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Europaudvalget 2005-06, Udvalget for Fødevarer, Landbrug og Fiskeri 2005-06
EUU Alm.del Bilag 66, FLF Alm.del Bilag 138
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JOB(05)/298

26 November 2005

DOHA WORK PROGRAMME

Preparations for the Sixth Session of the Ministerial Conference

Draft Ministerial Text

In line with the procedure set out at the General Council meeting in October and the meetings

of the TNC in September and October, the attached draft text is being presented by the Chairman of

the General Council and the Director-General for Members' consideration, with the following

observations.

It should be emphasized that this draft text does not purport to represent agreement overall,

and it is without prejudice to any delegation's position on any issue. It draws on and incorporates

much work done by the Chairs of the negotiating bodies and other WTO bodies. Their consultations

have in many cases produced inputs for the present draft which are either fully agreed by Members or

reflect a high level of convergence. In other areas, the text reflects a lower level of convergence. In

some areas where important substantive differences persist, this draft attaches a report by the relevant

Chair, on his own responsibility, setting out the present situation as he sees it.

The attached text is a first draft. Any possible revision of it will depend upon further progress

towards convergence among Members, with whom we shall be consulting intensively in the very

limited time remaining before the General Council considers the text it will send to Hong Kong.

In carrying out these further consultations, we shall continue to be guided by the principles of

consensus-building and working in a "bottom-up" way.

We urge Members to approach this draft text in a constructive spirit and with respect for the

positions of others. We will continue to work with you all to facilitate agreement in the short time

ahead of us.

_______________

05-5618

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Draft Ministerial Text

We reaffirm the Declarations and Decisions we adopted at Doha and our full commitment to

give effect to them. We emphasize the central importance of the development dimension in every

aspect of the Doha Work Programme and recommit ourselves to making it a meaningful reality, in

terms both of the results of the negotiations on market access and rule-making and of the specific

development-related issues set out below. We renew our resolve to complete the Doha Work

Programme fully and to conclude the negotiations launched at Doha successfully in 2006.

In pursuance of these objectives, and taking into account the Decision adopted by the General

Council on 1 August 2004, we agree as follows:

Agriculture

negotiations

We reaffirm our commitment to the mandate on agriculture as set out in

paragraph 13 of the Doha Ministerial Declaration and to the Framework adopted by

the General Council on 1 August 2004. We welcome the progress made by the

Special Session of the Committee on Agriculture since 2004, but note that much

remains to be done in order to establish modalities and to conclude the negotiations.

We take note of the report by the Chairman of the Special Session, attached in

Annex A to this document, and agree to intensify work to fulfil the Doha objectives.

In particular, we are resolved to establish modalities no later than [...] and to submit

comprehensive draft Schedules based on these modalities no later than [...].

We recall the Decision adopted by the General Council on 1 August 2004 to

address cotton ambitiously, expeditiously and specifically, within the agriculture

negotiations in relation to all trade-distorting policies affecting the sector in all three

pillars of market access, domestic support and export competition, as specified in the

Doha text and the July 2004 Framework text. We note the work already undertaken

in the Sub-Committee on Cotton and the proposals made with regard to this matter.

We reaffirm our commitment to ensure prioritization of the cotton issue and to

establish modalities which are in full conformity with the terms of the August 2004

Decision.

With regard to the development assistance aspects of cotton, we welcome

the Consultative Framework process initiated by the Director-General to implement

the decisions on these aspects pursuant to paragraph 1.b of the General Council

Decision of 1 August 2004. We take note of his Periodic Reports and the positive

evolution of development assistance noted therein. We urge the Director-General to

further intensify his consultative efforts with bilateral donors and with multilateral

institutions, with emphasis on improved coherence, coordination and enhanced

implementation. We urge the development community to further scale up its cotton-

specific assistance and to support the efforts of the Director-General. We welcome

the domestic reform efforts by the cotton proponents aimed at enhancing

productivity and efficiency, and encourage them to deepen this process. We reaffirm

the complementarity of the trade policy and development assistance aspects of

cotton. We invite the Director-General to furnish a third Periodic Report to our next

Session with updates, at appropriate intervals in the meantime, to the General

Council, while keeping the Sub-Committee on Cotton fully informed of progress.

Cotton

NAMA

negotiations

We reaffirm our commitment to the mandate for negotiations on market

access for non-agricultural products as set out in paragraph 16 of the Doha

Ministerial Declaration and to the Framework adopted by the General Council on

1 August 2004. We welcome the progress made by the Negotiating Group on

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Market Access since 2004, but note that much remains to be done in order to

establish modalities and to conclude the negotiations. We take note of the report by

the Chairman of the Negotiating Group, attached in Annex B to this document, and

agree to intensify work to fulfil the Doha objectives. In particular, we are resolved

to establish modalities no later than [...] and to submit comprehensive draft

Schedules based on these modalities no later than [...].

Services

negotiations

The negotiations on trade in services shall proceed to their conclusion with a

view to promoting the economic growth of all trading partners and the development

of developing and least-developed countries (LDCs), and with due respect for the

right of Members to regulate. In this regard, we recall and reaffirm the objectives

and principles stipulated in the GATS, the Doha Ministerial Declaration, the

Guidelines and Procedures for the Negotiations on Trade in Services adopted by the

Special Session of the Council for Trade in Services on 28 March 2001, as well as

Annex C of the Decision adopted by the General Council on 1 August 2004.

We urge all Members to participate actively in these negotiations towards

achieving a progressively higher level of liberalization of trade in services, with

appropriate flexibility for individual developing countries as provided for in Article

XIX of the GATS. Negotiations shall have regard to the size of economies of

individual Members. We recognize the particular economic situation of LDCs,

including the difficulties they face, and acknowledge that they are not expected to

undertake new commitments. We recognize the special situation of recently-

acceded Members who have undertaken extensive market access commitments at the

time of accession. This situation will be taken into account in the negotiations.

We are determined to intensify the negotiations in accordance with the

above principles and the Objectives, Approaches and Timelines set out in Annex C

to this document with a view to expanding the sectoral and modal coverage of

commitments and improving their quality. In this regard, particular attention will be

given to sectors and modes of supply of export interest to developing countries.

Rules

negotiations

10.

We recall the mandates in paragraphs 28 and 29 of the Doha Ministerial

Declaration and reaffirm our commitment to the negotiations on rules, as we set

forth in Annex D to this document.

11.

We take note of the report of the Chairman of the Special Session of the

Council for TRIPS setting out the progress in the negotiations on the establishment

of a multilateral system of notification and registration of geographical indications

for wines and spirits, as mandated in Article 23.4 of the TRIPS Agreement and

paragraph 18 of the Doha Ministerial Declaration, contained in document TN/IP/14,

and agree to intensify these negotiations in order to complete them within the overall

time-frame for the conclusion of the negotiations that were foreseen in the Doha

Ministerial Declaration.

12.

We reaffirm the mandate in paragraph 31 of the Doha Ministerial

Declaration aimed at enhancing the mutual supportiveness of trade and environment

and welcome the significant work undertaken in the Committee on Trade and

Environment (CTE) in Special Session. We instruct Members to intensify the

negotiations, without prejudging their outcome, on all parts of paragraph 31 to fulfil

the mandate.

13.

We recognize the progress in the work under paragraph 31(i) based on

Members' submissions on the relationship between existing WTO rules and specific

TRIPS

negotiations

Environment

negotiations

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trade obligations set out in multilateral environmental agreements (MEAs). We

further recognize the work undertaken under paragraph 31(ii) towards developing

effective procedures for regular information exchange between MEA Secretariats

and the relevant WTO committees, and criteria for the granting of observer status.

14.

We recognize that recently more work has been carried out under paragraph

31(iii) through numerous submissions by Members and discussions in the CTE in

Special Session, including technical discussions, which were also held in informal

information exchange sessions without prejudice to Members' positions. We instruct

Members to [continue the work under paragraph 31(iii) by developing a common

understanding of the different approaches to the negotiations with the objective of

reducing or, as appropriate, eliminating tariff and non tariff barriers to environmental

goods and services, in a manner that enhances the mutual supportiveness of trade

and environment and takes fully into account the interests of developing-country

Members] [complete by [...] 2006 the work under paragraph 31(iii) by identifying

environmental goods for the reduction or, as appropriate, elimination of tariff and

non tariff barriers in this area].

Trade

Facilitation

negotiations

15.

We recall and reaffirm the mandate and modalities for negotiations on Trade

Facilitation contained in Annex D of the Decision adopted by the General Council

on 1 August 2004. We note with appreciation the report of the Negotiating Group,

attached in Annex E to this document, and the comments made by our delegations

on that report as reflected in document TN/TF/M/11.

We endorse the

recommendations contained in paragraphs 3, 4, 5, 6 and 7 of the report.

16.

We take note of the progress made in the Dispute Settlement Understanding

negotiations as reflected in the report by the Chairman of the Special Session of the

Dispute Settlement Body to the Trade Negotiations Committee (TNC) and direct the

Special Session to continue to work towards a rapid conclusion of the negotiations.

17.

We reaffirm that provisions for special and differential (S&D) treatment are

an integral part of the WTO Agreements. We renew our determination to fulfil the

mandate contained in paragraph 44 of the Doha Ministerial Declaration and in the

1 August 2004 Decision of the General Council, that all S&D treatment provisions

be reviewed with a view to strengthening them and making them more precise,

effective and operational.

18.

We take note of the work done on the Agreement-specific proposals,

especially the five LDC proposals. [We agree to adopt the decisions contained in

Annex F to this document]. However, we also recognise that substantial work still

remains to be done. We commit ourselves to address the development interests and

concerns of developing countries, especially the LDCs, in the multilateral trading

system, and we recommit ourselves to complete the task we set ourselves at Doha.

We accordingly instruct the Committee on Trade and Development in Special

Session to expeditiously complete the review of all the outstanding Agreement-

specific proposals [,with priority on the LDC proposals,] and report to the General

Council, with clear recommendations for a decision, by [...].

19.

We are concerned at the lack of progress on the Category II proposals that

had been referred to other WTO bodies and negotiating groups. We instruct these

bodies to expeditiously complete the consideration of these proposals and report

periodically to the General Council, with the objective of ensuring that clear

recommendations for a decision are made no later than [...]. We also instruct the

Special Session to continue to coordinate its efforts with these bodies, so as to ensure

DSU

negotiations

S&D treatment

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that this work is completed on time.

20.

We further instruct the Special Session, within the parameters of the Doha

mandate, to resume work on all other outstanding issues, including on the cross-

cutting issues, the monitoring mechanism, and the incorporation of S&D treatment

into the architecture of WTO rules, and report on a regular basis to the General

Council.

Implementation

21.

We reiterate the instruction in the General Council Decision of 1 August

2004 to the TNC, negotiating bodies and other WTO bodies concerned to redouble

their efforts to find appropriate solutions as a priority to outstanding implementation-

related issues. We take note of the work undertaken by the Director-General in his

consultative process on all outstanding implementation issues under paragraph 12(b)

of the Doha Ministerial Declaration, including on issues related to the extension of

the protection of geographical indications provided for in Article 23 of the TRIPS

Agreement to products other than wines and spirits and those related to the

relationship between the TRIPS Agreement and the Convention on Biological

Diversity. We request the Director-General, without prejudice to the positions of

Members, to continue with his consultative process on all outstanding

implementation issues under paragraph 12(b), if need be by appointing Chairpersons

of concerned WTO bodies as his Friends and/or by holding dedicated consultations.

The Director-General shall report to each regular meeting of the TNC and the

General Council. The Council shall review progress and take any appropriate action

no later than [...].

22.

[Text

to be inserted following meeting of TRIPS Council on 29 November]

TRIPS &

Public Health

Small

Economies

23.

