The DDA NegotiationsThe DDA Negotiations• The Ninth WTO Trade Round launched in the Qatari

City of Doha at the Fourth WTO Ministerial Conference in November 2001

• Unsuccessful attempt to launch the negotiations in December 1999 in Seattle, USA

• Concerns of developing countries – marginalisation in the MTS, lack of transparency and inclusiveness

• Members resolved to place the needs and interests of developing countries at the heart of the negotiations

• Work Programme: TWO tracks – negotiating issues under the auspices of the TNC and non-negotiating issues under the auspices of the General Council

Areas Under The Areas Under The NegotiationsNegotiations• Agriculture (Including Cotton)Agriculture (Including Cotton)• ServicesServices• Non- Agricultural Market AccessNon- Agricultural Market Access• TRIPS (GIs Register)TRIPS (GIs Register)• WTO Rules (AD, Subsidies, RTAs)WTO Rules (AD, Subsidies, RTAs)• DSU (outside Single-Undertaking)DSU (outside Single-Undertaking)• Trade and EnvironmentTrade and Environment• Special and Differential TreatmentSpecial and Differential Treatment• Trade FacilitationTrade Facilitation

Principal Elements of the Principal Elements of the DDADDA• Doha Declaration (WT/MIN/(01)/DEC/1)Doha Declaration (WT/MIN/(01)/DEC/1)

• 1 August 2004, General Council 1 August 2004, General Council Decision (WT/L/579)Decision (WT/L/579)

• Hong Kong Declaration Hong Kong Declaration (WT/MIN(05)/DEC)(WT/MIN(05)/DEC)

Intractable IssuesIntractable IssuesNegotiations resumed in Feb 2007

after suspension in July 2006 No breakthrough as yet. Members

still clinging to established positions

What are the intractable issues in agriculture and NAMA preventing across-the-board progress in all the negotiating areas?

Agriculture Agriculture

•Market AccessMarket Access

•Domestic SupportDomestic Support

•Export CompetitionExport Competition

Agriculture-Market AccessAgriculture-Market Access

• Substantial improvement for all Substantial improvement for all agricultural productsagricultural products

• Agreement in HK that a tiered formula Agreement in HK that a tiered formula would be used to reduce tariffs – 4 tierswould be used to reduce tariffs – 4 tiers

• Progressivity – higher tariffs to be Progressivity – higher tariffs to be reduced by a greater percentagereduced by a greater percentage

• Lack of progress on the tariff bands Lack of progress on the tariff bands (thresholds) and the cuts to be made (thresholds) and the cuts to be made within each bandwithin each band

Market Access - TariffsMarket Access - Tariffs Four bandsFour bands G-20 thresholds for developed countries, with linear cutG-20 thresholds for developed countries, with linear cut EC to do more - cuts in magnitude between the EC and USEC to do more - cuts in magnitude between the EC and US

Cut in top band critical issue – the rest will be proportionate to Cut in top band critical issue – the rest will be proportionate to thatthat

Issue of disproportionality if high number of tariffs in top band Issue of disproportionality if high number of tariffs in top band (e.g. 25%-30% of tariffs)(e.g. 25%-30% of tariffs)

Increasing readiness to discuss average cut – maybe above Increasing readiness to discuss average cut – maybe above 50%50%

BandBand ThresholdThreshold EC CutsEC Cuts US CutsUS Cuts

11 0 - 20%0 - 20% 35%35% 55% - 65%55% - 65%

22 20% - 50%20% - 50% 45%45% 65% - 75%65% - 75%

33 50% - 75%50% - 75% 50%50% 75% - 85%75% - 85%

44 75% +75% + 60%60% 85% - 90%85% - 90%

Other Market Access IssuesOther Market Access Issues• Treatment of Sensitive products Treatment of Sensitive products

– 1% - US, Cairns, Brazil1% - US, Cairns, Brazil– 8% - EC8% - EC– 15% - G1015% - G10

• Treatment of Special ProductsTreatment of Special Products– 20% of tariff lines – G-3320% of tariff lines – G-33– 5 products – US5 products – US– Intermediate positions – Pakistan, Thailand, Intermediate positions – Pakistan, Thailand,

