How can we bring the Round to a successful and timely conclusion?

The presentation was divided into three sections: the prospects for the negotiations on the Doha Development Agenda finishing by the agreed deadline of 1 January 2005; Dr Supachai's assessment of the key issues; and his views on the strategy for successful completion within the deadline. [1]

Dr Supachai opened by commenting that the debates at Wilton Park seemed to be less heated this year than last year. It was still uncertain then how the Doha conference would turn out. Requests were being made to mainstream trade into development. Wilton Park brought people together and he learnt a lot. Now he was more constrained than previously in what he could say, but he would listen and take ideas to Geneva. He will work in co-operation with the members, but also he will think independently.

Can we finish the Agenda on time?

During his visits around the world since Doha, people asked Dr Supachai why the negotiations are due to be finished in three years, rather than four or five years. The Uruguay Round started as three years but took seven years. What will differentiate this Work Programme, so that it can be completed by January 2005? The complexity of the Doha Work Programme is not much less than that of the Uruguay Round. Discussion of the "new issues" [2] might be long-winded, as we have seen with the MAI negotiations under the auspices of the OECD.

For Dr Supachai's part, any term can be set. As a former trade negotiator, he found tight time-frames, with substantial goals, necessitate political leaders coming up with decisions earlier. In this Round, ministers will have to explain their positions to domestic audiences, before they can be endorsed. Even in Asia, where outcomes used to be endorsed without any controversy, due to the financial crisis, there will be questioning. If ministers are not pressed, difficult decisions will be delayed. The difference from the Uruguay Round is that most matters on the table have already been discussed widely. Since Seattle, there has been much soul-searching. APEC and other regional meetings have involved trade ministers. The Doha issues are not new.

If we go into a fourth year, there would be a risk that some of the people who have been working together would no longer be present. Those who were in Doha understand the need to move forwards. There would be benefits in terminating before the set of characters change. If we reach 2005, some questions would need to be taken up again.

After a set of UN conferences, with promises and pledges of aid, transfer of technology and closing the digital gap, we understand it is more effective to achieve change through trade, rather than increasing ODA. Developing countries would do better earning their own keep. The conferences in Brussels [the Third United Nations Conference on the Least Developed Countries, 14-20 May 2001], Monterrey [International Conference on Financing for Development, 18-22 March 2002], and Johannesburg [World Summit for Sustainable Development, 26 August - 4 September 2002] are demonstrating that the international coalition against poverty regards trade as the most effective mechanism to achieve progress.

Dr Supachai said he would not kid himself that the three years will be an easy process. We will need more devoted effort than was seen during the Uruguay Round. We have to allow for a difficult initial period. There have been problems over the composition of the negotiating groups, the appointment of their chairmen and even over who can be observers. We need to set the right tone and then move into a higher gear. From what he has heard, there has been concern in Geneva over some unnecessary delays and bottlenecks.

What are the key issues?

Dr Supachai said he would not present solutions to the major issues, but go through the questions. He had more concern on some issues than those being discussed at Wilton Park.

Implementation was difficult and complex. About 50 areas were handled at Doha and now some 50 more have to be handled. By the end of December 2002, a wide range of issues currently being addressed outside the negotiations will come back to the Trade Negotiations Committee. Many will have to be addressed at the level of trade and tariffs (TAT) by the end of the year. Some people in Geneva feel that meeting the commitments on textiles [the Agreement on Textiles and Clothing (ATC), which was part of the Uruguay Round] and "special and differential treatment for developing countries" (S and D) [3] might be difficult. The current situation was still seen as unsatisfactory. The point is being made by some members that there is a lack of seriousness, a lack of interest – Dr Supachai said he was quoting – some just want these issues to go away. Their position is that to achieve implementation of S and D, there must be classification of the countries, criteria for applying special measures and eventually a system for graduation in their application. Do not underestimate the problems. Many developing countries still think they have not gained sufficient return for the concessions they made in the Uruguay Round. The key dates are the end of July 2002 [4] and the end of December 2002 [5]. The need to meet these deadlines has to be addressed in a devoted and serious manner.

Agriculture had already been discussed in a previous session at Wilton Park, so Dr Supachai dealt with the subject briefly. He had full understanding for the United States position. When the time comes for a real agreement, starting with the March 2003 deadline on modalities, the US will clarify its position, because of the benefits that ending protectionism will bring to all. [6] Various estimates are being floated of the benefits of further liberalisation and they provide a healthy sign for an agreement.

