ACP Group Briefing: State of Play and Preparations for the Tenth Ministerial Conference 15-18 December 2015^[1]

This report provides a state of play on key areas in preparation for the World Trade Organization (WTO) Tenth Ministerial Conference (MC10) in Nairobi to be held 15-18 December this year. The report updates the one provided in October this year. Before a briefing on the issues to date on the preparations for Nairobi, the paper provides a section on the information regarding the arrangements and programme for the Ministerial.

1. Arrangements and Programme[2]

A. Officers of the Ministerial

Chairperson: H.E. Ms Amina Mohamed (Kenya)

Vice-Chairs: H.E. Mr Alexander Mora (Costa Rica)

H.E. Mr Carlo Calenda (Italy)

H.E. Mr Gregory L. Domingo (Philippines)

B. Opening Session

C. Plenary Session

D. Informal Sessions

E. Accession Ceremonies

F. Closing Session

G. ACP Trade Ministers and G90 Trade Ministers Meetings

ACP Trade Ministers

In addition to the above arrangements for the conference, the ACP Trade Ministers meeting will be held on 14 December 2015. The possible preliminary agenda for the ACP Trade Ministers meeting might be as follows:

I. Opening remarks Cabinet Secretary H.E: Amina Mohamed (to be confirmed)

II. Keynote remarks: Secretary General H.E. Mukhisa Kituyi , UNCTAD (to be confirmed)

III. State of Play and update on ACP proposals

IV. Common positions ACP Ministers should take

V. Informal negotiating sessions expected (if any)

G90 Trade Ministers

It is possible that if negotiations on the G90 special and differential treatment proposals decision submitted for decision by Ministers will require continued negotiations in Nairobi. Should this be the case, the ACP Coordinator should hold a briefing meeting with all G90 Trade Ministers, co-chaired with the Ministerial level coordinators of the African Group and LDC Group. It is also possible that WTO will hold negotiating sessions to reach consensus on the SDT proposals should consensus not be reached in Geneva. The Ministers should decide on whether the three coordinator Ministers should represent the G90 in negotiations, led by Barbados as G90 Coordinator. Transparency and any decision-making meetings with wider G90 should be discussed.

2. Provisional WTO Ministerial Agenda

3. Summary of the State of Play

1. It should be noted that to harvest an agreement on trade facilitation at the WTO’s Ninth Ministerial held in 2013 in Bali, the Bali Ministerial Declaration mandated that a work program for the remaining Doha Development Agenda (DDA) issues be completed by December 2014. However, on 27 November last year, the WTO General Council agreed to extend the deadline to July 2015 to complete the task. In spite of this, WTO Members were not in a position to agree on a post-Bali work program by the end of July 2015 due to persistent discord between the U.S. and major developing country delegations. As Members failed to meet this new deadline, they decided that the work on the substance of remaining DDA issues would continue after the summer recess with the aim of determining what outcomes could be ripe for agreement in Nairobi.

2. Since September, discussions therefore moved away from the discussion on a post-Bali work program and focused on possible deliverables for Nairobi, termed a “mini-package” with intensive negotiations concentrating around three broad components: a development/LDC package, an outcome on export competition in agriculture and some elements under the rules negotiations. The ACP Group had submitted a paper in July that introduced the concept of a “development package” since the Ministerial will be in Kenya, the first WTO Ministerial in Africa and an ACP State. Moreover, soundings about the demise of the DDA due to recalcitrance between the U.S., China, India, and other major players at WTO, signaled the need to reap harvests drawn from proposals submitted by developing countries, in particular Africa, ACP and LDCs, instead of proposals from others imposed on developing countries and LDCs in the guise of development.

3. The larger debate on future negotiations post-Nairobi has also crystalized in the drafting of the Ministerial Declaration for Nairobi. The main challenge in this area consists of the need to reconcile the views of the U.S., supported by Japan and the EU, which argues that the prospects for reaching an agreement under the DDA framework is exhausted and that they are willing to discuss the areas of agriculture, and other areas on the table under a different frameworks. The EU, Canada, Chile, and others would like to focus work after Nairobi on new issues of importance on the global scene such as investment, global value chains, and digital economy. On the other hand the majority of developing countries argue that negotiations should continue under existing Doha mandates and on the basis of existing draft texts and that new issues can only be explored after the DDA negotiations are concluded.

4. Despite the oscillation between these positions, it is strikingly clear that the linchpin of the debate rests on the U.S. insistence to revise the agreement in 2001 on the treatment of flexibilities for China in domestic supports as part of China’s accession protocol. This accord was carried over into draft modalities texts on the table in the DDA negotiations since 2008, in particular for agriculture. The U.S. maintains that the economic and factual climate today regarding the amount of domestic supports used by both the U.S. and China, warrant a change in the 2008 stabilized texts and concessions given to China in 2001. Not surprisingly, China opposes the U.S. suggestion. The U.S. argues that developing country and other agriculture exports face significant trade distorting supports from China as well. Therefore one cannot ask the U.S. to reduce or eliminate its supports while China maintains theirs.