MalaysiaMalaysia– TQRs – domestic consumption, current import TQRs – domestic consumption, current import

volumes and the cuts to be madevolumes and the cuts to be made

Other Market Access IssuesOther Market Access Issues

• Special Safeguard MechanismSpecial Safeguard Mechanism– Volume and price triggersVolume and price triggers– G-33 prefers a lower threshold, while most G-33 prefers a lower threshold, while most

developed countries prefer higher thresholdsdeveloped countries prefer higher thresholds

• Erosion of preferencesErosion of preferences

• Tropical productsTropical products

• CommoditiesCommodities

Domestic SupportDomestic Support• High levels of support provided by developed countriesHigh levels of support provided by developed countries

• For budgetary reasons, very few developing countries For budgetary reasons, very few developing countries are providing subsidiesare providing subsidies

• Amounts provided by most developing countries Amounts provided by most developing countries inconsequential- could be justified as de minimis (10% of inconsequential- could be justified as de minimis (10% of the total value of agricultural production or under Article the total value of agricultural production or under Article 6.2 of the agreement on Agriculture – investment and 6.2 of the agreement on Agriculture – investment and input subsidies) input subsidies)

• Agreement that there will be three bands for the Agreement that there will be three bands for the reduction of AMS/OTDS – the EC in the top band, Japan reduction of AMS/OTDS – the EC in the top band, Japan and the US in the second band and all Members in the and the US in the second band and all Members in the third bandthird band

Domestic Support - OTDSDomestic Support - OTDS Must meet the mandate of Must meet the mandate of effective cutseffective cuts

For US, must do moreFor US, must do more• Reduce OTDS – less than $19 billion & above very low teensReduce OTDS – less than $19 billion & above very low teens• Political link to other areas of the negotiation (works both Political link to other areas of the negotiation (works both

ways)ways)

For ECFor EC• Minimum cut likely to be 70% cut but could be 75%-80%Minimum cut likely to be 70% cut but could be 75%-80%

Developing countries with no AMS exempt from OTDS cutDeveloping countries with no AMS exempt from OTDS cut

BandBand MemberMember CutsCuts

11 All other All other Members, Members, including including

developing developing countriescountries

? (31% - 70%)? (31% - 70%)

Whatever is agreed, DGC Whatever is agreed, DGC with AMS to do 2/3 of with AMS to do 2/3 of

DDC reductionsDDC reductions

22 US and JapanUS and Japan > 53% (53% - 75%)> 53% (53% - 75%)

33 ECEC > 70% (70% - 80%) > 70% (70% - 80%)

Domestic SupportDomestic Support

• De minimis – reductions in the level De minimis – reductions in the level that could be provided by developed that could be provided by developed countries: from 5% to 2.5% or lower?countries: from 5% to 2.5% or lower?

• Blue Box – reduction from 5% to 2.5 % Blue Box – reduction from 5% to 2.5 % of the average level of total production of the average level of total production during a determined base period?during a determined base period?

• Green Box – strengthened disciplines?Green Box – strengthened disciplines?

Export CompetitionExport Competition• Agreement in HK to eliminate all forms of Agreement in HK to eliminate all forms of

export subsidies by 2013export subsidies by 2013

• Export subsidies on cotton eliminated by Export subsidies on cotton eliminated by developed countries at the end of 2006developed countries at the end of 2006

• Parallel commitments in respect of Parallel commitments in respect of export credits, export credits guarantee export credits, export credits guarantee schemesschemes

• STEs – monopoly powersSTEs – monopoly powers

• Food aidFood aid

NAMANAMA• The formula – Simple Swiss Formula with two co-The formula – Simple Swiss Formula with two co-

efficients or a Swiss-type formula with variable co-efficients or a Swiss-type formula with variable co-efficients depending on the average tariff rates of efficients depending on the average tariff rates of MembersMembers

• Overwhelming support for the use of a simple Overwhelming support for the use of a simple swiss formula with two co-efficientsswiss formula with two co-efficients

• Should co-effiecients be within sight of each other?Should co-effiecients be within sight of each other?

