Self-serving post-Cancun versions add to distrust

Geneva, 18 Sep (Chakravarthi Raghavan) - Success has many fathers, failures have none, is an old adage; to that must be added (in the context of the WTO), that whether success or failure, after the event it becomes the fable story of the six blindmen describing an elephant.

Each of them feel with their hands one or another part of the elephant (the four feet, the trunk and the tail); and their descriptions of the parts may be correct, but overall mis-leading. The many versions of the final hours of the Cancun meeting, many self-serving, from participants and the observers leave such a picture.

The most self-serving perhaps have been the versions being relayed by the European Community, the United States, and some of the WTO officials all of whom collectively contributed to failure.

The UNCTAD Secretary-General, Mr. Rubens Ricupero, a former Brazilian ambassador and negotiator for part of the Uruguay Round, and who was present at Cancun, gave his assessment and impressions to a meeting of the Group of 24 (the Third World grouping at the IMF/World Bank) this week in Geneva. The meeting of the deputies was part of the preparations for the IMF/World Bank meetings in Dubai, beginning 19 September.

According to participants at the G-24 meeting, Ricupero considered the Cancun Ministerial Conference as useful, because it had clarified the positions and limits after the formation of the G-20 (China, India, Brazil, South Africa and others on the Agriculture framework as a counter to the US-EC proposal that the WTO secretariat mostly used for the ministerial draft declaration). He expressed the hope that negotiations would proceed in Geneva in a climate that would take account of the new realities.

Until very recently, he said, it had been generally expected that the Conference would be successfully concluded with some sort of a minimal agreement.

While the agreements on TRIPs and Public Health had supported this expectation, the meeting had been polarized before its start by the agreement on agriculture between the United States and the European Union, which included much fewer concessions than developing countries had hoped, and particularly the formation of the G-20 (on agriculture), which in some sense could be seen as a reaction to the US-EU agreement.

The G-20 was a very important new element, because distinct from the G-77 that had issued only very vaguely phrased declarations, it had come up with a sound proposal for negotiations in Cancun.

The UNCTAD head reportedly considered that the failure of the Conference was mainly due to disagreement on the issue of agriculture, where concessions by the US and the EU brought too little too late. Moreover, the conservative attitude of the US regarding cotton subsidies had been highly symbolic.

Ricupero argued that the failure was an indication of deeper-rooted problems, namely, that WTO as an institution was based on the fiction that all countries could abide by the same rules, the fiction that the GATT rounds had accomplished trade liberalisation in goods so that the WTO agenda could now extend to behind-the-border issues. However, it was apparent that the main developed countries had not been prepared to adopt the measures required to complete trade liberalisation in goods before embarking on other issues.

Perhaps to this assessment must be added the fundamental issue: issues of trade, money and finance, technology, and development cannot be dealt with in separate compartments, or in closed door non-transparent negotiations where the will of the few is sought to be thrust upon everyone, with the help of partisan secretariats or dealt with in ministerial conferences which are proving to be high-cost tourist jamborees and travelling circuses.

UNCTAD which was founded to undertake this job has now been forced to virtually give up on such wide-ranging discussions - partly by the pressure of the majors, the loss of interest in such work by the Latin American region (a decision taken on the eve of the Cartagena UNCTAD meeting), and subsequently by most governments, as well as the senior officials at UNCTAD itself.

Whether any serious effort can be made by governments at the next UNCTAD Conference set for Sao Paulo in Brazil remains to be seen. In the preparatory process so far, the themes and ideas that some UNCTAD officials have been sounding are now irrelevant - competition and competitivity of countries. (As Paul Krugman wrote in one of his early books), it does not make any economic sense: enterprises can be competitive, but not countries in a market economy nor can all countries be competitive at the same time.

In terms of international agreements, it is clear they have to be negotiated by government plenipotentiaries, patiently sitting together and trying to reconcile their differing interests, on the basis of concrete proposals known to everyone and however long it takes. Power-play is part of the game, but only agreements reached by plenipotentiaries, and considered and ratified by governments and parliaments will endure.

The inability of the US, with its overwhelming military power, after the invasion and occupation of Iraq, and driving out of power the Saddam Hussein regime, to occupy and pacify that country, and rebuild and make use of Iraq’s oil resources the US coveted is an indication that military power, and of a super-power, can destroy but can’t prevail.

The WTO and its secretive ways and coercive powers and threats of retaliation was conceived and used to force the developing world to comply and make way for the major corporations of the world. Cancun has shown that it may no longer be feasible.

Patiently sifting through the many reports and versions of what happened at Cancun provide a picture of sorts that does not speak well of the WTO system and its secretariat and high-level staff, the once-in-two-year ministerial conferences, their costs and benefits.

It raises questions on whether the system can be repaired and salvaged or will be left in limbo for the present.

It is clear that the two majors, the US and EC, each for their own domestic purposes, did not want success or progress at Cancun, nort the multilateral process to move forward, and manoeuvred the failure - a record of failures of substance and of manipulation too: two ministerial conferences out of the last three, and all the ministerial conferences in North America (the 1988 Montreal GATT Uruguay Round ministerial meeting, the 1999 Seattle Ministerial Conference, and now the Cancun meeting) have ended in failure.

The Doha approach could not work at Cancun: the two majors had nothing to give to the others. The US did not want any serious negotiations until the 2004 elections are out of the way: the re-election of George W.Bush already in trouble in the aftermath of Iraq and the domestic economy and loss of jobs, would not have a chance if there were even talk of some give on the agriculture and other fronts.

