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  • 1. SPECIALOFFICE OF TRADE NEGOTIATIONS … for trade matters OTN Update December 15, 2011 Th e Fo cu s of t he W T O 8 th Mi ni st er i al Co nf er en c e ( M C 8) A series of negotiating setbacks addressed in the 2012 work programme. The intention was to adopt an approach to the negotiations that would Following the realization that the source of the entrenched allow them to overcome the frustrating attempts to stalemate in the Doha negotiations resided in the NAMA conclude the Round by the end of 2011, but at the same Negotiating Group, WTO Members were compelled to begin time, preserve the integrity, legitimacy and relevance of to consider a recalibration of the approach to the the multilateral system by concluding an abridged Doha negotiations, including the consideration of alternatives to package by December 2011. concluding a comprehensive agreement.1 However, consultations on the Early Harvest failed to In that regard, the WTO Members shifted their focus to broker consensus on what should constitute the delivering an ‘Early Harvest’ package deal at the Eighth package. The most challenging component was largely WTO Ministerial Conference. The proposed package was to related to deciding on which non-LDC issues, if any, address three core LDC concerns, namely, Duty-Free- should be included in an abridged package deal. At the Quota-Free (DFQF) for LDC’s; LDC Services Waiver and same time, there was also discord amongst Members Cotton which were to be placed on fast track. In addition, about which LDC-specific issues should be prioritized. some countries were pushing for consideration of an LDC- plus- package which would address additional issues that What then for the MC8 Agenda? have neared resolution in the Round, such as Trade Facilitation, Fisheries Subsidies, RTA Transparency The failure to agree on an Early Harvest deliverable Mechanism and SDT Monitoring Mechanism. Other topics resulted in a shift in the focus on preparations for the such as market access (AGRI, NAMA and Services), TRIPs, Eighth WTO Ministerial Conference. The failure to agree trade rules (Services and Trade Remedies) were to be on an agreed package and the continuing deadlock of OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 2. 2the Doha Round are likely to down play the significance of that the future work in the negotiations should bethe December Ministerial as well as the overall credibility of focused on the mandate and on progress and gainsthe WTO. The discussion at the Eighth Ministerial already attained in the Round. From CARICOM’sConference (MC8) scheduled to begin on December 15 perspective, there would be interest in preserving all the2011 will most likely focus on the future of the organization gains already secured by the African, Caribbean andand the broader multilateral trading system, as well as the Pacific Group of States (ACP), Small Vulnerableway forward with the Doha Development Agenda (DDA) Economies (SVEs) and Less Developed Countrieswithout a focus on pursuing significant negotiation (LDCs) (the groups to which CARICOM Members areoutcomes. principally affiliated) in the current respective draft negotiating texts, and during the MC8; CARICOM will be keen to articulate their position on this issue. a. DDA Specific Issues In this regard, CARICOM will emphasize, amongst otherWith respect to the DDA, it is likely that the MC8 Ministerial things, multilateralizing the ACP/EU/Tropical Proponentsparticipants will encourage the WTO membership to more agreement in the ACP/EU/Tropical Proponentsfully explore different negotiating approaches. Although not agreement, which was secured parallel to the Genevaformally tabled, there appears to be interest amongst some Agreement on Trade in Bananas that ended theof the Membership to reduce negotiations to series of longstanding trade dispute on bananas. The ACP/EU/clusters of disciplines, which would entail negotiating a Tropical Proponents agreement detailed the items to beseries of plurilateral agreements. However, it is unclear how designated preference erosion treatment products alongthis process of dividing the DDA into blocks of issues could with their specific treatment. Through multilateralisingbe plausibly pursued without undermining the principles of the agreement, CARICOM would be assured that itsParagraph 47 and the Single Undertaking, the pursuit of contents will be shielded from any revision. CARICOMwhich, for most developing countries, constitutes an member states campaigned aggressively to ensure thatinsurance policy against selectivity and imbalance. through that agreement the loss of banana preferences was offset by more tempered reduction in preferenceFurthermore, the type of plurilateral agreements on which margins on other major Caribbean exports. Therefore,further