CONCLUSIONS AND RECOMMENDATIONS
What happened at Cancún?
1. We welcome this long overdue agreement
on TRIPS and public health which removes one of the obstacles
which poor people face in gaining access to affordable essential
medicines, and acknowledge the contribution made by the UK Government
to securing agreement. (Paragraph 10)
2. we support Oxfam's call for UK legislation
to be amended to allow compulsory licensing for export. This
should apply to all drugs for life-threatening diseases, for export
to least-developed countries. The UK should also support similar
changes to European pharmaceutical legislation. (Paragraph 11)
3. We see the collapse of Cancún as a
major setback—not least for multilateralism. (Paragraph
12)
4. Important progress had been made at Cancún,
and more may have been possible. But it is not possible to say
with any certainty whether a good deal was in the offing, particularly
because the unexpected closure of the Ministerial meant that some
countries and country-groups had probably not played all of their
cards (Paragraph 13)
Learning the lessons of Cancún
Process matters: Time, timing and organisation
5. If Ministerials are to work better in
future, and there is to be sufficient time for negotiations, then
lessons must be learned about the effective use of limited time.
There is little point in delegates wasting time rehearsing their
well-established positions. (Paragraph 17)
6. If Ministerials are to be successful, the
preparatory work must be done. Better progress must be made at
Geneva, deadlines must be met, and decisions should not be simply
postponed to Ministerials. (Paragraph 18)
7. In our view the closure of the Ministerial
was premature as well as unexpected. Participants in WTO Ministerials
must know when negotiations are set to conclude. Otherwise, negotiations
are unlikely to work. Ministerials ought not to be extended as
a matter of course, and, there should be clear mechanisms for
making decisions about whether, exceptionally, to extend them.
The decision to extend a Ministerial must not be in the hands
of one person. (Paragraph 20)
8. In a development round it was a serious mistake
to prioritise negotiations on the Singapore Issues over agriculture,
because agricultural reform is clearly of greater importance to
most developing countries. It was wrong to attempt to make progress
on agriculture a "reward" that developing countries
would receive if they agreed to include the Singapore Issues on
the WTO agenda. Decisions as to the order in which negotiations
proceed at Ministerials ought to be taken by the WTO's membership
as a whole, rather than being made by the Chairman in consultation
with a small number of countries. (Paragraph 21)
9. The Government refers somewhat cryptically
in its memorandum to the need for "better designed negotiating
structures". We invite the Government to clarify what it
means by this phrase, and to outline what it is doing to ensure
that negotiating structures are better designed in future. For
the EU, which uniquely has one negotiator for a number of WTO
member states, it is essential that trade ministers of Member
States meet the EU trade Commissioner regularly, at least daily,
during WTO Ministerial meetings so that the Commissioner can base
his negotiating position on policies agreed collectively by the
trade ministers. (Paragraph 22)
10. The status of papers produced by Chairmen
and facilitators of Working Groups, and the role of the WTO Secretariat
in such processes, should be clarified. (Paragraph 23)
Geo-politics matters: New country-groups and
the failure of brinkmanship
11. The increased coordination and coherence
between developing countries at the WTO, and their stronger voice
was perhaps the most positive aspect of Cancún. We are
pleased that the Government—in contrast to some of its developed
country partners—shares this view. The Government can be
justly proud of its work in building the capacity of developing
countries to enable them to have a more effective voice in international
negotiations. This important work should continue—even if
countries who receive assistance sometimes take up positions which
conflict with the UK's perceived interests—and should apply
beyond the trade arena (Paragraph 26)
12. All participants in negotiations need to
be flexible; otherwise agreement is impossible. Country-groups
should, as far as possible, work out their positions prior to
Ministerials. And, perhaps most importantly, the EU and the USA
must realise that the geo-politics of the WTO have changed; they
can not expect to set the agenda. Further, given the significant
barriers to South-South trade, negotiations and liberalisation
between developing countries must form part of a development round.
In this regard, we were interested to see the European Commission's
somewhat provocative suggestion that the G20+ be invited to give
preferential access to the poorest countries. (Paragraph 27)
13. The members of the G20+ are not the very
poorest countries, and they do have different interests, but they
are a serious grouping—at Cancún the G20+ represented
63% of the world's farmers and 51% of the world's population—and
should be treated with respect rather than contempt. (Paragraph
29)
14. The EU's offer to unbundle the Singapore
Issues, and to withdraw its demands for a start to negotiations
on Investment and Competition, came far too late. The European
Commission's strategy of brinkmanship was destined to derail Cancún,
particularly given the complications introduced by the emergence
of new country-groups. The timing of the Commission's offer to
unbundle the issues left countries with little time to consider
their positions, consult with their allies and respond constructively.
