World Trade Organization (WTO)

WTO Doha Round Bulletin

Week ending 4 November 2005

Key Issues

Agriculture

The WTO agriculture negotiations have intensified over the past few weeks. Negotiators have been meeting on a rolling basis in Geneva and Ministers from the Five Interested Parties (FIPs - US, EU, India, Brazil and Australia) met on 19 October in Geneva and again via videoconference on 29 October and 3 November. Detailed positions from the EU, US and G20 (group of developing countries) have been put forward on both market access and domestic support.

On market access, the US has put down the most ambitious proposal with tariff cuts for developed countries of between 55% and 90%, with a tariff cap of 75%, and approximately 1% of tariff lines to be designated as sensitive products (subject to lower tariff reductions). The G20 has put forward a proposal with tariff cuts for developed countries of 45% to 75%, a tariff cap of 100% and a very limited number of sensitive products. After much pressure from other WTO members, the EU finally put forward a revised offer on 28 October that included a disappointing proposal on market access. The EU proposed tariff cuts ranging from an average of 35% in the bottom tier up to a fixed cut of 60% in the top tier, a tariff cap of 100% and extensive opt-outs for sensitive products - up to 8% of tariff lines to be excised (expected to cover key products of interest to Australia). The use of the concept of "an average cut" of 35% in the bottom tier introduces additional flexibility, allowing individual lines to be cut by as little as 20%.

The EU offer is not sufficient to provide a basis for a consensus. The Cairns Group expressed its disappointment with the offer during a WTO meeting in Geneva on 31 October, stating that "the EU offer does not appear to advance beyond the modest level of ambition of the Uruguay Round, given the average depth of reductions envisaged, the flexibility now sought in the bottom tier, and the large number of sensitive products proposed".

Urgent progress is needed on market access in the lead up to the Ministerial Conference in Hong Kong and negotiators have undertaken to intensify work over the next few weeks. However, time is running out and the Round now hinges on whether the EU and others such as the G10 (group of industrialised countries such as Norway and Japan with high levels of agricultural protection) can come forward with a better offer that provides real commercial opportunities for exporters.

On domestic support, the key movement in the past month has been generated by the US proposal which Australia and others welcomed as a useful starting point for the negotiations. The US proposal would result in cutting its own trade distorting subsidies by 60% and EU subsidies by 83%. The US also proposed reducing the Blue Box cap from 5% (as it currently stands in the July 2004 Framework Agreement) to 2.5% (the Blue Box is currently uncapped and encompasses programs that are less trade-distorting, as they limit production levels). The G20 has also put forward an ambitious proposal with cuts to trade-distorting subsidies ranging from 80% for the top tier (targeting the EU), 70% for the second tier (targeting theUS) and 60% for the third tier. The EU revised agricultural offer released on 28 October also contained a domestic support element. The EU reiterated its commitment to cut subsidies by 70%, retain a 5% Blue Box cap but with additional disciplines to limit the shifting of programs between trade-distorting categories. Further negotiation of a domestic support package is presently linked to an outcome on market access. The US has stated that it needs a strong market access outcome in order to sell any reduction of farm subsidies domestically.

Non-Agricultural Market Access (industrial products)

In the absence of progress in agriculture, negotiations on non-agricultural market access (NAMA) have stalled. Significant differences remain between Members on the key outstanding issues of the tariff reduction formula for non-agricultural tariffs, including flexibility for developing countries, and treatment for unbound tariff rates. In view of that impasse, the Chair of the Negotiating Group on Market Access (NGMA) has held a series of informal consultations with Members to discuss technical issues, such as non-tariff barriers and product coverage. Small-group discussions have also been held on the sectoral negotiations, concerns of newly-acceded Members, the treatment of least-developed countries, and issues relating to the erosion of non-reciprocal preferences .

Negotiations in the lead-up to Hong Kong will aim to bridge remaining differences between Members on the depth of tariff cuts in developed and developing countries and the extent of special and differential treatment for developing countries. The EC, as part of its 28 October offer, proposed a simple Swiss formula with a coefficient of 10 (with developing countries having recourse to flexibilities for a small, as yet undecided, proportion of products), but developing countries are likely to see that proposal as inconsistent with the principle of less-than-full-reciprocity in tariff reduction commitments.

