Azevedo issues sanitized version of "consultation" meetings

Original Publication Date: 
9 June, 2015

Third World Network
Published in SUNS #8034 dated 4 June 2015
Geneva, 3 Jun (D. Ravi Kanth) -- The Director-General of the World Trade Organization (WTO), Mr. Roberto Azevedo, has issued to members what appears to be a sanitized version of his meetings and issues discussed with trade envoys in different configurations over the last one month.
A glimpse of the closed-door consultations between the director-general and select trade envoys in various configurations were reported by different publications, including the SUNS.
The consultations were aimed at drawing-up the post-Bali work program by end-July which would serve as the basis for concluding the Doha Development Agenda (DDA) negotiations by the end of this year. The DDA negotiations were launched largely at the insistence of the European Union and the United States.
"Your reports have forced the DG to come clean on all his meetings about which members hitherto have remained clueless," a European trade envoy told SUNS on Tuesday (June 2) after attending the India trade policy review meeting.
The media was promised that the transcript of the DG's speech delivered on Monday (June 1) at an informal heads of delegations (HOD) meeting will be made available on the WTO's website on the following day.
But, for inexplicable reasons, that statement was not made available until today (June 3). At the time of writing, the WTO website only had as a ‘news item' (posted on 1 June), an 8-para, 364-word report of Mr. Azevedo's remarks as TNC chair at the informal HOD meeting on 1 June.
Several trade envoys said (after the HOD meet) that the DG had spent considerable time in his statement haranguing members about "media" reports on his consultatons with select trade envoys, dubbing them as "inaccurate" and "biased." He did not name the publications which had carried these reports over the last four weeks.
"Azevedo embarrassed himself by preaching us on how to behave with reporters and treating us like school children," said an African trade envoy.
Nevertheless, the DG issued a truncated version of his marathon statement delivered at the HOD meeting to members on Tuesday (June 2) in which he provided information of the consultations he has had since May 7, said trade envoys familiar with the statement.
At the HOD meeting on Monday (June 1), Azevedo had emphasized the special safeguard mechanism (SSM) as an issue on which there is no agreement, according to trade envoys present at the meeting.
However, the G-33 coalition led by Indonesia along with other developing country groups like the ACP (Africa, Caribbean, and Pacific) and Africa Group spoke up to insist that the SSM is at the core of the Doha Development Agenda (DDA) negotiations.
The United States threatened that the WTO's tenth ministerial conference which will take place in Nairobi, Kenya, in December is a "make or break" event for the Doha trade negotiations. The US said members can only get an outcome on issues where there is consensus, implying that where there is no consensus the issues should not be pursued, said trade envoys after attending the HOD meeting.
Several developing country members - Brazil, India, the G-33 farm coalition, the ACP group - severely questioned the "re-calibration" approach.
Brazil said agriculture remains at the centre of the final outcomes. Brasilia said re-calibration cannot result in an outcome that is meaningless. Further, all issues must be decided in a balanced manner, Brazil said, while cautioning that it will not accept a Bali-type of best endeavour outcome in agriculture. Mexico said it can re-calibrate on what is doable but members need a stronger outcome in agriculture and other areas.
On behalf of the G-33 farm coalition, Indonesia said the 2008 revised draft modalities and the proposals it had presented last year must remain as the basis for further work. Indonesia said the simplification and re-calibration approach are misleading as they lay emphasis on lowering the level of ambition with no additional flexibilities.
The G-33 coalition cautioned that the re-calibration approach doesn't mean members have to re-calibrate their own proposals. Indonesia said SSM must form an integral part of the post-Bali work program as any attempt to lower the level of ambition in market access and domestic subsidies increases the need for a strong SSM for developing countries. The G-33 said the permanent solution on public stockholding programs is an imperative of the development round.
India questioned the underlying rationale of the "make-it-or-break it" narrative advanced by the United States, saying re-calibration with a lowering of ambition must be "symmetrical" across all areas of the negotiation. India said the Round cannot be concluded without a credible outcome on the development dimension.
In his concluding remarks, Azevedo said agriculture is central to the Round. Despite differences in the domestic support pillar, we need "a step forward" in addressing trade-distorting domestic subsidies. The tariff cuts in market access must be modest, the director-general said, arguing that we need some ministerial meetings, according to trade envoys present at the meeting.
On Tuesday (June 2), the DG issued his truncated report that speaks of two sets of consultations he attended over the last 30 days. While the DG convened green room meetings in which over two dozen trade envoys took part, Azevedo said he took part in consultations to which he was "invited" such as the meetings with the seven major developed and developing countries (the United States, the European Union, China, India, Brazil, Australia, and Japan).
The report did not indicate who had convened the meetings with the seven major developed and developing countries, and who had invited Azevedo to participate.
The DG's report said the chair for the General Council Ambassador Fernando De Mateo of Mexico, the chair for the Doha agriculture negotiations Ambassador John Adank of New Zealand, and the chair for Doha industrial goods negotiations Ambassador Remigi Winzap of Switzerland had taken part in the G-7 meetings.
The green room meetings, the report said, were specifically focused on Doha "rules"; "services" ("market access"; "domestic regulation"; and "GATS rules"); "Special Safeguard Mechanism"; and "LDC issues."
The DG's meetings with the seven countries were focused on "domestic support [in agriculture]", "export competition", "market access in agriculture and NAMA", the report added.
