Report from Geneva, II

By July 23, 2008Policy Experts, Trade

From the NAM’s perspective it was a mixed day at the WTO negotiations in Geneva. Contrary to some predictions, nobody walked out. Also Indian Trade Minister Nath rethought his rather critical initial comments on the U.S. offer to cap total agricultural subsides at $15 billion and said it was a useful thing for the United States to do Additionally, Brazil is understood to have said they could work within the present NAMA text. NAM has said the same thing, but we have low end developing coefficients in mind, along with reasonable flexibilities not excluding too many products, and of course participating in major sectorals. I don’t think Brazil is in the same corner as we are.

On the other hand, some mid-range developing countries were understood to step forward and say they could do sectorals. That is very good, and hopefully a bandwagon could develop that might develop some momentum. However, Argentina dumped all over the NAMA text and South Africa had major problems as well, being concerned that cutting their tariffs would allow China to decimate their manufacturing industry.

The U.S delegation began advancing some thoughts about how sectorals might be made more attractive, but I think it is too early to expect a reaction to that, and I should not get into details at this point.

Director General Lamy decided that the “Green Room” process with 30 or more ministers in the room was not helping narrow differences and was locking things into their already established positions. So he decided to move to “Small Group Meetings,” for example, with the U.S., EU, Japan, Brazil, India, and Australia, to see if these groups could do a better job of narrowing differences.

In my experience from previous negotiations, that is the right thing to do at this time. I don’t read any backward movement into it all. This is a good thing, and we will see where it goes.

NAM had a good session with Commerce Under Secretary Padilla today on sectorals. Chris is totally convinced that without sectorals there cannot be enough balance to move forward with NAMA, as is Ambassador Schwab and key White House advisor Dan Price. Conversation with Chris came up with some additional ideas, and they may work their way into the U.S. position.

Also met with Japanese officials, who said they have been advocating sectorals in their bilateral meetings, and with the Federation of Indian Chambers of Commerce and Industry, who are certainly not supportive of sectorals. We had a good and friendly talk, though, to try to understand each other’s positions better. My view is that India’s position is not wholly based on hard economic analysis, but also reflects a strong legal view that they do not want to be committed to things to which they did not agree in the Doha or Hong Kong ministerial text. But they certainly made their point that they are an immovable object on sectorals, and I made the point we are an irresistible force. So who knows where this will turn out.

Also had discussions with Business Europe, who is increasingly on board with sectorals, but also wants the anti-concentration clause which would limit the proportion of any import category that could be exempted from tariff cuts on the part of developing countries.

Finally, had detailed discussion with a key Congressional staffer to explain NAM’s views on sectorals from top to bottom.

All in all, a busy day. No wheels fell off the cart, and we are off to Thursday.

Frank Vargo
NAM’s Man in Geneva, July 23, 2008

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