The NGMA is scheduled to meet from 7-11 November 2005, although in the absence of signs of progress on the key outstanding issues, it may be postponed.

Services

Australia is working with other Members to develop a platform for consensus that will allow WTO Ministers in Hong Kong to set ambitious targets to identify the way forward in the GATS negotiations. The current focus of our efforts is the Council for Trade in Services Special Session (the negotiating group on services) meeting this week in Geneva and consultations with like-minded WTO Members. Australia is supporting calls for agreement on so called ‘complementary approaches’, particularly setting targets for collective and individual levels of ambition and plurilateral approaches that identify the issues and sectors of most interest to Members.

Complementary approaches build on the existing request-offer process - they do not replace it. Most Members consider that request-offer negotiations on their own will not deliver new business opportunities and, if not complemented, would result in limited trade in services outcomes for the Round. Complementary approaches would take account of developing countries’ capacity constraints, in accordance with the GATS objective of aiming for progressive liberalisation.

Australia has been recognised by other WTO Members for its commitment to an ambitious GATS Round. Key trading partners welcomed our revised trade in services offer, tabled on 26 May, covering the movement of skilled professionals, legal services, telecommunications services, environmental services, private health services, freight logistics services, construction and related engineering services, air transport (marketing) services, and other business services. Our broader efforts are aimed at ensuring our strong offer results in new and expanded business opportunities for Australian services exporters. To date, 69 initial offers (covering 94 Members) and 28 revised offers (covering 53 Members) have been submitted by WTO Members.

TRIPs Council

Discussion at the recent regular TRIPS Council meeting held on 25-26 and 28 October was dominated by TRIPS and public health and the TRIPS and Convention on Biological Diversity (CBD) issues. There remain wide gaps in Member views -on how to amend the TRIPS Agreement to give effect to the August 2003 General Council decision on TRIPS and public health, and in discussions on the relationship between the TRIPS Agreement and the CBD. Zambia submitted a request for a 15-year extension of the implementation period for least developed countries under Article 66.1 of the TRIPS Agreement.

At the Special Session of the TRIPS Council held on 27 October, discussions on the negotiation of a multilateral system for notification and registration of wine and spirits geographical indications (GIs) continued. The meeting continued to work through the Secretariat document that sets out side-by-side the three register proposals that have been submitted to the Special Session. The Secretariat document (TN/IP/W/12) is available from http://docsonline.wto.org

Trade Facilitation

The Negotiating Group on Trade Facilitation is making good progress, with around 60 proposals submitted by both developed and developing country Members on all aspects of the mandate. The Group is currently discussing a draft of the Chairman’s report to the Hong Kong Ministerial Conference, which will set clear markers for negotiations in 2006 on the scope and content of potential trade facilitation commitments. Australia recently submitted a national experience paper on advance rulings (binding advice in connection to the planned importation of goods) which laid down principles which could form the basis for multilateral commitments in this area.

Meetings for the remainder of 2005 are scheduled for 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 continue to work through the detail of the various negotiating proposals.

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

Information on preparations for the Sixth WTO Ministerial Conference

Meetings in Geneva (as at 21 September 2005)

NOVEMBER

1 Trade Policy Review Body - Bolivia

1 Negotiating Group on Rules - Regional Trade Agreements

1 Committee on Anti-Dumping Practices Fax

2 Committee on Technical Barriers to Trade

3 Trade Policy Review Body - Bolivia

3 Committee on Safeguards

3 Council for Trade in Services - Special Session

4 EID AL-FITR (WTO non-working day)

7 - 11 Nov NAMA week

7 Agriculture Committee - Special Negotiating Session

7 General Council - Dedicated Discussion on E-Commerce fax

8 - 9 Negotiating Group on Trade Facilitation

10 Council for Trade in Goods

11 Working Group on Trade and Transfer of Technology

14 - 18 Nov Geneva Week

These special week-long events bring together representatives of WTO member countries who do not have permanent missions in Geneva and therefore cover WTO matters from other European capitals or from their capitals. The purpose is to inform these member countries and observers about recent developments taking place at the WTO.

21 Negotiating Group on Trade Facilitation

28 Trade Policy Review Body - Romania WTO/AIR/2701

28 - 29 Committee on Trade and Development

28 Dispute Settlement Body

30 Trade Policy Review Body - Romania WTO/AIR/2701

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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