Global Trends by
Sunday 21 September
Behind the Collapse
of the Cancun Ministerial
Malaysia played an important role in mobilizing the strength of developing
countries at the WTO’s Ministerial Conference last week. Because the
developing nations spoke up for their rights, there was a deadlock as
the rich nations kept piling the pressure. The meeting collapsed spectacularly
last Sunday not only because the countries could not agree on key issues
but because of the undemocratic system of decision-making and of drafting
the texts of agreements. MARTIN KHOR reports from Cancun, Mexico.
By Martin Khor
The dramatic collapse of the
WTO’s Cancun Ministerial meeting last Sunday had many causes. It is vital
to identify them and learn the lessons so as to avoid further damage to
the multilateral trading system.
It is still unclear what happened
in the meetings’s last hours, whether the talks broke down due to any
specific issue or whether time simply ran out with serious divisions on
many issues unresolved.
The immediate reason for the
collapse was the inability to agree on whether to start negotiating new
WTO agreements on the “Singapore issues” (investment, competition, procurement
and trade facilitation), so-called because they were first introduced
at the first WTO Ministerial meeting in Singapore in 1996.
The EU and Japan have been
championing negotiations, but over 70 developing countries were strongly
Malaysia has been one of the
key leaders of these 70 countries. International Trade and Industry Minister
Datuk Seri Rafidah Aziz chaired the meeting of the countries just before
the Ministerial began, and was their spokesperson at a press briefing
to announce why the coalition was opposing the starting of negotiations
on these issues.
Through the leadership of this
grouping of countries, Malaysia became one of the prominent players at
the Cancun meeting. Rafidah and her officials played a significant role
in mobilizing the developing countries to stand up for their rights, and
not to be bullied as happened in past WTO Ministerial meetings.
The resistance of developing
countries to intense pressures was one of the important features of Cancun,
and perhaps a major reason why the talks reached deadlock.
On Sunday morning, the Conference
chair, Mexican foreign secretary Luis Ernesto Derbez convened an exclusive
“Green Room” meeting of about 30 Ministers to discuss the outstanding
issues. He started with the Singapore Issues as they were now the main
issue of contention.
At the meeting, many developing
countries reiterated opposition to expanding the WTO’s mandate to the
four new issues. EC Trade Commissioner Pascal Lamy reportedly agreed
to drop investment and competition, but wanted to proceed to negotiations
for the other two issues. After a lunch break when Ministers consulted
with their regional groups,
there was still no agreement.
Derbez then said a consensus was not possible for the whole package of
issues and decided to close the Conference.
The lack of consensus on the
Singapore issues may have been the immediate cause, but the meeting’s
collapse had broader and deeper roots. For the first three days, the
conference focused mainly on the controversial agriculture issue, with
the main protagonists being the EU and US on one side, and the Group of
21 developing countries led by Brazil and India on the other side, and
a grouping of 32 other developing countries fighting for for stronger
mechanisms to protect small farmers from a flood of cheap imports.
A revised draft of the conference
Declaration, issued at lunchtime on Saturday, had the effect of intensifying
rather than reducing the polarization in the Conference. The developing
countries were unhappy that the agriculture text did not answer their
concerns. They were outraged with the sections on Singapore issues, as
the views and formal proposals of 70 of them (not to launch negotiations)
had been swept aside. And they were also angry at the poor treatment
of the African proposal to end cotton subsidies in the text, which one
Minister proclaimed to be an insult to Africans and unworthy of the WTO.
The atmosphere was already
on the boil when one by one the developing countries took the floor at
a lengthy Saturday night meeting to criticize the draft Declaration.
The issue of the WTO’s manipulative
decision-making process, particularly in the drafting of texts, was then
coming to he fore.
“Here we are with 70 or more
developing countries speaking up clearly in the consultations, having
a consensus document with language on the Singapore issues, clearly expressed,
and the draft just ignores our position and takes the opposite position,”
said the Minister of a Carribean country on Saturday night, while having
a coffee break. “What kind of organization is this? Who does it belong
to? Who does the drafting? Who appointed them? Why waste our time engaging
seriously in consultations only to find our views not there at all in
In the end it was the WTO’s
untransparent and non-participatory decision-making process that led to
the collapse the Cancun talks collapsing.
The WTO’s Ministerial meetings
have been characterized from the first by the lack of democracy. In Singapore
(1996), most Ministers were shut out of the negotiations as only 30 countries
were invited to exclusive consultations known as Green Room meetings throughout
The uninvited Ministers were
angry when they were told at a last plenary that they should adopt to
a Declaration they had no hand in drafting. They reluctantly agreed only
after the then Director General, Renato Ruggiero, promised that exclusive
meetings would not happen again.
