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1. Failure of talks a serious setback,
admits Lamy


Published in SUNS #6529 dated 31 July

TWN Info Service on Trade and WTO

31 July 2008

Third World Network



Geneva, 30 July (Martin Khor) — At a
press briefing just hours after the

collapse of the Geneva WTO talks on
Tuesday night, WTO Director General

Pascal Lamy said there was no point
beating about the bush about the

serious setback caused by the failure
of the negotiations.




He said the difference regarding the
trigger for special safeguard

mechanism (SSM) led to the failure.




"We had a mandate for SSM. Those
who feared it would disrupt normal trade

wanted as high as possible a trigger.
Others wanted a lower trigger. After

over 60 hours to bridge positions these
differences were not reconcilable.

The remaining issues including cotton
were not negotiated.




"What happens to the package on
table and Round? We need the dust to

settle first, it is hard to see too far
in future at this point, must see

how members want to bring pieces




A sombre Lamy said what happened today
will not strengthen the

multilateral trading system (MTS) which
gave insurance against

protectionism for 60 years but the
system is resilient and can go through

the bumpy road ahead.




Asked if the failure was due to a lack
of leadership by the US and India,

Lamy said there would be no blame game
on his side. Whether and when it

can be back on track needs reflection.




The Ministers in the Green Room wanted
the talks to be put back on track

shortly. "Some asked for a last
try to be made tonight on this difference

in SSM. So we’ll think about that and
consult but as far as I am

concerned, today is a serious setback,
I will try to put it back on





Lamy said he told the Ministers their
failure to bridge a difference meant

they had to take a collective
responsibility on what threatened the

conclusion of this Round.




Lamy was then asked whether cotton
should have been addressed up-front,

and that it was not appropriate to say
that the SSM issue is the cause of

the collapse.




He replied: "We didn’t negotiate
cotton. The thing broke down on SSM. Why

didn’t we address cotton? Because it
was linked to product specific caps

and Blue Box.. These needed adjustment
and cotton is linked to that. It is

not in my capacity to oblige people to
negotiate something if they believe

in their own to-do list which is linked
to other things.




"We have dispute settlement in
WTO, there are on going litigations on

cotton. If decisions on cotton were
taken they would have been implemented

in Round. In future months the cotton
issue will be active in the DSB."




Asked if he should have called the
meeting and if he intended to stand as

DG again, Lamy said he asked himself
the same question. He asked

Ministers, and none of them said he
shouldn’t have done it.




"We would not have got it done
without Ministers in town and de-doing the

fortresses their officials had
constructed around these topics. We need

Ministers to take down the tactical
walls. We did it, we had 25 items and

we did down 23. They did most of the
job. We are in single undertaking, we

can assess that there remain 1 or 2 or
3 issues to be closed."




On the second question, Lamy said he
had no answer for moment, it is a

very personal question.




Asked if talks could be picked up only
in 2 years because of elections

coming, Lamy replied that there is the
political cycle, in the US, India,

etc. "The US administration is
near the end of its mandate. We have to

factor this in." +





2. Schwab still blaming India and China
at press briefing


Published in SUNS #6529 dated 31 July

TWN Info Service on Trade and WTO

31 July 2008

Third World Network




Geneva, 30 July (Kanaga Raja) — US
Trade Representative Susan Schwab said

that five out of seven countries in the
G7 had accepted the Lamy package

put forward last Friday night, and
implied that these two countries (India

and China) had blocked the WTO talks in
Geneva from success.




She said it was "distressing"
for the US to find itself without a Doha

Round agreement. The provision on the
scope of a special safeguard

mechanism in WTO Director-General
Pascal Lamy’s compromise package, which

according to her deadlocked the
negotiations, would have "done the trick".




Schwab was speaking at a media briefing
Wednesday morning following the

collapse of the WTO Geneva talks the
previous evening.




She said that "tremendous
progress" was made over the last week in

bringing clarity to aspects of the Doha
Round package in agriculture,

manufactured goods and services.
"We’ve probably moved the ball further

forward in the last ten days than we
have in the last eight years."




Schwab said on Friday, we really
thought we had the makings of a deal.

According to her, five of the seven
countries in the "G7 leadership group"

were prepared to accept the proposal
put forward by Director-General

Pascal Lamy. Unfortunately "we
weren’t able to capitalize on that."




She said the negotiations ultimately
deadlocked on the scope of a

so-called safeguard mechanism. She said
that there was such a provision in

the Friday compromise and "it
would have done the trick. The provision

would have addressed the legitimate
concerns and needs of those worried

about their subsistence farmers and
livelihood of farmers in the event of

surges of agricultural products."




"And yet, there were others who
demanded more, and more included a tool to

close markets," she said, adding
that "it would have been a very sad

commentary on a development round if
the conclusion had resulted in higher

barriers to trade leaving the round than
those we had coming in. And quite

honestly, there were some advocating
that the safeguard mechanism be

designed in such a way that that would
have been the outcome."




She said that the issues like the
trigger (in the SSM) are not just

numerical debates, and those have to do
with how should it be for a

developing country to close its market
to other developing countries, and

how easy should it be for "a
developing country, a recently acceded member

of the WTO" to roll back or take
back tariff concessions it made in its

WTO accession negotiations.