We reaffirm our commitment to the Work Programme on Small Economies

and urge Members to adopt specific measures that would facilitate the fuller

integration of small, vulnerable economies into the multilateral trading system,

without creating a sub-category of WTO Members. We take note of the report of the

Committee on Trade and Development in Dedicated Session on the Work

Programme on Small Economies to the General Council and agree to the

recommendations on future work. We instruct the Committee on Trade and

Development, under the overall responsibility of the General Council, to continue

the work in the Dedicated Session and to monitor progress of the small economies'

proposals in the negotiating and other bodies, with the aim of providing responses to

the trade-related issues of small economies as soon as possible but no later than

[31 December 2006]. We instruct the General Council to report on progress and

action taken, together with any further recommendations as appropriate, to our next

Session.

24.

We take note of the report transmitted by the General Council on the work

undertaken and progress made in the examination of the relationship between trade,

debt and finance and on the consideration of any possible recommendations on steps

that might be taken within the mandate and competence of the WTO as provided in

paragraph 36 of the Doha Ministerial Declaration and agree that, building on the

work carried out to date, this work shall continue on the basis of the Doha mandate.

We instruct the General Council to report further to our next Session.

25.

We take note of the report transmitted by the General Council on the work

undertaken and progress made in the examination of the relationship between trade

and transfer of technology and on the consideration of any possible

Trade, Debt &

Finance

Trade &

Transfer of

Technology

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recommendations on steps that might be taken within the mandate of the WTO to

increase flows of technology to developing countries. Recognizing the relevance of

the relationship between trade and transfer of technology to the development

dimension of the Doha Work Programme and building on the work carried out to

date, we agree that this work shall continue on the basis of the mandate contained in

paragraph 37 of the Doha Ministerial Declaration. We instruct the General Council

to report further to our next Session.

TRIPS non-

violation and

situation

complaints

26.

We take note of the work done by the Council for Trade-Related Aspects of

Intellectual Property Rights pursuant to paragraph 11.1 of the Doha Decision on

Implementation-Related Issues and Concerns and paragraph 1.h of the General

Council Decision of 1 August 2004, and [direct it to continue its examination of the

scope and modalities for complaints of the types provided for under subparagraphs

1(b) and 1(c) of Article XXIII of GATT 1994 and make recommendations to our

next Session. It is agreed that, in the meantime, Members will not initiate such

complaints under the TRIPS Agreement].

27.

We take note of the reports from the General Council and subsidiary bodies

on the Work Programme on Electronic Commerce, and that the examination of

issues under the Work Programme is not yet complete. We [agree to reinvigorate

that work, including the development-related issues under the Work Programme and

discussions on the trade treatment,

inter alia,

of electronically delivered software.

We agree to maintain the current institutional arrangements for the Work

Programme. We declare that Members will maintain their current practice of not

imposing customs duties on electronic transmissions until our next Session].

28.

We reaffirm our commitment to effectively and meaningfully integrate

LDCs into the multilateral trading system and shall continue to implement the WTO

Work Programme for LDCs adopted in February 2002. We acknowledge the

seriousness of the concerns and interests of the LDCs in the negotiations as

expressed in the Livingstone Declaration, adopted by their Ministers in June 2005.

We take note that issues of interest to LDCs are being addressed in all areas of

negotiations and we welcome the progress made since the Doha Ministerial

Declaration as reflected in the Decision adopted by the General Council on 1 August

2004. Building upon our commitment in the Doha Ministerial Declaration, we agree

to fully implement duty-free and quota-free market access for products originating

from LDCs by the end of the Round in a manner that ensures security and

predictability. Furthermore, in accordance with our commitment in the Doha

Ministerial Declaration, Members shall take additional measures to provide effective

market access, both at the border and otherwise, including simplified and transparent

rules of origin so as to facilitate exports from LDCs. In the services negotiations,

Members shall implement the LDC modalities and give priority to the sectors and

modes of supply of export interest to LDCs, particularly with regard to movement of

service providers under Mode 4. We agree to facilitate and accelerate negotiations

with acceding LDCs based on the accession guidelines adopted by the General

Council in December 2002. We commit to continue giving our attention and priority

to concluding the ongoing accession proceedings as rapidly as possible. [We

welcome the decision by the TRIPS Council to extend the transition period under

Article 66.1 of the TRIPS Agreement.] We reaffirm our commitment to enhance

effective trade-related technical assistance and capacity building to LDCs on a

priority basis in helping to overcome their limited human and institutional trade-

related capacity to enable LDCs to maximise the benefits resulting from the Doha

Development Agenda (DDA).

E-commerce

LDCs

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Integrated

Framework

29.

We continue to attach high priority to the effective implementation of the

Integrated Framework (IF) and reiterate our endorsement of the IF as a viable

instrument for LDCs' trade development, building on its principles of country

ownership and partnership. We reaffirm our commitment made at Doha, and

recognize the urgent need to make the IF more effective and timely in addressing the

trade-related development needs of LDCs. We highlight the importance of

contributing to reducing their supply side constraints.

30.

In this regard, we are encouraged by the endorsement by the Development

Committee of the World Bank and International Monetary Fund (IMF) at its autumn

2005 meeting of an enhanced IF. We welcome the establishment of a Task Force by

the Integrated Framework Working Group as endorsed by the IF Steering Committee

(IFSC) as well as an agreement on the three elements which together constitute an

enhanced IF. The Task Force, composed of donor and LDC members, will provide

recommendations to the IFSC by April 2006. The enhanced IF shall enter into force

no later than 31 December 2006.

31.

We agree that the Task Force, in line with its Mandate and based on the

three elements agreed to, shall provide recommendations on how the implementation

of the IF can be improved,

inter alia,

by considering ways to:

1. provide increased, predictable, and additional funding on a multi-year basis;

2. strengthen the IF in-country, including through mainstreaming trade into

national development plans and poverty reduction strategies; more effective

follow-up to diagnostic trade integration studies and implementation of

action matrices; and achieving greater and more effective co-ordination

amongst donors and IF stakeholders, including beneficiaries;

3. improve the IF decision-making and management structure to ensure an

effective and timely delivery of the increased financial resources and

programmes.

32.

We welcome the increased commitment already expressed by some

Members in the run-up to, and during, this Session. We urge other development

partners to significantly increase their contribution to the IF Trust Fund. We also

urge the six IF core agencies to continue to cooperate closely in the implementation

of the IF, to increase their investments in this initiative and to intensify their

assistance in trade-related infrastructure, private sector development and institution

building to help LDCs expand and diversify their export base.

Technical

Cooperation

33.

We note with satisfaction the substantial increase in trade-related technical

assistance since our Fourth Session, which reflects the enhanced commitment of

Members to address the increased demand for technical assistance, through both

bilateral and multilateral programmes. We note the progress made in the current

approach to planning and implementation of WTO's programmes, as embodied in

the Technical Assistance and Training Plans adopted by Members, as well as the

improved quality of those programmes. We note that a strategic review of WTO's

technical assistance is to be carried out by Members, and expect that in future

planning and implementation of training and technical assistance, the conclusions

and recommendations of the review will be taken into account, as appropriate.

34.

We reaffirm the priorities established in paragraph 38 of the Doha

Ministerial Declaration for the delivery of technical assistance and urge the Director-

General to ensure that programmes focus accordingly on the needs of beneficiary

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countries and reflect the priorities and mandates adopted by Members. We endorse

the application of appropriate needs assessment mechanisms and support the efforts

to enhance ownership by beneficiaries, in order to ensure the sustainability of trade-

related capacity building. We invite the Director-General to reinforce the

partnerships and coordination with other agencies and regional bodies in the design

and implementation of technical assistance programmes, so that all dimensions of

trade-related capacity building are addressed, in a manner coherent with the

programmes of other providers. In order to continue progress in the effective and

timely delivery of trade-related capacity building, in line with the priority Members

attach to it, the relevant structures of the Secretariat should be strengthened and its

resources enhanced. We reaffirm our commitment to ensure secure and adequate

levels of funding for trade-related capacity building, including in the Doha

Development Agenda Global Trust Fund, to conclude the Doha Work Programme

and implement its results.

Commodity

Issues

35.

We recognize the dependence of several developing and least-developed

countries on the export of commodities and the problems they face because of the

adverse impact of the long-term decline and sharp fluctuation in the prices of these

commodities. We take note of the work undertaken in the Committee on Trade and

Development on commodity issues, and instruct the Committee, within its mandate,

to intensify its work in cooperation with other relevant international organizations

and report regularly to the General Council with possible recommendations. We

agree that the particular trade-related concerns of developing and least-developed

countries related to commodities shall also be addressed in the course of the

agriculture and NAMA negotiations. We further acknowledge that these countries

may need support and technical assistance to overcome the particular problems they

face, and urge Members and relevant international organizations to consider

favourably requests by these countries for support and assistance.

36.

A successful conclusion to the Doha Round, particularly in areas of interest

to developing countries and LDCs, will allow the multilateral trading system to

make a further, substantial contribution to greater coherence in international

economic policy-making with the aim,

inter alia,

of promoting stronger growth and

sustainable development.

For developing countries and LDCs, rules-based

multilateral trade liberalisation is a crucial complement to international financial

initiatives – increased Official Development Assistance and debt relief – that have

advanced this year. We welcome the Director-General's actions to strengthen the

WTO's cooperation with the IMF and the World Bank in the context of the WTO's

Marrakesh mandate on Coherence, and invite him to continue to work closely with

the General Council in this area. We value the General Council meetings that are

held with the participation of the heads of the IMF and the World Bank to advance

our Coherence mandate. We agree to continue building on that experience and

expand the debate on international trade and development policymaking and inter-

agency cooperation with the participation of relevant UN agencies. In that regard,

we note the discussions taking place in the Working Group on Trade, Debt and

Finance on,

inter alia,

the issue of Coherence, and look forward to any possible

recommendations it may make on steps that might be taken within the mandate and

competence of the WTO on this issue.

37.

We welcome the discussions of Finance and Development Ministers in

various fora, including the IMF and the World Bank Development Committee, that

have taken place this year on expanding Aid for Trade. Aid for Trade should aim to

help developing countries, particularly LDCs, to build the supply-side capacity and

trade-related infrastructure that they need to assist them to implement and benefit

Coherence

Aid for Trade

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from WTO Agreements and more broadly to expand their trade. Aid for Trade

cannot be a substitute for the development benefits that will result from an ambitious

conclusion to the DDA, particularly on market access. However, it can be a valuable

complement to the DDA. We invite the General Council to convene a meeting

before July 2006 dedicated to considering how Aid for Trade might contribute most

effectively to a successful and ambitious conclusion to the DDA. We also invite the

Director-General to consult with Members as well as with the IMF and World Bank,

relevant international organisations and the regional development banks with a view

to reporting to the General Council on appropriate mechanisms to secure additional

financial resources for Aid for Trade, where appropriate on concessional terms.

Accessions

38.

We reaffirm our strong commitment to making the WTO truly global in

scope and membership. We welcome those new Members who have completed their

accession processes since our last Session, namely Nepal, Cambodia and Saudi

Arabia. [We note with satisfaction that Tonga has completed its accession

negotiations to the WTO]. These accessions further strengthen the rules-based

multilateral trading system. We continue to attach priority to the [30] ongoing

accessions with a view to concluding them as rapidly and smoothly as possible. We

stress the importance of facilitating and accelerating the accession negotiations of

least-developed countries, taking due account of the guidelines on LDC accession

adopted by the General Council in December 2002.

