Bali package must be tied up in next few days, says Azevedo

18 November, 2013

Third World Network
Published in SUNS #7695 dated 13 November 2013
Geneva, 12 Nov (Kanaga Raja) -- The Bali package must be tied up once and for all in the next few days, the Director-General of the World Trade Organisation (WTO), Mr Roberto Azevedo, told an informal meeting of the Trade Negotiations Committee (TNC) on Tuesday.
In his assessment of whether a Bali package is achievable, the D-G, in his capacity as Chair of the TNC, urged members to redouble their efforts, adding that "time remains our biggest problem".
"We must intensify our work for this final push over the next few days. I repeat: we have to close this in the next few days," he said.
Speaking following the TNC Chair's report, the G-33 stressed the importance of its food security proposal, adding that this proposal is absolutely essential to any balanced Bali outcome.
According to trade officials, members were able to get an agreement on customs cooperation in Section I of the draft consolidated negotiating text on trade facilitation, which means that governments will now be able to exchange information between customs agencies in a rules-based manner.
Progress was also made on other issues in Section I but there are still some issues under this section that remain unresolved, trade officials added, referring in this context to issues such as expedited shipments, consularisation and advanced rulings, which are still unresolved.
On the G-33 proposal on public stockholding for food security purposes under the agriculture pillar, trade officials said that there are two issues that are still proving to be difficult in the negotiations - the duration of the ‘peace clause' that would be implemented and a safeguard mechanism that would ensure that grains that have been stockpiled do not leak into domestic and subsequently, international markets.
Trade officials noted that a General Council meeting will be held on 21 November, and that this session will be expected to transmit all the documents - not just on the Bali issues but on other issues as well - for decision by Ministers at Bali in early December.
In his statement at the TNC, Mr Azevedo reported that on trade facilitation (TF), "a very important hurdle" was overcome on Sunday, when members closed the text on the customs cooperation section.
It is not perfect, but the core of an agreement is there, said the D-G, adding however that on Section I of the TF text, "there remain some very hard nuts to crack".
"Meetings with smaller groups suggest we have solutions on the horizon in most areas. But in the remaining areas where solutions are not yet evident, it is clear that you need some tough calls."
To his mind, Section II represents "the biggest iceberg in our path", he said. "We have convergence on concepts, but we are struggling to convert those concepts into text. As I see it, an over-reliance on the part of both sides on particular words or formulations is preventing us from finding creative solutions."
On the development pillar, the D-G reported that the LDC issues "are progressing well. We have come to an agreement on preferential rules of origin and the operationalisation of the services waiver."
Work is still not finalised on cotton and duty-free quota-free (market access for LDC products, DFQF), said the TNC Chair, adding however that his consultations have left him feeling positive.
On DFQF, "I think we are in a position to find a way forward. We're not there yet - but we're almost there."
On cotton, the D-G reported that work is advancing. "I sense that there is a degree of flexibility on both sides that should allow us to come to an understanding."
On the (S&D) monitoring mechanism too, Mr Azevedo said, "we are making progress". Many of the gaps have been closed, and that there are one or two outstanding paragraphs, "but I am sure that differences in these areas can be bridged."
On the G-33 proposal on food security, under the agriculture pillar, the D-G said that he has a positive feeling here.
"We still have one or two areas which are more sensitive, particularly on safeguards, and also on the duration of the work programme. But I get a sense that both sides are working in good faith with a genuine desire to find a solution."
He added: "I know this will not be easy. It is an issue of both political and economic significance. But I am not in a negative mood. Every time that we have discussed this issue I have found constructive engagement on both sides. So I am hopeful that we will get there."
Tariff Rate Quota (TRQ) administration is, unfortunately, a different story, said the TNC Chair.
"Despite some genuine attempts at convergence, no material progress has been achieved. And this is not just the state of play over the last few days - this has been the situation for quite a while. After several weeks of no movement towards convergence, I am beginning to wonder what we could do even if we had more time to try."
Mr Azevedo said that he is also concerned about export competition. "It is true that we have made progress on a number of aspects. But there is still the central issue of whether some kind of down-payment could be required - or, if not, what kind of tangible commitment could be put in place towards making concrete progress in the near future. Again, a big question mark hangs over this issue."