5. While some Members have suggested that Nairobi will be the end of the DDA, other than those developing countries part of the “middle grounder” group[3], the majority of developing countries have insisted that the DDA framework continue and not let Nairobi be the burial place of the first development round in the WTO. India and other developing countries have stated that, beyond LDCs, they would not support a small package in Nairobi unless there is a clear mandate to continue on remaining DDA issues post-Nairobi. The ACP Group supports continuation of the DDA mandate post-Nairobi, while at the same time seeking an early delivery on a minimum package on developing country, LDC and SVE proposals.

6. Proposals from developed countries to have a small package on transparency areas in rules and services has become another challenge for the ACP Group as a whole because Members would be expected to take on new commitments in Nairobi, without any time to consult thoroughly in capital on such a prospect by Nairobi. Moreover, these proposals from developed and a few middle grounder developing country Members have only recently been tabled. Even with flexibilities on transition periods, it is difficult for developing countries to consider, so soon after the Bali agreement on trade facilitation, taking on new obligations in isolation of a wider conclusion of the DDA. However, some individual member states within the ACP Group indicated interest to explore those areas on their own volition. On all matters at the WTO, the ACP Group can only decide what common areas to pursue as a group and leave individual members space to proceed outside of the group.

7. It should be noted that to avoid challenges around the consensus-based decision-making custom in the WTO negotiations, many developed countries and middle grounder WTO Members intend to pursue negotiations with willing members under the WTO framework, after Nairobi, on a plurilateral basis with a view to MFN benefits to all WTO members whether participating in those plurilaterals or not. In particular, negotiations on environmental goods is already underway. They will also pursue negotiations on regional or free trade agreements in parallel, outside of WTO. For example, a number of WTO Members dissatisfied with the lack of movement in the DDA services negotiations, are advancing negotiations under the Trade in Services Agreement negotiations (TISA). Similarly, the Trans-Pacific Partnership Agreement (TPP) has been concluded on a number of trade areas. Therefore, another theme as a backdrop for Ministers in Nairobi is how this trend will impact on commitment to DDA negotiations.

8. Other matters on the agenda for Nairobi include the extension of decisions on electronic commerce and Trade-Related Aspects of Intellectual Property Rights (TRIPS) non-violation complaints moratorium; an extension of the LDC pharmaceuticals transition period; any acceptances toward entry into force of the Trade Facilitation Agreement; contributions to the Trade Facilitation Agreement Facility (TFAF) Trust Fund, accession of new Members including Liberia and Afghanistan, and a pledging conference for EIF Phase Two for LDCs on the margins of the meeting.

4. Decisions agreed so far for transmission to Nairobi

9. Decisions anticipated for Nairobi are expected to fall under two main categories 1) Standing Agenda items and 2) other actions the Ministerial deems necessary to take. The outcome document Members are aiming to achieve for Nairobi is expected to follow the Bali formula of a Ministerial Declaration and decisions.

10. Standing agenda item decisions in WTO regular work have been agreed as follows:

1) Work Programme on Electronic Commerce WT/MIN(15)/W/26

2) TRIPS non-violation and situation complaints WT/MIN(15)/W/25

3) Work Programme on Small Economies WT/MIN(15)/W/24

5. Other decision proposals

11. Decisions for LDCs agreed so far are those to extend the transition period for pharmaceutical products under the TRIPS Agreement to 2033. A decision on preferential rules of origin is close to agreement. Other LDC Decisions expected are on cotton, services, and special and differential treatment proposals as part of a package with G90. LDCs are also discussing DFQF.

12. It should also be noted that the TRIPS and Public Health Paragraph 6 Amendment period for acceptance due to expire the end of December this year, was extended by the General Council at its meeting held on 30 November 2015.

13. Other decisions proposed by Members for Nairobi, including those from the ACP Group, have not yet been agreed. At the time of this writing, negotiations in the negotiating groups and other relevant bodies and the TNC continue on the basis of text based proposals from Members. The areas under negotiation or discussion are: agriculture – export competition led by Brazil, the EU, Argentina, New Zealand, Paraguay, Peru, and Uruguay, special safeguard mechanism and submitted by the G33 led by Indonesia and public stockholding also submitted by G33; development- G90 SDT proposals; Rules- fisheries subsidies proposals including those submitted by ACP Group and proposals from the EU and others on transparency across all rules pillars (antidumping, countervailing duties, regional trade agreements and fisheries); and transparency – services domestic regulations transparency proposals from Australia and Canada jointly, a non-paper text from the EU, and another from India. ACP specific proposals are described in the section below.

