On NAMA, countries did not agree on a framework for future negotiations, but only on its "initial elements." On services, this week's progress consists of setting a May 2005 date for countries to submit revised offers to open their markets.

In an Aug. 1 press conference, U.S. Trade Representative Robert Zoellick insisted he was "not at all disappointed" by the outcome on NAMA. On services, Zoellick said the U.S. has been successful in making it a third part of the main market access negotiations along with agriculture and NAMA. This is an apparent reference to the fact that the May deadline was not included in earlier drafts of the framework.

The WTO's General Council endorsed the framework deal just after midnight on Aug. 1, which formally acknowledges that the Jan. 1, 2005 deadline for concluding the Doha round will not be met. The declaration states that members agree to continue work beyond that deadline, and to meet for the sixth WTO ministerial in Hong Kong in December 2005.

Geneva officials made it clear this week they do not see a conclusion of the Doha negotiations by that ministerial. Instead, they expressed the hope that countries would agree to specific negotiating approaches or modalities by that time. But they also acknowledged that may be difficult if developing countries continue their current stance against major concessions. For example, on industrial or agricultural market access, modalities would settle the controversial issue of what formula should be applied to tariff cuts and to what extent it would reduce developing countries' barriers to imports.

Indian Minister of Commerce Kamal Nath told reporters that he thought the Doha round could be completed in 2006. To do so, negotiations would have to "move at the same pace as [in] the last six months," he said. "This momentum must not be lost."

He also said that the lessons of this week's Geneva meetings and of last year's failed Cancun ministerial are that the U.S. and European Union must put their agriculture subsidies on the negotiating table to get any progress on market access. "It seems like the U.S. and EU have recognized for the first time that market access can't happen without substantial and effective steps in them changing their own domestic policies of support. This was not so earlier," Nath said.

But at the same time, he did not indicate that India would be flexible on market access concessions if the U.S. and EU agreed to cut their subsidies. "The issue is not that I don't want to give market access," Nath said. "It's that I don't want to give unfair market access." He warned that developing countries will not be "shortchanged" on that issue.

Zoellick defended the NAMA language in the final text, even though the U.S. and EU had tried to preserve a draft framework prepared by Mexican Foreign Minister Luis Ernesto Derbez at Cancun against changes demanded by developing countries. The final text inserts language spelling out developing countries' objections into the Derbez text as the first paragraph, which appears to water it down.

U.S. industry representatives, such as the National Assn. of Manufacturers, had urged U.S. negotiators to keep the Derbez text intact as much as possible by ensuring that any proposed changes would be relegated to a side letter or cover note. But developing countries rejected that idea as not giving their views the same legal standing as the Derbez text. In a July 30 draft framework, the additional views were included as a lead-in paragraph or headnote to the Derbez text, but developing countries successfully opposed that.

In the Aug. 1 press conference, Zoellick said he actually favored including the paragraph in the main NAMA text, which is Annex B to the overall declaration approved by the General Council. He said the Derbez text was a "reasonably good text" and the U.S. had been successful in preserving three elements in it: a non-linear formula to be applied on a line by line basis, which could mean higher tariffs would be cut more than lower ones; a sectoral component that Zoellick said was "strong," and language on the need to discipline non-tariff barriers.

He also said WTO members had to move on agriculture in order to move on NAMA, so industrial tariffs was always seen as a challenge for the Geneva meetings.

The new first paragraph of the Derbez text now states that the framework contains the "initial elements" for future work and that "additional negotiations are required to reach agreement on the specifics of some of these elements." These elements are a formula for reducing tariffs, the issue of whether participation will be mandatory in a sectoral initiative to eliminate tariffs, and flexibilities for developing countries.

Zoellick also said the U.S. was careful in negotiating the wording of this additional paragraph. For example, he said, it states that additional negotiations are required to reach agreement on the "specifics" of some elements in NAMA. His comments seemed to imply that this wording makes it clear the elements themselves are not at issue, merely the specific details that they cover.

According to Zoellick, the U.S. successfully resisted efforts to remove the word "specifics" from the text. "If you parse the words closely, you'll see there's words like focus on the specifics and there were, of course, some runs that taking out those sort of words which didn't happen," he said.

EU Trade Commissioner Pascal Lamy, speaking immediately before Zoellick, also rejected the idea that the additional paragraph watered-down the NAMA text, and insisted it actually improved it. "I'm convinced the latest version is better than the initial version," Lamy said. During this week's negotiations, EU member states had highlighted the importance of achieving strong language on NAMA to ensure that agriculture was not the most advanced area of the negotiations. In the end, EU member states unanimously backed the Commission's decision to accept the framework, a Commission official said.

