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TWN Info Service on WTO Issues (Oct03/2)

2 October 2003

Third World Network

Dear friends and colleagues

C. RAGHAVAN’S ARTICLES ON POST-CANCUN SITUATION:

(2)  HAS WTO LEARNT ANYTHING OUT OF CANCUN?

Mr. Chakravarthi Raghavan, Chief Editor of the South-North Development Monitor (SUNS), has written a number of incisive articles on the post-Cancun situation in Geneva.

Earlier we sent you one of the articles, “No easy answers how to proceed after Cancun.”

Below is another, “Has WTO learnt anythng out of Cancun?”

It was published in the SUNS No. 5428 of 29 September 2003.

We are reproducing it with the kind permission of the SUNS.  Republishing or reproduction requires permission from Mr Raghavan, who can be contacted at sunstwn@bluewin.ch.

 

With best wishes

Martin Khor

TWN

 

Has WTO learnt anything out of Cancun?

By Chakravarthi Raghavan, Chief Editor, SUNS

Published in South North Development Monitor (SUNS) No. 5428

Geneva, 29 September 2003

As trade negotiators from developing countries on their return to Geneva begin to assess the outcome of the Fifth Ministerial Conference at Cancun, and the ‘road-map’ laid out in the six-paragraph ministerial statement on 14 September, there are some indications of attempts under way at the WTO and the ‘principals’ to get back to business as usual, and use the same discredited processes to get the Doha negotiations back on the same track - perhaps to another train wreck.

Unofficial information from some trade officials and several developing country trade diplomats is that a number of negotiating meetings, set before Cancun, are now in the process of being cancelled. The meeting for the Negotiating Group on Rules has been cancelled, and so will be the Agriculture Special Sessions.

The Chairman of the General Council, Mr. Carlos Perez del Castillo, is said to be planning to begin consultations, individual confessionals and with groups, leading to the informal General Council heads of delegation (HOD) processes and decisions.  Agriculture, Non-Agricultural Market Access and the Singapore issues, in this view, will be high on the Castillo post-Cancun process.

There is a suggestion that though at Cancun, at least three issues were given up - investment, competition and transparency in government procurement - with a fourth (trade facilitation) in some doubts, depending on the version or versions of the ‘Green Room’ process that is being relayed - keeping them on the table will provide a leverage. That is, a price could be paid or exacted for the EC taking them off the agenda.

This would  presumably be the G-22 modifying their agriculture demands or India and others agreeing to the demands of the US-EU in NAMA etc.

Perhaps, the WTO has too many Bourbons who haven’t learnt the lessons of history and are doomed to repeat it.

There are at least two opposing, if not more, views and versions of what happened at Cancun, what caused the failure, and how to get the WTO juggernaut going again.

The WTO view, informally being put across in media reports (apart from blaming the non-governmental groups for ‘priming up’ the developing countries, and particularly the ACP group and within them smaller African  countries to make ‘unrealistic demands’, such as over the Cotton issue) and in the ‘loud thinking’ of the trade officials in informal conversations, is that the entire Cancun failure is due to the Conference chair, Mexican Minister Ernesto Derbez Bautista.

In this reading, Derbez committed the initial ‘error’ of not accepting the Perez del Castillo and secretariat view that the entire discussions (as at Doha) should be only based on the Draft Ministerial text and annexes put forward by Castillo, and no other document from any group of countries or ministers of countries formally notified, should be put on the table.

If Derbez had listened to this advice, undoubtedly even until the last day, the Conference would have been arguing on the procedure and which document was before the meeting: the views of the Group of 22, even before the conference opened, was made clear by Brazil’s foreign minister, Mr. Celso Amorim, at Cancun after the ministerial meeting of the group. Even earlier, at Geneva, the Brazilian ambassador, Luiz Felipe des Seixas Correa at the General Council, where he served notice on this issue that the Castillo draft and agricultural annex was just one of the documents before Cancun, and the G-17 or 18 (at that time) framework was also on the table.

Derbez compounded this ‘error’ of allowing all the other texts too on the table on an equal footing, by taking up the Singapore issues first, and then ending the meeting prematurely, when if (as per the WTO ‘tradition’) it had been prolonged for one more day, and pressure had been kept up at the ‘green room’, the trouble-makers would have been isolated and forced to yield (as at Doha).

In this Alice-in-the-Wonderland view, if this had been done, the negotiations would have gone forward on the basis of the Castillo ministerial draft, and its revision at Cancun by Chairman Derbez’s draft (of 13 September), and Cancun would have concluded successfully with a revised mandate and resumed negotiations at Geneva.

Who are the ‘trouble-makers’? EC Commissioner, Pascal Lamy, in his statement before the EU Parliament at Strassbourg on 24 September, has spelt it out as the G-22 (though he seems to have been unable in that statement to get beyond the original G-17 - ‘Brazil, India, China, South Africa and 13 Latin American countries.’)

He has described the G-21 itself as the outcome of a ‘strange marriage’ - between a ‘political father’ and an ‘agricultural mother’.

The political father (in the view of the WTO officials, the trouble maker or makers) “was the desire of developing countries to assert themselves in front of a supposed Euro-American duopoly”.

Lamy is horrified that no distinction is drawn between the US and EU positions - on access to medicines, Singapore issues, GIs  (geographical indications of origin of products) , consequences to WTO of the conventions on bio-diversity and the reform of the WTO dispute settlement system.

