1. SPECIAL
OFFICE OF TRADE NEGOTIATIONS
… for trade matters
OTN Update
December 15, 2011
Th e Fo cu s of t he W T O 8 th
Mi ni st er i al Co nf er en c e ( M C 8)
A series of negotiating setbacks addressed in the 2012 work programme. The intention
was to adopt an approach to the negotiations that would
Following the realization that the source of the entrenched allow them to overcome the frustrating attempts to
stalemate in the Doha negotiations resided in the NAMA conclude the Round by the end of 2011, but at the same
Negotiating Group, WTO Members were compelled to begin time, preserve the integrity, legitimacy and relevance of
to consider a recalibration of the approach to the the multilateral system by concluding an abridged Doha
negotiations, including the consideration of alternatives to package by December 2011.
concluding a comprehensive agreement.1
However, consultations on the Early Harvest failed to
In that regard, the WTO Members shifted their focus to broker consensus on what should constitute the
delivering an ‘Early Harvest’ package deal at the Eighth package. The most challenging component was largely
WTO Ministerial Conference. The proposed package was to related to deciding on which non-LDC issues, if any,
address three core LDC concerns, namely, Duty-Free- should be included in an abridged package deal. At the
Quota-Free (DFQF) for LDC’s; LDC Services Waiver and same time, there was also discord amongst Members
Cotton which were to be placed on fast track. In addition, about which LDC-specific issues should be prioritized.
some countries were pushing for consideration of an LDC-
plus- package which would address additional issues that What then for the MC8 Agenda?
have neared resolution in the Round, such as Trade
Facilitation, Fisheries Subsidies, RTA Transparency The failure to agree on an Early Harvest deliverable
Mechanism and SDT Monitoring Mechanism. Other topics resulted in a shift in the focus on preparations for the
such as market access (AGRI, NAMA and Services), TRIPs, Eighth WTO Ministerial Conference. The failure to agree
trade rules (Services and Trade Remedies) were to be on an agreed package and the continuing deadlock of
OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery
(CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments
germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate
and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy
developments of currency and importance to the Caribbean.
http://www.crnm.org

2. 2
the Doha Round are likely to down play the significance of that the future work in the negotiations should be
the December Ministerial as well as the overall credibility of focused on the mandate and on progress and gains
the WTO. The discussion at the Eighth Ministerial already attained in the Round. From CARICOM’s
Conference (MC8) scheduled to begin on December 15 perspective, there would be interest in preserving all the
2011 will most likely focus on the future of the organization gains already secured by the African, Caribbean and
and the broader multilateral trading system, as well as the Pacific Group of States (ACP), Small Vulnerable
way forward with the Doha Development Agenda (DDA) Economies (SVEs) and Less Developed Countries
without a focus on pursuing significant negotiation (LDCs) (the groups to which CARICOM Members are
outcomes. principally affiliated) in the current respective draft
negotiating texts, and during the MC8; CARICOM will be
keen to articulate their position on this issue.
a. DDA Specific Issues
In this regard, CARICOM will emphasize, amongst other
With respect to the DDA, it is likely that the MC8 Ministerial things, multilateralizing the ACP/EU/Tropical Proponents
participants will encourage the WTO membership to more agreement in the ACP/EU/Tropical Proponents
fully explore different negotiating approaches. Although not agreement, which was secured parallel to the Geneva
formally tabled, there appears to be interest amongst some Agreement on Trade in Bananas that ended the
of the Membership to reduce negotiations to series of longstanding trade dispute on bananas. The ACP/EU/
clusters of disciplines, which would entail negotiating a Tropical Proponents agreement detailed the items to be
series of plurilateral agreements. However, it is unclear how designated preference erosion treatment products along
this process of dividing the DDA into blocks of issues could with their specific treatment. Through multilateralising
be plausibly pursued without undermining the principles of the agreement, CARICOM would be assured that its
Paragraph 47 and the Single Undertaking, the pursuit of contents will be shielded from any revision. CARICOM
which, for most developing countries, constitutes an member states campaigned aggressively to ensure that
insurance policy against selectivity and imbalance. through that agreement the loss of banana preferences
was offset by more tempered reduction in preference
Furthermore, the type of plurilateral agreements on which margins on other major Caribbean exports. Therefore,
further DDA negotiations would be based is a concern. from a CARICOM perspective, it would be important that
Within the multilateral trading system, plurilateral the draft modalities text reflect the agreement to
agreements can be negotiated on an MFN basis, and as a reinforce that the negotiations on bananas and tropical
consequence would confer privileges to both the signatories products constituted one package.
