Divide and Rule: - ActionAid

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The EU and US response to developing country alliances at the WTO2.2 The developed country responseDeveloped country WTO members were not preparedfor these new developing country alliances, and theirfirst reaction was overwhelmingly negative. The world’srichest countries have enjoyed such supremacy ininternational trade talks over the years that they wereunwilling to face a new era which required them torespect the negotiating positions of other parties.Instead, they launched a series of public and privateattacks on the developing country groupings – andin particular the G20 – to undermine their cohesion.These are detailed more fully in the next chapter.From the EU side, Trade Commissioner Pascal Lamyadmitted to the European Parliament just ten days afterthe Ministerial that the EU had not been properlyprepared for the new geopolitical reality whichmanifested itself at Cancún (EP 2003). The EU hadplayed the hardest pressure game at Doha, successfullyforcing through its agenda in the face of developingcountry resistance. At Cancún, by contrast, the EU founditself on the back foot from the outset, widelycondemned for refusing to give ground on agriculturebut still persisting aggressively with its own demands.As regards the EU’s continuing refusal to acceptdeveloping country opposition to the Singapore issues,a spokesperson for the US Trade Representativesummed up the feeling of most observers with thecomment that the EU had “isolated itself from the entireplanet” (Bridges 2003a).The USA was also unwilling to make concessions duringthe Ministerial. In addition to its intransigence on cotton,the USA repeatedly argued that the joint agriculture paperit had submitted with the EU in August 2003 representedthe most it could contribute to the negotiations, and that itwas incumbent upon others to make concessions. Thisjoint strategy with the EU ensured that no movementwould be made to address the profound injustices indeveloped countries’ agricultural systems, while both USand EU representatives went on the offensive insteadand criticised the alternative proposal which had beensubmitted in August by the G20. The most outspokenattack was made on the eve of Cancún, when EUAgriculture Commissioner Franz Fischler suggested thatthe G20’s proposal was “intellectually dishonest”, butboth EU and US representatives continued withunproductive criticism of developing country positionsthroughout the Ministerial itself.As a result of this negative approach from the mostpowerful WTO members, remarkably little time wasspent on negotiations. An increasing number ofdelegations began to voice concern that nothing hadbeen achieved in the opening three days of theMinisterial, with formal Heads of Delegation meetingsbeing used only to restate official positions. Once againit seemed that the tactics of brinkmanship would beemployed to force less powerful delegations into ‘makeor break’ decisions which they could not refuse.2.3 Betrayal: the draft Ministerial TextOn 13 September, just one day before the Ministerial’sscheduled ending, the focus turned to the new draft ofthe Ministerial Text. While Cancún was billed as a stocktakingexercise in the ongoing Doha Round, it wasacknowledged that the Ministerial needed to restore asense of purpose and urgency to the WTO negotiations,which had remained deadlocked for many months. Tothis end, the Ministerial Text would need to establish atleast the basic framework for continuation ofnegotiations in Geneva, and discussion of what the textwould contain assumed increasing importance as theMinisterial progressed towards its final stages.There were already significant problems in the draftMinisterial Text which had been transmitted to Cancúnfrom Geneva on the personal responsibility of CarlosPérez del Castillo, Chair of the General Council, andWTO Director-General Dr Supachai. As pointed out bynumerous delegations, that text was substantially basedon the proposals made by the USA, EU and otherdeveloped countries – even where alternative proposalshad been submitted by developing country members. Inparticular, the crucial annexes dealing with agriculture,non-agricultural market access and the Singaporeissues were almost entirely based on documentssubmitted by developed countries. The conspicuousbias of this draft made the whole process of negotiationparticularly difficult, as Ministers were not presented withoptions on which to negotiate, and this spurreddeveloping countries into making several strongstatements at Cancún to ensure that their views wouldbe acknowledged in the final Ministerial Text.fighting poverty together 9