Services were of greater concern to Dr Supachai. There was a very good World Bank report on services around the world. [7] It is necessary to base discussions on real facts. Services are growing much faster than other sectors for many countries, including developing countries. The gain from trade in services would be more than in the industrial sectors, particularly because not much had yet be done. There are parts where we can all gain. We should achieve trade-offs between the different modes.

There is opposition to the GATS from civil society representatives. Dr Supachai did not think there should be more consultations, but we should study the NGO reports. GATS does not require WTO members to privatise public services. Privatisation and liberalisation of trade in services are different issues. There is not a problem over privatisation of public services. It is not the multinational corporations who provide sub-standard services. On the other hand, even when privatisation occurs, they do have to be regulated. Dr Supachai would be concerned about a very rapid the turnover of public services. The process must remain on a voluntary offer basis.

The main concern of the negotiations will not be new international rules, but domestic rules. Some would benefit each of the countries themselves. However, in other cases, adaptation to international standards will be costly. The World Bank has shown that intellectual property rights have been costly. We must have open eyes on this. It demonstrates the need for trade-related technical assistance, so that the international community bears the cost.

Some other key issues will be left to the Fifth Ministerial Conference in Cancun. There are difficulties with the modalities for negotiations on investment and on competition. The remaining time must be used to upgrade understanding of the consequences of embarking on negotiations. Meetings are being organised, but some say that they do not want to attend for fear of being brainwashed.

What might be the possible consequences of agreeing rules on investment and competition? Can developing countries mobilise more foreign direct investment? For Africa, it is not enough to have the rules. In China, FDI flowed in before they joined the WTO. We have to be explicit. Rules serve transparency and enhance the credibility of regimes. We need a better allocation to Africa, but also indigenous conditions need to be in place. We have to work with UNCTAD, so that the rules help solve Africa's shortcomings.

What is the strategy for success?

Dr Supachai was emphatic that there must be better co-ordination between the Geneva process and policy-making in the capitals. One might have expected that this was already being done, but it is not adequate. We should all help, especially for countries that are not represented in Geneva. The final decisions will have to come from the capitals and the sooner the better. However, this cannot by-pass the Geneva process.

Informal mini-ministerial meetings will contribute. Good use of them was made in the preparations for Doha. The idea has been broached that they should be used again now. There is sensitivity on this question. They would be beneficial. There will have to be care with the timing. Mini-ministerials should carry forward, but not supplant, the Geneva process. They cannot be negotiating sessions.

Early concessions – such as the Everything but Arms initiative from the EU – are needed, to create goodwill. Is it going to be different to have a Development Round or is it just a matter of semantics? There can be benefits for all. It would be a good strategy to make concessions to the Least Developed Countries, to give substance to special and differential treatment and to provide trade-related technical assistance. It would not hurt the developed countries, but would make it costly for developing countries to walk away.

Dr Supachai suggested three processes could maximise the chance of success. Firstly, some countries have to address the problem of their domestic preparations. It is necessary to manage the domestic process from the beginning, in a timely manner, so that domestic constituencies understand from the beginning what the benefits will be. Governments should talk to NGOs before they take up positions for Cancun. Support should be raised from consumer groups. Secondly, the Geneva process should not cause delays. Country positions should be announced as soon as possible. The controversies should be confronted before Cancun and brought to a head. Thirdly, Dr Supachai, in his role as chair of the Trade Negotiations Committee, looked forward to a more organic and more frequent interaction with the chairs of negotiating bodies. He planned to have weekly meetings. He was willing to make contributions, to nip controversies in the bud.

Dr Supachai asserted the Doha Agenda has to be completed in three years. He hoped to produce a position paper on strategy to achieve this, to make it an efficient Round.

Further Points of Interest During the Discussions
[This section consolidates a debate that did not all occur in the sequence given below.]

Worries were expressed about the demands made of acceding countries, some of which went beyond the competence of the WTO. It was suggested that there should be codes of conduct for the working parties, specifying what types of requests could be made. Dr Supachai responded there should be no doubt about his commitment to streamlining the accession process and he had been briefed recently on current progress.

Some participants thought there would be conflict between burdensome rules for GATS impacting upon domestic rules and the public interest. It would take time for analysis to be done at the country level to assess the social impact of opening up services. Negotiations are proceeding ahead of policy-making. Dr Supachai agreed there were substantial costs for poor countries in undertaking domestic reforms. If the Doha negotiations were too rapid, it might hurt countries.