6. ACP Proposals and Submissions leading up to MC10

14. Following the ACP Trade Ministers meeting in Brussels in October and the ACP Ambassadors and Experts retreat in Lausanne, Switzerland, the ACP Group tabled a series of textual proposals based on its July 2015 submission JOB/TNC/46 defining minimum elements of a credible development package for Nairobi. These included:

· Agreement that the flexibilities in both the 2008 text on agriculture and NAMA in favor of developing countries, LDCs and SVEs are stabilized and that any agreement on new approaches shall not result in a disproportionate or prejudicial position compared to those Members that apply the formula. In addition, the specific concerns of Developing Country Members within Customs Unions shall be taken into account (WT/GC/W/709; TN/C/W/70; TN/AG/W/10; TN/MA/W/143; TN/S/W/62).

· Reaffirmation of the flexibilities for developing countries, LDCs and SVEs contained in GATS Article IV and XIX, the Services Negotiating Guidelines and Procedures, and the Hong Kong Ministerial Declaration paragraph and its’ Annex C (WT/GC/W/709; TN/C/W/70; TN/AG/W/10; TN/MA/W/143; TN/S/W/62).

· Agreement on the Special and Differential treatment proposals (WT/MIN(15)/W/31).

· Agreement on the developmental and food security aspects of fisheries subsidies including minimum disciplines on the most egregious forms of subsidies, as highlighted in the approach suggested by the ACP and LDC Group proposals. (TN/RL/W/267 and TN/RL/W/269)

· Agreement on the LDC issues for Nairobi.

· Agreement on cotton.

· Agreement on the establishment of a working group to examine and address all NTBs in developed countries that affect export trade of developing countries (WT/GC/W/710; TN/C/W/71).

15. Of the above expected proposals, it appears some level of political will exists to try to arrive at agreement on the following areas- G90 SDT proposals, LDC decisions, including cotton, export competition. India has said that it would not join consensus on an export competition decision for Nairobi unless there is equally an agreement on a special safeguard mechanism.

7. The Draft MC10 Ministerial Declaration

16. The ACP Ministerial Declaration deliberated upon and agreed at Brussels in October, was the first submission from WTO Members found in WT/MIN(15)/3 on the WTO website for MC10 and was announced by document number by the Director General at an Informal TNC meeting. The ACP Group contribution to the Director General and facilitator’s process to prepare the Nairobi declaration was the second submission from WTO Members placed on the table (WT/MIN(15)/W/2). At this stage, the 5-page consolidated draft Ministerial Declaration is split into a preamble and three main parts focusing on (i) the multilateral trading system in the context its 20^th anniversary, (ii) any specific Nairobi deliverables, and (iii) the WTO’s future work. The document has been compiled based on over 20 written submissions tabled in recent weeks. However, as instructed by members, the facilitators draft explicitly states that the text did not contain language on “nor place holders for the most contentious issues identified by Members, namely the reaffirmation of the DDA and instructions on the way forward, and on New Issues. In addition, no draft language is proposed on the Security Exceptions where we detected strong divergences. ” However, since the tabling of the texts, Members have submitted or have proposed from the floor, new insertions from principally from their submissions into the Facilitators’ text. These text proposals have been introduced into the text in brackets.

17. While originally not deemed a contentious issue in the discussions, some developing country delegations have attempted to target the paragraph on small, vulnerable economies and any other area in the text where SVEs are mentioned. Unfortunately, provoked by the U.S., EU and other developed country attempts to categorize Brazil, China, India and South Africa as emerging economies outside of the developing country umbrella, some of these countries voiced concerned that any mention of SVEs is a way to create a new category of developing countries that excludes them. SVEs, including those not members of the SVEs Group, have raised objections to the objections to their paragraph and references in the text. It is likely that a compromise wording will be agreed shortly.

18. With the Nairobi Ministerial coinciding with the WTO’s 20-year anniversary, the document notes, under the first section, a series of “achievements and challenges” to date in the area of monitoring and dispute settlement. Referring to the negotiating function of the institution, the draft notes “some progress” in areas such as the adoption of the Protocol Amending the TRIPS Agreement and the Trade Facilitation Agreement. The ACP Group supported India’s correction to this line where the sentence before, implied that TRIPS was a result of the DDA. In fact, in Doha a number of important decisions were taken at the same time the DDA was launched. For example, the ACP Waiver Decision was finally adopted after a two year impasse in the Council for Trade in Goods concerning bananas, when its agenda was blocked to examine the EU request for the Cotonou waiver. In addition other decisions independent of the DDA launch, were the TRIPS and Public Health Declaration was agreed after protracted negotiations since it was placed on the WTO regular agenda by the African Group, an implementation-related issues decision was agreed, and a decision on the Agreement on Subsidies Article 27.4 was also agreed and was of importance to a number of ACP States. The follow-on agreement to the TRIPS and Public Health Paragraph 6 amendment was the result of four additional years of negotiations on a separate track from the DDA.