What the US remains committed to is a
safeguard mechanism that

distinguishes between the legitimate
need to address exceptional

situations involving sudden damaging
import surges and "a mechanism that

could be abused and set back the
trading system for decades to come."




She said that the irony is that all of
this debate about how easy or hard

it should be to raise barriers to food
imports took place in the context

of a global food crisis, adding that
"when the last thing we should be

talking about and negotiating about, or
even thinking about is raising

barriers to trade in food."




The USTR acknowledged that there were
other important things on the table

as yet unresolved such as cotton,
subsidies to over-fishing, environmental

goods and services, and aid-for-trade.
She believed the will was there to

address those. She said the US stood by
its offers, and that it had put

significant offers on the table.




She pointed to three factors in terms
of how the issue evolves and how it

is addressed – political, policy issues
and practical issues. She set

aside the political factors, saying
that this wasn’t really a political

discussion. On the policy issue, she
asked under what circumstances should

a country be able go above its pre-Doha
bindings. "Under what

circumstances do you allow countries
pretty much to violate one of the

basic tenets of the GATT and now WTO,
which is bindings."




"Under what circumstances could
countries use the surge mechanism to raise

the trade barriers," she asked,
noting that the US did agree that there

are circumstances where that could
happen. "They needed to be narrowly

defined so as to really address
legitimate surges rather than create this

huge window for countries just to
vitiate or renege on three decades of

trade agreements…"




The number of 140 (in relation to
percentage of base imports in the SSM

trigger) was the middle-point, the
compromise point that was reached, she

said. Referring as examples to Chinese
import of soy beans over the last

ten years, she said that at 140, China
could have used this mechanism in 8

out of 10 years to raise their tariffs
above bound rates. In case of

poultry, China could have used the
mechanism in 6 out of 9 years to raise

tariffs. India could have used the
mechanism in 3 out of 6 years to raise

palm oil tariffs.




"You can imagine any number below
that turning into a free-for-all where

developing countries were raising
barriers every year," said Schwab,

adding that the trigger really was the
question of how easy do you make it

for countries to raise their barriers
above current rates.




"I am so very sad that there were
countries that felt so strongly about

making it easier to raise barriers that
they were willing to give up the

safeguard mechanism in its entirety,
because it doesn’t currently exist."




In terms of going forward, she said
that there are some discreet parts of

the package that have been negotiated
or have almost been negotiated, or

where there is a consensus that they
can be moved forward – duty-free

quota free market access, export
competition, trade facilitation,

environmental goods and services.




"Some of those pieces of it, one
could start moving ahead and see whether

the rest can catch up or sit back and
reflect how will the multilateral

trading system operate going forward.
It may be as Pascal has said the

complexity of the cathedral that was
built for the Doha Round was its own

worse enemy, was its own source of
demise," she said.




"You ask yourself in terms of
timing, does it all have to come together at

the same time because that’s sort of
the basic premise… Why should it

have to come together at exactly the
same time. We need to reflect on how

we move forward, but there are ways of
moving forward certainly with

pieces of this, both near term and
longer term."




She said that the package on Friday
night was the compromise package,

which had the safeguard in it and
included the negotiated number, that 6

out of the 7 countries agreed to.
"The fact that one or more held out for

a different number – a number that
differed from the one that had been

agreed by all of the other parties in
the room, developed and developing –

was the reason this came apart."




Asked as to why the cotton issue was
not addressed (in the G7) and that

African Ministers were waiting for 10
days, Schwab said that the issues

that were addressed by the G7 were the
ones that Director-General Lamy

laid out for them, recognizing "that
we knew that there were other issues

that would also have to be concluded,
including cotton."




Asked by an Indian journalist to
comment on the fact that there was never

agreement on the package and that Lamy
had offered a solution to break the

logjam on the SSM, followed by an EU
negotiator who offered a tiered

structure and gave some room for both
sides to move, but that the US

refused to move, Schwab said "The
answer is no. The answer is what you are

repeating there is inaccurate,




"The fact of the matter is there
was a package… it was a compromise

package. It was negotiated within an
inch of its life and it had a

significant safeguard within it, in
addition to modest market opening on

the part of emerging markets, very
significant market opening on the part

of developed countries… every country
in the room except one accepted





In terms of what happened subsequently,
she said that "all of us showed

flexibility except one, and one didn’t
show their hand…" She added that

as recently as Monday afternoon, she
asked participants if they could

still sign on to the Friday package and
move ahead with that. "5 out of 7

said yes. So, we had our compromise
package." +







3. Kamal Nath explains how the Geneva
talks failed


Published in SUNS #6529 dated 31 July

TWN Info Service on Trade and WTO

31 July 2008

Third World Network




Geneva, 30 July (Kanaga Raja) —
"We cannot put at stake the livelihood

security of 1 billion people from all
countries," Indian Commerce Minister

Kamal Nath said Wednesday, explaining
the stalemate that occurred the

previous day over the issue of the
special safeguard mechanism in the WTO

mini-Ministerial talks.




