WTO Director-General Pascal Lamy announced after long hours of hard talking that ministers have failed in their effort to agree on blueprint agreements in agriculture and industrial products. He told a press conference after speaking to members that out of a to-do list of 20 topics, 18 had seen positions converge but the gaps could not narrow on the 19th — the special safeguard mechanism for developing countries.
He said he would call a formal meeting of the Trade Negotiations Committee the following day for members to comment but he suggested they should wait for the “dust to settle” before deciding how to move ahead. “It is no use beating around the bush. This meeting has collapsed. Members have not been able to bridge their differences,” he told journalists later.
So close …
The talks’ failure does not mean the end of the Doha Round. Mr Lamy told an informal meeting of the Trade Negotiations Committee that he remains convinced that what is on the table represents twice or three times more than has been achieved in any previous multilateral trade negotiation. Much was achieved in these meetings, he said.
They began on Monday 21 July and ran late into the night and through the weekend. But in a sequence of meetings following the “concentric circles” structure, he told participants that there was no escaping the fact that ministers had been unable to bridge their differences on one key issue,
the special safeguard mechanism in farm products for developing countries.
Today’s meetings included a group of seven ministers, followed by the Green Room session of about 30 representative delegations (with 20 ministers still present) and finally in the informal meeting of the full membership. The membership will be given a chance to comment when the formal Trade Negotiations Committee meeting takes place on Wednesday 30 July.
But still on the table are the draft agriculture and non-agricultural “modalities” texts (containing formulas for cutting tariffs and agricultural subsidies, flexibilities for making different cuts, and related rules and disciplines), he reported. Ministers’ positions had converged on many issues, he said.
To-do list almost done
He told a press conference afterwards that out of a “to-do list” of 20 topics, 18 had seen positions converge but the gaps could not narrow on the 19th — the special safeguard mechanism for developing countries, which would allow developing countries to raise tariffs temporarily in order to deal with import surges and price falls.
The difference boiled down to some wanting a high “trigger” (a large import surge needed to trigger the tariff increase) in order to avoid the safeguard being triggered by normal trade growth, while others wanted a lower trigger so that the safeguard could be easier to use and more useful, he said.
“After more than 36 hours trying to find bridges between these two positions, today it became clear that the differences were irreconcilable. The remaining issues, including cotton, were not even negotiated.”
He said he was personally disappointed. “I had hoped to come to you today with good news,” he told journalists. “The good news would have been that after a whole week of extenuating negotiations, after hours and hours of seniors officials and ministers meetings, we had converged on a final package comprising the issues that all of us care about. “I was hoping to say that we had slashed and capped the level of trade distorting subsidies like never before. I was hoping to announce that beef, sugar, ethanol, tropical products or products suffering from tariff escalation [higher tariffs on processed products than raw materials] would now see an improvement of their market access worldwide.“I was hoping to tell you that tariff peaks on industrial products of interest for developing countries had been slashed, that least developed countries would consolidate duty-free and quota-free market
access in the WTO, that exports support in the form of subsidies, state trading enterprises, exports credits or food aid had been removed.
“All this was ready for a final package but some important pieces were missing. The special safeguard measure for developing countries to counter surges in food imports and cotton, not to talk about the issues of GIs [geographical indications] and biodiversity [the intellectual property proposals on geographical indications and patent reforms related to genetic materials and traditional knowledge]. And the list goes on.”
Mr Lamy gave a rough estimate of the economic cost of the failure.“What members have let slip through their fingers is a package worth more than $130 billion in tariff saving annually by the end of the implementation period, with $35 billion saving in agriculture and $95 billion in industrial goods. “With developing countries contributing one third and benefiting from two thirds of the overall gains [this would be] a true development round … with a rebalancing of the rules of the trading system in favour of developing countries.”
Mr Lamy turned to the future. “What happens to the package already on the table? what happens with the Round? “We will need to let the dust settle. It is probably difficult to look too far into the future at this point. WTO members will need to have a sober look at if and how they bring the pieces back together. “This is certainly not going to strengthen the multilateral trading system; it will not improve the system which has provided all its members an insurance policy against protectionism over the last 60 years. “But I hope the system is resilient and will be able to resist the bumpy road ahead of us. “For my part I will continue to serve this organization and its members as best as I can and devote my efforts to a fairer trading system.”