ࡱ> `b_q dbjbjt+t+ )tAAT`O']l l l v  8 $ #$ .8 8 8 8 8 8 #######$% 'f$ 8 8 8 8 8 $ 8 8 8 | 8 8 # 8 #   #8 |hz3 X#* Background Paper The ϲʹ's 2-year strategy comes to fruition January 2002 Introduction This background note highlights the major elements of ϲʹ activities from the 3rd Ministerial Conference in Seattle through the 4th Ministerial Conference in Doha. Significant elements of the ϲʹ's work have been listed chronologically to provide a sense of how the efforts of ϲʹ Member Governments, the Director-General, the General Council Chairmen and Chairpersons of other various committees lead to the successful outcome in Doha. Post-Seattle confidence-building The preparations for the Doha Ministerial Conference actually began immediately after the setback at Seattle. In early 2000 the Chairman of the General Council and the Director-General announced a comprehensive set of confidence-building measures. These included specific initiatives to identify the difficulties facing LDCs in the ϲʹ, a comprehensive reassessment of technical cooperation and capacity building activities, a separate mechanism to deal with implementation-related issues and concerns and a dedicated process to seek improvements in ϲʹ procedures to ensure the greater inclusiveness and more effective participation of all Members. Throughout 2000 these confidence-building measures took centre stage at the General Council level with the Director-General and the ϲʹ Secretariat pursuing several parallel initiatives on outreach to non-resident Members, installation of ϲʹ reference centres in developing and least-developed countries (106 in place by the end of 2001), and closer cooperation with other international agencies such as the World Bank and the IMF to ensure consistency and coordination of development policies. Mandated Negotiations In addition to these measures, 2000 also marked the launch of the mandated negotiations on agriculture and services which combined account for over two-thirds of the world's economic output and employment. These negotiations have proceeded according to schedule and on their dedicated tracks with a high degree of participation from the entire ϲʹ membership. At the end of March 2001 both negotiating processes reached a stocktaking point at which there was broad agreement among Members that the work done so far had been both very constructive and provided a solid foundation for entering into the more detailed work of phase two. Negotiations on both agriculture and services have advanced relatively well along their separate tracks, with Member Governments contributing 126 proposals in the agriculture negotiations and about 100 in the services negotiations by the end of 2001. But the success at Doha will require ϲʹ Members to explore ways in which these two important areas could fit into a possible wider work programme. 3. The year 2000, was also notable for the accession of five countries into the ϲʹ; Jordan ( 11 April), Georgia (14 June), Albania (8 September), Oman (9 November) and Croatia (30 November). The Preparatory Process for Doha 4. On 8 February 2001 ϲʹ Members accepted the offer by Qatar to host the Fourth Ministerial Conference and at the same time provided the Chairman of the General Council, in cooperation with the Director-General, with a mandate to begin consultations on organizational and substantive matters related to the preparatory process for this event. 5. On 20 April the General Council Chairman, Mr. Stuart Harbinson, Permanent Representative of HongKong, China, circulated a checklist of possible issues to be included on the agenda for the Fourth Ministerial Conference. Without being exhaustive the checklist was generally welcomed by Members as a framework within which the Chairman and the Director-General could proceed to organize further intensive consultations. 6. The Chairman's preparatory process has been conducted largely on the basis of informal open-ended General Council meetings supplemented as necessary by other consultations. This approach has reflected the wishes of Members as expressed during discussions on internal transparency for a transparent, yet flexible and efficient process. The immediate focus of the Chairman's process has been to clarify and build towards agreement on elements of the Doha agenda. This "bottom-up" approach has been widely welcomed by Members and the Chairman has discouraged formal proposals such as those tabled throughout 1999. 7. An early feature of the "bottom-up" approach to the preparatory process was the so-called "proponent-driven" process. In order to promote the inclusion of a number of items in the negotiating agenda post-Doha various ϲʹ Members undertook initiatives outside the formal ϲʹ structure in areas such as non-agricultural market access, investment, competition, environment, fisheries subsidies and DSU reform. These initiatives were never seen as a substitute for the General Council process but as a source of inputs into that process, along with differing views of other Members. Both the Chairman of the General Council and the Director-General emphasized that the responsibility of bringing such inputs into the General Council preparatory process rested with the proponents. Implementation Issues 8. During the two years between the 3rd and 4th Ministerial Conferences, ϲʹ Members spent considerable time and effort on the Implementation Review Mechanism. This dedicated process for addressing implementation-related issues and concerns, was established by the General Council in a decision on 3 May 2000. Due to the importance of this issue to a great many developing countries and the fact that many of the issues under negotiations were politically sensitive, no issue required more time and effort during this period of time. The Chairman of the General Council and the Director-General urged flexibility and realism on all sides, in order to enable this complex set of issues to become a positive contributor to the Doha outcome rather than a problem. Efforts to reach agreement on implementation issues intensified throughout 2001, most notably with the submission of a paper by a group of seven countries. 