19. Regarding the DDA negotiations, the Facilitators’ draft also notes “with regret that much less progress has been made in central elements of the WTO’s negotiating agenda, in particular on agriculture”. This line is under heavy negotiation where some Members do not feel Ministers should express regret and others such as Brazil and Australia, major agriculture proponents, would like to express reality of the situation for agriculture, which has no outcome in the last 20 years. Other Members do not like the emphasis on agriculture alone, since both agriculture and services were part of the Uruguay Round built-in agenda.[4]

20. Under Part 2, the document includes bracketed text for whichever decisions may be adopted at the ministerial, referring specifically to recent decisions adopted on non-violation and situation complaints under the TRIPS Agreement, the WTO’s work programme on e-commerce, and the work programme on small economies. It also contains a placeholder for any other decision to be inserted into that section as negotiations advance. These may include a possible deal on export competition in agriculture, as well as select issues of relevance to developing and least developed countries, as well as some outcomes from the “rules” negotiations (see section on Nairobi deliverables below).

21. In addition to the issue of expressing “regret” about the DDA, other paragraphs in section III mention the principles of special and differential treatment and less than full reciprocity for developing and least-developed country members,” saying that these must be an “integral parts” of the organisation’s future work, referring among others to the importance of addressing the needs of LDCs, small, vulnerable economies, and recently acceded members.

22. Since the release of the Facilitators’ document on 27 November, several members tabled proposals for potential insertions or modifications, particularly regarding the language on Doha and new issues. The ACP contribution for the ministerial declaration for part III, found in WT/MIN(15)/W/2, followed the structure of the ACP Brussels declaration by defining specific parameters for future negotiations in agriculture, NAMA, services and rules, and TRIPs. This was the case due to the failure of WTO Members to arrive at a post-Bali work programme informed by summary paragraphs in the Bali Declaration instructing Members to agree by the end of 2014, extended by the General Council to July 2015. Therefore, the ACP Group proposed detailed instructions on substance for post-Nairobi. However, given the sense of the room that a measured approach for part III was more desirable, the ACP Group also provided a summarized version of these paragraphs, which now appears in list form under paragraph 23 of the Facilitators’ draft.

23. A proposal from India, South Africa, China, Ecuador, Indonesia, and Venezuela, and those from the African Group and LDC Group a group of developing countries, asked for the insertion of a paragraph in the preamble and in Part 3 reaffirming the DDA and decisions and declarations adopted since the Doha Ministerial. Text suggestions from Korea noting instead the difficulties in reconciling members’ disagreements on Doha and instruct officials “to continue deliberations” on next steps in addressing the unresolved issues from the Round, in order to decide on a “way forward” by the end of next year, was rejected by many developing countries. Some proposals also feature language on addressing “any trade-related issues deemed necessary in order to stay relevant and in keeping with the evolution of the global economy,” while noting that these could be pursued “at least on an exploratory basis,” so long as they do not get in the way of addressing current, unresolved issues. This is deemed a way to bring in new issues that would distract attention post-Nairobi on concluding the DDA. The facilitators attempted to avoid including these contention issues.

24. Intensive negotiations on the draft are underway. The contentious issues of reaffirming the DDA and bringing in any language, however creative, on new issues, remain a hurdle in the work to remove brackets. The ACP Group is taking a modest approach so far. However, the Group agreed to propose the text from the ACP Brussels Ministerial Declaration agreed in Brussels in October on the affirmation of the DDA as follows:

· We call upon Members to reaffirm in Nairobi, the Ministerial declarations and General Council Decisions relevant to the Doha mandates; and to take concrete steps to conclude the remaining issues in the DDA, with development as a key component.

· We further call upon Members to ensure that post-Nairobi, all unresolved issues in the DDA on the development mandate are addressed and yield specific development milestones to conclude the DDA as soon as possible.

25. This wording is now found in brackets in the draft Facilitators text. The ACP Group also offered wording to clarify that while the principle of less than full reciprocity in the negotiations is important for goods, in particular NAMA where it was introduced in the Doha Declaration, the services architecture and mandates require no reciprocal commitments. Therefore, the current drafting of the principle in the Facilitators text is far-reaching.

26. At the last informal TNC consultations on the Ministerial outcome document held on 8 December, the Director General closed deliberations with 17 paragraphs out of 28 are with no brackets of Parts I and III. Part II where specific decisions for Ministers to take are to be listed, are TRIPS non-violation complaints, Work programme on e-commerce, and small economies work program, however these entries contain brackets. The Director General will take this document in a non-paper format to the Nairobi Ministerial Conference for deliberation by Ministers.

8. Specific Issues

3.1 Special and differential treatment (S&DT)

27. In July 2015, the G-90 – which comprises the ACP Group, the African Group, and the LDC Group–tabled a refined set of 25 S&DT proposals for negotiations, seeking to revive talks on a subset of the 88 original S&DT proposals submitted by the African Group and other developing countries, at the time of the launch of the DDA, ahead of Nairobi JOB/TNC/51, and rev. 1. Discussions were based this submission, and a subsequent revision submitted in November and a recent decision text proposal with 15 prioritized proposals for decision in Nairobi and wording for the treatment of remaining proposals and parts of proposals for deliberation in Nairobi and agreement by July 2016 (WT/MIN(15)/W/31). The consliultations led by the Chair of the Committee on Trade in Development in Special Session (CTD-SS) have been intensive and difficult, due to the resistance of major developed countries and a few developing countries to treat the G90 proposals in substance and insistence by them that only 2 or 3 proposals can advance but for LDCs only. The U.S. has been the most objectionable. The G90 led by the ACP Coordinator, Barbados, has steadily defended all proposals providing detailed information, analysis and data.