_______________

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Page A-1

Annex A

Agriculture

Report by the Chairman of the Special Session of the Committee on Agriculture to the TNC

The present report has been prepared on my own responsibility. I have done so in response to

the direction of Members as expressed at the informal Special Session of the Committee on

Agriculture on 11 November 2005. At that meeting, following the informal Heads of Delegation

meeting the preceding day, Members made it crystal clear that they sought from me at this point an

objective factual summary of where the negotiations have reached at this time. It was clear from that

meeting that Members did not expect or desire anything that purported to be more than that. In

particular, it was clear that, following the decision at the Heads of Delegation meeting that full

modalities will not be achieved at Hong Kong, Members did not want anything that suggested implicit

or explicit agreement where it did not exist.

This is not, of course, the kind of paper that I would have chosen or preferred to have

prepared at this point. Ideally, my task should have been to work with Members to generate a draft

text of modalities. But this text reflects the reality of the present situation. There will be – because

there must be if we are to conclude these negotiations – such a draft text in the future. I look at this

now as a task postponed, but the precise timing of this is in the hands of Members.

As for this paper, it is precisely what it is described to be. No more, no less. It is the

Chairman's report and, as such, it goes from me to the TNC. It is not anything more than my personal

report – in particular, it is not in any sense an agreed text of Members. It does not, therefore, in any

way prejudge or prejudice the positions of Members on any matter within it or outside of it. And, it

certainly does not bind Members in any way. It should go without saying that the agreed basis of our

work is, and shall remain, the Doha Mandate itself and the July 2004 Framework on Agriculture.

As to the character of the paper, I have endeavoured to reflect what I discerned as the wishes

of Members when they directed me to prepare this paper. I have tried to capture as clearly as I can

such conditional progress and convergence as has developed in the post-July 2004 period. In doing

so, I have not tried to brush under the carpet divergences that remain, and the paper tries to be just as

clear on those points. Of course, it is a summary report. As such, it cannot – and does not –

recapitulate each and every detail on each and every issue. But I took from Members' comments that

they would prefer a paper which could 'orient' further discussion.

In that regard, I hope that anyone reading this paper would be able to get a pretty clear idea of

what it is that remains to be done. Members made it clear that it was not my task as Chair to prescribe

what is to be done next in a programmatic way. My task was to register where we are now, but I

confess to having done so with an eye to genuinely clarifying where key convergences exist or key

divergences remain, rather than obscuring or overcomplicating matters.

My own sense, when I review this myself, is the compelling urgency of seizing the moment

and driving the process to a conclusion as rapidly as possible. We have made – particularly since

August of this year – genuine and material progress. Indeed, it has come at a relatively rapid pace. It

is also clear to me that it has been the product of a genuinely negotiating process. In other words, it

has been a case of making proposals and counterproposals. That is why the matters covered in this

report have an essentially conditional character. As I see it, the reality is that we have yet to find that

last bridge to agreement that we need to secure modalities. But it would be a grave error, in my view,

to imagine that we can take much time to find that bridge. As Chair, I am convinced that we must

maintain momentum. You don't close divergences by taking time off to have a cup of tea. If you do

so, you will find that everyone has moved backwards in the meantime. That, it seems to me, is a

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profound risk to our process. I would like to believe that this report at least underlines to us that there

is indeed something real and important still within our grasp and we ought not to risk losing it. Our

over-riding challenge and responsibility is to meet the development objective of the Doha

Development Agenda. To meet this challenge and achieve this goal, we must act decisively and with

real urgency.

The future life of this paper, if any, is a matter entirely in the hands of TNC Members to

decide. This, as I see it, is the proper safeguard of the integrity of what has come to be described as a

"bottom-up" process.

DOMESTIC SUPPORT

basis.

There has been very considerable potential convergence, albeit on a manifestly conditional

Overall Cut

There is a working hypothesis of three bands for overall cuts by developed countries.

There is a strongly convergent working hypothesis that the thresholds for the three bands

be US$ billion 0-10; 10-60; >60. On this basis, the European Communities would be in

the top band, the United States and Japan in the second band, and all other developed

countries at least in the third band. For developing countries, there is a view that either

developing countries are assigned to the relevant integrated band (the bottom) or that

there is a separate band for them.

Based on post-July 2005 proposals, there has been an undeniably significant convergence

on the range of cuts. Of course, this has been conditional. But subject to that feature, a

great deal of progress has been made since the bare bones of the July 2004 Framework.

The following matrix provides a snapshot:

Bands

De Minimis

On product-specific

de minimis

and non-product-specific

de minimis,

there is a zone of

engagement for cuts between 50% and 80% for developed countries.

As regards developing countries, there are still divergences to be bridged. In addition to

the exemption specifically provided for in the Framework, there is a view that, for all

developing countries, there should be no cut in

de minimis

at all. Alternatively, at least

for those with no AMS, there should be no cut and, in any case, any cut for those with an

AMS should be less than 2/3 of the cut for developed countries.

Thresholds (US$ billion)

0-10

10-60

> 60

Cuts

31%-70%

53%-75%

70%-80%

Blue Box

There is important and significant convergence on moving beyond (i.e. further constraining)

Blue Box programme payments envisaged in the July 2004 Framework. However, the technique for

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achieving this remains to be determined. One proposal is to shrink the current 5% ceiling to 2.5%.

Another proposal rejects this in favour of additional criteria disciplining the so-called "new" Blue Box

only. Others favour a combination of both, including additional disciplines on the "old" Blue Box.

AMS

There is a working hypothesis of three bands for developed countries.

There is close (but not full) convergence on the thresholds for those bands. There

appears to be convergence that the top tier should be US$25 billion and above. There is

some remaining divergence over the ceiling for the bottom band: between US$12 billion

and 15 billion.

There has been an undeniably significant convergence on the range of cuts. Of course,

this has been conditional. But, that understood, a great deal of progress has been made

since the bare bones of the July 2004 Framework. The following matrix

iii

provides a

snapshot:

Bands

Thresholds (US$ billion)

0-12/15

12/15-25

>25

Cuts

37-60%

60-70%

70-83%

There is therefore working hypothesis agreement that the European Communities should

be in the top tier, and the United States in the second tier. However, while the basis for

Japan's placement as between these two tiers has been narrowed, it remains to be finally

resolved.

For developed countries in the bottom band, with a relatively high level of AMS relative

to total value of agriculture production, there is emerging consensus that their band-

related reduction should be complemented with an additional effort.

What is needed now is a further step to bridge the remaining gap in positions –

particularly as regards the United States and the European Communities, it being

understood that this is not a matter to be resolved in isolation from the other elements in

this pillar and beyond.

On the base period for product-specific caps, certain proposals (such as for 1995-2000

and 1999-2001) are on the table. This needs to be resolved appropriately, including the

manner in which special and differential treatment should be applied.

Green Box

10.

The review and clarification commitment has not resulted in any discernible convergence on

operational outcomes. There is, on the one side, a firm rejection of anything that is seen as departing

from the existing disciplines while there is, on the other, an enduring sense that more could be done to

review the Green Box without undermining ongoing reform. Beyond that there is, however, some

tangible openness to finding appropriate ways to ensure that the Green Box is more "development

friendly" i.e. better tailored to meet the realities of developing country agriculture but in a way that

respects the fundamental requirement of at most minimal trade distortion.

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EXPORT COMPETITION

End Date

11.

While concrete proposals

have been made on the issue of an end date for elimination of all

forms of export subsidies, there is at this stage no convergence. There are suggestions for the

principle of front-loading or accelerated elimination for specific products, including particularly

cotton.

Export Credits

12.

Convergence has been achieved on a number of elements of disciplines with respect to export

credits, export credit guarantee or insurance programmes with repayment periods of 180 days and

below. However, a number of critical issues remain.

Exporting State Trading Enterprises

13.

There has been material convergence on rules to address trade-distorting practices identified

in the July 2004 Framework text, although there are still major differences regarding the scope of

practices to be covered by the new disciplines. Fundamentally opposing positions remain, however,

on the issue of the future use of monopoly powers. There have been concrete drafting proposals on

such matters as definition of entities and practices to be addressed as well as transparency. But there

has been no genuine convergence in such areas.

Food Aid

14.

There is consensus among Members that the WTO shall not stand in the way of the provision

of genuine food aid. There is also consensus that what is to be eliminated is commercial displacement.

There have been detailed and intensive discussions, some of which have even been text-based, but not

to a point where a consolidated draft text could be developed. This has been precluded by Members

clinging to fundamentally disparate conceptual premises. There are proposals that in the disciplines a

distinction should be made between at least two types of food aid: emergency food aid and food aid to

address other situations. However, there is not yet a common understanding where emergency food

aid ends and other food aid begins, reflecting concerns that this distinction should not become a

means to create a loophole in disciplines. A fundamental sticking point is whether, except in

exceptional, genuine emergency situations, Members should (albeit gradually) move towards untied,

in-cash food aid only, as some Members propose but other Members strongly oppose.

Special and Differential Treatment

15.

Framework provisions for special and differential treatment, including with respect to the

monopoly status of state trading enterprises in developing countries and an extended lifetime for

Article 9.4, have been uncontroversial, but details remain to be established.

Special Circumstances

16.

Work on the criteria and consultation procedures to govern any ad hoc temporary financing

arrangements relating to exports to developing countries in exceptional circumstances is not much

developed.

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MARKET ACCESS

Tiered Formula

We have progressed on

ad valorem

equivalents.

vii

This has successfully created a basis

for allocating items into bands for the tiered formula.

We have a working hypothesis of four bands for structuring tariff cuts.

There has been very considerable convergence on adopting a linear-based approach for

cuts within those bands. Members have, of course, by no means formally abandoned

positions that are even more divergent.

viii

We need now to narrow the extent of

divergence that remains. This will include whether or not to include any "pivot" in any

band.

Members have made strong efforts to promote convergence on the size of actual cuts to

be undertaken within those bands. But, even though genuine efforts have been made to

move from formal positions (which of course remain), major gaps are yet to be bridged.

Somewhat greater convergence has been achieved as regards the thresholds for the bands.

Substantial movement is clearly essential to progress.

Some Members continue to reject completely the concept of a tariff cap. Others have

proposed

a cap between 75-100%.

Sensitive Products

Members have been prepared to make concrete - albeit conditional - proposals on the

number of sensitive products. But, in a situation where proposals extend from as little as

1% to as much as 15% of tariff lines, further bridging this difference is essential to

progress.

The fundamental divergence over the basic approach to treatment of sensitive products

needs to be resolved.

Beyond that, there needs to be convergence on the consequential

extent of liberalisation for such products.

Special and Differential Treatment

Just as for developed countries, there is a working hypothesis of four bands for

developing countries. There is no disagreement on lesser cuts within the bands. A

certain body of opinion is open to considering cuts of two-thirds of the amount of the

cuts for developed countries as a plausible zone in which to search more intensively for

convergence.

xii

But significant disagreement on that remains, and divergence is, if

anything, somewhat more marked on the connected issue of higher thresholds for

developing countries.

xiii

Some Members continue to reject completely the concept of a tariff cap for developing

countries. Others have proposed

xiv

a cap at 150%.

For sensitive products, there is no disagreement that there should be greater flexibility for

developing countries, but the extent of this needs to be further defined.

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Special Products

Regarding

designation

of special products, there has been a clear divergence between

those Members which consider that, prior to establishment of schedules, a list of non-

exhaustive and illustrative criteria-based indicators should be established and those

Members which are looking for a list which would act as a filter or screen for the

selection of such products. Latterly, it has been proposed (but not yet discussed with

Members as a whole) that a developing country Member should have the right to

designate at least 20 per cent of its agricultural tariff lines as Special Products, and be

further entitled to designate an SP where, for that product, an AMS has been notified and

exports have taken place. This issue needs to be resolved as part of modalities so that

there is assurance of the basis upon which Members may designate special products.

