Global Trends by Martin Khor

Monday 20 October 2003


POST-CANCUN TALKS RESUME AT WTO

Blurb:   After the dramatic collapse of the Cancun Ministerial Conference on 14 September, the World Trade Organisation is trying to get talks moving again in Geneva with the aim of meeting a new deadline of 15 December.  Last week saw the WTO convening its first post-Cancun meeting -- but only five countries spoke up.  The wounds of Cancun are evidently taking time to heal.  MARTIN KHOR reports from Geneva.  

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One month after its Cancun Ministerial Conference broke down without agreement, the World Trade Organisation convened again for the first time last week at a meeting in its Geneva headquaters. 

It was almost a non-event.  Only five delegations spoke up, after the General Council chairman and the WTO Director General gave brief speeches on how they intend to get talks moving again, following the trauma and confusion surrounding the closure of the Cancun meeting.

The five were Mauritius, Botswana, Benin, Morocco and Bolivia.  They all reaffirmed how important the multilateral trade system is, and how vital it was to get the negotiations moving on track again.

But there was a deafening silence from the developed countries.  The European Commission’s Ambassador explained to journalists that the European Union  was still in a period of “reflection” and thus was not willing to proclaim its intentions.  And major developing countries like India, Brazil, China, and Malaysia also kept their quiet.  The meeting lasted just an hour.

After the talks collapsed in Cancun, the Ministers in a brief statement directed the Ambassadors to continue the work in Geneva and set a deadline of 15 December to convene a General Council meeting of senior officials to take decisions.

Officials in Geneva are now working towards that target date to make meaningful decisions on at least some issues possible.  So far there is not much optimism even this will be achieved.

The atmosphere at the WTO headquarters is tense, with delegations trying to figure out what attitudes and approaches others are having, whilst themselves also trying to evolve their own positions.

The developed countries, especially the EU and the US, are perceived as being in a “sulky” mood, still smarting from the collapse of the Cancun talks.  They blame the collapse on developing countries, for not going along with their proposals.

Many developing countries, meanwhile, are indignant at any notion that they caused the Cancun failure.  They believe their own positions were very reasonable, and that it was the developed countries that were not willing to open their agriculture markets but on the other hand were insisting that the poorer countries open up their markets.

The developing countries are however cautious not to engage in a “blame game”.  Indeed, in its statement at the WTO meeting last week, the Botswana Ambassador took pains to say that both developed and developing countries should share the blame.

They keep stressing the importance of the multilateral trading system, and would like the talks to resume in Geneva.  But more significantly they also want the agreements and process to be fair. 

The talks will start in the WTO in earnest this week.  But they will not be in the open.

The talks will go “underground” in a series of “consultations” led by the Chairman of the General Council, the Uruguay Ambassador, Carlos Perez del Castillo, and the WTO Director-General, Supachai Panichpakdi.

The consultations will be a combination of meetings between one or both of these officials with individual delegations (now known as “confessionals”) and with small groups of countries.  Occasionally above-ground meetings of all members will be called (though still in an “informal mode” where minutes are not kept or circulated) to keep everyone abreast of what has been happening underground.

This was basically the same process followed in the Geneva preparatory phase before Cancun.  For much of the time, delegations did not come face-to-face with one another to openly debate their positions, and so the differences could be papered over, since much of the negotiations was between delegations and the Chairpersons conducting the consultations.

But when the delegations did get together, at meetings dedicated to specific topics, the divergences came out in the open.  Attempts to narrow the divergences through a clean text issued “under his own responsibility” by the Chairpersons of particular issues, eventually did not succeed in producing consensus.

Thus, the differences remained on the boil at Cancun.  And when the same process of bilaterals, confessionals and small-group meetings continued under “Facilitators” of key issues at Cancun, the divergences remained as wide or even wider;  this despite (or more accurately because) of a “clean” new revised Ministerial text on 13 September, the eve of the Conference’s end. 

Since the “informal consultations” will now resume in Geneva, the stage is set for continuing the non-transparent processes that have so characterized the pre-Cancun phase.  Whether this way of doing business succeeds this time, when it failed recently, remains to be seen.

The consultations will focus on four key issues:

**  Agriculture liberalization.   Developing countries want the rich nations to significantly reduce and eventually eliminate their high export and domestic subsidies, but the latter are resisting.  Developing countries in turn want to ensure their farmers are not overwhelmed by cheap imports, but the rich countries want them to open their markets.

** Cotton.  Some African cotton-producing countries want the WTO to take a special initiative to end the cotton subsidies, especially of the US, which are harming their farmers.  The US is most reluctant to do so, being intent on protecting their own few cotton farms.

** Industrial products.  WTO members are wrangling over a formula to cut tariffs on industrial goods, and over a scheme to accelerate the elimination of tariffs in seven selected sectors.  The rich countries want the poor ones to drastically reduce their tariffs, but the latter are worried that too drastic a rate of liberalization would damage or even destroy their local industries.

** Singapore Issues.  These refer to four new issues (investment, competition, transparency in government procurement, trade facilitation) which the developed countries want to develop into new WTO agreements.  Most developing countries refuse to do so, arguing that the proposed new rules would go against their developmenjt interests and their sovereign right to formulate national policies.  

At the WTO meeting last week, Dr. Supachai said that from his discussions with delegations and capitals, he had an overwhelming impression everyone is still very committed to the multilateral trading system.  The aim is to arrive at a sufficient degree of consensus in all areas by December to enable the negotiations to resume their full momentum.   He warned however that “Time is not on our side”.

Only five delegations---Mauritius, Botswana, Benin, Morocco and Bolivia---spoke.  They reiterated their support for the multilateral trading system and agreed to pick up the positive elements from the Cancun conference to try to unlock the negotiations in Geneva.

The Botswana Ambassador, Charles Ntwaagae, on behalf of the African, Carribean and Pacific Group, said the Group actively participated in the Cancun conference but were disappointed by the lack of balance in its deliberations.  However all is not lost and important lessons have been learnt, particularly as regards balance and priorities. 

The ACP Group also reiterated the critical need to ensure transparency in consultations and decision-making process.  It is our hope this matter will continue to receive attention in all the post Cancun consultations and meetings.

The Benin Ambassador stressed the importance of focusing on the cotton initiative, as it is urgent that a solution be found to the cotton problem.

The European Commission’s Ambassador, Carlo Trojan, told journalists outside the meeting that the EU is having its own internal reflection exercise. The EU requires some more weeks to reflect on these issues, he said, replying to questions on why the EC did not make any statement at the HOD meeting.