Tale/innlegg | Dato: 09.12.2005
In his statement to the Storting on 9 December 2005 on the status of the WTO negotiations Foreign Minister Støre said, among other things; "The review of Norway’s requests to developing countries has been based on a thorough consideration both of the countries’ interests and of Norway’s offensive interests. The government has emphasised that Norway should not submit requests that could be perceived as restricting the way developing countries organise their public services. The government has therefore decided to withdraw the requests to other developing countries relating to electricity distribution, water supply and higher education". (09.12)
Foreign Minister Jonas Gahr Støre
Status of the WTO negotiations in the run-up to the Ministerial Conference in Hong Kong on 13-18 December 2005
Statement to the Storting on 9 December 2005
Translation from the Norwegian
A binding multilateral trading system is our best safeguard against arbitrariness, protectionism and the abuse of power. This is extremely important for countries like Norway that have open, export-based economies. In fact it is important for most countries, not least developing countries.
The current multilateral trading system is based on the General Agreement on Tariffs and Trade (GATT), which was concluded in 1947.
The agreement was a response to the extensive restrictions that had been imposed on international trade and financial transactions in the interwar period. These led to the collapse of world trade, economic stagnation and unemployment. In the years following World War II, 23 countries, including Norway, therefore conducted negotiations on the basic principles of international trade and the level of tariff protection. The negotiations resulted in the 1947 GATT Agreement.
The multilateral trading system is one of the best postwar examples of successful international cooperation. The system has been extended, developed and adapted to economic realities through 50 years of major political and economic upheaval. Today, the World Trade Organisation (WTO) is a global cooperation forum with 149 member states, and it covers virtually all world trade.
The ultimate purpose of the ongoing Doha Round of negotiations is to maintain the multilateral trading system. The idea is to update and further develop the system so that it safeguards the interests of all Member States. One of the main goals of this round is to integrate the developing countries properly into world trade so that the multilateral trading system is made relevant to the economic challenges of the 21st century too. Norway supports this goal. The outcome must result in genuine advantages in all areas for the developing countries.
The negotiations are now entering their final phase. The plan was for the Ministerial Conference in Hong Kong to be a decisive meeting at which the final decisions would be made on specific reduction commitments and amendments to the rules. However, this no longer appears to be within reach. Positions remain far apart, particularly in the area of agriculture. This is unfortunate, but not unexpected, given that these negotiations affect vital interests for virtually all of the countries involved.
During the past month there has been a rush of meetings between key actors like the US, the EU, Brazil and India. For instance, there was an informal ministerial meeting in Geneva on 8 November, which the Minister of Agriculture and I attended, and there have been other meetings at senior-official level. These meetings have not led to a breakthrough in the key areas, that is to say specific reduction commitments for agricultural and industrial products, including fish.
Nevertheless, this has not led to a serious crisis in the negotiations. The parties have agreed to adjust their level of ambition to what can feasibly be achieved in Hong Kong. On the other hand, this does not mean that the level of ambition for the Doha Round itself is being lowered. The goal of the Ministerial Conference in Hong Kong is to provide the impetus to propel the negotiations into the decisive final phase. Norway supports this goal.
On this basis, agreement has been reached on a draft ministerial text, which has been transmitted to the Ministerial Conference by the WTO General Council. The draft is not very ambitious, and consists mainly of a status report for most of the areas of negotiation.
Agriculture is a key negotiating area. I have found this to be an issue in which the delegations of all the countries are deeply engaged. The conditions for agriculture affect important aspects of a country’s economy, and also of its culture, settlement patterns and social structure.
It is also worth recalling that seven entire GATT rounds were required to negotiate tariff reductions on industrial products. This was a demanding and time-consuming process. In practice agriculture was first included in the multilateral trading system through the Uruguay Round, which was concluded in 1994. This was done by means of a separate agreement on agriculture, which among other things provides for the maintenance of special support schemes for agriculture. In addition, the tariff rates for agricultural products are significantly higher than those for industrial products. The compromise that made a successful conclusion of the Uruguay Round possible was an obligation included in the Agreement on Agriculture to continue the reform process and resume negotiations within five years.
