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WTO 'Resumption': Another Blair House Accord?
Aileen Kwa

''Resumption? This is a false resumption. The process is to legitimise the deal that the US and EU may come up with.'  African delegate to the WTO, based in Geneva.

Whilst the WTO Doha negotiations have formally resumed, most negotiators in Geneva are in the dark about what is really going on. There are no formal agriculture meetings of the membership. The agriculture committee chair, New Zealand Ambassador Crawford Falconer is regularly holding informal 'fireside chats' which only about 23 - 25 delegations are invited to. These meetings are only for Ambassadors. A meeting of the African Group in Geneva on Friday 16 February saw African delegates expressing anger over the fact that they have been excluded from these talks. Of the entire continent, only Benin, as the spokesperson for the West African cotton issue, is on the 'fireside chat' invitation list – an irony given DG Pascal Lamy's proclamations that the Round is most important for Africa.

The fireside chats last for about two hours and are held about once or twice a week. Various scenarios – numbers on domestic supports and market access – are explored at these meetings.

In the recent weeks, however, the real talks, it seems, are only between the US and EU, although there is reportedly a G4 [US, EU, India and Brazil] meeting today in London and a Brazil- India meeting scheduled for 5 March.

The format of negotiating amongst the G6 (US, EU, India, Brazil, Australia and Japan), the 'real negotiating forum' before the talks collapsed in July last year, has been disbanded. USTR Susan Schwab commented in a press conference that the G6 forum was not useful. Instead, she has been advocating a 'reverse engineering' approach.

US – EU Reverse Engineering - Blair House Accord by Another Name?
Explains one developing country delegate, Schwab's 'reverse engineering' is the process whereby the US and EU set the market access tariff cutting formula aside in their negotiations, and instead focus on the products of market access interest to each other, or products which are sensitive for their domestic constituencies. Agreement is worked out between them product by product. After that, the tariff cutting formula to be applied multilaterally, as well as the treatment for sensitive products, will be worked out to fit in with the bilateral agreement.

When they have decided upon their desired package, the talks are then expanded to include first India and Brazil, and then a small group of other Members (probably those in the fireside chats). The majority of WTO Members are finally presented with a take-it-or-leave it package.

This process is not new. The Uruguay Round was infamously concluded only after the US and EU met in Blair House (the official state guest house for the US President in Washington), and came up with the 'Blair House Accord' which they then proposed to the rest of the Membership for endorsement as a multilateral deal.

Informally commenting on the current state of affairs and their exclusion from the process, one African delegate, whose country has not been invited to the fireside chats lamented:

'We are not having a multilateral process, but the bilateral and plurilateral agreements are being 'processed' and passed through the multilateral route just to justify that the membership is on board. In actual fact, we are not having a member driven negotiation.'

He continued:

'Resumption? This is a false resumption. The process is to legitimise the deal that the US and EU may come up with. Perhaps they felt that they were close to the conclusion of a deal or they were making progresss, and they want the rest of the membership to endorse what they come up with, so they called for a 'resumption'. But the reality is that the rest of the Membership is just sitting there waiting... The Chair's informal sessions (open to all Members held once in two or so weeks) is simply about information. You are told for example that the fireside chats did not make progress. It is a waste of time. These (open-ended meetings) are not negotiating meetings'.

Washington Politics – Farm Bill and TPA
The Trade Promotion Authority (TPA) and whether Congress would give the Bush administration an extension when it expires on 1 July 2007, will determine the life or death of the Round. However, as one US official shared informally, the extension does not have to be in place by 1 July when the current TPA expires.  It could well be that there is a lapse of several months before Congress agrees to a new TPA for the purposes of concluding Doha and several FTAs (Peru, Panama, Colombia, South Korea). Obviously though, Schwab's negotiating authority vis a vis her trade partners would be diminished if TPA lapses. A hard campaign is ongoing in Washington. Labour and environmental clauses for the FTAs are being discussed in order to draw the Democrats on board. Also, Democrats representing farm interests are being courted and asked what they want to get out of Doha and the Farm Bill. Whether the Administration's campaign will be successful remains to be seen.

On 1 February, the Administration unveiled 65 proposals for the US Farm Bill to Congress. Whilst these remain only at the proposal stage, the trends are not particularly encouraging. More box shifting is being planned for – moving subsidies from WTO illegal categories to direct payments which, in the WTO, fall under the unlimited Green Box. In fact the US already houses about 70% of its subsidies under the Green Box, which the WTO cotton case has revealed is anything but non-trade distorting. These moves towards direct payments will simply make non-transparent export subsidies and trade distortions. The increase in direct payments could be up to the tune of 5.5 billion. This means that US can declare that it is WTO compatible, but in reality, will still be distorting trade.

