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Note: This document is from the archive of the Africa Policy E-Journal, published
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Africa: Cancun, Overview
AFRICA ACTION
Africa Policy E-Journal
September 12, 2003 (030912)
Africa: Cancun, Overview
(Reposted from sources cited below)
"The rhetoric of global trade is filled with promise. We are told
that free trade brings opportunity for all people, not just a
fortunate few. We are told that it can provide a ladder to a
better life, and deliverance from poverty and despair. And we are
led to hope that the current round of trade negotiations will
deliver on this promise. Sadly, the reality of the international
trading system today does not match the rhetoric."
As the World Trade Organization ministerial summit in Cancun
moves into its closing days, African and other developing
countries have had some success in calling attention to their
concerns. It remains to be seen whether this will be reflected in
the fine print of the official and highly technical negotiations.
This posting contains two general background summaries of the
issues under debate, while a separate posting focuses on
agricultural issues.
The most useful sources for more detailed background and updates,
from NGOs closely following the negotiations, are Third World
Network [http://www.twnside.org.sg] and the International Centre
for Trade and Sustainable Development [http://www.ictsd.org].
Several additional selected sources are given at the end of this
posting.
A special Africa Action briefing on "Africa and the World Trade
Organization" prepared two years ago at the time of the Doha
Ministerial, is available at
http://www.africafocus.org/docs01/wto0111.php> Given the lack of
progress on most issues, the general points of that briefing are
still largely applicable.
The most recent E-Journal postings on related topics can be
found at:
http://www.africafocus.org/docs03ej/tr0306a.php>,
http://www.africafocus.org/docs03ej/tr0306b.php>,
and
http://www.africafocus.org/docs03/acc0309.php>
+++++++++++++++++end summary/introduction+++++++++++++++++++++++
Africans Head for WTO With Low Expectations
http://allAfrica.com
September 8, 2003
By Charles Cobb Jr., Washington, DC
[reposted with permission]
African trade ministers and officials are approaching the fifth
World Trade Organization (WTO) ministerial talks that begin in
Cancun, Mexico, on Wednesday, with low expectations.
Since the collapse of the WTO's 1999 session in Seattle,
Washington, the organisation has struggled to come up with a new
world treaty on trade. It took about two years before trade
ministers met in Doha, Qatar in November 2001 and gave themselves
three years to complete work on a new treaty.
The 146-member organization has gotten virtually nowhere. Since
launching the current round of world trade talks in Doha, WTO
members have missed every deadline they set for themselves. "Up
to now globalization has completely failed poor people and the
WTO?s trade rules have made things worse," says Adriano Campolina
Soares, head of the food rights campaign for the London-based
advocacy group, ActionAid.
In Washington,last week, President George W. Bush urged WTO
negotiators to recover enough lost ground in Cancun to reach a
new world trade agreement by the 2005 deadline it set in Doha.
But hardly anyone thinks that's likely to be achieved.
An end to the agricultural subsidies in Europe and the United
States that make African agricultural products uncompetitive tops
the agenda of concerns. The WTO would like to say it is making
progress on the issue. But last week, in a statement on behalf of
the Africa Group, Morocco criticized a draft WTO declaration on
trade for failing to commit to ending subsidies, describing the
draft as "a complex set of rules that appear to formalize... the
continued use of domestic support. No mention is made of possible
time-frames for the elimination of major portions of
trade-distorting domestic support, a matter of great importance
to the AG [Africa Group]."
But European Union (EU) Agriculture Commissioner Franz Fischler
last week indicated that such demands went too far; in a sharply
worded rebuff to poor nations pressing for the abolition of
subsidies, he said: "If they want to do business, they should
come back to mother earth. If they choose to continue their space
odyssey, they will not get the stars, they will not get the moon,
they will simply end up with empty hands."
Rich countries spend some US$300 billion a year on farm
subsidies, about six times more than on development aid. Every EU
cow gets about $2.50 a day in subsidies; a Japanese cow gets
$7.50 a day. The World Bank estimates that getting rid of farm
subsidies in rich countries would cause a 17 percent rise in
global agriculture production, adding $60bn a year, or six
percent, to the rural incomes of low and middle-income states.
