THE TTALK QUOTES

On Global Trade & Investment

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The Global Business Dialogue, Inc.

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No. 70 of 2014

TUESDAY, OCTOBER 21, 2014

Filed from Portland, Oregon

Click here for the October 8 quote from the EU's Trade Commissioner-Designate.

NO WAY OUT - THE GENEVA VERSION

"I am not warning you today about a potentially dangerous situation - I am saying that we are in it right now."

Roberto Azevêdo
October 16, 2014

CONTEXT

Geneva-based delegations of WTO members meet regularly at the WTO headquarters, but not always under the same rubric. Last Thursday, October 16, they met as the Trade Negotiations Committee or TNC. WTO Director-General Roberto Azevêdo chairs the TNC, and in that capacity he shared his assessment of the current impasse. The core of that impasse is the WTO's inability to move forward on the Trade Facilitation Agreement reached in Bali last December, mainly because India has blocked the implementing protocol.

The WTO members met again today, not as the TNC, but as the WTO's General Council. The chairman of that group is John Fried, Canada's ambassador to the WTO. In addressing him and the membership, Mr. Azevêdo said:

"Mr. Chairman I have no additional news to report since my statement at the TNC last week. Therefore I won't make a further substantive statement today. I would like simply to add my TNC statement to the record of this meeting."

Today's featured quote is from the Director-General's TNC statement on the 16th.

At one level, the impasse is easy enough to explain. India, which insists she supports trade facilitation, is nevertheless refusing to allow the Trade Facilitation Agreement to move forward unless her demands with respect to agricultural subsidies ("food security") are met first. And yet in some fundamental respects the situation is difficult to understand. More on that below.

What needs to be underscored here is how very concerned the Director-General is about the effects of this stalemate on the WTO itself. In his remarks last Thursday, he said:

"[T]his 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 paralyzing effect on our work across the board."

Further on, he added: "[A] continuation of the current paralysis would serve only to degrade the institution - particularly the negotiating function."

The failure to resolve the trade facilitation-food security stand-off isn't just holding up those two issues. It is also holding up work on the other eight elements of the Bali package as well as the work that was to be done this year on a road map for finishing the Doha Round.

COMMENT

There are some big questions here. One is, What does India want? Whenever one party to a negotiation refuses to say "yes" to a deal, you have to wonder what its real objectives are. After all, India got what she demanded in Bali, and has been offered more on top of that. In that vein, The Hindu BusinessLine recently ran a story with the following comment from an unnamed Indian official:

"Although the US has now approached us in Geneva (WTO headquarters) to tell us that they are willing to extend the peace clause indefinitely, our Ambassador to the WTO has told them that we are not ready to accept that."

So again: What does India really want?

Whatever India wants, has the time come for those who want Trade Facilitation to look for another way forward? Should they, for example, explore making the trade facilitation agreement a separate, stand-alone plurilateral agreement, one that would bind only that subset of WTO members who want to implement it? And what would that do to the institution?

Also, one has to wonder, has India inadvertently done the world and the WTO a favor? Whether by design or not, her actions are forcing the institution to look beyond the Doha Round. And in the view of many, the time for doing that is long overdue.

SOURCES & LINKS

At the WTO is a link to the WTO website. You will find there links to the Director-General's remarks to the TNC on October 16 as well as his comments at today's meeting of the General Council.

A U.S. Offer on Hold takes you to the story from The Hindu Business Line cited in the Comment section above.

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