www.actionaid.orgIn their own words“Doha was slightly different from Cancún. When developing countries from the ACP and LDCgroups went to Doha, we told our Ministers that the Ministerial Text had problems, but therewere two issues – (the ACP waiver plus TRIPS and health) – that allowed the EU to get whatthey wanted. In Cancún, there wasn’t any fanfare that ‘we are not going to accept this until weget that’. The entire text was rejected. There wasn’t anything for developing countries in theentire text.”African delegate to the WTO, interviewed May 2004“In Cancún, they couldn’t force anyone to accept anything, because there was nothing there.”Latin American delegate, interviewed May 2004When the redrafted Ministerial Text appeared shortlyafter noon on 13 September, therefore, the shock waspalpable. Instead of acknowledging the views ofdeveloping country delegations, the new text ignoredthem conclusively, simply repeating the positions of richcountry members of the WTO. Most blatantly, despiteconsistent and vocal rejection by a majority of WTOmembers of new negotiations on the four Singaporeissues, the new text announced that negotiations wouldindeed be launched on three of the four (investment,government procurement and trade facilitation) at thesame time as it opened the door to possiblenegotiations on the fourth (competition policy).Similarly, on cotton, the new text went out of its way todisregard the developing country position. Despite thewidespread support which the four West Africancountries had gained from other WTO members for theirattempt to see an end to all cotton subsidies, the newMinisterial Text simply reproduced the isolated positionof the USA. Rather than addressing the marketdistortions caused by US provision of subsidies to itscotton producers, the text instead followed the USsuggestion that those countries in which cottonaccounts for the major share of economic output shouldbe helped to diversify away from it. The reaction of onerepresentative from the African cotton industry was: “Weare used to hardship, disease and famine. Now the WTOis against us as well.” (Bridges 2003b)On agriculture, too, the new text failed to represent thelevel of ambition called for by developing countries intheir demand for the elimination of export subsidies,while their concerted efforts throughout the conferencesecured only the most minor gains in bringing undercontrol the domestic support provided by rich countriesto their agricultural producers. Worse, the new textstated that there would be an extension to the peaceclause under which WTO members undertook not tochallenge other countries’ subsidy programmes at theWTO – despite the fact that developing countries hadcategorically dismissed this as a possibility. At the sametime, the text rejected the central call of the G33 andAU/LDC/ACP Alliance that developing countries shouldbe exempted from making tariff cuts in special productsessential for food security and rural development.Finally, on non-agricultural market access the new textreflected the full ambition of the EU, USA and Canadaas set out in their joint submission of August 2003.Key developing country proposals on the formula forcalculating reductions in industrial tariffs were not evenincluded as alternatives, just as the new text alsodisregarded their call for an exemption from the ‘sectoralapproach’, which would require highly dangerous tariffreductions in key industrial sectors of developingeconomies. The proposal from African countries toexempt LDCs and other developing countries fromhaving to increase their binding of industrial tariffs waslikewise rejected. Indeed, the same story was repeatedacross the other development concerns groupedtogether in the new Ministerial Text.The outraged reaction of developing countries to thenew text indicated that there had been a serious breachof impartiality in its production. In addition to manyinformal expressions of anger, there was spontaneousapplause from developing country members at theHeads of Delegation meeting on the evening of 13September when Barbados and India voiced theirfrustration at the process which had led to such a onesideddraft. Many other countries spoke out againstspecific sections of the new text, with Mali expressingthe profound disappointment of West and CentralAfrican countries at the rejection of their proposal onelimination of cotton subsidies.The Kenyan delegation submitted an official statementof their frustration to Minister Derbez, the Mexican Chairof the Ministerial, detailing specific grievances across10 fighting poverty together
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Page 5 and 6: www.actionaid.org1. IntroductionThe
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Page 21 and 22: www.actionaid.org4. Who’s pulling
Page 23 and 24: www.actionaid.orgGideon Mendel/Corb
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