Eloquence amidst restraints

After the Doha Declaration at the fourth MC held in Doha, it appeared that the agenda for the Cancun MC was clear. In addition to the issues included by developed countries such as the Singapore issues, there were ample references to the issues of interest to LDCs and development issues in general. By this time, Supachai Panitchpakdi, the former Thailand Deputy Prime Minister had been elected as the Director General of the WTO, which sent out a positive signal to developing countries. The Fifth MC started in Cancun in right earnest under the Chairmanship of the Mexican Foreign Minister Luis Ernesto Derbez. The DG, WTO and the Chairman of the General Council, Carlos Perez des Castillo (Uruguay’s Ambassador), were also present. The Mexican Foreign Minister announced the following agenda as well as facilitators to help the discussions:

* Agriculture — George Yeo Yong-Bon, Singapore’s Trade and Industry Minister;

* Non-agricultural market access (NAMA) — Henry Tang Ying-yen, Hong Kong China’s Financial Secretary;

* Development issues — Mukhisa Kituyi, Kenya’s Trade and Industry Minister;

* “Singapore” issues — Pierre Pettigrew, Canada’s, International Trade Minister;

* Other issues — Clement Rohee, Guyana’s Foreign Trade and International Cooperation Minister (this included the TRIPS registry for geographical indications for wines and spirits, and other topics).

To signal that issues of interest to LDCs and developing countries were important, the cotton proposal from the African nations of Benin, Burkina Faso, Chad and Mali was taken up on the first day itself. The proposal called for subsidies on cotton in developed countries to be removed since it hurt the exports of the proponents.

Issues at the Cancun MC

A draft text was circulated in July 2002 for the consideration of members to be adopted at the Cancun MC. However, issues of importance to developing countries and LDCs, which were included in the Doha MC, remained unresolved or unaddressed in this draft text. Two important issues come to mind: the issue of public health in the context of the TRIPS agreement (which was agreed in the Doha MC) and the issue of continued subsidies, domestic support and high tariffs by developed countries. While no solution was found to the public health issue (how were developing countries without manufacturing facilities to take advantage of doing away with patents), the issues in agriculture remained unaddressed. In fact, it seemed that the EC had no intention to dilute any provisions of its Common Agriculture Policy (CAP) and intended to continue with high tariffs and domestic support in agriculture.

On the other hand, developed countries were pushing aggressively for launching discussions on Investment, which would lead to multilateral rules. It may be recalled that this issue was left unresolved till the last minute in the Doha MC. It was only after the Chairman of the Doha MC announced that a decision to launch this issue would be taken in the next MC, was the Doha declaration adopted unanimously. The investment issue was of obvious interest to developed countries because more than 75 per cent of foreign investment originated in these countries and was deployed in the markets of developing countries. It was clearly important for furthering the operations and interests of multinational corporations of developed countries in the area of goods and services.

Why Cancun failed

Ultimately, the Cancun Ministerial also collapsed because of an opposing world view of the developed and developing countries. Ironically, the talks failed because of the greater inclusiveness and participation of the developing countries as compared to earlier MCs. Developing countries were far more organised as compared to Seattle and were able to articulate an alternative vision and proposal. While the developed countries put aside all pretense of the importance of ‘development’, developing countries emphasised the need for a fair and transparent multilateral trading system, which would address the concerns of developing countries and LDCs.

There were at least three developing country groupings formed at Cancun. The G20 grouping was led by Brazil to advocate issues on Agriculture such as domestic support and tariff barriers; the G16 grouping was led by Malaysia to highlight the reservations of many developing countries on the Singapore issues, particularly investment; the G33 grouping was led by Indonesia and wanted a special safeguard mechanism to protect the livelihoods of vulnerable farmers; and the G90 grouping formed mostly of African Union, African and Caribbean countries, LDCs and the G20 grouping to push for issues of interests of developing countries and LDCs in general. Interestingly, India played a key role in the formation of all these groupings.

While there are many views on why the Cancun talks failed, there were two issues that were the trigger: one was the virtual revolt by the ACP countries against the Singapore issues, in particular, the investment issue. The other issue was the way the cotton issue referred to above was dismissed by the EC and USA. While the US was unwilling to antagonise its large cotton farmers, when elections were due in a year, the EC did recognise the importance of the issue, but was unwilling to address the concerns of cotton exporters, in particular, the rules of origin issue. To be sure, there were other reasons too, which led to the failure of the Cancun MC, such as: the deadlock on issues of domestic support and escalating tariff barriers by developed countries in agriculture, the disagreement on the TRIPs and public health issues, the implementation issues which were a leftover of the Uruguay Round and meant to be addressed in Doha (these were mostly related to negotiations in agriculture and services as well as granting special and differential treatment to developing countries) and the opaque negotiating process in which most members had no say in preparing the final draft of the MC.

While the developed countries blamed developing countries for the collapse, the actual reasons were more complex as discussed above. Many developing countries as well as the NGOs and civil society groups thought that the real reason for the collapse was neither the Singapore issues, nor the cotton subsidies issue. These were just red herrings pushed by developed countries to divert attention from the real issues such as domestic support and high tariffs that persisted and which developed countries were unwilling to address.

Conclusion

Even though the Cancun MC failed, there was one positive development from the developing countries point of view: that they were much better organised and more articulate than ever before. The various groupings and the alternative proposals tabled by them was proof of this development. This would continue into the future MCs and perhaps bring about a geopolitical shift, at least in the trade negotiation arena.

The writer is Additional Chief Secretary, Department of Mass Education Extension and Library Services and Department of Cooperation, Government of West Bengal.