Monday, August 11, 2008

WTO: September Ministerial Likely?

This report from India's Economic Times suggests there might be one.

There might be another mini-ministerial meeting in Geneva in September. It would aim at concluding the deal which almost seemed within grasp in last month’s mini-ministerial meeting,” an official said. The Geneva meeting resulted in failure as the US and India (which was representing about 100 developing countries) could not agree on the special safeguards to protect poor farmers against a surge in imports.

Saturday, August 9, 2008

WTO: Promising Signs For Resumed Negotiations

We decided after all the drama and frustration to take a bit of a break. Literally, we headed off to Italy f0r a holiday. But we are now back in Geneva.

We will be posting once daily to keep readers informed about latest developments in attempts to revive talks.

The main positives as we see them are the willingness of all the key players to leave the texts as they ended up on 29 July intact - the progress that was made is not lost; and efforts by Brazil's President to talk to China and India about the possibility of getting talks re-started. WTO Director-General Lamy is also about to hit the road. This could compliment Brazil's efforts nicely.

Also positive is the news that at least one of the Chairs of the negotiating groups - agriculture's Crawford Falconer from New Zealand seems to be staying in Geneva instead of returning to his capital, because there still seems hope of reviving the talks. Our sources in Brussels say that the US and EU both put pressure on the New Zealand Trade Minister to leave Falconer in place (Falconer was being talked about as either the new Vice Minister of Trade in New Zealand or Director of Trade and Agriculture in the OECD). The talks broke down in July because Falconer had not been able to bridge difference on agriculture sufficiently in his "walk in the woods" process.

Here are some interesting media reports.

AFP reports on President's Lula's efforts.

The IHT looks at the efforts underway to revive negotiations.

But it won't be easy. Senior US officials still haven't learned how to handle China. Public rebukes are not the way...

Tuesday, August 5, 2008

World Trade Organization - Unofficial guide to agricultural safeguards

The talks among ministers meeting in Geneva from 21 July 2008 broke down on 29 July over the special safeguard mechanism (SSM). What exactly is the problem? A new unofficial guide is available on the WTO website. Browse or download Word or pdf versions here:

Wednesday, July 30, 2008

Lamy Statement To Today's TNC

At our informal meeting yesterday, I reported on the events of the last few days. That report will be put on the record of this meeting, and I will not repeat it but just highlight a few points.
There is no escaping the fact that the intensive efforts the whole membership has been putting in over the last days with the aim of establishing modalities in Agriculture and NAMA have failed.
Members have been unable to bridge their differences despite more than a week of hard work.Much has been achieved this week. We were very close to finalizing modalities in Agriculture and NAMA. A very few issues, which had not been there, led us not to establish modalities, but a huge amount of problems which had remained intractable for years have found solutions. Negotiators have been prepared to reach out beyond their entrenched positions and seek compromise, which they did. However, as I explained in detail in my statement yesterday, we were not able to find convergence in the area of the Special Safeguard Mechanism. And we did not even get around to discussing Cotton.As a result we have not been able to establish the Agriculture and NAMA modalities this week.
Yesterday, I outlined what this could cost the membership. I am sure you have all done the analysis for yourselves. I trust that Members will resolve together not to lose these benefits, even if it takes longer.You all know the value of what is on the table, not only in Agriculture and NAMA, but across the whole range of the agenda, whether in Services, the fastest growing and most dynamic sector in most economies, or in Trade Facilitation, just to take two examples.
Over the past few weeks, the Chairs of the Negotiating Groups have circulated reports on the state of play in their respective areas including reflections on the way forward. The Agriculture and NAMA Chairs will also shortly be circulating reports capturing the work of the last few days. We are working on this.Overall, the Chairs reports underline the breadth and depth of the progress we have made right across the Single Undertaking. The reports also show the wide and deep range of benefits that this Round can provide — two to three times more than any previous multilateral negotiation, and I have not changed my number on that. My own sense is that we need to build on this, and your own sense of whether you believe we need to build on this is the determining factor.
We can also clearly see progress in other areas, such as the Dispute Settlement negotiations and S&D. Good work has also been accomplished over the past few days in the area of TRIPS thanks to the very good process which Jonas Støre led and the constructive spirit of delegations.
I would also like to highlight the Services Signalling Conference which was held on 26 July. My report on this Conference will be circulated later today.
I think we all now need to engage in serious reflection on the next steps in our collective endeavour which is the Doha Development Agenda. I believe we have a collective responsibility to begin this process of reflection right now.Perhaps the dust needs to settle a bit before we can have a clear idea of those next steps. But my view is that the progress we have made in Agriculture and NAMA and in all the other Groups should be preserved. This represents thousands of hours of negotiation and serious poltical investment by all the Members of the WTO. This should not be wasted. All Members need now to seriously reflect about if and when we can jump the obstacle of what was not possible this week. Where there has been deadlock, we must find new ideas and new solutions.Our immediate priority is to reaffirm our commitment to the multilateral trading system which comes out of this week dented. All Ministers present here over the last 10 days have underlined how vital this system is, in terms not just of trade, but also of the stability of the international system. The task then, after the necessary reflection, is to translate words into deeds. The comeback should begin today. I would like to encourage you in your interventions not to dwell upon failure, which is a reality and which needs to be acknowledged, but to look forward to how we can do better next time. And I am convinced that there will be a next time, which is why I said yesterday that I was not throwing in the towel.
Finally, I thank you all for your hard work and cooperation. I would like to pay tribute to the many hours of work of the Chairs of the negotiating groups, and in particular Crawford, Don and Bruce as well as Jonas Støre. A final word for the staff in the Secretariat, including my office, who have put countless hours of work in helping you in your negotiating endeavour.The floor is open for your comments.
If any of you wish to have your statement posted on the WTO website, please send it electronically to the Information and Media Relations Division.

Tuesday, July 29, 2008

Talks Collapse

So near but so far.

Thank you India and China and the nine neanderthals within the EU.

This from the International Herald Tribune

A high-level summit meeting to salvage a global trade pact collapsed Tuesday after the United States, China and India failed to compromise on farm import rules, according to trade officials.
Trade diplomats, who were not authorized to speak publicly, said that the meeting of seven commercial powers collapsed here at the World Trade Organization's headquarters.
Officials, two from advanced economies and one from a developing nation, told The Associated Press that a U.S. dispute with China and India over farm import safeguards had effectively ended any hope of a breakthrough. The comments were confirmed by a European official, who was also not authorized to comment publicly.
They said that the WTO chief, Pascal Lamy, had informed ministers that an agreement could not be reached after more than a week of talks.
There was no immediate word on whether the participants would seek to meet again in 2008 to try to salvage the talks.

The United States accused India and China of seeking to backtrack on an agreement in principle made Friday. Washington accused the two emerging powers of insisting on allowances to raise farm tariffs above even their current levels.
India denied that it ever approved the previous text.
On Tuesday, ministers considered a new compromise proposal on the issue, brokered largely by the European negotiators, at what has now become the longest-ever ministerial meeting of the World Trade Organization.
"The general feeling is disbelief that this could go down over special safeguard measures," one official close to the negotiations, who was not authorized to speak publicly, said before the collapse. "It risks becoming a totemic issue: subsistence farming versus commodity exports."
Politically, any deal would have been difficult to sell in India.
The main complication, said another diplomat who was also not authorized to speak publicly, is that the Indian negotiator, Kamal Nath, comes from "an electoral region that is completely opposed to the idea of a deal."
At present, India does not have a safeguard mechanism for its farmers, though developed countries can invoke special measures to protect some of their goods if imports climb sharply.

Is It Always darkest Before The Dawn?

It seems pretty bleak around the WTO membership as we wake up this morning.

Another deadline for new texts has been broken. India stays apart from the package solution and now China seems even more firmly at their side.