28. The interventions from the Coordination and the focal points, and coordinators from the African Group and LDC Group were persistent in each session and further strengthening G90 solidarity. The G90 felt compelled in the last rounds to restate to developed Members that the G90 objective to prepare and present these proposals as a group in July must be maintained: 1) while some of the G90 proposals contain LDC specific ones, all proposals are of importance to LDCs and non-LDCs. The characteristics of the G90 as both non-LDC and LDC developing countries, and the Doha Declaration paragraph 44 mandate, must not be undermined by reducing the outcome for development at Nairobi to be again LDC only; 2) flexibility of G90 to modify the proposals should not reduce the proposals to meaningless results with no economic value or development benefits; 3) while some proposals may be prioritized for Nairobi, Ministers must clearly decide on the treatment of the parts of proposals and whole proposals not yet achieving consensus for after Nairobi; and 4) none of the G90 proposals shall undermine existing rights of all developing countries but should supplement the SDT provisions in a manner that does not exclude other developing countries.

29. In this regard, the emphasis only provided with respect to LDCs and SVEs as the weaker and more vulnerable among developing countries should be acknowledged in the nature of the proposals. The fact is that the term “differentiation” has lost its true meaning in the debates in the last decade. The term “differentiation” was intended to mean that LDCs as designated by the UN receive special flexibilities and benefits, whilst all other developing countries must receive benefits from SDT provisions, among them the attention might be different according to their weaknesses and vulnerabilities. Not to exclude any developing country from their rights.

30. While the original set of 25 presented in July was deemed extremely ambitious, the G90 has made three revisions in the direction of what the traffic should bear and taking on board suggestions from partners to the extent the suggestions were constructive, doable for G90 and did not cross G90 redlines, especially on the question of scope of the proposals to both non-LDC and LDC developing countries. Other contentious areas were proposals to strengthen GATT provisions for developing countries aimed at preserving more policy space for industrialisation strategies (e.g. those dealing with protection of infant industries, flexibility from TRIMS, and the Agreement on Subsidies and Countervailing Measures). The proposal on infant industry protection was advanced among the original 88, 12 years ago by St. Lucia and African Group. Other developed countries suggested that it would not be possible for some of the interest sought inherent in the G90 proposals to apply to all developing countries, especially the stronger ones like China. Therefore, the G90 attempted in the first revision to capture some of the emerging acquis in the WTO to place some attention on SVEs while at the same time prioritizing LDCs, including by introducing different thresholds for SVEs compared to LDCs. The formulation from G90 however could not exclude other developing countries or disturb existing rights to GATT and other WTO provisions that refer to developing countries broadly. The G90 texts contain the formulation “developing countries, in particular LDCs and SVEs.” However, some developed countries, in particular the U.S., stated that this did not go far enough, whereas the EU, Norway, Switzerland and Australia have made some signs of openness.

31. The U.S. and others said that their redlines are those proposals where the scope was beyond LDCs and even for LDCs, would not support exemptions or modification of WTO rules and framework. The U.S. has also suggested that beyond 2 or 3 proposals for LDCs in Nairobi, it would not entertain any discussion of other proposals after Nairobi, unless they were brought to the Monitoring Mechanism, sought by the African Group for MC9 and agreed. However, it should be noted that at the time of agreement on the Monitoring Mechanism, the line between the proposals on the table under the CTD-SS negotiations was drawn by developing countries.

32. In the last G90 revision, in addition to reducing the number of proposals as urged by the Chair and developed members, G90 went further to narrow the spotlight on SVEs by introducing a definition drawn from emerging and stabilized definitions in the agriculture and NAMA negotiating texts. Moreover, the G90 loosened the obligations sought from developed Members to best endeavor clauses where possible using words such as “shall endeavour” or “shall to the extent practicable”. These types of best endeavour clauses contain a binding obligation to the extent of demonstrating before a WTO dispute settlement panel that the Member took specific steps.^[5] In addition, G90 introduced qualifiers for SVEs compared to LDCs in the form of wording “developing countries, including small, vulnerable, with capacity constraints”. In other instances the formulation “developing, in particular LDCs and SVEs” is maintained. The revision also took on board suggestions from India and Hong Kong. Reactions to the latest revisions were mixed in that more developed members came forward to say the changes were workable and heading in the right direction.

