September 29 2003

SOUTH AFRICA: Developing countries were held to ransom in Cancún, says Alec Erwin

Alec Erwin, South Africa's minister of trade and industry, in a commentary written for inter-press service:

The seeds of the unsuccessful outcome of the Cancún meeting of the World Trade Organisation were sown many months ago. In the lead-up to Cancún the European Union failed to make any proposal that would have met its commitment, at Doha in 2001, to reduce trade-distorting agricultural subsidies and high tariffs. As the meeting drew closer, the US - the world's second largest agricultural subsidiser - realised the EU was unlikely to meet its commitments and shifted to a s trategy of bilateral engagement with the Europeans. The product of the discussions between the two was an accommodation of each other's trade-distorting farm support policies.

In response, developing countries, including Brazil, India, China and South Africa, established a broad alliance that became the G20+. This was forged around a common aim of creating equality in agricultural trade to ensure an outcome for these talks that met Doha's development objectives.

With Brazil as co-ordinator, the G20+ engaged with the EU and the US separately then jointly, during the first two days of Cancún. The negotiations were constructive and all sides seemed to be flexible. But both the EU and the US focused their demands on developing countries rather than on each other. The US maintained a tough stance on the need to expand its access to developing country markets. The EU was willing to grant poor countries special treatment only if European farmers were granted similar exemptions. The G20+ ministers explained they were willing to liberalise their markets and that the degree to which they would be able to do so was open to negotiation and possible differentiation between developing countries. For instance, developing countries are still threatened by subsidised agricultural imports. Those that were in a structurally different position by virtue of their larger rural populations and the importance of agriculture as a proportion of their gross domestic product would need a slower process of adjustment.

One more meeting focused on agriculture would probably have tested the flexibility of all players. But that meeting never happened. On the afternoon of day four of the five-day ministerial meeting, the chairman released his second draft agreement. Developing countries criticised it, sometimes passionately, as an unacceptable basis for negotiations. This was not a political or polemical stance: the balance of the draft was wrong.

On agriculture, it poorly reflected the progress that had been made, and ignored additional areas of possible agreement. On cotton, the draft called on west African farmers - whose livelihoods are being destroyed by the effect of US and EU subsidies - to consider other economic options, but did not commit the US or the EU to remove subsidies themselves. African countries were appalled.

The talks appeared to break down over the "Singapore issues" - competition, investment, transparency in government procurement and trade facilitation. The EU offered at the last minute to drop its demands on investment and competition and the chair asked for negotiations on one issue - trade facilitation. But ministers representing the African, Caribbean and Pacific countries and the least-developed countries said they could not support the launch of negotiations on any of the Singapore issues. One reason for this was that no link was made between trade facilitation and progress in agriculture negotiations or the demands of west African countries on cotton subsidies. But when South Korea insisted all four Singapore issues be negotiated, the chair called the entire conference to a halt.

The unexpected closure was a great disappointment to the G20+. Further discussion may have produced an accommodation on trade facilitation and the focus would have shifted to agriculture.

The real cause of the breakdown was that both the EU and the US lacked the political will and mandate to advance the agricultural negotiations. Once again, developing countries were held hostage to the lack of agricultural reform in the developed world. What this shows quite clearly is that the WTO negotiations are political: the developed world retains its increasingly self-defeating privileges while the developing world shows increasing frustration. Blaming the poor and weak members of the WTO for the failure in Cancún is unjustified. Instead, we all need to work together to put the negotiations back on track. (IPS)

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