Lets hope the key players had a very good sleep and that they have woken up with new ideas - otherwise these talks could die today.

We think that the US and EU should show true leadership and accept the Chinese and Indian positions - lets see what happens then. Will India and China find new issues on which to disagree? Or are the issues in dispute genuine "red lines"?

We are concerned about the extent that personalities have come to dominate these negotiations - both at officials level and at Ministerial level. Next time around it will be important to ensure, somehow that the negotiations are de-personalized.

Negotiators Burn Midnight Oil As Anothe Deadline Passes

It is now 0040 on Tuesday morning in Geneva and we are about to call it a day.

Talks continue at small group level - G7 (G6 plus China).

There seems to have been no progress yet. China and India are standing firm as are the US and EU.

This Bloomberg report summarises the issues on the table. Unfortunately this impass is standing in the way of the new texts on agriculture and Nama that were due out yesterday. Will Ministers just run out of time at this Ministerial - already some are leaving?

World Trade Organization talks may collapse because India and China have refused to support a compromise deal worked out in the last few days, the U.S. said.
``There is a real threat to the delicate balance that we achieved on Friday night and I'm very concerned that it will jeopardize the outcome of this round,'' U.S. Trade Representative
Susan Schwab told journalists in Geneva today. ``There's a real risk because those countries are advocating selectively reopening the package.''
The current negotiations mark the last chance to strike a deal on cutting tariffs and subsidies in agriculture and manufactured goods before the U.S. presidential election in November. Failure to lock up an accord may delay the
Doha Round of talks for years because of changes in the U.S. administration and at the European Commission.
WTO chief
Pascal Lamy told delegates earlier today that negotiators had made ``very important progress'' since talks on an accord in agriculture and industrial goods began eight days ago. ``There is now a very high level of convergence on many subjects,'' he said, adding that he expected to release new proposals later in the day aimed at liberalizing trade in farm and industrial products. That's no longer likely to happen today.
India and China refuse to accept key elements of a compromise put forth by Lamy three days ago and refined by ministers over the weekend, according to the U.S. India never endorsed the proposal and China is now ``backtracking'' in its support, Schwab said.
The key sticking point for India is the threshold for special safeguard measures, which allow developing countries to boost their agriculture tariffs to shield domestic farmers in case of a surge in imports. The proposed mechanism permits duties to rise when imports climb over 40 percent -- a level India says is too high to protect its farmers.
India wants the trigger set at 10 percent, a position supported by 100 developing nations that are concerned about the future of their farming industries in light of rising food prices, according to Commerce Minister
Kamal Nath.
Still, India says it's not trying to torpedo the talks. ``We are continuing with these discussions and I'm still optimistic,'' Nath told journalists.
China dismissed the U.S. criticism, saying it's made concessions that demonstrate its commitment to a global trade deal and willingness to compromise.
U.S. Rigidity
``We have tried very hard to contribute to the success of the round,'' WTO Ambassador
Sun Zhenyu said. It's U.S. rigidity in areas such as sensitive products and trade-distorting farm subsidies that is impeding the talks, he said.
Optimism had grown about the prospects for an accord since governments accepted Lamy's proposals as the basis for further talks. Trade ministers returned yesterday to thorny issues in the areas of agriculture and manufactured goods following a one-day shift to service-industry disputes, a priority for wealthy economies such as the U.S. and the European Union.
WTO talks have moved in fits and starts since beginning in November 2001 as industrialized and emerging markets clashed over how open up trade. Lamy has estimated that a deal would add as much as $100 billion to the global economy at a time when slowing growth and soaring food and fuel prices are undercutting living standards around the world.

