World Trade Organization (WTO)

WTO Doha Round Bulletin

Week ending 12 August 2005

Key Issues

WTO Informal Ministerial meeting: Dalian, China, 12-13 July 2005

On 12-13 July 2005, China hosted an informal meeting of WTO ministers in Dalian - the fourth time this year that ministers have met to take stock of the negotiations and work to move the discussions forward. Around 30 ministers, including Mr Vaile, attended, representing a range of key WTO members and groupings. It had been hoped that the meeting would be able to substantially move forward negotiations on the key issues of the agriculture market access formula and the shape of the formula for tariff reductions on industrial products. While there was some progress in narrowing the gaps between positions, the meeting was ultimately inconclusive.

July 'First Approximations'

In the first Informal Ministerial Meeting of 2005 - held in the margins of the WEF meeting in Davos, Switzerland in January - ministers agreed that WTO members should strive to achieve 'first approximations' by the end of July of certain key modalities for the Doha Round negotiations. Despite intense work in the last two weeks of July it proved impossible to complete this process. The Chairs of the different negotiating groups and Director-General Supachai reported to the WTO General Council on the state of progress. Negotiations will recommence as soon as possible after the Northern Summer break. More detailed summaries of current state of individual negotiations follow below.

Agriculture

Agriculture Negotiations Chair Groser (New Zealand) held a series of intensive, small group consultations in Geneva during July. However negotiators failed to achieve the breakthrough needed to secure a first draft on agriculture by the end of the month.

Exchanges on the key gateway issue of market access failed to achieve any convergence. The EU and G10 continue to argue for additional flexibility in the formula for sensitive products. The Cairns Group, G20 and the US contest the EU/G10 approach as it undermines the July Framework provisions and does not provide any certainty in delivering substantial improvements in market access - a key aspect of the Doha mandate.

Although there was some convergence on the structure that will be used to cut trade-distorting domestic support, the negotiations on this pillar (the Blue and Green Boxes) made no new progress. Likewise, exchanges on proposed disciplines for export competition including state trading enterprises (STEs) and food aid, failed to reach any conclusions.

At the Trade Negotiations Committee meeting at the end of July, Groser presented a second status report which again pointed to the enormous amount of work which remains to be done by the end of the year if modalities are to be agreed by the Hong Kong Ministerial Meeting. Negotiations will resume again in early-mid September in Geneva under the direction of the new Chair - incoming New Zealand Ambassador Crawford Falconer.

Non-Agricultural Market Access (industrial products)

The Chair of the WTO Negotiating Group on Non-Agricultural Market Access (NAMA) held informal consultations during the week of 18 - 22 July on the two key issues of the tariff reduction formula and treatment of unbound duties; as well as on the methodology to convert non- ad valorem tariffs to ad valorem equivalents (AVEs) and on product coverage. While there were no breakthroughs, progress was made on the latter two technical issues and the WTO Secretariat has now prepared draft guidelines for the conversion of non-AVEs to AVEs for the consideration of WTO members.

In his progress report on the Doha Round presented to WTO Members at the General Council meeting on 29 July, the WTO Director-General, as Chair of the Trade Negotiations Committee, focused on the two most critical issues in NAMA - the tariff reduction formula and the treatment of unbound duties.

On the formula, the WTO Director-General observed that divergences seem to be mainly related to the balance between the level of ambition and the flexibilities, rather than the structure of the formula itself. A balance will only be found if Members engage in a "number crunching exercise" - running simulations to demonstrate the effective tariff cuts arising from the application of different formulas. This should enable members to develop a more fully informed assessment of how each of the different proposals on the table may, or may not, meet the concerns and expectations of members.

The Director-General observed that there has been some movement with respect to the treatment of unbound duties - there appears to be an increasing convergence around the use of a non-linear mark-up approach. However, a pragmatic, equitable, solution needs to be found to deal with the sensitivities of some Members concerning unbound tariffs at low applied rates.

In concluding, the Director-General reminded members that industrial products represent almost three quarters of the world trade in goods and highlighted that Members need to intensify efforts in the NAMA negotiations leading up the Hong Kong Ministerial Meeting in December.

The next NAMA meeting is scheduled to take place in Geneva from 21-23 September.

Services

Australia's revised offer drew favourable comment at the June-July cluster of services meetings. Its Mode Four (temporary entry) centrepiece was particularly well-received.

68 initial offers have now been made, covering 93 Members (because of the multiple coverage of the EC offer). 25 revised offers (covering 50 Members) are also now on the table. The offers by Australia, Canada, Korea, Iceland, United States, European Communities, New Zealand, Japan, Norway and Chile are available on the WTO web site and/or Members' relevant national web sites.

During the June-July services cluster many Members, including Australia, expressed disappointment at the overall quality of the offers, and agreed that the request offer process, as it currently operates, is not producing satisfactory results and more focus is required. These Members agreed that a further round of offers should include an ambitious target for increased sectoral coverage and improvement in quality of offers. There is as yet no consensus, however, either on the idea of setting a target or on identification of a mechanism by which it might be set.

At last month's mini-ministerial meeting in Dalian, ministers noted that that the offers so far on the table fell short of expectations in terms of both numbers and content, and asked the Chair of the services negotiations to undertake intensive consultations in order to enhance the request offer process, and to explore other approaches within the parameters of the GATS.