Unfortunately, this deceptive game of box-shifting could unlock the current deadlock in the Doha Round. Due to high commodity prices because of biofuels, so-called 'trade distorting supports' of the US amounted to 11.5 billion in 2006, down from about 19 billion the previous year. In its last official agriculture offer in the WTO, in October 2005, US proposed binding their trade distorting supports at 22 billion. The G20 rejected this, and has asked the US to bring supports down to 12.5 billion.

The US could conceivably accept the G20 position at this point. If so, the only stumbling block in the domestic supports pillar would be disciplines on the blue and green boxes. Hopefully, the G20 will wake up to and push for strong disciplines in the Green Box – they have articulated some of these disciplines but seem not to have pushed them hard in the negotiations.

In market access, a source close to the Brazilian negotiating team said that whilst EU's Peter Mandelson has made it known that he is willing to accept the G20 market access position of 54% tariff cuts, gaps between EU and Brazil still remain. The EU apparently wants to cut tariffs based on averages (even as they are asking developing countries to cut NAMA tariffs line by line), whilst the G20 is asking for line-by-line cuts. There are also remaining differences in the coverage and treatment of sensitive products.

Non-Agriculture Market Access (NAMA)
In NAMA, Canadian Ambassador Donald Stephenson has also been holding some informal consultations (similar to the fireside chats in agriculture). At these meetings, Stephenson has been exploring the different ideas of 'level of ambition'. Whilst it does not make much logic that one sector is traded off with another in the negotiations, WTO negotiators are generally aiming for ambition in agriculture to be more or less matched by ambition in NAMA and Services. That is, if tariffs in agriculture are cut by 54%, those in NAMA may not be too far from that percentage also.

Since the resumption, the US and EU have, as in services, attempted to intensify the NAMA negotiations. This approach was rejected by most developing countries. India reportedly said that this Round is about agriculture since that is the sector that is most distorted and it would be impossible to finalise figures for NAMA before the figures in agriculture emerge.

There has been disagreement around the concept of 'level of ambition', with the Chair attempting to equate level of ambition as 'tariffs minus flexibilities plus sectorals'. The NAMA 11 were opposed to that – their reasoning being that flexibilities should be a completely separate issue from the tariff formula (this is the same position NAMA 11 held on to last year). They also said that sectorals were completely voluntary and should not be factored in the level of ambition equation.

The EU is still pushing hard for coefficients 10 for developed countries and 15 for developing countries in the Swiss formula ie. maximum tariffs of 10 and 15 respectively. US was reported to have been silent on the issue of coefficients. They are apparently facing difficulties at home in the manufacturing sector and may not be even keen on an across the board coeffient of 10 for themselves. The two sectors which are sensitive for them are automobiles and textiles. Instead, US remains very aggressive in pushing for sectoral negotiations. A sectoral approach to liberalisation is in their interest since they want low to zero tariffs in most sectors, but high tariffs in textiles. They have tried in NAMA to push for a 'positive sectoral' in textiles ie. higher tariffs than the formula would yield, but this effort did not seem to go far in the negotiations last year. 

Talks are also taking place on non-tariff barriers (NTBs) and the non-legally binding mechanism for settling NTBs.

Services
There were attempts at the end January Davos meeting by US and EU to get developing countries to agree to a date for the revision of their services offers. Again, developing countries have chosen to wait for clearer indication in agriculture before committing themselves further. No date has been set. Explaining why developing countries have not bitten the bait, a Caribbean delegate says, 'They (the US and EU) are attempting to have low ambition in agriculture and high ambition in services and NAMA. Given the current situation (where nothing has emerged in agriculture), there is no way I can account to my capital why I need to provide a revised offer'.

Nevertheless, informal services clusters are taking place in the last two weeks of every month. The February cluster will deal with rules rather than market access – including domestic regulation and the emergency safeguard mechanism.

The domestic regulation talks have been continuing under the chairmanship of the Singapore's Peter Govindasamy. He has dealt with the following issues at his meetings – transparency, technical standards, necessity test and development. With each meeting, he has been working with groups on parts of the domestic regulation text.

Positions however, remain far apart. The US has said clearly that it will not be forced to agree to a necessity test. If one is included in the text, there will be no domestic regulation negotiations. EU used to be silent on the issue, but is also now saying no to the necessity test. Switzerland, Australia, India, and Hong Kong China are amongst the delegations pushing for the necessity test. The end result, some speculate, could be a 'best endeavour' necessity test.

However, the US has been aggressively pushing 'prior comment' under transparency. That is, countries need to notify the WTO membership before changing their domestic regulation, and receive feedback from other delegations about their proposed changes in regulation. Developing countries are opposed to this – it would give other countries an avenue to interfere in domestic policies. Also, developing countries have argued that they do not have the institutional capacity to enforce such an agreement. The current text is based on the US position and could be watered down into best endeavour language.