The Indian Minister was speaking to
media today after the collapse of the

WTO’s Geneva talks. Nath said that when
a special safeguard mechanism is

operated, there should not be a remedy
that frustrates it. "Then, why have

this special safeguard mechanism,"
he asked.




Nath said that he has always said that
he was willing to negotiate

commerce, "but not livelihood
security. If there was to be a stalemate on

commercial considerations, it would
have been entirely different from this

deadlock on livelihood security."




He noted that the G33 had worked for
the last three years on the issues of

livelihood security. He also cited the
declaration of the G33, the ACP,

the African countries and the
vulnerable economies – representing about

100 countries – in that the most
important thing was that the livelihood

security and the vulnerability of the
poor farmers could not be traded off

against commercial interests of the
developed countries.




In the Hong Kong Declaration,
developing countries had been given the SSM.

He said that at the heart of the
development round lies less than full

reciprocity, special products, and
special safeguard mechanisms. "That’s

at the heart of this round. That’s the
bedrock of this round."




He said the SSM would operate only in
terms of a contingency, and when you

operate it, you cannot have a remedy
which frustrates it. "Otherwise, why

have this special safeguard
mechanism," asked Nath. "It was this which led

to the stalemate, when I thought that
we cannot put at stake the

livelihood security of 1 billion people
from all countries," said Nath.




Referring to the Lamy package on
Friday, Nath said: "I want to make it

very clear, there was a proposal on
Friday where I had very clearly said

that this proposal is not satisfactory,
is not adequate in terms of the

special safeguard mechanism. This
proposal has subsidies which are twice

than those subsidies which are being




"And if developing countries want
to guard themselves against a surge of

subsidized products, of course, they
need a special safeguard mechanism.

You need a special safeguard mechanism
in any event and more so to protect

yourself against subsidized




Nath said that he would urge
Director-General Pascal Lamy to treat this as

a pause, not a breakdown and to keep on
the table what is there.




"For six months, officials have
worked very hard and have produced texts

and what is at stake is not mere
commercial interests but what is at stake

is so many benefits to our African
friends, to our LDCs; we would have to

not let these fritter away."




Asked about India’s relations with
Brazil and G20, which had taken a

different position in the talks, Nath
said that the G20 is a diverse group

and that is what gives the G20
credibility. The G20’s proposal has always

respected and contained in it provisions
for SSM and SPs. There are no

numbers in it but the concept has been
accepted by the G20 in its





Responding to a question on what USTR
Susan Schwab had said about possible

abuse of SSM, Nath said the US has
imposed safeguards 28 times in the last

three years on textiles.




Referring to what world prices are
today, he said that the SSM would not

need to be imposed, so why should
anybody be worried. "But if it’s a

matter of caution, should you be
leaning towards safeguarding livelihood

security or safeguarding commercial




Asked if the single undertaking
approach to the Doha Round had been one of

the complications, with too many issues
to be resolved at once, Nath said

that the single undertaking has to be
there because nothing is agreed

until everything is agreed. "The
WTO is not a buffet that you pick up what

you want and go."




Asked about two developments on SSM – a
compromise proposal by Lamy and

subsequently, a negotiator within the
G7 group who tried to converge

positions by offering a tiered formula,
Nath said that after the Friday

effort, there was an alternate proposal
because one of the concerns was

misuse and abuse (of the SSM).




"And I categorically said that we
are willing to subject ourselves to any

anti-abuse or misuse provision. Let it
be crafted any way. That was

crafted," said Nath, who went on
to read out the relevant provision

whereby any member may request a review
of the necessity by a permanent

group of experts and their decisions
will be within 60 days, and shall be

binding and not subject to appeal.




"Never in the history of the world
trading system has any country agreed

to this," said Nath, adding that
India agreed to this. "We agreed to this

only to dispel a feeling of misuse or
abuse." There was a proposal and it

was rejected by one country (referring
to the US).




Nath said on Monday night it was
decided that a proposal meeting the

concerns of everybody could be prepared
after consultations, and for three

hours, it was worked on (by senior
officials) on Tuesday morning. It was

rejected by one country, said Nath,
adding that he did not want to go into

the blame game.




Nath said the SSM was a
"given" and it is the bedrock. It was the

mechanism of protection and "if
you say ‘we don’t want to give you

anything to protect yourself’, well
then so be it."




Asked how the collapse of the Doha
talks will go down in India, Nath said

that he has to go back home to find
out. India has always stood for

under-developed countries. "We
must remember that India has more poor than

all the LDCs put together. And we have
always stood by the concerns, the

needs of the poorest countries and we
shall continue to do so," he said.




In response to another question, the
Indian Commerce Minister said that

the negotiations were going very well.
It’s not that they have broken down

on huge issues. They have broken down
on a safeguard mechanism to protect

livelihood security. "I don’t
think anybody doubts that. Now, if somebody

says ‘we don’t want to give you this
protection’, what do you do," he

asked. +





4. Developing countries call to
reassess Doha priorities after talks fail


Published in SUNS #6529 dated 31 July

TWN Info Service on Trade and WTO

31 July 2008

Third World Network




Geneva, 30 July (Martin Khor and
Sangeeta Shashikant) — Many developing

countries called for a reassessment of
the Doha negotiations following the

failure of the past fortnight’s Geneva
talks. In particular, they said

that one major failure of this week was
that development issues, concerns

and perspectives were not taken into
account at the various meetings.




