Divide and Rule: - ActionAid

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The EU and US response to developing country alliances at the WTOWest African proposals to eliminate its devastatingcotton subsidies, while the WTO Secretariat itself camein for severe criticism over its role in producing a revisedMinisterial Text which was even more blatantly onesidedthan the original.Rather than learning from these mistakes, however, thepost-Cancún period saw a renewed set of attacksagainst developing countries, and the G20 in particular.Once again individual countries were threatened withloss of trade preferences – most notably, the possibilityof negotiating free trade agreements with the USA – ifthey continued as members of the G20. This approachsucceeded in breaking a handful of Latin Americancountries away from the grouping, while other countriesjoined the G20 in their place.Recently, however, these attempts to break countriesaway from the G20 have been replaced with a moresophisticated variant of the ‘divide and rule’ strategy, asindividual country groupings have been offered preferentialaccess to developed country markets in return for theircooperation at the WTO. The EU’s overtures to theMercosur bloc of South American countries have beenregarded by some as a possible example of this ploy.However, since June 2004, others have suggested thatthe EU is using hard-line tactics in their negotiationswith Mercosur, and has withdrawn its previous offers.Meanwhile, the EU’s May 2004 proposal to the G90 isan even more dramatic attempt to turn developingcountries against each other at the WTO – even as theproposal itself turns out to be an empty offer.These attempts to divide and rule developing countrymembers of the WTO undermine hopes that theinternational trading system could actually address theneeds of the poorest and most vulnerable communitiesin those countries. Instead, the policies and practices ofthe EU and USA continue to be dictated by thecorporate interests of their own business communities.These interests determined the positions of developedcountries at the Cancún Ministerial, just as the privilegedaccess granted by rich country governments to theirbusiness representatives stands in direct contrast to thelack of transparency offered to civil society. This reportexamines the undue role played by corporate interests,both at Cancún and in WTO negotiations since.The EU, USA and other rich country governments will beable to ignore the needs of the poorest countries andtheir vulnerable populations just as long as the absenceof basic democratic procedures at the WTO allows themto do so. The process followed at and before Cancúnwas responsible in large part for the Ministerial’s collapse– yet proposals for increasing the democracy andtransparency of such conferences have repeatedly beenrejected by developed country members of the WTO.ActionAid calls on all WTO members to address thenegotiating procedures of the WTO as a matter ofurgency, including the preparation and conduct ofministerials. In particular, ActionAid calls for anindependent inquiry into the role of the WTO Secretariatduring the Cancún Ministerial, with special reference toits part in the production of the second revision of theMinisterial Text. Finally, WTO members must undertaketo refrain from using political, economic or personalthreats against other members in order to manufactureconsensus in international trade negotiations. Only if theWTO functions as an open and democratic organisationcan there be any hope of its addressing the needs ofthe world’s poor.Mahmud/map/ActionAid BangladeshActionAid International would like to thank the Ford Foundation for supporting this research.fighting poverty together 3
www.actionaid.org1. IntroductionThe Fifth Ministerial Conference of the World TradeOrganisation (WTO), held from 10 to 14 September2003 in Cancún, Mexico, opened a new phase ininternational trade relations. In an unprecedented showof strength, developing countries banded togethersuccessfully to defend their trading interests at the WTO,while repeated attempts by the world’s richest countriesto force through their own agenda ultimately led to theMinisterial’s collapse. This report outlines the newbalance of forces at Cancún, and exposes the threatsand pressures which developing countries faced at andafter the Ministerial. It also calls for a radical reform ofthe way in which the WTO operates, to ensure that theprocedural abuses which took place around the CancúnMinisterial are not repeated in future.The WTO has been plagued by charges of unfairpractices and arm-twisting throughout its ten-yearhistory. Nowhere have these practices been moreapparent than at the ministerial conferences which arescheduled to take place at least once every two years.Early ministerials were characterised by exclusive ‘greenroom’ meetings which ensured that the most powerfulcountries set the global trade agenda according to theirown preferences. Failure to launch a new round of tradenegotiations at the 1999 Seattle Ministerial was adirect result of this exclusion of developing countryrepresentatives, who eventually walked out in disgustat the undemocratic nature of the proceedings.The next attempt to launch the new round took placeat the Doha Ministerial in November 2001, held in thehighly-charged context of the US-led invasion ofAfghanistan just four weeks before. This time, underthreat of being seen to be on the ‘wrong side’ in theinternational war on terrorism, developing countries didagree to a new round of trade negotiations. Yet manycountries had voiced their strong opposition to EU andUS demands for a comprehensive round, and signalledtheir intention to maintain this opposition even in theface of external coercion. Full details of the threats andpressures which eventually forced developing countriesto drop their opposition at Doha came to light throughresearch co-funded by ActionAid and published justprior to the Cancún Ministerial in the acclaimed bookBehind the Scenes at the WTO (Jawara and Kwa 2003).The WTO is often held up as a model of democracyamong international institutions on the grounds that itultimately relies on the democratic principle of ‘onemember, one vote’. Yet the WTO does not hold votes.Instead, the WTO relies on a system of decision-makingby ‘passive consensus’, whereby any member countrywhich is not actively opposing a proposal is taken to bein favour of it – even if that country’s representatives arenot present. This system makes it easier for powerfulcountries to overcome opposition through threats andpressures, since critical delegates need only remainsilent for the ‘consensus’ decision to go through.Michael Amendolia/Network/ActionAid UKThere will always be an element of imbalance in aninternational forum such as the WTO – not least whenmany of its poorest members do not have a singlerepresentative to defend their interests in its ongoingGeneva meetings. By contrast, richer countries not onlyhave substantial permanent missions to the WTO, butalso fly in large teams of special advisers from theircapitals whenever they are needed for negotiations onspecific issues. As former WTO Director-General MikeMoore acknowledged, despite formal equality betweenWTO members, “there is also no denying that somemembers are more equal than others” (Moore 2000).4 fighting poverty together
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