[ Tough negotiations, self-confident developing countries ]

Cancún failed –
‘Development Round’ adjourned without a result

What finally rang the death knell for the meeting was the question of whether the so-called Singapore issues (investment rules, competition, trade facilitation and transparency in government procurement) should be negotiated within the framework of the WTO. Many industrialised nations, headed by the European Union, insisted on that throughout the conference, while the developing countries rejected it. When at the last minute the EU signalled it would be content if only the two less controversial issues of the four (trade facilitation and government procurement) were negotiated, it was already too late. Botswana, representing the African Union, rejected any negotiations on the Singapore issues. When South Korea and Japan thereupon declared they insisted that all four issues should be discussed, Derbez closed the conference on the afternoon of its last day.

The consistent attitude of the African countries at the end of the negotiations (which, admittedly, would have been inconceivable without the backing of bigger developing and middle-income countries such as India and Malaysia), was symptomatic of the entire conference. For the talks were from the start marked strongly by the robust manner of the developing countries – especially on the subject of agriculture. A new coalition of 22 countries in Asia, Latin America and Africa (G21-plus) had formed even before the conference. In a draft for an agricultural agreement they had demanded the rapid and complete dismantling of the rich nations’ tariffs and subsidies, but at the same time called for far-reaching exemptions for the poor countries. The group of least-developed countries, which are not represented in the G21-plus alliance, tabled their own draft, which emphasises above all the need for trade preferences for the poorest countries.

Of great symbolic significance for the conference was the so-called cotton initiative of the four West and Central African countries Benin, Burkina Faso, Chad and Mali. The four countries appealed to the industrialised nations (such as at a ‘Cotton Day’ organised by the German Development Ministry in Cancún), and mainly to the USA, to eliminate their subsidies for their cotton growers and „compensate“ African cotton farmers until the subsidies were finally scrapped. The initiative, which was viewed with goodwill by many industrialised nations, developed in Cancún into a kind of litmus test of how seriously the rhetoric about the ‘Development Round’ was to be taken. There were then comments ranging from „outrage“ to „dismay“, particularly among the African countries, when in the draft ministerial declaration the initiative had been interpreted beyond recognition according to US concepts. Dismantling subsidies was now mentioned only in the margin, and instead the African countries were given a vague promise that trade distortions in the textiles sector as a whole were to be examined. Some observers rate this disappointing result as the turning point in Cancún. It was not until the obvious disregard for the cotton initiative became clear that the gulf between the developed and developing countries became too big to overcome.

But in the final analysis Cancún foundered because both groups of countries largely took rigid positions against each other right from the start. That was shown by the reactions to the draft ministerial declaration which conference chairman Derbez tabled on the last but one day, and with which no side was satisfied. The G21-plus group complained that the text did not go far enough on agricultural trade, while other delegates such as German Agriculture Minister Renate Künast said the cuts in subsidies demanded were unacceptable. In reverse, many developing countries rejected the proposed tariff reductions for imports of industrial goods, while German Economics Minister Wolfgang Clement demanded even greater concessions. With regard to the Singapore issues, the draft provided for deleting the subject of competition rules and negotiating on only three issues – which by this time did not satisfy the EU and was still too much for the developing countries.

Opinions differ greatly on how the failure of the conference is to be assessed from the point of view of the developing countries (see box). True, the negotiations are to be resumed in the WTO General Council in Geneva by December 15 at the latest. But some (industrialised nations) governments described Cancún as a serious setback for a multilateral trade policy, which would hurt the developing countries most of all. By contrast, many NGOs and some developing countries rate the breakdown of the negotiations not as a reverse, but on the contrary as an important step towards a genuine multilateral trade policy by which the poor countries will sit at the negotiating table as equal partners. Viewed this way, Cancún could in the long run turn out to have been a success. However, it remains to be seen how stable the new developing countries’ coalitions are. The spokesmen for the most important group, G21-plus, which includes countries such as Brazil, China and India, may be united in their opposition to the industrialised nations’ farm subsidies. But that togetherness could soon end once the current deadlock in the Doha Development Round is overcome and the negotiations begin to get down to details. (ell)