At a standstill

No forward movement in trade talks, post-Cancun

By Clifford Polycarp
Published: Saturday 15 November 2003

more than a month after the debacle in Cancun, Mexico, where global trade talks collapsed, the stalemate persists. Two crucial World Trade Organization (wto) meetings in Geneva have not yielded any noteworthy results. And while the deliberations have resumed informally, little progress can expected anytime soon.

The heads of delegation (hods) of the wto members met informally on October 14 and formally, under the auspices of the General Council (gc), on October 21. Amid little enthusiasm from members at the informal gathering, gc chairperson Perez del Castillo outlined the process through which he intended to take the negotiations forward. At the gc meet, too, the only decision of any significance was the approval of a proposal by Hong Kong to host the Sixth Ministerial Conference.

The latter meet had an important issue on its agenda. The item for consideration was a proposal put forward by four west and central African countries, including Benin, Burkina Faso, Chad and Mali. It countered the content on the 'cotton initiative' in the September 13 Draft Cancun Ministerial Text. The draft had perversely ignored the views of these nations and reflected only the position of the us.

However, according to wto officials, Benin withdrew the item from the agenda on Castillo's suggestion that the issue be addressed informally. It may be noted that massive domestic subsidies given to us farmers have been crippling these cotton-dependent economies, and they had brought the matter to the wto for an immediate solution.

Under the process enunciated by Castillo at the informal hod meet, they would now focus primarily on four "key outstanding issues" -- agriculture, market access for non-agricultural products, the cotton initiative and the Singapore issues (investment, competition, transparency in government procurement and trade facilitation). The chairperson's decision followed consultations with wto director-general Supachai Panitchpakdi as well as individual members.

Although, only one matter will be discussed at a time, this would not preclude other issues (including the key outstanding ones) from being discussed simultaneously. "We are committed to a horizontal and integrated process where progress in specific areas can contribute to progress across the board," said Castillo at the informal meeting. He added that the negotiations would take place in various formats in smaller groups, including through bilateral meetings and "confessionals", where interested members could join in to discuss a specific issue. Regional and other groupings would also be consulted on a regular basis. Informal discussions are to continue at least until the gc meets next on December 15, 2003.

A pertinent subject that has been occupying the negotiating capital in Geneva is what text should be considered the basis for further negotiations. Even as the eu, the us and members of the Asia Pacific Economic Forum favour the September 13 Draft Cancun Ministerial Text, India has rejected it outright. Holding it responsible for the Cancun deadlock, India's commerce and industry minister Arun Jaitley recently argued that it had failed to reflect the concerns of the developing countries.

In the meantime, the us is busy inking bilateral and regional trade pacts. The eu and numerous other countries are following suit. The first casualty of the development is the 22-member coalition of developing countries that aligned in Cancun against Northern subsidies on agriculture. Five Central American countries have defected from the group. They are in the process of negotiating a free trade agreement in the us. The only silver lining is that the core members -- Argentina, Brazil, China, India and South Africa -- are still a part of the alliance.

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