The development concerns of the ACP countries are not been endorsed by developed countries such as the US, which fears that what the ACP is asking for could amount to too many loopholes in the agreement. In addition, the major players are apparently not agreeing to carve outs for LDCs! All in all, there remain many differences.

Foreclosing Developing Countries' Development Prospects
History does not seem to have changed, and we seem to be reliving the end days of the Urugauy Round negotiations.

Poverty in Africa has doubled in the past 25 years under structural adjustment policies. UNCTAD has already revealed that even in the recent years, when some developing countries have experienced positive economic growth, and increased exports, poverty has not declined. In Comoros, Malawi, Mali, Tanzania and Zambia, GDP growth has not translated to higher consumption per capita i.e. no decrease in poverty.Harvard's Dani Rodrik concludes too that poor African countries can grow, but they cannot seem to sustain their growth. This is probably connected to the finding of UNCTAD economist S.M. Shafaeddin, who cites the examples of Jamaica, Ghana, Colombia, Uruguay and Paraguay – all countries which have had high or moderate levels of growth rates in exports in the recent years, but have had negative manufactured value(MVA) added. That is, even as countries are growing in exports, there has been a process of deindustrialisation. Ghana's MVA was at -3.5% during the 1990s indicating  severe deindustrialisation.
                   
These issues have not been discussed in the multilateral trade institution. Instead, Doha negotiations and its fixed formulas liberalising all sectors and products line by line, and permanently, is being negotiated, with outcomes experts have already predicted will amount to losses for the poor.

Addis Ababa Ministerial declaration on Economic Partnership Agreements Negotiations

*(Conference of ministers of Trade of the African Union 3rd Extraordinary Session 15-16 January 2007, Addis Ababa, Ethiopia)

We, Ministers responsible for Trade of Member States of the African Union, meeting in the Third Extraordinary Session in Addis Ababa, Ethiopia on 16th January 2007:
Recalling the objectives contained in the Georgetown Agreement and the Cotonou Partnership Agreement,
Re-affirming positions contained in the Declarations of Mauritius, Cairo, and Nairobi on Economic Partnership Agreements Negotiations,
Recalling the Decision on Economic Partnership Agreements of the ACP Council of Ministers held in Khartoum Sudan in December 2006,
Having regard to the Outcome of the African Union Summit held in Banjul, The Gambia, in July 2006 which, inter alia, addressed the issues of harmonization of Africa’s RECs, including overlapping membership and the incongruence between the EPA negotiating configurations and regional integration groupings,
Having regard to the reports on EPA negotiations at the regional level, which in general indicate lack of sufficient progress in all aspects of the negotiations and in particular the delay by the European Commission to respond to certain issues submitted by the African negotiators related, inter alia, to the development dimension, market access and regional integration as well as the EC’s demand for the inclusion of new generation issues,
Concerned that at this advanced stage of the negotiations, Africa’s priorities have not been positively and adequately addressed by the European Commission,
Taking into account the reports of the ECA and the four African regions on the Comprehensive Review of EPAs under Article 37.4 of the Cotonou Agreement, Whereas the EPAs should result in the promotion of the economic development of all African States,
Considering the Conclusions on operationalisation of Aid for Trade adopted by the General Affairs and External Relations Council of the European Union on 16 October 2006,
Considering the need to ensure that EPAs take into account African countries’ concerns such as the cost of adjustment and building of the supply capacities, market access, including flexibilities related to product coverage, transitional period as well as financing of trade-related infrastructure,
Underscoring that regional integration is a priority for Africa in accordance with the legal instruments and programmes for the establishment of the Regional Economic Communities and progressively the African Economic Community, and in accordance with the Constitutive Act of the African Union
Reiterating that the African regions will be allowed to pursue their regional integration processes at a pace that is commensurate with their political, economical and social capacities,
Noting that the level of preparedness to conclude Economic Partnership Agreements is inadequate in Africa due to among other reasons the lack of completion of country-specific impact assessment studies,
1. We therefore call upon the European Commission in the spirit of partnership to show flexibility and to positively and adequately respond to key concerns of Africa,
2. We further call upon the European Union and its Member States to genuinely provide additional resources in accordance with their commitment, paying attention to the development and financing needs of Africa in building competitiveness and addressing supply side and infrastructure constraints,
3. Fully aware of the potential huge adjustment costs that Economic Partnership Agreements would entail during implementation and in this regard, as the questions of how to adjust still persist, clear measures need to be defined that will help our countries address the challenges of adjustment. We therefore re-iterate the call for a broad EPA adjustment facility, in addition to the EDF, as an appropriate instrument that should cover social development, economic reforms, private sector development, and institutional development,
4. Having regard to the preliminary results of the Comprehensive Review, we urge all the parties to take stock of the negotiations and explore all alternatives to ensure that there is no disruption of mutual trade, including whether to extend the period of negotiations,
5. We direct our negotiators in each of the regions to ensure that they coordinate the negotiations for Economic Partnership Agreements including at the technical level. In this regard, the AU coordination of the negotiations should be strengthened. The negotiating groups should involve the Commission of the African Union in their events and negotiations,
6. We direct our negotiators to ensure that the review fully addresses and makes recommendations on all outstanding issues in the negotiations; and that the four negotiating groups of Africa coordinate their activities in this regard and produce a consolidated report with the assistance of the Commission of the African Union in collaboration with the Economic Commission for Africa,
7. Cognisant that Article XXIV of the GATT 1994, as currently interpreted by the EU, is unsuitable for pro development Economic Partnership Agreements, we recall the proposal by the ACP group at the WTO and urge WTO members to take this proposal fully into account.

