Doha round:

The Doha Round is the latest round of trade negotiations among the WTO membership. Its aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules. The work program covers about 20 areas of trade. The Round is also known semiofficially as the Doha Development Agenda as a fundamental objective is to improve the trading prospects of developing countries.

The Round was officially launched at the WTOs Fourth Ministerial Conference in Doha, Qatar, in November 2001. The Doha Ministerial Declaration provided the mandate for the negotiations, including on agriculture, services and an intellectual property topic, which began earlier.

In Doha, ministers also approved a decision on how to address the problems developing countries face in implementing the current WTO agreements.

Briefing notes on some of the main issues of the Doha Round:

These briefing notes are designed to help the public understand some of the main issues of the Doha Round. While every effort has been made to ensure the contents are accurate, they are not legal interpretations of the WTO agreements, nor do they prejudice member governments' positions in the negotiations. Agriculture Non-agricultural market access (NAMA) Services Rules Intellectual property: geographical indications and biodiversity

Trade and environment Trade facilitation Special and differential treatment Dispute settlement E-commerce Jargon buster Country groupings

Agriculture: negotiating modalities

The agriculture negotiations began in 2000, under a commitment members made in the 198694 Uruguay Round to continue reform in the trade. They were brought into the Doha Round when it was launched in 2001. Broadly, the objective is to reduce distortions in agricultural trade caused by high tariffs and other barriers, export subsidies, and some kinds of domestic support. The negotiations also take into account social and political sensitivities in the sector and the needs of developing countries. Modalities The way or method of doing something in the Doha Round these are blueprints for the final deal, eg, how to cut tariffs, and reduce agricultural subsidies and support, along with flexibilities to deal with various sensitivities. Once the modalities have been agreed, countries can apply the formulas to tariffs on thousands of products and to various support programmes. The negotiations aim to reform agricultural trade principally in three areas: market access, domestic support and export subsidies. The modalities spell out how to achieve this.

What does this mean for... ? Market access: tariffs, tariff quotas and safeguards

 For wheat, rice, beef, sugar, cheese, potatoes, pineapples, etc - how deep the cuts on tariffs would be for these depends on: how high the current tariff is: higher tariffs have higher cuts, ranging from 50% to 66-73% subject to a 54% minimum average for developed countries; 33.3% to 44-48% for developing whether the product is sensitive (all countries) or special (developing): sensitive products would have cuts of only 1/3, 1/2 or 2/3 of the normal cut but with a quantity allowed in at a lower quota; special products would also have smaller cuts, and some might be exempt completely whether the applied tariffs are lower than the bound tariffs. Cuts are made from legally bound rates. Tariffs actually charged can be lower. If a developing country has a bound tariff of 100% but only charges 25%, the bound tariff would be cut by 42.7% ie, cut to 57.3%. That means no change in the 25% tariff actually charged, with room to more than double the tariff. the country's status: least-developed countries would make no cuts on any products, developing countries in general would make smaller cuts and have more flexibilities than developed, small and vulnerable economies would make even smaller cuts with even more flexibilities, and countries that recently joined the WTO would also have special terms.

Support for farmers and for agriculture

Support for prices, or for earnings according to how much is produced or sold, would be substantially cut but not eliminated. Countries providing large amounts of this distorting support would cut it the most, many are already reforming their programmes. They and the rest would still be allowed a conceptually small or de minimis amount limited to 2.5% of the value of production for developed countries, 6.7% for developing. For individual products this type of support would also be limited to avoid concentration.

But a wide range of support for agriculture as a whole would be allowed without limit under the Green Box, considered non-trade distorting, i.e., for development, infrastructure, research, agricultural extension, structural adjustment, etc. Conditions would be tightened to prevent direct income supports, etc, from stimulating production. Export subsidies These would be eliminated by 2013, including subsidies hidden in export credit, disciplines on state trading enterprises and non-emergency food aid. July 2008 negotiations and after When ministers came to negotiate modalities in Geneva in July 2008, Director-General Pascal Lamy said they had agreed tentatively on a number of issues but were stuck on the special safeguard mechanism for developing countries. This is described here. Summaries of the July talks (and more) can be found here. Now on the table Then in December 2008, the chairperson of the agriculture negotiations circulated the latest version of his draft modalities. This is the version currently on the table.
Dec 2008

Overall trade distorting domestic support (Amber + de minimis + Blue). EU to cut by 80%; US/Japan to cut by 70%; the rest to cut by 55%. Downpayment (immediate cut) of 33% for US, EU, Japan, 25% for the rest. Bigger cuts from some other developed countries, such as Japan, whose overall support is a larger % of production value. Cuts made over 5 years (developed countries) or 8 years (developing). Amber Box (AMS). Overall, EU to cut by 70%; US/Japan to cut by 60%; the rest to cut by 45%. Bigger cuts from some other developed countries whose AMS is larger % of production value. Also has downpayment. Per product Amber Box support: capped at average for notified support in 1995-2000 with some variation for the US and others. Countries' caps to be annexed to these

modalities

De minimis. Developed countries cut to 2.5% of production. Developing countries to make two-thirds of the cut over three years to 6-7% (no cuts if mainly for subsistence/resource-poor farmers, etc). (Applies to product-specific and non-product specific de minimis payments) Blue Box (including new type). Limited to 2.5% of production (developed), 5% (developing) with caps per product. Green Box. Revisions particularly on income support, to ensure it really is decoupled (ie, separated) from production levels, and on developing countries food stockpiling and tighter monitoring and surveillance.

MARKET ACCESS

Tariffs would mainly be cut according to a formula, which prescribes steeper cuts on higher tariffs. For developed countries the cuts would rise from 50% for tariffs below 20%, to 70% for tariffs above 75%, subject to a 54 % minimum average, with constraints on tariffs above 100%. (For developing countries the cuts in each tier would be two thirds of the equivalent tier for developed countries, subject to a maximum average of 36%.) Some products would have smaller cuts via a number of flexibilities designed to take into account various concerns. These include: sensitive products (available to all countries), the smaller cuts offset by tariff quotas allowing more access at lower tariffs; Special Products (SP, for developing countries, for specific vulnerabilities). Contingencies. Developed countries will scrap the old special safeguard (available for tariffied products). The option for them to keep some has been removed. More proposed details of the new special safeguard mechanism for developing countries are in an additional paper.

EXPORT COMPETITION

Export subsidies to be eliminated by end of 2013 (longer for developing countries). Half of this by end of 2010. Revised provisions on export credit, guarantees and insurance, international food aid (with a safe box for emergencies), and exporting state trading enterprises.

Non-agricultural market access (NAMA)

Non-agricultural products include industrial goods, manufactured goods, textiles, fuels and mining products, footwear, jewellery, forestry products, fish and fisheries, and chemicals. Collectively, they represent almost 90% of world merchandise exports. Aim of the negotiation To reduce or as appropriate eliminate tariffs, including the reduction or elimination of high tariffs, tariff peaks and tariff escalation as well as NonTariff Barriers, in particular on products of export interest to developing countries.

Three crucial elements in the negotiation To cut tariffs according to general formula based on a coefficient. Overall around 40 countries, which include the world's largest traders, will apply the formula. All the others have different specific provisions. Flexibilities for developing countries (that would allow these countries to make smaller or no cuts in tariffs for limited percentages of their most sensitive sectors). Special treatment for small, vulnerable economies (31); least-developed countries (LDCs) (32); recently acceded members (RAMs) (16); members with low binding coverage (12); and others.

Latest negotiating text The new NAMA modalities text, issued on 6 December 2008 by the chairman of the negotiations on non-agricultural market access, builds upon the previous three texts and provides further details and wider

