Overview of Developments in the Doha Round: Updates
WTO negotiating groups to resume work
The momentum for reviving the Doha Development Agenda (DDA), after the failure at Cancun, has been building up following US Trade Representative's letter to trade ministers of WTO Members in January 2004, in which he referred to agriculture as "the essential topic and catalyst" in view of the critical role it pays in the negotiations. There was an immediate and positive response to this initiative by the EU (for the latest position of the EU on the matter see the Trade Commissioner's recent speech on "Moving the Doha Development Agenda Forward") as well as the G20 group of developing countries (see related communiqué). Also, the WTO Director-General has repetitively warned that the alternative to the Doha Round is "a fragmented world, with greater conflict and uncertainty" (see the WTO DG's latest speech on the matter).
Following the WTO General Council meeting on 11 February 2004 and the election of chairpersons for 2004 of the negotiating groups established under the DDA, formal negotiating sessions have now been scheduled. The Special Session of the Committee on Agriculture (SSCoA) will meet on 22-26 March, the Negotiating Group on Market Access (NAMA) on 29 March to 1 April, the Negotiating Group on Rules on 16-17 March, and the Special Session of the Council for Trade in Services on 2 April. Following these formal meetings of the negotiating groups, the Trade Negotiations Committee (TNC) is tentatively scheduled to meet on the week of 19 April.
The pace of the negotiations following these initial formal meetings of the negotiating groups is still unclear. However there are some indications of what may come, in particular establishing negotiating frameworks by midyear (before the WTO's August recess). It is expected that Members would take as a starting point the draft framework texts which the 5th WTO Ministerial Conference in Cancun failed to adopt. In addition, it is expected that by midyear it would be clear whether the deadline for completing the DDA can be adhered to or an extension would be necessary. In view of several political developments in major negotiating Members of the WTO (notably, the US presidential elections and the changeover in the European Commission), progress by midyear is seen as the last "window of opportunity" for this year to move the process forward.
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Uncertainty in the MTNs after Cancún Ministerial fails to produce agreement
Following five days of intense negotiations in Cancún in the context of the WTO 5th Ministerial Conference (10-14 September, 2003), Members of the WTO failed to reach agreement on the key issues of the Doha Development Agenda. The Ministers were unable to reach consensus on how to proceed in a number of key areas, in particular on a "Framework" on establishing modalities for negotiations in agriculture, and whether to extend negotiations on a number of "new issues" (the so-called "Singapore" issues: trade and investment, trade and competition policy, transparency in government procurement and trade facilitation).
While there was some progress in a number of areas surrounding these issues, the Ministerial Conference came to a close without agreement on any of the issues on which decisions were expected at Cancún, as mandated by the 4th Ministerial Conference at Doha. Failure to agree has been attributed to a variety of reasons, including an over-loaded agenda for the Conference with many complex and divisive issues, the uncompromising positions by some of the Members of the WTO, the seemingly cumbersome decision-making procedures of the Organization, the alleged premature closure of the proceedings of the Conference, etc. As was the case in 1999 at Seattle, this is not the first time that a WTO ministerial conference has failed to have an outcome. Such temporary setbacks are often due to the complexity of the issues involved, important and conflicting policy interests of Members, and perhaps the stage of preparedness of Members to make trade-offs that go beyond particular sectoral interests.
At Cancun, agriculture was one of the major contentious issues. Already going into Cancun, Members disagreed on the proposed Framework text (Annex A) contained in the Draft Ministerial Declaration, forwarded by the Chairman of the WTO General Council to Ministers in Cancún as a basis for negotiations. Some Members, particularly a group of developing countries (the so-called G-21 1) demanded substantial reforms in agricultural policies, including the elimination of export subsidies, sharp reductions in trade-distorting support and the capping of all domestic support, including those allowed under the "green box". Others, in particular some developed countries, felt that they could not go along with this proposal at this stage.
The difficulties on agriculture were further compounded by disagreement over cotton subsidies and the plea of four West and Central African (WCA) countries that these subsidies distort international cotton prices and negatively affecting the livelihoods of an estimated 11 million poor African farmers and their dependents. This issue was the subject of considerable debate during the formal and informal proceedings in Cancún and received the support of many Members, including several developed country governments. However, the solution proposed for this problem, as expressed in paragraph 27 of the revised Draft Ministerial Text of 13 September, called on international agencies to assist these countries to diversify out of cotton rather than for a reduction of trade distorting cotton subsidies. This was seen by many Members, developing and developed countries, as an inappropriate and unacceptable response, which may have caused a degree of disillusionment among some Members, particularly African countries, as to what they could expect from the overall negotiations.