In other words, we are currently in the second round of negotiations, and the goals are very ambitious. The mandate for the Doha Round states that the agricultural negotiations should lead to “substantial improvements in market access; reductions of, with a view to phasing out, all forms of export subsidies; and substantial reductions in trade-distorting domestic support”. At the same, time non-trade concerns such as food security, cultural landscapes and settlement patterns are to be taken into account. Further guidance was provided by the decisions of the General Council in 2004. These specify that the highest tariff rates should be reduced the most, that the question of introducing a tariff cap should be evaluated, that the tariffs on sensitive products will be reduced less, and that the number of sensitive products will be subject to negotiation.
The great majority of developing countries support the proposal for better access to rich country markets. In addition, most of them wish to protect their own markets. We sympathise with this proposal and will continue to support it in the negotiations. The G-20 group of agricultural exporters are fronting the demand for market access. This group includes relatively advanced developing countries like Brazil, China and South Africa, very poor countries such as Tanzania, small, poor Latin American countries like Cuba, Bolivia and Guatemala, and a number of other developing countries such as India, Pakistan and Egypt. They maintain that the industrialised countries used the seven GATT rounds to negotiate tariff reductions for products in which they themselves had export interests to a level where they no longer constitute serious trade barriers. They call for similar progress to be made on agricultural products, where the developing countries have clear offensive interests.
To illustrate the fact that the developing countries are not a homogeneous group, I would like to highlight the problems connected with the issue of tariff preferences. The 54 countries in the African, Caribbean and Pacific Group of States, or ACP countries, enjoy the benefits of long-standing preferential access for important export goods to key markets. They emphasise the crucial importance of these preferential regimes, and do not wish the industrialised countries to cut tariffs too deeply, since this would reduce their preferential margins. The main disagreement is between developing countries that have preferential access to the EU and US markets, and those that do not. This means the ACP countries, including many of the least developed countries, on the one hand, and small countries in Latin America and Asia, including Peru, Ecuador, Costa Rica, Uruguay, Sri Lanka and Pakistan, on the other.
Given the overall negotiating situation, we must be prepared for an outcome that gives exporters of agricultural products the opportunity to increase their exports, including exports to the Norwegian market.
A significant share of the agricultural products on the Norwegian market are already imported. The government gives high priority to Norway’s right to produce food for its own population and the possibility of maintaining agricultural production in all parts of the country. The main challenge in the negotiations is therefore how to accommodate the proposals for better market access and at the same time ensure that Norway and other countries whose competitiveness is limited can retain the support and protection levels they need to maintain production of key agricultural products.
Some people are creating the impression that our goal of maintaining agricultural production is incompatible with our ambition of achieving an outcome that is generally favourable for the developing countries. This is not correct. Firstly, Norway is prepared to accept significant reductions in all areas covered by the agricultural negotiations. We are prepared to reduce support, we are prepared to reduce tariff rates, and we are prepared to reduce and phase out our export subsidies. It is already clear that we will be facing greater challenges than almost all other countries and groups of countries. Other industrialised countries are for instance prepared to reduce support levels in return for increased market access for their exports. We have not proposed this type of solution, and the results in all the negotiation areas in the agricultural field will therefore pose a challenge for us. We are prepared to deal with this, and in line with goals set out in the new government’s policy platform, we are prepared to undertake an in-depth review of our agricultural policy to identify what is needed to maintain a viable agricultural sector in Norway.
Nonetheless, I have found it necessary to stress that we do not have a mandate to negotiate an end to Norwegian agriculture. Norway is a net importer of agricultural products, its exports are modest, its agricultural sector operates under difficult climatic conditions, and its agricultural policy also includes important goals related to settlement patterns and protection of the cultural landscape. This means that we must have the right to make it clear that there are limits to how far we can go in the direction of structural adaptation. Other countries and groups of countries have their own pain thresholds and they speak up when they are reached. We have one too, and we will also speak up. We are particularly concerned about tariff reductions and the number of sensitive products and how they are dealt with.
The bodies of the Storting are being kept informed about the progress of the negotiations and about the proposals put forward by Norway and like-minded countries.
Our alliance partner in the negotiations on agriculture is the G10. The countries in this group include Japan, Switzerland and Iceland, and are facing a number of the same challenges as Norway. The government is giving high priority to efforts to ensure that the G10 can continue to play an active role in the negotiations. Since the Ministerial Conference in Cancún in 2003, Norway, together with the G10, has been working to prevent the introduction of a tariff cap on agricultural products. The present government is working on the presumption that the tariff cap as proposed by the US, the G20 and the EU will not be introduced. We will also seek a solution that provides sufficient flexibility to safeguard non-trade concerns and that allows for the application of national agricultural policy measures.