Some moves toward convergence on

treatment

of Special Products have been made

recently. Some Members had considered that special products should be fully exempt

from any new market access commitments whatsoever and have automatic access to the

SSM. Others had argued there should be some degree of market opening for these

products, albeit reflecting more flexible treatment than for other products. In the

presence of this fundamental divergence, it had clearly been impossible to undertake any

definition of what such flexibility would be. Genuine convergence is obviously urgently

needed. There is now a new proposal for a tripartite categorization of Special Products

involving limited tariff cuts for at least a proportion of such products which remains to

be fully discussed. It remains to be seen whether this discussion can help move us

forward.

Special Safeguard Mechanism

There is agreement that there would be a special safeguard mechanism and that it should

be tailored to the particular circumstances and needs of developing countries. There is

no material disagreement with the view that it should have a quantity trigger. Nor is

there disagreement with the view that it should at least be capable of addressing

effectively what might be described as import "surges". Divergence remains over

whether, or if so how, situations that are lesser than "surge" are to be dealt with. There

is, however, agreement that any remedy should be of a temporary nature. There remains

strong divergence however on whether, or if so how, a special safeguard should be

"price-based" to deal specifically with price effects.

There is some discernible openness, albeit at varying levels, to at least consider coverage

of products that are likely to undergo significant liberalisation effects, and/or are already

bound at low levels and/or are special products. Beyond that, however, there remains a

fundamental divergence between those considering all products should be eligible for

such a mechanism and those opposing such a blanket approach.

Other Elements

17.

There has been no further material convergence on the matters covered by paragraphs 35 and

37 of the July 2004 Framework text. The same may be said for paragraph 36 on tariff escalation,

albeit that there is full agreement on the need for this to be done, and a genuine recognition of the

particular importance of this for commodities exporters. Certain concrete proposals have been made

on paragraph 38 (SSG) and met with opposition from some Members.

18.

Concrete proposals have been made and discussed on how to implement paragraph 43 of the

July 2004 Framework on tropical and diversification products. But there remains divergence over the

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precise interpretation of this section of the July Framework

xvi

and no common approach has been

established.

19.

The importance of long-standing preferences pursuant to paragraph 44 of the July 2004

Framework is fully recognised and concrete proposals regarding preference erosion have been made

and discussed.

xvii

There seems not to be inherent difficulty with a role for capacity building.

However, while there is some degree of support for e.g. longer implementation periods for at least

certain products in order to facilitate adjustment, there is far from convergence on even this. Some

argue it is not sufficient or certainly not in all cases, while others that it is not warranted at all.

LEAST-DEVELOPED COUNTRIES

20.

There is no questioning of the terms of paragraph 45 of the July Framework agreement, which

exempts least-developed countries from any reduction requirement. The stipulation that "developed

Members, and developing country Members in a position to do so, should provide duty-free and

quota-free market access for products originating from least-developed countries" is not at this point

concretely operational for all Members. At this stage, several Members have made undertakings.

Proposals for this to be bound remain on the table.

xviii

COTTON

21.

While there is genuine recognition of the problem to be addressed and concrete proposals

have been made, Members remain at this point short of concrete and specific achievement that would

be needed to meet the July Framework direction to address this matter ambitiously, expeditiously and

specifically. There is no disagreement with the view that all forms of export subsidies are to be

eliminated for cotton although the timing and speed remains to be specified. Proposals to eliminate

them immediately or from day one of the implementation period are not at this point shared by all

Members. In the case of trade distorting support, proponents seek full elimination with "front-loaded"

implementation.

xix

There is a view that the extent to which this can occur, and its timing, can only be

determined in the context of an overall agreement. Another view is that there could be at least

substantial and front-loaded reduction on cotton specifically from day one of implementation, with the

major implementation achieved within twelve months, and the remainder to be completed within a

period shorter than the overall implementation period for agriculture.

RECENTLY-ACCEDED MEMBERS

22.

Concrete proposals have been made and discussed, but no specific flexibility provisions have

commanded consensus.

MONITORING AND SURVEILLANCE

23.

A proposal has been made but there is no material advance at this point.

OTHER ISSUES

24.

On paragraph 49 (sectoral initiatives, differential export taxes, GIs) certain positions and

proposals have been tabled and/or referred to. They are issues that remain of interest but not agreed.

25.

At this point, proposals on paragraph 50 have not advanced materially.

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26.

In the case of small and vulnerable economies, a concrete proposal has been made recently. It

has not yet been subject to consultation.

27.

There is openness to the particular concerns of commodity-dependent developing and least-

developed countries facing long-term decline and/or sharp fluctuations in prices. There is, at this

point (where, overall, precise modalities are still pending), support for the view that such modalities

should eventually be capable of addressing effectively key areas for them.

xxi

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Notes

On the proposed basis that cut remains to be determined for those developing countries with an AMS.

In any case, there is a view (not shared by all) that cuts for developing countries should be less than 2/3 of the

cut for developed countries.

The exact extent of the flexibility to be provided pursuant to paragraph 15 of the July 2004

Framework remains to be agreed.

Of course, this needs to be viewed as illustrative rather than overly literally, if for no other reason

than that these are conditional figures. For instance, while the European Communities has indicated it could be

prepared to go as far as 70% in the top tier, they make it clear that this is acceptable only if the United States

will go to 60% in the second tier. The United States for its part, however, has only indicated preparedness to go

to that 60% if the European Communities is prepared to go as high as 83% - which it has not indicated it is

prepared to do.

One Member has proposed the year 2010 for "export subsidies", with accelerated elimination for

"specific" products. Another group of Members have proposed a period "no longer than five years" for all

forms of export subsidies, with "direct" export subsidies subject to front-loading within that period.

This includes, but is not limited to: exemptions, if any, to the 180 day rule; whether the disciplines

should allow for pure cover only or also permit direct financing; the appropriate period for programmes to fully

recover their costs and losses through the premia levied from the exporters (principle of self-financing - there

needs to be convergence between position which range from one year to fifteen years); the disciplines regarding

special circumstances; and the question of special and differential treatment, including whether, as some

Members argue, developing countries should be allowed longer repayment terms for export credits extended by

them to other developing countries and the specifics of differential treatment in favour of least-developed and

net food-importing developing countries.

This fundamental divergence has effectively precluded convergence on such matters as what

disciplines, if any, should be established with respect to monetization of food aid or the question of the

provision of food aid in fully grant form only. The importance of operationally effective transparency

requirements is generally acknowledged, but details have still to be developed, particularly those relating to the

role of the WTO in this context. Further work is required to clarify the role of recipient countries and relevant

international organizations or other entities in triggering or providing food aid.

vii

viii

iii

The method for calculating the AVEs for the sugar lines is still to be established.

At one end of the spectrum, as it were, a "harmonisation" formula within the bands; at the other end

"flexibility" within the formula.

The matrix below is an illustrative table that portrays the extent of divergences that remain, even on

the basis of post-August 2005 proposals. This does not entirely cover all the subtleties of those proposals to

utilize a "pivot" (although most are in fact within the ranges tabulated), but is intended to convey a snapshot of

the status of average cuts proposed post-August.

Thresholds

Band 1

Band 2

Band 3

Band 4

0% - 20/30%

20/30% - 40/60%

40/60% - 60/90%

>60/90%

Range of cuts (%)

20-65

30-75

35-85

42-90

As an element in certain conditional proposals on overall market access, tabled post-July 2005.

Some see this as being tariff quota based and expressed as a percentage of domestic consumption,

with proposals of up to 10%. Others propose

pro rata

expansion on an existing trade basis, including taking

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account of current imports. Some also propose no new TRQs, with sensitivity in such cases to be provided

through other means, e.g. differential phasing. There is also a proposal for a "sliding scale" approach.

In this pillar, as well as in the other two, there is general convergence on the point that developing

countries will have entitlement to longer implementation periods, albeit that concrete precision remains to be

determined.

The matrix below is an illustrative table that portrays the extent of divergences that remain, just on

the basis of post-August 2005 proposals.

Thresholds

Band 1

Band 2

Band 3

Band 4

0% - 20/50%

20/50% - 40/100%

40/100% - 60/150%

>60-150%

Range of cuts (%)

15-25*

20-30*

25-35*

30-40*

xiii

xii

*There is also a proposal that cuts for developing countries should be "slightly lesser" than the upper tariff cuts

for developed countries shown in the preceding table (i.e.: "slightly lesser" than 65, 75, 85 and 90%).

xiv

As an element in certain conditional proposals on overall market access, tabled post-July 2005.

While the eventual zone of convergence for developed countries undoubtedly has a bearing in this

area, it has been proposed by a group of Members that the principles of sensitive products generally and for

TRQs specifically should be different for developing countries. Another group of Members has proposed, in the

post-August period, an entitlement for developing countries of at least 50% more than the maximum number of

lines used by any developed Member. This would (based on developed country proposals) amount to a potential

variation between 1.5% and 22.5% of tariff lines. This latter group has also proposed that products relating to

long-standing preferences shall be designated as sensitive and that any TRQ expansion should not be "at the

detriment of existing ACP quotas". This particular view has been, however, strongly opposed by other Members

which take the firm position that tropical and diversification products should not at all be designated as sensitive

products.

It is argued by some Members that this is to be interpreted as meaning full duty- and tariff quota-free

access, but by others as less than that.

xvii

xviii

xvi

Note 15 above refers.

It is also proposed that this should be accompanied by simple and transparent rules of origin and

other measures to address non-tariff barriers.

Concrete proposals have been made, with a three-step approach: 80% on day one, an additional

10% after 12 months and the last 10% a year later.

A Member has indicated that it is prepared to implement all its commitments from day one and, in

any case, to autonomously ensure that its commitments on eliminating the most trade-distorting domestic

support, eliminating all forms of export subsidies and providing mfn duty- and quota-free access for cotton will

take place from 2006.

This would appear to include in particular such a matter as tariff escalation, where it discourages the

development of processing industries in the commodity producing countries. The idea of a review and

clarification of what the current status is of GATT 1994 provisions relating to the stabilisation of prices through

the adoption of supply management systems by producing countries, and the use of export taxes and restrictions

under such systems is also on the table. Proponents would seek something more than this such as more concrete

undertakings in the area of non-tariff measures and actual revision of existing provisions. There is, at this point,

no consensus in these latter areas, but an appreciation at least of the underlying issues at stake.

xxi

xix

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Annex B

Market Access for Non-Agricultural Products

Report by the Chairman of the Negotiating Group on Market Access to the TNC

NTRODUCTION

A Chairman's commentary of the state of play of the NAMA negotiations was prepared in

July 2005 and circulated in document JOB(05)/147 and Add.1 (hereinafter referred to as the

"Chairman's commentary"). The current report, made on my responsibility, reflects the state of play

of the NAMA negotiations at this juncture of the Doha Development Agenda, and supplements that

commentary.

With an eye on the forthcoming Ministerial, Section B of this report attempts to highlight

those areas of convergence and divergence on the elements of Annex B of document WT/L/579

adopted in July 2004, (hereinafter referred to as the “NAMA framework”), and to provide some

guidance as to what may be a possible future course of action with respect to some of the elements.

Section C of the report provides some final remarks about possible action by Ministers at Hong Kong.

In preparing this report, use has been made of documents provided by Members (as listed in

TN/MA/S/16/Rev.2) as well as the discussions in the open-ended sessions of the Group, plurilateral

meetings and bilateral contacts, as long as they were not in the nature of confessionals.