The formal outcome of the 5th WTO Ministerial in Cancún consists of the Ministerial Statement, adopted at the closing of the Conference on 14 September 2003. Members noted that despite their hard work in Cancún and the "considerable progress" that was made, more work was needed in some key areas to enable the conclusion of the negotiations in fulfillment of the commitments made at Doha. The statement mandates that this work should be undertaken "taking fully into account all the views that we have expressed in this Conference". It further mandates the Chairman of the General Council, working in close co-operation with the Director-General, to coordinate this work and to convene a meeting of the General Council at Senior Officials level no later than 15 December 2003 to "take the action necessary at that stage to enable us to move towards a successful and timely conclusion of the negotiations".
The call by the Ministers "to continue working on the outstanding issues with a renewed sense of urgency and purpose" provides some hope that the obstacles that prevented reaching an agreement in Cancún, while serious, may not be insurmountable. Key in the renewed efforts is a fresh view on what divides countries especially in agriculture, the most contentious issue of the DDA, and how much it is possible to move away from their already stated negotiating positions.
1 G21 consists of Argentina, Bolivia, Brazil, Chile, China, Colombia, Costa Rica, Cuba, Egypt, Ecuador, Guatemala, India, Mexico, Nigeria, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand and Venezuela.
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Overall Situation prior to Cancun Ministerial
The WTO Trade Negotiations Committee (TNC) was set up by the Doha Declaration to oversee the implementation of the work programme of the Doha Development Agenda (DDA). Work in the different areas take place under a number of subsidiary negotiating bodies created by the TNC to handle the different negotiating subjects. The TNC operates under the authority of the WTO General Council and meets periodically to take stock of the negotiations under the DDA. The TNC met for the last time on 14-15 July 2003, before the Fifth WTO Ministerial Conference at Cancun (10-14 September 2003). The DDA negotiations face a number of difficulties with six deadlines having been missed, including on: TRIPs and access to essential medicines; implementation issues; SDT for developing countries; modalities on agriculture; improvements to the Dispute Settlement Understanding (DSU); and modalities for non-agricultural market access. While most WTO Members remain committed to the overall deadline for completing the Round as a whole by 1 January 2005, missing these important deadlines along the way does raise questions about adhering to this completion date. Some adjustments may be necessary to be made at the Fifth WTO Ministerial, which may involve a trade-off between adherence to the 1 January 2005 deadline and the level of ambition of the reforms to be achieved.
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Revised Draft Ministerial Text sets the scene for intensive negotiations in Cancún and beyond (General Council, 25-27 August 2003)
A revised draft Ministerial Declaration text was discussed by the WTO General Council, which met in its final pre-Cancún session in Geneva (25-27 August 2003). The revised text contains some 28 paragraphs covering a wide range of issues, including agriculture (paragraph 4), and 7 Annexes, of which Annex A contains the new proposed framework for establishing modalities in agriculture. The text is an attempt to bridge the gap between WTO members on several key divisive issues such as access to essential medicines, agriculture, non-agricultural market access, and the "Singapore" issues -- investment, competition, transparency in government procurement and trade facilitation. Reactions to the text were many and varied, reflecting the heterogeneity of interests including economic policies and domestic circumstances. For some Members the text fails to reflect the level of ambition of the Doha Mandate, while for others it is too ambitious and goes beyond the Doha Mandate.
The revised draft Ministerial Declaration text was forwarded to Ministers by the Chairman of the General Council and the WTO Director General under a cover letter on 31 August 2003. The cover letter indicates that the text is not an agreed document and is being presented on the responsibility of the Chairman of the General Council in close co-operation with the Director-General. They stress that it has not been agreed "in any part", and does not include many of the member governments' proposals, but "it remains our best judgement of what could constitute a workable framework for action by Ministers at Cancún".
In agriculture, the draft Ministerial Declaration calls upon the Special Session of the Committee on Agriculture to conclude its work on establishing modalities by a date to be agreed by the Ministers in Cancún and that Members would submit their comprehensive draft Schedules of commitments, based on these modalities, no later than a date also to be agreed in Cancún. It also reaffirms the Doha Mandate as regards the "single undertaking" commitment, i.e. the conclusion of the negotiations in agriculture as part and at the date of conclusion of the negotiating agenda as a whole.
The proposed framework for establishing modalities in agriculture (Annex A) is based on the latest submissions made by Members, especially the joint EC-US paper circulated on 13 August 2003 and submissions by other Members, in particular a joint proposal by 20 developing countries (including Brazil, China, South Africa and India). While Annex A takes on board most of the framework contained in the EC-US paper, some important additions/qualifications, suggested by the other Members, have been added, especially as regards special and differential treatment for developing countries.
