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TWN Info Service (July03/11)

Third World Network

22 July 2003

Dear friends and colleagues

ANALYSIS OF DRAFT CANCUN TEXT AND ITS PROCESS

The first draft of the Cancun Ministerial Text was circulated to WTO members on Friday 18 July.   This followed from a meeting of the Trade Negotiations Committee (TNC) on 14-15 July.

Below is an analysis of the Text and also the processes, including the TNC meeting and after.

It is written by Tetteh Hormeku who coordinates trade issues at the Third World Network Africa secretariat, and also the Africa Trade Network, a network of African NGOs and other institutions involved in trade issues.  He is currently in Geneva monitoring WTO developments.

Please check the TWN website for previous issues of TWN Info Service.

With best wishes

Martin Khor

TWN

 

 

A SKELETON INSIDE AN UNTRANSPARENT PROCESS

An analysis of the Draft Cancun Ministerial Text and its process

Third World Network (Africa) and Africa Trade Network

1.   Introduction

The first draft of the so-called “operational text” which will form the basis of decisions to be taken by trade ministers when they meet at the 5th WTO Ministerial in Cancun was released on Friday 18 July, in line with the announcement by Dr. Supachai Pantichpakdi, the WTO Director-General and Chair of the Trade Negotiations Committee (TNC) at a two day meeting of the TNC on 14 -15 July.  Just as  Supachai described it at that meeting, the Draft Ministerial Text which is now circulating is “skeletal” in nature, with critical gaps yet to be filled in all the key areas of contention.

However, not only does the structure of the text seem to weigh the filling of the gaps against the interest of developing countries.  More importantly, judging from the developments at last week’s TNC meeting, these gaps are set to be filled through an untransparent, imbalanced, and non-participatory process, which will make it possible to secure an outcome in Cancun suited to the major powers of the WTO. 

2.   How will the text be revised and approved?

From statements made during the TNC meeting by Dr Supachai and from positions expressed by some of the major powers, the text may not be formally approved or even properly discussed by WTO the representatives at Geneva.    

WTO members will have the opportunity to comment on the text, in its current skeletal form, at the meeting of the General Council for scheduled the 24 and 25 July.  However, according to the present WTO schedule, that will be the last meeting of the General Council before Cancun.  Thereafter any further work to formulate and refine the text will take place through the informal meetings of head of delegations and other informal meetings and consultations where no records are kept of the proceedings  nor the participants known.

Demands at the TNC meeting by many developing countries for effective participation in deciding the final shape of the text did not seem to have cut much ice.   At that meeting, a demand by Nigeria, supported by Botswana and others for a special joint-session of the TNC and the General Council later in August to consider further revisions to the draft was reportedly dismissed by the United States as impractical.

Some developing countries are expected to press the demand for another session of the General Council when the council meets on 24 July.  Nigeria has already submitted a letter to this effect.  There may thus be another General Council meeting after all, reported to be on 25-26 August.

Nevertheless, it is not known how or if the divergent views of members will be reflected in the draft, whether  this draft will be revised after comments by members.  But it is now likely that the draft will not be subject to approval by the members but will be sent to Cancun under the “personal responsibility” of the chairs of the General Council and the TNC.

The draft Ministerial Text was  released by Ambassador Carlos Perez de Castillo of Uruguay, the Chairman of the General Council, “on his own responsibility, in close cooperation with the Director-General”. 

The gaps in the text are explained as reflecting the reality of how far WTO members “still have to go in a number of key areas to fulfil the Doha mandates.  The task ahead of us in the short time remaining before Cancun is to fill in the gaps in this draft so that it becomes a workable framework for action by Ministers.”  Filing these gaps will be the focus of intense consultations  “centred on the informal Heads of Delegation process and the General Council.”  

The text expects that  in “some areas the discussions at next week’s General Council on reports from WTO bodies may contribute to the evolution of this draft.  In others, further dedicated consultations will clearly be necessary”.  The aim is “to produce a text for transmission to Ministers by the latter half of August.

3.   Deceptively open text

On the face of it the Draft Ministerial Text of 25 relatively short paragraphs appears straightforward.  In the opening paragraph, Ministers would re-affirm the declarations  made and the decisions taken at Doha, take note of the “progress that has been made towards carrying out the Work Programme agreed at Doha, and recommit ourselves to completing it fully, and renew their “determination to conclude the negotiations launched at Doha successfully by the agreed date of 1 January 2005.”

