Inside US Trade | Vol. 19, No. 31 | August 3, 2001
A World Trade Organization informal General Council meeting this week on preparations for the November ministerial largely featured a restatement of countries' positions on the launch of a negotiating round, in what General Council Chairman Stuart Harbinson dubbed a "static" debate, trade sources said. WTO Director General Mike Moore also warned the group that without a change of positions between now and September, when negotiations on a draft declaration must begin, "the process could implode and become unmanageable."
"If we return in September with unchanged positions then I fear the worst. There is time, we must use it. When we meet again the question will be 'What has changed?'" Moore told the July 30 session. "By the beginning of September we must be ready to start the intensive process of negotiation that will enable you to put before Ministers a coherent and balanced draft declaration."
Harbinson reiterated the need for countries to move beyond the "entrenched positions" he had outlined in a status report for the meeting (Inside U.S. Trade, July 27, p.1). Most countries accepted the status report as a realistic assessment of the prospects for talks, but the U.S. said it was too pessimistic, and India, which is taking a hard line against a broader round, said it was too optimistic.
While some trade sources noted increasing support for negotiations beyond the built-in agenda of agriculture and services, there is no consensus to add any single additional issue.
The U.S. and European Union this week were again seeking to stress their cooperation in launching a round, but were short on evidence of specific agreement, either on agriculture or on convergence to common positions on issues the EU is seeking to add, such as investment, competition and the environment.
On competition, the U.S. is resistant to the idea of using dispute settlement to enforce new rules, putting it in line with Canada and developing countries like South Africa that have signaled openness to the discussing the topic, but resistance to a dispute settlement component. The EU has yet to back off on its desire to see limited competition rules supported by dispute settlement.
On investment, the U.S. this week signaled its openness to rules based on GATT principles, such as national treatment and most favored nation status, trade sources said. That formulation could allow some room for compromise with the EU and other members, who are pushing investment talks. However, it is unclear how the U.S. position on investment would accord with the flexibility that proponents have built in for developing countries.
The EU's push for negotiations on environmental rules is shaping up as one of the most contentious areas, with strong resistance not only from developing countries but also from the U.S. The EU sought to undercut that resistance this week by defining limits on its agenda. It signaled that efforts to clarify rules to allow for precautionary health and environmental measures would be based on existing WTO panel and Appellate Body reports (see related story).
The EU also said that the agenda for the Committee on Trade and Environment could be used as a "partial agenda for a negotiating mandate." Although that committee has been controversial with developing countries, members have agreed on its agenda. Two aspects of its agenda discuss issues the EU wants to negotiate -- the relationship between WTO rules and multilateral environmental treaties, and the issue of eco-labeling.
Developing countries again signaled resistance to expansion of the agenda to include these new issues. Least-developed countries, the African groups and many Asian countries tied satisfaction of their "implementation" demands -- changes to existing agreements to give them more benefits -- to flexibility on accepting new issues. South American groups linked the new issues to a more ambitious agricultural mandate, which the EU is resisting.
Even on reduction of tariffs on industrial products, where there is more support then on other issues, there is still no consensus. Developing countries made a concerted effort to say that such negotiations would be acceptable only if tariff escalation and tariff peaks are addressed. Tariff escalation refers to duties that are higher the more a product is processed, discouraging exporters from developing value-added industries. The EU also signaled that it would only accept talks in this area in the context of a broader agenda.
Referring to Harbinson's status report, EU Director General for Trade Peter Carl said, "Harbinson wisely avoids the trap of suggesting there is a consensus on market access. There clearly is not -- yet -- but for the record the Community for one will accept market access negotiations in the context of a wider round."
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