World Trade Organization (WTO) talks are taking place in Geneva, Switzerland, this week as world leaders to try to restore movement on the Doha Development Agenda. The July 2008 package is a stepping stone on the way to concluding the Doha Round by the end of 2008. The main task before WTO members is to settle a range of questions that will shape the final agreement of the Doha Development Agenda. Political breakthrough requires consultations among a group of ministers representing all interests in the negotiations. The outcome will be put to the full membership in the Trade Negotiations Committee.
U.S. Senators Sherrod Brown (D-Ohio), Olympia Snowe (R-Me.), Debbie Stabenow (D-Mich.), Evan Bayh (D-Ind.), and John D. Rockefeller IV (D-W. Va.) sent a letter to U.S. Trade Representative (USTR) Susan Schwab on Monday urging her to defend and maintain current U.S. trade remedy laws while in Geneva.
“While there are may be temptation to show false forward momentum this week in Geneva, any WTO deal that fails to advance U.S. national interests would face difficulty obtaining Congressional approval,” the senators wrote.
The letter addressed concerns over what the senators called the “WTO’s propensity to overreach into areas beyond its jurisdiction.” Specifically, the letter expressed concern to Schwab over the Continued Dumping Subsidy and Offset Act (CDSOA)— which provides compensation to U.S. companies hurt by illegal dumping or overseas subsidies — and “zeroing” — a longstanding practice in U.S. antidumping investigations and reviews.
The WTO Appellate Body decisions on zeroing and CDSOA have been widely criticized, including by the Bush Administration and others, as having no basis in WTO agreements. The senators urged Schwab to withhold from making additional concessions with agriculture and non-agricultural market access (NAMA) and to offer a vigorous defense of CDSOA in the weeks ahead.
“Having lost more than 3 million manufacturing jobs since 2000, it is imperative that U.S. trade negotiators rigorously defend our trade laws. Strong trade laws ensure there is a level playing field for our farmers and workers,” said Senator Brown. “If our trading partners seek any weakening of these trade laws, they should understand it will be met with steadfast opposition in Congress.”
“At a time when our economy is slowing, there couldn’t be a worst time to entertain foreign countries’ attacks on our domestic trade laws,” said Senator Snowe, a member of the Senate Finance Committee. “Any effort to undermine or weaken our trade laws will be met with congressional resistance. We are making it clear that the false appearance of progress and momentum is not an acceptable tradeoff for weakening our trade laws and damaging our economy.”
“For eight years, the Bush administration has ignored the needs of American workers and businesses. The result has been the loss of over 3.5 million manufacturing jobs and a trade deficit that has sky-rocked to over $700 billion,” said Senator Stabenow. “I encourage the Bush administration to come up with a trade policy that puts American workers and businesses first.”
“At a time when our economy is struggling, we must preserve protections against foreign competitors that break U.S. trade laws to gain an unfair advantage,” Senator Bayh said. “The Byrd Amendment is an important tool for assisting injured American companies. Our trade representative should accept no compromises that weaken our trade laws.”
“We will not accept a Doha deal that undermines fair trade disciplines, and we need to deliver that strong and unequivocal message in Geneva,” said Senator Rockefeller. “The United States is alarmed at the WTO’s overreach in striking down critical aspects of our trade remedy laws, and we need to fight to restore those laws and fight against any attempts to weaken them further. Now is the time to make that clear.”
On Monday, U.S. Trade Representative Susan C. Schwab held a press briefing on the Doha Mini-Ministerial from Geneva.
She said the United States remains committed to a succesful Doha outcome. “The U.S. is unalterably committed to the outcome of this round,” she stated. “There is no question about that, cannot be a question about that. We have been all along and will continue to be a leader in this round. We know that we have a responsibility of leadership. We also know that a single country or two countries or five countries alone are not going to be able to deliver the Doha Round to a successful conclusion without the active engagement and goodwill and participation and above all contribution of all of our colleagues.”
Ambassador Schwab said that in order to have a meaningful outcome, leaders must secure meaningful new market access in agriculture, in manufacturing and in services. She said that is particularly true when it comes to the interests of the developing countries involved and of the rapidly emerging markets that are so key to this negotiation in terms of their involvement and in terms of the contribution that they can make to a successful outcome.
On Tuesday, Ambassador Schwab said that in order to move negotiations forward, she would inform her Green Room colleagues that the United States stands ready to reduce Overall Trade Distorting Support (OTDS) to $15 billion in exchange for an ambitious market access outcome in agriculture and NAMA.
She said, “This is a major move, taken in good faith with an expectation that others will reciprocate and step forward with improved offers in market access. These cuts will deliver effective and significant reductions in trade distorting domestic support. They would require adjustments to our farm programs. We are prepared to make these changes, but we must also have assurances that if our programs meet these disciplines they are not subject to subsequent legal challenges that reduce them further.”
