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North-South
Divide
WTO Talks
Collapse in Cancún
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An
NGO member puts up a sign reading “WTO kills peasants” beside the
summit logo. |
In
scenes reminiscent of Seattle in 1999, World Trade Organisation (WTO) delegates
ended a meeting in Cancún, Mexico, on September 14 without reaching
agreement on the final declaration of the summit. Such a collapse was greeted by
the resounding call from many southern countries and campaigning groups that
“no deal is better than a bad deal” for the poor countries and peoples of
the world.
Like
Seattle, the build up to the Cancún WTO meeting was intense, with all
sides keenly focused on its possible outcome. This was in stark contrast to the
mood at the WTO meeting in Doha, Qatar in November 2001, where the attention of
delegates and campaigners had been distracted by the events of September 11.
As a result of 9/11 and the damage it threatened to do to the world economy,
developing countries signed up to a series of compromises at Doha on the
understanding that the new round of talks launched there would be genuinely
“development focused.” The meeting for example, produced the famous “Doha
Declaration,” which stated poor countries’ rights to override aspects of WTO-based
trade related intellectual property rights (TRIPS) agreements in order to access
cheaper generic medicines, especially for HIV/AIDS.
Since
Doha, however, the moral and political advantage held by the US (and by
implication the EU) after 9/11 has slipped away. Partly as a result of the war
on Iraq, partly because the US has actually consistently attempted to block
implementation of the Doha Declaration on medicines, and partly because the US
and the EU have refused to offer any serious reform of their agricultural
subsidies policies, developing nations felt betrayed by the empty promises made
at Doha. At Cancún, the spirit of Seattle was back with a vengeance as
they once again showed determination not to be bullied into acceding to trade
agreements that are blatantly against their interests.
The
collapse of talks in Cancún was greeted with calls that “no
deal is better than a bad deal.” |
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The
issues at stake in the talks at Cancún were primarily two-fold. First,
was the issue of reform to agricultural trade rules. In a basic repudiation of
the values of “free trade,” the rich countries of the world (notably the EU,
the US and Japan) pay enormous subsidies to their farmers. These subsidies
grossly distort global agricultural trade; they give farmers in rich countries
massive advantages over farmers in poor countries, despite the natural or
comparative advantages developing nations actually have in agriculture, which
for many is their major industry. The result is that poor farmers cannot compete
against subsidised produce, and as local markets get swamped with dumped surplus
from the rich countries, many go out of business. This has further knock on
consequences for developing countries, since it undermines their ability to
establish domestic food security systems – a real problem in Africa for
example, where despite the great potential of African countries to feed
themselves, many continue to go hungry.
Despite
repeated promises from the US and the EU to tackle agricultural subsidies,
nothing has been done. The EU’s latest attempt to reform the Common
Agricultural Policy, by “decoupling” subsidies from export production has
been criticised for being worthless in terms of its real impact on reducing the
power of the EU subsidy in global trade, while the US has increased rather than
reduced its subsidies on a range of agricultural products over the last two
years.
As
for the second issue, at the same time as refusing reform in agriculture, the US
and especially the EU have been aggressively insisting for some time that the
so-called “New” or “Singapore” Issues be placed on the agenda for
negotiation at Cancún. Demanding that the Singapore Issues - competition,
investment and government procurement – come under WTO rules represents a
concerted attempt by the developed world to force developing countries to cede
control to the international market in vital strategic areas such as foreign
investment and local enterprise. Coupled with the pressure from the EU to
liberalise key service sectors such as health and water under the General
Agreements in Tariffs and Trade (GATT), accession to such negotiations could
have disastrous consequences for developing countries’ autonomy and control.
In effect, such agreements would open key sectors of their economies to global
corporations without any domestic regulation. Under such conditions, some
analysts predict third world economies could collapse in a matter of weeks.
The
majority of countries at the WTO have repeatedly insisted that they do not want
to begin any new negotiations on the Singapore Issues. They argue that their
priority is those issues relevant to developing nations – agriculture,
medicines and special and differential treatment – that have yet to be
properly addressed. Until these issues are addressed, they insist, they have
neither the time and expertise, nor the incentive to negotiate further
liberalisation of their economies. Despite this, the EU aggressively lobbied at
Cancún for the inclusion of the Singapore Issues. The EU’s chief
negotiator Pascal Lamy consistently asserted that there could be no deal on
agriculture unless the Singapore Issues were included in the talks. The view of
the EU was that which prevailed in the final draft ministerial declaration drawn
up on Saturday September 13, 2003.