Monday, July 28, 2008

France Remains A Headache For Mandelson

Reports from various US capitals are suggesting that the EU Trade Commissioner Peter Mandelson is facing continuing difficulties in maintaining EU unity. This report is from India

French President Nicolas Sarkozy has complained to European Commission head Jose Manuel Barroso about a proposed deal on offer at crucial WTO talks here, a diplomatic source said on Monday. Sarkozy called Barroso over the weekend and also demanded that the EU's chief trade negotiator Peter Mandelson travel to Paris to explain his position -- a demand that was refused, the source said. France currently holds the rotating presidency of the European Union. The French government said on Monday it would not sign proposals for a trade pact as they stand because they show no progress on "essential" matters. "Today, the cabinet considers that the project currently on the table is not acceptable as it stands, to the extent that it shows no advance on elements which are altogether essential in our eyes," French government spokesman Luc Chatel said after a cabinet meeting. He mentioned "the protection of indications of geographical origin", in a reference to such issues as the labelling of wine, and "the defence of our European industrial interests in the face of emerging countries". Mandelson is negotiating at the mammoth talks here in Geneva on behalf of all 27 members of the European Union, but the former British cabinet minister is viewed with suspicion in Paris as a so-called "neo-liberal" who would be willing to sacrifice France's hefty agricultural sector for the sake of a deal.

India And China Throwing WTO Round Into Gravest Jeopardy

Indian and Chinese attitudes to the Special Safeguard Mechanism on agriculture and Chinese attitudes to sectoral negotiations remain major sticking points in the ongoning Geneva negotiations.

AP are reporting senior USTR official David Shark's comments on agriculture

The United States slammed China and India on Monday, saying they were threatening seven years of work on a new global commerce pact and using some of the strongest language yet at a crucial set of talks at the World Trade Organization.
David Shark, a U.S. trade official, told the WTO's 153 members that the United States has "swallowed hard and accepted" a compromise proposal to open up trade in manufactured goods and agriculture.
But he criticized India for rejecting the package laid out by WTO chief Pascal Lamy, and China for backing out of terms it committed to last week.
"Their actions have thrown the entire Doha round into the gravest jeopardy of its nearly seven-year life," Shark said, according to a copy of his statement obtained by The Associated Press.

Shark said the two emerging powers are insisting on allowances to raise farm tariffs above even their current levels. That violates the spirit of the trade round, the U.S. and other agricultural exporters argue, because it is supposed to help poorer countries develop their economies by boosting their exports of farm produce.
But China and India are not alone. Faced with rising food prices, a number of developing nations have sought wide loopholes against opening up their farm markets — either by blocking certain strategic products such as rice or grains or through rules that would allow them to spike tariffs if faced with a sudden flood of imports.
Shark accused China of trying to carve out cotton, sugar, rice and other commodities from any tariff cuts under a WTO deal. He said Beijing and Delhi were working to protect their own interests by controlling a large group of even poorer nations.
"Ironically, these policies would have their most serious detrimental effects on precisely those poorer developing countries that already have such limited agricultural export capabilities," he said.
Cuba, Haiti, Indonesia, Philippines and Venezuela and are among over 30 WTO countries allied with India and China in WTO agriculture negotiations.
They, and other developing countries, have sought steeper cuts in rich-world farm subsidies, which they blame for distorting global commodities prices and hindering Third World development. The U.S. and the European Union have demanded new market opportunities for their industrial goods and service providers in exchange. Washington also wants better conditions for farm exports.
After nearly a week of fruitless talks, a compromise proposal on Friday by Lamy finally cajoled major countries into making tough decisions.
It called for cutting limits on European farm subsides by 80 percent and on U.S. payments by 70 percent. That, however, would not entail a reduction in overall spending for the U.S., which paid out only US$9 billion last year in trade-distorting support to American farmers but would still be allowed to increase that to about US$14.5 billion.
In goods trade, there were concessions for both rich and poor countries. Lamy's offer gave developing countries a choice for industrial tariff caps from 20 to 25 percent. The steeper the cuts developing countries chose, the more loopholes they receive to protect strategic industries such as automobiles.
While Brazil and China bit by tentatively accepting the compromise, India held firm. But diplomats from developing countries grumbled all weekend that Beijing's support was wavering.
Shark said unless China and India "immediately reverse course to become problem solvers rather than obstacles to the round, all of us will leave Geneva empty-handed."