33. The Chair of the CTD-SS has issued her report to the General Council on the state of play so far.^[6] She summarized that extensive engagement has taken place building a better understanding of the proposals. She commended the G90 revisions, in particular the latest as having closed some of the gaps, but that other issues of contention remained, requiring more work. She also posed the question of what to do with remaining proposals. She stated that she would continue in the time left on the basis of the narrowed list of proposals. The Chair suggested that if the consultations do not bear fruit before leaving for Nairobi, negotiations might continue in Nairobi. The ACP Group will need to remain vigilant on these core objectives of the proposals as some developed members are confident that the G90 Ministers will be persuaded to drop the G90 objectives.

34. Deliberations closed in Geneva with the Director General requesting the Chair of the CTD-SS to prepare a Chair’s draft for Ministerial consideration in Nairobi.

3.2 Preservation of flexibilities gained in the agriculture, NAMA and services negotiations in favour of ACP States

35. In addition to the 25 S&DT proposals, the ACP Group has tabled a proposal to lock-in stabilised flexibilities in both the 2008 text on agriculture and NAMA in favour of LDCs, SVEs, NFIDCs or countries with low binding coverage ahead of any future negotiations It also states that any agreement on new approaches shall not result in a disproportionate or prejudicial position compared to those Members that apply the formula. Finally, it proposes specific ways to address the specific concerns of developing country Members within Customs Unions. In the area of services, the proposal reaffirms the flexibilities for developing countries, LDCs and SVEs contained in GATS Article IV and XIX, the Services Negotiating Guidelines and Procedures, and the Hong Kong Ministerial Declaration paragraph and its Annex C. The Group also submitted a proposal for the establishment of a work program to examine and address all NTBs that affect export trade of developing countries, in particular, LDCs and SVE under the CTD.

36. The position of the U.S. and Japan to block anything that is a remnant of the DDA poses a challenge for this proposal. The U.S. has expressed in the CTS-SS, services negotiating group that it will not support the ACP proposals.

3.3 LDC issues

37. Least developed countries’ (LDCs) issues received a renewed impetus in 2013 during the Bali Ministerial Conference, when ministers adopted four LDC-related decisions on duty-free quota-free (DFQF) market access, preferential rules of origin, operationalisation of the LDC services waiver, and cotton. LDCs now want substantive, binding, LDC specific decisions which should be commercially meaningful on all four elements covered by the Bali package. Since Bali, the LDC Group has therefore been actively pursuing work to operationalise the guidelines on RoO adopted by ministers through various submissions. At the time of writing, delegations seemed close to reaching an agreement on a draft ministerial decision, but consultations were continuing. On cotton, the Cotton-4 African countries (Benin, Burkina Faso, Chad and Mali) have tabled a wide-ranging draft decision, proposing action in the areas of market access, domestic support, export competition, and development assistance (see section on agriculture below). Other cotton producing African countries have also stressed that the endeavour is of interest to them.

38. Discussions on DFQF have traditionally be more difficult not least because of a lack of consensus among the LDC group about the extent to which the US should extent full DFQF to Asian LDCs, potentially at the expense of existing preferences granted to AGOA countries. The LDC Group is proposing to resolve this issue for all LDCs by conducting a tariff line analysis with regards to textiles and clothing. The objective is to determine which tariff lines should be included under DFQF while preserving preferences under AGOA. As of today, however no specific textual proposal has been tabled either by the LDC Group, or by any of its members. The LDC Group has reached no consensus on this issue.

39. Prospects for the operationalisation of the services waiver has seen some progress, with18 notifications from WTO members of concrete sectors and modes of supply to provide specific preferential treatment to LDC services and services suppliers. Negotiations in this area have focused on a draft decision which would among other things seek an extension of 15 years for the services waiver from the date of the notification, a definition of preferential treatment linked to the principle of removing restrictions for LDCs alone or the extension of other preferential arrangement benefits to LDCs. Other elements include principles on reducing fees on visas, work permits and reduction of other administrative burdens on LDC suppliers and urging governments to facilitate recognition of LDC qualifications and accreditation of LDC institutions. A few developed and developing countries having notified preferences object to these principles for agreement in Nairobi. Open-ended informal consultations on a revised draft text took place on the 3rd of December, where members agreed that the Chairman's draft presented an acceptable basis for further work.

40. LDCs also prepared agreement specific proposals under the SDT package, which is now merged with the G90. Overall, responses so far on all of the LDC proposals for decision in Nairobi, with the exception of TRIPs, have been to reject the text and essence of LDC proposals, primarily by the U.S. Responses tend to weaken LDC objectives without demonstrating how the counter-proposals add value to LDCs. Negotiations continue.

3.4 ACP NTBs work programme proposal

Since the ACP Group proposed a new structure in the WTO to tackle the nature and range of NTBs impacting developing countries in developed markets in its March proposal and in July, some discussion took place in the NAMA negotiating group. However, some Members queried about the NAMA NTBs mandate and role of the TBT and SPS committees. The ACP Group has said that the intent is a crosscutting approach as there are other types of NTBs that studies have shown are becoming more problematic as barriers compared to tariffs, including TBT and SPS. The Group decided to

3.5 Agriculture

Domestic Support and Market Access

41. Progress on key issues, namely domestic support and market access was also pursued. However, outcomes on these two vital pillars as potential deliverables for MC-10 proved unattainable.

