Delegations of some 20 richest industrial countries and the biggest emerging economics in the world agreed to a 47-point action plan over the weekend in an initial effort to stem the seriously deteriorating global economy – including a call to complete “modalities” negotiations in the nearly eight-year-old Doha Development Agenda (WTD, 11/13/08).

Leaders from the invited nations – excluding the Netherlands, whose Prime Minister had to depart before the sessions began due to a death in the family – discussed what to do about the crisis. A discussion of Doha took place at a Friday evening dinner. The leaders met most of the day Saturday hammering out the five-page declaration.

A senior White House economic official noted to reporters on Saturday the importance of including Doha in the discussions. “The leaders ... have charted a course here; they have affirmed certain principles and made some very specific commitments, including in the area of protectionism. So it’s not just the usual statement that we want to have the Doha round done. .... It is different in quality and character than prior statements because it contemplates the possible direct involvement of leaders ... and it is coupled with the commitment not to raise new trade barriers,” the official explained. Leaders in Washington pledged not to raise new barriers to trade and investement over the next 12 months – as nations engage in formally concluding the trade round.

12. We recognize that these reforms will only be successful if grounded in a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, effectively regulated financial systems. These principles are essential to economic growth and prosperity and have lifted millions out of poverty, and have significantly raised the global standard of living. Recognizing the necessity to improve financial sector regulation, we must avoid over-regulation that would hamper economic growth and exacerbate the contraction of capital flows, including to developing countries.

13. We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty. In this regard, within the next 12 months, we will refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports. Further, we shall strive to reach agreement this year on modalities that leads to a successful conclusion to the WTO's Doha Development Agenda with an ambitious and balanced outcome. We instruct our Trade Ministers to achieve this objective and stand ready to assist directly, as necessary. We also agree that our countries have the largest stake in the global trading system and therefore each must make the positive contributions necessary to achieve such an outcome.

14. We are mindful of the impact of the current crisis on developing countries, particularly the most vulnerable. We reaffirm the importance of the Millennium Development Goals, the development assistance commitments we have made, and urge both developed and emerging economies to undertake commitments consistent with their capacities and roles in the global economy. In this regard, we reaffirm the development principles agreed at the 2002 United Nations Conference on Financing for Development in Monterrey, Mexico, which emphasized country ownership and mobilizing all sources of financing for development.

15. We remain committed to addressing other critical challenges such as energy security and climate change, food security, the rule of law, and the fight against terrorism, poverty and disease.

16. As we move forward, we are confident that through continued partnership, cooperation, and multilateralism, we will overcome the challenges before us and restore stability and prosperity to the world economy.

Supervisors should collaborate to establish supervisory colleges for all major cross-border financial institutions, as part of efforts to strengthen the surveillance of cross-border firms. Major global banks should meet regularly with their supervisory college for comprehensive discussions of the firm's activities and assessment of the risks it faces.

Regulators should take all steps necessary to strengthen cross-border crisis management arrangements, including on cooperation and communication with each other and with appropriate authorities, and develop comprehensive contact lists and conduct simulation exercises, as appropriate.

Authorities, drawing especially on the work of regulators, should collect information on areas where convergence in regulatory practices such as accounting standards, auditing, and deposit insurance is making progress, is in need of accelerated progress, or where there may be potential for progress.

Authorities should ensure that temporary measures to restore stability and confidence have minimal distortions and are unwound in a timely, well-sequenced and coordinated manner.

Much of the declaration addressed the need for better regulation along with a call to reform the World Bank. The leaders also called for establishment of a “college” of international regulators to act as an early warning system in the current crisis.

A majority of delegations – including some leaders – met with President-elect Obama’s representatives on the side-lines of the meeting. Former Secretary of State Madeleine Albright and former House member Jim Leach met with Australian Prime Minister Rudd, South Korea President Lee, Mexico President Calderon, Argentina President Kirchner and Turkey Prime Minister Erdogan.

Also attending the summit were the heads of government of Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Russia, Saudi Arabia, South Africa, Spain, the United Kingdom and the European Union along with the heads of the World Bank, the International Monetary Fund, the United Nations and the Financial Stability Fund. The Netherlands delegation was led by its minister of finance.

