Africa: Developed Countries hold the keys to revival of trade talks

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Editorial: Developed Countries hold the keys to revival of trade talks
Rangarirai Machemedze

The EU Trade Commissioner, Pascal Lamy concurred to the broad assumptions that the failure of Cancun was like an accident, which involved 148 cars on their way to a wedding. In explaining the accident, he forgot to mention (although casualty levels still not clear) that some of the victims escaped unhurt and they stood aside instead of helping those who were hurt. Among those who escaped unhurt, some were wearing helmets and others were putting on life jackets. Those who were hurt, most of them wore ordinary clothing and had no any other form of protection.

But all of them still need to go to the wedding. And those who escaped unhurt should not just stand aside and assume that those hurt will uplift themselves. The unhurt must do something to ensure that everyone goes to the wedding where there is plenty of food and drink. Unfortunately, we are seeing a situation where the law of the jungle is being applied: survival of the fittest and elimination of the unfit, yet all of them want to celebrate together at the wedding.

This is the stark reality that we find developed and developing countries in after the collapse of trade talks in Cancun. At the informal heads-of-delegation meeting on 14 October, it was agreed that the Chairman of the WTO general Council, Perez del Castillo and Director-General Supachai Panitchpakdi, would conduct consultations with members, starting with agriculture, the cotton initiative, non-agriculture market access, and the Singapore Issues.

The aim of these consultations is to find common ground on the four areas with the WTO members, which could allow the restart of negotiations in 2004. However, reports coming from Geneva suggest that positions on the four issues are still the same as to those prior Cancun.

To make matters worse the consultations are being held with the same pre-Cancun method for which they have been so severely criticised: informal, undocumented small group or country-by-country consultations where nobody knows who is meeting with whom and when and what has been talked about. From time to time, Perez del Castillo will then convene informal, undocumented Heads of Delegation meetings on the result of these consultations.

Right after the collapse in Cancun, most of the blame was put on the US and the EU that they were responsible for the breakdown, while the two big trading blocks blamed others, especially the G20 Group of middle-income countries, and the ACP countries. As the EU Trade Commissioner (Lamy) has already indicated, they are now adopting a strategy that aims at shifting the responsibility of reviving the talks towards developing countries, avoiding their own responsibility. The EU must adjust their negotiating scope and mandate and must show a willingness to engage in fair and just trade practices. As long as they continue to subsidise their farmers to that frightening level of US$1 billion per day then they should forget about engaging developing countries.

Actually, the developing countries were the first to show their willingness to continue negotiations under the Doha Development Agenda. Now, all parties, even the US, have signaled their willingness to restart negotiations as soon as possible and this is the positive step that they should carry through until they come to a common understanding with the rest of the developing world.

The EU has stated publicly in various occasions that it is not going to undertake any initiative to revive the talks. It is well known that the EU is still in its process of reflection as regards its commercial policy in general and its positions within the WTO in specific. However, the Geneva-based delegates from developing countries interpret this posture as one suggesting that the EU wants them to make an initial offer that would bring the EU back to the negotiating table. Thus, by acting in this way, the EU aims to make developing countries feel responsible for the failure in Cancun and force a concession that would present a solution to the stalemate.

And we think otherwise. The developed countries hold the keys to the revival of talks.

Prior to and during Cancun, developing countries were pressuring the developed countries, particularly the US and the EU to eliminate all forms of subsidies that they were giving to their farmers. They (developed countries) did not listen and of course there was no progress. And now positions are still the same between the developed and developing countries. The developing countries have got practical and heart rending reasons as to why subsidies should be eliminated. And unless this is done then of course there should not be any reason for negotiations to continue. This is the reason why we say the developed countries have the keys to kick start the process again.

Two weeks prior to Cancun developed countries closed ranks and conceded that for sure there was a need to agree to the worthy cause of developing countries on TRIPs and Public Health as mandated by the Doha Declaration. Whether this was a misjudgment (on their part) thinking that this could sway the position of developing countries on Agriculture and Singapore issues into theirs is debatable. But what they did is commendable although the solution is temporary.

Now after Cancun, why the same can't be done on these four issues? It is clear how agriculture subsidies are hurting the livelihoods of the poor in the developing world. It is also clear how cotton subsidies by the US have impoverished poor farmers in central and western Africa. It is also very much clear how the New Issues will surrender the sovereign power of nation states to the dictates of Transnational Corporations.

When the US and the EU developed their industries, they did so under a protective kind of system which was never open to abuse by other countries. Today they have pressurized developing countries to open their economies to the rest of the world while they are still protecting theirs.

The first article in this Bulletin shows to a large extent the different positions that countries were taking on non-agricultural market access. The US and EC, stated strongly that they wanted a non-linear formula with a single coefficient to be applied by both developing and developed country members undertaking tariff cuts. In this regard, newly acceded WTO members should also undertake more liberalisation in this area.

On the other hand, many developing countries conveyed their opposition to, and unhappiness with the approach of the developed countries for a non-linear formula with a single coefficient to be applied by all. Several made clear that they could not accept the application of a non-linear formula in making tariff reductions.

The same concept that the developed countries used in the Harbinson Text on Agriculture is more or what they are attempting to apply. Deep tariff cuts will only mean accelerated market access for developed country members' products to the developing world. As alluded to earlier, protection of the different sectors should be the priority of developing countries like what their counterparts did when they were developing their industries.

On the Singapore issues the Chairman suggested that the members could perhaps agree to launch negotiations for transparency in government procurement and trade facilitation at the SOM on 15 December and then subsequently discuss their respective modalities. On the issue of investment and competition rules, he proposed that members could perhaps agree to re-start the clarification process on the modalities. This could then lead to several options, including adoption of a plurilateral agreement, which gives the opportunity of opting in or out of such an agreement.

His suggestion really is meaningless to the developing countries. In Cancun Developing countries took the position that negotiations on the New issues should not start unless there is explicit consensus as the language of the Doha Declaration says. There is no explicit consensus. As the Brazilian Foreign Minister, Amorim in the third article in this Bulletin rightly puts it “you cannot ignore - you cannot just, nowadays, write a paper, put your preferred option, ignore the opinion of 80 countries and then think that it will go. That does not happen any more. That is no longer how the world is made up, fortunately.”

If real negotiations are to take place, the WTO must first listen to the concerns of their members particularly on the process of negotiations itself. The developed countries, moreover, must wake up and listen to the concerns of their unequal counterparts. There is now doubt whether sufficient progress will be made before the 15 December General Council Senior Officials Meeting (SOM) for an agreed outcome.

Still the developed countries must open the doors of the crushed cars, because they have the keys, such that everyone will go to the wedding and eat the same food and have the same drinks.

Rangarirai Machemedze is a Senior Analyst with SEATINI