Uganda Civil Society Memorandum Presented to Mr. Pascal Lamy, Director General to WTO on 3 February, 2007 at Hotel Serena, Kampala, Uganda

Uganda Civil Society Organisations in a memorandum presented to Mr Pascal Lamy expressed concern that issues which are of critical interest to developing countries were being sidelined and expressed the need of ensuring that the process used to arrive at decisions is fair, transparent and inclusive.

Introduction
The Multilateral Trading System is important and has the potential to contribute to human development and the achievement of the Millennium Development Goals. This system has registered some progress in addressing the development needs of developing and poor countries. The Doha Round with its emphasis on putting development on the WTO Agenda was a positive development. We appreciate the efforts towards a bottom-up approach of consulting members and stakeholders evidenced by your presence here today. However, inherent in the globalization and liberalization process being promoted by the Multilateral Trading System through the WTO is the danger of increased marginalization and insecurity of vulnerable groups such as women, pastoral groups and the people in the rural areas among others. For us in the civil society, our pre-occupation is to ensure that the Multilateral Trading System is better aligned with broader objective of human development, helping poor people everywhere gain tools, opportunities and choices to build a better life for themselves, their families and their communities.

The WTO has a major role to play in maximizing potential benefits of global trade, minimizing the risks, and ensuring the beneficial integration of developing countries and equitable sharing of benefits. The rules that are being fashioned should have this in view. We have noted with concern that prior and subsequent to the Hong Kong Ministerial meeting, the following issues, which are of critical interest to Developing Countries, were sidelined:

i) Inclusiveness
We note that towards the suspension of the WTO talks in July 2006, negotiations had been limited to only six countries. We also note that a decision has been reached in Davos recently to resume the negotiations.
However, we are concerned that in reaching such fundamental decisions, the Least developed and poor developing countries are excluded, yet such decisions affect them as well. This is contrary to the democratic principle of all inclusiveness that the WTO so much prides itself in. We are aware of the challenge of involving all the 150 member states in the consultation process. However, there is need to have a systematic way of ensuring that the process used to arrive at decisions is fair, transparent, consistent and all inclusive. This will ensure that issues critical to less powerful countries are not sidelined.

ii) Development
We appreciate the development package contained within the Hong Kong declaration especially the offer of duty free and quota-free market access for LDCs. The coverage of 97% diminishes the value of this offer since it will allow developed countries to exclude key products in which LDCs are competitive. We also note, that this offer will greatly depend on the prevailing Rules of origin, which in their present form, are unfavorable to Uganda and other developing countries. Further, the package, does not address issues on Special and Differential Treatment & Implementation that were proposed by the African countries. We are concerned that there are no modalities for implementation of the development package to the benefit of LDCS. For an LDC like Uganda, it will be a crucial element of the Doha negotiations to secure duty and quota-free market access – bound at 100% - to all developed countries and developing countries in a position to do so.

iii) Agriculture
Agriculture is critical to food security and the livelihoods of many Ugandans. Therefore, we emphasise that on resumption of the negotiations, the following issues are addressed:
a) actual cuts in the domestic and export subsidies in developed countries that lead to dumping to poor countries should be undertaken;
b) that products of importance to Uganda and other developing countries in terms of food security, farmer’s livelihoods and rural development are not subject to tariff reductions.

iv) Services
The WTO’s GATS enshrines the right of countries to determine whether to liberalise any of their services and at what pace. We are concerned that new approaches to negotiations in services compromise the flexibilities earlier granted to developing countries. We call upon the WTO to allow member countries to retain policy space so that development can be promoted.