SUMMARY OF THE STATE OF PLAY

Full modalities must have detailed language and, where required, final numbers on all

elements of the NAMA framework. Such an agreement should also contain a detailed work plan

concerning the process after the establishment of full modalities for the purpose of the submission,

verification and annexation of Doha Schedules to a legal instrument. While acknowledging that

progress has been made since the adoption of the NAMA framework, the establishment of full

modalities is, at present, a difficult prospect given the lack of agreement on a number of elements in

the NAMA framework including the formula, paragraph 8 flexibilities and unbound tariffs.

Regarding the structure of this section, generally Members recognize that the issues identified

in the preceding paragraph are the three elements of the NAMA framework on which solutions are

required as a matter of priority, and that there is a need to address them in an interlinked fashion. So,

this report will commence with these three subjects before moving on to the other elements of the

NAMA framework in the order in which they are presented therein.

Formula (paragraph 4 of the NAMA framework)

On the non-linear formula, there has been movement since the adoption of the NAMA

framework. There is a more common understanding of the shape of the formula that Members are

willing to adopt in these negotiations. In fact, Members have been focusing on a Swiss formula.

During the past few months, much time and effort has been spent examining the impact of such a

formula from both a defensive and offensive angle. In terms of the specifics of that formula, there are

basically two variations on the table: a formula with a limited number of negotiated coefficients and a

formula where the value of each country's coefficient would be based essentially on the tariff average

of bound rates of that Member, resulting in multiple coefficients.

In order to move beyond a debate on the merits of the two options (and in recognition of the

fact that what matters in the final analysis is the level of the coefficient) more recently Members have

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engaged in a discussion of numbers. Such a debate has been particularly helpful, especially as it

demonstrated in a quantifiable manner to what extent the benchmarks established in paragraph 16 of

the Doha Ministerial Declaration would be achieved. While it is evident that one of the characteristics

of such a formula is to address tariff peaks, tariff escalation and high tariffs (as it brings down high

tariffs more than low tariffs), one benchmark which has been the subject of differences of opinion has

been that of "less than full reciprocity in reduction commitments" and how it should be measured.

Some developing Members are of the view that this means less than average percentage cuts i.e. as

translated through a higher coefficient in the formula, than those undertaken by developed country

Members. However, the latter have indicated that there are other measurements of less than full

reciprocity in reduction commitments including the final rates after the formula cut which in their

markets would be less than in developing country markets. Also, in their view, such a measurement of

less than full reciprocity in reduction commitments has to take into account not only the additional

effort made by them in all areas but also of paragraph 8 flexibilities and the fact that several

developing Members and the LDCs would be exempt from formula cuts.

Other objectives put forward by developed Members and some developing Members as being

part of the Doha NAMA mandate are: harmonization of tariffs between Members; cuts into applied

rates; and improvement of South-South trade. However, these objectives have been challenged by

other developing Members who believe that, on the contrary, they are not part of that mandate.

During the informal discussions, many Members engaged in an exchange on the basis of an

approach with two coefficients. In the context of such debates, the coefficients which were mentioned

for developed Members fell generally within the range of 5 to 10, and for developing Members within

the range of 15 to 30, although some developing Members did propose lower coefficients for

developed Members and higher coefficients for developing Members. In addition, a developing

country coefficient of 10 was also put forward by some developed Members. However, while this

discussion of numbers is a positive development, the inescapable reality is that the range of

coefficients is wide and reflects the divergence that exists as to Members’ expectations regarding the

contributions that their trading partners should be making.

Flexibilities for developing Members subject to a formula (paragraph 8 of the NAMA

framework)

10.

A central issue concerning the paragraph 8 flexibilities has been the question of linkage or

non-linkage between these flexibilities and the coefficient in the formula. A view was expressed that

the flexibilities currently provided for in paragraph 8 are equivalent to 4-5 additional points to the

coefficient in the formula, and as a result there was need to take this aspect into account in the

developing country coefficient. In response, the argument has been made by many developing

Members that those flexibilities are a stand alone provision as reflected in the language of that

provision, and should not be linked to the coefficient. Otherwise, this would amount to re-opening

the NAMA framework. Some of those Members have also expressed the view that the numbers

currently within square brackets are the minimum required for their sensitive tariff lines, and have

expressed concern about the conditions attached to the use of such flexibilities, such as the capping of

the import value. In response, the point has been made by developed Members that they are not

seeking to remove the flexibilities under paragraph 8, and therefore are not re-opening the NAMA

framework. They further point out that the numbers in paragraph 8 are within square brackets

precisely to reflect the fact that they are not fixed and may need to be adjusted downwards depending

on the level of the coefficient. In addition, the need for more transparency and predictability with

regard to the tariff lines which would be covered by paragraph 8 flexibilities has been raised by some

of these Members. Some developing Members have also advanced the idea that there should be the

option for those developing Members not wanting to use paragraph 8 flexibilities to have recourse to a

higher coefficient in the formula in the interest of having a balanced outcome.

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Unbound Tariff Lines (paragraph 5, indent two of the NAMA framework)

11.

There has been progress on the discussion of unbound tariff lines. There is an understanding

that full bindings would be a desirable objective of the NAMA negotiations, and a growing sense that

unbound tariff lines should be subject to formula cuts provided there is a pragmatic solution for those

lines with low applied rates. However, some Members have stressed that their unbound tariff lines

with high applied rates are also sensitive and due consideration should be given to those lines. There

now appears to be a willingness among several Members to move forward on the basis of a non-linear

mark-up approach to establish base rates, and in the case of some of these Members, provided that

such an approach yields an equitable result. A non-linear mark-up approach envisages the addition of

a certain number of percentage points to the applied rate of the unbound tariff line in order to establish

the base rate on which the formula is to be applied. There are two variations of such an approach. In

one case, a constant number of percentage points are added to the applied rate in order to establish the

base rate. The other variation consists of having a different number of percentage points depending

on the level of the applied rate. In other words, the lower the applied rate the higher the mark-up and

the higher the applied rate, the lower the mark-up. There is also one proposal on the table of a target

average approach where an average is established through the use of a formula, with the unbound

tariff lines expected to have final bindings around that average.

12.

On a practical level, in their discussions on unbound tariff lines, Members have been referring

mostly to the constant mark-up methodology to establish base rates. In the context of such

discussions, the number for the mark-up has ranged from 5 to 30 percentage points. Once again the

gap between the two figures is wide, but Members have displayed willingness to be flexible.

Other elements of the formula (paragraph 5 of the NAMA framework)

13.

Concerning product coverage (indent 1), Members have made good progress to establish a list

of non-agricultural products as reflected in document JOB(05)/226/Rev.2. The main issue is whether

the outcome of this exercise should be an agreed list or guidelines. It would appear that several

Members are in favour of the former outcome, however, some have expressed their preference for the

latter. In any event, there are only a limited number of items (17) on which differences exist and

Members should try and resolve these differences as quickly as possible.

14.

ad valorem

equivalents (indent 5), agreement was reached to convert non

ad valorem

duties to

ad valorem

equivalents on the basis of the methodology contained in JOB(05)/166/Rev.1 and

to bind them in

ad valorem

terms. To date, four Members have submitted their preliminary AVE

calculations, but there are many more due. Those Members would need to submit this information as

quickly as possible so as to allow sufficient time for the multilateral verification process.

15.

The subject of how credit is to be given for autonomous liberalization (indent 4) by

developing countries provided that the tariff lines are bound on an MFN basis in the WTO since the

conclusion of the Uruguay Round has not been discussed in detail since the adoption of the NAMA

framework. However, this issue may be more usefully taken up once there is a clearer picture of the

formula.

16.

All the other elements of the formula such as tariff cuts commencing from bound rates after

full implementation of current commitments (indent 2), the base year (indent 3), the nomenclature

(indent 6) and reference period for import data (indent 7) have not been discussed any further since

July 2004, as they were acceptable to Members as currently reflected in the NAMA framework.

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Other flexibilities for developing Members

Members with low binding coverage (paragraph 6 of the NAMA framework)

17.

A submission by a group of developing Members, covered under paragraph 6 provisions, was

made in June 2005. The paper proposed that Members falling under this paragraph should be

encouraged to substantially increase their binding coverage, and bind tariff lines at a level consistent

with their individual development, trade, fiscal and strategic needs. A preliminary discussion of this

proposal revealed that there were concerns about this proposal re-opening this paragraph by seeking

to enhance the flexibilities contained therein. Further discussion of this proposal is required.

However, it appears that the issue of concern to some of the paragraph 6 Members is not related so

much to the full binding coverage, but rather to the average level at which these Members would be

required to bind their tariffs.

Flexibilities for LDCs (paragraph 9 of the NAMA framework)

18.

There appears to be a common understanding that LDCs will be the judge of the extent and

level of the bindings that they make. At the same time, Members have indicated that this substantial

increase of the binding commitments which LDCs are expected to undertake should be done with a

good faith effort. In this regard, some yardsticks for this effort were mentioned including the

coverage and level of bindings made in the Uruguay Round by other LDCs as well as the more

recently acceded LDCs.

Small, vulnerable economies

19.

A paper was submitted recently by a group of Members which proposes

inter alia

lesser and

linear cuts to Members identified by a criterion using trade share. While some developing and

developed Members were sympathetic to the situation of such Members, concerns were expressed

with respect to the threshold used to establish eligibility, and also the treatment envisaged. Other

developing Members expressed serious reservations about this proposal which in their view appeared

to be creating a new category of developing Members, and to be further diluting the ambition of the

NAMA negotiations. The sponsors of this proposal stressed that the small, vulnerable economies had

characteristics which warranted special treatment.

20.

This is an issue on which there is a serious divergence of opinion among developing

Members. This subject will need to be debated further. Discussions may be facilitated through

additional statistical analysis.

Sectorals (paragraph 7 of the NAMA framework)

21.

It appears that good progress is being made on the sectoral tariff component of the NAMA

negotiations. Work which is taking place in an informal Member-driven process has focused on

inter

alia

identification of sectors, product coverage, participation, end rates and adequate provisions of

flexibilities for developing countries. Besides the sectorals based on a critical mass approach

identified in the Chairman's commentary – bicycles, chemicals, electronics/electrical equipment, fish,

footwear, forest products, gems and jewellery, pharmaceuticals and medical equipment, raw materials

and sporting goods – I understand that work is ongoing on other sectors namely apparel, auto/auto

parts and textiles.

22.

While this component of the NAMA negotiations is recognized in the NAMA framework to

be a key element to delivering on the objectives of paragraph 16 of the Doha NAMA mandate, some

developing Members have questioned the rationale of engaging in sectoral negotiations before having

the formula finalized. Many have also re-iterated their view that sectorals are voluntary in nature. The

point has also been made by other developing Members that sectorals harm smaller developing

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Members due to an erosion of their preferences. However, the proponents of such initiatives have

argued that sectorals are another key element of the NAMA negotiations and an important modality

for delivering on the elimination of duties as mandated in paragraph 16 of the Doha Ministerial

Declaration. In addition, they have pointed out that some of the sectorals were initiated by developing

Members. Moreover, such initiatives require substantive work and were time-consuming to prepare.

Concerning preference erosion, this was a cross-cutting issue.

23.

Members will need to begin considering time-lines for the finalization of such work, and the

submission of the outcomes which will be applied on an MFN basis.

Market Access for LDCs (paragraph 10 of the NAMA framework)

24.

In the discussions on this subject, it was noted that the Committee on Trade and Development

in Special Session is examining the question of duty-free and quota-free access for non-agricultural

products originating from LDCs. Consequently, there is recognition by Members that the discussions

in that Committee would most probably have an impact on this element of the NAMA framework,

and would need to be factored in at the appropriate time.

Newly Acceded Members (paragraph 11 of the NAMA framework)

25.