These views were projected at the
formal Trade Negotiations Committee

meeting (at which formal record is made
of the proceedings) at the WTO

this morning.




India said that during the nine days’
negotiations, it remained convinced

that we can resolve the remaining
issues in NAMA and agriculture and to

address services, TRIPS and Rules. At
the end, "we found it difficult to

understand how we could not come to
terms with an issue that reflects the

livelihoods of millions of the poor around
the world", clearly referring

to special safeguard mechanism (SSM).




India said it is pertinent to note that
the issues on which we could not

make much progress are issues central
to the development mandate of the

Round – trade distorting support and
disciplines, special products, SSM,

cotton, duty free quota free (DFQF)
treatment for LDCs, etc.




"This has to be a cause for
serious introspection. We have to ask why we

cannot resolve the main issues which
concern developing countries in the

WTO. An answer to this is relevant for
the future credibility of [the]

WTO… If we are to strengthen the WTO,
a way will have to be found to

enable it to address the aspirations of
the bulk of its membership."




India suggested that a dialogue be
initiated to consider how to take

forward some issues with deep
development implications on a fast track

basis, such as DFQF for all LDCs, aid
for trade, and enhanced integrated





India said we are disappointed but not
disheartened. As a first step, it

is important to capture the
understandings on a number of issues, and the

cumulative understandings constitute
very substantial corpus of work that

can be the platform for future
engagement. They are too important to be

consigned to memoirs. After a period of
introspection, we need to engage

on how to build a programme to bridge
the gaps.




South Africa, represented by its Trade
Minister, said the failure is a

missed opportunity. In particular, it
regretted that there was no early

resolution of cotton, DFQF access for
LDCs, the banana issue and tropical

products and so on. "We therefore
support the proposal for an early

harvest on DFQF, cotton and




While there will be varying assessments
of the causes for the failure, we

need to reflect seriously on the
systemic implications for the WTO and the

fuller integration of developing
countries on equitable terms into the

global trade system.




To prepare for re-starting the talks,
important lessons from the last 10

days should be taken. The development
agenda must remain at the centre of

the talks, with the core aim of
strengthening the system to support

development aspirations.




"For negotiations to succeed, we
must ensure the development objectives

are given greater weight than narrow
mercantilist objectives. Development

and increased trade are not
synonymous… A single minded focus on trade

and market opening can also be
detrimental to broader development

considerations. The construction of the
agenda and the negotiation process

must take this into account.




"A second lesson from the last 9
days is that pursuing rigid formulas and

frameworks that ignore the specific
situations and concerns of particular

members can be a recipe for failure.
The system must respond and

accommodate specific concerns of
particular countries.




"We have to reaffirm and implement
principles of SDT and less than full

reciprocity in favour of developing
countries, while taking into account

real differences among developing




China said after 10 days of hard work
by ministers, China is disappointed

as many others with the setback we are
confronted with in the

negotiations. On the substance in
general terms, China reiterated the

importance of the development dimension
that the round should deliver,

without which it could never come to a
successful conclusion.




In this regard, the major developed
Members need to exercise genuine

leadership in the negotiations rather
than engage in any unhelpful

activities with a view to shifting
responsibilities onto others, including

through the media, said China.




For the sake of strengthening the
multilateral trading system, Members

should not give up our efforts, said
China. All the progress made should

be preserved instead of being wasted
and we should resume our work as

early as possible on those issues still




Indonesia, on behalf of the G33, said
that it shared the deep

disappointment expressed by many that
we are unable to achieve the

objective of our meeting.




The G33 has been here to engage
constructively. We have showed flexibility

to move as we know the concerns of some
members. The G33 was prepared to

compromise and negotiate an acceptable
balance. But it regretted that the

compromise could not be reached.




The G33 continues to take a positive
and constructive approach. It hoped

the process will continue, whilst
keeping the positive results achieved.




Argentina’s Minister was deeply
disappointed and said the problems were on

substance and process. On the process,
the senior officials should have

tried to reduce differences and let, if
possible, the main controversial

issues to be left to Ministers.




In Agriculture, the work was evidently
made before the meeting with broad

participation and in the text the
positions and options were clearly

identified. On the other hand, NAMA was
problematic because of how the

texts were presented and how a consultation
group was formed (referring to

the G12 that met at the US Mission).




The lack of the Geneva meeting was due
to the wrong insistence by

developed countries to put pressure on
developing countries. The level of

commitment for developing countries
exceeds that of developed countries,

violating para 24 of Hong Kong




It is clear that amendments must be
made to the text especially on NAMA,

and this requires structural changes so
that it can be a basis of

negotiations. Only once there is
compliance with the principles of the

round will it be possible to make
progress in NAMA, said Argentina.




In a brief statement, the US Trade
Representative Susan Schwab said that

this is not the time for long speeches
but rather a time for reflection.

It is not a time for name calling but
for constructive leadership.




