Inside US Trade March 23, 2001
Developing countries' efforts to wring more benefits from existing World Trade Organization agreements ran into a wall of silence from the leading industrial countries at an informal General Council meeting late last week.
The lack of response from Quad countries-- the U.S., European Union, Canada and Japan-- to the calls from developing countries for concessions on their implementation agenda infuriated developing country officials at the March 16 meeting.
One developing country official said the meeting showed the Quad countries were "not sincere" when they agreed earlier this month to give political attention to the issue and place implementation on a parallel track with agriculture, services and the preparation for a new negotiating round.
"The bottom line is we want results," he said. "It doesn't please us to have meetings for the sake of meetings."
Trade officials from the quad countries defended their silence at the meeting, saying it would have been "counterproductive" to answer the "diatribes" from developing country officials with a response that said their demands were unrealistic.
"The developing countries think we can have another great show about the need to rebalance the Uruguay Round agreements," one trade official said. "We chose not to play this game." He insisted that there had been no common strategy worked out before the meeting to sit in silence.
At the meeting, developing countries again made veiled-- and not so veiled-- references that resolution of the implementation demands is linked to the preparation for a new round and the on-going negotiations of the built-in agenda, trade officials said. Pakistan ended the meeting with a statement that said without progress on implementation there would be no progress on anything else, officials said.
In the Council session, the chairman's report shows little progress has been made in a review of demands for changes in the agreements on agriculture, services, plant and animal health rules as well as intellectual property.
The chairman's report raised significant doubts about whether the developing countries' key demands on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) can be met in the present informal consultation process. "I fear that on some [the TRIPS] issues, the likelihood of finding ways to resolve them in the present process is quite low," he told the officials. Among the controversial demands is a demand for extension of TRIPS obligations, including patent and copyright protections, for developing countries.
The chairman also said there was "little hope for immediate progress" for demands that developing countries obtain greater leeway in the domestic support they provide for agriculture.
A Geneva trade official said that he did not see a "huge number" of the items demanded by developing countries addressed by the ministerial meeting at Qatar, the agreed-upon endpoint for the implementation process. He said demands to rewrite the agreements on subsidies, antidumping and intellectual property are not achievable by that date. But he said it was "still possible" that the countries could agree on some of the implementation demands.
The implementation process is supposed to run parallel to the preparation for the fourth ministerial conference, as well as to the negotiations on services and agriculture. WTO members had committed to produce results by the November meeting in Qatar, but over the past year of implementation debate there has been no indication that the industrialized world is interested in meeting any of the developing countries' demands.
The chairman of the General Council said he is hoping to inject some new approaches into the implementation process and hold a special session of the General Council around Easter.
Part of the dynamic involves the level of commitment of the U.S. to the launch of a broad-based round, which would require the support of developing countries. A continued standoff on implementation would likely stymie agreement on a new round, and if countries want agreement from developing countries, "someone has to blink" on implementation, one official said.
So far, there are no indications in Washington that the Bush Administration is actively preparing positions on key issues facing the WTO, such as implementation or how to handle demands for investment rules.
There has been no agreement among Quad officials on how to handle implementation, but officials in Geneva are also comparing notes in a detailed matter on the specific demands, officials said. But there "is not yet a formal checklist" on what is "doable," the official said.
Both the U.S. and Canada are still engaged in internal deliberations on how to approach the implementation question. European Union signals that it is willing to be more accommodating than the U.S. and Japan have not taken concrete form, partly because it has not been able to reach agreement with the U.S. and other industrialized countries on where to show flexibility, the official said.
It is still "possible" that industrialized countries will agree on a package of concessions, one official said. They note the Quad countries are actively engaged in informal discussions on the slate of implementation demands. The chairman's report, however, reveals little flexibility, especially on the more far-reaching demands.
On sanitary and phytosanitary measures, developing countries are asking that measures affecting their exports be delayed, but the Chairman's report says that, despite a "good exchange of views," further consultations are still needed. On the demand for increased efforts to include poor countries in standards-setting bodies, the Chairman of the SPS Committee is due to report back to the General Council in April.
On agriculture, developing countries are seeking disciplines on the use of agriculture export credits, which the U.S. uses to finance its exports. A group of Latin American countries, including Brazil and Argentina, joined with India and Malaysia in submitting a new paper on this issue both for the implementation debate and the agriculture negotiations. It calls for disciplines on repayment periods, interest rates and other features of the financing. The chairman's report calls for periodic reports on how this issue is dealt with in the agriculture talks. The Chairman's report also refers to a new proposal on how net-food importing countries cope with agriculture liberalization, which one official said would call for the establishment of a fund to help these countries deal with increased food costs.
On services, the demands include that countries liberalize the movement of natural persons, so that services professionals may more easily contract for work around the world. The chairman's consultations on this subject were "rather encouraging" he said.
On intellectual property rights, demands include a bar on any nullification and impairment cases under the agreement, which would bar dispute settlement action against countries' measures that do not in themselves violate the IPR rules but prevent the trade benefits of those rules from taking effect. This demand, along with another for stronger protections for geographical indications, is already the subject of discussion in the TRIPS council. Another controversial demand seeks a delay in requirements for patent or other intellectual property protections for plants varieties.
The implementation demands largely parallel paragraphs 21 and 22 of the draft ministerial declaration prepared for the failed Seattle Ministerial, with paragraph 22 consisting of more long-range demands. Among the more-far reaching demands are those for increased market access for textile and apparel products currently restricted by quotas, and greater leeway under trade rules to subsidize industrial and agricultural production. After implementation talks yielded little substantive results in December, the process was restarted by reorganizing the paragraph 21 and 22 demands according to the WTO agreement they seek to alter.
Under the parallel processes initiated under the General Council, July is seen as a possible target date for an assessment of progress in both implementation talks and talks on what a ministerial declaration would address in terms of the scope of new negotiations.
But after last week's talks, some developing countries are debating whether to force the issue earlier than July, possibly at a late April special session on implementation.
"Some [developing country officials] are talking about making the April session into a major crisis-- push the Quad to a corner and ask them to say a big 'No,'" one official said.
That view is not shared by India, however, one of the leaders of the like-minded group, according to a trade official. It still holds to the timeline agreed to in December to complete the process by the Qatar ministerial, and keeping the implementation demands. That approach separates the implementation agenda from direct linkage to agreement on a new round and also from the demands being folded into new negotiations. However, the official said that approach could evolve over the coming months.
Developed country officials also criticized setting up the April meeting as a make-or-break deal, saying countries were not able to make "big down payments."
"That might be pushing it, though the April meeting has to be more give and take then at this meeting," one official said.
At Friday's meeting, interventions by Chile and Singapore pushing a more moderate approach to the implementation agenda were rebuffed by members of the like-minded group, trade officials said. Chile sought to emphasize that agriculture and services negotiations were also important and so should not be held hostage to the implementation talks, trade officials said. Singapore's representative said developing countries should make a realistic appraisal of which demands were doable and which would have to be incorporated in a new round.
These interventions were met with a "barrage of accusations" that Chile and Singapore were abandoning their brethren in the developing world, according to trade officials.
"There is strong pressure from the like-minded group led by Pakistan that there should be no breaking of ranks among developing countries," a trade official said.:
