At long last, a lay of hope shone on the stalemated Doha round negotiation yesterday (July 26th: Beware the time difference.) On the verge of the collapse of the talk, Mon Capitán Pascal Lamy managed to persuade negotiators to continue negotiating by presenting a critical "package of elements," which might be coined the "Lamy Plan," if not "Lamy Draft." This deal-salvaging package is nothing but a thoughtful compromise proposal which is based on the most recent draft modalities on the agriculture and NAMA (non-agriculture market access, which concerns industrial tariffs reduction) yet attuned to the more recent consultations among major WTO members.
What Lamy did was to present some concrete headline numbers on several major sticking issues (ranging from farm subsidies to industrial tariffs reduction) in an articulated fashion out of the intense consultations among the seven key negotiating parties (G 7: the U.S., the EU, Australia, Japan, China, Brazil and India). Under the Lamy Plan, the U.S. should cut the current bound level of farm subsidies (US$ 48 billion) to US$ 14 billion (which is still lot lower than the actual spending last year of US$ 7 billion). Developing countries are also allowed to shelter some (12% of all covered products) of their crops, which are critical to their development concerns (food, livelihood security or rural development reasons) and called "special products," from the tariff reductions based on the NAMA modalities. Developing countries are obliged to cut their industrial tariffs averagely to 20, 22, or 25% (coefficients) depending on three different "flexibility" mechanisms which they will choose to protect some of their strategic products more than others within these limits.
Of course, one should not be misled to believe that we have a genuine "breakthrough" in the Doha talks. Not yet, but better sooner than later. There are still so many (maybe TOO many) other issues, ranging from cotton to geographical indications. From a realistic standpoint, they need to be either fudged or set aside for a while to get the job done. In particular, the upcoming "signaling conference" for the services talk seems quite decisive for the destiny of the current negotiation.
For the WTO coverage in this topic, click here. For the Financial Times coverage, click here. If you are interested in more details on the Lamy Plan (the package of elements), a very informative coverage by the ICTSD is here.