World Trade Organization - Lamy urges members to accelerate movement towards compromises

Director-General Pascal Lamy reported to an informal meeting of the Trade Negotiations Committee on 28 July 2008 that "we have registered very important progress...there is now a very high level of convergence on many subjects". He urged negotiators to accelerate movement towards compromises in the coming hours, adding that he aims to issue revised "modality" texts on agriculture and non-agricultural market access later in the day.
Talking points for the Director-General (coming soon):
Audio: Opening remarks by Chair and report by Jonas Gahr Støre

Forces Of Darkness Fight Rear Guard Action

Sunday was meant to be a day of reflection, consolidation, and a day in which the Chairs could convert Friday's framework package into revised texts. Unfortunately India and others have been using the day to try and disrupt the integrity of the package. Most of these attempts have made it into the media.

It was not all bad news however, the long running banana issue seems to have been solved.

From our perspective, possibly the most serious problem now is China's position on NAMA sectorals.

The reaction to today's revised texts will be telling. We still see things as more positive than negative but this negotiation is so finely balanced it could blow apart on any issue. The beauty of Friday's position was thaat it was a package. It could not be changed. No one was entirely happy, but everyone gained more than they "lost".

Saturday, July 26, 2008

India A Real Problem

India continues to cause troubles at this Ministerial and is continuing to seek support from the G33. Argentina seems to be the only close ally of significance left. There is still scope to disrupt or kill this negotiation as many issues remain unresolved. But what is unclear is whether India is acting out of national interest or whether Indian Minister Nath is on a personal ego trip. Several Ministerial colleagues are suggesting the latter...

Services Signalling Conference Goes Well

Feedback from participants suggest that the Services Signalling Conference went as well as can be expected. The US signalled, as hoped for, a willingness to move further on mode 4 for services. This will make it even more difficult for India to walk away.

India And Argentina Still Causing Problems

The media are reporting continuing problems - with India in particular, at the WTO Ministerial. We hear the same but our sense is that India and Argentina have become so isolated that they don't have the will to force failure. We will wait and see. But this is why we have been suggesting leadership from the US on services. We can't give India the excuse to walk away.

A sense of optimism surrounded WTO negotiations on a new global free trade pact Saturday, but opposition from India and a handful of others could doom hopes of a breakthrough, insiders said. Ministers from 35 leading nations headed for meetings aiming to finally bridge their differences, with pressure piling on negotiators from India and Argentina which have signalled opposition to a deal. "This afternoon's session will be important. India will be looking to see what it can get out of the session to decide whether to ditch discussions," a diplomatic source told AFP on condition of anonymity.

What Has Been Happening This Week?

  • There has been slow but steady progress at officials' level for some weeks;
  • Bilateral meetings between Ministers last weekend also showed helpful signs;
  • But Brazil and India didn't seem that willing to engage until the Indian confidence vote outcome was known and Nath returned to Geneva;
  • India's initial reaction to the US domestic subsidy offer was too negative and had to be corrected by Nath, this helped unblock things;
  • Serious negotiations began on Wednesday by the G6 plus China;
  • India and Brazil gave enough ground on NAMA to allow the US to go further on agricultural subsidies;
  • This has allowed the services signalling conference to proceed. The assumption is that the US will not want the talks to fall over at this stage so will signal what India needs to hear on mode four;
  • But India and Brazil have enough issues up their sleeves as yet unresolved to stall things again if they don't get what they want on services;
  • The four amigos will continue to try and disrupt on services but will they really have the authority to kill the entire negotiation - we think not;
  • It can still go wrong but signs are positive. Today the US has to show leadership and signal a willingness to do something good one mode four (there should be no problem here. Implementation isn't going to be Bush's problem. It iwll be up to either Obama or McCain). And Mandelson needs to continue to stare down France and Ireland.