Geneva – With formal backing hand backing from 20 leaders from industrial and big emerging markets to conclude negotiation on negotiating modalities in the Doha Development Agenda negotiations, World Trade Organization Director General Lamy plans to convene a mini-ministerial meeting around December 10 – but some serious doubts remain over the outcome of that effort minus adequate texts in agriculture and nonagricultural market access, WTD has learned (see related report this issue).

The December 10 date for the ministerial meeting was set in a meeting in Washington on Friday – just ahead of the G-20 economic summit – between Brazilian foreign minister Celso Amorim and US Trade Representative Susan Schwab.

It is expected that the Director General will unveil an action plan which contemplates revised draft texts in agriculture and NAMA sometime after November 24 – but soon enough for a scheduled senior officials meeting in early December, WTD was told.

The successful effort in Washington to include the Doha language in the leaders’ declaration was due primarily to pressuring by the United States, Brazil, Australia, the European Union and the United Kingdom, trade envoys said.

But a number of diplomats here have raised some doubts about the impact of the G-20 directive – maintaining that some key players will have to show flexibility in both areas to reach any agreement by the end of this year. A number of delegations here, WTD was told, feel it would be imprudent to rush into any agreement at a juncture when so many differences exist. They suggested that prospects for tabling new draft texts in agriculture and NAMA will hinge on “revised” and “new” ideas from key players who have failed to show any flexibility on contentious issues until now.

For a ministerial to be successful there will have to be revised draft texts that suggest new solutions to the contentious issues that brought down a similar mini-ministerial in July, said several trade diplomats. They added that four or five major issues remain unresolved in agriculture.

The envoys also noted that until now the United States, Australia and Uruguay, have failed to come up with new ideas on how to break the stalemate with the members of the Group-of-33 developing-country coalition on the special safeguard mechanism for developing countries. In fact, they added, some issues have arisen that were thought to have been settled back in July.

Similarly, the European Union, Japan, Norway and Switzerland will have to come up with concrete ideas on farm tariff simplification; the EU, Japan, Canada, Norway and Switzerland also will have to moderate their stances on “sensitive” products, WTD was told.

“The situation on the ground is that there is no convergence; neither proponents nor opponents have come up with flexible proposals,” commented one senior trade envoy.

The picture is much worse in the NAMA discussions, where the United States and other industrialized countries continue a push for a commitment from China, India, Argentina and South Africa to participate in the sectoral negotiations on chemicals, industrial machinery and electricals and electronics, WTD was told.

The Treasury Department this week will publish much-anticipated final rules for the inter-agency Committee on Foreign Investment in the United States to review proposed foreign investments that have national security implications (WTD, 10/14/08).

The rules implement legislation passed by Congress last year aimed at making sure the government follows a stringent review process whenever a foreign-government owned entity attempts to purchase a US business deemed to have national security value.

The final rules clarify what types of proposed transactions would fall under a CFIUS review and specifies that the new rules will apply retroactively to any investment proposed or pending since August 23, 1988. The rules clarify that in determining foreign control, CFIUS will consider all relevant facts and circumstances, rather than applying a “bright-line” test.

Treasury will publish guidance on the types of transactions CFIUS has reviewed in the past to give potential investors a better idea of the kinds of investments likely to fall under the rules.

The US Treasury Department, on behalf of the Committee on Foreign Investment in the United States (CFIUS), issued final regulations governing CFIUS on November 14, 2008. The regulations implement Section 721 of the Defense Production Act of 1950, as amended by the Foreign Investment and National Security Act of 2007 (Section 721). The regulations also codify improvements to the CFIUS process informed by seventeen years of practice. Issued in proposed form on April 21, 2008, the final regulations reflect CFIUS's careful consideration of all comments received during the public comment period, as described in the discussion that precedes the regulatory text. By increasing clarity and transparency and ensuring that the CFIUS process is efficient, the regulations reinforce the United States' longstanding commitment to open investment.

Covered transaction: Any transaction proposed or pending after August 23, 1988, by or with any foreign person, which could result in control of a US business by a foreign person.

Long-term lease: May be a covered transaction only if a foreign lessee makes substantially all business decisions concerning operation of a leased US business, as if it were the owner.