Trade Facilitation

Negotiations continued during July in the Working Group on Trade Facilitation. In his report to the Trade Negotiations Committee (21-22 July), the Chair of the negotiating group stated that these negotiations appeared to be proceeding satisfactorily, with a large number of proposals received from a broad range of developed, developing and least-developed countries to clarify and improve GATT Articles V, VIII and X. The Chair commended the compilation of proposals prepared by the Secretariat (see June edition) as a valuable working document on which to base the Negotiating Group's preparations for its report to the Hong Kong Ministerial Conference. He said that the work of the negotiating group would need to continue to advance at a measured pace and to address all aspects of the mandate, including special and differential treatment, technical assistance and capacity building for developing and least-developed Members.

The meeting of the Trade Facilitation Negotiating Group on 25-26 July endorsed the Secretariat's compilation document as the basis for its further work. The Secretariat circulated a draft questionnaire to enable Members to conduct their own needs-assessments for technical assistance and capacity building, and outlined a proposal for a new webpage dedicated to Members' technical assistance activities. A new proposal from India and the US on "customs cooperation" and information exchange was greeted with caution by some, raising concerns about its practicality and the protection of confidential business information.

Meetings for the remainder of 2005 are tentatively scheduled for 19-20 September, 5-6 October, 8-9 November and 21 November. In addition to formal negotiating group sessions, it is expected that Members will also meet informally in small groups to work through the detail of the various negotiating proposals.

Rules - Trade Remedies

The WTO rules negotiations on trade remedies (anti-dumping, subsidies and countervailing duties) have moved into an intensive phase. Negotiating sessions were held in February, April June and July this year and further sessions are scheduled for September, October and November/December. During this year Australia has submitted elaborated subsidy proposals on prohibited export subsidies and their enforcement.

In the lead-up to the Hong Kong Ministerial meeting, the objective is to clearly identify and define key issues, thereby providing a strong base for text-based negotiations to proceed in 2006. The Rules Group Chair, in his report to the Trade Negotiations Committee, has proposed supplementing this year's intensive meeting schedule with intersessional consultations at technical and political levels, using "Friends of the Chair" to advance work on particular issues; and to sharpen the process by a focus on precise textual proposals.

Anti-dumping and countervailing measures remain the most active area of the rules negotiations. Australia is participating in an informal 'middle group' of WTO Members that share a willingness to improve the Anti-Dumping Agreement but that also have exporter-related interests that need to be taken into account. .

Negotiations on fisheries subsidies have gathered momentum. In the July negotiating session, Australia, co-sponsored by Ecuador and New Zealand, presented a paper on aquaculture. The paper was well received. The central point of the paper is that aquaculture may be more amenable to existing subsidies rules but that possible disciplines on the wild capture aspects of aquaculture may be necessary.

The next formal session of the Rules Negotiating Group is scheduled for the week beginning 26 September.

The Development Dimension

At the General Council meeting of 27-28 July, WTO Director General Supachai reminded members that it was indispensable for growth and development that the Round be concluded successfully. He also noted the opportunities presented by the Round for developing countries to benefit from opening up their own trade regimes, including to other developing countries.

Regarding the specific negotiations in the Special Session of the Committee on Trade and Development on the Review of Special and Differential Treatment provisions, he noted that work has proceeded over the last twelve months on the basis of the Doha mandate and last year's Framework Package. While members have been unable to agree on the modalities to be taken to these negotiations, work on the remaining proposals by Least Developed Countries has progressed. However Director-General Supachai reminded members that a great deal of work remains to be done before Hong Kong in working through the remaining Agreement-specific proposals on the table and in addressing outstanding issues, including cross-cutting issues. Members also needed to decide what to do with the 28 existing proposals which have achieved in-principle agreement.

Sixth WTO Ministerial Conference - 13-18 December Hong Kong, China

Information on preparations for the Sixth WTO Ministerial Conference

Forthcoming meetings in Geneva (as scheduled 3 August 2005)

September

14 Trade Policy Review Body - Trinidad and Tobago

15 Committee on Trade and Environment - Special Session

16 TRIPS Council - Special Session

16 Trade Policy Review Body - Trinidad and Tobago

19-23 NAMA Week

19-23 Services Week

19 Committee on Trade in Financial Services

19-20 Negotiating Group on Trade Facilitation

20 Working Party on Domestic Regulation

21-23 Negotiating Group on Market Access

21 Working Party on GATS Rules

22 Committee on Agriculture

22 Committee on Specific Committments

23 Council for Trade in Services

23 Dispute Settlement Body - Special Session

23 Committee on Rules of Origin

26-30 Rules Week

26-30 Services Week

26 Council for Trade in Services - Special Session

26 Negotiating Group on Rules

27 Dispute Settlement Body

28 Committee on Import Licensing

29 Sub-Committee on Least-Developed Countries

29-30 Council for Trade in Services - Special Session

Contact Us:

Trade Policy Section
Office of Trade Negotiations
Department of Foreign Affairs and Trade
BARTON ACT 0221
Fax: (02) 6261 3514

or email trade.consult@dfat.gov.au

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