Memorandum submitted by Christian Aid
Like many agencies working in the developing
world, Christian Aid regrets the collapse of the Cancún
WTO ministerial. Clearly, an agreement supported by all its members
would have been better for the WTO. However, Christian Aid is
not of the view that a deal should have been made at any cost.
The huge effort that the WTO has recently expended on patching
up just one aspect of the TRIPs agreement is a forceful reminder
of the dangers of signing up to flawed agreements in the WTO.
Given the extremely poor deal that was on offer at Cancún,
calling a halt may have been the best option available to many
developing countries.
In Christian Aid's view, there are a number
of key lessons to be learned from Cancún:
— The WTO's de facto executive structure,
currently made up of the chairs of the different negotiating groups,
must be made more representative and accountable to the WTO membership.
— The new groupings of developing countries
must be encouraged and strengthened, so they can continue to act
as a vital counterweight to the more powerful countries in the
WTO.
— There are problems with accountability
in trade policy making at the EC level that need to be considered
in the light of the EC's role in the Cancún ministerial.
— If the EC is serious about the "development
round", it must learn from Cancún that developing
countries cannot be forced into agreements that they know are
against their interests. It must apply this lesson to all negotiations
with developing countries, including the Cotonou negotiations
with the ACP.
WHAT HAPPENED?
After a slow few days, there were two key flashpoints
in the last two days of the conference:
1. THE DRAFT
MINISTERIAL TEXT
1.2 Following several days of formal sessions
during which countries mainly reiterated their established positions,
and informal sessions in which the key issues of agriculture—in
particular cotton—and the Singapore issues were discussed
in various groupings, a draft text appeared at lunchtime on Saturday
13 September. This was a revised version of the text that had
been prepared in Geneva in August.
1.3 There were a number of areas in which
the draft text was considered by developing countries to be unbalanced.
Although the new text did make progress in some areas, in particular
on tariff escalation, in others it represented a step back from
the first draft ministerial text. The paragraph on cotton was
particularly disappointing, and the section on the Singapore issues
was unacceptable to many countries on two counts: firstly for
committing WTO members to negotiate on three of the four issues,
and secondly for explicitly tying progress on these issues to
progress on agriculture by setting the same deadline for both
sets of negotiations.
1.4 The draft declaration highlights the
problem of process at WTO ministerials. According to some developing
country delegates, in many ways their participation in Cancún
represented an improvement on at Seattle or Doha. Most developing
countries had many more delegates than at previous ministerials.
They were also, again in stark contrast to previous ministerials,
kept busy negotiating most of the time.
1.5 However, despite the apparent improvements
in developing-country capacity, the draft declaration reflected
very little, if any, of the views and interests of the developing
countries. This illustrates very sharply where problems are due
to the processes of the WTO itself, rather than being a result
of lack of capacity of developing countries. In this case, although
many developing countries had the capacity to engage fully with
the negotiations, and were operating in effective coalitions to
maximise their negotiating clout, the drafting process did not
reflect this. Texts were drafted by just one or two people, who
discussed them with delegations individually or in small groups.
1.6 The process of this ministerial seemed
to veer between two extremes—a large and unwieldy negotiating
structure in which 146 WTO members negotiated with each other,
and a highly centralised process of drafting text, in which just
one or two people, in effect an executive body for the purposes
of the ministerial conference, largely controlled who had inputs
and how those inputs were dealt with.
1.7 The experience with the draft ministerial
text adds weight to calls for reform of the WTO. The priority
is not necessarily to streamline the process of negotiations among
the total membership. Clearly, 146 delegations cannot draft a
text. However, every WTO member needs to know how that text is
being drafted, have confidence that someone involved in that process
is acting in their interests, and have some means of influencing
that process. The WTO needs to consider how its de facto executive
structure, currently composed of the chairs of various negotiating
groups and the ministerial conferences, can be made more democratic.
1.8 Various proposals have been made, before
and since Cancún, for a more formal executive committee
in the WTO. Christian Aid believes that this is an idea that merits
serious consideration by WTO members. In doing so, members will
have to balance the need for some form of representative system,
in which countries with common interests are grouped together,
with the need for flexibility and a system that can deal with
changing alliances and shifting interests.
1.9 However, the problems with the draft
declaration did not stem entirely from the drafting process. It
also reflected the failure of the EU and the US to compromise,
or even to recognise the strength of feeling among developing
country delegates. The text on cotton was particularly inflammatory,
since many felt it advanced a US, rather than an African, agenda.
Despite repeated warnings about the strength of feeling among
most developing country delegates, the EU insisted on hardening
the language on the Singapore issues from the first draft, to
the dismay of many.
1.10 It is not clear that the EU, at least,
has learned anything from Cancún. The paper prepared by
the EC's Director-General for Trade, Peter Carl, for the 133 meeting
on 3 October was startlingly aggressive toward developing countries.[54]
Among other things, it accused those opposed to the Singapore
issues of a "serious breach of faith" in rejecting negotiations
on those issues, and accused the G-21 group of failing to engage
in any "meaningful negotiation", on the grounds that
its key members were not interested in seeing any progress in
the agricultural negotiations since their interests were largely
defensive. This paper came out 10 days after the collapse of the
conference and, unfortunately, must be seen as representing the
considered view of the EC on Cancún and its aftermath.
This attitude does not bode well for the WTO—but it also
illustrates why agreement in Cancún was, in the end, impossible.
It also puts a heavy burden on the UK government, which has made
much of its pro-development credentials, to pressure the commission
to change this high-handed attitude towards developing countries.
