Report from Geneva, VI

By July 27, 2008Policy Experts, Trade

I sympathize with journalists who have to fill a newspaper even when there is nothing to report. There is a lot going on here in Geneva, but most of it has continued to be the small group meetings and one-on-one bilaterals. And that’s really how things get done in trade negotiations. You cannot have 30 people sitting around a table and get anything agreed. You have to get the most interested parties to meet with each other, see what they can swap, get them to agree on some language, and then to out and sell it to the rest.

There are 153 countries in the WTO and theoretically any one of them could hold up a deal. That’s very unlikely, but there are probably 40-50 countries who absolutely have to be in accord with an agreement.

WTO Director General Pascal Lamy’s text, which I reported on in an earlier blog, is the basis of the agreement, if there is one. After a full day of bilateral discussions on this, a “Green Room” was convened about 7 p.m. Geneva time and could run quite late tonight – it is 11 p.m. as I write this, and I don’t know if the Green Room is running or not.

Lamy’s plan is to have his text – really his outline – incorporated into the ag and NAMA chairmen’s’ texts and given out for approval tomorrow. Then there will be another day of discussion and angst, and hopefully we will be done Wednesday – although I was asked to be prepared to be here through Thursday (groan). You know, you can only eat so much raclette.

My activities today involved meeting with General Director Lamy’s Chief of Staff, meeting with Commerce staff to discuss some technical details, and trading rumors with some of the press. And I did get to take a long walk along the beautiful lake. It is very warm in Geneva, and thousands of people were out in the lakeside parks or out on sailing boats.

I had earlier promised to discuss in somewhat greater detail the “anti-concentration clause (ACC),” so let me do that now. Developing countries are allowed to exclude up to 14 percent of their tariff line items from making cuts, and there is concern that they will cluster these tariff lines in sensitive areas, particularly textiles and autos. So, the European Union came up with the idea that no more than half of a tariff category could be excluded – or 40 percent, depending upon the breadth of the category definition. That would ensure that at least half the items in the tariff category (4-digit HS, for those of you who do that sort of thing) would have to take the formula cut.

Well, this set off a cacophony among the developing countries, who precisely want to concentrate their exemptions in key sectors. The result was that Lamy’s text says that at least 20 percent of a tariff category must take the full percentage cuts – meaning a country can exclude up to 80 percent. That’s not very helpful in spreading the flexibilities and keeping them from being clustered, and is one more problem we face on the road to trying to cobble out a deal that looks reasonably balanced for us.

NAM’s Man in Geneva
Frank Vargo

For previous posts from Geneva, please go here.

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