options for ministers to negotiate a balanced final package for the full modalities. The text is now almost complete. Here are the key elements of the document: Formula and flexibilities Tariff reductions for industrial products would be made using a simple Swiss formula with separate coefficients for developed or for developing country members. But whereas the coefficient for developed members will be the same applicable to all of them, there will be a menu of options for developing members that will apply according to the scale of the flexibilities they choose to use. The lower the coefficient the higher the flexibilities and vice versa. A Swiss formula produces deeper cuts on higher tariffs. (A higher coefficient, as envisaged for developing members, means lower reductions in tariffs). The Chair's draft modalities contain these coefficients: 8 for developed members and 20, 22 and 25 for developing. Therefore not all developing countries applying the formula would apply the same coefficient. The use of the different coefficients would depend on three new options: A member choosing to apply the lowest coefficient, 20, would be entitled to make smaller or no cuts in 14 percent of its most sensitive industrial tariff lines, provided that these tariff lines do not exceed 16 percent the total value of its NAMA imports. These tariffs would be subject to cuts equal to half of the agreed formula reduction. As an alternative, the member can keep 6,5 percent of its tariff lines unbound or exclude them from tariff cuts, provided they do not exceed 7,5 percent of the total value of its NAMA imports A member choosing to apply a coefficient of 22 would be entitled to make smaller or no cuts in a smaller number of products: up to 10 percent of its most sensitive industrial tariff lines from the full effect of the formula, provided that these tariff lines do not exceed 10 percent of the total value of its NAMA imports. These tariffs would be subject to cuts equal to half of the agreed formula reduction. As an alternative, the member can keep 5

percent of its tariff lines unbound or exclude them from tariff cuts, provided they do not exceed 5 percent of the total value of its NAMA imports. A member choosing to apply the highest coefficient, 25, will have to apply it on all its products without exceptions. The proposed coefficients would mean: The maximum tariff in developed countries would be bellow 8 per cent. This would mean that developed countries would have bound tariffs at an average of well below 3 per cent, and tariff peaks below 8 per cent even on their most sensitive products. The majority of tariff lines for developing country members applying the formula would be less than 12-14 percent, depending on the coefficient and the flexibilities used. In the developing countries applying the formula, bound tariffs would be at an average of between 11 to 12 per cent, and only a limited number of tariff lines would have levels above 15 per cent. The difference between bound rates and those actually applied would be substantially reduced. The tariff reductions will be implemented gradually over a period of five years for developed members and ten years for developing members, starting 1 January of the year following the entry into force of the Doha results. Overall, the approximately 40 members applying the Swiss formula (the others have special provisions) account for close to 90 per cent of world NAMA trade. Among these, four are recently acceded members (RAMs). The text also contains the following: A so-called anti-concentration clause, to avoid excluding entire sectors from tariff cuts. A minimum of 20% tariff lines or 9% of the value of imports in each tariff chapter would be subject to the full formula tariff reduction

Country-specific provisions The text includes precisions for the possible treatment of: South Africa, Botswana, Lesotho, Namibia and Swaziland, members of the South African Customs Union (SACU). They would have additional flexibilities still to be negotiated Argentina, Brazil, Paraguay and Uruguay, concerning the calculation of the value of trade limitation affected by the flexibilities. The total value of Brazil's non-agricultural imports would apply. Oman. Because of its status of Recently Acceded Member and membership of the Gulf Cooperation Council, shall not be required to reduce any bound tariff below 5 percent after applying modalities. Other possible country-specific provisions (Argentina and Venezuela) are still under negotiation Sectors for deeper tariff reduction or elimination The Chair's text notes that further work is still required in the so-called "sectoral initiative". Some members have been engaged in negotiations which would envisage undertaking deeper tariff reductions in some nonagricultural sectors. There are 14 sectors currently under consideration: Automotive and related parts; Bicycles and related parts; Chemicals; Electronics/Electrical products; Fish and Fish products; Forestry products; Gems and Jewellery products; Raw materials; Sports equipment; Healthcare, pharmaceutical and medical devices; Hand tools; Toys; Textiles, clothing and footwear; and Industrial machinery. As a result of a successful sector initiative, tariffs in that particular sector would be reduced or even brought down to zero. The chair's text underscores the voluntary nature of the participation in this initiative but mentions that some members want commitment by others on participation in the initiative as a way to balance the overall ambition. There is still no