The draft ministerial text is intended to confirm the political agreement that has been reached in certain areas. For instance, it has been agreed that reduction commitments related to various types of trade-distorting support will be organised into three bands, and tariff reductions into four bands. On the other hand, there is considerable disagreement about where to draw the line between the bands and about how big the cuts in each band should be.
Market access for industrial goods, including fish and fish products, is another key negotiating area. Here, Norway only has offensive interests, particularly with regard to fish and fish products, where the tariffs are higher than for other industrial goods. The “July 2004 package” provides guidelines for how to implement the decision set out in the Doha Declaration on allowing smaller tariff reduction commitments for developing country Members than for industrialised countries. It has been agreed that the least developed countries (LDCs) are to be exempt from all such commitments. It has also been agreed that a number of other poor developing countries are only expected to bind their tariff rates.
The main focus of the recent negotiations has been on the type of formula that is to be used for cutting tariff rates, and how much flexibility the other, more advanced developing countries should have. There is broad agreement that the formula should cut high tariff rates more than low ones, and that the tariff rates in industrialised countries should be cut more than those in developing countries. This is in line with the government’s view. However, agreement has not been reached on the size of the cuts or how great a difference there should be between the cuts in industrialised and developing countries.
The draft ministerial text does not give specific figures. Whether or not a breakthrough is achieved in terms of specific figures will depend on the progress of the agriculture negotiations.
The Government will continue to promote substantial cuts in the tariff rates for industrialised and advanced developing countries. We will also seek to ensure that the needs of the poorest developing countries are safeguarded.
Norway also has offensive interests in shipping and other maritime services, energy services, telecommunications and marine and energy insurance. However, it is also important that the negotiations lead to better opportunities for developing countries to benefit from the trading system in terms of economic growth and development. Norway will therefore take a balanced approach that both focuses on results and retains flexibility for developing countries. There is disagreement on how services should be dealt with in the ministerial text, particularly as regards the annex. In our view, the draft ministerial text strikes a good balance between these two considerations. We will therefore discuss this further in Hong Kong.
In the government’s view, the text safeguards Norway’s interests. But we also have a responsibility to state clearly our willingness to promote developing countries' opportunities to develop their own economies and systems for providing services in both the public and the private sector. With this in mind, and in light of its policy platform, the government has reviewed Norway’s position in the services negotiations, including its requests for specific commitments from developing countries. During this process we have been in close dialogue with the relevant trade associations and NGOs, and these have provided a good deal of input on transparency, the further negotiation process and the Norwegian proposals.
In line with its policy of greater transparency, the Government has decided to publish an overview of which countries have received requests in which sectors. As regards requests for specific commitments from Norway, certain countries have pointed out that these proposals are confidential and cannot therefore be published without their consent. Because of the nature of the negotiations, it is therefore the government’s view that the current practice should not be changed at present, but that this principle could be discussed at a later stage.
It is generally acknowledged that the LDCs cannot be expected to undertake new commitments. Norway has therefore decided not to follow up the requests it has submitted to the LDCs. In order to further clarify the Norwegian position, the government has decided that the countries involved should be informed directly of Norway’s decision to withdraw its requests.
The review of Norway’s requests to developing countries has been based on a thorough consideration both of the countries’ interests and of Norway’s offensive interests. The government has emphasised that Norway should not submit requests that could be perceived as restricting the way developing countries organise their public services. The government has therefore decided to withdraw the requests to other developing countries relating to electricity distribution, water distribution and higher education.
This is an important political signal. I would like to add that the most favoured nation principle also applies in this type of negotiations. This means that the specific commitments a country agrees to undertake in response to a request automatically apply to all other countries.
The rules negotiations are concerned with anti-dumping, subsidies – including fisheries subsidies – and free trade agreements. We have offensive interests in these areas as well. Norway has a special interest in more stringent rules for the use of anti-dumping measures. This is particularly important to prevent unjustified restrictions on Norwegian exports to our most important markets. If possible, the guidelines for the further negotiations on the anti-dumping regulations should be strengthened.
