Memorandum submitted by the World Development
Movement (WDM)
INTRODUCTION
The World Development Movement welcomes the
ongoing interest of the International Development Select Committee
in the Doha Round WTO trade negotiations and thanks the Committee
for the opportunity to comment on the outcome of Cancún.
What follows are some brief comments followed,
where appropriate, by recommendations on a range of issues relevant
to Cancún and its outcome.
1. THE "NEW
ISSUES" AT
CANCÚN
The World Development Movement's pre-Cancún
analysis stated that expansion of the WTO agenda to start negotiations
on the so-called "New Issues" could cause the collapse
of trade talks in Cancún.
WDM also notes that the IDC raised similar concerns
relating to the potential for new issues to overload the WTO agenda
and the questionable benefits of potential WTO agreements on investment
and competition policy.
Before and during Cancún, at least 66
developing countries (ACP, LDCs, African Union plus others) stated
explicit opposition to commencing negotiations on all of the "New
Issues". Unfortunately, the EU left it until a few hours
before the Conference was due to end before "offering"
to drop two of the "New Issues" (investment and competition).
This turned out to be too little too late. With 148 WTO members,
this kind of last-minute "high-pressure" deal-making
is just as likely to lead to breakdowns as it is to lead to agreements.
Although HMG had previously stated the "New
Issues" were not a priority—a subtle policy shift which
the IDC played an important part in bringing about—questions
need to be asked about the UK's strategy of not attempting to
work with other member states in advance of Cancún, or
earlier in the conference, to change Commissioner Lamy's negotiating
mandate.
WDM welcomes the recognition that 2 of the "New
Issues" were dropped from the EU's final position but would
urge the Government to call for dropping all four, based on the
lack of explicit consensus from developing countries.
"New issues" have wasted enough important
negotiating time already. The EU needs to respect the wishes of
the majority of developing countries, drop all of them and concentrate
on the real development issues in the round.
2. INVESTMENT
IN THE
WTO
Although Cancún saw the likely end of
moves to create new WTO investment rules, there are existing agreements
covering investment in the WTO. WDM appreciates the thought and
effort the IDC put in to examining the case for investment rules
that, according the EU, were aimed at covering the primary and
secondary sectors (eg agriculture, fishing, mining and manufacturing).
However, most of the concerns that have been raised over such
a proposed investment agreement apply equally to the General Agreement
on Trade in Services—an existing WTO investment agreement
covering the tertiary sector (eg tourism, retail, construction,
broadcasting).
Such concerns include the steady erosion of
poor countries' ability to use a range of investment regulations
that rich countries used during their own development; the "locking-in"
of such policies giving future governments and parliaments little
choice in policy-making; the virtual impossibility of policy-makers
having the foresight necessary to be able to list appropriate
limitations to their commitments on behalf of future governments;
and the potential intrusion of domestic regulation rules on government
social and environmental policy-making.
The draft text in Cancún included an
exhortation for all governments to submit offers, despite the
fact that the supposed GATS flexibility allows governments not
to submit any offer if they so wish. WDM is concerned that such
a text would be used as a political tool with which to push poor
countries into making more and deeper commitments. The Cancún
text also included no reference to developing country submissions
calling for assessment.
WDM thanks the IDC for the consideration it
gave to GATS during its pre-Cancún Inquiry and urges the
Committee to bear in mind arguments on investment when looking
at GATS in future and to keep a watching brief on the talks as
these will have a considerable impact on developing country economies.
3. THE URGENT
NEED FOR
DEVELOPMENT-FRIENDLY
TRADE RULES
With political will, Cancún could have
been an opportunity to set about the necessary reforms to make
trade rules more development friendly. However, WDM does not believe
negotiators were close to striking a deal which would have constituted
a positive development outcome. Development issues were largely
sidelined in the draft Ministerial text that emerged on Saturday
13 September.
It was noticeable that on agriculture, where
much of the focus had been, there was a greater sense of understanding
of key development issues (eg "special products") even
if the text did not do justice to the concerns of the poorest
countries. However on most other issues, the development aspects
of the talks seemed to have been forgotten and the draft text
did not even attempt at serious reform.
