Identifier
Created
Classification
Origin
05GENEVA2179
2005-09-15 12:18:00
UNCLASSIFIED
US Mission Geneva
Cable title:  

MEETING OF THE WTO TRADE NEGOTIATIONS COMMITTEE (TNC)

Tags:  ETRD WTRO USTR 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 04 GENEVA 002179 

SIPDIS

PASS USTR FOR ALLGEIER AND DWOSKIN
EB/OT FOR CRAFT
USDA FOR FAS/ITP/SHEIKH, MTND/HENKE
USDOC FOR ITA/JACOBS

E.O. 12958: N/A
TAGS: ETRD WTRO USTR
SUBJECT: MEETING OF THE WTO TRADE NEGOTIATIONS COMMITTEE (TNC)
- SEPTEMBER 14, 2005


Summary

UNCLAS SECTION 01 OF 04 GENEVA 002179

SIPDIS

PASS USTR FOR ALLGEIER AND DWOSKIN
EB/OT FOR CRAFT
USDA FOR FAS/ITP/SHEIKH, MTND/HENKE
USDOC FOR ITA/JACOBS

E.O. 12958: N/A
TAGS: ETRD WTRO USTR
SUBJECT: MEETING OF THE WTO TRADE NEGOTIATIONS COMMITTEE (TNC)
- SEPTEMBER 14, 2005


Summary


1. On September 14, 2005, the new WTO Director-General,
Pascal Lamy, convened his first meeting of the Trade
Negotiations Committee to outline a process for advancing the
Doha Development Agenda (DDA) and ensuring that the upcoming
Ministerial Conference in Hong Kong, China is a success. Lamy
brought a new brisk, no nonsense style, emphasizing that he
wanted more negotiating and less speeches. The Chairs
followed his example in their presentations and Member
comments were limited and to the point.


2. Lamy's overall message is that Hong Kong should serve as
the two-thirds point in the negotiations and set the stage for
completion of the negotiations at the end of 2006. In his
statement, he pointed to key issues where he felt progress
will be central to advancing the negotiations and he
identified key actions that were needed for each of them. In
terms of process, Lamy set a couple of informal benchmarks for
the negotiations. By mid-October, he said Members should be
in a position to assess the progress being made and define
their ambitions for the Ministerial Conference, and by mid-
November, the negotiating groups should have produced
substantive and specific results so there is sufficient time
for review in capitals. Time is short and Members are
entering a three-month period of ongoing permanent
negotiations leading up to Hong Kong, he said. He closed by
urging Members to stay ambitious and not to settle for lowest-
common denominator outcomes.


3. Following Lamy's presentation, the TNC heard reports from
the negotiating group chairs and fourteen Members made
statements. Lamy did not suggest a date for the next TNC,
saying he would have a clearer picture of how to proceed
following upcoming negotiations in key areas.

Lamy's Statement


4. Lamy opened the meeting by saying the essential question
is - what do Members have to do to ensure that Hong Kong
serves as the two-thirds point in the negotiations and sets
the stage for successful conclusion at the end of 2006? This
is the objective we should focus on, he said, because if
Members do not make it two-thirds of the way in Hong Kong then
prospects for a conclusion in 2006 will be seriously

compromised.


5. Lamy then presented a "precise diagnosis" of essential
questions to be solved if Members wanted to arrive at a
coherent result in Hong Kong. The list is not exhaustive, he
said, but these issues are "strategic" and progress is
necessary to turn what has been a vicious cycle into a
virtuous one.

- Progress on agriculture is needed urgently, he said.
Members should prepare agreement on an end date for
export subsidies as well as parallelism for state trading
enterprises, export credits, and food aid. Members need
a clear vision of what will be done on domestic supports
including the reduction commitments and a tiered formula
for reductions of the final bound aggregate measure of
supports. On market access, there should be a solid
package of equivalent ambition to the other pillars
including a tiered formula with flexibilities for
sensitive and special products. In addition, we must
tackle "all elements of the cotton dossier," he
emphasized.