9. This paper, which was generally well received by delegations, was used as a basis for further consultations and resulted in the Chairman and the Director-General putting forward specific elements on which they believed possible early agreement could be reached. In late July, Members agreed informally to four of the elements proposed by the Chairman and the Director-General and agreed with the Chairman's request to refer a number of proposals to subsidiary bodies for their consideration and reporting back to the General Council. The July "Reality Check" 10. On 24 July the Chairman of the General Council and the Director-General circulated a report of the work they had undertaken so far in the preparatory process for the Fourth Ministerial Conference. The report served as the basis of discussions among all ϲʹ Members at an informal General Council meeting on 30-31 July. The Director-General referred to this meeting as the "reality check" for delegations before the summer break. At the Council both the Director-General and the Chairman of the General Council emphasized that the report was an attempt to provide ϲʹ Members with a frank and sobering assessment of the situation and possibilities which had arisen out of the preparatory process so far. The report, which dealt with the full range of issues currently on the ϲʹ agenda, stressed that despite the constructive tone of consultations in Geneva and elsewhere, substantial differences remained among Members on key questions concerning the scope of the agenda for Doha. Well-known and well-defended positions still dominated the discussions and while some signs of flexibility had begun to show there was still a sense that many players were waiting for others to make the first concessions. 11. The tone of "reality check" meeting was, like the report, sober but not pessimistic. A large number of delegations agreed that the time had come for each Member to show flexibility. There was broad consensus that progress on implementation related issues remained important to unlocking other issues of a possible Doha agenda. At the end of the meeting the Chairman of the General Council briefly outlined the status of consultations on implementation. These consultations produced an understanding among Members that certain matters could be referred to subsidiary bodies for their consideration. The Chairman proceeded to outline a list of issues to be referred to these subsidiary bodies and emphasized that he would be asking for a report back to the General Council by 30 September at the latest. Members agreed to proceed along these lines. The first draft of the Ministerial Declaration and of the Decision on Implementation-Related Issues and Concerns 12. The General Council resumed its work after the summer break on 4 September with the Chairman reminding delegations of the urgency of the task ahead. He emphasized that the Seattle experience had shown that ministers cannot and indeed should not be expected to resolve in a few days issues of fundamental importance that delegations in Geneva had been unable to resolve in months of intensive work. It was equally clear that there would be little hope of simply drafting over fundamental differences. The Chairman also outlined the procedures for moving forward and in particular stressed the need for consultations to move from single issues to a broader approach which cuts across issues and enhances the possibility for linkages and trade-offs. He announced his intention to begin a series of intensive consultations with individual and small groups of delegations. The Chairman added that he would be requesting the assistance of the Director-General and his colleagues in the Secretariat to hold other informal consultations as necessary. All of these meetings would be conducted in a transparent and inclusive manner, the Chairman said. He indicated that he would submit, for the consideration of Members, a draft text of elements for a Ministerial Declaration and also a draft decision on implementation-related issues and concerns at the end of September. 13. On 26 September the Chairman of the General Council in co-operation with the Director-General released two texts, the draft Ministerial Declaration and the draft decision on implementation-related issues and concerns. In presenting the draft Ministerial Declaration, the Chairman emphasized that it was in no way an agreed text and that agreement must be reached on the text as a whole. This draft represented what the Chairman and the Director-General judged to be the best possible basis for reaching an eventual consensus on a balanced text to be put before Ministers in Doha. In introducing the draft decision on implementation-related issues and concerns, the Chairman stated that he and the Director-General believed that it represented their best judgment of the possible basis for reaching agreement. He added that they believed that the draft decision represented a credible effort to move the implementation debate to a new level of understanding. The Chairman stressed that the relationship between the two texts would need to be further developed as consultations on both proceeded. 14. During the first week of October the Chairman convened informal open-ended meetings to discuss the implementation text as well as the first draft of the ministerial declaration. On implementation, Members generally welcomed the text and saw it as a basis for continuing the work on implementation-related issues and concerns. Some developing-country Members requested that Annexes I and II proposing respectively those decisions to be adopted in October and in Doha -- be consolidated into one text. Other Members called for specific improvement in the language of the draft decisions and urged more elements to be included in the decision. A number of members called for clarification of the relationship between paragraph 10 of the draft Ministerial Declaration and the draft decision on implementation-related issues and concerns. At the informal meeting on the draft ministerial declaration some 40 delegations spoke. Members in general welcomed the efforts of the