To this end, the Ministers would in the second paragraph, agree to adopt a number of decisions in the various areas of the Doha work programme, listed in the subsequent paragraphs  Each area of work is listed and next to it, a formulation to the effect that Ministers agree to proceed in the manner outlined some other document  Those documents are not attached, but represented by a space in a square bracket.   Thus in the area of TRIPS and Public Health it says: 

“We welcome the decision on implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health set out in document [...] “  In relation to Agriculture:  “We adopt the modalities for further commitments in agriculture set out in document [...] and agree that participants will submit their comprehensive draft Schedules based on these modalities no later than [...]”.   

However, the formula is different on the Singapore issues.  Here, on each of the issues,  the corresponding statement  refers to the work done in the respective working group, as well the work on the issue of modalities at the General Council, and offers two options both placed in square brackets. 

These are: either an adoption “.....by explicit consensus the decision on modalities of negotiations set out in document...”  or  another decision denoted by the words “decide by.”   For example in relation to investment, it says: “Taking note of the work done by the Working Group on the Relationship between Trade and Investment under the mandate we gave at Doha, and the work on the issue of modalities carried out at the level of the General Council, we [adopt by explicit consensus the decision on modalities of negotiations set out in document ...] [decide that ...]”

The formula of the main Declaration transferring the substantive text to an Annexed Document appears in varied forms in relation particularly to all the areas under contention.  In some areas, like trade and transfer of technology, trade and finance, where there is apparently not much contention, the indication of the text is that Ministers would recommend further work to continue.

4.   The “flesh” will be in  the annexes

Thus, on the face of it, the draft Ministerial Text appears open, with nothing decided, and with the crucial issues still subject to further discussions and negotiations.  This is deceptive, on a number of grounds.  It also dangerously weighs against the developing countries’ issues and their ability to influence the text.

One of these grounds for worry relates to some of documents that will be used to fill in the gaps.  At the meeting of the TNC on 14 July, Supachai stated that the reports produced by the Chairs of the various negotiating groups “will support and complement this brief operational text with analyses of key issues and priorities”. 

Officials of the WTO who briefed journalists during the TNC meeting cited the respective chairmen’s draft modalities for agriculture (of March) and for market access in non-agricultural products (of May) as texts to be “annexed” to the intended operational text.   As is known, however, controversy still continues in the cases of both the agriculture and non-agriculture market access negotiations.  Here developing countries have registered grave objections to the proposed modalities.  In non-agriculture market access, African countries have objected to the modalities proposed by the chair, and have suggested alternatives which have yet to find their way into the text.

At the TNC, many developing countries objected to the suggestion that reports produced by the chairmen of the negotiating groups would be annexed to the operational text to submitted to Ministers.  Kenya said that the agriculture text has not been agreed to, and therefore should not be annexed. 

Some WTO officials suggested that while it may true that the agriculture text is has not been agreed upon, it was the only text available and as such would form part of the operational text as the basis for Ministers to frame their discussions.   If this logic is followed, then texts with which developing countries are in disagreement will find their way as an integral part of the text for Cancun.  And yet the fact that there is not agreement on the Chairman’s proposals were reinforced again at a two day informal and formal meeting on Agriculture held on 17 -18 July.  Here countries remained as far apart as they were before the meeting.

5.   Imbalances against developing countries

Apart from leaving the way for texts on which developing countries disagree to be sent to Cancun as the negotiating text, in areas where no such texts exist, the draft Ministerial Text formulates an orientation of the particular issues in  a manner that would prejudice the view points of developing countries.  This is the case in relation to Singapore issues.  In each of these areas, the text not only refers to work which has been done in the working group, but also on some work in the General Council on the issue of modalities for the negotiations.  So far however, there have been little or no discussion on the question of modalities in relation to the Singapore issues in the General Council.

As far as many developing countries are concerned,  the focus of the work so far carried out in the respective Working Groups on the Singapore issues has been on the clarification of issues, and the question of modalities for negotiation has not been discussed.  Even on the clarification of issues, there has been no common understanding of the issues among the members, but rather a wide divergence in almost all the topics.  Similarly, there is conflict among the WTO members, mainly on North-South lines, on the very definition of modalities.  

It may be that the Ministerial text foresees further work in the General Council on modalities on these issues.  Indeed, some documents have been circulated privately purporting to lay out the basis for discussion of modalities.  Japan has formulated its own view of the elements of modalities, around which it is apparently carrying out consultations.  The chairman of the working group on competition has also circulated a note  representing the results of his consultations with members on modalities in the area of trade and competition policy.