The unexpected closure of the Ministerial reduced the time available
still further. (Paragraph 31)
Substance matters most: The Singapore Issues,
agriculture and cotton subsidies
15. The insistence, by the EU and a small
number of other countries, on the adoption of the Singapore Issues,
in the face of overwhelming opposition from most developing countries,
and the linkage made in the Derbez text between progress on agriculture
and non-agricultural market access and progress on the Singapore
Issues, were key factors in the collapse of Cancún. The
EU's decision to pursue negotiations on the Singapore Issues was
a major error. The lesson is simple: developing countries' concerns
should be listened to carefully and taken seriously. (Paragraph
35)
16. The timing of the agreement on CAP reform
and the EU's failure to agree on an absolute reduction in subsidies
may well have made it difficult for the EU to sell its CAP reform
plans to other members of the WTO. But the timing and extent of
CAP reform was something which the EU's member-states alone could
determine. This was an own goal resulting from a lack of coherence
between EU policies on trade, development and agriculture. (Paragraph
36)
17. Although trade policy has international repercussions,
it is primarily the product of domestic politics. When international
trade policy is the by-product of US electoral politics and rising
protectionist sentiment, the USA's trading partners, including
developing countries, are the losers. In our pre-Cancún
report we suggested a general principle: the burden of adjustment
should not fall on those countries who are least-equipped to deal
with it. The same applies to the burden of non-adjustment. We
welcome DFID's ongoing work which aims to understand better the
plight of the West African cotton producers, and encourage the
UK and its EU partners to emphasise, in their dealings with the
USA as well as with their own farmers, that the poor should not
have to suffer the impacts of northern subsidies (Paragraph 40)
The European Commission and the EU's Member
States: Mandate, communication, accountability and transparency
18. in our view the Government should have
done more to persuade the EU and the Commission to unbundle the
Singapore Issues, and to drop Investment and Competition rather
than simply make them less of a priority. The Government should
not have left itself open to the charge that it failed to express
its views about the Singapore Issues with sufficient force. (Paragraph
45)
19. Although we welcome the EU's commitment to
greater use of Sustainability Impact Assessments as a contribution
to enhancing transparency and improving discussion of the impacts
of trade policy, the UK Government should do more. They should
clarify the legal status of the Article 133 Committee and explain
its role in determining the aims of European trade policy and
pursuing those aims in multilateral fora. The UK Government should
also consider following Denmark's example by publishing the agendas
of Article 133 Committee meetings when it next holds the presidency
of the European Union in 2005. We share the Government's view
that the policies pursued by its developing country partners should
be determined through democratic and inclusive processes; the
EU should make this case through example. (Paragraph 46)
Governance, role and scope: The WTO and a development
round
20. Along with Pascal Lamy, many developing
countries, and many NGOs, we are also concerned about the governance
of the WTO, and specifically about the way in which Ministerials
are run. As the World Development Movement put it, "for an
organisation that creates so many rules, it is surprising that
the WTO does not have any rules to guide its own negotiations
and decision-making." The motivation for introducing new
rules must be broader than one of efficiency; it must also be
to ensure that multilateral negotiations are democratic, accountable
and transparent. We were pleased therefore to hear Patricia Hewitt
state that: "the fundamental principle of one member one
vote must not be tampered with". It seems likely that greater
use might be made of mini-Ministerials, to try to reduce the pressure
on Ministerials themselves. This, and other organisational improvements
are suggested in a reflection paper produced by DG Trade of the
European Commission for the consideration of the Article 133 Committee.
We would be interested to hear the Government's response to the
proposals mooted in this paper. Specifically, we invite the Government's
comments: first, on what might be done to improve the effectiveness
of Ministerials; and, second, on the likely impact of a greater
use of Ministerials on levels of democracy, accountability, transparency
and the participation of developing countries at the WTO. (Paragraph
48)
21. In the face of challenges with delivering
a genuine development roundBut in our view, rather than excuse
the developed world from delivering on its promise of a "Development
Round" which involves developing countries, the appropriate
response is to work harder to deliver a round that really does
serve the developmental interests of the WTO's diverse membership.