Chairman and the Director-General to produce a concise and constructive document which could serve as a basis for further work. While most delegations expressed appreciation over the style and format of the first draft, several speakers highlighted that large differences remained and that the overall balance of the text depended on the outcome on the key areas of agriculture and implementation. On 27 October, the Chairman and the Director-General issued a second draft text which was notable for the fact that it did not contain options on key issues like investment and competition but instead sought to find middle ground that might be the basis for consensus. The two men produced another draft decision on implementation and a draft decision on TRIPs and public health/access to essential medicines. This latter text was one area where the differences between Members on whether to focus the impact of the TRIPS agreement on public health generally, or more specifically on the agreement and its impact on access to essential medicines, were such that the Chairman and the Director-General agreed that options should be presented to Ministers in Doha. The External Environment 15. Throughout 2001, the preparatory process for the Ministerial Conference in Doha received important attention from international gatherings outside Geneva. However, while the arguments in favour of launching a new Round appeared to gain ground, such political movement had yet to translate into concrete progress. Despite the terrible events in the US on 11 September several important trading nations, including Qatar, expressed determination to proceed with preparations for the Fourth Ministerial Conference. 16. In order to complement the Geneva process and build momentum for a positive outcome at Doha the Director-General pursued a large number of contacts with Ministers both bilaterally and at international meetings. In these meetings the Director-General signalled the urgent need both for active political involvement to allow for the necessary flexibility in negotiating mandates and for close, continuous follow-up by Ministers to ensure that the boost in political momentum carried through into action in Geneva and ultimately at Doha. The Director-General's efforts to facilitate agreement required a large number of contacts with Ministers and other senior officials. During the two year period between the conferences, the Director-General travelled over 625,000 kilometres, visited 182 cities and met with more than 100 Ministers. In addition, he kept in daily contact with ministers and hosted several informal meetings of Ministers and senior officials during 2001. At each of these meetings, the Director-General stressed the importance of ensuring adequate funding for technical assistance, improved coherence between international organizations so that developing country needs are better addressed and the importance of keeping the development dimension of the ϲʹ at the core of any future work programme. The Doha Results 17. Although the outcome of the Doha Ministerial Conference was in doubt until the very end, there was a sense among Ministers throughout the meeting that a positive result was possible. The negotiating atmosphere, in contrast to Seattle, was largely constructive. The Director-General, together with Ministerial Conference Chairman Yousef Hussain Kamal, Qatar's Minister of Finance Economy and Commerce, oversaw daily informal sessions of Ministers. Running in parallel to the Plenary sessions, these meetings were open-ended and were conducted in such a way that all Ministers were able to speak at all sessions. The Director-General and Chairman Kamal also selected six ministers to serve as friends of the chair. These ministers were each assigned issues of particular importance where substantial differences between members remaineds. Each of these ministers held open-ended meetings for all delegations, met individually with particular ministers and reported to the informal Conference meetings regularly. The Director-General and Chairman Kamal met with Ministers in a variety of formats and co-ordinated the work of the Friends of the Chair in an effort to find the trade-offs between issues that held the key to consensus. The negotiations in some areas, particularly agriculture, environment, investment and competition, proved so difficult that Minister Kamal extended the conference an extra day beyond the original deadline of 13 November. Following two sleepless nights, consensus on three texts was achieved. The result is a 2-stage 3-year work programme, including negotiations on market access, rules and institutional reform, with development at the core. In agriculture, developing countries stand to gain substantial commercial benefits under the negotiating mandate. Currently, according to the OECD, rich countries pay out $1 billion a day to their farmers in agricultural subsidies; that is more than 6 times all development assistance going to poor nations. Negotiations will open markets, and reduce "with a view to phasing out, all forms of export subsidies" and trade-distorting domestic farm support, while taking into account non-trade and development concerns, including through appropriate special and differential treatment in favour of developing countries. 18. In services, liberalization could mean gains of between 1.6% of GDP (for India) to 4.2 % of GDP (for Thailand) if tariff equivalents of protection were cut by one-third in all countries, according to the World Bank. Telecommunications, finance, transport and business services have many links to the rest of the economy and raise the productivity of many sectors. Under the Doha agenda, special priority shall be given to LDCs, and sufficient flexibility to developing countries. Negotiations will liberalize entry of foreign services in as many domestic sectors as governments choose and make it easier to employ foreign workers on temporary contracts. 