Members recognize the extensive market access commitments made by the NAMs at the time

of their accession. From the discussions held on this subject, it was clarified that those NAMs which

are developing Members have access to paragraph 8 flexibilities. As special provisions for tariff

reductions for the NAMs, some Members are willing to consider longer implementation periods than

those to be provided to developing Members. Other proposals such as a higher coefficient and "grace

periods" for the NAMs were also put forward, but a number of Members have objected to these ideas.

There has also been a submission by four low-income economies in transition who have requested to

be exempt from formula cuts in light of their substantive contributions at the time of their WTO

accession and the current difficult state of their economies. While some Members showed sympathy

for the situation of these Members, they expressed the view that other solutions may be more

appropriate. Some developing Members also expressed concern about this proposal creating a

differentiation between Members. Further discussion is required on these issues.

NTBs (paragraph 14 of the NAMA framework)

26.

Since adoption of the July 2004 framework, Members have been focusing their attention on

non-tariff barriers in recognition of the fact that they are an integral and equally important part of the

NAMA negotiations. Some Members claim that they constitute a greater barrier to their exports than

tariffs. The Group has spent a considerable amount of time identifying, categorizing and examining

the notified NTBs. Members are using bilateral, vertical and horizontal approaches to the NTB

negotiations. For example, many Members are raising issues bilaterally with their trading partners.

Vertical initiatives are ongoing on automobiles, electronic products and wood products. There have

been some proposals of a horizontal nature concerning export taxes, export restrictions and

remanufactured products. On export taxes, some Members have expressed the view that such

measures fall outside the mandate of the NAMA negotiations. Some Members have also raised in

other Negotiating Groups some of the NTBs they had notified initially in the context of the NAMA

negotiations. For example, a number of trade facilitation measures are now being examined in the

Negotiating Group on Trade Facilitation. Some other Members have also indicated their intention to

bring issues to the regular WTO Committees. NTBs currently proposed for negotiation in the NAMA

Group are contained in document JOB(05)/85/Rev.3.

27.

Some proposals have been made of a procedural nature in order to expedite the NTB work,

including a suggestion to hold dedicated NTB sessions. Further consideration will need to be given to

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this and other proposals. Members will also need to begin considering some time-lines for the

submission of specific negotiating proposals and NTB outcomes.

Appropriate Studies and Capacity Building Measures (paragraph 15 of the NAMA framework)

28.

There has been no discussion as such on this element as it is an ongoing and integral part of

the negotiating process. Several papers have been prepared by the Secretariat during the course of the

negotiations and capacity building activities by the Secretariat have increased considerably since the

launch of the Doha Development Agenda. Such activities will need to continue taking into account

the evolution of the negotiations.

Non-reciprocal preferences (paragraph 16 of the NAMA framework)

29.

In response to calls by some Members for a better idea of the scope of the problem, the ACP

Group circulated an indicative list of products (170 HS 6-digit tariff lines) vulnerable to preference

erosion in the EC and US markets as identified through a vulnerability index. Simulations were also

submitted by the African Group. Some developing Members expressed concern that the tariff lines

listed covered the majority of their exports, or covered critical exports to those markets and were also

precisely the lines on which they sought MFN cuts. As a result, for these Members, it was impossible

to entertain any solution which related to less than full formula cuts or longer staging. In this regard,

concern was expressed by them that non-trade solutions were not being examined. For the proponents

of the issue, a trade solution was necessary as this was a trade problem. According to them, their

proposal would not undermine trade liberalization because they were seeking to manage such

liberalization on a limited number of products.

30.

This subject is highly divisive precisely because the interests of the two groups of developing

Members are in direct conflict. Additionally, it is a cross-cutting issue which makes it even more

sensitive. While, the aforementioned list of products has been helpful in providing a sense of the

scope of the problem and may help Members to engage in a more focused discussion, it is clear that

pragmatism will need to be shown by all concerned.

Environmental Goods (paragraph 17 of the NAMA framework)

31.

Since the adoption of the July framework in 2004, limited discussions have been held on this

subject in the Group. However, it is noted that much work under paragraph 31(iii) of the Doha

Ministerial Declaration has been undertaken by the Committee on Trade and Environment in Special

Session. There would need to be close coordination between the two negotiating groups and a stock

taking of the work undertaken in that Committee would be required at the appropriate time by the

NAMA Negotiating Group.

Other elements of the NAMA framework

32.

On the other elements of the NAMA framework, such as supplementary modalities

(paragraph 12), elimination of low duties (paragraph 13) and tariff revenue dependency (paragraph

16) the Group has not had a substantive debate. This has in part to do with the nature of the issue or

because more information is required from the proponents. Regarding supplementary modalities, such

modalities will become more relevant once the formula has been finalized. On elimination of low

duties, this issue may be more suitable to consider once there is a better sense of the likely outcome of

the NAMA negotiations. On tariff revenue dependency, more clarity is required from the proponents

on the nature and scope of the problem.

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INAL REMARKS

33.

As may be observed from the above report, Members are far away from achieving full

modalities. This is highly troubling. It will take a major effort by all if the objective of concluding

the NAMA negotiations by the end of 2006 is to be realized.

34.

To this end, I would highlight as a critical objective for Hong Kong a common understanding

on the formula, paragraph 8 flexibilities and unbound tariffs. It is crucial that Ministers move

decisively on these elements so that the overall outcome is acceptable to all. This will give the

necessary impetus to try and fulfil at a date soon thereafter the objective of full modalities for the

NAMA negotiations.

35.



Specifically, Ministers should:

Obtain agreement on the final structure of the formula and narrow the range of numbers.

Resolve their basic differences over paragraph 8 flexibilities.

Clarify whether the constant mark-up approach is the way forward, and if so, narrow the

range of numbers.

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Annex C

Services

Objectives

In order to achieve a progressively higher level of liberalization of trade in services, with

appropriate flexibility for individual developing country Members, we agree that Members should

strive to ensure that their new and improved commitments adhere to the following objectives:

(a)

Mode 1

(i)

(ii)

(b)

Mode 2

(i)

(ii)

(c)

Mode 3

(i)

(ii)

(iii)

(d)

Mode 4

(i)

new or improved commitments on the categories of Contractual Services

Suppliers, Independent Professionals and Others, de-linked from commercial

presence, to reflect

inter alia:

removal or substantial reduction of economic needs tests

indication of prescribed duration of stay and possibility of renewal, if any

new or improved commitments on the categories of Intra-corporate

Transferees and Business Visitors, to reflect

inter alia:

removal or substantial reduction of economic needs tests

indication of prescribed duration of stay and possibility of renewal, if any

commitments on enhanced levels of foreign equity participation

removal or substantial reduction of economic needs tests

commitments allowing greater flexibility on the types of legal entity

permitted

commitments at existing levels of market access on a non-discriminatory

basis across sectors of interest to Members

commitments on mode 2 where commitments on mode 1 exist

commitments at existing levels of market access on a non-discriminatory

basis across sectors of interest to Members

removal of existing requirements of commercial presence

(ii)

(e)

MFN Exemptions

(i)

removal or substantial reduction of exemptions from most-favoured-nation

(MFN) treatment

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(ii)

(f)

clarification of remaining MFN exemptions in terms of scope of application

and duration

Scheduling of Commitments

(i)

ensuring clarity, certainty, comparability and coherence in the scheduling and

classification of commitments through adherence to,

inter alia,

the

Scheduling Guidelines pursuant to the Decision of the Council for Trade in

Services adopted on 23 March 2001

ensuring that scheduling of any remaining economic needs tests adheres to

the Scheduling Guidelines pursuant to the Decision of the Council for Trade

in Services adopted on 23 March 2001.

(ii)

In order to provide guidance for the request-offer negotiations, the sectoral and modal

objectives as identified by Members may be considered

Members shall pursue full and effective implementation of the Modalities for the Special

Treatment for Least-Developed Country Members in the Negotiations on Trade in Services

(LDC Modalities) adopted by the Special Session of the Council for Trade in Services on

3 September 2003, with a view to the beneficial and meaningful integration of LDCs into the

multilateral trading system.

Members must intensify their efforts to conclude the negotiations on rule-making under

GATS Articles X, XIII, and XV in accordance with their respective mandates and timelines:

(a)

Members should engage in more focused discussions in connection with the technical

and procedural questions relating to the operation and application of any possible

emergency safeguard measures in services.

On government procurement, Members should engage in more focused discussions and

in this context put greater emphasis on proposals by Members, including on proposals

for a possible framework for government procurement.

On subsidies, Members should intensify their efforts to expedite and fulfil the

information exchange required for the purpose of such negotiations, and should engage

in more focused discussions on proposals by Members, including the development of a

possible working definition of subsidies in services.

(b)

(c)

Members shall develop disciplines on domestic regulation pursuant to the mandate under

Article VI:4 of the GATS before the end of the current round of negotiations. We call upon Members

to develop text for adoption. In so doing, Members shall consider proposals and the illustrative list of

possible elements for Article VI:4 disciplines

As attached to the Report by the Chairman to the Trade Negotiations Committee on [...]

November 2005, contained in document TN/S/23, as well as any future revisions thereof.

As attached to the Report of the Chairman of the Working Party on Domestic Regulation to the

Special Session of the Council for Trade in Services on 15 November 2005, contained in document

JOB(05)/280.

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Approaches

Pursuant to the principles and objectives above, we agree to intensify and expedite the

request-offer negotiations, which shall remain the main method of negotiation, with a view to

securing substantial commitments.

In addition to bilateral negotiations, we agree that the request-offer negotiations should also

be pursued on a plurilateral basis in accordance with the principles of the GATS and the Guidelines

and Procedures for the Negotiations on Trade in Services. The results of such negotiations shall be

extended on an MFN basis. These negotiations would be organized in the following manner:

(a)

Any Member or group of Members may present requests or collective requests to other

Members in any specific sector or mode of supply, identifying their objectives for the

negotiations in that sector or mode of supply.

Any Member or group of Members who have made such requests in a specific sector or

mode of supply, together with Members to whom such requests have been made, and

any other interested Member, shall enter into plurilateral negotiations to consider such

requests.

Plurilateral negotiations should be organised with a view to facilitating the participation

of all Members, taking into account the limited capacity of smaller delegations to

participate in such negotiations.

(b)

(c)

Due consideration shall be given to proposals on trade-related concerns of small economies.

Members, in the course of negotiations, shall develop methods for the full and effective

implementation of the LDC Modalities, including expeditiously:

(a)

Developing appropriate mechanisms for according special priority including to sectors

and modes of supply of interest to LDCs in accordance with Article IV:3 of the GATS

and paragraph 7 of the LDC Modalities.

Undertaking commitments, to the extent possible, in such sectors and modes of supply

identified, or to be identified, by LDCs that represent priority in their development

policies in accordance with paragraphs 6 and 9 of the LDC Modalities.

Assisting LDCs to enable them to identify sectors and modes of supply that represent

development priorities.

Providing targeted and effective technical assistance and capacity building for LDCs in

accordance with the LDC Modalities, particularly paragraphs 8 and 12.

Developing a reporting mechanism to facilitate the review requirement in paragraph 13

of the LDC Modalities.

(b)

(c)

(d)

(e)

10.

Targeted technical assistance should be provided through,

inter alia,

the WTO Secretariat,

with a view to enabling developing and least-developed countries to participate effectively in the

negotiations. In particular and in accordance with paragraph [...] on Technical Assistance in the Hong

Kong Ministerial Declaration, targeted technical assistance should be given to all developing

countries allowing them to fully engage in the final phase of the negotiation. In addition, such

assistance should be provided on,

inter alia,

compiling and analyzing statistical data on trade in

services, assessing interests in and gains from services trade, building regulatory capacity, particularly

on those services sectors where liberalization is being undertaken by developing countries.

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Timelines

11.