On agriculture, the framework text is much more specific on export competition and domestic support than on market access. Zoellick said language calling for the elimination of export subsidies at a date certain was a "very big plus" for the U.S. because it meets a long-standing demand. The specific end date will be determined in future negotiations, but officials described the commitment to eliminate export subsidies as a historic achievement.

Zoellick also said the U.S. had pushed very hard in securing language that states higher levels of permitted trade-distorting domestic support will be subject to deeper cuts. The framework also said that there will a "strong element" of harmonization in the subsidies cuts by developed countries. This is a big plus, he said. U.S. farm groups have criticized the results of the Uruguay Round for allowing the EU a much higher level of trade-distorting subsidies than the U.S.

U.S. agriculture producers have long insisted that they want to see significant market access gains if they are to accept reductions in domestic subsidies. But the agreed framework is vague in explaining how the Doha round mandate of "substantial improvements" in market access is to be achieved.

The text calls for the use of a tiered formula, states that reductions would be from bound rates, and calls for making deeper cuts to higher tariffs than to lower ones. But it also calls for flexibility on market access concessions for sensitive products without further explanation.It merely says that there will be substantial improvements on market access for "all products."

The new text also provides little guidance on the selection of sensitive products that members can shield from the full extent of future market access concessions. The final text states that member may designate "an appropriate number, to be negotiated" of sensitive tariff lines, with the understanding that this should not undermine the tiered formula tariff cuts.

Substantial market access improvement should apply to each product, according to the text. This could allow some countries to protect individual tariff lines from substantial market access concessions, since there are often several tariff lines within each product definition.

The issue of how much countries must increase their market access by tariff-rate quota expansion if they shield a product from major tariff cuts will be determined later in the negotiations, according to the text.

Swiss President Joseph Deiss signaled his country will continue to fight hard for the right to protect sensitive products such as dairy. He said in the next stage of the talks, the G10 of net food importers to which Switzerland belongs along with Japan will call for modalities that will allow such protection.

The position taken by developed countries on protecting their sensitive products will have an impact on the demands of developing countries, such as India. They have demanded proportionally more flexibility to protect their own sensitive products than developed countries.

The new text also requires members to reduce by 20 percent the sum of their trade-distorting subsidies in the first year of the agreement as contained in the amber and blue boxes as well as the subsidies counted as de minimis payments excluded from a member's aggregate measure of support (AMS). Under the Uruguay Round, these de minimis subsidies were capped, but not subject to reduction commitments, while the new framework says they will be cut.

Nath and other officials said these were positive steps, but some experts on agricultural trade in the U.S. and Brazil said the "down payment" commitment was relatively meaningless. It will be made from the ceilings authorized in the Uruguay Round, not from the amount countries actually spend on subsidies. In addition, the new framework will give the U.S. the ability to shield some of its farm bill subsidies not linked to production in a new blue box.

As a result, even after the 20 percent down payment cut, the U.S. subsidy level would be about the same as its allowable subsidies limits today, they said. However, that subsidies ceiling could then be further cuts depending on the outcome of the future agriculture negotiations.

On special and differential treatment, the final draft includes a July 2005 deadline for work on proposals by developing countries to strengthen specific provisions in various WTO agreements. By that date, the Committee on Trade and Development in its special session is to report to the General Council "with clear recommendations for a decision."

The text also asks that the Committee address all other outstanding issues, within the parameters of the Doha mandate, and to report "as appropriate" to the General Council. Work on S&D has made minimal progress so far even as the Committee has been under similar instructions previously.

With respect to implementation of existing trade agreements, Director General Supachai Panitchpakdi is to hold consultations on pending proposals, including the issue of extending protections for products with geographic names other than wines and spirits. He is to report to both the General Council and the Trade Negotiations Committee by May 2005, with the stipulation that the General Council will then take "any appropriate action" by July 2005, according to the framework.

The requirement that Supachai report to both the TNC and the General Council is intended to serve as a compromise between the India and Brazil and other members of the WTO. India and Brazil wanted the director general to report to the TNC because this would make implementation issues more part of the single undertaking of the Doha round. India and Brazil want the implementation work to lead to changes in the Agreement on Trade-Related Investment Measures.

But other countries opposing increased GI protection wanted the director general to report to the General Council to ensure this issue would not become part of the Doha negotiations.