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Azevêdo says Bali impasse paralyzing WTO work, chairs report no progress in consultations

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Azevêdo says Bali impasse paralyzing WTO work, chairs report no progress in consultations

Azevêdo says Bali impasse paralyzing WTO work, chairs report no progress in consultations
Photo credit: WTO

Director-General Roberto Azevêdo, as chair, reported to the Trade Negotiations Committee on 16 October that despite intensive consultations “we have not found a solution to the impasse” more than two months after the deadline on the Trade Facilitation Agreement had passed. “This could be the most serious situation that this organization has ever faced,” he said, and while members should keep working for a solution to the current impasse, “we should also think about our next steps”.

Good morning everyone – and welcome to the thirty-fifth formal meeting of the Trade Negotiations Committee.

Our meeting today comes at a very important moment. These are difficult days for our organization.

As you know, we reached a major impasse in July, related to the interplay between two of the Bali decisions – public stockholding on one hand, and the adoption of the protocol of amendment on the Trade Facilitation Agreement on the other. While there is no formal or legal linkage here – clearly an important political linkage has been made bringing the two together.

We made every effort to resolve the problem in July. But in the end our efforts came to naught. As a result we missed the deadline for the adoption of the protocol of amendment on the Trade Facilitation Agreement, which was the first deadline that Ministers set us in Bali.

I said at the time that I feared there would be serious consequences. I asked you to reflect over the summer and talk to each other about potential ways forward. And I carried on my own consultations as well.

To address the situation, I convened an informal Heads of Delegations meeting on 15 September, immediately after the summer break. That meeting marked the beginning of a period of intense and comprehensive consultations to break the impasse and move forward.

Since then, the Chairs of the relevant negotiating and regular bodies have been working hard. They have been taking stock of Members’ positions and discussing how we can move forward to implement all of the Bali decisions, and develop a post-Bali work programme.

Meetings have been held in a range of different formats and configurations. Members have been engaging with each other – both here in Geneva, and in capitals. I have spoken to a wide range of delegations and groups of delegations – as has the General Council chair, Ambassador Fried. I have also met with Ministers wherever possible. We have tried everything to resolve the problem.

We are now at the end of that period of intensive consultations. I promised that, at this stage, I would give you a clear assessment of the situation – based on your views and those of all Members. So that is what I will try to do today.

Statement by the Chairman of the General Council

Reports by Chairpersons of the Bodies established by the TNC

Having listened to those reports, and on the basis of my own consultations with Members, I will now make my formal statement as TNC Chairman, to provide you with my sense of how I see the current situation. I think it is my duty to give you my views – and to be honest and straight-forward in doing so. I stress that this is only my perspective – and that it is based primarily on what I hear from you.

As I see it the situation is clear as day:

  1. First, we have not found a solution for the impasse. The deadline on the Trade Facilitation Agreement passed more than two months ago. We are on borrowed time.

  2. Second, as I feared, this situation has had a major impact on several areas of our negotiations. It appears to me that there is now a growing distrust which is having a paralysing effect on our work across the board.

This is the situation. And I am not in a position to tell you that a solution for our impasse is in the making. Of course I encourage you to keep working and keep looking for a solution. And I will keep trying as well.

However, I have promised to give you my frank assessment, and it is my feeling that a continuation of the current paralysis would serve only to degrade the institution – particularly the negotiating function.

I think we have a responsibility to the people who sent us here to be realistic about the situation – and therefore to find ways to continue our work and to keep moving forward, while still looking for a way out of the impasse. In my view, this is our only option. We have to continue our work.

But, we all heard the reports a moment ago. They were not encouraging. Work on substance seems unlikely to advance. Therefore, I think our first step now should be to start a broader discussion about the basis on which we can overcome the current scenario of disengagement. I think we need to start a discussion about the future – a future which honours the aims of the Marrakesh Agreement, which is worthy of our role in international relations, trade and development, and which delivers for the people we are here to serve – particularly the poorest. It is time to face up to the undeniable problems we have in this organization and have an open and honest discussion about how we can move forward.

There are a numbers of layers to this discussion, each of which I think we must address. In order to better frame our dialogue, I suggest that we take a look at all these different layers. And in my opinion, the issues at stake fall into four concentric circles.

The first circle covers Trade Facilitation and Public Stockholding. Progress on the TF Agreement is stalled as we wait for progress on the adoption of the protocol of amendment. And public stockholding is stalled too, as the conversations have ground to a halt. So, how should we respond? Do we simply put these two Bali decisions on the shelf? Is there a way to move them forward?

On the Trade Facilitation question, this also affects the Trade Facilitation Agreement Facility, which will become operational once the provisions of the TFA are being implemented. Despite the current situation – or rather because of it – we need to work to keep the Facility alive and keep donors interested in the initiative. Of course donors have budgetary and time constraints – and so they need clarity about what is happening. And despite the state of affairs here in Geneva, I see a lot of support out there. On Friday I was in Washington to enhance the WTO’s cooperation with the World Bank on this issue. President Jim Kim and I announced a strengthened partnership, under which the WTO and World Bank would work closely together to ensure that support is available for all who need it under the terms of the Trade Facilitation Agreement.