Further, GATS would be of meaningful benefit to Uganda and other developing countries, when developed countries make meaningful offers especially under Mode 4 that would enable skilled and semi-skilled workers access employment in developed countries. Without meaningful horizontal commitments on Mode 4 that not only de-link access to commercial presence, African countries will have difficulty in participating in international trade in services. The negotiations have to address these issues in order to have a development outcome.

v) NAMA
We have noted that the LDCs are not required to make any reductions under NAMA and this is applauded. However, the MFN deductions are bound to affect the margin of preferences enjoyed by LDCS, and therefore there is need to work out adjustment measures to address this loss. We also note that Developing Countries such as Kenya will be required to bind all their tariffs which will reduce their flexibility. Kenya, being part of East African Community, this will invariably affect our Common External Tariffs and intra East African Community Trade flows.

vi) GATT Article XXIV
This article provides for the rules that govern Regional Economic Integration .The existing provisions do not sufficiently and explicitly take into account developmental aspects of Regional Trade Arrangements entered into between developed and developing countries. The African Caribbean and Pacific countries are negotiating Economic Partnership Agreements with European Union which are due to be concluded in December 2007. In view of the deficiency of GATT Article XXIV, the ACP group of States put forward a proposal in 2004 to address this issue. We are concerned that there has not been much progress in clarifying these rules. It would be impossible to conclude pro-development Economic Partnership Agreements (EPAs) without amending GATT Article XXIV, allowing for a sufficiently long transition period for developing countries, a substantial level of asymmetry in reciprocity, as well as flexibility for developing countries to exclude a sufficiently large number of sensitive products from the coverage of the RTA.

vii) Commodity issues
We are concerned that the WTO has not given sufficient attention to this issue, which would go a long way in addressing the development concerns of Uganda.

viii) Aid for trade
We appreciate Aid for Trade to assist the developing countries in building their trade related infrastructure. Developing Countries especially LDCs face many challenges related to supply capacity and competitiveness. Aid for Trade should address some of these concerns through the provision of, and assistance to enhance production capacities, Technical Assistance, institutional reform, infrastructure (both physical and institutional) and assistance with adjacent costs. Aid for trade, especially in LDCs, needs to be directed at improving their productive capacities. It is through developing their production capacities that the LDCs will be able to compete in international markets in goods and services which go beyond primary commodities. In order for it to have impact, this Aid should be new, unconditional, predictable and not debt creating. It also should not be used to pressure developing countries to accept greater commitments in the WTO.

ix) Food aid
While food aid is essential for humanitarian purposes, there is need to ensure that it does not negatively impact on domestic production or cause trade distortion. We are aware that some developed countries use Food Aid to dispose off surplus products and also continue export subsidization in developing countries. We reiterate our position that; Food aid must be provided in cash form, save for emergency situations in order to allow for local purchase.

x) Cotton
We support the C4 along with Senegal on the issue of cotton. We also support the view that the cotton issue be handled expeditiously, ambitiously and specifically and should be treated separately from the wider agricultural negotiations as earlier agreed. However, since the cotton issue affects many more other countries on the continent other than the C4, the developmental solutions to address this issue should be expanded to include other sub-Saharan African countries. In concluding, we wish to emphasise that, we are in support of the resumption of the negotiations if they put development at the center and not if they are at the expense of the development of poor countries like Uganda. Analysis of econometric data has shown that weak countries such as Uganda will not be in a position to benefit from a pure 'market access round' unless other issues such as subsidies, supply-side constraints, compensation for preference erosion and tariff revenue loss, as well as adjustment costs effectively became part of the overall package. There must be a balance between issues, interests and the time allocated for negotiations. Issues for negotiation should mature through predictable debates and discussions before being tabled for negotiations. The major players, in particular the EU, Canada, Japan, the USA, Brazil, India and China should assume more responsibilities in ensuring positive outcomes of the talks by taking more and concrete commitments including on issues related to agriculture, facilitating capacity building and ensuring that at the end of the day there is genuine fair trade.

The Addis Ababa African Union Trade Ministers Declaration on WTO trade negotiations

The African Ministers meeting in Addis Ababa in their declaration reiterated their shared interest in having an ambitious pro-development outcome of the Doha Round. They rejected moves that would have effects of reducing the development dimension or modifying the existing mandate.  They recognised that developing countries have a common strategic objective to advance that development dimension of the Doha Round. The declaration states:

We, African Ministers of Trade, meeting in Addis Ababa on 16 January 2007, having examined the developments since our last meeting in Nairobi in April 2006 and the subsequent suspension of the negotiations of the Doha Round in July 2006;
Taking into account the issues at stake in these negotiations for Africa and the legitimate aspirations of its people as restated by the Current Chairperson of the African Union in his Statement on 6 October 2006 regarding the resumption of the negotiations;
Considering the immense costs incurred and the related efforts made by African countries in terms of human and financial resources since the launch of the Round in November 2001;
Emphasising the imperative need for the Round to yield results that achieve the development objectives contained in the Doha Ministerial Declaration and later reaffirmed by the WTO General Council Decision of 1 August 2004 (the July Framework) and subsequently the 6th WTO Ministerial Conference held from 13 to 18 December 2005 in Hong Kong;
Underlining the understanding reached at the Trade Negotiating Committee (TNC) meeting on 16 November 2006 to build on the consultations and the need to ensure a fully inclusive and transparent process in all areas of the negotiations;
Underscoring the fact that African countries, and in particular the Least
Developed Countries (LDCs) among them, have specific needs in view of their particular situation and their levels of development;
Considering the adverse consequences of the domestic support and subsidies granted to cotton by the developed countries on the economies and the populations of the cotton producing countries of Africa;
Reaffirming our positions and concerns as contained in the Kigali Consensus (27 - 28 May 2004), the Cairo Road Map on the Doha Work Programme (5 - 9 June 2005), the Arusha Development Benchmarks (21 – 24 November 2005), the Arusha Ministerial Declaration on Commodities (21 – 23 November 2005) and the Nairobi Ministerial Declaration (12 - 14 April 2006);
Noting with concern that there are still differences in the positions expressed by the major players, especially on the development dimension, which are hampering a timely and successful conclusion of the negotiations:

1. STRESS that it is important to the Members as well as the global economy that the current Round of negotiations give rise to a fair and balanced agreement, including full modalities that will truly integrate the development dimension, pursuant to the mandate given by the Doha Ministerial Declaration, the July Framework and the Hong Kong Ministerial Declaration which remain the only bases on which these negotiations should be conducted. In this regard, the establishment of partial modalities will not be conducive to a productive and acceptable outcome.

2. REAFFIRM at this critical juncture, our readiness to engage with all Members to ensure that WTO negotiations in Agriculture live up to the commitments of the Doha Round mandate. The results of the negotiations should guarantee substantial and effective reduction in trade-distorting domestic support of developed countries coupled with necessary disciplines to prevent box-shifting and shifting of support among products; substantial improvement in market access; and expeditious elimination of all forms of export subsidies, while taking into account the concerns of the Net Food Importer Developing Countries (NFIDCs) and LDCs. The results should also address the issue of food aid in accordance with the joint submission of the African Group and LDCs in March 2006, resolve the issue of longstanding preferences and preference erosion, including the banana issue and other commodities through traderelated solutions especially the institution of reference periods of equivalent effect or duration and ensure that effective and operational Special and Differential Treatment, Special Products and Special Safeguard Mechanism are fully integrated in the final outcome, taking into account the development needs and concerns of Africa.

3. URGE that WTO Members, with regard to cotton, immediately build on the positive developments achieved by the General Council Decision of 1 August 2004 and the Sixth Ministerial Conference.

We FURTHER URGE the Director General of the WTO to speed up the consultation process on the approaches and mechanisms that will address the revenue losses as a result of the decline in cotton prices and to report to the Members of the WTO.

 We ALSO CALL UPON the Director General of the WTO to organise a meeting as soon as possible in 2007 to take stock of the development aspects of the cotton sector as part of the follow up on the mandate given by the Hong Kong Ministerial Conference.

(NAMA) negotiations should not lead to the de-industrialisation of African economies. Adequate flexibilities, less than full reciprocity and appropriate Special and Differential Treatment should be provided to address the development needs and concerns of African countries, including trade solutions to the problem of
erosion of preferences.

5. FURTHER STRESS that the Duty Free Quota Free Market Access for products originating from LDCs is still a negotiating issue and must be maintained in the Special Session of the Committee for Trade and Development, taking into account the proposals made by the LDCs. In this regard,  We URGE Members to build on the positive development of the WTO Sixth Ministerial Conference.

6. URGE that the negotiations in Services should give special consideration to sectors and modes of supply of interest to African countries, maintain the current flexibilities of GATS and allow African Countries to liberalise according to their individual levels of development. We ALSO CALL for the full operationalisation of the modalities on the basis of the proposals made by LDCs in March 2006. In this regard, we REITERATE our position as reflected in the Nairobi Declaration.

7. REAFFIRM that the negotiations in Trade Facilitation should take into account the need to provide technical and financial assistance and capacity building during the negotiations as well as the implementation and post implementation periods. Such assistance should address, among others issues physical infrastructure and trade capacity constraints. There should be appropriate Special and Differential Treatment provisions for the developing countries, and particularly for the LDCs, to enable tangible benefits from the reform process.

8. REQUEST the Economic Commission for Africa (ECA), the African Development Bank (ADB), the International Trade Center (ITC), the United Nations Development Programme (UNDP), the United Nations Conference on Trade and Development (UNCTAD) and other collaborating agencies to assist the African Group to respond rapidly to the evolving dynamics in the negotiations and, in particular, to assist the Group in developing an effective and operational Special and Differential package in the upcoming modalities phase.

9. RECALL the pledge made at Doha to place the needs and interests of developing countries, especially the least developed  among them, at the heart of the Doha Round. We therefore REITERATE our shared interest in a pro-development outcome of the Round. We HIGHLIGHT the indivisibility of such a development agenda particularly the need to ensure an ambitious outcome for development.