She said it is a huge disappointment
that we did not reach the goal, and

assured partners and the Director
General that "what you have put on the

table is still on the table."
There is always room for improvement and

managing the process. The difficulties
of this negotiations were not on

process but on substance.




Switzerland said even if negotiations
have not succeeded, a lot of useful

work was done even if some important
issues are open. The first priority

is the stabilization of all the texts,
the Chair’s reports, report of the

services signalling conference, report
of TRIPS consultations, this will

be the basis for future work.




It said that August should be for
internal reflection, and the DG has many

tools to work with, such as quiet
diplomacy, technical work on issues that

are not ready for decisions,
plurilateral discussion on how to improve the





Colombia said that all the agreements
achieved should be reflected in a

Chairman’s text.




Guyana (speaking for the Caribbean
Community) said that we cannot avoid

the use of the word failure because
some leading members cannot secure

convergence on SSM. As members of the
G33, the Carribean Community is of

view that a satisfactory outcome of SSM
is a sine qua non.




Despite the importance of this issue,
it is inconceivable and beyond our

wildest imagination that at a historic
moment, we could not construct the

bridge between the legitimacy of using
the SSM and possible abuse of SSM.

Something else must be at work here (to
prevent an agreement).




Surely we have treated cotton again in
a shabby fashion, said Guyana.

There are clear instructions of how to
deal with the C4’s proposals, to

avoid the shame the world will heap on
us on this issue. Let us try and

carve out some arrangement that will
allow an early harvest for cotton

producing countries, said Guyana.




Indeed, since we are on early harvest
matter, it is necessary to note that

as this round becomes comatose, we in
the Caribbean are exposed to an

early harvest on bananas. We cannot and
will not subscribe to the terms of

a deal on bananas in whatever form,
since that agreement seeks to drive

the final death nail into the banana




The EC has said that it will compensate
the farmers but how it intends to

compensate for the loss of entire
livelihoods is yet to be seen.




Venezuela’s Trade Minister said the WTO
should take into account the

demands of developing countries and the
negotiations should have the

participation and approval of the
entire membership. It strongly affirmed

that any results that arise from small
groups of countries or their

efforts to reach conclusion of the
Round cannot and should not represent a

basis of future discussion.




Noting that the negotiations (of the
past days) did not involve the full

participation of developing countries
nor reflect the interests of all

members, Venezuela said we should go
back to having the negotiations in

negotiating groups and that proposals
made by members that are not

included should be included, so that
the reports can be credible.




On services, Venezuela reiterated that
the Chair of the group should limit

himself to having a factual report
given on his own responsibility, since

there is no consensus on a new text.




If these discussions have not led to a
successful outcome, this is due not

to developing countries or any topic
but to the lack of real political

will on the part of developed countries
which would like to impose their

wishes and interests on the rest of the




Mauritius, on behalf of the ACP, said
it is a sad day but all is not lost.

The presence of Ministers have closed
gaps on a number of pending issues.

How we capture this progress and chart
a road map are concerns that we

have to address.




Australia said we should recognize the
enormous amount of work achieved.

Our challenge is to ensure progress is
not lost. We should reflect on the

failure and on best way forward.




Nigeria said it had called on major
players to exercise flexibilities to

reach Mont Blanc. It regretted that
this plea has not been heeded. The

present difficulties are only
temporary. It warned against a blame game.




Bolivia said for future talks, we
should avoid setting artificial dates.

It proposed a change in the mandate to
enhance the development dimension.

The Chairs’ texts should not be
considered the only basis for

negotiations, but the formal and
informal positions of members should also

be considered. Various expressions of
positions should be treated equally.




The problem where certain delegations
felt that certain texts were not

valid should be dealt with. On the
TRIPS disclosure consultations, Bolivia

had difficulty with the 9 July document
as it does not cover concerns of

Bolivia that there should be no patents
on life.




Bolivia also requested that in the
Rules negotiations the reform of

Article 24 of GATT (on regional
agreements) be included. It wanted to

consider possibilities of including SDT
and asymmetries as principles in

bilateral trade.




On services, Bolivia said there is no
mandate on a text although it

supported areas where there is a
consensus (such as treatment of LDCs). It

also wanted the report to include that
there should be an exclusion from

GATS of services that relate to human
rights, such as education, water,

and telecommunications.




It supported an early harvest for
cotton and LDCs. It said there should

not be finger pointing on the failure.
However, we should indicate that

more than 100 developing countries face
problems in truly achieving

development in this round. The real
problem is with mind-sets. We want

positive results but we are not
achieving beneficial results with the

current package.




Cuba said the hollow rhetoric of the
rich countries on development was

shown up. We need to look at the new
starting point, at how the new

process will be conducted and at the
participation of members. We cannot

accept that what was discussed between
a reduced number of countries can

be taken as a starting point.




Criticising the process, Cuba said many
members noted that this was a

process favouring a few members. It
called for changes in the direction of

the WTO. It also supported what
Venezuela and Bolivia said on services.