19. The highest immediate priority for developing countries is implementation. About half the original 90 implementation issues raised by developing countries were addressed by a separate Declaration adopted at Doha. Of particular note is the decision on the extension of exemptions for certain small developing countries which allows a longer phase out period for certain types of export subsidies. The remaining implementation issues will be addressed under the relevant negotiating mandates of the new work programme or in the standing ϲʹ bodies on a priority basis. 20. Another immediate priority for developing countries is market access for industrial goods. The negotiating mandate focuses on reduction or elimination of tariff peaks and tariff escalation, in particular on products of export interest to developing countries, as well as on non-tariff barriers. Here too, the mandate states that "the negotiations shall take fully into account the special needs and interests of developing and least-developed country participants". Moreover, ministers agreed to capacity-building measures to assist least-developed countries, and committed themselves to "the objective of duty-free, quota-free market access for products originating from LDCs". According to the World Bank, complete liberalization of merchandise trade and elimination of subsidies could add US$1.5 trillion to developing country incomes. And reshaping the world's trading system and reducing barriers to trade in goods could reduce the number of poor in developing countries by 300 million by 2015 and boost global income by as much as $2.8 trillion over the next ten years. 21. The negotiating agenda also covers a range of "new issues". It has been agreed to establish multilateral framework rules for competition policy and foreign direct investment, with negotiations proper beginning after the 5th Ministerial Conference if the Members so agree by explicit consensus. The Doha Ministerial Declaration also provides for possible negotiations after the 5th Ministerial on transparency in government procurement and on trade facilitation. 22. Trade and environment was one of the most difficult issues at Doha. The commitment to negotiate on the environment is focused on the relationship between existing ϲʹ rules and the trade obligations in multilateral environmental agreements, and on the reduction or elimination of tariff and non-tariff barriers to environmental goods and services. In its continuing work programme, the Committee on Trade and Environment is directed to give particular attention to the effect of environmental measures on market access, the relevant provisions of the TRIPS Agreement and labelling requirements for environmental purposes. The Committee will make recommendations to the 5th Ministerial on future action which may include negotiations on these subjects. 23. On drugs patents and public health, a separate Ministerial Declaration states that the ϲʹ's agreement on the protection of intellectual property rights (TRIPS) "does not and should not prevent members from taking measures to protect public health", adding that it should be interpreted and implemented in a manner "supportive of ϲʹ members' right to protect public health and, in particular, to promote access to medicines for all". This declaration is a shot in the arm for global efforts to address the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics. Near universal coverage 24. Ministers at Doha also successfully concluded the membership negotiations of China and Chinese Taipei. Membership of the ϲʹ will commit China to implement legal and domestic policy reform. For other ϲʹ members, China's accession will cement and accelerate the benefits of the liberalization undertaken in China over the last 20 years. After implementing all its commitments, China's average bound tariff level will decrease to 15% for agricultural products, and to 8.9% for industrial goods. In Chinese Taipei, tariffs will fall an average of just over 4% for industrial goods and to an average of just under 13% for agricultural items. 25. In addition to China and Chinese Taipei, the ϲʹ accepted two other members in 2001: Lithuania (31 May), Moldova (26 July). Since Seattle, about a quarter of the world's total population i.e. some 1.5 billion people have joined the ϲʹ. Another 28 countries are currently negotiating their terms of membership. The ϲʹ's multilateral trading system is now near-universal covering more than 97% of total global trade. The Road Ahead 26. Since Doha, the Director-General has continued his efforts at consensus building. He has set a number of objectives which he believes would facilitate a conclusion to the Doha Development Agenda by the tight deadline of 1 January 2005. Mr. Moore has urged members to approve a 6.75% increase in the budget, to just over CHF 143 million, so that the ϲʹ can carry out Minister's instructions from Doha to meet the increased technical assistance and training needs of developing countries. Mr. Moore has also re-deployed the ϲʹ Secretariat personnel to address development issues along the lines proposed in the Doha Ministerial Declaration. Mr. Moore has also urged members to select the venue for the 5th Ministerial Conference as soon as possible so that the host country can begin preparations for the conference including the selection of the Ministerial Conference Chairperson. Early selection of the Chairperson would further assist in the preparations for the 5th Ministerial Conference, by bringing that person into the negotiations as soon as possible, the Director-General has said. Moreover, early selection of the Chairperson would enable that person to begin working immediately with the Director-General and the Chairman of the General Council on the ϲʹ's work programme as it pertains to the conference. Finally, the Director-General has advised members to proceed with care in establishing the proper structure for the Trade Negotiations Committee, called for by Ministers, so that the preparatory process commences smoothly. Additional information on the future work of the ϲʹ can be found in the Director-General's Year End Message which is available on our website at www.wto.org.  Argentina, Morocco, New Zealand, Norway, Switzerland, Thailand and Uruguay. 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