Export Competition

42. In September, WTO Director-General Azevêdo told Members that export competition seemed more likely to yield an outcome than other agricultural pillars. Several negotiating groups have nonetheless tabled proposals which address a broader set of trade concerns, including special safeguards.

43. At the 2005 Hong Kong Ministerial Conference, Members agreed that developed countries would eliminate their agricultural export subsidies by the end of 2013, and that disciplines would be established on all export measures with equivalent effect (e.g. export credit, international food aid and exporting state trading enterprises). In November, Brazil, the EU Argentina, New Zealand, Paraguay, Peru, and Uruguay tabled a proposal on all components of “export competition” pillar, which was closely based on the 2008 revised draft modalities text (Rev.4). The proposal would add five (5) years to the export subsidy elimination deadlines set out in Rev.4, meaning that developed countries would have to do so by 2018, and developing countries would have to end most types of export subsidies by 2021. A clause would still allow developing countries to provide export subsidies for marketing and transport until 2026 (Art. 9.4 subsidies) -which Australia has complained as it would allow India legal cover for its export subsidies for sugar.

44. Flexibilities for ACP countries would be preserved and unlimited repayment period under export credit would be granted to Cuba as requested by the ACP Group. In a bid to respond to US concerns over proposed disciplines on export credits, a clause in the Brazil-EU proposal would allow WTO Members to provide export financing for up to nine months instead of the six months envisaged in the Rev.4, so long as risk-based fees charged to loan recipients are benchmarked against the Organisation for Economic Co-operation and Development (OECD) minimum premium rates. Another clause in the same proposal would allow a to-be-determined percentage of food aid in both emergency and non-emergency situations to be “monetised” – or sold to raise donor funds. In contrast, a separate US food aid proposal would impose no firm restrictions on recipients’ ability to sell in-kind food aid and only best endeavour disciplines on export credit.

45. A separate proposal from India would condition implementation of any agreement on export competition to a broader agreement in all pillars of Agriculture. Tunisia would remove any phase-out deadline for this type of payments for net food-importing developing countries. LDCs have proposed to phase out all kinds of export subsidies in three years, and have developing countries do so in six years. Meanwhile, Australia and Chile have proposed that WTO Members should not provide export subsidies to agricultural goods that they send to least-developed countries or small, vulnerable economies, from January 2016 onwards. In another proposal submitted jointly with Colombia and Ukraine they also propose additional limits on the use of export subsidies during any implementation period with tighter disciplines on countries which are major exporters of a particular product, and benchmarking subsidies against historical levels that countries have reported to the WTO[7]. Finally, a proposal from the African Group calls for new disciplines to be based on the Rev.4, as did a communication from the Philippines that called for the Rev.4 text to be maintained in several of the areas where other members had suggested making changes. Overall, the ACP Group supports the principle of parallel elimination of all types of export competition measures while taking into account problems faced by NFIDCs and maintaining existing flexibilities related to: (i.) State Trading Enterprise flexibility for SVEs and LDCs; (ii.) long repayment period for NFIDCs and LDCs, and considering possible unlimited repayment periods; (iii.) International Food Aid and Disciplines; and (iv) access to Article 9.4 subsidies.

Special Safeguard Mechanism (SSM)

46. China, India, Indonesia, and other members of the G-33 coalition have called for the Nairobi ministerial to adopt a draft decision on a proposed new “special safeguard mechanism,” which would allow them to raise tariffs temporarily in the event of a sudden import surge or price depression. However, many agricultural exporting countries have said that any new safeguard should be negotiated as part of a broader deal to cut tariffs and other market access barriers. Developing countries such as Brazil, Pakistan, and Paraguay have taken this stance, along with developed countries such as Australia, the EU, and the US. Consultations on this issue have continued to show entrenched and widely divergent positions. Some proponents of the SSM have stressed however that they consider the SSM to be a balancing element in relation to other potential outcomes for Nairobi[8].

Public Stockholding for Food Security Purposes

47. The G-33 have argued that the Nairobi ministerial should result in an agreement on a “permanent solution” to some of the problems that developing countries say they face in operating public food stockholding programmes under WTO farm subsidy rules. A new proposal from the G-33 would remove the requirement to count purchases made under these programmes towards developing countries’ ceiling on trade-distorting support. Agricultural exporting countries such as Australia and the US remain however concerned that doing so could allow countries to distort global markets for food and agriculture. Another proposal from Australia, Paraguay and Canada calls for countries to use the Bali ministerial decision as a basis for negotiating a permanent solution. Meanwhile, a separate submission from least-developed countries has called for their own purchases at administered prices under these programmes to be exempt from WTO ceilings on trade-distorting support. Turkey would peace clause decided under the Bali Decision be limited to the public stockholding programmes existing as the date of the Bali Decision.The latest consultations, based on the proposed texts, have not so far shown significant signs of convergence[9].