But the DG's report, said one trade envoy, failed to give an "accurate" and "unbiased" picture of what exactly transpired during the consultations. Azevedo's report, for example, left things unsaid about certain parts of the consultations on issues in the domestic support and export competition pillars where one or two developed country members made exceptional demands for removing the special and differential treatment flexibilities for developing countries.
The United States, in one of the meetings, had called for discontinuing Article 6.2 of the Agreement on Agriculture (AoA), that provides policy space for developing countries through special and differential treatment flexibility, on the ground that some countries do not have to undertake commitments.
The DG's report merely said on the domestic support: "Although participants agreed on the desirability of significant results in domestic support, there was no solution in sight to bridge the very fundamental differences among some delegations. That was particularly the case for the discussions on OTDS, where opposing positions were quite evident. Participants discussed whether all members (with the exception of LDCs and NFIDCs under certain conditions) should have a binding OTDS limit. In that case, what compensatory adjustments, if any, could potentially be explored, particularly for members who do not have AMS entitlements or access to Article 6.2 flexibilities? No signs of convergence were seen in that discussion. Indeed, positions were very much entrenched."
Clearly, it would be beneficial for members who are not present at the meeting to know exactly how the discussion proceeded and whether the DG made any effort to clarify what the existing provisions are and how they apply regardless of the demands made at the meeting. Azevedo as the past trade envoy and negotiator of Brazil and now as the DG of the 161-member organization ought to have clarified where the rules stand and whether it is proper to make such demands, trade envoys said.
The European Union had suggested making Art. 9.4 of the AoA inoperative. This allows developing countries to provide export subsidies while the EU will have to eliminate its export subsidies. The DG's report merely said "views on the date of elimination and phasing-out timetable were not conclusive" on export subsidies.
On export credits and food aid, the DG's report, for example, attempts to hide the differences when only one member i. e. the United States is uncomfortable with the provisions in the revised draft modalities of 2008.
Azevedo said "there was a view that the rev. 4 provisions had to be adjusted" but he remained silent on why they need to be adjusted and who is asking for adjustment when other members are ready to accept the provisions.
On food aid, which was one of the most divisive issues at the 2005 Hong Kong Ministerial Conference between the United States and the European Union, Azevedo said "a view was also expressed which sees very little room for outcome in Food Aid disciplines." It is an open secret that the US is not ready to accept the provisions on monetization of "in-kind" food aid currently in Rev. 4.
As regards the special safeguard mechanism, the DG's report is full of inaccurate details, said an African trade envoy.
Azevedo said: "This issue has historically been quite contentious. There are many unresolved issues on this topic, but the key point at this moment is whether an outcome on SSM should be linked to outcomes in the area of agriculture market access, or if the SSM is a stand-alone issue that should be negotiated separately. The meeting demonstrated that Members remain starkly divided on this point. The proponents consider that outcomes here should be distinct from market access outcomes, and that it is an essential element in any Doha outcome. They maintain that an SSM should not have any a priori product limitations and should not be linked to tariff reductions.
"Some Members have noted that the mandate for the SSM included in the Hong Kong Ministerial does not establish a link between market access outcomes and developing country Members' right to an SSM. Others do not agree that this can be treated as a stand-alone issue, noting that it was included as part of Doha discussions precisely because developing country Members were being asked to liberalize. They also noted that 100% eligibility of products for the SSM was not consistent with the argument that the SSM was needed to protect small and vulnerable farmers in very specific situations.
"Despite these differing views, some ideas have been put forward regarding options in this area. Some Members suggest that a practical way forward would be to consider whether elements of the existing SSG provisions, with appropriate modifications, could assist in elaborating an SSM, also noting that the SSG was designed to be temporary and should be eliminated. Other Members would prefer revisiting elements described in the 2008 modalities to address concerns. Many have stressed that transparency and predictability would be important elements for any outcome.
"Overall developed countries and developing country exporters expressed an openness to discuss outcomes in this area proportionate to the current negotiating environment. However, there was also a view that consensus would only be possible if outcomes on safeguards were linked to market access outcomes and that, given the current context, the concept of an SSM could not be supported. These sharp divergences pose important challenges for the work ahead."
During the actual discussion (in the Green Room on SSM), there was only one member which raised the linkage of SSM with market access and not as a standalone issue. That member also said the SSM will not fly while the majority of members present at the meeting said the SSM is a vital component of the Development agenda. When the DG concluded the meeting on SSM, he said there are differences among members on the issue. But a trade envoy told Azevedo that it was not correct to say "there are differences among members when only one member remains opposed to SSM."
The LDC trade envoys also questioned the DG's report on the discussion held on their issues on May 29. "The DG kept telling me that I'm repeating my positions to which I said my issues were never addressed till now and I will continue to raise them."
In short, no one knows exactly what happened in those consultations barring those who were present at the meeting. And even for those members who were present at the meeting, the DG's report fell short of giving an unbiased account of the actual flow of to-and-fro discussions and the intransigent positions held by one or two members.
All these problems would not have arisen if Azevedo followed a "bottom-up and transparent" process all these months. Clearly, saying one thing to one member and something different to another will invariably lead to crisis of confidence as demonstrated during the recent consultations by Azevedo, trade envoys said.
It is always useful to show a mirror to those who are at the helm for ensuring that they become transparent. That is what the MEDIA reports did, commented several trade envoys! +