WTO Talks 'Now in Crisis'

USTR Susan Schwab and Ag Secretary Mike Johanns described the situation as serious, but not beyond hope. Compiled by staff

Published on: Jul 3, 2006

Ministers have failed to narrow their differences on the "modalities" or template agreements that are needed to compile detailed cuts in World Trade Organization tariffs and agricultural subsidies, and members have asked Director-General Pascal Lamy to try to broker a compromise "as soon as possible". Members also shared his assessment that the negotiations are now in crisis.

The U.S. participated in several days of WTO negotiations, which included bilateral and small group meetings. U.S. Trade Representative Susan C. Schwab and U.S. Agriculture Secretary Mike Johanns described the situation as serious, but not beyond hope.

The "modalities" are needed so that countries can list their new commitments to reduce tariffs on thousands of products and to cut farm subsidies. The lists will be in documents known as "schedules" that will run to several hundred pages per country and to tens of thousands of pages for the whole membership. These lists will take several months for each member to compile and in each case for other members to examine and possibly negotiate.

"I will not beat about the bush," Mr Lamy told delegates in an informal meeting that immediately preceded the formal meeting. "We are now in a crisis. We are far from the necessary convergence to be able to establish modalities in agriculture and NAMA [non-agricultural market access], despite all the hard work put in by everyone."

A formal meeting on July 1 of the Trade Negotiations Committee, which comprises the entire WTO membership, brought to an end about three days of discussions among a representative group of ministers. No progress was made in trying to narrow the gaps on formulas for reducing tariffs and subsidies, various flexibilities, and other disciplines that would be in the "modalities."

Members agreed that Lamy should consult members intensively and widely in order to establish "modalities" urgently - the term several used was to "facilitate" and act as a "catalyst."

Johanns says the big task was to agree on how to deliver on the Doha mandate to 'substantially improve' market access in agriculture through programs of fundamental reform and by reducing barriers to industrial goods. "We don't have all the answers yet, but the central question of market access is squarely on the table. We also had a long overdue discussion on the balance that we all need to achieve for the Round to succeed."

Schwab adds that although the US is disappointed, it won't be deterred. "As Ministers reflect and consult, with the help of Director General Lamy, we must shift the debate from how to grow loopholes in both agriculture and manufactured goods that undermine liberalization and focus instead on what each of us - developed and developing countries alike - can bring to the table to ensure the Round succeeds. We leave Geneva more determined than ever to stay focused on achieving the promise of Doha."

Sen. Saxby Chambliss adds that although the negotiations broke off without any progress, he remains hopeful and optimistic that the talks can continue towards a successful conclusion. "While we want to make sure we do everything possible to try to achieve an agreement, the EU and the G-20 must come forward with meaningful offers rather than political posturing," he states.