of the agreement as well as non-signatories. An example of
this approach is reflected by the WTO’s Information CARICOM also has interest in securing the re-binding of
Technology Agreement (ITA). On the other hand, plurilateral Suriname’s and Haiti’s Tariffs. The draft Agriculture
agreements can be exclusive and in this vein would only (AGRI) modalities contain a provision that would allow
confer benefits to the signatories of the agreement. An Suriname to rebind its tariffs without having to resort to
agreement of this type is the WTO Agreement on GATT Article XXVIII and the concomitant requirement to
Government Procurement. For CARICOM countries, should award compensation to major trading members for
the idea of the negotiation of plurilateral agreements gain increasing its bound tariffs. This proposal in the
traction, MFN based plurilaterals would be preferred as Agriculture modalities is necessary in light of Suriname’s
these would facilitate their access to the benefits of such binding of its entire agricultural tariff lines at 20%, that is,
agreements without binding them to any commitments below the CARICOM CET rate of 40% for most primary
under such agreements. agricultural products. A similar provision for Haiti is
being sought that would facilitate that country’s
During the MC8 discussions, it is unlikely that the WTO assumption of its CARICOM CET obligations. The
members will depart from signalling their commitment to the provision should be extended to both AGRI and Non
mandate as well as their intent to continue to work towards Agricultural Market Access (NAMA) as Haiti has bound
the conclusion of the Round. They will also likely reaffirm its agricultural and industrial tariffs at 21.1% and 18.2%.
OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery
(CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments
germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate
and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy
developments of currency and importance to the Caribbean.
http://www.crnm.org

3. 3
A provision allowing Haiti to re-bind its tariffs to the target prove elusive. Specifically, the draft proposal, the
average of other CARICOM countries would therefore development of which was extensively influenced by the
assist in facilitating that country’s deeper integration into Caribbean, envisages a review of all the MTS
the CSME. development provisions and programmes in order to
establish their efficacy and value, along with
The promotion of the Small Economies Work Programme recommending revisions, in cases necessary. Under the
is also an issue that is of priority for CARICOM. The proposal, the development review would be conducted
region provided the political and technical leadership to under the auspices of the Committee on Trade and
ensure that the establishment of a Small Economies Work Development (CTD), thereby supporting the
Programme was established at the 2001 Doha Ministerial strengthening of that WTO body. It is also contemplated
Conference. As a result of these efforts, SVEs are defined that a report on the MTS development review would be
in precise terms in both the NAMA and AGRI draft submitted for the consideration of Ministers at the 9th
modalities. In these areas of DDA negotiations, specific Ministerial Conference in 2012. The Caribbean and the
flexibilities are envisaged for SVEs. While conceding that wider ACP group will likely press this issue at the MC8
no new category of countries would be created, WTO and it is further anticipated that support for the
Members generally accept the principle that SVEs implementation of this initiative will be supported by
deserve special treatment commensurate with both their WTO Members during the MC8 and will feature in the
limited share of global merchandise trade and structure outcome documents that emanate from the Conference.
of their economies which constrain them from benefitting
from trade openings. However, the challenge remains that In keeping with maintaining development at the core of
of agreeing to the specific articulation of flexibilities for the WTO’s work and purpose, during MC8, CARICOM
SVEs. Some WTO Members, in order to deny additional and other developing countries are expected to
flexibilities to SVEs, have cited the Doha mandate as emphasize their support for the prioritization of LDCs
precluding the actual establishment of a new category of interests in the future work of the WTO and will therefore
WTO membership. A further wave of opposition to the re-iterate their support for the delivery of LDC prioritized
award of SVE flexibilities stems from a handful of issues, i.e., cotton, DFQF and the services waiver. For
developing countries that are themselves small CARICOM, political support for the LDC package is
economies but remain ineligible for SVE designation. principally rooted in its support for Haiti, CARICOM’s
During the MC8, it will therefore be imperative for only UN-recognized LDC, and in the appreciation of the
CARICOM to continue to press for the expedited significant extent to which this action would greatly
treatment of small economies issues. assist Haiti, particularly in the areas of services and
DFQF. CARICOM will also be interested in re-iterating
b. Non-Doha specific considerations support for operationalizing the Special and Differential
Treatment (SDT) enshrined in the Hong Kong Ministerial
Although it is clear that the DDA is at a stalemate, the Declaration, specific flexibilities to promote LDC
Ministerial Conference will be used, as in years past, to Accession and Aid for Trade (AfT).
