The Cancun ministerial conference collapsed on September 14th as Minister Derbez made the decision to halt the negotiations because of the absence of a consensus on the pending decision on the Singapore issues.
Preliminary Analysis
The following factors contributed to the failure of the mid-term review of the Doha Development round.
1- Overloaded agenda
This failure occurs after two years of missed deadlines and postponement of decisions leading to a clearly overloaded agenda. The lack of progress before the Cancun ministerial was due to a lack of political will on the part of developed countries to fulfill the promises made at Doha.
TRIPs and public health : the decision on paragraph 6 which was scheduled for the 31st of December 2002 was only reached a few days before Cancun, after a long and conflictive process which poisoned the atmosphere and caused delays in work on other issues. The delay was caused by the unwillingness of the United States to make even minimal concessions. The last minute deal, clearly unsatisfactory from the point of view of public health, was insufficient to clear the atmosphere.
Agriculture : the deadline of March 2003 for the completion of modalities was missed because of the CAP reform process, which paralyzed the European Union until June, when a reform package was adopted by the European member states which was minimal in the relief it offered developing countries from dumping. The joint proposal presented by the European Union and the United States on agriculture, a necessary condition for advancing talks on subsidies, came very late in the process during the month of August. Unable to propose modalities (principles and percentages to change countries’ agricultural trade regimes), this proposal only envisioned the adoption of a "framework". The US and the EU clearly indicated that there would not be negotiations on modalities at Cancun since they were not ready yet to propose specific numbers in terms of subsidies and tariffs. This approach was seen by many developing countries as an attempt to rewrite the Doha mandate and extract concessions in other negotiation areas without an assurance on the depth of the commitments on agriculture.
Other deadlines missed : deadlines for completion of work on implementation, and Special and Differential Treatment, which are key issues for the poorest of the WTO members were all missed and proposals presented in the draft ministerial text were completely inadequate. These crucial issues, which were a key motivations for many countries to buy in to the Doha Development Agenda, were not even discussed at the ministerial conference. This meant that there was very little on the table for countries like the ACP.
Singapore issues : Despite repeated declarations by 70 developing countries in Geneva and at ministerial level opposing a launch at Cancun and the lack of consensus on any elements of possible modalities, the draft ministerial declaration proposed the launch of negotiations based on procedural modalities.
2- Stalemate during the conference on key issues
The lack of political will by developed countries to fulfill their promises, which marked the last two years, was still in evidence at the conference. In an election year, the United States was unwilling to make concessions that could anger powerful lobbies financing election campaigns. Moreover, the United States indicated that a failure was not of great importance to them because of their focus on bilateral and regional trade negotiations where they believe concessions can be more easily extracted from developing countries than at the WTO. In the case of the EU, the commitment towards multilateralism expressed by commissioner Lamy and many member states was overshadowed by the continuing unwillingness of Europe to reform its agricultural sector and a reluctance to listen to developing countries on Singapore issues.
Agriculture : The basic approach, dictated by farm lobbies, was todo as little as possible regarding subsidies -i.e. reshuffling boxes to leave the overall level of subsidization untouched—and secure as much access to developing country markets as possible. The sheer inadequacy of this proposal, on the three key elements of the Doha mandate (the elimination of export subsidies, substantial reduction of domestic support, and special and differential treatment) led to a polarization of a debate marked by the creation of the G-20+ and the growing frustration of other developing country groups such as the Africa Union, the LDCs and the ACP group. The G-20+ and the Special Products alliance tried to react constructively by putting together counterproposals, which were ignored in Annex A of the draft ministerial declaration. Failing to respond to the growing frustration of developing countries, the revised draft of the declaration presented on September 13 introduced only minimal changes to the existing text. The framework basically remained the same (ambiguity of the end date of export subsidies, creation of a new blue box) and worsened in some parts, with the reintroduction of the peace clause or the weakening of Special and Differential Treatment with the choice of the more ambitious tariff-reduction formula for developing country markets favoured by the United States.. The proposal on the table was so unattractive, particularly for the poorer members, that it became impossible for many countries to adopt a ministerial text on agriculture without further revisions. Proposals to that effect were never discussed due to lack of time.
Cotton : The proposal made by four West African countries which had the support of many developed and developing country governments was treated with derision by the United States which refused to make specific commitments regarding cotton subsidies but instead tried to link the issue to its controversial proposal for a sectoral initiative on textiles (zero-for zero) which has so far received almost no support from WTO members. Hope of an acceptable solution was raised when Director General Supachai took personal leadership of a consultation group on cotton. However, the suggestion in the revised draft declaration text that the most efficient cotton producers in the world, the West Africans, should diversify out of cotton and vague promises about development aid further angered the whole developing country camp. Cotton became the symbol of the rigged rules and double standards plaguing the world trade system, where 25,000 US cotton producers have more power than the opinion of most WTO members. The EU appeared unwilling to champion this cause despite positive indications from Commissioner Lamy because of its alliance with the United States on agriculture and the opposition of Spain and Greece.