Technically and formally perhaps, after the failure of Cancun, the entire Doha work programme and its implementation, and the various papers and proposals, and the infamous drafts of the ministerial declarations, have now been sent back to the WTO General Council (which will be meeting for its regular session in October).

And strictly in terms of the WTO agreement, when the Ministerial Conference is not in session, the General Council can act and do whatever the Ministerial Conference is authorized to do. It can take all Singapore issues off the agenda, or keep only trade facilitation for further clarification, jettisoning the rest.

To say that the failure is due to the ‘medieval processes’ at the WTO or that the other countries ganged up and wanted to adopt UN tactics or postures is so patently propagandist that it does not even wash in their own constituencies or media - more so when it has been the US, EC and majors preventing procedures being set.

The worst process of negotiations, and one that should be remedied first, is the Ministerial Conference of the WTO as a negotiating and decision-making forum, or one requiring some movement forward in concrete trade agreements at every meeting. It can remain only as an event where ministers can meet and exchange views, but not as a negotiating forum.

The secretariat, and the majors, believe that ministers can be fooled and pushed, but it is difficult to push around ambassadors here.

At Cancun, trade officials at the WTO and the trade negotiators of the majors tried to play high-stake poker or black-jack for a jackpot to beat the house; in the WTO blackjack, the croupier, and several of the participants are all in league, wanting to clean out one or two of the opponents (from the developing world). And they all lost.

Pascal Lamy is often described as a marathon runner, but clearly both he and Zoellick failed in the Cancun gambling game, when the others called the bluff and put a ‘show card’ stake on the table.

And international negotiations, aimed at reaching good faith agreements that every government will observe and implement (a major premise of international law), cannot be carried on as a game of black-jack in a casino, but only by patient, transparent and participatory negotiations.

The role of several of the WTO officials and personalities, identified by participants, and their roles at every stage of the various drafting exercises from Geneva to Doha, Doha to Geneva, and Geneva to Cancun are now so blatant that unless they are held accountable for departing from their obligations under the WTO rules to the entire membership, there can be no real progress, and the damage to the system by confidence-building can’t be repaired, several trade diplomats say privately.

On par with officials of governments and ministers who were at Cancun or trade ambassadors and their aides, the active civil society groups (NGOs), as campaigners and otherwise, are better equipped, more savvy and knowledgeable on the political economy of trade and development, global and countrywise. All are providing versions of what happened and why that together provide an approximation for careful analysts.

From all accounts, it seems now to be fairly clear that, though the EC has expressed some surprise as to why the most difficult issues of the agenda were taken up first in the green room, and the conference was closed ‘abruptly’, it was the EC that brought this about in a way, with US support or connivance.

According to other participants in the wider green room, and the smaller meeting of a few ministers with the Chairman before, it was the EC Commissioner Pascal Lamy who wanted Singapore issues to be brought up first in the larger green room. He appears to have indicated this in the group of smaller ministers-only meeting in the early hours of Saturday night-Sunday morning, immediately after the HOD on the new text.

This adds strength to the view that the US and EU decided to collapse the meeting, but do it in a way that others could be blamed. But this has failed, with everyone spotlighting the US-EC failures on agriculture.

After trying to see whether the developing countries opposing negotiations on Singapore issues would yield, and realising he would fail, Lamy consulted his 133 Committee, and came back and offered to take off the table investment and competition issues. He did not disclose what his conditions were on other issues; and some of the others in that green room who knew it was conditional, but did not know the conditions, would not play.

While inside the meeting, he spoke of unbundling the package to take off the table investment and competition, the term ‘unbundling’ in the Geneva process meant something else, and many negotiators understood it this way.

Lamy however apparently clarified either in the green room or on the side to others that he would no longer ask for negotiations on these issues, or further study of them at Geneva.

And after Rafidah Aziz of Malaysia (which with India’s Arun Jaitley coordinated the Singapore issues group) said she was not going to agree to transparency in government procurement either, there was an impression that Lamy would agree to take this too off the table, but wanted trade facilitation negotiations to take back home, and which the US too wanted.

However, Korea and Japan wanting to protect agriculture even more vehemently than the US and EU did not agree to unbundling and insisted on the entire Singapore package - whether they would have stood out if others had agreed is not clear.

Dr. Supachai would appear to have talked to India, Malaysia and a few others requesting them to agree to trade facilitation, without the DSU, to give the US and EU a way out; but he did not indicate what would happen on agriculture (which in the Mexican Chairman’s revised ministerial draft took back some of the concessions made in the Annex A that came from Geneva to some of the G-20).

According to some who were at the ACP-LDC-African Union meeting, Bangladesh and South Africa would appear to have told their constituencies that the two, and may be three, Singapore issues could be completely out of WTO agenda, provided they agreed to trade facilitation. But they could not provide anything on paper or on what conditions this would all be done.

Supachai would appear to have sent a letter to the ACP-African Union-LDC coordinators that only talked of taking investment and competition policy off the agenda, and nothing else.

This added to the suspicion of the group on what was on offer, and what guarantee there was that the issues would not come back or be brought back to the WTO agenda in some other form, and why they should compromise without getting anything - give up cotton, and nothing on agriculture etc.

Such a level of distrust at the WTO - against the secretariat and its top officials, the majors trading nations and the others - is not a sound basis on which a serious system of rules can survive. The majors are threatening unilateralism and bilateralism or regionalism. However, they need the multilateral WTO and its cheaper (for majors) way of enforcing rules - without armies, gunboats or expense to themselves. – SUNS 5422

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