“The political father of the G-21,” Lamy told the EPS, “therefore probably had plans way beyond the scope of the WTO: there was in this coalition, in my opinion, the expression of a desire of the large developing countries to assert themselves in the international arena. They were unable to do it in the UN over Iraq, so they did it in Cancun over trade.”

Lamy’s intent and views in talking about inability of large developing countries (India and China?) at the UN over Iraq,  is not very clear - excepting as a Machiavellian tactic of trying to maintain the US support and tilting a lance at Chirac and Schroeder who opposed the US on Iraq.

Lamy then goes on to speak of the agricultural mother of the G-21, “since it is true that relative to the size of the WTO, it is the US and the EU who are the main suppliers of agricultural subsidies.”

Nevertheless, he adds, the breakdown in discussions meant the key issue of the common agricultural policy of the future (it is not clear whether he had in mind the CAP or WTO’s agricultural trade rules and policy) could not be discussed, namely “the difference between those agricultural subsidies which harm trade and those which do not.” He also talks of the ‘other characters’ surrounding the birth of the G-21, the “industrial uncle” of industrial high tariff levels, “very upsetting for our exporters and not rushing to reduce them.”

“For the G-21, the combined weight of the political successes of asserting its existence and defensive mercantilist concerns, though legitimate in the WTO, has ....  weighed heavier than the prospects of success, however attractive in agriculture.”

At the EU parliament, the short debate (the uncorrected texts in original languages are available on the webpages, and corrected versions, in English, may be made available soon), showed that at least two or three members raised the issue of Lamy’s mandate (given on the eve of the 1999 Seattle Ministerial, and not changed or renewed since then). Caroline Lucas, of the Green party, underlined that the mandate given for Seattle Ministerial (let alone Doha and Cancun) was now null and void, and the EU/EC can no longer pretend, now that two of three ministerials have collapsed, that “we are dealing with business as usual.... The EU must now accept the verdict of developing countries that they do not want negotiations on Singapore issues... we must drop, not just two, but all the four of them.”

Glenys Kinnock (from the UK), in her intervention and in stock-taking, pointed out that the “extremely overloaded agenda” that the ministers had to cope with at Cancun, made for a process that was clearly unsustainable. The whole process was wasted until Saturday (13 September) when a new text (Derbez’s revised draft) arrived “to the consternation of developing countries.”

“There was a real perception (among developing countries) as they arrived at Cancun, and confirmed by this revised text, that “the vision, promise and ambition of Doha was being seriously threatened, because matters of substance on agriculture, cotton and the new issues, which are important to developing countries, are not being addressed... We have to acknowledge very clearly what the perception of developing countries is. It is not good enough to come here and say that the developing countries were asking for too much. They should be insulted by the implication that NGOs were able to manipulate and manage their opinions in the way that some have said.” (Western media reports, after Cancun, said that the anti-WTO NGOs had briefed and misled the developing nations, particularly the Africans!).

Kinnock asked about the kind of ‘bridge-building and confidence-building’ Lamy was engaged in. On Singapore issues, Kinnock pointed out that the UK Trade Minister had told Parliament that she was seeking a meeting with Lamy on the Singapore issues, and to get assurance that he would stick to the position taken at Cancun, and EU would no longer press for negotiations on investment and competition.

It is clear that Lamy is struggling to divert criticism away from his disastrous external trade policy, by creating a big bogey of the ‘political father and agriculture mother’, in an effort to break up the G-22 and indications that its core was trying to consolidate beyond mere agriculture.

However, at the WTO, if Perez del Castillo is allowed to have his way, the WTO may face the danger of irrepairable damage. Uruguay in the Southern Cone of Latin America is perhaps the odd man out, unlike Brazil and Argentina, which are both moving away from the neo-liberal economics of the past, and attempting to find space and identity, as against the US and its diktats.

Uruguay on the other hand, as some of the civil society groups of the region perceive it, though in serious economic crisis and with output stagnant or falling, is still hewing to the US line.

In the consultation process, several trade diplomats say, without getting bogged down into lengthy procedural questions, a few basic ones come high on the post-Cancun process.

The entire discussions at Cancun (over the Castillo ministerial draft, and even of the Derbez text) were at the informal HOD meetings - and hence there is no official record. So it is not clear how the progress made at Cancun (para 3 of the Ministerial text) is to be established, and what are the ‘outstanding’ issues on which the trade representatives at official level at Geneva are being asked to continue working, “taking fully into account all the views expressed in this (Cancun) Conference.”

What is the baggage that is being brought from Cancun when paragraph 5 talks of “We will bring with us all the valuable work that has been done at this conference”?  That para also says “In those areas where we have reached a high level of convergence on texts, we undertake to maintain this convergence while working for an acceptable overall outcome.”

How are all these to be identified and brought into the process that Castillo and Supachai have been asked “to coordinate” (they have not been given any other mandate, beyond a coordinating role)? Given past history and record, several trade diplomats do not even trust the ability or likelihood of the secretariat and its officials, even preparing faithful record of what happened at Cancun (from the tape-records that must be available).

Maybe a starting point for ‘transparency’ and confidence building, could be for all the tapes of the HOD meetings should be given to an outside transcription service that could produce uncorrected verbatim copies and records that will be available to every delegation. What the Hutton inquiry in the UK has achieved, is not too difficult for the WTO to match, in terms of records, available almost immediately.

 


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