SUMMARY
The World Trade Organization's (WTO) 5th Ministerial in Cancún, Mexico, collapsed on 14 September 2003 with no agreement reached. The failure of the Ministerial was a major setback for the development round and for multilateralism. Its longer term implications depend on what happens next.
Cancún collapsed because on a range of substantive issues, individual countries and country-groups were unable, by the close of the Ministerial, to reach agreement through the usual WTO negotiating processes. Lessons must be learned.
Process matters: Time, timing and organisation
Preparation for Ministerials must be better. Deadlines must be met, decisions made and not postponed, and Ministerials not overloaded. At Ministerials, time must be used effectively, with clear mechanisms for making decisions about the organisation and sequencing of negotiations, and for deciding whether to extend Ministerials. The role of Chairmen, and the status of the negotiating texts they produce, must also be clarified.
Geopolitics matters: New country-groups and the failure of brinkmanship
Developing countries and country-groups found their voice at Cancún. An appropriate response by developed countries to the reshaping of the geo-political landscape might make development-friendly agreements more likely. But more actors with more objectives make strategies based on last-minute brinkmanship risky; the dismal failure of the EU's approach on the Singapore Issues showed this.
Substance matters most: Agriculture, cotton subsidies and the Singapore Issues
Ultimately, Cancún collapsed because countries' positions on matters of substance were too far apart. Without agreement on agriculture, there will be no development round. The developed world failed to offer sufficiently radical or quick reforms of its agricultural policies. The EU's failure on agriculture was an own goal resulting from a lack of coherence between its policies on trade, development and agriculture. The developed world must accept that if its agricultural policies harm developing countries—and trade-distorting domestic support and export subsidies clearly do—then, they must be changed.
The condescending refusal by the USA to negotiate on cotton, and the EU's insistence, in the face of overwhelming opposition from most developing countries, that formal negotiations on the Singapore Issues should commence, were also key factors in the collapse of Cancún. The lesson is simple: developing countries' concerns should be listened to carefully and taken seriously.
In Europe, there should be greater transparency and accountability about the formulation and pursuit of trade policy and objectives, and about the respective roles of the Member States, the Council, the Commission and the European Parliament. For the WTO itself, lessons must be learned about its governance, role and scope, and changes made. Such changes must not sacrifice democracy, accountability and transparency for efficiency gains, and must not postpone progress with the development round.
The delivery of a genuine development round is hugely important; a shift to bilateral trade relations would marginalise developing countries still further. If a genuine development round is to be revived, then all four Singapore Issues—with the possible exception of Trade Facilitation - must be removed from the agenda, and there must be a commitment to meet the concerns of the cotton producers. The EU needs to reform its Common Agricultural Policy (CAP) more radically and more quickly. If agricultural subsidies keep farmers in business, and their products are exported, then those subsidies are trade-distorting. If the EU wishes to support its farmers, or protect its environment, or improve animal welfare, this must be done in a manner which does not harm developing countries. As Oxfam note: "You can defend multilateralism, or defend the CAP; you cannot do both."
The announcement by the World Bank and International Monetary Fund of initiatives to help developing countries with the costs of adjusting to a more liberalised world—and the recognition that the timing and sequencing of liberalisation matters—is welcome. Along with progress on Special and Differential Treatment, greater coherence between the WTO and other multilateral organisations is essential in order to deliver a development round which meets the needs of the WTO's diverse membership.
Political leadership is needed now to revive a genuine development round. The EU's re-engagement is welcome, but it needs to go further on agriculture, and it should stop pursuing agreements on the Singapore Issues whilst the priorities of developing countries are addressed. The UK must continue to play its part, encouraging the EU in its support for multilateralism, pushing the EU further and faster on agricultural reform, and re-iterating that the Singapore Issues are not a developmental priority.
If the legacy of Cancún is a genuine development round and a WTO more responsive to the diversity of developing countries, then the collapse of the Ministerial may be seen as a key episode in the emergence of a fairer system of global governance in which developing countries' voices are clearly heard. As an example of what can be achieved through multilateral cooperation, the delivery of a genuine development would be hard to beat. That should be the aim.
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