In his assessment, the D-G said that it was his sincere hope that by today he would be in a position "to tell you that, although we have some difficulties ahead, we are in pretty good shape. Some more blood would have to be shed, but the fighter would not die in this arena. I was hoping I could say that he - or she - would live to fight another day. But I do not think I can tell you that."
He added: "I think the risk of failure is still present - particularly in some of the areas that I have outlined."
According to the D-G, another possibility was that he would come to members today and say ‘Look, we have tried really hard, but it is clear that in some areas you are not going to converge. There is nothing we can do. We need instead to consider how we can approach Bali in a way which is least prejudicial to the future of the organisation.'
"But, I am not in a position to tell you that either. Because, despite those big icebergs that we have ahead of us, I think that this ship may well make the crossing. It is very disappointing to be in this position today. But, in my view - informed by my conversations with all of you - that is where we are. If we insist on today's hard deadline, then, at this point, we do not have a package," said Mr Azevedo.
However, he added, "I do not believe that that is what Members want. I sense from Members that they want to keep going; that we are too close to success to accept failure. Therefore, the only option is to make a last ditch attempt - to continue this effort and continue our work for a few more days."
"But let me be clear," he stressed, "we cannot work right up until the wire. Our deadline cannot be the start of the Ministerial Conference. One of the clearest messages from my consultations with Members is that Bali must not be a negotiating conference. The duration of the flight would be enough time for positions to become entrenched. It would be the surest way to kill this agreement. We have to close this in Geneva."
Moreover, he added, there is need to leave time before Bali to put all the documents together - the Bali deliverables, and the documents and decisions that stem from the regular work under the General Council Chair.
"We also need to decide what the nature and substance of the documents issued should be. And, significantly, we need to leave time before Bali to consider what happens after Bali. That conversation can happen as soon as we conclude the negotiations on the package - but not before. We can only assess what shape a post-Bali framework should take once we know which scenario we will be living in," he said.
The D-G said he wants to reassure Members again that all issues are of equal importance. Each of the three pillars is critical for some part of the membership. "From talking to Members, my belief is that if one fails then the whole edifice will crumble."
In conclusion, Mr Azevedo said that he is confident at this moment "that we are united in our desire to conclude this deal. I think our efforts on customs cooperation proved this beyond doubt. In just 4 weeks we went from having no text to having a fully agreed text on a very difficult issue - one of the largest icebergs we had before us."
"That shows the degree of commitment we have to delivering in Bali... So we must redouble our efforts." he said.
"But it is all or nothing now. We must tie the package up once and for all in the next few days," the D-G cautioned.
Several delegations spoke following the TNC Chair's report.
China (represented by its Vice Minister for Commerce) said that it appreciated the D-G's tireless efforts in closing the gaps on key issues and commended the positive progress that has been achieved, in particular the break-through on customs cooperation.
It said that it is deeply impressed with high expectations of Members for Bali harvest and unshakable confidence to make it deliver. That being said, it emphasised that mutual trust matters a lot in the final countdown and that a successful Bali harvest is (in) the interests of all Members.
China fully supported the position of the G-20 on TRQ (administration) and export competition, and also supported the position of the G-33 on food security.
China has been constructively participating in the discussions on all three pillars of Bali harvest. In spite of numerous difficulties it had at home, China said it has been demonstrating maximum flexibilities wherever it can and has made concrete contributions to the negotiations.
"Of course, in that process we all have difficulties and core concerns, the most difficult part of which we call red lines. After twelve years' negotiations, the red line of each party is nothing secret, it is known to all. China fully respects the sensitivity of other Members on their red lines. We hope all others do the same to China. The text of S&D provision on TRQ should not be reopened for negotiation," it said.
According to trade officials, Indonesia (on behalf of the G-33) stressed the importance of its food security proposal. It said that the G-33 will be playing a constructive role in the time remaining.
There is need for a balanced agreement on the Bali package, it stressed, adding that members must show political commitment and flexibility. The G-33 proposal is absolutely essential to any balanced outcome, it added.
The Dominican Republic said that it was impressed with the work of the D-G and that the process has been inclusive and transparent.
It highlighted that there are problems with Section II (of the draft negotiating text on TF) but that this is important though because many developing countries need this for capacity that will be coming as a result.
Trade is an area that offers countries real hope for poverty reduction, said the Dominican Republic, adding that it would like to be able to raise hundreds of thousands out of poverty.
There is need to generate trade, and to have a balanced outcome, it said, adding that it supported the G-33 proposal.