| Author (Person) | Bower, Helen | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Publisher | ProQuest Information and Learning | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Series Details | 22.9.03 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Publication Date | 22/09/2003 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The Fifth Ministerial Conference of the World Trade Organisation, which took place in Cancún, Mexico, drew to a close on 14 September 2003 without agreement on the Ministerial text. The failure of delegates to reach agreement on the Cancun text has raised questions about the future of the global trading system and has prompted some commentators to compare the effect of the Cancun Ministerial on the World Trade Organisation to the damage done to the United Nations by the Iraq crisis. It is the second time in four years that WTO talks have broken down (following Seattle in 1999) and although trade ministers now plan to meet again in Geneva in December 2003 it is unlikely that the Doha round of negoitations will finish on schedule by 1 January 2005. The episode has prompted countries around the world to reconsider their use of the multialteral trading system. The United States has said that it will now press ahead with bilateral negoitations while European Commissioner for Trade, Pascal Lamy, said that the EU should reconsider whether it wishes to make multilateralim its trade policy priority and whether the current working method of the WTO should be kept as it is in the future. But while the United States and the European union may be moving away from the WTO because of the lack of progress, both along with Japan were blamed for the collapse of the ministerial talks. All three parties were keen to press on with the so-called Singapore issues (investment, competition, transparency in government procurement and trade facilitation) but the developing countries said they not ready to negotiate on these issues leaving the 146 member body in stalemate. Background The main aim of the Cancun Ministerial Conference was to assess the progress in the negotiations and efforts under the Doha Development Agenda, adopted at the last WTO ministerial conference held in the capital of Qatar in November 2001. At the 4th WTO Ministerial Conference in Doha, delegates from 146 countries agreed to launch a new round of WTO negotiations comprising both further trade liberalisation and new rule making, underpinned by commitments to strengthen assistance to the world's less developed countries. A target deadline of 1 January 2005 was set for the completion of negotiations. (See The key areas of negotiations are:
The EU's position on Cancún negotiations Following on from the agreements reached at Doha in November 2001, the EU has remained committed to the Doha Development Agenda and it approached the Cancún Ministerial Conference with a desire to complete negoitations in certain sectors - such as agriculture - while launching dicussions on new areas such as investment, competition and trade facilitation. After a WTO deal on generic medecines was finally agreed on 1 September 2003 , which will those countries without the capacity to produce their own medicines to import generics, the European Commission suggested that the general mood going into the conference should be fairly upbeat with all WTO members aware of the importance of the meeting. In a press release [IP/03/1198] issued ahead of the Cancún conference, the European Commission stated its determination for success, saying:
Pascal Lamy, the European Commissioner for Trade, added:
The European Union agreed on its negoitating position for the Cancún ministerial at a Council meeting of the EU's foreign mnisters on 21 July 2003 One of the priority areas for the EU in Cancún concerned the agricultural negoitations. The European Union believes that the proposed reforms of the Common Agricultural Policy demonstrate the EU's important contribution to the Doha negoitations but the Agriculture Council has also stressed that the margin of manoeuvre offered by this CAP reform could only be used in the DDA on condition of equivalent agricultural concessions from the EU's WTO partners. The EU aslo hopes that the Cancún meeting will provide an opportunity to find a balance between market opening and the protection of the countryside. In further effort, the European Union and the United States produced a joint initiative on agriculture for the WTO negoitations on 14 August 2003 [See IP/03/1160]. With regards to trade in goods, the EU offered to keep customs duties within a narrow bracket and to prevent tariff peaks for some products. In addition, it has proposed the abolition of export restrictions on raw materials and the provision of zero rating for textile sand clothing for all WTO partners, a move it believes would particularly benefit developing countries since these are their main exports. On services, the EU was particularly keen to establish a clear roadmap for negotiations in order to make the Doha deadline in January 2005. Similarly, it was keen to press its WTO members to agree on the negoitating modalities for issues related to international trade rules, the so-called Singapore issues. The EU believes that these discussions must get underwya immediately after Cancún in order to make the 2005 deadline. The EU also agreed to press certain environment issues in Cancún as well as the protection of geographical indications. The latter is an area where the EU is increasinlgy active and it is keen to establish a multilateral register of wines and spritis whilst dicussing the prospects of extending protection to other agricultural products. Overall, the European Union approached Cancún in an ambitous and determined way. While it argued that the a revised draft Cancun Ministerial text, tabled on 24 August by the Chairman of the General Council of the WTO, Mr. Perez de Castillo, indicated the substantial differences remaining between WTO members that must be resolved by Ministers in Cancun it also commented on the number of areas of agreement. Generally the EU stated that the text was "not balanced in some areas (notably in agriculture), insufficiently ambitious in others (for example in industrial tariffs and geographical indications or presents a step down in ambition (e.g. on Environment)".It also criticised the text for failing to provide an unequivocal decision on the launch of the negotiations on the Singapore issues. Cancún - From Early Successes to Failure The Cancún Ministerial got off to a good start. The membership agreements of Cambodia and Nepal were approved on 11 September 2003, paving the way for them become the WTO's 147th and 148th members, and first least-developed countries to join the WTO through a full working party negotiation. They still have to ratify their agreements and inform the WTO, and 30 days after that they will become WTO members. There was also a productive debate on a proposal concerning the trade in cotton preapred by four African countries (Benin, Bukina Faso, Chad and Mali). However by the mid-point of the conference tensions were beginning to show as the "faciliatators" for each issue began work on a new draft Ministerial declaration. In particular, the group responsible for the "Singapore issues" were divided about the way forward. On 12 September 2003 facilitator Pierre Pettigrew reported three distinct positions in the group:
The EU and US argued for the launch of negotiations in Cancún but the developing countries said they were not prepared to do so. While in the past, the "effective power" of the EU and US has often helped them to successively defend their position against the small developing countries, this time they faced more organised opposition. A group of twenty countries, including Brazil, Argentina, Egypt, China, India and South Africa joined forces in a group, now known as the G20+, to defend the interests of developing countries in the multilateral trade negoitations. By day four of the conference, Chairperson Luis Ernesto Derbez, Meixco's foreign minister, expressed concerns about the effects that the failure of the conference would have on the global economy and the international trading system. Describing the ministerial meeting as a once-in-a-generation opportunity, he warned that if Cancún failed, the negotiations may take a long time to recover. Generally, a large number of ministers suggested that their particular concerns had not been included in the draft ministerial text. For example, they found the agriculture section either too ambitious or not ambitious enough. They differed over whether to launch negotiations on the Singapore issues or whether there is no consensus to do so. They had comments on the non-agricultural market access text, including the description of the tariff cutting formula and whether sectoral deals (zero tariffs for all products within specified sectors) should be compulsory for all members. Others said the text on the cotton initiative did not reflect the proposal to phase out subsidies and for subsidizing countries to compensate the African producers in the interim. Moreover, a number of African and Caribbean countries criticised the draft for doing too little on special and differential treatment for developing countries. Amidst the negative atmoshpere, a few countries, both developed and developing, expressed concern that the negative sentiments would wipe out what they described as possible significant results in areas such as agriculture, which are particularly important for developing countries. Ultimately, Chairperson Derbez ended the conference on 14 September 2003 after concluding that despite considerable movement in consultations, members remained entrenched, particularly on the "Singapore" issues . With negotiations on the Singpaore issues continuing through the night but without a breakthrough, time had run out for agreement on the Ministerial text and so a Ministerial statement was prepared instead. The text noted the considerbale progress made at Cancún and said that this would be used in the progress of the negotiations. It called upon officials to continue working on outstanding issues and asked the Chairman of the General Council, working in close co-operation with the Director-General, to coordinate this work and to convene a meeting of the General Council at Senior Officials level in Geneva no later than 15 December 2003 to take the action necessary at that stage to enable the WTO members to move towards a successful and timely conclusion of the negotiations. It concluded:
Reaction to the failure of the Cancún Ministerial Conference Many countries participating expressed their surpise at the chairperson's decision to end the conference without agreement on the ministerial text since many believed that this could have been achieved in some form or other. Franz Fischler, the European Commissioner responsible for the EU's agriculture negotiations at the meeting, said:
However, from the perspective of the European Trade Commissioner, Pascal Lamy, Cancún highlighted the failures of the WTO system:
His view has been echoed by many commentators from developed countries who believe that a fundamental reform of the WTO is now necessary. They argue that the decision-making system, based on reaching consensus, makes failure near enough inevitable when there 146 countries represented. In future, many have said that they will focus on bilateral trade relations as opoosed to the multilateral system. Even the EU is reconsidering its position. However, for the less developed countries Cancún is being heralded as a limited success. While agreement may not have been reached on a number of important issues, they claim that their increased power to represent their views through the G20+ group is a significant step forward, providing them with more punchweight against the "big boys". Ironically, it was this success with led to the divisions over the Singapore issues and ultimately the failure of Cancún. But in the long run, the developing countries could be the biggest losers as they fail to benefit from more favourable trading conditions. Clearly, the WTO's Director -General General Supachai Panitchpakdi needs to ensure that the momentum behind the Doha Development Agenda is maintained and that officials meet in Geneva in December 2003 preapred to make progress. He is all too aware of the importance of the Doha round of negotiations. After Cancún failed, he said:
But with the world's richer countries moving more towards bilateral relations and further away from the multtilateral trading system, officials at the WTO may find themselves facing as much of an uphill challenge as those at the United Nations in the months ahead. Further information within European Sources Online:
Further information can be seen in these external links: EU Institutions European Commission International Organisations News Organisations
Helen Bower 22 September 2003 |
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