A round of uncertainty

Published : Jul 04, 2003 00:00 IST

Supachai Panichpakdi, the Managing Director of the World Trade Organisation. - APICHART WEERAWONG/AP

Supachai Panichpakdi, the Managing Director of the World Trade Organisation. - APICHART WEERAWONG/AP

As the next ministerial of the WTO approaches, schisms have begun to surface between contending parties. The Cancun meet is shaping up to be another Seattle.

ONLY a little over 12 weeks remain before the tourist haven of Cancun in Mexico plays host to the Fifth Ministerial of the World Trade Organisation (WTO) in early September. But the negotiations, which have been going on in Geneva, are practically at a stalemate. A feeling is taking hold that Cancun will not be another Doha, where cooperation between the United States and the European Union in the aftermath of the September 11 attacks helped the acceptance of an agenda for limited trade negotiations.

The current state of affairs is reflected in the polarised situation in the negotiations on agriculture. The controversial Harbinson Draft for a new Agreement on Agriculture (prepared by Agricultural Negotiations Chairman Stuart Harbinson) remains an orphan. The U.S. and the Cairns Group of developed and developing country agro-exporters consider the tariff reductions it has proposed too shallow while the E.U. and Japan see them as too deep. Developing countries are concerned that the draft requires substantial tariff cuts from them. They are also demanding a broadening of Harbinson's "strategic products" proposal, which currently reserves just a few staple foods for shallower tariff cuts.

A negative development is that the E.U. and the U.S., in pushing for negotiating advantage, have split the ranks of the developing world. The developing countries in the Cairns Group, such as Brazil, Uruguay and Thailand, are siding with the U.S. against the E.U. and Japan. The E.U. has hit back by gaining the support of India and many other developing countries for a counter-proposal for agricultural liberalisation that would replicate the allegedly more flexible liberalization formula of the Uruguay Round.

The long and short of it is that it is very unlikely that there will be an agreement on the modalities of the agricultural negotiations before Cancun.

In the controversy over Trade-Related aspects of Intellectual Property Rights (TRIPS) and public health, there has been no give on the part of the U.S. In defiance of the Doha Declaration, it continues to maintain its position that only in the case of drugs for three diseases - Human Immunodeficiency Virus (HIV) infection-Acquired Immune Deficiency Syndrome (AIDS), malaria and tuberculosis - should patent rights be loosened. In its negotiating discourse, Washington is now talking about loosening patent rights for "public health crises" instead of "public health problems". U.S. negotiators have reportedly told their developing country counterparts that they cannot change their positions, and if the latter want any movement in the negotiations, they should talk directly to the pharmaceutical giants! Another disturbing occurrence is that WTO Director-General Supachai Panitchpakdi himself is spreading the blame for the stalemate from the U.S. to Brazil and India, whose manufacturers, he alleges, will be the ones that will principally benefit from looser patent rights.

On the controversial "new issues" - investment, competition policy, government procurement, and trade facilitation - the E.U. is trying to delink the decision to commence negotiations on these issues from the moves on the part of the E.U. to liberalise agriculture. The governments of rich countries have intensified their campaign to convince the governments of developing countries, which are wary of negotiating these issues, that liberalisation in these areas is for their own good. To bring about some movement, the U.S, has reportedly proposed to "unbundle" the four areas so that negotiations could proceed on them separately. The E.U. has publicly agreed with the U.S., but its preference is still to take the four areas together.

The E.U. is also sidestepping developing countries' concerns about substantive modalities, preferring to narrow down the negotiations on modalities to be agreed on in Cancun to procedural ones - how many meetings should be held, and so on. Not surprisingly, this has been criticised by developing countries as an attempt to elicit from them a blank cheque to start negotiations without first agreeing on the substance of these negotiations.

In two key negotiating areas of great interest to developing countries, there has been absolutely no movement. These are the issues of Special and Differential Treatment and Implementation. On the latter, interestingly, at a meeting with non-governmental organisations (NGOs) in Bangkok a few weeks ago, Pascal Lamy, Trade Commissioner of the E.U., placed the blame squarely on developing countries, whom he accused of not being able to agree on what the two or three top priorities regarding implementation were that need to be tackled were.