consensus on how and when to define the commitment of members to participate in sectorals without altering the non-mandatory character of these negotiations. Such negotiations would require a "critical mass" of countries joining the initiative for it to take off. After the adoption of the modalities, members choosing to join, would have 45 days to indicate their participation in the negotiations if they have not done so by the establishment of modalities. Recently acceded members (RAMs) Albania, Armenia, Cape Verde, The Former Yugoslav Republic of Macedonia, the Kyrgyz Republic Moldova, Mongolia, Saudi Arabia, Tonga, Viet Nam and Ukraine shall not be required to undertake tariff reductions beyond their accession commitments. RAMs such as China, Chinese Taipei, and Croatia subject to the formula would have an extended implementation period of three years to phase in their Doha commitments. Modalities for other developing members (around 75) The 32 poorest countries (Least-developed countries or LDCs) are exempt from tariff reductions; there are special provisions for approximately 31 SVEs and for 12 developing countries with low levels of binding. As a result, relatively weaker developing economies will retain higher average tariffs and greater flexibility on how they structure their tariff schedules. But they will nevertheless contribute to the negotiations by significantly increasing the number of bindings and reducing "the water" (the difference between bound rates and those actually applied) and binding a high number of their tariffs. Bolivia, Fiji and Gabon are singled out as special cases. There are also proposed solutions for members with preferential access to developed country markets who would see their preferences erode because of the overall tariff reductions. In addition, there are provisions for other developing members who do not enjoy preferential access and would be disproportionably affected by such a solution (Bangladesh, Cambodia, Nepal, Pakistan and Sri Lanka)

Non-tariff barriers (NTBs) NTBs, restrictive measures unrelated to customs tariffs that governments take (such as technical, sanitary and other grounds), are also part of the negotiation. Proposed legal texts have been submitted by members on some of these measures, and are compiled in the Chair's text. The Chair noted that a decision on whether these proposals move forward to a textbased negotiation would need to be taken at the time of final modalities.

Services
Services such as telecommunications, banking, insurance, construction, distribution and transport help to enhance overall economic performance. Over the last 20 years or so, the government's role in the supply of many services has changed fundamentally from producer, distributor and financier to regulatory control and enforcement. To reflect these new market realities, the international trading system was adjusted with the entry into force of the WTO's General Agreement on Trade in Services (GATS) in January 1995. The GATS defines four ways (modes) of delivering or trading a service: Mode 1 is where services are supplied from one country to another (e.g. international phone calls), officially known as cross-border supply; Mode 2 is where consumers or firms make use of a service in another country (e.g. tourism), officially known as consumption abroad; Mode 3 is where a company sets up branches abroad (e.g. banks operating in overseas countries), officially known as commercial presence; and Mode 4 is where individuals travel abroad to provide services in another country (e.g. fashion models), officially known as movement of natural persons.

Under the Doha round of negotiations Governments aim to open, improve and clarify the rules on regulations, the poorest countries and flexibilities. A la carte system: Each government has the right to decide which sectors it wants to open to foreign companies and to what extent, including any restrictions on foreign ownership.

Main concern: Does the GATS force governments to privatize and deregulate all services, including public services, to allow foreign competition from transnational corporations? There is no legal obligation on a government to privatize any service, nor does the GATS outlaw government or private monopolies. Even if a government decides to open its domestic public services to foreign suppliers, it retains the right to set limits on foreign involvement, to set qualification requirements, to set standards for consumer health and safety and to introduce new regulations to pursue any other policy objective.

Some key issues in the Doha negotiations Many developed countries are looking for new export opportunities in sectors such as financial services, telecoms, energy services, express delivery and distribution services. Several developing countries are seeking similar opportunities in sectors such as tourism, medical services and professional services, as well as opportunities for their individual service providers under mode 4.

In addition, many countries, both developed and developing, are working on clearer disciplines on domestic regulations such as qualification standards for professionals such as accountants, lawyers and healthcare workers.

Signalling conference As governments advanced towards establishing modalities for Agriculture and non-agricultural market access (NAMA), many delegations stressed the need to gauge progress in the services request-offer negotiations. Since the revised services offers were going to be submitted only at a later stage, it was agreed to hold a Signalling Conference at ministerial level on 26 July 2008. The conference provided governments with the opportunity to exchange indications on their own new and improved commitments as well as the contributions expected from others. It was understood that, while the signals exchanged were important in measuring progress, they would not represent the final outcome of the negotiations. They would provide comfort to governments by reflecting real progress in the services negotiations. The conference was chaired by Pascal Lamy. He presented a detailed report to the Trade Negotiations Committee on 30 July 2008 (JOB(08)/93.

