Trade Commentary - October 2007

For every step forward in WTO negotiations, the process often takes two steps back. By the end of September the mood among negotiators appeared positive and it was expected that Ambassador Falconer would be able to begin drafting a revised modality text by the end of October. However, negotiations in October slowed to a crawl and on some issues even moved backwards. Little to no progress was reported on pressing issues pertaining to special products, special safe guards and other market access concerns.

Falconer has stressed to members that precious little time remains to get a deal done before the end of the year and warned that if they don’t come up with compromises on their own, he would be forced to guess what an acceptable agreement might look like. Falconer hopes that this hard lined “take it or leave it” approach to negotiations may motivate members to find convergence on a number of issues. The new “deadline” for a revised modality text has now been delayed to mid November, which could still lead to ministerial meetings sometime in early December.

Even if a deal were to be reached before Christmas it remains highly unlikely that the deal would be quickly approved by member governments. In particular, the mood out of the United States continues to suggest that they currently have no appetite for a new trade deal. Some negotiators argue that a new WTO trade deal will not even be on the US congress agenda until after elections are completed in early 2009.