Recognizing that an effective timeline is necessary in order to achieve a successful conclusion

of the negotiations by [...], we agree that the negotiations shall adhere to the following dates:

(a)

(b)

(c)

(d)

(e)

Any outstanding initial offers shall be submitted as soon as possible.

Groups of Members presenting plurilateral requests to other Members should submit

such requests by [February 2006] or as soon as possible thereafter.

A second round of revised offers shall be submitted by [date].

Final draft schedules of commitments shall be submitted by [date].

Members shall strive to complete the requirements in 9(a) before the date in 11(c).

Review of Progress

12.

The Special Session of the Council for Trade in Services shall review progress in the

negotiations and monitor the implementation of the Objectives, Approaches and Timelines set out in

this Annex.

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Annex D

Rules

I. Anti-Dumping and Subsidies and Countervailing Measures including Fisheries Subsidies

We:

acknowledge

that the achievement of substantial results on all aspects of the Rules mandate,

in the form of amendments to the Anti-Dumping (AD) and Subsidies and Countervailing

Measures (SCM) Agreements, is important to the development of the rules-based multilateral

trading system and to the overall balance of results in the DDA;

aim

to achieve in the negotiations on Rules further improvements, in particular, to the

transparency, predictability and clarity of the relevant disciplines, to the benefit of all

Members, including in particular developing and least-developed Members. In this respect,

the development dimension of the negotiations must be addressed as an integral part of any

outcome;

call on

Participants, in considering possible clarifications and improvements in the area of

anti-dumping, to take into account,

inter alia,

(a) the need to avoid the unwarranted use of

anti-dumping measures, while preserving the basic concepts, principles and effectiveness of

the instrument and its objectives where such measures are warranted; and (b) the desirability

of limiting the costs and complexity of proceedings for interested parties and the investigating

authorities alike, while strengthening the due process, transparency and predictability of such

proceedings and measures;

consider

that negotiations on anti-dumping should, as appropriate, clarify and improve the

rules regarding,

inter alia,

(a) determinations of dumping, injury and causation, and the

application of measures; (b) procedures governing the initiation, conduct and completion of

antidumping investigations, including with a view to strengthening due process and

enhancing transparency; and (c) the level, scope and duration of measures, including duty

assessment, interim and new shipper reviews, sunset, and anti-circumvention proceedings;

recognize

that negotiations on anti-dumping have intensified and deepened, that Participants

are showing a high level of constructive engagement, and that the process of rigorous

discussion of the issues based on specific textual proposals for amendment to the AD

Agreement has been productive and is a necessary step in achieving the substantial results to

which Ministers are committed;

note

that, in the negotiations on anti-dumping, the Negotiating Group on Rules has been

discussing in detail proposals on such issues as determinations of injury/causation, the lesser

duty rule, public interest, transparency and due process, interim reviews, sunset, duty

assessment, circumvention, the use of facts available, limited examination and all others rates,

dispute settlement, the definition of dumped imports, affiliated parties, product under

consideration, and the initiation and completion of investigations, and that this process of

discussing proposals before the Group or yet to be submitted will continue after Hong Kong;

note,

in respect of subsidies and countervailing measures, that while proposals for

amendments to the SCM Agreement have been submitted on a number of issues, including

the definition of a subsidy, specificity, prohibited subsidies, serious prejudice, export credits

and guarantees, and the allocation of benefit, there is a need to deepen the analysis on the

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basis of specific textual proposals in order to ensure a balanced outcome in all areas of the

Group's mandate;

note

the desirability of applying to both anti-dumping and countervailing measures any

clarifications and improvements which are relevant and appropriate to both instruments;

recall

our commitment at Doha to enhancing the mutual supportiveness of trade and

environment,

note

that there is broad agreement that the Group should strengthen disciplines

on subsidies in the fisheries sector, including through the prohibition of certain forms of

fisheries subsidies that contribute to overcapacity and over-fishing, and

call on

Participants

promptly to undertake further detailed work to,

inter alia,

establish the nature and extent of

those disciplines, including transparency and enforceability. Appropriate and effective

special and differential treatment for developing and least-developed Members should be an

integral part of the fisheries subsidies negotiations, taking into account the importance of this

sector to development priorities, poverty reduction, and livelihood and food security

concerns;

10.

direct

the Group to intensify and accelerate the negotiating process in all areas of its mandate,

on the basis of detailed textual proposals before the Group or yet to be submitted, and

complete the process of analysing proposals by Participants on the AD and SCM Agreements

as soon as possible;

11.

mandate

the Chairman to prepare, early enough to assure a timely outcome within the context

of the 2006 end date for the Doha Development Agenda and taking account of progress in

other areas of the negotiations, consolidated texts of the AD and SCM Agreements that shall

be the basis for the final stage of the negotiations.

II. Regional Trade Agreements

We welcome the progress in negotiations to clarify and improve the WTO's disciplines and

procedures on regional trade agreements (RTAs). Such agreements, which can foster trade

liberalization and promote development, have become an important element in the trade policies of

virtually all Members. Transparency of RTAs is thus of systemic interest as are disciplines that

ensure the complementarity of RTAs with the WTO.

We commend the progress in defining the elements of a transparency mechanism for RTAs,

aimed, in particular, at improving existing WTO procedures for gathering factual information on

RTAs, without prejudice to the rights and obligations of Members. We instruct the Negotiating

Group on Rules to intensify its efforts to resolve outstanding issues, with a view to a provisional

decision on RTA transparency by [...].

We also note with appreciation the work of the Negotiating Group on Rules on WTO's

disciplines governing RTAs, including

inter alia

on the "substantially all the trade" requirement, the

length of RTA transition periods and RTA developmental aspects. We instruct the Group to intensify

negotiations, based on text proposals as soon as possible after the Sixth Ministerial Conference, so as

to arrive at appropriate outcomes by end 2006.

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Annex E

Trade Facilitation

Report by the Negotiating Group on Trade Facilitation to the TNC

Since its establishment on 12 October 2004, the Negotiating Group on Trade Facilitation met

eleven times to carry out work under the mandate contained in Annex D of the General Council

Decision in WT/L/579. The negotiations are benefiting from the fact that the mandate allows for the

central development dimension of the Doha negotiations to be addressed directly through the widely

acknowledged benefits of trade facilitation reforms for all WTO Members, the enhancement of trade

facilitation capacity in developing countries and LDCs, and provisions on special and differential

treatment (S&DT) that provide flexibility. Based on the Group's Work Plan (TN/TF/1), Members

contributed to the agreed agenda of the Group, tabling 60 written submissions sponsored by more than

100 delegations. Members appreciate the transparent and inclusive manner in which the negotiations

are being conducted.

Good progress has been made in all areas covered by the mandate, through both verbal and

written contributions by Members. A considerable part of the Negotiating Group's meetings has been

spent on addressing the negotiating objective of improving and clarifying relevant aspects of GATT

Articles V, VIII and X, on which about 40 written submissions

have been tabled by Members

representing the full spectrum of the WTO's Membership. Through discussions on these submissions

and related questions and answers (JOB(05)/222), Members have advanced their understanding of the

measures in question and are working towards common ground on many aspects of this part of the

negotiating mandate. Many of these submissions also covered the negotiating objective of enhancing

technical assistance and support for capacity building on trade facilitation, as well as the practical

application of the principle of S&DT. The Group also discussed other valuable submissions dedicated

to these issues.

Advances have also been made on the objective of arriving at provisions for effective

cooperation between customs or any other appropriate authorities on trade facilitation and customs

compliance issues, where two written proposals have been discussed.

Members have also made

valuable contributions on the identification of trade facilitation needs and priorities, development

aspects, cost implications and inter-agency cooperation.

Valuable input has been provided by a number of Members in the form of national experience

papers describing national trade facilitation reform processes. In appreciation of the value to

developing countries and LDCs of this aspect of the negotiations, the Negotiating Group recommends

that Members be encouraged to continue this information sharing exercise.

Building on the progress made in the negotiations so far, and with a view to developing a set

of multilateral commitments on all elements of the mandate, the Negotiating Group recommends that

it continue to intensify its negotiations on the basis of Members' proposals, as reflected currently in

document TN/TF/W/43/Rev.4, and any new proposals to be presented. Without prejudice to

individual Member's positions on individual proposals, a list of (I) proposed measures to improve and

clarify GATT Articles V, VIII and X; (II) proposed provisions for effective cooperation between

customs and other authorities on trade facilitation and customs compliance; and, (III) cross-cutting

submissions; is provided below to facilitate further negotiations. In carrying out this work and in

TN/TF/W/6-W/15, W/17-W/26, W/28, W/30-W32, W/34-36, W/38-W/40, W/42, W/44-W/49, W/53,

W/55, W/58, W/60-W/62, W/64-W/67, W/69, W/70.

TN/TF/W/33, W/41, W/56, W/63, W/73 and W/74.

TN/TF/W/57 and W/68.

TN/TF/W/29, W/33, W/41, W/62 and W/63.

TN/TF/W/48, W/50 , W/53, W/55, W/58, W/60, W/61, W/65, W/69 and W/75.

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tabling further proposals, Members should be mindful of the overall deadline for finishing the

negotiations and the resulting need to move into focussed drafting mode early enough after the Sixth

Ministerial Conference so as to allow for a timely conclusion of text-based negotiations on all aspects

of the mandate.

Work needs to continue and broaden on the process of identifying individual Member's trade

facilitation needs and priorities, and the cost implications of possible measures. The Negotiating

Group recommends that relevant international organizations be invited to continue to assist Members

in this process, recognizing the important contributions being made by them already, and be

encouraged to continue and intensify their work more generally in support of the negotiations.

In light of the vital importance of technical assistance and capacity building to allow

developing countries and LDCs to fully participate in and benefit from the negotiations, the

Negotiating Group recommends that the commitments in Annex D's mandate in this area be

reaffirmed, reinforced and made operational in a timely manner. To bring the negotiations to a

successful conclusion, special attention needs to be paid to support for technical assistance and

capacity building that will allow developing counties and LDCs to participate effectively in the

negotiations, and to technical assistance and capacity building to implement the results of the

negotiations that is precise, effective and operational, and reflects the trade facilitation needs and

priorities of developing countries and LDCs. Recognizing the valuable assistance already being

provided in this area, the Negotiating Group recommends that Members, in particular developed ones,

continue to intensify their support in a comprehensive manner and on a long-term and sustainable

basis, backed by secure funding.

The Negotiating Group also recommends that it deepen and intensify its negotiations on the

issue of S&DT, with a view to arriving at S&DT provisions that are precise, effective and operational

and that allow for necessary flexibility in implementing the results of the negotiations. Reaffirming

the linkages among the elements of Annex D, the Negotiating Group recommends that further

negotiations on S&DT build on input presented by Members in the context of measures related to

GATT Articles V, VIII and X and in their proposals of a cross-cutting nature on S&DT.

II.