Cotton

48. African countries have seen only slow progress in WTO negotiations since ministers agreed a decade ago to address cotton “ambitiously, expeditiously and specifically”. A draft decision tabled by the C-4[10] for Nairobi calls for developed countries and developing countries in a position to do so, to grant, from 1 January 2016, duty-free, quota-free market access to cotton exports from LDC. Developed countries would cut their trade-distorting support for cotton in three tranches, with a view to phasing out completely by the beginning of 2018. Half of the support would be cut from the start of 2016. The U.S. still rejects including this element in an agreement for Nairobi and links progress to the agriculture negotiations as a whole, and to the extent to which large developing countries such as China would also be required to undertake new commitments. The Chairman of the agriculture negotiating group is holding consultations on the proposal in an effort to reach convergence. As we move towards Nairobi, some consensus might however be achieved on some less controversial element of the C4 proposal. A draft text has been circulated by the Chair on his own responsibility and is close to being finalized for consideration at Nairobi, leaving options open on the most controversial issues for ministers to consider and decide upon.

3.6 Rules negotiations

49. The proposals put forward since September by Members on rules negotiations can be organised into three groups: (i) those asking for some form of prohibitions on harmful fisheries subsidies; (ii) those pushing for more transparency either on fisheries subsidies or for the four rules areas in general; and (iii) proponents of improving transparency and due process in relation to anti-dumping disciplines.

Fisheries subsidies

50. On 18 November the ACP circulated a draft decision on developmental and food security aspects of fisheries subsidies disciplines (TN/RL/W/269) that would see further negotiations on fisheries subsidies as part of a post-Nairobi work programme including the adoption within one year of a prohibition on subsidies to any vessel engaged in IUU fishing and to any vessel or activity negatively affecting fish stocks that are in an unequivocally overfished condition. Negotiations should also continue beyond these subsidies bans and take into account the importance of S&DT for developing nations. The ACP group draft decision also suggests additional notification requirements for members accounting for a certain portion of global wild fisheries catch. Earlier in November the ACP group had submitted a separate proposal (TN/RL/W/267) to amend the WTO the SCM Agreement to incorporate the various provisions outlined above. The document met with resistance, however, from some Members who argued that there was not enough time at that stage to negotiate amendments to WTO texts before Nairobi. The revised approach by the ACP Group, under the Group’s original title of a developmental and food security outcome, still faces resistance from some Members including India and South Africa who, though a Member of ACP, reserved its position under the ACP proposal. Meanwhile other Members such as Australia and the EU have suggested to focus on a transparency only outcome, a proposal rejected by the ACP group who has argued that a transparency alone outcome would not be sufficient and would only result in additional administrative burden for developing countries.

51. The ACP fisheries advancing proposals separate from other rules areas still meets resistance from a few Members. However, it is hoped that at least the mandate will be registered in Part III of the draft ministerial text and at the same time see a declaration on the developmental and food security aspects to discipline fisheries subsidies under Part II.

Anti-dumping Transparency proposals

52. A third approach by some members has focused on improvements around anti-dumping rules alone. This includes proposals by Russia and another one by Japan, following up on a co-sponsored paper by 11 WTO members, known as the “Friends of Anti-Dumping” (FANs) focusing on boosting transparency and due process in anti-dumping investigation proceedings.These anti-dumping proposals in various incarnations have nevertheless faced pushback from other Members. For some countries, proposals that aim at changes to WTO texts would be too difficult to negotiate in time for MC10. Others particularly developing countries have also warned that they have no interest in tackle the anti-dumping issue altogether arguing that the additional transparency efforts were too ambitious and would place too much of an additional burden on developing and least developing countries.

Other Rules and Services Transparency Proposals

53. Indicated above, the Director General and certain Members, led by the EU, proposed to include in a small package for Nairobi across all of the rules negotiations pillars of antidumping, subsidies, RTA and fisheries negotiations. The proposals in this area have not garnered very much support. In addition, the delegations of the EU, Australia and Canada, supported by a few other delegations such as Hong Kong China and Chile, advance the notion of a domestic regulations transparency small package excerpting three paragraphs from the 2009 Chairman’s draft text . A recent proposal of a decision text was circulated by Australia and Canada this month and counter text was circulated by India specific to transparency in measures applied on the movement of natural persons (Mode 4). The Chairman of the services negotiating group will hold informal consultations on these proposals.

Trade Facilitation Agreement Ratifications

54. The Director General is also seeking ratification of the TFA by Nairobi. The total number of ratifications is now 56 of 161 WTO members, which is more than half the number required for entry into force of the agreement. Two-thirds of the Membership is required. Of the 56, 10 ACP States have accepted the agreement: Belize, Botswana, Côte d'Ivoire, Grenada, Guyana, Mauritius, Niger, Saint Lucia, Togo, Trinidad and Tobago.[11]

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