DDA negotiations would be based is a concern. from a CARICOM perspective, it would be important thatWithin the multilateral trading system, plurilateral the draft modalities text reflect the agreement toagreements can be negotiated on an MFN basis, and as a reinforce that the negotiations on bananas and tropicalconsequence would confer privileges to both the signatories products constituted one package.of the agreement as well as non-signatories. An example ofthis approach is reflected by the WTO’s Information CARICOM also has interest in securing the re-binding ofTechnology Agreement (ITA). On the other hand, plurilateral Suriname’s and Haiti’s Tariffs. The draft Agricultureagreements can be exclusive and in this vein would only (AGRI) modalities contain a provision that would allowconfer benefits to the signatories of the agreement. An Suriname to rebind its tariffs without having to resort toagreement of this type is the WTO Agreement on GATT Article XXVIII and the concomitant requirement toGovernment Procurement. For CARICOM countries, should award compensation to major trading members forthe idea of the negotiation of plurilateral agreements gain increasing its bound tariffs. This proposal in thetraction, MFN based plurilaterals would be preferred as Agriculture modalities is necessary in light of Suriname’sthese would facilitate their access to the benefits of such binding of its entire agricultural tariff lines at 20%, that is,agreements without binding them to any commitments below the CARICOM CET rate of 40% for most primaryunder such agreements. agricultural products. A similar provision for Haiti is being sought that would facilitate that country’sDuring the MC8 discussions, it is unlikely that the WTO assumption of its CARICOM CET obligations. Themembers will depart from signalling their commitment to the provision should be extended to both AGRI and Nonmandate as well as their intent to continue to work towards Agricultural Market Access (NAMA) as Haiti has boundthe conclusion of the Round. They will also likely reaffirm its agricultural and industrial tariffs at 21.1% and 18.2%. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 3. 3A provision allowing Haiti to re-bind its tariffs to the target prove elusive. Specifically, the draft proposal, theaverage of other CARICOM countries would therefore development of which was extensively influenced by theassist in facilitating that country’s deeper integration into Caribbean, envisages a review of all the MTSthe CSME. development provisions and programmes in order to establish their efficacy and value, along withThe promotion of the Small Economies Work Programme recommending revisions, in cases necessary. Under theis also an issue that is of priority for CARICOM. The proposal, the development review would be conductedregion provided the political and technical leadership to under the auspices of the Committee on Trade andensure that the establishment of a Small Economies Work Development (CTD), thereby supporting theProgramme was established at the 2001 Doha Ministerial strengthening of that WTO body. It is also contemplatedConference. As a result of these efforts, SVEs are defined that a report on the MTS development review would bein precise terms in both the NAMA and AGRI draft submitted for the consideration of Ministers at the 9thmodalities. In these areas of DDA negotiations, specific Ministerial Conference in 2012. The Caribbean and theflexibilities are envisaged for SVEs. While conceding that wider ACP group will likely press this issue at the MC8no new category of countries would be created, WTO and it is further anticipated that support for theMembers generally accept the principle that SVEs implementation of this initiative will be supported bydeserve special treatment commensurate with both their WTO Members during the MC8 and will feature in thelimited share of global merchandise trade and structure outcome documents that emanate from the Conference.of their economies which constrain them from benefittingfrom trade openings. However, the challenge remains that In keeping with maintaining development at the core ofof agreeing to the specific articulation of flexibilities for the WTO’s work and purpose, during MC8, CARICOMSVEs. Some WTO Members, in order to deny additional and other developing countries are expected toflexibilities to SVEs, have cited the Doha mandate as emphasize their support for the prioritization of LDCsprecluding the actual establishment of a new category of interests in the future work of the WTO and will thereforeWTO membership. A further wave of opposition to the re-iterate their support for the delivery of LDC prioritizedaward of SVE flexibilities stems from a handful of issues, i.e., cotton, DFQF and the services waiver. Fordeveloping countries that are themselves