If trade and trade liberalisation is a positive-sum game, then
it ought to be possible to ensure that all countries gain; for
a development round, the gains for developing countries should
be substantial. (Paragraph 50)
22. We would like to hear the Government's views
about the implications for developing countries of a shift to
plurilateral trade negotiations and agreements: might such a shift
presage the emergence of a more flexible and development-friendly
WTO; and, how could the interests of developing countries, and
the priority afforded to poverty reduction, be protected? (Paragraph
51)
23. Now is not the time for fundamental reforms
which act as a distraction, and which postpone any progress on
making trade work for poverty reduction. The question is whether
there are some limited and useful reforms which can be undertaken
immediately to restart negotiations in a more transparent and
efficient manner without stalling the process completely, whilst
discussions about more fundamental reform go on in parallel. We
invite the Government to comment on what immediate reforms it
would like to see and what it is doing to secure such reforms,
and also to tell us what input it is making into debates, including
the work of the Sutherland Commission, about longer-term reforms.
(Paragraph 52)
Reviving a genuine development round
Post-Cancún prospects: Bilateralism,
trans-atlantic relations and the peace clause
24. The UK Government must ensure that its
strong support for multilateralism is heard loud and clear by
its European partners, and also that in the EU's own bilateral
relations—through for instance Economic Partnership Agreements
with the ACP countries—its objective remains developmental
partnership rather than bilateral arm-twisting. (Paragraph 54)
25. We trust that the Prime Minister is using
what political capital he has with President Bush to convince
him that reviving the development round is an important front
in the war on poverty, and that the war on poverty is complementary
to the war against terrorism. (Paragraph 55)
26. We would not want to see the WTO swamped
by a flood of disputes, but clearly if the WTO is to be credible
and effective, developing countries must be able to make use of
its dispute settlement procedures to challenge trade-distorting
agricultural subsidies wherever they are found. The Peace Clause
should not be extended; backdoor efforts by the USA and the EU
to extend it through re-interpretation of its expiry date must
be resisted strongly. (Paragraph 56)
What's on the table?: The Derbez text and the
Singapore Issues
27. If the Derbez text is to be the basis
for negotiations, the Singapore Issues must—with the possible
exception of Trade Facilitation on which an explicit consensus
seems near - be removed and the condescending language on cotton
subsidies expunged. The Singapore Issues should be considered
parallel to the round, with reports on possible ways forward made
to the WTO's General Council by the start of 2005. A solution
to the issues around cotton should be pursued within the agriculture
negotiations, alongside efforts to tackle agricultural subsidies
more generally. (Paragraph 60)
28. We fail to understand how, having signed
up to the Ministerial Declaration, the European Commission can
perform a u-turn on the Singapore Issues and hope to retain its
credibility. Such a manoeuvre shows no appreciation of the strength
of feeling among developing countries about the Singapore Issues.
If the Commission's about-turn looks shoddy to us, as parliamentarians
of an EU member state, we can imagine how it must look to developing
countries. This is not the way to rebuild trust and confidence
in the EU's commitment to a genuine development round. Neither
is it the way to revive the round or to work towards an equitable
inclusive system of multilateral global governance. Credibility
and trust, the essential lubricants of peaceful international
relations, are quickly lost, but slowly regained. We look forward,
in the interests of transparency and accountability, to hearing
exactly what position the Government has been taking at meetings
of European trade Ministers and officials in the run-up to 15
December. (Paragraph 62)
29. There may well be value in optional participation
and plurilateral agreements on the Singapore Issues, but unless
developing countries' underlying concerns are addressed—including
legitimate concerns about their policy space—the Commission's
proposals will not, and should not, be accepted. Plurilateral
optional agreements entered into by a sub-set of the WTO's membership
are not problem-free; this approach was floated by the EU prior
to Cancún and received, at best, a lukewarm response from
developing countries. A plurilateral approach would leave developing
countries with the unenviable choice of taking part in negotiations
that they don't want, or not participating and facing pressure
at a later date to sign up to an agreement they had no part in
negotiating. (Paragraph 66)
30. We reiterate what we said prior to Cancún:
the Singapore Issues are not a development priority. Developing
countries have made this abundantly clear. Agreements on these
issues should not, therefore, be pursued as part of the current
round. This reasoning should apply to each of the issues, with
the possible exception of Trade Facilitation, an issue on which
an explicit consensus seems near. (Paragraph 67)
The European Union and agricultural reform
31. We welcome the inclusion in the Derbez
text of the EU-inspired proposal to "remove export subsidies
for products of particular interest to developing countries",
and hope that developing countries will respond positively to
this offer. This offer must remain on the table post-Cancún;
there must be no backtracking. And it must be for developing countries
themselves to determine which products are of particular interest
to them. (Paragraph 69)
32. The interests of European taxpayers and consumers,
and most especially the farmers of developing countries who suffer
the effects of the dumping of agricultural products, are poorly
served by the EU's agreement on CAP reform. The reform may be
substantial in terms of EU politics, but that does not mean that
it will make a substantial difference to developing countries.
