133 COMMITTEE MD : 176/03 SOURCE : S Delegation FOR : Information DATE RECEIVED : 25-03-03

Modalities of Negotiations on the Singapore Issues - Swedish Non-Paper -

1. Background and Next Step The Doha Ministerial Declaration stipulates that "negotiations will take place after the Fifth on the basis of a decision to be taken, by explicit consensus, at that session on the modalities of negotiations". In view of the need for unanimity among all members of the WTO at Cancún, the Commission has tabled a paper (MD 38/03 Rev 1) on options for modalities. The Commission paper underscored that "[t]hese options for modalities should be sufficiently broad and flexible to take into account the obvious differences between the four issues, while ensuring that a positive decision is taken for the four issues, which all constitute a priority for the EC and its Member States". Similar considerations have been raised by Member States in discussions on individual aspects relating to the Singapore issues. In transparency for , for example, the German, British and Austrian delegations expressed in a joint statement (MD 44/03) that "it does not seem advisable to us to present maximum demands, no matter how desirable they are in principle." The Commission paper provides a valuable starting point for a more detailed discussion in the EU on specific modalities for each of the Singapore issues.

2. Potential Options for Modalities of Negotiations In preparation for the Cancún Ministerial Conference, for each Singapore issue, one can foresee three options for modalities – or a combination thereof:

1. Restating the Aims/Issues Listed in the In most areas, the Doha Declaration lists the aims and/or specifies the issues for the negotiations. These aims/items provide guidance to the negotiations by, in broad terms, setting the negotiating agenda. Also for the Singapore issues, the Doha Declaration identifies various issues to be subject to further work by the respective Working Groups. In the case of investment and competition, the Declaration lists a number of issues to be subject to "further clarification". These issues, by in large, also reflect the thrust of any future agreement and hence could potentially serve as "basic" modalities of negotiations. Some elaboration of the relevant text of the Doha Declaration would, of course, be necessary both to more properly reflect the EU positions and to incorporate relevant developments in the discussions in the Working Groups, especially regarding developing country considerations. For example, on competition, the Doha Declaration presently lacks a reference to dispute settlement and peer review. The question therefore arises: - Which specific areas of concern to the EU or other issues relevant for a positive decision in Cancún, including developing country concerns, would potentially need to be added to the existing text of the Doha Declaration on investment and competition? In the case of transparency in government procurement and facilitation, however, the Doha Declaration would appear to be broader and thus provide less guidance. In the Working Group on Transparency in government procurement, the discussions have, for example, been structured around the informal note by the Chairman from 1999, ("list of the issues raised and points made", Job (99)/6782), which comprises of twelve issues. Consequently, the following question needs to be addressed: - Is there a need for a more fundamental elaboration of the text of the Doha Declaration on and transparency in government procurement so as to identify specific issues of any future negotiating agenda and, if so, which issues should be listed?

2. Procedural Modalities In the Commission paper, procedural issues pertaining to the negotiating phase are identified as one of the potential elements of modalities. As proposed by the Commission, this includes, inter alia, the number of meetings, timing, internal deadlines for tabling proposals, legal texts etc. Procedural issues could hardly constitute the only element of the modalities of negotiation. It is worth noticing, however, that a number of paragraphs of the Doha Declarations contain specific deadlines for the negotiations, such as outstanding implementation issues (para 12), agriculture (para 14), services (para 15), as well as the establishment of a multilateral system of notification and registration of geographical indications for wine and spirits (para 18). Other procedural issues, on the other hand, are less prevalent in the Doha Declaration or non-existent. The questions related to procedural modalities are among other things: - What value added would procedural issues provide in the modalities for the Singapore issues? - Would it be advisable – and feasible – to emphasize procedural issues as a core element in the modalities and, if so, what?

3. Substantive Modalities The Modalities of negotiations could also be more substantiated than the existing text in the Doha Declaration. As opposed to procedural modalities, the aim would be to establish the scope and coverage of the negotiating agenda, as outlined in the Commission paper. Substantive modalities should help to facilitate the negotiations and their completion by the end of 2004. The modalities could in principle be so comprehensive that merely legal drafting is needed for the completion of an agreement. In that case, it would, to some extent, be comparable to the modalities to be agreed on this spring, on agriculture and market access for non- agricultural products. A prerequisite for more detailed modalities is, however, that there is convergence in the views of WTO-members on what should be included in a future agreement and how. A key issue in this regard is special and differential treatment and other considerations of specific needs, capacity restraints and interests pertaining to developing countries. Also, with the substantive modalities, one would probably foresee large differences in the level of detail and the extensiveness of the modalities for the various Singapore issues. A number of questions follow from this: - Would it be possible to reach a common understanding among WTO- members to agree on more specific substantive modalities in any of the Singapore issues and, if so, on which issue(s)? - What level of detail should the modalities have on each of the Singapore issues so as to prepare the ground for a positive decision, while ensuring sufficient guidance for the future negotiations? - In what way, if any, would EU proposals on special and differential treatment, or other alterations in EU positions, serve to facilitate more substantive modalities on each of the Singapore issues, i.e. how could we frame the modalities to make negotiations more attractive to developing countries?

3. The Development of the WTO-round and the Singapore Issues Important steps have been taken in the Working Groups on the Singapore issues to clarify the EU positions and bridge differences among WTO member states. Much remains to be done, however, in order to ensure a positive decision in Cancún. Recent developments in other areas of the WTO-round also risk having a "chilling effect" on the discussion on modalities of negotiation for the Singapore issues. The recent mini-ministerial meeting in Tokyo underscored the need for making progress on the Singapore issues from now until Cancún. This discussion should aim to outline modalities for each of the Singapore issues that would both serve EU interests and are sufficiently balanced and flexible, not the least regarding developing country concerns, to ensure the launch of negotiations at the Cancún Ministerial Conference.

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