Dr Supachai said we need to know what are the areas where trade-related technical assistance is required. Such assistance should continue beyond the DDA and become integral to the WTO. It was not possible to have the same approach for all developing countries as a mass. Technical assistance should be targeted at groups such as Central America, the Caribbean, South Asia etc. Some countries have little to trade – can they participate?

Several participants raised questions about overload of the agenda and the need for capacity-building. Dr Supachai responded that the Secretariat had produced a manual with an ambitious programme for technical assistance and capacity-building, based on the DDA mandate. It was up to the recipients to set their priorities. He had talked to the World Bank, UNCTAD and the OECD to help the WTO. The World Bank had just produced a manual and established a department on international trade.

Dr Supachai had expressed support for a Development Box in the past, but could not now take a position on this. However, he said it was necessary to be inventive on the new issues. He had made a proposal for the scope and consequences of the new rules to be clarified.

A participant expressed support for mini-ministerials, but not mini-green-rooms. Dr Supachai agreed and said the aim was to narrow differences, to undertake stocktaking and avoid being caught unawares by problems late in the process. He also commented that there were many groups of Members. Could the Green Room be formalised to include all the groups?

Several participants expressed concern whether developing countries would benefit from the outcomes while one participant suggested Cancun might fail, if it was seen as a North-South conflict. Another spoke of lack of trust and the feeling that some countries were not acting in good faith, with respect to the commitments made in the Uruguay Round and at Doha. Dr Supachai asserted it is a Round for all countries. It was important for developing countries themselves. Anti-dumping rules were necessary for resolving some South-South disputes. Tariff walls for trade within the South are generally higher than for developing country exports to the North. When there were regional agreements among developing countries, the growth in trade was substantial.

Dr Supachai took to his heart comments about being the first Director-General from a developing country and an appeal to him not to feel guilty nor to try to prove his neutrality. Dr Supachai said that there had been press reports in the UK that he would be a champion of the developing countries. Words had been put into his mouth – he had actually said that he would be a champion of free and just trade for everyone.

Footnotes

1. While Wilton Park adopted the common practice of referring to "the Doha Round", the Fourth Ministerial Conference held in Doha, 9-14 November 2001, officially agreed to undertake a "Work Programme", rather than initiate a Negotiating Round. However, as the Doha Declaration covered a wide-ranging agenda and as all the issues (with the exception of any changes in the Dispute Settlement Understanding) are to be concluded and ratified as a single undertaking, the political process is the same as for a Round. Similarly, it is also common to refer to the Doha Development Agenda (DDA). Although this phrase is not used in the Declaration it is used on the official WTO website covering the negotiations.
2. New issues or Singapore issues are terms that refer to the four issue areas of trade and investment, trade and competition policy, transparency in government procurement and trade facilitation that were added to the WTO Work Programme in the Declaration of the First Ministerial Conference in Singapore, 9-13 December 1996. The terms serve to distinguish the four issue areas from the Built-In Agenda of work for the WTO agreed during the Uruguay Round. It was agreed at Doha that negotiations on each of the new issues would start after the next Ministerial Conference, on the basis of a consensus decision on the "modalities of negotiations".
3. Special and differential treatment (S and D): the concept of exempting developing countries from the need to treat all countries equally (the Most-Favoured Nation principle) goes back to the GATT Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries of 28 November 1979 and is embedded in the WTO Agreements. However, developing countries have expressed discontent that S and D appears to be seen by some developed countries as no more than giving the developing countries extra time to meet their commitments to liberalise. As a result it was agreed at Doha that the provisions would be reviewed to strengthen them and to deliver clear trade benefits.
4. Recommendations on reductions of quotas on textile imports; a committee report on countervailing duties; and recommendations on making S and D mandatory and effective are all due by the end of July 2002.
5. Recommendations on what is of "substantial interest" to developing countries; assistance from developed countries on tackling customs fraud; reports by developed countries on measures to promote technology transfer; a progress report to the Trade Negotiations Committee on negotiations on other outstanding implementation issues; a report from the Director-General on technical assistance and capacity-building; and a report from the Director-General on all issues affecting LDCs are all due by the end of December 2002.
6. There are mixed views on the US farm bill enacted in May 2002. For some, it was not a threat because it remained within the Uruguay Round agreements and was time bound. For others, it was politically damaging in appearing to be in bad faith, encouraging the EU and Japan to remain protectionist and increasing the barriers to trade.
7. Global Economic Prospects and the Developing countries, 2002, (Washington DC: World Bank, October 2001), Chapter 3, "Trade in Services: Using Openness to Grow".