Annual cotton subsidies to U.S. farmers of more than $3bn (three
times U.S. foreign aid to Africa) "depress world cotton prices
and crowd out poor but efficient farmers in West Africa," said
the Bank in a report on Global Economic Prospects released last
week.
Tens of thousands of anti-globalization protestors are expected
in Cancun this week.
Even the announcement by the WTO that it had cut a deal to permit
developing nations to import cheap generic drugs to combat
HIV/Aids, tuberculosis, malaria and other epidemics, was greeted
with disappointment and skepticism by several aid agencies. It's
largely cosmetic, said an Oxfam spokesperson, although African
nations seem pleased. "It's good news for Africa and especially
good news for the people of Africa who so desperately need access
to affordable medicine," Kenya's ambassador, Amina Chawahir
Mohamed, told reporters in Geneva.
The WTO deal requires the drugs to look different - not to be a
copy of the originals. The deal may set up a patent conflict with
countries like India, whose laws permit copying branded drugs as
long as they use a different manufacturing process. But South
Africa may benefit. Aspen Pharmacare, South Africa's largest
producer of generic medicines,is planning to double production
over the next year.
For some, however, the debate over subsidies is largely
"peripheral." Economist Mark Weisbrot of the Center for Economic
and Policy Research in Washington, citing World Bank figures,
says gains from removing all the rich countries' remaining
barriers to merchandise trade -- including manufacturing as well
as agricultural products -- and removing agricultural subsides
will have little real impact. "When the changes are phased in by
2015... an African country with an annual income of $500 per
person would then have $503." In Weisbrot's view, the IMF
"creditors cartel" and the "unpayable" debt burden, particularly
in Africa - and a range of "inappropriate" macro-economic
policies [are] "likely to have far more severe consequences."
Nonetheless certain crops subsidized in the West -- like cotton
-- are of unquestionably of crucial importance to some African
nations. But last month in Nairobi, the chairman of African trade
ministers, Jayakrishna Cuttaree, urged the continent's
governments not to be side-tracked from issues vital to Africa,
as covered in the WTO's Doha Round. "We will not defuse pressure
on Doha to new issues of discussion," he warned.
Deep divide
Beyond differences between rich nations and poor nations - and
indeed between middle income nations, rich nations and poor
nations - on specific issues like subsidies and generic drugs,
the deep divide underlying every debate centers on what should
the WTO be.
African nations are not only concerned with subsidies but also
about the potential negative effects of proposed new rules on
investment, competition, procurement policies, and trade
facilitations. The lack of transparency in decision-making is
another concern. In August, in a draft proposal for the Cancun
meeting, eleven African nations called for clarification of the
relationship between trade and investment, and expressed concern
about "transparency" in trade and procurement.
And there has been bullying of developing nations. A new report
released Monday by the Amsterdam-based Corporate Europe
Observatory (CEO) documents EU arm twisting at the WTO. The
report, based on interveiws with WTO neotiators, quotes one
unamed negoatior's complaint: ""Both the United States and
European Communities trade negotiators take us to the slaughter
house at the end of the day. The latter might be more subtle and
polite about it, however the end result is the same; we get
slaughtered. I do prefer dealing with the US; at least you know
exactly where you stand with them."
"There should be fair procedures especially in the final day and
hours of the Ministerial Conference," the draft stated. Impromptu
"green room" meetings -- a euphemism for private sessions where a
few trading partners wheel and deal -- and privately circulated
drafts of documents have been hallmarks of previous meetings.
"There should not be last-night or last-day exclusive 'green
room' meetings," the eleven ministers stated.
In the view of many in the South, the European Union, Japan, and
the United States have shaped the WTO as a kind of global
governance system reflecting their own interests, reaching far
beyond trade. WTO rules - 800 pages of them - often override
domestic policies in developing nations - as is the case with
generic drug production. And not only developing nations are
affected; in 1999, in order to force the Europeans to import U.S.
beef raised using growth hormones, the U.S. placed sanctions
worth about $117m on European goods.