Lending transaction: Not a covered transaction unless the foreign person acquires financial or governance rights characteristic of an equity investment, but not of a loan. Imminent default giving a foreign person actual control of collateral that constitutes a US business is a covered transaction – but lenders in the ordinary course may qualify for an exception.

Incremental acquisition: After CFIUS concludes action on a covered transaction, the foreign person's acquisition of additional interest in a US business is not a new covered transaction.

Functional test: CFIUS will continue to consider all relevant facts and circumstances, rather than applying a bright-line test to determine whether a transaction results in foreign control.

Important matters: Expand the illustrative list of “important matters.” Control is defined as the “power, direct or indirect, whether or not exercised...to determine, direct, or decide important matters affecting an entity.”

Private equity: Add examples to clarify that certain structures create ownership interests but not control, clarifying that CFIUS focuses on person's powers, not transaction form.

Passive investment: Clarify that there is no automatic exclusion for acquisitions of ten percent or less. That rule applies only if the investor is passive, maintains that sole intent, and takes no action to the contrary.

Minority shareholder protections: Identify negative rights that do not, in themselves, confer control, and provide that other rights held by minority shareholders also could be found not to confer control on a case-by-case basis.

Convertible voting instruments: Identify factors CFIUS takes into account in determining whether to consider, at the time of acquisition or at a later date, the rights a foreign person will receive upon conversion of convertible voting instruments, for purposes of assessing control.

Clear timelines: Ensure an efficient process by requiring prompt action throughout the review process by the Staff Chair and by parties to transactions, within the context of the strict deadlines established by statute for reviews (30 days) and investigations (45 days).

Contents of notice: Increase transparency by requiring in a voluntary notice the types of information CFIUS requests in practice, which also aids efficient review by CFIUS.

Penalties: Set a limit on civil penalties and provide the right to petition for reconsideration of any penalty, which may be imposed upon any person who makes a material misstatement or omission in a notice filed with CFIUS, makes a false certification to CFIUS, or breaches a mitigation agreement.

Critical infrastructure: Clarify that CFIUS considers the particular assets involved in a transaction, rather than designating whole classes of assets as :critical infrastructure.”

Just back from Oman, Deputy US Trade Representative John Veroneau said Friday that he expects the small Persian Gulf country to implement all its obligations under a 2006 bilateral free trade agreement with the United States sometime in January (WTD, 10/28/08).

Getting Peru to fully implement, however, is likely to take longer, the deputy USTR told reporters following the speech (WTD, 9/29/08). That agreement also was negotiated in 2006.

The Deputy USTR again urged Congress to pass the three pending FTAs – with Colombia, Panama and South Korea – before it finally adjourns later this week (WTD, 11/14/08).

Europe's trade chief on Sunday backed a call by world leaders to strive for a breakthrough in long-running world trade talks by the end of the year, Reuters news service reported from Brussels (see related report this issue). “With the right combination of hard work and leadership we should now aim to agree the framework of a final deal before Christmas,” EU Trade Commissioner Catherine Ashton said of the Doha negotiations.

“It now falls to trade ministers and (World Trade Organization chief) Pascal Lamy to make this a reality, by tackling the few remaining issues where agreement eluded us in July in Geneva,” she added.

Chinese President Hu Jintao urged the international community to guard against erecting protectionist barriers to trade and investment, according to a Dow Jones news service report. In a speech Saturday to the first-ever summit of the Group of 20 industrial and emerging nations, the commander-in-chief of the world's fourth-largest economy said efforts should be made to promote the Doha Round of trade talks and achieve positive developments soon.

Brazilian officials called Friday for a rapid conclusion to the long-stalled Doha round of global trade talks to help ease the international financial crisis, the Associated Press news service reported. Foreign Minister Celso Amorim said Friday he expected the “modalities” of the Doha talks would be resolved by the end of the year allowing for a free trade agreement that would lubricate the world economy. “The question of the World Trade Organization (talks) is timing. It will be easier for the next American president to take an already negotiated agreement before Congress than it will be if he has to negotiate each point,” Amorim said. Amorim made his comments following a meeting between Brazilian President Luiz Incio Lula da Silva and British Prime Minister Gordon Brown ahead of the Saturday's G-20 summit on the global financial crisis.

