Trade Officials Say WTO Unlikely to Deliver Deal in December, Doha Heading for Shelf
GENEVA—Trade officials in Geneva said July 21 they see little chance that World Trade Organization members will reach an agreement on a “deliverables” package for the trade body’s December ministerial conference and predicted the stalled Doha Round of trade talks could go into several years of hibernation following the meeting.
Speaking at a seminar at the Graduate Institute in Geneva to discuss prospects for the Doha Round, U.S. deputy ambassador to the WTO David Shark admitted that efforts among key WTO members to agree on a deliverables package are faltering.
WTO Director-General Pascal Lamy will now have to decide whether to continue pursuing his initiative, although one official told BNA that a growing number of the WTO members involved in the talks now believe the idea of a deliverables package should be dropped.
Lamy is due to meet with key WTO members July 25 to discuss options for moving forward before briefing the WTO membership as a whole on July 26.
The deliverables package—also referred to as “Doha Lite”—is intended to rebuild confidence in the Doha talks following the admission earlier this year that differences between the United States and major emerging economies on market access issues cannot be bridged at present. The goal is to conclude an agreement that can be adopted at the WTO’s Dec. 15-17 ministerial conference in Geneva.
WTO members generally agree that a deliverables package should focus on issues of interest to least developed countries (LDCs) but have been unable to agree on what these issues should be and whether to include so-called “LDC-plus” issues of interest to a broader swath of the membership.
Shark Sees No Appetite for Compromise
“What we’re seeing is that first, there’s not agreement on the content of the LDC package, and secondly, when we look at the plus issues, there are some saying I can’t do this, I can’t do that, I can’t do this if you don’t do that, so…that’s the situation in a nutshell,” Shark said.
“When you look at all this, you come to conclusion that it probably won’t work out,” he added.
Zhu Haitao, second secretary at China’s WTO mission in Geneva, agreed that it “seems unlikely we are going to have [a deliverables agreement] in December.”
“Some are saying there can only be LDC issues, some are saying there must be more,” said Zhu, who spoke in a personal capacity. “China supports LDC-plus, if members could agree on having more topics in package; for China this is not a problem.”
WTO members have been discussing a deliverables package that would focus on issues such as duty-free/quota free (DFQF) market access for LDC exports and associated rules of origin, a waiver from any market access commitments under a future Doha Round services agreement, and a “step forward” on addressing cotton subsidies.
Friction Over Cotton Subsidies
However, key members are divided on what should be covered in the talks. The cotton issue has been one of the most divisive: the original Doha Round proposal on cotton submitted by four African cotton-producing nations in 2004 targeted the billions of dollars in subsidies paid out annually to U.S. cotton farmers through countercyclical payments and other subsidy programs.
The United States argues that any agreement on reducing cotton subsidies must include commitments by China, which has now become the world’s largest cotton subsidizer. U.S. countercyclical payments have fallen due to the rising price of cotton on global markets.
The United States also insists that a deal on cotton must also address other trade-distorting policies, most notably China’s 40 percent import tariff on cotton. China has so far been silent on what concessions, if any, it is prepared to make on cotton subsidies and tariffs.
“I doesn’t appear to be coming together” on cotton, Shark admitted, adding the U.S. government nevertheless intends to carry out reforms of its cotton support programs in response to the WTO’s 2005 ruling on U.S. cotton subsidies.
Discussions on the “plus” issues have also proven to be divisive, with members failing to agree on the inclusion of proposed topics such as trace facilitation, export competition in agriculture, fisheries subsidies, and environmental goods and services…