Peter Mandelson, EC Trade Commissioner,
said we have to face up to the

consequences of our failure. We did not
fail for lack of time. We failed

because we lacked the political will to
close the final gaps. He said we

had agreement on 90-95% of the issues
at stake in modalities. This was a

deal within reach. I believe that
people will look at the question on

which this round broke and shake their
heads in disbelief.




The EC had tabled ambitious offers
including a 60% average cut in the EU’s

farm tariffs, 80% cut to trade
distorting subsidies, cuts to industrial

tariffs that would have left us with an
average tariff of barely 2% and no

tariff over 6%.




Only Doha could have delivered these
things in a single package. What

would have been a huge collective
success, must now be counted a massive

collective failure. We have just lost
the insurance policy that would have

bound in the openness of the global




In the autumn, after a summer of
reflection, we must renew our dialogue,

nurture our relationships, said
Mandelson, and talk like adults about

where we go from here. None of the
politics in our countries will get any

easier. He said his team would return
to Geneva, not to take up where we

left off, but to make sure what we have
is not entirely lost. +





5. WTO talks near collapse as delegates
ponder what comes next


Published in SUNS #6528 dated 30 July

TWN Info Service on Trade and WTO

30 July 2008

Third World Network




Geneva, 29 July (Martin Khor) — The
WTO talks were heading for a collapse

in the early evening of Tuesday, as the
G7 failed to reach agreement on

the issue of special safeguard
mechanism (SSM) for agriculture in

developing countries. This issue had
become the center of the negotiations

in the past three days.




The United States reportedly insisted
that on an extra trigger of 140% or

more before developing countries can
use the SSM to raise the duty above

the pre-Doha levels (i. e. the present
rates set at the Uruguay Round or

during accession to the WTO).




This continued to be unacceptable to
India in the G7 meeting this morning.

The Indian position has been backed by
about 100 developing countries in

the G33, African, ACP, LDC and SVE
groups, which on Monday circulated

their joint statement on SSM and
Special Products at the Trade

Negotiations Committee.




Many Ministers involved in the
"Green Room" have been expressing

frustration at the slow rate of
progress of the G7 talks, as they have had

to wait in their hotels day after day,
as the WTO meeting went beyond its

allocated six days. (It was scheduled
to end last Saturday).




Many of the 30 to 40 Ministers whom
Lamy had invited for the

mini-Ministerial had already decided to
go back, as they found little role

for themselves for most of their week
here, while those remaining had

reached the limits of their patience.
"I have a government to run back

home," said one Trade Minister, as
he left the WTO for the last time,

three days ago.




At a Green Room meeting this morning,
the diminishing number of Ministers

was noticeable, according to one
diplomat. "It has become a mini

Mini-Ministerial," he said. The
inability to keep these other Green Room

Ministers waiting for another day, even
if the G7 Ministers were willing

to carry on, may have set the ultimate
deadline for the talks to succeed

or fail today.




The special safeguard had become the
big cause on which a majority of

developing countries gathered around,
and the G33-ACP-Africa-LDC-SVE joint

statement detailing their positions on
SP and SSM had changed the dynamics

of the overall negotiations.




The United States had tried to portray
India as the country that was

stalling the G7 talks. For a little
while the media went along and painted

Kamal Nath, the Indian Commerce
Minister, as the one person holding back

progress, due to what was portrayed as
his stubborn and intractable

position on SP and especially SSM.




The joint developing-countries
statement articulated the deeply-felt

concerns that import liberalization had
already led to import surges and

threats to local agriculture, and that
a an effective and easy-to-use SSM

was essential to prevent further
farmers’ dislocation.




The SSM became a symbol and a rallying
call for these countries. "And a

SSM alone is not enough. It has to be
an effective SSM that we can use"

said an African official, whose words
were echoed by many in the past few





On Monday morning, an unexpected and
strong attack by the US on China and

India at the Trade Negotiations
Committee soured the atmosphere, and

increased the level of tension.




On Monday night, Lamy put forward a new
one-page draft on SSM which was

vastly different from the text in the
agriculture Chair’s text of 10 July

or his own draft of last Friday. Kamal
Nath on Friday night told

journalists he could accept a lot of
the new SSM text, and he called on

the United States to also accept it as
the basis for discussion.




The Lamy text did away with triggers
altogether and with figures on the

remedy (or by how much extra duties can
be imposed to counter lower import

prices or higher import volumes).




A major operational paragraph is that
"The level and duration of the

measure shall be proportionate to the
harm in question, and shall not

exceed what is necessary to facilitate
adjustment. The duration of the

measure shall not exceed the calendar




Kamal Nath said that the new Lamy text
made the SSM more simple to use as

there were no triggers. He indicated it
could be the basis for a solution.




Some G33 officials who saw the text
later also welcomed the simplicity and

possible effectiveness of the paragraph
above. However, they were against

some parts of the text, in particular
that the SSM could be used when a

product is imported "in such
quantities or price and under such conditions

so as to cause demonstrable harm to its
food security, livelihood security

and rural development needs."




The condition to show
"demonstrable harm" is similar to the WTO’s

Agreement on Safeguards, in which
serious injury to local producers is a

condition for the use of the
"normal safeguard." It is because the special

needs of agriculture and farmers
require prevention of harm or injury

rather than action only after serious
injury, that a special safeguard for

agriculture is needed.