Malaysia has unveiled a series of measures, in a bid to protect its trade and investment from the global economic slowdown, Channel News Asia reported from Kuala Lumpur. The much awaited measures were unveiled by International Trade and Industry Minister, Muhyiddin Yassin, on Friday. He gave the assurance that the government would help export-oriented industries, in particular manufacturers.

The more significant measures included the scrapping of import duties on over 400 raw materials, such as iron steel bars, petrochemical, textiles, apparels, machinery and equipment. And to make it easier to do business, manufacturing licences will be automatically renewed from December. The exceptions are industries related to health, security and the environment. To ease the burden on manufacturers, banks will also be asked to roll over loans, especially for the SMEs.

The European Union will closely examine any aid package from the US government to its automakers to ensure it complies with international trade rules, an EU spokesman said Friday according to a Dow Jones news service report from Brussels (WTD, 11/14/08). Democrats in Congress want to pass a $25 billion government rescue for the “Big Three” US automakers: General Motors Corp., Ford Motor Co. and Chrysler LLC. The companies are burning through cash and may face bankruptcy in 2009 without government help.

“We will look very carefully at the details of the proposed aid package to the US auto industry, in order to ensure compliance with international trade rules and assess the potential impact which it may have on trading partners,” said Peter Power, trade spokesman for the European Commission, the EU's executive arm. The US Congress already approved $25 billion in taxpayer-backed loans for the “Big Three.” Additional aid beyond that appears to have the support of president-elect Barack Obama, but it faces opposition from congressional Republicans and President Bush.

US agricultural trade set a record for fiscal 2008 with both exports and imports up, Agriculture Department Economist Nora Brooks told USDA Radio. Exports for fiscal 2008 hit $115.5 billion – up 41 percent above the previous fiscal year. Imports for fiscal 2008 were $79.3 billion, a 13 percent rise over the previous year.

But Ms. Brooks said she does not expect the record high levels to continue. Fiscal 2009 is likely to see lower commodity prices and lower demand because of the global economic slowdown.

A US-Cuba trade group says the island has spent a record $536 million for American agriculture goods through the third quarter, already surpassing all annual amounts since 2001, the Associated Press news service reported from Havana. The US Trade and Economic Council says that most of the growth is because of price increases, and not quantities. The council released the figures Friday.

Chinese candle exporters will be hit with extra charges when selling in Europe to punish some producers for selling below cost, the European Union said Saturday according to a Associated Press news service report from Brussels. The EU imposed antidumping charges for six months from Saturday after European candlemakers complained that they were losing business to cheaper Chinese products. The EU said Chinese candles sell for around 9 percent less and make up about one third of the European market.

The EU fixed different fees for several Chinese exporters after deciding that some pay most of their business costs. The fees imposed by the EU vary from zero for one exporter to 66 percent of the value of the candle for those who did not respond to an EU investigation. The EU antidumping charges will last for six months while the trade investigation continues. Next year, officials will recommend whether the charges should stay in place for up to five years.

Customs. Customs Bureau fact sheet on agricultural imports. (available at: http://www.cbp.gov/linkhandler/cgov/newsroom/fact_sheets/printer_fact_sheets/agriculture.ctt/agriculture.pdf ) issued: 11/14/08.

SPS. World Trade Organization announcement of new program of sanitary and phytosanitary issues. (available at: http://www.wto.org/english/news_e/news08_e/sps_14nov08_e.htm ) issued: 11/14/08.

TBT. World Trade Organization latest transitional review report on China’s technical barriers to trade. (available at: http://docsonline.wto.org/GEN_viewerwindow.asp?http://docsonline.wto.org:80/DDFDocuments/t/G/TBT/24.doc ) issued: 11/14/08.

ACE. Customs Bureau update on the Automatic Commercial Environment program. (available at: http://www.cbp.gov/linkhandler/cgov/newsroom/fact_sheets/printer_fact_sheets/ace_print_sheets/ace_fact_sheet.ctt/ace_fact_sheet.pdf and http://www.cbp.gov/linkhandler/cgov/newsroom/fact_sheets/printer_fact_sheets/ace_print_sheets/ace_pms_fs.ctt/ace_pms_fs.pdf and http://www.cbp.gov/xp/cgov/newsroom/fact_sheets/trade/ace_factsheets/ace_glance_sheet.xml and http://www.cbp.gov/xp/cgov/newsroom/fact_sheets/trade/ace_factsheets/ace_monthly_sheet.xml ) issued: 11/14/08.