- A lot of work remains to be done on NAMA, he said,
including on core elements of formula, flexibilities, and
unbound tariffs. Members need to strike the right
balance between formula and flexibilities and make
progress on the issues of preference erosion, sectors,
and non-tariff barriers.

- On services, there is a new dimension - the importance of
the issue for developing countries - that should energize
the negotiations. In the run-up to Hong Kong, Members
should develop different approaches that lead to more and
better commitments to open trade as well as improvements
in services rulemaking.

- On rules, Lamy framed the goal for Hong Kong as "arriving
as closely as possible to draft negotiated texts on
antidumping, services and countervailing measures, and in
fisheries subsidies." He encouraged Members to make
"third-generation proposals" as well as drafting
suggestions as soon as possible so that Members can focus
on improvements in Hong Kong.

- Development should be integrated across all of the issues
in the negotiations so the sum of results in each area
delivers on the development dimension of the
negotiations. In addition, there are development-related
issues such as work on special and differential treatment
where Members need to define an acceptable outcome for
Hong Kong. He opined that Members should intensify work
on TRIPS/public health so that agreement can be reached
to amend the TRIPS text. He said that an "aid for trade"
window would be essential to turn the development promise
of the round into reality and noted the IMF and World
Bank have started work on it.


6. On process, Lamy said he hoped today's TNC session would
mark the beginning of a new and more productive phase for the
TNC. He would call more formal and informal meetings, he
said, but before scheduling anything specific he wanted to let
the negotiating process continue in the respective groups.
There are only three months left, he said, and Members should
consider themselves in ongoing permanent negotiations.


7. In assembling the package for ministerial consideration in
Hong Kong, Lamy said it would be important to make a
transition between a vertical, issue-specific approach and an
integrated approach. That task would be accomplished in a
"bottom-up" fashion, he explained, with the components of the
package being developed by Members in the negotiating groups,
rather than a top-down approach where the DG or someone else
simply threw a comprehensive text on the table.


8. He closed by setting a couple informal benchmarks - by mid-
October, Members should be able to assess progress and define
their ambitions for Hong Kong, and by mid-November, the
process should aim for specific results and a consolidated
text so that there is sufficient time for review in capitals.
Lamy urged Members to stay ambitious, and not to settle for
least-common denominator results.

Statements by Chairs


9. Lamy then invited the chairs to make statements, noting
that the chair of the rules negotiations - Ambassador Valles
Galmes of Uruguay - was out of town.

Agriculture


10. The agriculture chair, Ambassador Falconer of New
Zealand, began by emphasizing that there is much to be done by
mid-November. For better of worse, the negotiations are in a
new phase, after the last phase (ending in July 2005) did not
succeed in achieving a first approximation of modalities. Now
we are on a path where we must achieve modalities by mid-
November. It will be important to focus on essentials, both
in terms of issues and sequencing.


11. To move forward, there must be political movement. We
hear that intensive work is going on in capitals, but we have
yet to see the fruit of any new developments. In short, we
are still where we were in July, when Ambassador Groser
prepared his overall assessment of the negotiations, and there
is very little time to prepare for Hong Kong. He then posed
three questions that would be pivotal to progress and which
have been the topic of recent negotiations:

- First, on structure, should we continue to focus on a
structure without numbers, or should we tackle both
structure and ambition at the same time? Do we need
numbers to help us move the discussion of structure
forward?

- Second, how do we define the level of ambition?

- Third, with respect to balance, to what extent do we need
to look at overall balance across the pillars? What are
the tradeoffs necessary to reach agreement?

Services


12. Ambassador Jara began with an assessment of offers,
saying there is widespread disappointment with the state of
play including the number and quality of offers as well as new
business opportunities created. At the current rate we would
be very lucky, he said, if we had a critical mass of initial
offers by the end of the round. [Note: Jara tabulated that
there have been 69 initial offers from 93 Members, meaning
there are more than twenty offers outstanding not including
LDCs or more than fifty including LDCs. Revised offers were
due last May, he added, and so far there have been only 27
from 51 Members.]
Services negotiators have an intensive schedule leading up to
the next services cluster on topics such as modalities for
LDCs, which he felt should be part of the Hong Kong package,
and on finding complementary approaches to request-offer to
help address what he described as "the current unsatisfactory
situation." Leading up to Hong Kong, he would work to further
identify the expectations of Members across all aspects of the
negotiations.