PROPOSED MEASURES TO IMPROVE AND CLARIFY GATT ARTICLES V, VIII

AND X

UBLICATION AND

VAILABILITY OF

NFORMATION



Publication of Trade Regulations



Publication of Penalty Provisions



Internet Publication

(a) of elements set out in Article X of GATT 1994

(b) of specified information setting forth procedural sequence and other requirements for

importing goods



Notification of Trade Regulations



Establishment of Enquiry Points/SNFP/Information Centres



Other Measures to Enhance the Availability of Information

IME

ERIODS

ETWEEN

UBLICATION AND

MPLEMENTATION



Interval between Publication and Entry into Force

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ONSULTATION AND

OMMENTS ON

EW AND

MENDED

ULES



Prior Consultation and Commenting on New and Amended Rules



Information on Policy Objectives Sought

DVANCE

ULINGS



Provision of Advance Rulings

PPEAL

ROCEDURES



Right of Appeal



Release of Goods in Event of Appeal

THER

EASURES TO

NHANCE

MPARTIALITY AND

-D

ISCRIMINATION



Uniform Administration of Trade Regulations



Maintenance and Reinforcement of Integrity and Ethical Conduct Among Officials

(a) Establishment of a Code of Conduct

(b) Computerized System to Reduce/Eliminate Discretion

(d) Technical Assistance to Create/Build up Capacities to Prevent and Control Customs

Offences

(e) Appointment of Staff for Education and Training

(f) Coordination and Control Mechanisms

EES AND

HARGES

ONNECTED WITH

MPORTATION AND

XPORTATION



General Disciplines on Fees and Charges Imposed on or in Connection with Importation

and Exportation

(a) Specific Parameters for Fees/Charges

(b) Publication/Notification of Fees/Charges

(d) Periodic Review of Fees/Charges

(e) Automated Payment



Reduction/Minimization of the Number and Diversity of Fees/Charges

ORMALITIES

ONNECTED WITH

MPORTATION AND

XPORTATION



Disciplines on Formalities/Procedures and Data/Documentation Requirements Connected

with Importation and Exportation

(a) Non-discrimination

(b) Periodic Review of Formalities and Requirements

(d) Use of International Standards

(e) Uniform Customs Code

(f) Acceptance of Commercially Available Information and of Copies

(g) Automation

(h) Single Window/One-time Submission

(i) Elimination of Pre-Shipment Inspection

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(j) Phasing out Mandatory Use of Customs Brokers

ONSULARIZATION



Prohibition of Consular Transaction Requirement

ORDER

GENCY

OOPERATION



Coordination of Activities and Requirement of all Border Agencies

ELEASE AND

LEARANCE OF

OODS



Expedited/Simplified Release and Clearance of Goods

(a) Pre-arrival Clearance

(b) Expedited Procedures for Express Shipments

(d) Post-Clearance Audit

(e) Separating Release from Clearance Procedures

(f) Other Measures to Simplify Customs Release and Clearance



Establishment and Publication of Average Release and Clearance Times

ARIFF

LASSIFICATION



Objective Criteria for Tariff Classification

ATTERS

ELATED TO

OODS

RANSIT



Strengthened Non-discrimination



Disciplines on Fees and Charges

(a) Publication of Fees and Charges and Prohibition of Unpublished ones

(b) Periodic Review of Fees and Charges

(d) Periodic Exchange Between Neighbouring Authorities



Disciplines on Transit Formalities and Documentation Requirements

(a) Periodic Review

(b) Reduction/Simplification

(d) Promotion of Regional Transit Arrangements

(e) Simplified and Preferential Clearance for Certain Goods

(f) Limitation of Inspections and Controls

(g) Sealing

(h) Cooperation and Coordination on Document Requirements

(i) Monitoring

(j) Bonded Transport Regime/Guarantees



Improved Coordination and Cooperation

(a) Amongst Authorities

(b) Between Authorities and the Private Sector



Operationalization and Clarification of Terms

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III.

PROPOSED PROVISIONS FOR EFFECTIVE COOPERATION BETWEEN

CUSTOMS AND OTHER AUTHORITIES ON TRADE FACILITATION AND

CUSTOMS COMPLIANCE



Multilateral Mechanism for the Exchange and Handling of Information

IV.

CROSS-CUTTING SUBMISSIONS

Needs and Priorities Identification



General tool to assess needs and priorities and current levels of trade facilitation



Take result of assessment as one basis for establishing trade facilitation rules, arranging

S&D treatment and providing technical assistance and capacity building support

Technical Assistance and Capacity Building

Technical Assistance and Capacity Building in the Course of the Negotiations



Identification of Needs and Priorities



Compilation of Needs and Priorities of Individual Members



Support for Clarification and Educative Process Including Training

Technical Assistance and Capacity Building Beyond the Negotiations Phase



Implementation of the Outcome



Coordination Mechanisms for Implementing Needs and Priorities as well as Commitments

Multiple-Areas



Identification of Trade Facilitation Needs and Priorities of Members

Cost Assessment

Inter-Agency Cooperation

Links and Inter-relationship between the Elements of Annex D

Inventory of Trade Facilitation Measures

Assessment of the Current Situation

Timing and Sequencing of Measures

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Annex F

Special and Differential Treatment

Remaining LDC Agreement-specific Proposals

23) Understanding in Respect of Waivers of Obligations under the GATT 1994

(i)

The General Council agrees that requests for waivers by least-developed country Members

under Article IX of the WTO Agreement and the Understanding in respect of Waivers of Obligations

under the GATT 1994 shall be given positive consideration and a decision taken within 60 days.

(ii)

When considering requests for waivers by other Members exclusively in favour of least-

developed country Members, the General Council agrees that a decision shall be taken within 60 days,

or in exceptional circumstances as expeditiously as possible thereafter.

(i)

The General Council agrees that requests for waivers by least-developed country Members

under Article IX of the WTO Agreement and the Understanding in respect of Waivers of Obligations

under the GATT 1994 should be given positive consideration and a decision taken within 60 days.

(ii)

When considering requests for waivers by other Members exclusively in favour of least-

developed country Members, the General Council agrees that a decision should be taken within 60

days, or in exceptional circumstances as expeditiously as possible thereafter, taking into account the

interests of other developing Members so as not to affect them.

36) Decision on Measures in Favour of Least-Developed Countries

The General Council agrees that Developed Country Members shall, and Developing Country

Members in a position to do so should:

(a)

Provide bound duty free and quota free market access for all products originating from all

LDCs by year [x] in a manner that ensures stability, security and predictability.

(b)

Ensure that preferential rules of origin applicable to imports from LDCs are simple and

transparent, and contribute to facilitating market access.

In this context these Members shall notify once every year to the General Council, which shall review

the steps taken to provide duty-free and quota-free market access to the LDCs.

The General Council urges all donors and relevant international institutions to increase financial and

technical support aimed at diversification of LDC economies, while providing additional financial and

technical assistance through appropriate delivery mechanisms to meet their implementation

obligations, including fulfilling SPS and TBT requirements, and to assist them in managing their

adjustment processes.

The General Council agrees that developed country Members, and developing country Members

declaring themselves in a position to do so, shall build on the commitments made at Doha and in the

General Council decision of 1 August 2004 to:

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(a)

Provide duty free and quota free market access for products originating from LDCs in a

manner that ensures stability, security and predictability, consistent with the Enabling Clause.

(b)

Ensure that preferential rules of origin applicable to imports from LDCs are simple and

transparent, and contribute to facilitating market access.

In this context these Members shall notify once every year to the General Council, which shall review

the steps taken to provide duty-free and quota-free market access to the LDCs.

The General Council urges all donors and relevant international institutions to increase financial and

technical support aimed at diversification of LDC economies, while providing additional financial and

technical assistance through appropriate delivery mechanisms to meet their implementation

obligations, including fulfilling SPS and TBT requirements, and to assist them in managing their

adjustment processes resulting from MFN liberalisation.

The General Council agrees that developed country Members shall and developing country Members

in a position to do so should

(a)

Provide duty free and quota free market access for all products originating from all LDCs by

[year XX] in a manner that ensures stability and predictability.

(b)

Notwithstanding any measure necessary to prevent circumvention, ensure that rules of origin

are transparent and simple, so as to improve the utilisation of preference schemes.

Members facing difficulties to provide duty free and quota free market access according to (a) shall

provide duty free and quota free market access for [99%] of products originating from LDCs, defined

at the tariff line level, by [year XX]. In addition, these Members shall take steps to progressively

achieve compliance with the obligations set out under (a) within an additional period of [YY] years.

With the entering into force of the obligations, any Members shall have the possibility to designate

those products for which they may take recourse to the provisions of Article 5 in the Agreement on

Agriculture. Any additional duty imposed shall not exceed the level of duties for the same product in

any other preferential market access schemes.

Members shall notify the General Council at least once every year on measures taken in this regard.

Furthermore, the General Council urges all donors and relevant international institutions to increase

financial and technical support aimed at diversification of LDC economies while providing financial

and technical assistance through appropriate delivery mechanisms to meet their implementation

obligations, including fulfilling SPS and TBT requirements, and to assist them in managing their

adjustment processes.

38) Decision on Measures in Favour of Least-Developed Countries

It is reaffirmed that least-developed country Members will only be required to undertake

commitments and concessions to the extent consistent with their individual development, financial or

trade needs, or their administrative and institutional capacities.

Within the context of coherence arrangements with other international institutions, the General

Council urges donors, multilateral agencies and international financial institutions to coordinate their

work to ensure that LDCs are not subjected to conditionalities on loans, grants and official

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development assistance that are inconsistent with their rights and obligations under the WTO

Agreements.

84) Agreement on Trade-Related Investment Measures

LDCs shall be allowed to maintain on a temporary basis existing measures that deviate from their

obligations under the TRIMs Agreement. For this purpose, LDCs shall notify the CTG of such

measures within one year, starting [x]. LDCs will be allowed to maintain these existing measures until

the end of a new transition period, lasting [x] years. This transition period may be extended by the

CTG under the existing procedures set-out in the TRIMs Agreement, taking into account the

individual financial, trade, and development needs of the Member in question.

LDCs shall also be allowed to introduce new measures that deviate from their obligations under the

TRIMs Agreement. These new TRIMs shall be notified to the CTG no later than [x] months after

their adoption. The CTG shall give positive consideration to such notifications, taking into account

the individual financial, trade, and development needs of the Member in question, and take a decision

within [x] months. The duration of these measures will not exceed [x] years, renewable subject to

review and decision by the CTG.

Any measures incompatible with the TRIMs Agreement and adopted under this decision shall be

phased out by year [x].

LDCs shall be allowed to maintain on a temporary basis existing measures that deviate from their

obligations under the TRIMs Agreement. For this purpose, LDCs shall notify the CTG of such

measures within one year, starting [x]. LDCs will be allowed to maintain these existing measures until

the end of a new transition period, lasting [x] years. This transition period may be extended by the

CTG under the existing procedures set-out in the TRIMs Agreement, taking into account the

individual financial, trade, and development needs of the Member in question and possible effects on

other Members.

LDCs shall notify any new measures that deviate from their obligations under the TRIMs Agreement

to the CTG prior to their adoption. The CTG should give positive consideration to such requests,

taking into account the individual financial, trade, and development needs of the Member in question

and possible effects on other Members, and take a decision within [x] months. The duration of these

measures will not exceed [x] years, renewable subject to review and decision by the CTG.

Any measures incompatible with the TRIMs Agreement and adopted or maintained under this

decision shall be phased out by year [x].

88) Decision on Measures in Favour of Least-Developed Countries–Paragraph 1

Least-developed country Members, whilst reaffirming their commitment to the fundamental principles

of the WTO and relevant provisions of GATT 1994 shall, only be required to comply with obligations

or commitments to the extent consistent with their individual development, financial or trade needs, or

their administrative and institutional capabilities.

The General Council agrees that the implementation by LDCs of their obligations or commitments

will require adequate further technical and financial support directly related to the nature and scope of

such obligations or commitments.

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Members affirm their commitment to afford special consideration to those LDCs that, while

endeavouring to comply with the fundamental principles and obligations of the WTO, experience

difficulties with a specific obligation due to financial or institutional capacity constraints in a

circumstance. Should a least-developed country Member find that it is not in a position to comply

with an obligation or commitment on these grounds, it should bring the matter to the attention of the

General Council for examination and appropriate action.

The General Council agrees that the implementation by LDCs of any obligations or commitments

may require further technical and financial support directly related to the nature and scope of such

obligations or commitments and urges relevant donor agencies to coordinate their efforts in the

delivery of such support.

__________