
There have been five proposals on the formula approach, but there
is no sign yet of possible convergences. The NAMA Chairman
encouraged Members to intensify consultations among themselves,
because the June meeting is the last scheduled NAMA meeting
before the July General Council.
8. The Committee on Trade and the Environment Special Session
Chairman reported progress efforts to develop, by the Hong Kong
Ministerial, a list of environmental goods for tariff reduction
or elimination pursuant to paragraph 31(iii) of the Doha
Declaration. The Secretariat has prepared a compilation of
environmental goods drawn from five proposed lists of goods.
The Chairman called for a more broad-based participation in the
discussions and encouraged developing country Members, in
particular, to submit proposals for product lists. The next
meeting of the CTE Special Session is scheduled for 7-8 July, but
the Chairman is prepared to convene a special meeting in June, if
new proposed lists are received. The Chairman noted that gaps
need to be narrowed with respect to the subparagraphs 31 (i) and
(ii) (relating to multilateral environmental agreement elements)
of the Doha mandate.
9. The Dispute Settlement Body Special Session Chairman said
there had been a single meeting since the April meeting of the
TNC, but he "did not want to overstate progress, since there had
not been much convergence." He expects the July result in this
area to be a report on the discussions thus far and an indication
of what the group hopes to accomplish for Hong Kong. However, he
does not expect to achieve agreement on the elements of the Hong
Kong result by July. While the Chairman recognizes the need to
move to a text-based discussion, he cautioned Members that he
cannot be expected to pull a draft out of thin air.
10. The Negotiating Group for Trade Facilitation Chairman said
the May 2005 trade facilitation meeting had a constructive
atmosphere and a de-politicized discussion. The group had made a
notable achievement in framing issues and there are now 32
proposals for modalities, with roughly two-thirds of such
proposals coming from developing countries. The Chairman
observed that all the proposals aim to simplify and reduce import
and export procedural requirements, strengthen transparency and
due process, and incorporate elements relating to special and
differential treatment and capacity building.
11. The Rules Negotiating Group Chairman said there were
elements of progress on regional trade agreements. For
transparency of goods agreements, there had been a revised note
from the Chairman containing points of convergence in
notifications, presentation and reviews. The Group also recently
analyzed a mock Secretariat-prepared services agreement. For
systemic issues, an Australian paper offered some possible
solutions relating to "substantially all trade" and an EC paper
discussed RTA disciplines and linkages to the Enabling Clause.
Several documents have been submitted for the Group's end-May
meeting to discuss antidumping and subsidies issues.
12. The CTD Special Session Chairman said the 6 April meeting
had been suspended due to different views on the timing of the
discussions for agreement-specific proposals and cross-cutting
issues. Members will address the LDC agreement-specific
proposals as a matter of priority. The work has gotten back on
track, as Members are now discussing the substance of the issues,
rather than process, and the Chairman hopes to have some
recommendations for the July General Council meeting.
Statements from Participants
13. Interventions were made by Korea, Mexico, Rwanda (on behalf
of the Africa Group), Canada, India, Zambia (on behalf of the LDC
Group), Uganda, Hong Kong China, Kenya, Benin (on behalf of the
ACP Group), Botswana, Singapore, Indonesia, Switzerland,
Malaysia, Thailand, Peru, Bolivia, Chile and Barbados.
14. Agriculture: All the interventions referred positively to
the resolution of the ad valorem equivalents "gateway" issue for
market agricultural market access negotiations. However, several
Members noted a great deal of time had been devoted to this
technical issue and little time remained for the real
negotiations on the formula, and treatment of special and
sensitive products. The ACP Group registered its concern about
the treatment of sugar by the AVE agreement and it cautioned
against an outcome that would lead to the disappearance of a
"system" for agriculture upon which most of its members rely.
The African, LDC and ACP Groups made predictable interventions
with respect to cotton, sugar and preference erosion.
Switzerland identified GI extension as a crucial component of the
overall balance in the negotiations. Presumably because of the
AVE discussions, Switzerland cautioned against small group
discussions, particularly with Chairman or Secretariat
participation, that did not allow Members to make their views
known on specific issues of particular importance. Korea and the
ASEAN countries also made references to the need for
inclusiveness and transparency in the negotiating process.
15. Development: Developing countries made predictable calls
for progress on the "development dimension" of the Doha Agenda,
including attention to the special and differential treatment
items (in both the CTD Special Session and within the negotiating
groups), "implementation-related" issues, cotton, sugar,
preference erosion, and TRIPs and Public Health. India, Bolivia
and Barbados requested a "development audit" of the all areas of
the negotiation, to get an outline of development outcomes that
could be expected at Hong Kong. India and Peru described a
solution to the TRIPS and the Convention on Bio-Diversity issue
as essential to reaching a balanced result, and requested a clear
mandate in July for further work. Canada announced that it had
amended its patent, food and drug act to provide a framework for
the exportation of low-cost drugs to developing countries.
16. NAMA: Members had little to say about the NAMA
negotiations, presumably because there had not been a meeting or
other notable developments since the April TNC meeting.
Developing countries reiterated calls for "less than full
reciprocity," "special and differential treatment," consideration
of preference erosion, and duty-free, quota-free access for
imports from least-developed countries. Switzerland and
Singapore spoke up for maintaining ambition in the discussions,
with Hong Kong China adding that Members have been too focused on
the pain and not on the benefits to be derived from the
negotiations. Switzerland added that the level of ambition for
NAMA should not diverge considerably from the level for
agriculture. Mexico expressed confidence that a convergence can
be obtained by July on the formula, with flexibilities for
developing countries.
17. Other Negotiations: There was little said beyond passing
references to the services, rules and trade facilitation
negotiations. Canada announced that it had submitted the first
revised offer for services, and said that it had included
improvements for Mode 4, as well as in a number of specific
sectors. Canada encouraged other Members to join it in making
services offers public, as a means to improve transparency in the
negotiating process. On rules, there were no calls, this time,
to begin text-based negotiations, although Mexico asked for a
Secretariat-prepared compendium, grouped by topic, of the 158
antidumping proposals. Kenya expressed appreciation for the
large number of trade facilitation proposals, but felt that some
went beyond the scope of the negotiating mandate. Kenya also
sees a need to "operationalize" technical assistance that is to
be provided in parallel with the trade facilitation negotiations.
The only mention of the dispute settlement understanding
negotiations was by Mexico, which described them as a very
important element.
Concluding Remarks
18. TNC Chairman Supachai concluded the meeting by noting that
ministers expect to receive a broad substantive outcome in July
that can lead to a successful conference in Hong Kong. Supachai
wants to have clear ideas for agriculture in all three pillars.
For agricultural market access, Members will need to confront
issues of the formula, bands and thresholds, as well as
definitions of special and sensitive products. The work in NAMA
needs to be reinforced, with a concrete shape for the formula,
coefficients, and flexibilities for developing countries. There
should be equivalent specificity for agriculture and NAMA, with
important divergences in each negotiating area identified. For
development, Supachai encouraged redoubled work on the LDC
agreement-specific S & D proposals, as well as balance on other
development items. Supachai did not announce a date for the next
meeting of the TNC, preferring to focus on work in consultations,
as a means of making progress in all areas in a balanced manner.
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