NAMA

13. Ambassador Johannesson agreed with Lamy that time is
short and that the negotiations are entering a difficult
phase. Future meetings would address formula, unbound
tariffs, and flexibilities in an integrated and hopefully more
forward-looking manner. Key challenges will be optimizing the
balance between ambition and flexibility and moving to a
meaningful dialogue over numbers. In addition, it will be
important to address non-tariff barriers, he said, and he
called for specific proposals from Members wishing to address
the issue, reporting that so far proposals have not been
forthcoming. He asked Members to stay on call in a continuous
negotiating mode prior to Hong Kong.

TRIPS


14. Ambassador Ahmad provided a short report, explaining that
there would be formal and informal efforts in the run-up to
Hong Kong to try to overcome remaining blockages. A
disagreement over the linkage of one proposal to the mandate
of the Special Session has been resolved and all proposals can
now be discussed. That is but a first step, he emphasized,
and there has been no narrowing of differences on substantive
issues including legal effects, participation, and cost and
administrative burdens.

Trade and Environment


15. Ambassador Ali recalled that while all aspects of the
mandate are important, the paragraph 31 (iii) aspect related
to the reduction or elimination of tariff and non-tariff
barriers to environmental goods and services remains the best
candidate for tangible progress by Hong Kong. On this item,
Members are trying to get a sense of what can be achieved in
Hong Kong on the basis of a list approach, an environmental
project approach, and/or other approaches. Other aspects of
the mandate are equally important, he said, asking Members to
reflect on what can be achieved.

Dispute Settlement Understanding


16. Ambassador Spencer said he did not have much to add to
his written report from July. The focus of the upcoming
negotiating session would be on five or six contributions made
by Members in previous months. He hoped there would be a text
by Hong Kong, but that would be up to the Members to decide.
Members should focus on what they want out of this review, he
said, and it is the responsibility of Members to negotiate
amongst themselves to make this happen. He quipped that if
the negotiations were a football match, it was time for the
goal-keepers to become strikers.

Trade Facilitation


17. Ambassador Noor gave a short report, noting that there
have been no meetings since the last TNC but work to prepare
for the Ministerial Conference would resume soon. Next steps
included a further assessment of proposals made, and the
Secretariat compilation in TN/TF/W/43 would help to advance

SIPDIS
discussions. There has been a special focus on technical
assistance, capacity building, and special and differential
treatment, he said, where some progress has already been made
but concrete ideas are needed.

Trade and Development


18. Faizel Ismael reported that there has been intensive work
on the five LDC-specific issues - differences are narrowing
and although Members are very close on some of those issues,
they have not yet agreed on any of them. His approach in the
near term would be to consult on what Members hope to achieve
in Hong Kong, try to resolve the LDC-specific issues, and then
move on to other agreement-specific proposals including those
made by the Africa Group.

Statements by Members


19. Fourteen Members made statements, most of them heeding
Lamy's request to be concise and not to repeat well-known
positions. Themes included the shortness of time, the
centrality of agriculture, the importance of transparency and
inclusiveness. A few specific points may be of interest to
Washington agencies:

- India expressed concern that implementation issues were
not included in Lamy's presentation. India described
these issues as "vital" and called for progress
specifically on TRIPS/CBD as well as granting additional
flexibilities for developing countries in the TRIMS
agreement. Bulgaria also pointed to implementation,
opining that GIs is "the only implementation issue
specifically mentioned in the Doha Declaration" and
describing it as a key to a successful Ministerial
Conference. Lamy responded that he would continue the
same level of attention and involvement in these issues
as his predecessor.

- In a reference to bananas, Honduras pointed to
"collateral issues" that have important implications for
the negotiations. Lamy responded that it would be
important to ensure that litigation deadlines did not
interfere with the negotiations.

- Costa Rica stressed the importance of tropical products
and urged Lamy, in his consultations with different
regions, to take into account differing viewpoints within
regions. Lamy provided assurances that he would consult
with all participants. Shark