Brussels, 25/07/2006 (Agence Europe) - On Sunday evening the G6 (European Union, USA, Brazil, India, Australia and Japan) proved unable to find a compromise on modalities for the liberalisation of trade in agriculture and manufactured goods (NAMA), which was an indispensable preliminary to obtaining an agreement with all member countries. WTO Director General Pascal Lamy, therefore decided to indefinitely postpone Doha Round discussions. Although they should absolutely have been concluded before the end of the year so that a possible agreement could be ratified by the US Congress, given that the special negotiation mandate of the US government, Trade Promotion Authority (or Fast Track) expires in mid-2007, negotiations could, at best, begin again in several months time, very likely, according to non-official sources, after the Congress reshuffle next November.
Pascal Lamy says no WTO has ended up a winner in this failure
Addressing the Trade Negotiations Committee (TNC) on Monday, Pascal Lamy indicated to Heads of delegations that he would recommend to the General Council meeting on 27 July to take “time out” for discussions “time out” that would apply to all discussion groups. Without providing any indication of the length of the suspension of negotiations, he did highlight the need for “Time out to analyse the situation, time out to examine the options available, time out to review positions”. He warned that, “discussions can begin again when progress can be accomplished and that requires everyone to end their intransigent stances”. Lamy deplored the fact that partners had “missed an important opportunity of demonstrating that multilateralism worked”. He added that, “now we have to think first at home” and said that he shared the “feeling of frustration and impatience” of developing countries. One of their representatives at the Committee explained, “we realise we are now taken hostage by the large developed countries”. Mr Lamy also regretted that the main block was still located on both sides of the “triangle of balance” for a compromise, on agriculture, namely domestic support and market access. “G6 members have not even tackled the third side on NAMA”, he pointed out. Finally, he regretted that they had missed a chance of “integrating the most vulnerable counties in world trade” and hammered home the fact that “if the political will really existed, there could have been a result. But today there isn't any. And let me be clear, there are no winners and no losers in this assembly, Today there are only losers”. Refusing, however, to “speak about any definitive failure”, Mr Lamy questioned on Wednesday morning by France Inter called on the “different players” to have a “clear perception of the seriousness of the situation…and come back to the playing field once positions and tactics had been changed”. He concluded that “it will be even more serious if they do not come back to the negotiating table”.
Mandelson hoping for extension of Fast Track and Mr Bush's veto on Farm Bill prolongation
Addressing the press on Tuesday in Brussels, the Trade Commissioner Peter Mandelson, frustrated by another failure after divergences had been reduced between members, put responsibility squarely on Washington's shoulders for the suspension of these discussions. He said that flexibility was called for and “the European Union, despite divergent views among Member States, was able with a great effort…to show significant flexibility on the difficult agricultural market access issues. To raise our envisaged average farm tariff cut from 39% (offer of October 2005) to 50%” and therefore got close to the requests made by emerging G20 countries (54%). He then accused the USA of having shown no flexibility over domestic support, “although I do understand the domestic political considerations…the United States have been asking too much from others in exchange for doing too little themselves”. Diplomatic sources said that the failure of the negotiations was “relatively predictable” given the oncoming US elections (Congress reshuffle in the autumn). Mr Mandelson also regretted that this failure represented a victory for those, in particular in the United States, who were opposed to free trade and the opening of markets by playing on the fears of globalisation and severe economic and technological changes. Responding to journalists' questions, he said he hoped “President Bush will seek Congressional support to extend his fast track powers to approve free trade deals”, powers which avoid the need for approval section by section of a possible agreement by the American Congress. He also called on President Bush to “veto any extension or rollover of the US Farm Bill”. Such a gesture would “be a strong signal” of the US government's desire to bring the Doha Round to a successful conclusion, he stressed.
Mr Mandelson also regretted that this failure represented a victory for those, in particular in the United States, who were opposed to free trade and the opening of markets by playing on the fears of globalisation and severe economic and technological changes. Responding to journalists' questions, he said he hoped “President Bush will seek Congressional support to extend his fast track powers to approve free trade deals”, powers which avoid the need for approval section by section of a possible agreement by the American Congress. He also called on President Bush to “veto any extension or rollover of the US Farm Bill”. Such a gesture would “be a strong signal” of the US government's desire to bring the Doha Round to a successful conclusion, he stressed.
In the short term, remove development from overall negotiations
Although doubtful that the talks would be re-started in the near future, Commissioner Mandelson nonetheless gave assurances that he would not give up. “Europe remains committed to this Round … Doha will remain a central priority of European trade policy,” he said, criticising the ambiguity of some partners who believed that a round devoted to development should allow them to be exempted from making concessions. This was a thinly-veiled allusion to the G20 which, although probably demonstrating flexibility on the extent of the reduction in customs duties on NAMA that they were prepared to concede, made life difficult of the developed countries in the talks. “What can we do next? In the short term, we should ensure that the more needy developing countries do not fall victim to the inability of the WTO membership as a whole to strike a deal,” Mr Mandelson said. If this break in negotiations was to be prolonged or if negotiations were to go on and on, his idea would be to “extract a significant development package from the rubble of the negotiation and frontload it”. This initiative would consist of seven points: - negotiate and implement the Aid for Trade package, which would allow developing countries to increase their trade capacity; - negotiate a new agreement on trade facilitation, linked to aid for trade; - put in place an integrated framework for technical assistance to trade for the least developed countries (LDCs); - improve and implement the commitment to duty- and quota-free access to rich and emerging markets that are able to do it for all products from LDCs outside the Doha Round; - draw up a specific proposal on Special and Differential Treatment for developing countries; - work on making origin rules more development friendly; - put in place improvements on the WTO dispute settlement understanding to make it easier for developing countries to use. Mr Mandelson also gave assurances that Europe would make use of Economic Partnership Agreements as development instruments “to compensate for the lost benefits” of the Round. He said too he favoured thinking through the agenda of work for the WTO, how it works and how it makes decisions.
United States accused by Europe
The European Union has pointed an accusing finger at the United States, which it claims demanded too great market openings of its partners without reducing its domestic subsidies in return. Speaking on behalf of the Finnish Presidency of the Council of the EU, trade minister Paula Lehtomäki regretted that Washington refused to agree to reductions of farm subsidies as would have been found significant by the others, despite indications of further flexibility on access to their agriculture markets from the European Union and other partners. “Neither the industrialised countries nor the developing countries have won,” she added. French trade minister Christine Lagarde said, “The Doha Round is not far from being a complete failure, and we must expect nothing more in the immediate future”. “The United States did not want to make the slightest concession on its domestic agriculture subsidies, and this led to complete deadlock in the negotiations, which have been suspended quite cumbersomely, since no date has been set for the next meeting,” she went on, before adding, “It does not make one optimistic”. German agriculture minister Horst Seehofer was also critical that ultimately “the talks failed because of the political considerations of a major partner and its reticence to contribute to agricultural reform”. “It is frustrating to see that, so close to our goal, a partner, who was expected to be a leader, refuses to play its part,” he regretted.
The Committee of Professional Agricultural Organisations in the EU (COPA) and the General Confederation of Agricultural Cooperatives in the EU (COGECA) also reproach the US for its lack of flexibility in the talks. “The EU has reformed its agricultural policy in a very major and comprehensive way”, the US meanwhile “spent their time asking for more and more” from the EU, while trying to avoid reducing domestic subsidies such as counter-cyclical payments, stresses a joint press release.