For example, on non-agricultural market access
(NAMA) assessments of the draft suggest the idea of "non-reciprocity"
was not properly reflected. On special and differential treatment
(S&DT) the text included agreement on over twenty issues but
these were largely "interpretations" clarifying poor
countries rights under existing rules and therefore of little
real use. The post-Cancún S&DT talks dealing with more
difficult reform issues were downgraded to non-negotiations with
only a report-back to the WTO General Council by the end of the
round. They would therefore not even be part of the final deal.
"Implementation issues" were downgraded in a similar
fashion. The text on commodities was meaningless, as was the text
on cotton subsidies. In this regard, it was noticeable that the
US did not attempt to prevent the Mexican Chair from calling the
talks to a halt, which gives rise to the suspicion that they were
not keen to be exposed in the latter stages of the Cancún
talks on the cotton issue and pressured into politically difficult
reforms in advance of the US Presidential elections.
The core business of the current trade talks
should be reforming existing agreements so that they are development
friendly. This should involve, for example, reforming the agreements
on: agriculture, trade-related investment measures and trade-related
aspects of intellectual property rights. It should involve creating
meaningful special and differential treatment for poor countries
and providing the space for countries to fully assess the implications
of making irreversible GATS commitments.
HMG has made a welcome commitment to pushing
on with CAP reform regardless of the Cancún outcome. However,
there is still an important divergence between the Government
and many developing countries (along with many NGOs) on the degree
to which poor countries should be able to use trade measures to
pursue food security and industrial policy objectives; on how
this flexibility can be guaranteed; and on how long this flexibility
should be available. Clearly, further discussion and debate is
needed.
4. THE URGENT
NEED FOR
MORE DEMOCRATIC
NEGOTIATIONS AND
DECISION-MAKING
As he did in Seattle, EU Trade Commissioner
Pascal Lamy labelled the negotiating process "medieval"
and called for reforms to the decision-making system of the WTO.
While Commissioner Lamy's anger at the breakdown of talks is understandable
(although the EU has yet to admit any culpability in their decision
to keep on pushing new issues until the end), it is not clear
where Europe is coming from on WTO reform.
While Pascal Lamy and others in Europe (eg former
Secretary of State Stephen Byers) have called for WTO reform in
the newspapers, in Geneva Europe has been opposing proposals to
create rules and procedures for WTO decision-making. Last year,
a group of developing countries submitted a proposal to the WTO
suggesting a series of reforms aimed at making WTO Ministerial
Conferences more transparent and more predictable. This was opposed
by industrialised country WTO members, including the EU, because
they wanted to maintain "flexibility". Yet it is this
very "flexibility" that facilitated the confusion surrounding
the process during the final two days of Cancún. For example,
the fact that there is no official procedure for taking a decision
to extend the Ministerial Conference meant that nobody really
knew whether Cancún would run on an extra day or not.
For an organisation of the WTO's size and importance,
this situation is ridiculous. And 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. As with
reforming the trade agreements themselves, a core part of any
"development agenda" has therefore surely got to be
reform of WTO negotiating procedures to ensure that poor countries
are able to participate effectively.
WDM urges the UK Government to follow up on
the public rhetoric on reform and take a lead on pushing for meaningful
change to the way the WTO operates and also on how the EU takes
decisions. Issues that need addressing include: whether or not
the concept of "rounds" with a "single undertaking"
are the most appropriate way to create good decisions; how to
create a manageable agenda that ensures poor countries can participate
effectively; whether or not a four-day Ministerial Conference
is a workable decision-making forum; how the EU takes decisions
both before and during Ministerial Conferences.
5. A CHANGE IN
WTO DYNAMICS
Cancún saw the continuing emergence of
new groupings of developing countries such as the so-called Group
of 33 (G33) smaller developing countries and the Group of 20 (G20)
larger developing countries (which expanded to 23 during the conference)
including Brazil, South Africa, India and China. WDM believes
that the co-ordination amongst these groups, and the collective
strength they brought to the talks was a positive outcome of Cancún.
These groupings can create greater negotiating
strength for those involved and make negotiations a more manageable
process. However, it is critical that first, the negotiating process
takes into account the amount of time that is needed for representatives
of such groups to effectively consult group members on different
proposals. And second, it must be remembered that there will always
be countries left out of such groupings and a process must be
created to ensure their views are represented.
October 2003
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