The WTO General Council convened on July 27 -28 with an agenda consisting of a report by Director General Pascal Lamy as head of the Trade Negotiating Committee and other reports by the various committees. As expected, the highlight of the meeting was the indefinite suspension of the Doha Round negotiations following the failure of the G6 informal talks on Monday (July 24).

Lamys Report: No deadlines for resumption, Time for reflection

In his report, Lamy said that gaps remain too wide, that it is impossible to finish the Round within the year and faced with such a persistent impasse, he recommended the indefinite suspension of negotiations.

He said that he has no proposal for definite deadlines and resumption of talks will come only if there are changes in Members entrenched positions or only after some political decisions are taken by Members on few but very important issues in the Doha Round.

While Lamy expressed regrets over the collapse and indefinite suspension of talks, he reiterated the systemic importance of the WTO, the need to strengthen the multilateral trading system and that despite the deadlock, he is committed to bringing the Round to a successful conclusion.

He urged WTO Members to use the time (while talks are suspended) for sober reflection as opposed to megaphone diplomacy or blame game and that he will make himself available for contacts with all Members.

After Lamy finished his report, not a few Member country delegations stood up one after the other and issued diplomatic statements expressing regret over the collapse of talks while accepting the reality that talks have to be suspended.

Africa and LDC issues

The Ambassador of Benin, representing the Africa group, expressed disappointment for the impasse due to the inflexibility of big trading countries. He said that the waste resulting from the impasse would have disastrous consequences to LDCs and developing countries, noting that such impasse means the failure to immediately implement the HK ministerial declaration on Cotton, specifically the reduction and elimination of cotton subsidies by big trading countries (referring indirectly to US cotton subsidies).

Bangladesh, on behalf of the LDC group, expressed the same sentiment, saying that the suspension of talks would affect crucial issues for LDCs that have been brought on the table in the Doha Round. These he said are the Duty-Free Quota-Free market access for LDC products, the Enhanced Integrated Framework, Aid for Trade and LDC modalities for services.

Unbundling Aid for Trade and Trade Facilitation?

Before the GC formally convened, the EU made public statements that it was ready to unbundle aid-for-trade and trade facilitation issues from the single undertaking of the Doha Round in order to continue negotiations on these areas despite the suspension of talks. Some LDC and developing country members expressed agreement with the EU proposal if only to support the issues of prime interest to LDCs and the Africa Group.

Although there appeared some diplomatic consensus on the issue, with no one frontally opposing the idea, there was no formal agreement clinched in the GC. Some country delegations fear that the US may not be warm on the proposal, saying that it was easy for the EU to float such an idea because it would not entail additional commitments from the EU compared to the US.

As is where is: No carving out of issues, No backtracking

Many developing country members expressed the view that efforts to resume the talks should not be used as an attempt to backtrack on what has been achieved so far in the modalities negotiations as reflected on the Chairs reports of Agriculture and NAMA.

The ambassadors of Brazil, Egypt, Paraguay, Philippines, Mauritius and Zambia were among those who cautioned against carving out issues from the July 2005 Framework and the Hong Kong ministerial declaration just so the talks could resume and reach a consensus on a few select issues which some quarters termed as Doha Lite.

Brazil said that nothing lighter than the mandate of Doha, the July Framework and the HK ministerial should be the basis of resuming the talks, fearing that some Member countries might attempt to pin their political readiness to go back to the table based on a reduced agenda, referring indirectly to just market access ambitions sans flexibilities and SDT for developing countries and LDCs.

The Philippines stressed that there are fundamental inequities in the trading system and that developed countries should be ready to accept smaller benefits from the Doha Round because it was the developed countries which have reaped greater gains in the earlier rounds. Asked in a separate meeting about how the Philippines view Lamys earlier formula of a 20-20-20 landing zone, the Ambassador replied by saying that it should have been 20-20-20-20, with the fourth 20 being the 20% exemption of agricultural tariff lines as Special Products.

Paraguay said that freeze is a more appropriate term than suspension if only to explicitly indicate that there will be no backtracking from what has been reached so far in the negotiations once the talks resume.

No formalization of suspension, No formalization either of resumption 

Although there was acceptance of the political reality that talks have to be indefinitely suspended, the General Council did not formalize the suspension to avoid any procedural encumbrances of having to also formally declare the resumption of talks.

This was despite some questions from the floor by Venezuela about how to decide on resumption, what do we mean by ripe conditions to resume negotiations, who determines the ripe conditions and so on. Cuba also expressed the same alarm.

Without any political intention of putting on hostage the resumption of talks through procedural encumbrances, both countries were only emphatically expressing their dismay over the proliferation of small group informal meetings, referring to the G6 meetings and the process by which the suspension was informally decided in this meeting. They pointed to the subversion in these informal small group meetings of the avowed WTO principle of bottom-up approach.

In an NGO briefing in the afternoon of July 27, the WTO secretariat confirmed that the suspension was not formalized by the GC so that resumption of talks whenever conditions exist does not have to require a similar formalization by the same body. They said this would avoid any situation where a single Member could hypothetically vote to block resuming the talks. They added that process is not the issue here but the lack of political willingness on some Members...whats the use of talking when no one makes any movement in its political position.

The US and only but the US

Although not expressed on the floor during the GC meeting, many Members share the view that it was the intransigence of the US which scuttled the talks after newly-assigned US Trade Representative Susan Schwab walked out of the G6 meeting on Monday when it could not accept to cut down its domestic farm support to US$12 billion as proposed by the G20 (led by India and Brazil) or at least to US$15 billion as proposed by the EU. She returned home being hailed as a heroine by almost everyone in Washington who believed that no deal is better than a bad deal.

News reports have earlier indicated that the US trade negotiating team is handcuffed by clear domestic priorities and considerations before it could move politically into the negotiations.

One is the strong domestic lobby by farm groups against cutting US government farm subsidies whose interests many members of the US Congress including the Bush administration would not risk compromising in view of the upcoming elections in 2008.

Second is the expiration of the US trade promotion authority in June 2007 which provides authority for the Bush administration to negotiate trade deals without the Congress amending or emasculating trade agreements. This is the officially unstated reason for the previous rush by which the WTO wanted to have the Doha Round concluded by the end of 2006. Although such law could be extended by Congress, many analysts think that the Bush administration would not risk its political lot on something that its not sure to get from Congress at a time that many of its members would not also risk offending farm lobbies a year before the scheduled US elections in 2008.

Third, the US Farm Bill is set to be re-authorized next year. For the same reasons as above, Bush and majority of the US Congressmen would not want a Doha Deal coming in the way of their political policy space to either do little cuts or retain, if not increase their current levels of domestic farm support.

By all indications, the resumption of the Doha talks appears to be heavily dependent on the political decision of the US. It could well be what Lamy referred to as the ripe political conditions. Some country negotiators said that if the talks do not continue in five to six months, the impasse may take longer, like from three to four years. Others think that it may continue only after the US elections in 2008.

by Naty Bernardino, International Gender and Trade Network-Asia as posted on the Gender and Trade Mailing List <This email address is being protected from spambots. You need JavaScript enabled to view it.> on July 31, 2006