Pascal Lamy took over as Director-General (DG)of the WTO on September 1
The Hong Kong meeting of WTO member nation trade ministers starts on December 13. This is a key meeting for the ongoing "Doha Round" of trade negotiations. There won't be much chance to recover from a weak performance there.
Lamy's laid out his ideas about what needs to happen between now and Hong Kong in three recent speeches:
On September 14, Lamy addressed the WTO's Trade Negotiations Committee (TNC) , which he chairs in his capacity as DG. The TNC oversees the Doha negotiations. The actual negotiations on the different elements of the Doha round (agriculture, manufacturing tariffs, services, and so on) take place in negotiating groups supervised and coordinated by the TNC.
Here's Lamy's address to the TNC . The International Centre for Trade and Sustainable Development reports on the speech here: In First TNC Address, Lamy Announces "New Phase" In Talks
On Friday (Sept 23) he addressed the International Parliamentary Union (IPU) on the status of the Doha negotiations: Lamy address to the IPU .
On Saturday (Sept 24) he spoke to IMF officials: Remarks at the International Monetary and Financial Committee of the IMF .
Process
He discussed the negotiating process with the TNC.
He thinks that a successful negotiation will require two-thirds of the Doha Round to be complete by the end of the meeting of trade ministers in Hong Kong this coming December. A status assessment should be made in mid-October, and "substantive and specific" results from the negotiating groups should be available in mid-November (a month before the December meeting).
A "consolidated text" in mid-November leaves time for delegations "to prepare your ministers before the Ministerial - while some of them are permanently at the heart of the negotiating process, others are less so, and experience has shown that you need time."
Lamy sees the following role for himself:
As far as I, personally, am concerned, I shall obviously be fully hands-on, and I shall encourage whatever cross-collaboration we need. I have already established a very close working relationship with the General Council Chairman and with the negotiating group Chairs. I have also started an intensive series of contacts with delegations here, including the coordinators of regional and other groupings. Together with my frequent meetings with the negotiating group Chairs, I think that constant contact with Ambassadors here in Geneva is the best way for me to keep my finger on the pulse, and to play the role of honest broker that you have entrusted me with.
Content
He's also been discussing the content of a successful negotiation. Lamy provided the TNC a list, couched in WTO jargon, of the agreements he felt would have to be reached to create a successful Hong Kong ministerial. He provided less technical background for the parliamentarians. He told the IMF how to facilitate trade. Related sections from the three speeches are collated below, topic by topic.
The agreements must build on, and apply numbers to, the framework agreement reached by WTO members in August 2004.
Agriculture (to the parliamentarians):
In agriculture, the Framework was key to defining the contours of the negotiations — or the architecture of the final deal. It was agreed that all forms of agricultural export subsidies would be eliminated. This, of course, was a significant step forward, since export subsidies have long been considered the worst offence.
It was also agreed that the trade-distorting domestic support that is extended by WTO members to their agricultural sectors, would be reduced over time, with a 20% reduction in the first year of implementation... Moreover, members with higher levels of domestic support committed themselves to bigger reductions.
With respect to agricultural tariffs, members decided to cut higher tariffs the most, but maintained the right to nominate certain “sensitive products” that can continue to enjoy special protection.
The objective for Hong Kong is to insert “figures” or “numbers” into the Framework. The goal would be to agree on an “end date” for export subsidies; and on the rates at which tariffs and domestic support will be reduced. Negotiations are also underway at the moment on the "flexibilities” that will need to be built into the system, so as to enable negotiators to reach a final deal.
Due to the importance of cotton as a commodity for developing countries, trade-distorting policies affecting cotton were given special attention in the 2004 Framework. There, members agreed to deal with these policies both “ambitiously and expeditiously.” This is clearly an issue where progress will need to be made for Hong Kong....
The key agricultural elements (from the TNC speech):
- In export competition, we need to prepare agreement by Hong Kong on an end date for the elimination of export subsidies, plus the issue of parallelism for exporting state trading enterprises, export credits and food aid.
- On domestic support, we also need a clear understanding on what will be done, which in my view must include the reduction commitments and, in particular, a tiered formula for reductions of the final bound total AMS. As we all know, this presupposes agreement on the Blue Box and Green Box criteria.
- On market access, we also need a solid package, which is of equivalent ambition. This means a tiered formula for tariff cuts together with certain flexibilities, in particular the selection and treatment of sensitive products and of special products.
- I want to add to this list, all elements of the Cotton dossier.
Manufactured goods (parliamentarians):
With respect to industrial goods, the 2004 Framework was key to identifying the elements that would require additional work by WTO members. Most important amongst them are to identify the rate at which tariffs would be cut; the flexibilities that would be required for developing countries; and the possibility of sectoral accords.
While average customs duties are now at their lowest levels ever after eight GATT Rounds of trade negotiations, certain tariffs continue to restrict trade, especially vis-à-vis developing country exports. Also significant is the problem of tariff escalation, that discourages industrialization in many developing countries where raw materials originate. All of these issues are being discussed at present, and the goal for Hong Kong — as for agriculture — is to agree on numbers.