small CARICOM, political support for the LDC package iseconomies but remain ineligible for SVE designation. principally rooted in its support for Haiti, CARICOM’sDuring the MC8, it will therefore be imperative for only UN-recognized LDC, and in the appreciation of theCARICOM to continue to press for the expedited significant extent to which this action would greatlytreatment of small economies issues. assist Haiti, particularly in the areas of services and DFQF. CARICOM will also be interested in re-iterating b. Non-Doha specific considerations support for operationalizing the Special and Differential Treatment (SDT) enshrined in the Hong Kong MinisterialAlthough it is clear that the DDA is at a stalemate, the Declaration, specific flexibilities to promote LDCMinisterial Conference will be used, as in years past, to Accession and Aid for Trade (AfT).try to inject political influence into the negotiations in orderto resolve the impasse. While the preoccupation with the With regard to examining the future of the WTO and itsDDA and the stalemate is understandable, the WTO role within the multilateral trading system post 2011, it isMembers at the MC8 should also be reminded that the anticipated that the establishment of new WTODDA (and its lack of progress) should not be conflated disciplines regarding the intersection of trade andwith the multilateral trading system (MTS). energy, food security, currency exchange rates and climate change will also be discussed at MC8. WhileIn this context, the ACP has developed a proposal for the exchanges on these ‘21st century issues’ are expectedconduct of an MTS development review the primary aim to be deliberative, it is not anticipated that the Membersof which would be to ensure that the pursuit of will take concrete decisions. Rather, consideration of thedevelopment remains as the core WTO pursuit, institutional and policy implications of these issues forparticularly at a juncture when movement on DDA might the WTO, as an organization, will likely be the focus. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 4. 4Proponents, mostly developed countries, are of the viewthat for the WTO, an examination of the relationshipbetween these issues and trade would be essential to Conclusionmaintaining the WTO’s relevance, even beyond thecompletion of the DDA. However, the general sentiment Given that the MC8 is not expected to result in aamongst most developing countries, including the negotiating outcome, the Meeting should provideCaribbean, is that the WTO should centre its focus on Members with the opportunity to articulate their viewsfulfilling its traditional mandate rather than attempt to and core interests frankly and openly. It is not clearaddress additional issues which could detract from the however, how successful the discussions during MC8DDA’s thrust on development. Furthermore, developing will be in influencing traction of non-Doha issues, or thecountries seem to share a concern that the resuscitation of the DDA.consideration of new issues at this time would furtherconstrain their already limited institutional, financial andhuman capacity to fulfil their WTO obligations.Bilateral and Small Group Meetings on the marginsof MC8 ********************Several countries are expected to engage in a numberof bilateral and small-group meetings on the margins ofMC8. Amongst them are CARICOM and Canada whichwill use the opportunity of the MC8 to discuss issuesrelated to the CARICOM-Canada trade negotiations.Additionally, as Haiti and Suriname are currently notbeneficiaries of CARIBCAN, both countries areinterested in conveying to Canada an interest inbecoming beneficiaries of the preferential scheme.This bilateral session between CARICOM and Canadawill take place in a context where the WTO GeneralCouncil on November 30 2011 approved a new waiverfor CARIBCAN until December 31 2013. Canada’sapplication for the waiver became necessary in order topreserve CARICOM’s preferential access whilst the twoSides complete their negotiations of a new WTO-compatible trade agreement. Given that the new waiveris for a period of two years, Canada has proposed thatthe pace of negotiations in 2012 be increased with aview to completing the negotiations within a timeframethat would facilitate the technical and legal scrub,signature and ratification of the new Agreement prior tothe expiry of the waiver. The meeting will provide animportant opportunity for both Sides to take stock of theprogress achieved to date in the negotiations and to 1consider the steps that, in light of the Parties’ ambitions For a more detailed background refer to OTN Special Update - Aand sensitivities, will need to be taken in order complete Glimmer Of Hope Dimmed (July 13, 2011)the negotiations within the currently available timeframe. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org