The particular needs of the developing countries are a key consideration in all the negotiating areas, particularly in relation to market access. In addition, the text includes a package of proposals of interest to the LDCs. The objective of the Hong Kong conference is to achieve measurable results for the LDCs.
One of these proposals is to obtain stronger commitments on the part of industrialised countries and advanced developing countries in relation to duty-free and quota-free market access for products originating from LDCs. The LDCs themselves are proposing that the industrialised countries should bind such commitments in the WTO so that they cannot be changed or withdrawn overnight. This is important to ensure predictability in relation to the LDCs’ own investments.
As several countries are opposed to this proposal, it will probably not be possible to pass a general resolution on such binding commitments in the WTO. As you know, Norway already offers duty-free and quota-free market access for all goods originating from LDCs. The EU, Canada, Australia and a number of other industrialised countries have similar arrangements. The Ministerial Conference in Hong Kong will be an opportunity for us to give assurances that we do not intend to withdraw this access. We will also seek to persuade as many other countries as possible to provide duty-free and quota-free access to the LDCs.
Another important element in the package is the question of cotton subsidies. A number of the poorer developing countries, with Benin at the forefront, have presented a proposal for the immediate removal of various types of domestic and export support in developed countries, as they lead to prices that in effect bar the poorer developing countries from the world market. These countries have clear expectations as regards results in this area.
The EU has announced a unilateral elimination of cotton subsidies from 1 January 2006. The focus will then be on the US, which will probably not have a mandate to deal with this issue in Hong Kong. This could therefore be one of the most difficult issues at the conference. For Norway this specific issue is unproblematic in that we neither produce cotton nor subsidise such production. However, it is possible that the discussions will set important guiding principles for the discussions on agriculture subsidies both in Hong Kong and in the subsequent negotiations.
A third important element in the package is “Aid for Trade” – a substantial increase in trade-related assistance to enable the LDCs to utilise existing and new market openings for their products. Today the LDCs account for only 0.67 per cent of world trade, and only 0.2 per cent of Norwegian imports, despite duty-free and quota-free access for all their products. Norway will announce at Hong Kong that it will substantially increase the resources available for trade-related technical assistance, in line with the government’s policy platform.
With regard to the poorer countries’ opportunities to acquire essential medicines at reasonable prices, the government is pleased to note the decision of the General Council on 6 December that the declaration on health made at the Doha Ministerial Conference is to be incorporated into the WTO rules through an amendment to the TRIPS agreement.
Norway will also support the other elements in the package, including the proposal for special and differential treatment of LDCs in relation to various areas of the WTO rules.
The negotiations on trade facilitation first started in the autumn of 2004, and there are no plans to take any substantive decisions in Hong Kong. The same applies to trade and environment issues.
The draft ministerial text does not provide for substantive decisions in Hong Kong. At the discussions at the meeting of senior officials in Geneva last week, it was agreed that a number of concrete issues relating to agriculture and industrial tariffs should be discussed by the ministers in Hong Kong.
With regard to agriculture, these include the elements that should be included in the formulae for reductions in tariffs and domestic support, and the additional disciplines and flexibility that are needed. There are also outstanding questions on the elimination of export subsidies, cotton and special and differential treatment of developing countries.
With regard to industrial goods and fish, the focus will be on what elements should be included in a formula for reductions in tariffs, and on the extent to which the ministers can solve remaining problems relating to flexibility for developing countries and the treatment of unbound tariffs.
We must therefore be prepared for concrete negotiations on these issues. Negotiations on specific figures are not planned. In practice, such negotiations are contingent on the major actors agreeing that specific figures should be discussed. There are no signs of progress in this respect so far, but you never know. We must therefore be prepared for the possibility of some progress being made.
An important task in Hong Kong will be to agree on a schedule for the final phase of the negotiations. Our aim must be to take the necessary decisions and set the necessary political guidelines for the decisive phase of real negotiations on quantifying specific reduction commitments and amendments to the rules.
The considerable challenges in the agriculture area will be a key element of the government’s efforts in Hong Kong and in the final negotiations. The government will also take active steps to ensure that ambitious results are achieved in the negotiations on services and industrial goods and fish and fish products, and in tightening the rules governing the use of anti-dumping measures. Finally, I would like to emphasise that the Government will contribute actively to the successful conclusion of the Doha round. We will also serve as a reliable advocate for the interests of the developing countries with a view to ensuring that the Doha round is truly a development round.