Negotiating method Negotiations to improve market access are conducted through a requestoffer procedure. Governments send requests to each other indicating what market access opportunities they are seeking; the governments in receipt of such requests reply by submitting their initial offers specifying how and to what extent they are willing to consider opening their domestic market in response to these requests.

This sets in motion a series of bilateral or plurilateral bargaining sessions. Regardless of which country submits a request, the offer from the responding country applies to all countries. At the end of negotiations, the final offers then become legally-binding commitments specifying the conditions under which market access is granted.

Work in progress Work on a text. On 26 May 2008, the chairman of the services negotiations distributed a report on his consultations concerning a multilateral text. This text could provide further guidance in the services negotiations at the time of the establishment of modalities in agriculture and NAMA. The chairmans consultations are attempting to agree on language for the services element of the breakthrough package comprising the agriculture and NAMA modalities. All members agree that Annex C of the 2005 Hong Kong Ministerial Declaration would remain the basis for continuing and finalizing the services negotiations. Discussions in the Council for Trade in Services in Special Session: Following the guidance provided in the Chairman's report (26 May 2008) and the better than expected results of the Signalling Conference (26 July 2008), members have continued to discuss the key steps required to conclude the services negotiations. Bilateral and plurilateral request-offer negotiations to improve market access: In anticipation of a breakthrough in agriculture and NAMA, the bilateral and plurilateral request-offer negotiations have focused on technical work in preparation for the submission of final offers. Negotiations to develop appropriate methods and mechanisms for effective implementation of the least-developed countries modalities. Work has been continuing on a waiver mechanism allowing members to grant special priority to services exports from least-developed countries.

Negotiations on rule making: The Chairman launched a work programme of informal technical discussions on key outstanding issues in the emergency safeguard measures, subsidies and government procurement negotiations. Negotiations to develop disciplines on domestic regulations: The Chairperson of the Working Party submitted on 20 March 2009 a second revised draft of the text on domestic regulations. Work has continued on the basis of that draft.

Intellectual property: Geographical indications and biodiversity

TRIPS is trade-related aspects of intellectual property rights. One group of countries asked for three intellectual property issues to be part of the agenda for the July 2008 meeting of a group of ministers, and to link them with agriculture and NAMA modalities. Another group opposes both the linking and the assertion that the subjects are ready for negotiations based on draft texts. Only one of these subjects is officially part of the Doha round of negotiations and accepted as part of the single undertaking in which all Doha round subjects form part of a single package, with nothing agreed until everything is agreed: the negotiation to create a multilateral register for geographical indications for wines and spirits. The other two subjects are officially implementation issues. Members differ over whether these are subjects for negotiation or not: GI extension: a proposal to extend to other products the higher level of geographical indications protection now given to wines and spirits disclosure: requiring that patent applicants disclose the origin of genetic material and traditional knowledge used in their inventions, or

alternative proposals. This comes under the relationship between the TRIPS Agreement and the UN Convention on Biological Diversity (CBD). Although the three issues are not officially linked, in July 2008 one group of over 100 WTO members called for a procedural decision to negotiate them in parallel (see document TN/C/W/52 of 19 July 2008). Although positions remain largely unchanged, this development has produced two results. On the one hand, opponents argue that the three topics should not be linked and particularly that the only mandate is to negotiate the multilateral register. At the same time, reaching agreement among over 100 members required some compromises and the original EU proposal on the multilateral register has been modified to make it acceptable to the large number of delegations in that group.

Geographical indications Geographical indications are place names (in some countries also words associated with a place) used to identify products that come from these places and have specific characteristics (for example, Champagne, Tequila or Roquefort). Under the TRIPS Agreement, all geographical indications have to be protected at least to avoid misleading the public and to prevent unfair competition (Art.22). Wines and spirits are given a higher or enhanced level of protection (Art.23): subject to a number of exceptions (Art.24), they have to be protected even if misuse would not cause the public to be misled.