What does all this add up to? What does the lack of movement mean for the Cancun Ministerial? The question was posed to Lamy at the Bangkok meeting. Interestingly, his response was to sidestep the question and simply say that if one viewed the process from the Doha Ministerial's mandate for the negotiations to conclude by the end of 2004, then things did not look so bad, since "in some areas, negotiations are two-thirds of the way through, in some halfway through, in others a third through, in TRIPS 98 per cent through."

Now, the role of ministerials is to carry out negotiations in several areas simultaneously in order to bring about a comprehensive settlement. Since the modalities of negotiations in critical areas have yet to be agreed on, the WTO faces a problem that is not insignificant: what its member-governments will do in Cancun. Perhaps this is the reason why key WTO officials are now talking about coming up not with a declaration announcing agreements on issues being negotiated, but a "communiqu" serving as a "progress report" on the ongoing negotiations, drawing upon short reports made by the various negotiating groups on the work they have undertaken since Doha.

The hopes for a Doha-type outcome in Cancun have been further doused by the recent worsening of trade ties between the U.S. and the E.U. The E.U. has threatened to impose sanctions on the U.S. by the end of 2003 for tax breaks for exporters that a WTO judicial panel has found to be in violation of WTO rules. In what has been perceived as a retaliatory move, the U.S. said it would file a case with the WTO against the E.U.'s de facto moratorium against genetically modified foods. Taken in the context of already existing trade conflicts as well as the bitter struggle between the U.S. and Britain on one side and France and Germany on the other over the U.S. intervention in Iraq, these recent moves do not bode well for the chances of both parties arriving at consensus positions on negotiating modalities in agriculture and other trade issues before Cancun. One might recall that it was not only the revolt of the developing countries at the Seattle Convention Centre and the mass mobilisation in the streets, but also unresolved conflicts between the U.S. and the E.U. on agriculture, the environment, and other issues that brought down the third ministerial in Seattle in 1999.

Pascal Lamy and U.S. Trade Representative Robert Zoellick, who are personal friends, are said to be moving to bridge the Washington-Brussels gap before Cancun, but the contextual conditions are more difficult now than before the Doha Ministerial in November 2001, when the U.S. and the E.U. shared a common position on combating terrorism and intervening in Afghanistan and Washington had not yet imposed a 40 per cent protective tariff on steel imports and passed its $100-billion subsidies for American farmers. Nevertheless, it is important not to underestimate the capacity of Zoellick and Lamy to engineer a U.S.-E.U. concordat as they did in the lead-up to Doha. Indeed, some observers are putting the odds for a Doha-type outcome at more than 50 per cent.

As negotiations have ground to a halt in Geneva, civil society organisations are stepping up their efforts to mount massive mobilisations and civil disobedience in Cancun and elsewhere in the world during the week of the ministerial from September 9-14. At a meeting in Mexico City on May 11-12, delegates to the Hemispheric and Global Assembly against the Free Trade of the Americas and the WTO declared their "commitment to derail the Fifth Ministerial of the World Trade Organization," which they accused of institutionalising a free-trade paradigm that has resulted in "greater poverty, inequity, gender inequality, and indebtedness throughout the world" and "accelerated the destruction of the global environment".

The Mexican authorities are preparing for the arrival of thousands of activists not only from Mexico but from North America and Central America. In activist circles in Mexico, the big question is whether the Zapatistas of Chiapas will lend the anti-WTO demonstrations the widespread legitimacy they carry and the large numbers they can mobilise.

Opposition from civil society has put the WTO on the defensive. In what many observers have interpreted as an effort to split global civil society in the lead-up to Cancun, Director-General Supachai has invited several leading NGOs to form a "WTO NGO Advisory Committee". The invitation has so far received a cautious response from the target organisations, which will court the anger of their peers should they decide to break ranks.

With confrontation in the air and the WTO's credibility at its lowest point in years, Cancun is shaping up not to be another Doha but Seattle II.

Walden Bello is Executive Director of the Bangkok-based Focus on the Global South and Professor of Sociology and Public Administration at the University of the Philippines.

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