Annex A provides only a framework for the negotiations as all parameters, for example for reduction commitments, remain to be negotiated after Cancún. However, the text is significant because it attempts to bridge the gap between wide differences among WTO members on their approaches to the negotiations. For example, on market access, the proposed "blended" formula for tariff reductions combines elements of a harmonizing ("Swiss") formula with that of a Uruguay Round-type approach which provides some flexibility on a tariff line basis; on domestic support, the proposed formula for negotiating reduction commitments is a movement towards harmonization of domestic support across countries; and on export competition, the text provides for parallel treatment of export subsidies and export credits.
While the Chairman's text has attempted to resolve basic differences among WTO members regarding the approach to reform in the three "pillars" of the Agreement on Agriculture, it does not propose solutions for a number of important issues on which there remain wide disagreement among WTO members. These include: the so-called "peace clause"(article 13 of the AoA), product-specific commitments in domestic support, certain non-trade concerns, sectoral initiatives, inter-pillar linkages, geographical indications and other detailed rules. Overall, the text represents progress in the process towards establishing modalities in agriculture; however, the basic positions of Members remain unchanged in a number of important areas and this sets the scene for intensive negotiations during the Ministerial in Cancún and beyond.
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Draft Ministerial Declaration for Cancún (General Council, 24-25 July 2003)
At the last scheduled General Council (GC) meeting before the Fifth WTO Ministerial Conference in Cancún (September 10-14, 2003), the Chairman of the Trade Negotiations Committee (TNC) gave a progress report on the negotiations under the Doha Development Agenda (DDA). The TNC Chairman's report (accessed at http://docsonline.wto.org under the symbol TN/C/3) outlines developments and progress made in the negotiations on agriculture, services, non-agricultural market access, rules, dispute settlement, trade and environment, and trade and development. Progress reports were also made on other issues of the DDA, including the "Singapore" issues (government procurement, trade and investment, trade and competition policy, and trade facilitation) and on special and differential treatment for developing countries.
The General Council discussed a draft Ministerial Declaration put forward under the GC Chairman's own responsibility. The draft covers all the areas included in the DDA and outlines the specific actions and decisions that Ministers may take at Cancún. In the sensitive area of the negotiations on agriculture, the draft anticipates the possibility that a modalities text for further reform could be adopted by the Ministers in Cancún. It may be noted, however, that although some progress has been made since the deadline for establishing such modalities (31 March 2003), substantial differences on key issues remain.
Finally, the General Council discussed a proposal, put forward by Kenya, Tanzania and Uganda, relating to the long-term decline of primary commodity prices and the implications for trade and development of export-dependent developing countries (accessed at http://docsonline.wto.org under the symbol WT/GC/W/508). The countries concerned outlined a work programme to address this problem, involving a number of relevant WTO bodies, in cooperation with other relevant international organizations. In this connection they also proposed a draft text for inclusion in the Ministerial Declaration at Cancún. A large number of countries, both developed and developing, acknowledged the problems faced by primary commodity exporters, but there were differences on what to be done about it. While many developing countries gave their full support to the action proposed by the countries concerned, several developed countries expressed doubts about the role that the WTO could play in this regard.
In view of the many outstanding issues that need further consideration prior to the Cancún Ministerial Conference, the General Council will meet again on 25-26 August 2003.
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Establishing modalities continues to remain elusive (Trade Negotiation Committee, 14 July 2003 and SSCoA, 16-18 July 2003)
The SSCoA Chairman's Report to the Trade Negotiations Committee was circulated to WTO member governments on 7 July 2003 (see below on the content of this Report). Prepared by the Chairman, under his own responsibility, the report is "intended to assist participants in their deliberations on agriculture in the preparatory process for the Fifth Meeting of the Ministerial Conference." The Report summarizes the major divergent views on the negotiations on agriculture and concludes that: "achieving the objective of establishing modalities as soon as possible has continued to remain elusive" and that: "as matters stand, collective guidance and decisions are required on a number of key issues in order to clear the way for reaching [the goal set out in the Doha mandate]".
Little such collective guidance has come forward during the last negotiating session on agriculture (SSCoA, 16-18 July 2003). In his Report, the Chairman concluded that "... it is clear that significant movement is needed in order to find solutions acceptable to all" and that "compromises by all participants simply must be made in this critical area of the Doha negotiations as a whole." However, it appears unlikely at this stage that compromises would be forthcoming and it will be up to the Ministers at the Fifth WTO Ministerial in Cancun to consider what to do next.
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