Business as usual

The EU has not learnt anything from its failure at Cancun

By Steve Emmott
Published: Monday 31 May 2004

Business as usual

-- The collapse of the World Trade Organization's (wto) ministerial meet at Cancun last year was a big shock to the eu. The union had calculated that it would drive home its agenda related to agriculture and the so-called 'Singapore issues'. But it had failed to reckon for the simmering resentment left over from use of strong-arm tactics in the wto ministerial in Doha, two years earlier.

After the meet, the eu went into 'reflective mode.' The top civil servant in the union's trade directorate, Peter Carl, produced a remarkable document, The Doha Development Agenda After Cancun, 25 September 2003. It ascribed the Cancun failure to "...entrenched and inward looking policies of key members of the wto who had only reluctantly agreed to the launch of the dda [Doha Development Agenda] in the first place". The document went on to note, "It would be unrealistic to try to resume the negotiations in Geneva on the basis of business as usual". "Political balance and perceptions have been altered by the collective failure to move forward at Cancun, " the document added. In another document, the eu noted, "The consensus of the past fifty years, that regarded progressive trade liberalisation and strengthening of international trade rules as a public good, can no longer be taken for granted" .

For many, sentiments such as these suggested a window of opportunity for structural, institutional and procedural reforms of the wto. However, advocates of "business as usual" were already pressing for a speedy return to the negotiating table without any systemic changes. The reflections and introspections came to an end with the publication, on 26 November, 2003, of Reviving the DDA Negotiations -- the EU Perspective. This document concluded that the basic rationale for dda remained valid and that the eu's objectives, set out in earlier council conclusions, should be maintained. The document merely called for "...a relatively modest, but feasible, package of reforms, focusing first and foremost on the preparation and management of ministerial conferences, and other means to improve the efficiency and inclusiveness of wto negotiations". This implied that the failures in Cancun -- and at Seattle five years back -- were due to bad luck, poor planning or leadership failure. Such an approach cannot overcome the problems that are endemic to the wto.

Two of the major fault lines in the Doha agenda stem from the eu's intransigence on the agricultural subsidies system and the Singapore issues. On the latter it has always maintained that wto should continue to work towards new treaty negotiations on competition, investment, transparency in government procurement and trade facilitation. It was forced to partially back down in Cancun and drop competition and investment from the negotiations. But now it is trying to find ways of keeping these issues in play.

On agricultural subsidies, it is clear that the eu will have to move eventually. In fact, there will be immense pressure on the community budget after 1 May this year, when ten countries with relatively poor rural-based economies -- join the union. However, the union's Common Agriculture Policy is locked in place until 2007 because of a deal to keep French farmers quiet.

Moreover, there is an obvious practical problem, which contributes to wto's present instability. The organisation's existing "built-in" activity in Geneva already exceeds the capacity of all but the best-equipped members and many simply do not have the resources to follow all meetings. Achieving consensus amongst 148 members in this atmosphere becomes less and less likely and gives rise to more frustration and discontent. The point has been reached, when the wto should revert to its core trade agenda, rather then grapple with new issues. The emphasis should be on a simplified agenda which attempts to implement the outstanding commitments entered into in Marrakech.

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.