Partially decoupled agricultural support will still keep European
farmers in business at the expense of farmers in developing countries.
If agricultural subsidies keep farmers in business, and their
products are exported, then those subsidies are trade-distorting.
This is self-evident. (Paragraph 72)
33. The question of whether or not particular
forms of agricultural support fall into the Green Box must be
based on objective assessments rather than political bargaining,
as the EU itself seemingly recognised in its earlier proposal
to review the Green Box criteria. This issue has become too politically
divisive for it to be considered objectively at the WTO. We support
the call made by CAFOD, Action Aid and others for an independent
review—preferably conducted by the World Bank—of the
Green Box criteria and the impact of different forms of subsidies
on production and trade, and recommend that the UK Government
support this proposal too. (Paragraph 74)
34. Multilateral trade negotiations at the WTO
are supposed to be about providing a level playing field. The
Common Agricultural Policy slants the playing field to the tune
of $50 billion per year. As Oxfam point out, you can defend multilateralism
or defend the Common Agricultural Policy, but you cannot do both.
The UK must continue to press for urgent and radical reform of
the CAP, including full decoupling, rather than going along with
an exercise which tries to hide trade-distorting subsidies in
a different coloured box. 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 the interests of developing
countries. (Paragraph 75)
Dealing with difference: Preference erosion,
SDT and coherence
35. In response to our pre-Cancún
comments on SDT, the Government acknowledged that "the WTO
systems must be made more flexible and sophisticated to respond
to widely differing needs", and suggested that a first step
in encouraging a constructive debate might be to establish an
expert working grouping which would report to the WTO's General
Council. This sounds like a good idea; we look forward to hearing
what progress the Government has made with this proposal. (Paragraph
80)
36. The recognition by the international financial
institutions, and the WTO, that the impacts of trade liberalisation
vary by country, and that the timing and sequencing of a country's
trade reforms matters is welcome and somewhat overdue. Such a
recognition necessitates increased coherence between the various
multilateral institutions. As such, we warmly welcome the IMF-World
Bank adjustment assistance initiative as a concrete mechanism
for strengthening co-operation and coherence between the WTO,
the IMF and the World Bank, and applaud DFID for its role in
promoting this initiative.(Paragraph 81)
37. The IMF-World Bank initiative is potentially
very significant; the UK must do its utmost to ensure that it
is well-designed. Decisions about whether, when, how, on what
basis, and to which countries, assistance should be provided,
must be based on the needs of developing countries. And the IMF-World
Bank initiative must not be the sole preserve of the international
financial institutions. Rather, its design and operation must
be shaped by the expertise, knowledge and experience of developing
countries themselves, UNDP, UNCTAD and bilateral donors, as well
as the expertise and backing of the international financial institutions.
As the Government states, adjustment assistance and mechanisms
to deliver it must be built on sound analysis of the impacts of
liberalisation on poverty. (Paragraph 83)
Political leadership
38. Patricia Hewitt stated that: "Europe
as one of the largest and leading players in the WTO does need
to take a lead and put a great deal of effort into helping get
the talks back on track in Geneva". We fully endorse this.
The EU was the primary architect of the Doha Development Agenda
and could—by working with others including the G20+, the
G90 and the G33—revive the round. (Paragraph 87)
39. In summary, whilst it is very good news that
the EU is going to re-engage with negotiations, and is prepared
to be a little more flexible on the Singapore Issues, in other
areas the Commission's paper does little more than re-state familiar
positions. As the paper itself makes clear, the EU's objectives
have not changed; rather what the Commission proposes are new
strategies to refine and sharpen the EU's negotiating approach.
As we have made clear, particularly on agriculture, this is not
enough. (Paragraph 92)
40. 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. (Paragraph 93)
41. 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 round would
be hard to beat. That should be the aim. (Paragraph 94)
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