But in Seattle (1999), the
Green Room meetings to which only a few were invited operated again from
the start to the end of the meeting. Ministers of the ACP and Africa
groups were so outraged at being shut out that they issued a statement
they would not join the consensus on any Declaration. The talks collapsed.
At Doha (2001), Ministers were
all invited to informal consultations and kept busy. But the drafting
of the various versions of the Declaration were undertaken in an untransparent
and exclusionary manner, starting with the WTO General Council chairman
submitting an unpopular draft “under his own responsibility” to the conference
as the basis for negotiations, and ending with a final draft issued on
the last day which everyone was urged to adopt as there was no alternative
at that late hour. Until now it is not known who drafted this final text
and on what authority.
After Doha, the practice of
Chairs of the WTO councils and negotiating groups writing and submitting
texts “under their own responsibility” became widespread. Many developing
countries voiced their unhappiness with it, but the major countries found
it convenient to get their positions adopted through this undemocratic
The drafts for agriculture
and industrial products and later for the Cancun Text itself, were all
drawn up by Chairs and not by the members. Under this drafting system,
all it needed for the major powers’ interests to be satisfied were: a
Chair coming from the circles of the majors or compliant to their views;
a Secretariat condoning or promoting the practice; and a membership that
is willing (or at least that does not successfully object) to being part
in the process.
The drafting by Chairs has
shifted the WTO from a member-driven to a Chair-driven organization.
Instead of negotiating with one another, members are now negotiating with
the Chair, hoping he or she will take their views on board.
But the drafts, because they
usually reflected the views of the powerful minority, have lacked the
support of most of the developing country members (who are often outraged
that the texts were one-sided and did not reflect their positions) nor
In Cancun, this Chair-driven
process continued and became the norm. The appointed (and thus unelected)
Facilitators of the five working groups became all powerful as they not
only conducted consultations but were responsible for drafting the groups’
reports and texts. The Conference Chair himself was responsible for drafting
the revised Ministerial Text.
No one among the participants
is sure how the drafting is actually done, or who does it. It is known
that the Secretariat plays a major role. And when the revised Ministerial
draft came out on Saturday at 1pm, it again revealed biases (some of them
blatant) towards the developed countries.
By now, there were only 28
hours before the scheduled end of the Conference. It was evident that
the developing countries were this time much better organized and prepared
to face the unfair processes and the debates.
An attempt to reproduce a Doha
ending (i.e. to ram through an unpopular Declaration on the grounds that
there is no alternative, and that a “collapse” of a Ministerial would
lead to the breakdown of the trading system and the global economy) would
have led to an open revolt by developing countries.
Thus, the Mexican Minister
made a rational decision that the best option is to close the Conference
with a simple statement instead of risking a real catastrophe.
With the Cancun Ministerial
collapse, the issue of the WTO’s decision-making and text-drafting process
has again emerged to the fore. That the Ministerials are run without
rules and proper procedures can no longer be ignored if the system is
Having a failure rate of two
out of three of the most recent Ministerials is not a record any organization
can be proud of.
European Commission Trade Commissioner,
Pascal Lamy, at a closing press conference, himself termed the WTO as
having a “medieval organisation” which is “not so rules based”. But it
is a system which he has himself made use of in Doha to great effect,
to ram through the unpopular decision on Singapore issues.
Lamy called for reforms to
the decision-making system of the WTO. He forgot to mention that after
the Doha experience, many developing countries had put forward a set of
proposals (in February 2002) on establishing procedures for Ministerials
and their preparatory process, and that the EU with other developed countries
had blocked these proposals from being adopted.
Just a few weeks before Cancun,
developing countries again tried to raise the issue of the need to have
proper procedures for Ministerials, including for drafting texts. Several
international NGOs also launched a campaign for internal transparency
and participation in the WTO.
But these attempts for more
democracy in the WTO house were again swept aside by the major developed
countries and the Secretariat. They wanted to retain their grip over
the drafting of texts and the operation of Green Room meetings.
If this system continues, then
each Ministerial would be a poker game, characterized by uncertainty and
fraught with risks of failure, and whose fate depends on last-minute brinkmanship,
with powerful countries trying their luck and using various methods to
push their way through, and developing countries organizing themselves
to resist the pressures.
In Doha it worked for the majors.
In Cancun it didn’t. If things don’t change, it will be another gamble
wherever the next Ministerial is held.
Holding the trade system hostage
to the poker-like game of brinkmanship is however full of risks, as the
record of two failures out of three meetings shows.
The ultimate lesson of Cancun
is that the organization must change its “medieval ways” and democratize
to accommodate the developing countries (who after all form the majority
of members) or perish.
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