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No. 54 of 2014 

MONDAY, JULY 28, 2014     

 

   

Filed from Portland, Oregon   

 

     Click here for last Wednesday's quote from

former USTR Clayton Yeutter.



FIRST TRADE FACILITATION, THEN THE ROAD MAP

"Talking about the post-Bali agenda while failing to implement the TFA isn't just putting the cart before the horse, it's slaughtering the horse."

Michael Froman
July 17, 2014
CONTEXT
The United States Trade Representative, Ambassador Michael Froman, is on Twitter.  Today's quote is a tweet - a message of no more than 140 characters - he sent out on Thursday, July 17.  That was just a week before the WTO General Council was due to meet in Geneva and formally adopt the Trade Facilitation deal that the members had agreed to at their ministerial meeting last December in Bali, Indonesia.  The big battle in Bali had less to do with trade facilitation per se and more to do with India's demands for new arrangements on "food security" or public stockholding of food supplies.  Thus, although a trade facilitation agreement may have been the big Bali achievement, its principal building block was an agreement - a peace clause - on agricultural subsidies, one that specifically addressed India's concerns.

By July 17, it was already clear that the new Modi Government in India was not prepared to honor the deal struck in Bali but would instead insist upon further (and earlier) concessions for India's agricultural subsidies than the Bali deal provided.  And when the WTO General Council meeting came around on July 24, that is exactly what India did.  She had support from Bolivia, Cuba, and Venezuela, but India was leading this charge.  The General Council meeting carried over to Friday, July 25, but the situation did not change. 

In Bali, the ministers had set a deadline for finalizing the agreement on Trade Facilitation. It wasn't July 24 or July 25 or even today, July 28.  It was July 31, three days from now.  There are those who believe that, one way or another, things will be worked out by then, and this latest WTO crisis will fade into the background. 

Trade Facilitation was not the only issue Ambassador Froman raised in the tweet quoted above.  The trade ministers who met in Bali also charged the WTO and its members with this Herculean task: they are to produce a road-map for completing the Doha Development Agenda by the end of this year.  That's the post-Bali agenda Ambassador Froman was referring to.

We don't know what is happening in Geneva today, but we assume - and press reports seem to confirm - that the search for a solution is in full swing.  Reportedly, for example, WTO Director-General Robert Azevêdo has met (or will soon meet) with the coordinators of the WTO's various sub-groups.  We learned that from an article in The Hindu Business Line.  What particularly struck us in that article were these quotes from the WTO's spokesman, Keith Rockwell:

"If any delegation comes to the Chair ... and says it has a proposal for generating a consensus, the Council will reconvene and a discussion will ensue. ...

"In the absence of any proposal, at the stroke of midnight on July 31, the item will be considered closed and the General Council adjourned."

COMMENT
Readers of these entries will know that we have a fairly whimsical approach to using boldface type.  There are some rules.  We usually bold the first reference to major personalities.  After that, it's whatever strikes us as worthy of emphasis, such as that second Keith Rockwell sentence above.

We have not seen all of the WTO statements on last week's developments.  Certainly, however, those from the European Union and the United States were remarkable for their clarity.  In a statement on July 24, the EU said, they are "not ready to renegotiate basic elements of timeliness that were agreed as integral [parts] of the Bali package."

In his statement to the General Council on July 25, America's ambassador to the WTO, Michael Punke, framed the issue this way.  "This is a discussion," he said, "that boils down to a simple question. ... Will Members of the WTO keep their commitments?" - The commitments they made in Bali last December.

***

Let's step back for a moment to September 22, 1793.   In France then it had a different name, and not just because it was in French.  No, that was the first day of use for the French Republican calendar, and so it was 1 Vendémiaire II (Year 2).  The calendar, to be sure, was a very logical construct.  It was, also, one of those awkward post-Revolution experiments that Napoleon, bless his heart, abandoned. 

For us the Calendar of the First Republic is an enduring symbol of the fresh start, not just any fresh start but the idealized, it-begins-with-us fresh starts that are the hallmarks of certain governments.   When those governments grow out of revolutions, they are understandable.  As attributes of democratically elected governments of established, well-functioning democracies, they are unwelcome anomalies.  Countries are on-going entities and governments are their caretakers, responsible for the commitments of their predecessors.   And so our hope is that India will come around to an acceptance of the Bali package, especially since the current Modi government says it supports trade facilitation.

Specifically, we hope the Modi government will reconsider its position by mid-night on Thursday, but we are not bold enough to make a bet one way or another.  Looking at the current situation from India's perspective, one could argue the balance of advantages either way.

But India is not the only actor here, nor the only country that might be tempted to undo previous agreements.  Roberto Azevêdo has justly earned very high marks for what he has done for the credibility of the WTO since taking office last September.  Part of that was by being firm, by insisting, for example, that, if Trade Facilitation was to be done at all, it had to be done at Bali.  We hope he maintains that firmness in the current situation.  Yes, a delay in getting a final agreement on trade facilitation would be a serious disappointment to many and a blow to the WTO as an institution.   Bad as those setbacks would be, they could be overcome.  What the WTO can't afford to lose is the core of institutional credibility that Roberto Azevêdo has burnished so brightly. 

Thus the real question this week is not whether India will have a change of heart.  The real question relates to the resolve of everyone else.
SOURCES & LINKS
Tweet from Ambassador Froman is a link to the source for today's quote.

Geneva Meetings Today takes you the article from The Hindu Business Line with the quotes from the WTO's Keith Rockwell.

From the European Union is a link to the EU statement quoted above.

From Ambassador Punke is link to the text of Michael Punke's statement in the General Council on July 25.

The Calendar of the First Republic takes you to the Wikipedia discussion of this calendar.
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