Agriculture. Customs Bureau fact sheet on agricultural imports. (available at: http://www.cbp.gov/linkhandler/cgov/newsroom/fact_sheets/printer_fact_sheets/agriculture.ctt/agriculture.pdf ) issued: 11/14/08.

NAMA. World Trade Organization statement on nonagricultural market access negotiations. (available at: http://www.wto.org/audio/wasescha_2008_11_13_opening.mp3 ) issued: 11/14/08.

CFIUS. Treasury Department statement on release of the final Committee on Foreign Investment in the United States regulations. (available at: http://www.treas.gov/offices/international-affairs/cfius/ and http://www.treas.gov/offices/international-affairs/cfius/docs/finalregs_111408%20.pdf ) issued: 11/14/08.

China. World Trade Organization latest transitional review report on China’s technical barriers to trade. (available at: http://docsonline.wto.org/GEN_viewerwindow.asp?http://docsonline.wto.org:80/DDFDocuments/t/G/TBT/24.doc ) issued: 11/14/08.

World Trade Organzation. 2008 report of the World Trade Organization committee on technical barriers to trade. (available at: http://docsonline.wto.org/GEN_viewerwindow.asp?http://docsonline.wto.org:80/DDFDocuments/t/G/L/871.doc ) issued: 11/14/08.

WTO. World Trade Organization Trade Policy Review report for 2008. (available at: http://docsonline.wto.org/GEN_viewerwindow.asp?http://docsonline.wto.org:80/DDFDocuments/t/WT/TPR/232.doc ) issued: 11/14/08.

TPRM. World Trade Organization schedule of trade policy reviews for 2009. (available at: http://docsonline.wto.org/GEN_viewerwindow.asp?http://docsonline.wto.org:80/DDFDocuments/t/WT/TPR/233.doc ) issued: 11/13/08.

G-20. White House fact sheet on the results of the G-20 financial summit. (available at: http://www.whitehouse.gov/news/releases/2008/11/20081115-4.html ) issued: 11/15/08.

G-20. White House press briefing on the outcome of the G-20 economic summit. (available at: http://www.whitehouse.gov/news/releases/2008/11/20081115-7.html ) issued: 11/15/08.

G-20. List of delegations attending the G-20 economic summit in Washington. (available at: http://www.whitehouse.gov/news/releases/2008/11/20081114-5.html ) issued: 11/14/08.

G-20. Text of President Bush’s radio address on the G-20 economic summit. (available at: http://www.whitehouse.gov/news/releases/2008/11/20081114-1.html ) issued: 11/14/08.

G-20. Remarks by President-elect Obama on the G-20 economic summit. (available at: http://change.gov/newsroom/entry/your_weekly_address_from_the_president_elect/ ) issued: 11/14/08.

G-20. President-elect Obama announcement of meetings by his envoys to the G-20 economic summit. (available at: http://change.gov/newsroom/entry/former_sec_of_state_albright_and_former_gop_congressman_leach_meet_with_del/ ) issued: 11/14/08.

G-20. International Monetary Fund statement on the G-20 meeting in Washington. (available at: http://www.imf.org/external/np/sec/pr/2008/pr08286.htm ) issued: 11/15/08.

Rules of Origin. Report of the World Trade Organization rules of origin committee. (available at: http://docsonline.wto.org/GEN_viewerwindow.asp?http://docsonline.wto.org:80/DDFDocuments/t/G/L/870.doc ) issued: 11/14/08.

TPRM. World Trade Organization revised rules of the Trade Policy Review Mechanism. (available at: http://docsonline.wto.org/GEN_viewerwindow.asp?http://docsonline.wto.org:80/DDFDocuments/t/WT/TPR/6R2.doc ) issued: 11/14/08.

TPRM. World Trade Organization Trade Policy Review report for 2008. (available at: http://docsonline.wto.org/GEN_viewerwindow.asp?http://docsonline.wto.org:80/DDFDocuments/t/WT/TPR/232.doc ) issued: 11/14/08.