Developing
nations felt betrayed by the empty promises made at Doha. |
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Most
developing nations and campaigners were outraged as yet again the opinion of the
majority of countries was ignored by the WTO secretariat in favour of the
interests of the rich. Frantic negotiations involving the EU, US, China, Brazil,
Malaysia, Kenya, South Africa and Mexico took place throughout Sunday in an
attempt to reach a compromise. But despite some last minute concessions from
Lamy, the chairman, Mexican Foreign Secretary Luis Ernesto Derbez, closed the
meeting on the basis that agreement could not be reached.
While
the echoes of Seattle can be heard in the specific breakdown of talks at Cancún,
it resonates perhaps more significantly in the longer-term positions taken by
governments, lobbyists and campaigners working in and around the WTO. After Cancún,
it now seems clear that the compromises agreed at Doha were in fact a blip in a
trend that indicates that reaching genuine “development friendly” trade
agreements within the existing WTO framework is impossible.
Research
has shown just how undemocratic the negotiating process at the WTO is. Decisions
are made behind closed doors, in the so-called Green Rooms, where delegates from
developing nations are subjected to sustained pressure from developed world
delegates. Bullying, arm-twisting and blackmail are, it seems, common practice
within such negotiations, and even when country delegates effectively resist
such pressure, there is no guarantee that their position will be included in any
official WTO statement. Such a track record – repeated at Seattle, Doha and
Cancún - leaves claims by the rich countries of commitment in any way to
global poverty alleviation in serious doubt. It also raises major questions
about the claims of the WTO to be a democratic multilateral body.
The
WTO is a forum for rich and powerful interests to extend their
influence. |
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As
it has become clear that the WTO represents little more than a forum for rich
and powerful interests to extend their influence, both campaigning NGOs and
developing countries themselves have become more determined to resist such
manipulation and double standards. Developing country delegates have become far
better organised and determined in articulating and fighting for their interests
at the WTO. A new grouping – the G21 - has now emerged, which includes China,
India, Brazil, and South Africa, who are resolved to fight for their own
interests. At Cancún, the G21 group was extended to the G32 – a group
that includes within its ranks the Least Developed Countries (LDCs) of the
world. As such, this group now represents a formidable power that is unlikely to
be manipulated so easily by the EU and the US. At the same time, campaigns on
trade justice led by groups like Oxfam have grown hugely in profile since
Seattle, and the world’s population is now far more informed about what’s
really at stake at such meetings. As a result, the behind-closed-doors tactics
of the rich countries are unlikely to work in the future as they have in the
past.
However,
the power politics on display at Cancún has also put the future of the
WTO in real doubt. Given the intractable position of developed countries,
agreement on the Doha round – scheduled for completion in Geneva in 2005
– is unlikely to be reached. If agreement fails, the WTO will be rendered
completely irrelevant. And this is perhaps the crucial issue that underlies all
debate on the WTO and global trade, from Seattle to Cancún: as an
international institution should the WTO be allowed to continue or should it be
abandoned?
The
G32 represents a formidable power that is unlikely to be manipulated
so easily by the EU and the US. |
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Many
economists argue that doing away with the WTO will hurt the poorer nations more
than rich ones. The US and the EU are already engaged in pursuing separate trade
agreements with countries and regions, and will continue to do so – a strategy
for “doing business” that avoids the pressures they increasingly face at the
WTO. But this argument can cut both ways, since if equitable trade agreements
cannot be reached at the WTO, developing countries may also be better off
forging separate agreements without being subject to a global set of trade rules
fixed in the interests of the rich. Moreover, some analysts question just how
important trade really is for developing countries, for many of which trade
represents a tiny proportion of their economy. Such commentators argue that a
focus on exports actually prevents developing countries implementing pro-poor
policies at a domestic level. Domestically oriented pro-poor policies in turn
seem to depend on preventing, rather than encouraging, the encroachment of the
interests of the global rich, in order to allow economies the freedom to set and
meet their own priorities. So, unless global trade rules are transparent,
equitable and democratic, it is debatable just how beneficial they really are to
the poor countries of the world. This means the WTO faces a stark choice: reform
or perish.
In
bringing these issues to the fore, the failure to reach an agreement on trade at
Cancún represents a historic moment. No longer prepared to go along with
anything the rich nations say, developing countries – who represent the vast
majority of the world’s population – have taken matters into their own
hands. While the rich countries will no doubt continue to find ways to
manipulate the system to their advantage, their opponents have demonstrated that
resistance to their double-dealing from now on will be equally sustained.
Kate
Prendergast is a British freelance researcher and journalist with a
Particular interest in African politics and development.
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