Ambitions Fall as Egos Rise at the WTO

It seems that the mini ministerial discussion in Geneva on Monday night and Tuesday this week has made hot fudge (sweet, pleasant but unclear) with the next step in the Doha Agenda’s negotiation process. There has not been a convergence between the US, EU and G20 positions tabled up to last week. There seemed to be a determined view from the US, EU and G10 (essentially 1st world countries) to have the G20 (developing countries) realise that an ‘agriculture only’ discussion will not be acceptable. Much of the discussion centered on services (GATS) and the slow flow of offers from developing countries (including SA).

This result will make it extremely difficult for the WTO secretariat to bring out a generally acceptable ‘Chairman’s Suggested Text’ for Hong Kong by the end of next week as planned. In the meantime approximately US$ 500 billion in potential gains from trade is left lying on the negotiation table.

There was some serious ‘Hong Kong Bolstering’ by the US last night. The US Department of Agriculture’s office (USDA) held an in-flight press conference last night as the US squad headed to West Africa for discussions on the WTO Cotton Initiative today in Benin. The following comments to counter low morale were made:

“But the Hong Kong meeting is still very much on. The United States is pushing hard for a successful meeting, and again over the next few weeks we’re going to be pushing for even more of a consensus in order for us to have a more successful meeting – and then if we’re successful, negotiation throughout 2006.” (USTR Robert Portman 9 November 2005)

“In reference to the Hong Kong meeting, of course that meeting is still on. We believe there can continue to be an ambitious agenda for Hong Kong. Sometimes you have to size up expectations, and I think we have done that. I’ll be very candid. It does appear to me that we will not make as much progress in Hong Kong as we had hoped for. But, having said that, this round does extend through 2006. It would be a grave mistake to declare this round at an end at the Hong Kong meeting. There is still an entire year ahead of us when we can work aggressively to have a successful Doha Round. And we are committed to doing that.” (US Agriculture Secretary Mike Johanns 9 November 2005)

The WTO Director General, Pascal Lamy, was downbeat about the progress and sources moot that he would rather see the Hong Kong Ministerial meeting postponed to match with the realistic ambitions of the WTO Members. This is however unlikely as the major ‘trade egos’ are essentially locked into the Hong Kong dynamic.

A deadline that remains in the back of negotiators minds is the looming expiry in the US of President Bush’s so called ‘fast-track negotiation authority’ in July 2007. This authority means that the administration can agree to a trade agreement at the WTO and bring it home for US legislative approval unamended. In the absence of this mechanism the Congress can veto any deal brought home by the US negotiators, hence giving the US a credibility problem with the rest of the WTO Members as it would mean that anything agreed to would be only a provisional agreement – not a healthy negotiating dynamic.

Hilton E. Zunckel is monitoring the present phase of the WTO negotiations from Geneva. Clients who have specific questions about the negotiations are invited to contact him via e-mail.