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O 151936Z DEC 08
FM SECSTATE WASHDC
TO WORLD TRADE ORGANIZATION COLLECTIVE IMMEDIATE
RUEHGV/USMISSION GENEVA IMMEDIATE 5108

UNCLAS SECTION 01 OF 03 STATE 131354 
 
SIPDIS 
PASS USTR FOR SCHWAB 
VERONEAU 
EEB/TPP/MTAA FOR CRAFT 
USDA/FAS/ITP 
MTND 
USDOC FOR ITA 
 
E.O. 12958: N/A 
TAGS: ETRD WTRO USTR
SUBJECT: SUBJECT:  WTO DIRECTOR GENERAL DECISION NOT TO 
CONVENE MINISTERIAL 
 
¶1.  (U)  SUMMARY:  WTO Director General Pascal Lamy announced 
on December 12, 2008 that there are still significant gaps on 
a number of outstanding issues in the ongoing Doha Round 
negotiations and that he does not see the basis for convening 
a meeting of Ministers in Geneva before the end of the year. 
The U.S. is disappointed that Members have been unable to 
establish a basis for a productive Ministerial that would 
lead to an ambitious and balanced Doha outcome.  Work will 
begin this week, continuing into the New Year, on next steps. 
 Set out below is background on the current status of the 
Doha Round negotiations. Also included is the statement by 
USTR Susan Schwab on the decision not to call Ministers to 
Geneva, which Posts may draw from as needed.  Posts may also 
draw from "Qs and As" as needed to provide verbal responses 
to questions.  END SUMMARY. 
 
Background 
 
¶2.  (U)  The WTO Doha Round negotiations have been at the 
center of U.S. trade negotiating efforts since the 
multilateral round was launched in Doha, Qatar in November 
¶2001.  The United States played an instrumental role in 
launching the negotiations and has led efforts to advance 
them towards a successful conclusion.  After Cancun, the 
United States led the effort to ensure the negotiations moved 
ahead; the July 2004 mini-ministerial was the result of U.S. 
efforts to bring the negotiations back on track--resulting in 
the July "Framework-Agreement."  In October 2005, the United 
States tabled a comprehensive proposal for the agricultural 
negotiations to eliminate all tariffs and subsidies in a 
two-phased process, and over the next two years worked in 
various formal and informal processes to advance discussions. 
 In September 2007, the United States publicly stated in 
Geneva that it was prepared to negotiate within the range of 
subsidy reductions in the draft agriculture text, provided 
that the other leading nations did the same with respect to 
new market access for agricultural and industrial goods. 
President Bush has personally and actively led U.S. efforts 
to press the Doha Round forward, and led the push in the G-20 
Summit to gain commitments to achieve modalities before the 
end of 2008.  In short, no country has worked harder to bring 
the Round to an ambitious conclusion. 
 
¶3.  (U)  New momentum was injected into the negotiations in 
mid-November following the G-20 and APEC Leaders' political 
commitments to conclude modalities in agriculture and 
nonagricultural market access (NAMA) before the end of 2008, 
establishing the framework for an ambitious conclusion to the 
Doha Round in 2009.  In recent weeks, intense negotiations 
have been ongoing at the senior official level in Geneva and 
at the Minister level in capitals to achieve the convergences 
needed for Ministers to meet to agree on modalities in 
agriculture and NAMA.  The hope had been that such a meeting 
could take place before the WTO General Council meeting of 
December 18-19. 
 
¶4.  (U)  New negotiating texts were issued on December 6, 
2008 by the Chairs of the Agriculture and NAMA negotiating 
groups.  However, the revised texts did not resolve the most 
difficult outstanding issues, and some issues showed signs of 
destabilizion since July. 
 
¶5.  (U)  At an informal Trade Negotiations Committee meeting 
with the heads of delegations on December 12, 2008, WTO 
Director General Lamy announced that after extensive 
consultations with WTO Members, there are still significant 
gaps on a number of outstanding issues in the agriculture and 
NAMA modalities negotiations and that he does not see the 
basis for convening a meeting of Ministers in Geneva before 
the end of the year.  Lamy noted his intention to consult 
with Members on how to assemble the political will in the New 
Year, including an informal "Green Room" meeting on December 
16 to discuss how to move forward. 
 