“We are making our offer without knowing what others will do. But for this Round to succeed as a development round, all of the main developed and developing country players will be faced with hard decisions, and all of us— developed and emerging markets — must be prepared to make tough decisions,” she added.
Ambassador Schwab said that this is a very forward leaning offer and a strong sign of the United States’ commitment to achieving a successful outcome. The U.S. OTDS level would have exceeded $15 billion in 7 out of the last 10 years. It is nearly $2 billion below the United States’ average OTDS over the last 10 years ($16.8 billion). As recently as 2005, the United States’ OTDS was $18.9 billion, she said.
Senator Tom Harkin (D-Iowa) praised the offer, saying, “I welcome this initiative on the part of the United States in order to help move the Round forward. This offer represents a significant decrease in trade distorting agriculture supports and signifies that the U.S. stands ready to negotiate in good faith and complete this Round.
“In order to reach a successful Doha Round agreement, this proposal must be met with comparable initiatives on the part of other key WTO members in the areas of agricultural and industrial goods market access,” he continued. “I remain hopeful that an agreement is within reach.”
Senator Chuck Grassley (R-Iowa), ranking member of the Committee on Finance, with jurisdiction over international trade, and a senior member of the Agriculture Committee, criticized India’s response to the U.S. proposal.
“Ambassador Schwab put forth a major proposal to kick-start these negotiations into high gear, offering to reduce our allowable support from $48 billion down to $15 billion,” he said. “But according to one press report, India’s response is that it doesn’t pass the ‘laugh test.’ I have yet to see India make a constructive proposal that will actually advance these negotiations. This is not a laughing matter. We all stand to gain from increased trade. But to achieve that, we need to see meaningful reductions in tariff and non-tariff barriers to trade— from all sides. If India is going to stand in the way of opening up new trade flows, the negotiators might as well pack up and head home early.”
On Wednesday, WTO Director-General Pascal Lamy told a meeting of the full membership that 2 days of talks among 30 representative ministers in the “Green Room” have been constructive, but discussions in smaller groups are now needed to intensify the negotiations.
He described the consultations as constructive with a strong commitment from delegations to engage directly and in good faith. “However, I must emphasize that the progress has been modest,” he said.
Because the progress has been uneven, Lamy said smaller groups of delegations would discuss a series of agriculture and industrial products topics, the participants varying according to the subject, and involving three key ambassadors: agriculture negotiations chairperson Crawford Falconer, non-agricultural market access talks chairperson Don Stephenson and General Council chairperson Bruce Gosper. He described these arrangements as “variable geometry.”
In addition, Lamy said Norwegian Foreign Minister Jonas Gahr Støre had agreed to coordinate discussion on three intellectual property issues: the multilateral register for wines’ and spirits’ geographical indications, extending higher level geographical indications protection beyond wines and spirits, and proposals to require patent applicants to disclose the origin of genetic material and traditional knowledge— formally the relationship between the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement and the UN Convention on Biological Diversity (CBD).
In earlier meetings, several members urged Lamy to ensure that information about the consultations is shared fully and that all members can have a say in the outcome.
Mr. Lamy repeated his assurance that the Green Room consultations involve representatives of the full spectrum of members’ views and interests because they include coordinators of regional groups and other coalitions.
“Let me stress that in this process I am counting heavily on coordinators of the various WTO groupings to assist in maintaining transparency and inclusiveness,” he said. “I know that group coordinators face a big burden, but I do ask that you continue to ensure the flow of information and maintain consultations with your constituencies from small consultations so that they are kept informed and involved, as well as to convey your groups’ positions to other members, the negotiating group chairs, and myself.”
In the end, decisions can only be taken by the membership as a whole, he repeated.
Lamy said the focus in the discussions on agriculture was on the following: overall trade-distorting domestic support for developed countries, including the new U.S. offer to lower its proposed limit to $15 billion, which was seen as a positive step; cotton; top-tier tariff cuts for developed countries; sensitive products, particularly how many products, the size of tariff quotas opened in return for these products having smaller than normal tariff cuts, and whether products currently without tariff quotas can be designated as sensitive (sometimes misleadingly termed “no new tariff quotas”); whether any of developing countries’ special products can completely escape tariff cuts; and whether temporary increases in developing country tariffs— the “special safeguard mechanism” to deal with import surges or price slumps — can raise tariffs above the legally bound maximums in place before the Doha Round.
Lamy said members had mostly restated their well-known positions on the formula and flexibilities, but they were willing to engage seriously. They differed markedly on the anti-concentration clause (a proposal to prevent an entire sector from being shielded from cuts), he reported. And members differed in how much emphasis they gave to “sectorals” (free or freer trade in a sector), all recognizing that these would be voluntary.
For more information on the July 2008 Package or the Doha Development Agenda, please visit the WTO or USTR Web sites (www.wto.org and www.ustr.gov, respectively).
