Inside US Trade | Vol. 19, No. 20
Public statements by U.S. officials that they support a new round in the World Trade Organization belie a lack of flexibility by the Bush Administration on winning support from developing countries that would allow negotiations to actually begin, according to trade officials. At this point, the U.S. has taken a hardline on demands by developing countries that existing trade agreements must be implemented differently to give them more benefits, they said.
Action on the implementation agenda is seen as the key to securing developing country support for new negotiations, but as recently as this week, U.S. officials seem cool to making any significant concessions, sources said. In informal consultations in Geneva this week, a U.S. representative insisted that the U.S. wants the "full and faithful" implementation of existing trade agreements but professed willingness to examine what can be done "appropriately," sources said. That could mean a conditional extension of deadlines and technical assistance but not an easing of obligations, officials said.
Separately, U.S. staff-level officials have said that it is in the interest of developing countries to completely take on their obligations negotiated under the Uruguay Round. In addition, Commerce Secretary Don Evans told the Transatlantic Business Dialogue that the U.S. will not allow backsliding from Uruguay Round obligations, according to a copy of his May 14 prepared remarks.
The implementation issue was raised by European Union Trade Commissioner Pascal Lamy in a Quad ministerial meeting held in the margins of the Organization for Economic Cooperation & Development ministerial this week, they said. Lamy pressed the need to come up with a longer list of actions that industrialized countries could take to address developing country demands, these sources said. However, Quad ministers did not reach an agreement on the issue, they said. They met for less than an hour, officials said.
The EU is still hoping that it can reach an accommodation with the United States on the implementation issue by next month's bilateral summit in Sweden, sources said. The two sides hope to have a statement for the June 14 summit that will identify areas of actual agreement on what should be on the WTO agenda.
The new round also featured large in bilateral discussions between U.S. Trade Representative Robert Zoellick and Lamy, one official said. The two discussed the general strategy, the timeframe for a decision and considered items for the negotiating agenda, he said. The U.S. remains skeptical on the EU's demands to include investment and competition, he said.
In general, the U.S. has stayed out of the Geneva process preparing the November ministerial, where the EU and Japan have demanded new comprehensive negotiations. Trade diplomats are beginning to see this as part of a deliberate U.S. strategy that could ultimately force the EU and Japan to scale back their expectations as the preparation time for the ministerial runs out.
One way to expand the list of possible implementation actions is to use the work done during the 1999 Seattle ministerial by the implementation working group led by Canadian Trade Minister Pierre Pettigrew, officials said. That group came up with a list of twenty-one possible actions for developing countries, which did not include steps on intellectual property protection or market access for textiles (Inside U.S. Trade, Dec. 10, 1999, p. 1).
In this week's Quad ministerial, U.S. Trade Representative Robert Zoellick highlighted the need to use the World Bank for increasing the capacity of developing countries to participate in the international trading system, one source said.
On May 15, USTR announced it will give $1 million to the WTO for technical assistance. In addition to implementation, the Quad ministers also discussed how to handle requests by developing countries to extend the deadline for implementing the Agreement on Trade-Related Investment Measures, sources said.
In a related development, a U.S. official sketched the outline of a negotiating agenda during an informal General Council session held in the World Trade Organization on May 17, sources said. He said that possible additions to the built-in agenda of agriculture and services could be industrial tariffs, trade facilitation and transparency in government procurement, sources said. The U.S. also seeks a new impetus on electronic commerce, but that could come though a political statement by ministers, he said.
Beyond that the U.S. remains in a "listening mode" about possible new subjects, the U.S. official said. But he pointed out that not every issue raised would have to be part of the negotiating agenda; he said that alternative consideration could take place in a non-negotiating work program or through ministerial decisions.
The council meeting was held as part of the preparation process for the fourth ministerial to be held in Qatar in November. It discussed possible new elements for the WTO to consider, which is one of four bullet points in a checklist prepared by the chairman of the General Council, Stuart Harbinson, Hong Kong, China's WTO Ambassador (Inside U.S. Trade, May 11, p. 1).
Geneva diplomats said the May 17 informal council went better than expected since few developing countries expressed outright opposition to a new round of negotiations. However, these sources conceded that countries did not discuss issues in detail and that a number of countries that have been cool to new negotiations said that they are open to new subjects provided that the implementation issues have been solved.
In the meeting, a number of countries emphasized that new areas need to stay within the competence of the WTO, which was taken to mean that labor and environmental issues could not be considered, officials said. But at least one country used that test to speak out against the EU's proposal that investment and competition be on the negotiating agenda, they said.
In addition, a number of countries pressed for a commitment that all elements of the agenda be known by July, as a way to ward off unwelcome surprises, officials said. In the 1999 preparations for Seattle, the U.S. tabled a paper demanding a working party on labor in the WTO very late in the process.
Among the new topics raised in the Council were the relationship of countries' efforts to fight infectious disease to the Agreement on Trade-Related Aspects of Intellectual Property Rights, suggested by Brazil, Thailand and India, and the nexus of trade and debt as well as the transfer of technology, officials said.
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