Also the condition that all three
criteria must be satisfied is more

restrictive than the one condition in
the normal safeguard, i. e. injury

to local producers.




And the provision in the Lamy text that
other members can ask for a review

of the SSM action through a permanent
group of experts whose decision will

be made in 60 days and is binding and
not subject to appeal, is also

procedurally much more difficult and
could be a disincentive for affected

countries to take SSM action.




Nevertheless the positive aspects of
the text made India accept it as

basis for a possible solution. The
United States, however, refused to use

this new text for negotiations. It
continued to insist on the new and

major point in the previous Lamy text
(of 25 July), that if a country

wants to use the SSM to raise duties
above the pre-Doha levels, it has

first to satisfy the condition of a 40%
volume trigger (i. e. that the

import of the product has increased by
40% or more), and that the price of

that product has also declined.




The special trigger for SSM use for
duties above the pre-Doha bound rates

became a "must have" for the
US, while India and the G33 and other

developing country groupings could not
accept this special trigger, which

had been introduced so late in the day
by Lamy in his 25 July draft.




On Tuesday, other alternatives were
explored by officials of the G7

officials, but none could become the
basis of an agreement on SSM.




At a Green Room meeting on Tuesday
morning, the G7 deadlock on SSM was

revealed to the Ministers, while
progress in other areas was also

detailed. Many Green Room Ministers
reportedly spoke of their frustration

in waiting for the G7 to produce
results, thus increasing the atmosphere

that time was now really running out in
the WTO’s July process.




At 6 pm on Tuesday, the US Trade
Representative Susan Schwab appeared

before journalists and said that last
Friday night, "we were so close to

agreement" but unfortunately
things had moved apart.




Asked if the Round had collapsed, she
said: "No, I am not saying the Round

is over. We continue to be committed to
the Round."




But her brief and somber appearance
more or less confirmed that the real

negotiations had collapsed.




The next hours and the next day at the
WTO will be preoccupied with what

to do next, how to treat the various
texts and proposals on the table,

whether any of them would have a higher
status than others, and whether

the Doha negotiations would continue
after the summer break in September,

or would be "suspended", and
if so how and when they might be revived. +





6. Services conference gives out
"positive signals"


Published in SUNS #6528 dated 30 July

TWN Info Service on Trade and WTO

30 July 2008

Third World Network




Geneva, 28 July (Martin Khor and Kanaga
Raja) — A "services signalling

conference" that took place at the
WTO on Saturday afternoon seems to have

pleased many of the developed and
developing countries that took part in





The Trade Ministers of the United
States, European Union and Australia, as

well as India and Brazil gave broad
indications that they had received

positive signs or signals that their
potential partners had been





Independent experts are, however,
sceptical whether the US and EU

Ministers are able to live up to their
promises in trying to offer

commitments under Mode 4 to have more
visas for developing country

professionals. (See end of article).




There is no publicly available list of
which countries took part. However,

it is understood that the participants
included the US, EU, Japan,

Australia, Canada, Norway, Switzerland
and New Zealand, as well as China,

India, South Africa, Thailand,
Malaysia, Mexico, Singapore, Brazil, Chile,

Indonesia, Korea, Egypt, Hong Kong, and




The services meeting mid-way through
the negotiations on agriculture and

non-agricultural market access (NAMA)
was insisted on by developed

countries as well as India, so that
they could gauge the levels of

concessions their potential partners
were willing to make.




This, they said, would give them an
idea of the overall level of gains

they could get in the overall
market-access package of agriculture, NAMA

and services. In turn, this may
influence the concessions they would be

willing to make in agriculture and




In any case, this was the rationale of
the demandeurs of the signalling

conference. The developed countries
were interested to find out the

revised offers in Mode 3 (commercial
presence) that the developing

countries would make, while India was
interested in the offers on Modes 1

and 4 that the developed countries
would make, while LDCs were especially

interested in Mode 4 (temporary
movement of natural persons).




Speaking after the meeting, US Trade
Representative Susan Schwab said that

she felt that the first conversation
about services by Ministers was ”a

good step forward… All of us would
liked to have seen more on the

table… but I think the vast majority
would acknowledge it was a good

step and we hope that the Doha Round
will proceed so that we can see what

these signalled offers actually look
like in writing…”




Asked as to what the US signalled on
Mode 4, Schwab said that ”on Mode 4,

we’ve had consultations with Congress.
We’ll continue to do that and when

it comes to temporary entry of business
professionals, we signalled that

we are prepared to have that
conversation in the context of the Doha

Round, but obviously it needs to be in
conjunction with our consultations

with Congress.”




EU Trade Commissioner Peter Mandelson
said ”we just had a very good

meeting of signalling future potential
offers. I was encouraged by some of

the signals that we got and I think
that what was said this afternoon will

provide a basis for revised offers in
services in the autumn.”




He said that he heard some interesting
signals from India, and a couple of

things from China, one in particular
that he wants to specify and follow

up. He will also sustain the opening
that he indicated on Mode 4. He hoped

that others would match what he has
indicated so ”as to make it worth our





Indian Commerce Minister Kamal Nath
told journalists that on Modes 1 and

4, there were more specific offers from
the EU, while the US made some

positive statements on Mode 4 but said
that it was subject to decisions by

the US Congress.