1. Negotiation: the multilateral register for wines and spirits This negotiation takes place in dedicated special sessions of the TRIPS Council. It is about creating a multilateral system for notifying and registering geographical indications for wines and spirits, which today benefit from a level of protection that is higher than for other geographical

indications. The multilateral register is discussed separately from the question of extension extending the higher level of protection to other products although some countries consider the two to be related. The work began in 1997 under Article 23.4 of the TRIPS Agreement. In 2001 it was brought into the Doha Development Agenda (the Doha Declaration's paragraph 18). The different positions are summarized here. Papers submitted are here.

2. Implementation: geographical indications extension The issue here is whether to expand the higher level of protection (Article 23) to other products. A number of countries want to negotiate extending this higher level of protection to other products (i.e., cheeses, ceramics, meat, tea, coffee, etc.). Some others oppose the move, and the debate has included the question of whether the Doha Declaration provides a mandate for negotiations. More information can be found here. The subject is an implementation issue in the Doha Development Agenda (the Doha Declarations paragraphs 12 and 18). The latest mandate is paragraph 39 of the 2005 Hong Kong Ministerial Declaration. DirectorGeneral Pascal Lamy is mandated to consult the parties on a course of action. For a time, Deputy Director-General Rufus Yerxa chaired those consultations on his behalf, but more recently Mr Lamy has chaired the talks himself.

Patents, biodiversity and disclosure: implementation This debate was originally wide-ranging. It now focuses on how the TRIPS Agreement relates to the Convention on Biological Diversity, and particularly whether the agreement should be amended to require disclosure. The ideas put forward include:

Disclosure as a TRIPS obligation: A group represented by Brazil and India and including Bolivia, Colombia, Cuba, Dominican Republic, Ecuador, Peru, Thailand, and supported by the African group and some other developing countries, wants to amend the TRIPS Agreement so that patent applicants are required to disclose the country of origin of genetic resources and traditional knowledge used in the inventions, evidence that they received prior informed consent (a term used in the Biological Diversity Convention), and evidence of fair and equitable benefit sharing. Disclosure through the World Intellectual Property Organization (WIPO): Switzerland has proposed an amendment to the regulations of the WIPO's Patent Cooperation Treaty (and, by reference, WIPO's Patent Law Treaty) so that domestic laws may ask inventors to disclose the source of genetic resources and traditional knowledge when they apply for patents. Failure to meet the requirement could hold up a patent being granted or, when done with fraudulent intent, could entail a granted patent being invalidated. Disclosure, but outside patent law: The EU's position includes a proposal to examine a requirement that all patent applicants disclose the source or origin of genetic material, with legal consequences of not meeting this requirement lying outside the scope of patent law. Use of national legislation, including contracts rather than a disclosure obligation: The United States has argued that the Convention on Biological Diversity's objectives on access to genetic resources, and on benefit sharing, could best be achieved through national legislation and contractual arrangements based on the legislation, which could include commitments on disclosing of any commercial application of genetic resources or traditional knowledge. Like GI extension, this is an implementation issue in the Doha Development Agenda (the Doha Declarations paragraphs 12 and 18). Again, the latest mandate is paragraph 39 of the 2005 Hong Kong Ministerial Declaration. For a time, Deputy Director-General Rufus Yerxa chaired those consultations on behalf of Director-General Pascal Lamy, but more recently Mr Lamy has chaired the talks himself.

More information and documents submitted in the discussion can be found here and here. Documents available to ministers and the trade negotiations committee Two reports were issued on 9 June 2008 and can be found here. One was by Ambassador Manzoor Ahmad, chairperson of the negotiations on creating a system for registering geographical indications for wines and spirits. The other is from Director-General Pascal Lamy on his consultations at that time chaired by Deputy Director-General Rufus Yerxa on his behalf on whether to extend enhanced protection for geographical indications beyond wines and spirits, and on patents and biodiversity.

Both reports are factual accounts of the latest state of the discussions. They do not propose how members might compromise. They say members opinions differ on whether these three subjects should be part of the horizontal process and whether they should be linked. Discussions have continued since then, but positions remain largely unchanged.