Director-General Pascal Lamy, head of the World Trade Organization (WTO) said the immediate challenge for the organization is to generate momentum on “realistic, credible and achievable targets” for a positive result that could be agreed upon at the ministerial conference in Geneva on Dec. 15-17.
Lamy said priority in the December package should be given to issues of direct interest to least developed countries (LDCs), notably duty-free/quota-free (DFQF) market access for LDC exports and related rules of origin for LDC products; an LDC waiver from a future Doha services agreement; and a “step forward” on cotton. Lamy said he would continue consulting with WTO members and report back to the Trade Negotiating Committee on June 9 with the aim of having greater clarity on what the membership hopes to achieve in December so that delegations could get into the “real work” of negotiating on outcomes. The December package is intended to rebuild confidence in the Doha process following the recent admission that differences between the United States and major emerging economies on market access issues could not be bridged.
Members also are expected to decide at the December ministerial conference how to proceed in 2012 on the remaining issues on the Doha agenda, including the central issues of market access in agriculture, services and industrial goods. According to reports, battle lines are forming over cotton, one of the potential December “deliverables.” WTO members agreed in 2004 to address the issue ambitiously, expeditiously and specifically, within the agriculture negotiations, and to set up a subcommittee on cotton to address “all trade-distorting policies affecting the sector in all three pillars of market access, domestic support, and export competition.”
Amid these reports, NCC President/CEO Mark Lange and Senior Vice President John Maguire met with Administration officials and Congressional staff and conveyed the industry’s opposition to any proposals that include cotton in a scaled-back December package. In meetings with USDA Deputy Under Secretary Darci Vetter, USTR Assistant Trade Representative Sharon Bomer, and US Trade Ambassador to the WTO Michael Punke, NCC staff stressed that cotton only can be addressed as part of a comprehensive agreement encompassing all of agriculture.
The original target of the cotton initiative was subsidies available to US cotton farmers at the time, but Ambassador Punke noted that the situation has changed sharply since then.
“If people wish to discuss cotton, everyone's cotton programs must be on the table,” Punke declared. Referring to China, Punke said that “one member that is the world's largest market for cotton has failed to meet its WTO obligation to notify agricultural subsidies it has provided since 2004. Since that time, we understand that the member in question has initiated or significantly expanded subsidies benefiting its cotton sector. Let me be clear, we will not negotiate in the dark. If we are going to have a discussion about cotton, it must be a comprehensive discussion about all forms of market distorting practices. We would need to discuss both direct subsidization and other practices such as import licenses, sliding tariff scales and reserves management—that produce very substantial levels of effective support for domestic cotton producers.”
Punke added that even on the issue of DFQF (duty-free, quota-free market access), where broad support exists for its inclusion in the package, getting an agreement won't necessarily be easy.
“Frankly, we hear very different viewpoints from different LDCs, with some expressing grave concern about [tariff] preference erosion,” the US ambassador said. Punke also said that DFQF could not be “divorced” from its original context, where the issue had been discussed as part of an ambitious Doha Round agreement.
“The situation today is different,” Punke argued. “The United States is not pulling issues off the table, but neither can we ignore the dramatic shift in context.”
US officials already have indicated that a deal on DFQF would stand little chance of approval in the US Congress without something extra—such as trade facilitation—benefitting US exporters.
Responding to Punke's remarks, a Chinese official speaking on condition of anonymity accused the United States of bringing to the table a “series of issues, which go far beyond the concerns of LDCs, which are difficult, complicated, sensitive and obviously not achievable within the next few months.”
“The only solution to fundamentally address the difficulties of African cotton producers lies in the elimination of the subsidies of developed countries in an expedited manner,” the Chinese official declared.