try to inject political influence into the negotiations in order
to resolve the impasse. While the preoccupation with the With regard to examining the future of the WTO and its
DDA and the stalemate is understandable, the WTO role within the multilateral trading system post 2011, it is
Members at the MC8 should also be reminded that the anticipated that the establishment of new WTO
DDA (and its lack of progress) should not be conflated disciplines regarding the intersection of trade and
with the multilateral trading system (MTS). energy, food security, currency exchange rates and
climate change will also be discussed at MC8. While
In this context, the ACP has developed a proposal for the exchanges on these ‘21st century issues’ are expected
conduct of an MTS development review the primary aim to be deliberative, it is not anticipated that the Members
of which would be to ensure that the pursuit of will take concrete decisions. Rather, consideration of the
development remains as the core WTO pursuit, institutional and policy implications of these issues for
particularly at a juncture when movement on DDA might the WTO, as an organization, will likely be the focus.
OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery
(CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments
germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate
and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy
developments of currency and importance to the Caribbean.
http://www.crnm.org

4. 4
Proponents, mostly developed countries, are of the view
that for the WTO, an examination of the relationship
between these issues and trade would be essential to Conclusion
maintaining the WTO’s relevance, even beyond the
completion of the DDA. However, the general sentiment Given that the MC8 is not expected to result in a
amongst most developing countries, including the negotiating outcome, the Meeting should provide
Caribbean, is that the WTO should centre its focus on Members with the opportunity to articulate their views
fulfilling its traditional mandate rather than attempt to and core interests frankly and openly. It is not clear
address additional issues which could detract from the however, how successful the discussions during MC8
DDA’s thrust on development. Furthermore, developing will be in influencing traction of non-Doha issues, or the
countries seem to share a concern that the resuscitation of the DDA.
consideration of new issues at this time would further
constrain their already limited institutional, financial and
human capacity to fulfil their WTO obligations.
Bilateral and Small Group Meetings on the margins
of MC8 ********************
Several countries are expected to engage in a number
of bilateral and small-group meetings on the margins of
MC8. Amongst them are CARICOM and Canada which
will use the opportunity of the MC8 to discuss issues
related to the CARICOM-Canada trade negotiations.
Additionally, as Haiti and Suriname are currently not
beneficiaries of CARIBCAN, both countries are
interested in conveying to Canada an interest in
becoming beneficiaries of the preferential scheme.
This bilateral session between CARICOM and Canada
will take place in a context where the WTO General
Council on November 30 2011 approved a new waiver
for CARIBCAN until December 31 2013. Canada’s
application for the waiver became necessary in order to
preserve CARICOM’s preferential access whilst the two
Sides complete their negotiations of a new WTO-
compatible trade agreement. Given that the new waiver
is for a period of two years, Canada has proposed that
the pace of negotiations in 2012 be increased with a
view to completing the negotiations within a timeframe
that would facilitate the technical and legal scrub,
signature and ratification of the new Agreement prior to
the expiry of the waiver. The meeting will provide an
important opportunity for both Sides to take stock of the
progress achieved to date in the negotiations and to
1
consider the steps that, in light of the Parties’ ambitions For a more detailed background refer to OTN Special Update - A
and sensitivities, will need to be taken in order complete Glimmer Of Hope Dimmed (July 13, 2011)
the negotiations within the currently available timeframe.
OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery
(CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments
germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate
and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy
developments of currency and importance to the Caribbean.
http://www.crnm.org