10. ARE STRONGLY OPPOSED to the decline of the development dimension of the Doha Round and to any attempt to modify the existing mandate, given the special situation of African countries and taking into account the need to achieve the Millennium Development Goals.

11. URGE WTO Members, particularly the major trading partners which have a greater responsibility in these negotiations, to demonstrate flexibility and show the necessary political will to facilitate the full resumption of the negotiations.

12. ENCOURAGE the WTO Director General to continue his consultations while ensuring that the entire negotiation process remains fully member-driven, all-inclusive and transparent.

13. REAFFIRM our solidarity with all our African members that are in the WTO accession process and URGE all WTO Members to facilitate and accelerate the access ion process of these countries as we stipulated in the Nairobi Declaration. In keeping with the guidelines for the accession of LDCs, adopted by WTO members on 10 December 2002, we STRESS that acceding LDCs should not be compelled to negotiate concessions and commitments that go beyond what is undertaken by existing WTO LDC members. We ALSO STRESS that non-LDC African countries in the process of accession should not be compelled to make excessive concessions and commitments which are not compatible with their level of development and go beyond the commitments already taken by WTO developing countries Members.

14. UNDERSCORE our determination to contribute to the emergence of a strong multilateral trade system in the service of development of all WTO Members, through Regional Trade Agreements.

15. COGNISANT of the fact that most African countries are currently negotiating Economic Partnership Agreements (EPAs) with the European Union and RECALLING that the outcomes are to be consistent with WTO rules, URGE WTO Members in particular to support ACP proposals, incorporating development dimensions in the negotiations on the review and clarification of Article XXIV of GATT 1994.

16. CONCUR that Aid for Trade is not a substitute for the development objectives set by the Doha Development Agenda. Consequently, the resources to be allocated under Aid for Trade should be truly additional, predictable, non-conditional and released as grants, to enhance supply capabilities, develop trade-related infrastructure, build human and institutional capacities and meet the costs of implementing the multilateral trade rules. We FURTHER URGE that the recommendations of the Task Force be implemented expeditiously on a fast track and stand-alone basis, also taking into account the regional dimension of projects and programs implemented in Africa.

17. CALL for effective and timely implementation of the recommendations of the Task Force on the Enhanced Integrated Framework (EIF) in a manner that will result in positive benefits to the LDCs.

18. UNDERSCORE that technical assistance and capacity building are key integral components of the Doha Work Programme. We CALL ON our development partners to avail resources to the ECA and the African Trade Policy Center (ATPC) to be involved in the delivery of trade related technical assistance to African countries. We CALL ALSO on our development partners to adequately finance technical assistance and capacity building through, inter alia, the Enhanced Integrated Framework, the Joint Integrated Trade Assistance Programme (JITAP) and other complementary mechanisms.

19. WE RECOGNIZE that some African countries have benefited from JITAP. We therefore urge the continuation of the programme and the implementation of JITAP III. In this regard, we FURTHER URGE our development partners and relevant multilateral organisations to ensure that the original aims of JITAP are not undermined but rather made more secure to serve as a mechanism for delivering technical assistance and capacity building in Africa, while ensuring the participation of the countries that are already beneficiaries of the programme and those requesting to be involved in its conceptualization and in the consolidation of the new phase of the programme.

20. FURTHERMORE, determined to strengthen the synergy between the African countries which JITAP has continued to promote, we WELCOME the decision taken at the Workshop on the networking of the institutions involved in trade in services held in Tunis, in June 2006 to create an inter-African network on trade in services and URGE our development partners and the relevant multilateralorganizations to assist in the establishment and operationalization of this network as a tool for the promotion of inter- African trade. We AGREE, in this regard, to the creation of a mechanism to follow up on the recommendations of the Tunis Workshop.

21. UNDERSCORE the need for fair and balanced representation of Africa in the WTO Secretariat; in particular, we are concerned with the under-representation of Africa. We URGE that this situation be remedied.

22. RECOGNIZE that developing countries have a common strategic objective to advance the development dimension of the Doha Round. We APPLAUD the unity displayed since the Hong Kong Ministerial Conference by the various developing countries groupings.

23. REITERATE our commitment to working towards the achievement of the objectives of the Doha Round and to the successful conclusion of the negotiations.

Done in Addis Ababa, Ethiopia, this 16th day of January 2007.

Editorial: Africa Negotiators need to be extra vigilant as the negotiations approach a conclusive stage
By Ambassador Nathan Irumba

The Director General of the World Trade Organisation Mr. Pascal Lamy reported to the General Council that “we have resumed our negotiations fully across the Board” and “that conditions are now more favourable for the conclusion of the negotiations than they have been for a long time.”  Political leaders around the world clearly want to get back in business.

