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.