• Yes for developed countries and no for developing Yes for developed countries and no for developing countriescountries

• Proposals range from 5 to 30 per centProposals range from 5 to 30 per cent

NAMA – Other issuesNAMA – Other issues

• Paragraph 6 countriesParagraph 6 countries

• Treatment of unbound tariffsTreatment of unbound tariffs

• Flexibilities for developing countries – Flexibilities for developing countries – paragraph 8paragraph 8

• LDCs, small economies etcLDCs, small economies etc

• SectoralsSectorals

• NTBsNTBs

ServicesServices• Number of offers on the table satisfactoryNumber of offers on the table satisfactory

• Key issue is the quality of the offersKey issue is the quality of the offers

• Plurilateral requests/offers – key to Plurilateral requests/offers – key to improving offers on the table?improving offers on the table?

• Issues of concern to developing countries Issues of concern to developing countries /interests – mode 4/interests – mode 4

• GATS rules – progress in recent weeks on GATS rules – progress in recent weeks on domestic regulation disciplines – draft being domestic regulation disciplines – draft being discussed by Membersdiscussed by Members

RulesRules• RTAS – transparency mechanismRTAS – transparency mechanism

• No substantive progress on WTO disciplinesNo substantive progress on WTO disciplines

• With respect to antidumping and subsidies, With respect to antidumping and subsidies, Members have tabled a number of Members have tabled a number of proposalsproposals

• Remains to be seen what Members will Remains to be seen what Members will acceptaccept

• Linkages with other areasLinkages with other areas

Special and Differential Special and Differential TreatmentTreatment

• Not much progressNot much progress

• 28 Agreement-specific proposals – should 28 Agreement-specific proposals – should they be harvested or revisitedthey be harvested or revisited

• Decisions on 5 Agreement-specific LDCs Decisions on 5 Agreement-specific LDCs proposals in HKproposals in HK

• Category II proposals – not much progress Category II proposals – not much progress in the relevant WTO bodiesin the relevant WTO bodies

• 16 remaining category I and III proposals16 remaining category I and III proposals

Trade FacilitationTrade Facilitation• Good progress in the negotiationsGood progress in the negotiations

• Text-based contributions from Members – Text-based contributions from Members – platform for a draft text to be circulated by platform for a draft text to be circulated by the Chairman for Members’ considerationthe Chairman for Members’ consideration

• Special and differential treatment for LDCs Special and differential treatment for LDCs and developing countries in generaland developing countries in general

• Nature of disciplines – voluntary or Nature of disciplines – voluntary or watertight? watertight?

Other IssuesOther Issues

• Trade and EnvironmentTrade and Environment

• TRIPS Issues – Extension of the TRIPS Issues – Extension of the additional protection provided to wines additional protection provided to wines and spirits to other productsand spirits to other products

• TRIPS Register – automatic legal TRIPS Register – automatic legal effects or not - deadlock?effects or not - deadlock?

Concluding the Round: Concluding the Round: 2007?2007?• Challenge: how to make most of the Challenge: how to make most of the

renewed political commitmentrenewed political commitment

• Work progressing in all negotiating Work progressing in all negotiating bodiesbodies

• Role of G4+/- mainly on agriculture; Role of G4+/- mainly on agriculture;

• Other offstage bilateral/plurilateral Other offstage bilateral/plurilateral contactscontacts

Process as foreshadowedProcess as foreshadowed• Establish modalities in Ag and NAMA: July?Establish modalities in Ag and NAMA: July?

• Prepare schedules based on modalitiesPrepare schedules based on modalities

• Verification of schedulesVerification of schedules

• Conclude negotiations in other areas including Conclude negotiations in other areas including servicesservices

• Legal draftingLegal drafting

• Signing of Final ActSigning of Final Act

• Domestic ratification processesDomestic ratification processes

US Domestic ConsiderationsUS Domestic Considerations

• July breakthrough possible?July breakthrough possible?

• TPA renewal/extension?TPA renewal/extension?

• US Farm Bill reform?US Farm Bill reform?

• Conclude Round in 2007?Conclude Round in 2007?

THANK YOUTHANK YOU

Edwini KessieEdwini KessieCounsellor, C-TNC Division, WTOCounsellor, C-TNC Division, WTO

(edwini.kessie@wto.org)(edwini.kessie@wto.org)