2. BREAKDOWN
ON SUNDAY
2.1 The draft text made the atmosphere for
negotiations much more difficult. Developing countries were disillusioned
with the whole process of the ministerial, having seen how little
they seemed likely to get from it. This set the stage for the
final breakdown on Sunday.
2.2 Again, the breakdown was exacerbated
by the very centralised process of decision-making during the
conference—both the decision to discuss the Singapore issues
before agriculture in Sunday's Green Room meeting, and the decision
to close the conference when no agreement seemed possible on those
issues, were made by the chair of the conference, apparently with
little consultation. It is possible that an executive committee,
with a better understanding of the views of the members and of
the process followed at other ministerials might have made different
decisions.
2.3 Again, however, the significance of
process should not be overstated. A different process might have
resolved this particular problem in a different way, but the problem
was caused by the atmosphere of mistrust created by the apparent
refusal of the EU and the US to compromise on key issues for developing
countries. By the time the EU did agree to compromise on the Singapore
issues, it was too late for Cancún.
3. WHAT IS
THE SIGNIFICANCE
OF CANCÚN?
3.1 New issues
The UK government has made it clear that, in
its view, investment and competition are now off the WTO agenda.
The commission paper of 25 September seems to endorse this view,
with the caveat that a plurilateral approach may still be possible
in the WTO. However, since Cancún the EC has made it clear
that it will be seeking to negotiate on all four of the new issues
as part of the negotiations with the ACP on a successor to the
Cotonou agreement. Given that it was ACP countries which were
the most adamant in Cancún in rejecting the new issues,
this is a very worrying development, again illustrating the failure
of the EC to listen to the very strongly and clearly expressed
views of developing countries.
3.2 Developing Country Alliances
The fact that all three significant developing
country alliances—the G-22, the Africa group and the alliance
on special products—held together for the whole ministerial,
despite intense pressures, and maintained good relations between
themselves, is highly encouraging. It may be that the likely delays
in restarting agriculture negotiations in earnest will give these
groups more time to consolidate their positions and develop their
negotiating stance and tactics. In that case, the eventual deal
on agriculture may be better than if agreement had been reached
at Cancún. However, there is no guarantee that the groups
will manage to maintain a unified position. Given its commitment
to capacity building and its support for the new developing country
alliances, the UK government should investigate how best to offer
them support.
3.3 Role of NGOs
With sad inevitability, some officials and ministers
have targeted NGOs in their search for someone to blame for the
breakdown of negotiations in Cancún, among them Franz Fischler.
For someone with the resources of the EC at their disposal—including
the generous aid budgets and trade preferences available to friendly
countries—to complain that NGOs exerted undue influence
is surprising.
Clearly, on the Singapore issues, as on other
issues, developing countries have been receptive to NGO arguments.
This is due less to the dark arts practised by NGOs than to the
fact that those arguments chime with developing countries' own
views and experience. The view that NGOs have some sort of sinister
hold over the trade ministries of certain developing countries
is less a reflection of reality than an illustration of how far
the EC has to go before it can engage with developing countries
in an atmosphere of genuine mutual respect and trust.
4. ROLE OF
THE UK GOVERNMENT
4.1 Before arriving in Cancún, Patricia
Hewitt, the Secretary of State for Trade and Industry, visited
some of the organisations with which Christian Aid works in Honduras.
There she met farmers who had been forced to stop producing rice,
their main cash crop, because of competition from cheap subsidised
inputs from the US, and because of the threat of even cheaper,
though unsubsidised, imports of rice from Asia. The Honduran government
has recently introduced a quota system under which local millers
can only import rice if they buy first from local farmers. Rice
imports outside this system are subject to very high import tariffs.
Patricia Hewitt heard from farmers how liberalisation of the rice
market had wrecked their livelihoods, but how, thanks to the new
rice agreement, several were now able to make a living growing
rice again.
4.2 Christian Aid is pleased that Patricia
Hewitt accepted our invitation, and feels that it demonstrated
a real commitment on the part of the UK government to understand
trade issues from the perspective of the poorest. Judging from
her statements during and after the trip, we feel that this has
contributed to a greater understanding of the complexity of the
problems international trade can cause for poor farmers—that
problems are not just due to the subsidy regimes of Northern countries,
but also due to trade liberalisation itself. We are pleased that
Ms Hewitt used the Honduras experience to illustrate her commitment
to the concept of special products in the WTO agriculture negotiations.
4.3 We were also impressed with the amount
of effort the UK delegation put into the daily briefings for NGOs.
The regular briefings from ministers and civil servants proved
useful at several points during the conference. However, their
usefulness was curtailed by that fact that the UK government seemed
to have a limited knowledge of what the EC was actually doing
in the negotiations.
4.4 Christian Aid staff were represented
on the Irish delegation to Cancún. Their experience reinforces
the point about lack of communication between the EC and member
states. The Irish government were quite open about the difficulties
of finding out what the Commission were up to, in particular in
the first days of the conference. The 133 Committee meetings consisted
mainly of briefings from Lamy about what he had done, rather than
discussions of strategy or content.
4.5 The extremely weak lines of accountability
between the EC and member states during Cancún poses a
number of questions about democracy and accountability that should
be reviewed as part of a more general assessment of the EC's role
and responsibility in trade negotiations.
October 2003
54 European Commission, Peter Carl, Director-General
for Trade, "The Doha Development Agenda after Cancu«n",
25 September 2003. Back
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