Update on Multilateral Trade Negotiations

“The July Package”

PRESENTATION TO SELECT COMMITTEE 09 November 2004

1. Rationale and Context 2. Key Elements of “The July Package”3. Development 4. Agriculture 5. Non- Agricultural Market Access 6. Trade Facilitation 7. Key Challenges8. Conclusion9. Questions?

Overview of the Presentation

• Since failure to achieve concrete outcomes in Cancun in September 2003, a range of efforts have been put in place to put negotiations back on track: The EU and US re-engagement has ushered in a new phase in

the Doha negotiations post-Cancun. Over the previous months, a range of meetings at political and

technical levels were held that offer the opportunity to intensify the engagement.

In Geneva, consultations among WTO Members since Cancun identified key issues that required resolution to advance the negotiations. These were: agriculture, industrial tariffs, cotton and the Singapore issues (investment, competition, transparency in government procurement and trade facilitation).

However, the lead up to adoption of “The July Package” illustrated growing strength and cohesion of the G20 –political unity.

In this context, decision to adopt the package on 1st August 2004 signaled significant advance in the negotiating process.

Rationale and Context

Key Elements of “The July Package”

• The July Package Represents agreement on what had been unsuccessfully sought

for in Cancun Provides a framework for ongoing negotiations and ensures that

negotiation process is continued on a more focused agenda. Seeks to ensure that negotiation process continue without

compromising the Doha ambition, mandate and objectives. Addresses five issues considered to be immediate obstacles to

negotiations: development issues, agriculture, cotton, non-agricultural market access (NAMA) or industrial tariffs and trade facilitation.

Only marks agreement on framework for ongoing negotiations, though much work is still required to to define modalities that will give more definition to the final outcome.

Key Elements- Development

• The General council recommitted its members to fulfilling the development dimension of the DDA, which places the needs and interests of developing and LDCs at the heart of Doha Work Programme. There was growing cooperation between G20 and Africa

Group countries on development issues.

SA was requested to assit as facilitator of the so-called “weak and vulnerable developing country” issue.

The objective was to ensure that concerns of developing countries were addressed in the modalities phase of negotiations.

SA successfully negotiated the text during the process and this provided a basis for successful agriculture and NAMA negotiations

Key Elements: Agriculture • For the first time, member governments have agreed to abolish

all forms of agriculture export subsidies by a certain date. Domestic Support: The Ministerial Declaration called for that

susbtanatial reductions in trade distorting domestic support in agriculture, with a view to ensurig that preferential treatment remains an important component of domestic support;

Export Competition: A principled agreement was made that export subsidies will be eliminated by a certain date. The next phase of negotiations wil deal with other forms of subsidies that have same effect.

Market Access: The Ministerial Declaration called for substantial improvements in market access, that special and differintial treatment for developing countries would be an intergral part of all elements in the negotiations to ensure that that single approach meets the objectives of Doha mandate

Developed countries made an undertaking to provide enhanced access for tropical prodcuts from developing countries.

Key Elements: Non-Agricultural Market Access

(NAMA)• In Doha, Ministers agreed that negotiations shall aim at

reducing tariffs as well as non-tariff barriers on products of export interest to developing countries. However, two issues constrained progress at July meeting: Reluctance of members to negotiate on NAMA without clarity on

progress in agriculture Disagreement on what should constitute the basis of the

negotiationsHowever, members reaffrirmed that negotaitions on NAMA

shall aim at reducing or eliminating tariffs as well as non-tariff barriers on export products and the importance of preferential treatment as intergral parts of modalities.

Key Elements: Trade Facilitation

• The outcome of negotiations on Trade Facilitation signalled two important issues: EU and other proponents for negotiations on

Singapore issues (investment, competition, transparency in government procurement) agreed to drop the issues from the negotiations.

Consensus to launch negotiations on trade facilitation required an agreement on the framework within which negotiations would proceed.

• A combination of Presidential elections in the US and the appointment of new commissioners in the European Union in the 2nd half of 2004 would delay re-engagement in the WTO.

• The central role played by the Five Interested Parties (FIPS) group comprising of the US, EU, Australia, Brazil and India in setting out the final terms of agreement in agriculture Africa’s challenges are well-documented and characterised by slow economic growth and development

Key Challenges

• Difficult and complex negotiations still lie ahead. The July Package only marks agreement on framework for ongoing negotiations and much work is still required to define modalities that will define the final outcome of the process

• This proposes that SA will need to continue building its capacity to participate effectively in negotiations and forge strong alliances with with the G20, the Africa and Cairns Group.

• The next Ministerial conference will be held in December 2005 in Hong Kong. New Dates in between: May 2005 and July 2005.

Conclusion

Questions