Meanwhile, on Public Stockholding, it is my sense that there is a widespread positive disposition to negotiate an outcome – or a “permanent solution” as it has been branded. Nonetheless, there also seems to be an overarching reluctance to put other issues on hold while that “permanent solution” is sought.

So this all begs the question: is there any way for Members to move forward on these two issues in the context of the current paralysis and distrust that we are now seeing? That’s the first circle.

In the second circle are the other 8 Bali decisions, including agriculture, the monitoring mechanism and the package of measures for LDCs. Members must consider what is going to happen with these issues.

The LDCs, for example, have made clear that they are not preventing any other issues from progressing – so of course they ask, why should they be punished and their issues be held back as well? On the reverse side of this debate, others say that Bali was a package, and that we cannot easily separate off certain elements to take forward. This camp sees linkages among the Bali Decisions and is not ready to ignore them.

Despite these conflicting views, there is a clear appreciation from most of the logic that led to the different timeframes agreed in Bali for each specific issue. And I think it’s clear that what happens in this second circle is intertwined with what happens in the first. Our ability to implement the other Bali decisions affects our ability to move forward on Trade Facilitation and public stockholding – and vice versa. This is the second circle.

The issue in the third circle is the post-Bali work program. This task was mandated to us by Ministers with a deadline of 31st December this year. But realistically we have until the December meeting of the General Council. That gives us 8 weeks.

On the basis of the conversations we were having before July I was aiming at a very detailed and specific work program, which came very close to setting out modalities. As I said at the TNC meeting in June: if we prepare the ground properly, “we will be able to construct the clearly defined work program that we were tasked to deliver by the Bali declaration.” And I thought that if we could achieve that it would mean we were in a position to conclude negotiations on the DDA fairly rapidly.

I am very sorry to say that, in my view, such a detailed and precise modalities-like work program is now very unlikely to be ready by the end of the year. Of course, what happens is up to you. But I struggle to see how this can be achieved in the current circumstances. We have lost too much time due to the current impasse. And we have just heard from the Chairs’ reports that the engagement we need is simply not there.

Let me be clear that in saying this, I am not prejudging – this is very important so write it down! – I am not prejudging what can be achieved on the work program when the time is right. I am not commenting on the ambition, coverage and substance that it will have. All of this will be determined by you. I am simply commenting on the timing – and what I am saying is that in the 8 weeks we have until the December General Council, it seems very unlikely that a detailed, precise, modalities-like work program is possible. That’s all I am saying.

Therefore we have to ask, how are we going to deliver on the mandate we were given in Bali? If we are to deliver by December, as instructed, what shape will this work program have? That’s another conversation that Members need to have. And again, what happens in this third circle affects the first and second – and vice-versa. So that’s the third circle.

The issue in the fourth and final circle, which encompasses all of the others, is what does this mean for the organization itself?

Once again the negotiating track is stuck. Of course this is not new to us – deadlock has unfortunately become a familiar position. But that doesn’t make it any more acceptable. And it is not often that we have been able to overcome situations like this. We did so in Bali – and that gave us hope for a new WTO. Yet, now, we are here again. The lack of ability to find full convergence quickly leads to deadlock, and deadlock leads to paralysis. We have seen this situation too many times. So we can’t continue in such an inefficient and ineffective way that is so prone to paralysis.

Frankly, we know that Members have been talking about the other, non-multilateral options that are open to them. We may see these Members disengaging. We may see that these Members pursue other avenues. We may see that these Members explore other tracks – inside the WTO or outside.

So we have to think about the consequences of the situation we’re in – and consider how this organization can work. Again, this is something you have to talk about.

I will be here to facilitate this conversation. I will hold meetings with you. The chairs will convene meetings. And I urge you to talk to each other. As ever, we will need to engage in different formats and different configurations – including open-ended meetings.

This could be the most serious situation that this organization has ever faced. I have warned of potentially dangerous situations before, and urged Members to take the necessary steps to avoid them. I am not warning you today about a potentially dangerous situation – I am saying that we are in it right now.

So we have to move on. We should keep working for a solution to the current impasse, but we should also think about our next steps. I will be starting this discussion on what to do straight after next Tuesday’s General Council meeting – and all of you will have an opportunity to put your views forward on all of these issues.

As to the content of our discussion, I suggest that we try to answer the questions that are before us. Specifically:

  • What should we do with the decisions on Trade Facilitation and public stockholding?

  • What should we do with the other Bali decisions, including the LDC package?

  • How should we respond to the Ministerial mandate to develop a work program on the post-Bali agenda?

  • And how do we see the future of the negotiating pillar of the WTO?

I hope these questions will help to structure the conversation. I want to hear from you. Tell me what you want to do, what your priorities are, where the linkages lie – both legal and political. We often say that the WTO is a member-driven organization. It is you, the Members, who must now take control and find a way forward. You are the ones – the only ones – who can answer those questions. In short, I am extending to you an invitation for reflection. I hope you will accept it.

Thank you for listening.

This concludes my statement.

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