Indian Commerce Secretary G. K. Pillai
said that the EU had signalled an

offer on Mode 4 that included the
removal of an economics needs test and

the establishment of a minimum quota of
a certain number (that it

mentioned). Other developed countries
such as Australia and Canada also

spoke on Mode 4. However, the US
conditioned their statement on Mode 4

with the fact that it had to consult
with Congress.




According to a diplomatic source,
Brazil signalled offers on reinsurance,

financial information services,
maritime transport; China signalled

professional services, retail trade,
construction and energy services; and

India signalled commitments in R&D,
market research, mining-linked

services, courier and express delivery,
telecoms, financial services and

asset management.




While the reports from the major
participants of the signalling conference

were positive, there is considerable
scepticism whether the US will be

able to follow through on its promise
to try to win over Congress to get

more professional visas for developing
country citizens.




Commenting on the reports that Schwab
is "ready to talk" on giving more

visas, WTO expert Chakravarthi Raghavan
said that "to have a conversation

in the context of Doha", in the
words of Schwab – is even less than

"signalling" and has zero
value, and more so when the "conversation" will

be in conjunction with
"consultations with Congress".




"Even in terms of the ‘expired’
fast track authority, the congressional

authorisation had excluded visa issues
– viewing it as ‘not a trade’

issue. Even in the Uruguay Round, the
US agreed to provide some temporary

visas, but hedged it with several other
requirements; and in some

instances, the issues also touch the




"But with the Bush administration
having no authority whatsoever to

undertake and ensure adoption of the
commitments by Congress, and given

the widespread and tense internal
political debates in the US over the

‘immigration’ issues and the ’temporary
guest worker’ proposal that Bush

made, but was shot down by Congress,
the offer to hold conversations is

meaningless PR exercise.




"As for Mandelson ‘offering’ to
provide more such visas, unless the Lisbon

treaty is ratified by all EU members
(and there is no sign Ireland is

about to hold another referendum), the
visas, and other work permit

requirements, for non-EU ‘persons’ is
within jurisdiction of individual





"This means that individual
members of the EU have to agree and, as at the

time of the Marrakesh Treaty and
scheduling of the GATS concessions, they

could each put in their own conditions
and limitations – and in some

cases, it could result in a ‘person’ going
to one European country to

perform a service, not being able to
combine the work and move on to

another European country to do another




New Zealand academic Dr Jane Kelsey, an
expert on services negotiations,

said that to understand the EC’s "signal"
on Mode 4, it is necessary to

look at the EC’s position on
"movement of key business personnel" in their

current FTAs, the template for which is




"You will see there that there are
very strict conditions for gaining

access that will work to screen out
large numbers of contract service

suppliers and professionals who might
at first instance appear to

qualify," she said. "It seems
inconceivable that the EC would offer more

in the GATS negotiations than its newly
adopted approach in regional and

bilaterals, especially as it is still
negotiating an FTA with India and

will want to retain bargaining chips
for that one."




Myriam Vander Stichele, another GATS
expert and working as senior

researcher at SOMO (a Netherlands-based
CSO research centre) and closely

monitoring the EU and its GATS offers,
demands and proposals, said that

the so-called positive signals from the
EU (and the US) on Mode 4,

allowing more contractual service
suppliers from developing countries to

work temporarily in the EU are very




She said that it appears that the
persons who would be allowed to work in

the EU would have to be high level
professionals if they have a contract,

and not the many other lower level and
poorer services people some

developing countries are also
interested in.




Actually, the business community in the
EU is very much interested of

being able to hire the high-educated
from around the world in the EU where

they are facing a lack of the
professionals they need. For quite some

time, the services businesses have been
lobbying for more relaxing of

immigration of only high level
professionals, she added.




"Other so-called positive
proposals that have been seemingly made at the

signalling conference included
significant reduction of foreign equity

limitation (i. e. less exemptions of
Art. XVI on market access)," said

Vander Stichele.




"This means that developed
countries’ multinational companies will have it

easier to take over and control more
and more services companies in the

developing countries (e. g. when owing
more that 50% of the shares), with

higher profits going to the Northern
headquarters and their shareholders,"

she said. "This is without
assurance of better services in the developing

world… The arguments that Northern
controlled services companies bring

more efficiency in developing countries
is far from proven in different





Particularly worrying is the
liberalisation that may be "signalled" for

financial services, added Vander
Stichele. "What has been called progress

means that some Northern countries
might give more market access in

financial services for sophisticated
consumers. However, these

sophisticated clients are mostly in the
North and are mostly those

speculators that have been contributing
to the financial crisis and the

food crisis, as regulation and
supervision of institutions such as hedge

funds and the financial services they
have been offered, is still far





Raghavan added that viewing the
so-called Mode 4 offers of the EU and US,

and the other offers and proposals in
Modes 1 and 3, as a kind of

trade-off for the market access
demanded by the US and EU from India or

other developing countries is highly
misleading. +