Singapore issues : The bizarre insistence of the EU on Singapore issues was another major factor which led to the failure of the conference. Despite the declarations of 70 developing countries, the opposition of civil society groups, including trade unions, and the resolutions passed by many parliaments, the EU still came to the conference apparently determined to secure launch of all four Singapore issues. The insistence of Commissioner Lamy at the conference was fueled by the unwillingness of ministers of member states to review the EU’s mandate on these issues. Though welcome, the concession made by Commissioner Lamy on 3 out of 4 Singapore issues in the late morning or early afternoon of the 14th came way too late to salvage the talks. Risking the whole conference for an agreement on trade facilitation was baffling, especially since some members had proposed to deal with it in a non-binding way.
3- Non-transparent, chaotic process
The lead-up to the conference was marked by the rise of particularly undemocratic practices such as the drafting of texts under the responsibility of the chairman. The draft ministerial declaration was developed on this basis and sent to ministers without the approval of the General Council and despite the clear opposition of many countries to using such a text as the basis for negotiations. The revised declaration, which arrived late in the process on the afternoon of the penultimate day (13th), ignored reactions and counterproposals of developing countries. Cotton provided a stark illustration of the problem as the US proposal was included in the revised draft while most members had expressed support for the West African proposal. This confirmed that there was a growing gap between the positions of the vast majority of the membership and the content of the declarations, posing the question -still unanswered-of who writes ministerial declaration, on what mandate and for whose benefit. This led a number of countries to question the meaning of their participation in the conference and the WTO and feel extremely pessimistic about whether the text could be improved before the rapidly approaching end of the conference.
The decision to prioritise Singapore issues on the agenda delayed discussions on the core agenda of the conference, agriculture and NAMA. This also contributed to the polarization of discussions, as many developing countries felt they could not show flexibility without knowing what they would otherwise get in other areas of negotiations. The much-criticised practices of round-the-clock negotiations and green rooms re-emerged in a last-ditch effort to force a deal but proved unsuccessful given the increasing polarization and fast approaching deadline.
The false debate sparked by the European Commission on Minister Derbez’s decision to end the conference is a distraction from the real debate. What really happened is that the United States and the European Union refused to listen, waited until the very last hour to make concessions, and misread the political climate. They should not have assumed that the conference, as in Doha, would be automatically extended. Instead they should have come to the conference with constructive proposals in hand.
4- Misreading by the US and the EU of changing politics among developing countries
Developing countries came to this conference in the hope of securing a meaningful agreement. Conscious of their divisions in the past which led to adverse results, they worked in coalitions which enabled them to stand firm on issues of vital interest. The emergence of the G-20, which remained strong and united until the very end, despite repeated pressures to divide its core croup -Brazil, India, China, Argentina and South Africa-, was a turning point in the conference. The formation of the Africa Union, ACP and LDC coalition, in close coordination with the G-20+, completed the picture. The united developing country camp representing more than two thirds of the WTO membership decided to demand that the promises made at Doha of a development round start to be fulfilled at Cancun. However, the big players failed to realize that business as usual would not prevail and "divide and rule" tactics would fail. They were unable to make any meaningful concession on agriculture, cotton or the Singapore issues in time for the conference to be salvaged. In the end, one can wonder whether it was not the US and some European states who decided to pull the plug on this conference, when they finally understood the cold reality and refused to rise to the challenge. Perhaps they hope that the unity and resolve of developing countries will weaken in the future, enabling them to regain fuller control of the WTO agenda.
What next?
The ministerial declaration indicates that work should continue on outstanding issues under the coordination of the Chairman of the General Council and the Director General. A high-level meeting in Geneva is planned no later than December 15, 2003 to take actions necessary "to enable us to move towards a successful and timely conclusion of the negotiations". The official deadline for the completion of the negotiations remains January 1, 2005 though some members, including the United States, have expressed doubts about the feasibility of completing talks by that time.
The ministerial declaration clearly says that all the views expressed at the Conference should be fully taken into account. It is crucial that the points of view of developing countries be finally taken into account, in order to avoid other failures. Rich countries, in particular, need to take confidence-building measures in the run-up to 15th December. Given the continuing opposition of at least 70 developing countries to a launch of negotiations on Singapore issues and the fact that the European Union indicated its willingness to drop 3 out of four Singapour issues (except for trade facilitation) it seems very clear that the Singapore issues should now put to rest. Equally sincere initiatives on cotton, sugar and Special and Differential Treatment would be demonstrations of a commitment to the Development Round. These would be strong signals that developing countries have indeed been heard, which would clear the atmosphere in Geneva and allow talks to restart on a new and more constructive basis.
More information
If there are any questions that you would like to put to the Commission please send an email to the European Health NGOs representative, Jo Leadbeater.