This new positive mood followed a recent gathering of select Ministers hosted by their Swiss colleague in Davos where commitment was expressed to put the Doha Round back on track. All the Ministers present at that meeting supported resumption of full activity in various negotiating groups and declared that flexibility were available within their mandates. Expressing optimism Mr. Lamy declared that “we are now writing the last chapter of this long and sometimes tortuous story.”

The negotiations were suspended last year because of the differences between the major players. Mr. Lamy at the time stated that there was need for parallel progress on a triangle of issues which would require the US to agree on deeper cuts in domestic Agriculture support, the EU to provide increased Agriculture market access and developing countries to give substantial concessions on industrial tariffs and in services. From Mr. Lamy’s announcement, it is not clear what flexibilities or concessions the major agriculture subsidizers are willing to make and whether these will represent real cuts or just legitimize the status-quo namely by cutting only the water in agriculture support the USA and EU provide.

As we move to what appears the end stretch of the negotiations, the situation presents considerable challenges to African countries. Once the major powers work out a compromise among themselves, our countries and leaders will come under considerable pressure to join the so called “emerging consensus,” irrespective of whether the proposal on the table adequately reflect the desired outcome for our countries. It is not therefore accidental that there have been repetitive statements to the effect that failure of the negotiations will do more harm to Africa and other developing countries. Yet a number of studies show that we are likely to benefit least, and may experience losses.

As pointed out in the articles in this Bulletin, since the suspension of the discussions the discussions, thus far, have been limited mainly to the major trading nations and some advanced developing countries. There has not been much participation of the LDCs, and African in this side talks. The danger, therefore, of “a Blair House” type accord reached among the major players with the rest of the countries being left on the sidelines is real. As pointed out by the Uganda Civil Society memorandum to Mr. Lamy, there is therefore, need to ensure that the process used to arrive at decisions is fair, transparent and all inclusive. It is particularly at such times that developing countries need to be vigilant to avoid a repeat of Uruguay Round mistakes. What is desirable is to have an end result that is balanced, equitable and promotes our growth and Human Development. This is one of the issues in negotiations which is as yet to be resolved.

It is noteworthy a number of developmental issues advocated by Africa and other developing countries, especially with regard to implementation and special and differential treatment, remain outstanding. There does nor seem to be any hurry to address them, as deadlines have come and passed.

In agriculture the proposal for designation of special products aimed at addressing the problem developing countries regarding food security and livelihood have not yet been satisfactorily addressed and continue to meet resistance. As the EU pushes for greater room for flexibility for themselves on sensitive products, there are aggressive efforts to limit the flexibilities available to developing countries on special product and the special safeguard arrangements.

Commodity production has significant bearing on sustainable livelihoods and the export performance of African and other developing countries. The impact and implications of long term decline in prices of commodities have been further complicated by the emergence of concentrated market structures and stringent market entry requirements. African countries have placed this item on WTO agenda, but it has not so far been treated with the seriousness it deserves.

ACP countries are negotiating with the EU, as part of the Cotonou Agreements, WTO compatible Economic Partnership arrangements. The ACP would therefore need an instrument that is flexible enough in establishing special and differential treatment for adequate transition periods, product coverage and degree of asymmetry in the timetable for reduction of tariffs. GATT 1994 Article xxiv does not provide S&D treatment for developing countries in free trade area arrangements with developed countries, such as the EU.

Accordingly, African trade Ministers in their Nairobi Declaration, underscored the need for article xiv to be emended. They endorsed the proposal of the Africa Caribbean and pacific Group of States to the WTO Negotiating Group on Rules, calling for modification of Article xxiv of the General Agreement on Tariffs and Trade 1994. The flexibility currently available under Article V of GATS is limited. ACP countries will require greater flexibility if they are to negotiate trade in services under the EPAs.

In Hong Kong the Ministers re-emphasized the central importance of the development dimension in every aspect of the Doha work programme. They recommitted themselves to making it a meaningful reality in terms of both the results of negotiations in agriculture, Non Agriculture market access, rules and in specific development issues. The African Ministers in Arusha adopted development the benchmarks fro evaluating the outcomes in the Doha Round in Hong Kong and beyond. These benchmarks include inter alia; enhanced market access, balanced rules that provide developing countries policy space to pursue development policies and capacity building. The outcomes being proposed need to be evaluated against these benchmarks.

It needs no stressing that the success of Africa and other developing countries in achieving their negotiating goals will depend to a large extent on their unity and solidarity, as well as that of other developing countries. In this regard it is a welcome development that, the African Ministers in their Addis Ababa declaration recognised that developing countries have a common strategic objective to advance the development dimension of the Doha Round and applauded the unity displayed since the Hong Kong Ministerial Conference by various developing countries groupings. This solidarity will be especially need to be manifested, and will indeed be tested, as we move to the last stretch of the negotiations. There is need to avoid the temptation to be divided.