The key manufactured goods elements (TNC speech):
- (1) formula,
- (2)flexibilities and
- (3) unbound tariffs...
- Other elements, such as preference erosion, the sectoral component and non-tariff barriers, also need to be part of the Hong Kong picture in my view.
Services (parliamentarians::
Services negotiations are an equally vital component of the Doha Round. The 2004 Framework agreement had urged members to step up their services offers. So far, 92 members have tabled offers for services trade liberalization. However, the quality of the offers that are on the table at the moment remains poor. Many do not represent a substantial improvement on the status quo.
Given how vital the services sector is to the international economy, I intend to urge members to aim higher. Trade in services is not only important because of the value of the actual services being exchanged, but because the existence of efficient and competitive services in a country is the indispensable foundation for absolutely any form of trade. Take for instance, telecommunications services, transportation services and financial services — without these, few countries can properly engage in international trade. Personally, I cannot think of an international transaction that does not require a phone call or some form of communication!
The key services elements (TNC speech):
- From now until Hong Kong, Members should develop different approaches in services, leading to an increased number and to an enhanced quality of the commitments. What we must have are commitments which effectively open trade in services, with the corresponding improvements in the rule-making area.
Trade facilitation (parliamentarians):
The 2004 Framework was also instrumental in launching “trade facilitation” negotiations as part of the Doha Round. In these negotiations members are looking at expediting the movement, release, and clearance of goods that cross borders. Developing countries are to be provided with technical assistance to implement the results that are reached.
Personally, I do not see trade facilitation as being just another component of the Doha Round. Facilitating trade is the WTO's raison d'être if I may say so. The success of these negotiations therefore, is crucial to the ease with which countries may engage in international trade. Prior to coming here, I was reading a report on the countries in which it will be easiest to do business in 2006. One of the facilitating factors sighted, was that of improved and modernized customs procedures...
Assisting developing countries (parliamentarians):
Let me now turn to the development dimension of the Doha Round. “Development” is a theme that runs across all aspects of the negotiations. Its first pillar is to ensure greater market access for developing and least-developed countries in the areas that are of greatest interest to them. Its second pillar is to facilitate their adaptation to any new rules that would emerge from the Round. To do so would mean, looking into the careful “phasing-in” of new obligations, and the provision of the necessary technical and other support. Developing countries must be aided in re-training or compensating those who lose from greater trade liberalization...
From a WTO point of view, I prefer to think that more can be done for all, and not just some, developing countries — and in a manner that is not trade-distorting. The main alternative that the Doha Round offers is that of a sharp reduction in tariffs and other barriers to developing country trade. This will need to be accompanied by assistance to developing countries to facilitate their adjustment to new rules.
From the TNC talk:
- Most importantly, this is integrated across the various sides of the negotiations. Substantial results must be achieved in each particular area of negotiations, so that the sum of all areas delivers on the Development Dimension of the Doha Round. The challenge is to maximize the development value of every sector and of the Round as a whole. This in my view is the bulk of what we have to look after and negotiate about development.
- We also have a number of separate issues which are labelled “development-related”, some of which come under the aegis of the General Council. Concerning the work on Special and Differential Treatment, where the TNC has been overseeing Faizel Ismail's strenuous efforts, there is still a clear need to define an acceptable outcome for Hong Kong. I also believe that, on TRIPS and Health we need to intensify work in order to reach agreement on the amendment to the TRIPS text.
- We all know that the DDA will only succeed if this Development Dimension is at the centre of the negotiations and I am convinced that an “Aid for Trade” window can help us translate the development package of the round into reality. The IMF and the World Bank — which will hold their annual meetings in less than two weeks — have started focusing on this issue, as has the recent G-8 Summit in Gleneagles.
At the IMF, talked some more about "Aid for Trade":
But there is also a growing recognition that part of the challenge lies outside the WTO, if we are to translate improvements in market access or in new trade disciplines into realities for developing countries. Building the capacity they need to take advantage of open markets or helping them to adjust is now part of our common global agenda. The WTO's core role is trade opening, we are not a development agency. This is where the Bank, the Fund and other donors come in.
I am convinced that an Aid for Trade initiative is crucial for developing countries, who represents today two thirds of the WTO membership. I will spare no effort over the coming months to work with you, with WTO developing country members and with Fund and Bank staff, to make it a reality. At a minimum, I hope that by Hong Kong we can reach consensus on a decision to enhance our common existing mechanism for trade related technical assistance for least developed countries, which we call the Integrated Framework. Looking to the conclusion of the Round, I believe we should arrive at a more ambitious package of commitments for technical and financial assistance by the end 2006.
Additional stuff (TNC):
- In Rules, Members should in my view arrive as closely as possible to draft negotiated texts in anti-dumping, subsidies and countervailing measures and in fisheries subsidies. I think we also need third-generation proposals with clear drafting proposals as soon as possible, so that Members can focus on the improvements to the Agreements.
Saturday (Sept 24) he spoke at the IMF's annual meeting. Here's a Reuter's report: WTO chief makes plea to revive stalled trade talks .
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