But with only one or two more meetings of the General Council remaining, it is most unlikely it can achieve common understanding on the modalities. Thus, before Cancun, the major powers in the WTO are planning for most discussions to be taken in the informal process and in bilateral discussions, where the preferences of developing countries are likely to side-lined. In this connection, it may be indicative of the way the drafters of the Ministerial text wants to go that, although the text puts forward two options, it does not actually state, as the counter to the possible decision adopting explicit consensus on the modalities, the opposite option declared by most developing countries to the effect that the process of clarification in relation to the Singapore Issues must continue.

Since the Geneva process is so unlikely to resolve the stark differences on the Singapore Issues, it is certain that this set of issues will be decided at Cancun.  And the very pressurised and untransparent process of Ministerials will again act against the developing countries that are opposing these issues.

Finally, there is a double standard in the treatment of issues.  On issues like agriculture and non-market access where existing texts are biased against the developing countries, as well on the Singapore issues, the draft Ministerial Text envisages that concrete decisions will be taken at Cancun.  On the other issues of interest to developing countries,  it envisages only continuation of further work and for report at a subsequent, sixth WTO Ministerial.  Thus, on the issue of implementation, the  text would commit Ministers to note that while progress has been made under the Doha mandate, a number of outstanding issues and concerns remain.  “We instruct the WTO bodies concerned to redouble their efforts to resolve these issues, and instruct the General Council to report on progress at our next [i.e. the 6th Ministerial] Session”.

On S&D the formula is split.  On some S&D issues, that are relatively minor, some decisions are to be taken as set out in a document to be attached.  Even on this set of issues an informal meeting on 21 July of Head of Delegations on the S&D shows dissatisfaction by developing countries.  Indeed, the LDCs and the African group expressed concern that they have been given little time even to study the proposals being put to them.  Apart from these issues on the table, the  major, contentious cases related to S&D will be be decided before or at Cancun.  Instead, they are to be referred back for further work and be reported at the next WTO ministerial conference.

6.   Who decides and how?

The key question now is this:  What processes will be adopted on further work on the draft Ministerial Text in preparation Cancun?   One aspect of this is the  pressure to “consult” on so many documents simultaneously, in order for them to fill in the skeleton of the  Ministerial Text, and in so little time.  The developing countries and their small, sometimes one-member delegations are once again being put at a disadvantage.  For example, the LDCs and African countries have already found themselves short of time to consider the Chairman’s suggestions on how to treat their own original proposals on S&D.

Then there is the problem of informality of the process and how the conclusions, carried out in the informal consultations are arrived at. What is the state, say, of the  text on Agriculture, and how should it be treated in the declaration?  How about non-agriculture market access?  And implementation?  Whose word counts in deciding  how much progress has been made in all these areas:  the entirety of the membership of the relevant group, or the Chairman of the group who can then proceed on his own responsibility?  And after all these individual questions have been decided, who decides on their ultimate shape in the draft declaration—the membership, meeting formally to examine and approve the draft, or the Chairman of the Trade Negotiating Committee, closely co-operating with the Chair of the General Council, supported by the army of friends of the Chair(s), all supposedly acting on their own responsibility?

At the TNC meeting, Supachai appeared determined not to give ground on his approach that after the upcoming general council, further work will only take place in informal meetings, consultations, and bilateral exchanges.  Indeed, his insistence on this approach, in the case of the particular issue of implementation, led to one of the most awkward moments (diplomatically put) in the TNC meeting, and provides an indication of the extent to which he would go. 

As reported in the SUNS No. 5386, near the end of the meeting, Supachai in summing up discussions on the issue of implementation, indicated that he would hold further consultations, including with negotiating bodies which had been dealing with these issues.  When India, following similar statements earlier made by Kenya and China,  objected to this approach and asked for the issue to be sent to a special session of the TNC to be convened later, Supachai tried to isolate India suggesting it was only the latter who had difficulties.   India then noted that their concerns were shared by China and Kenya among other, whereupon Supachai turned to the Kenya seat.  But the Kenya delegate, who had made the statement, was not in his seat, having gone to attend another meeting being held simultaneously.    When the India delegate insisted that it had instructions from its capital on the importance that the  implementation issues must be dealt with at the level of the TNC, Supachai asked the India delegation to consider going back to the capital,  presumably to get a fresh mandate more in tune with Supachai’s views.

All these came at the end of  two days of meeting of the TNC in which many developing countries returned again and again to the question of “process”.  It is clear that for the developing countries, the process of decision-making is most unsatisfactory.  They are still seeking a process in which they can effectively participate in drafting, revising and approving the draft texts that form the key decisions before and at Cancun.

Thus resolving the issue of process will be the key aspect to the outcomes in Cancun.

 


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