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Divide and Rule: - ActionAid

Divide and Rule: - ActionAid

The EU

The EU and US response to developing country alliances at the WTOContentsExecutive summary1. Introduction2. What really happened at Cancún2.1 The developing country groupingsat Cancún2.2 The developed country response2.3 Betrayal: the draft Ministerial Text2.4 Collapse and culpability3. Divide and rule: the EU and USresponse to developing countryresurgence3.1 Power politics at Cancún3.2 Undermining developing country unity3.3 Post-Cancún strategy: sticks andcarrots3.4 Wooing the G904. Who’s pulling the strings? The powerbehind the politics4.1 Corporate expansion of the WTOagenda4.2 Special access of the business lobby5. Conclusion and recommendationsReferencesfighting poverty together 1

www.actionaid.orgExecutive summaryThe Fifth Ministerial Conference of the World Trade Organisation (WTO), heldfrom 10 to 14 September 2003 in Cancún, Mexico, opened a new phase ininternational trade relations. In an unprecedented show of strength, developingcountries banded together successfully to defend their trading interests at theWTO, while repeated attempts by the world’s richest countries to force throughtheir own agenda – aided by a series of procedural abuses – ultimately ledto the Ministerial’s collapse.This report outlines the new balance of forces whichpresented itself at Cancún, and exposes the threats andpressures which developing countries faced at theMinisterial, as well as the strategies which have beenused against them since. The evidence presented isbased on ActionAid’s first-hand experience at Cancún,supplemented by new interviews conducted in May2004 with developing country delegates to the WTO.The report calls for a radical reform of the way in whichthe WTO operates, to ensure that the procedural abuseswhich took place around the Cancún Ministerial cannotbe repeated in future.By the eve of the Cancún Ministerial, the WTO’slegitimacy as an international institution hung in thebalance. Basic procedures for ensuring the participationof all WTO members had repeatedly been flouted: private‘mini-ministerial’ meetings between an exclusive groupof WTO members had set the agenda for the talks, whilethe key documents on which negotiations were to bebased had bypassed any process of approval by theWTO’s membership. As a result, the draft Ministerial Textsent to Cancún was condemned by developing countriesfor failing to reflect their proposals alongside those ofdeveloped countries, leaving Ministers with little substanceon which to base the negotiations themselves.The Cancún Ministerial itself saw the emergence ofseveral strong groupings of developing countries, bothin response to the negotiating positions of developedcountries and in furtherance of their own specific aims.The G20 grouping brought together several of thelargest developing countries, centred around Brazil,India, China and South Africa, in direct opposition to thejoint proposal on agriculture submitted to the WTO bythe EU and USA. For its part, the G33 Alliance forSpecial Products and a Special Safeguard Mechanismaimed to defend food security and rural livelihoods indeveloping countries from the threat of import regimeliberalisation under the WTO’s Agreement on Agriculture.The G90 alliance of the African Union, least developedcountries and countries of the African, Caribbean andPacific bloc presented joint positions across a rangeof negotiating issues. Single issue alliances were alsoformed to resist the EU’s attempts to launch negotiationson the four ‘Singapore issues’ of investment, competitionpolicy, government procurement and trade facilitation,and also to campaign for an end to cotton subsidies inthe EU and USA, responsible for undermining thelivelihoods of millions of cotton farmers in West andCentral Africa.Developed country WTO members were not preparedfor these new developing country alliances, and theirfirst reaction was overwhelmingly negative. As describedin this report, a series of public and private attacks werelaunched on the developing country groupings in orderto undermine their cohesion, with the most concentratedassaults reserved for the G20. Developing countrieshoping to negotiate free trade agreements with the USAwere told directly that they would only be able to do soif they dissociated themselves from the G20. Many othercountries were warned against joining the grouping, onpain of forfeiting trade preferences and other crucialeconomic benefits.The eventual collapse of the Cancún Ministerial waswidely blamed on the EU and USA, both for theirintransigence on the issue of agricultural trade andalso for the EU’s increasingly isolated attempts toforce through the Singapore issues in the face ofoverwhelming opposition from other WTO members.The USA was condemned for its refusal to engage with2 fighting poverty together

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