¶6.  (U)  The United States is disappointed that Members have 
been unable to establish a basis for a productive Ministerial 
that would lead to an ambitious and balanced Doha outcome. 
It is especially disappointing during this time of global 
economic turmoil.  At the same time, as Lamy noted, calling a 
Ministerial would run an unacceptably high risk of failure 
that could damage not only the Round but the WTO system as a 
 
STATE 00131354  002 OF 003 
 
 
whole.  In response to Lamy's announcement that he was not 
calling a Ministerial, U.S. Ambassador to the WTO Peter 
Allgeier remarked that "I think it is the prudent thing to do 
given the gaps we have seen.  We are deeply disappointed we 
have not reached that stage yet." 
 
STATEMENT BY USTR SCHWAB 
 
¶7.  (U)  Ambassador Susan Schwab stated on December 12: 
 
"The U.S. has shown flexibility repeatedly in the past 
several weeks to achieve the convergence among WTO members 
necessary to convene a ministerial.  I am therefore 
disappointed, but respect the decision by the Director 
General to not call a ministerial at this time. 
 
Due to numerous outstanding issues voiced by several WTO 
members, it became apparent that the gaps were too large to 
bridge at this time.  There were several significant 
unresolved issues on the table that needed to be addressed 
for a deal on modalities to come together. 
 
The U.S. remains committed to working with the WTO and our 
trading partners to reach a successful Doha outcome, one that 
fulfills the promise of this round." 
 
QUESTIONS AND ANSWERS, FOR VERBAL USE BY POSTS 
 
¶8.  (U)  Posts may draw from the following "Qs & As" for 
verbal responses to questions. 
 
Q:  Is this the end of the Doha round negotiations? 
 
A:  No, the Doha Round will continue.  The U.S. remains 
committed to achieving a successful result in the Doha Round 
negotiations, and we will continue to work with others in 
Geneva toward advancing the negotiations. 
 
In order to achieve further progress, WTO Members, 
particularly advanced developing countries, must follow-up on 
the Doha political commitments made by G-20 and APEC Leaders 
and provide the contributions and flexibility necessary to 
produce a market-opening modalities package that would lead 
to an ambitious conclusion to the negotiations. 
 
There is a long-standing record of trade rounds continuing 
through transitions in presidential administrations. 
 
Q:  Is it true that the impasse is just about one or two 
issues involving U.S. demands? 
 
A:  No, there is a wide array of significant issues involving 
a number of WTO Members. 
 
For example, in agriculture, 
 
--There are still wide gaps on the treatment of sensitive 
products, that is, products sheltered against full tariff 
cuts, of great significance to Japan and Canada. 
 
--India also raised new issues relating to its subsidies 
programs and sought greater flexibility in the area of 
special products, that is, products sheltered from cuts. 
 
--On the Special Safeguard Mechanism, there have been a 
number of compromises put on the table since September.  The 
U.S. was willing to accept them, but China and India rejected 
them all. 
 
--The long-standing issue of bananas appears to have moved 
backwards since July, with the European Union and the Latin 
American countries digging-in. 
 
In NAMA, 
 
--Several developing countries (South Africa, Argentina, 
Venezuela) are making special, individual, flexibility 
requests that go beyond the flexibilities already available 
to those developing countries making cuts. 
 
--Several developing countries continue to have strong 
disagreements among themselves on the issue of preference 
erosion, that is, the effect of developed country tariff cuts 
on countries that already have preferential access to these 
markets. 
 
 
STATE 00131354  003 OF 003 
 
 
Q:  Why is the U.S. making new demands on sectorals, and 
trying to "rebalance" the July 25 package? 
 
A:  On sectorals, the U.S. has merely been seeking what was 
on the table in the July 25 package--that is, meaningful 
assurances from the leadership group of the WTO (the G7) on 
two sectorals that likely can achieve a critical mass of 
participants among the major producing and exporting 
countries.  We have shown flexibility and creativity in how 
such assurances could be fashioned.  In contrast, Brazil, 
India, and China would not agree to identify specific sectors 
on which they would be willing to negotiate. 
 
The U.S. position is driven by the Ministers' decision at 
Hong Kong (paragraph 16): "We instruct the Negotiating Group 
to review proposals (for sectoral initiatives), with a view 
to identifying those which could garner sufficient 
participation to be realized." 
 
End Points 
 
¶9.  (U)  Please contact Bruce Hirsh (202-395-9610 or 
bhirsh@ustr.eop.gov) or Dawn Shackleford (202-395-9461 or 
dshackleford@ustr.eop.gov) via phone or email with any 
questions or requests for further background. 
RICE