Developing countries, on the other hand, and African nations in
particular, see this as a value-laden policy that creates greater
imbalance in world trade. Wealthy nations use their great wealth
and power to ride roughshod over Africa's domestic priorities and
policies. They would like a WTO with rules that are actually
confined to setting the terms of international trade. "Trade
rules should [just] cover trade," says Lori Wallach, director of
Global Trade Watch.
No one is betting on whether progress will be made, or on how
much will be achieved. Last week, suggesting that the Cancun
session may fail poor nations, South African president Thabo
Mbeki said that maybe poor nations should join anti-globalization
protestors. "They may act in ways that you and I would not like -
breaking windows in the street and this and that - but the
message they are communicating relates to us," Mbeki told a
seminar in Malaysia during a visit to strengthen ties between
Africa and Southeast Asia.
If agreement can't be reached, "the U.S. will go it alone,"
warned U.S. Trade Representative Robert Zoellick, Friday. "We
will find countries that want to open up markets with the United
States. I hope they will be in the WTO. But if they are not, we
are not stopping. We are moving with the countries that are
willing to go."
TWN Info Service on WTO Issues
9 Sept 2003
Third World Network
http://www.twnside.org.sg
TWN Briefings 1
SOME KEY ISSUES IN CANCUN
By Martin Khor
SUMMARY
The WTO's 5th Ministerial Conference in Cancun faces many key
issues and problems. The outcome will be crucial for people and
communities around the world. The developed countries, led by the
US and EU, will push very hard to get their agenda accepted -
opening up markets in the developing world for their goods,
services and companies, whilst continuing to protect their own
turf especially in agriculture. The developing countries have
learnt that the rich countries will not give them access to their
markets; that import liberalization is damaging their local farms
and firms; and they should not be dragged into further
commitments to open up. They are resisting expansion of WTO into
new areas (the Singapore issues). They want the WTO to change its
anti-development bias. But the rich nations are used to the
GATT-WTO as their own club, and have mastered how to get their
way, even with opposition from a majority of developing
countries. Will the manipulations available in the rule-less
operations of WTO Ministerials again be the decisive factor that
decides the Cancun outcome? Or will developing countries stand
firm this time?
THE DOHA PROGRAMME BECOMES AN ANTI-DEVELOPMENT AGENDA
The work programme from the 4th Ministerial has been advertised
by the rich nations and WTO Secretariat as the Doha Development
Agenda (DDA). It was never called that by most developing
countries or the NGOs. That programme has now turnedf out to be a
Doha Anti-Development Agenda (DADA).
Post-Doha, there was supposed to be a strong development
dimension to the WTO's work. This has not been delivered. There
has been no substantial progress on implementation issues (the
programme intended to rectify the imbalances in the existing
Uruguay Round rules) nor on strengthening special and
differential treatment (S&D) for developing countries. Most of
their proposals have met with hostility from the rich countries.
Implementation issues have been downgraded and neglected, whilst
the 24 S&D proposed decisions in the Cancun draft lack commercial
value and do not expand policy space. The TRIPS and health
"solution" for countries with no or inadequate manufacturing
capacity is riddled with so many conditions and restrictions as
to render it practically useless: it is a concession made by
developing countries (and not by developed countries) to settle
the issue before Cancun.
Worse, in the negotiations on agriculture and industrial tariffs
(or non-agriculture market access), the Doha Declaration
assurances that developing countries' needs will be fully taken
account of have been cynically thrown to the winds. The rich
countries are proposing to drastically press down developing
counties' tariffs in agriculture and particularly in industrial
goods, without regard to the disastrous effects on local farms,
firms and livelihoods. The present Cancun draft text is biased
towards the US-EU proposals. In services, the rich countries have
a long list of "requests" for developing countries to give up
their regulations and allow foreign firms to take over the local
business. And worse will come if the rich nations succeed in
pushing Singapore Issues as negotiating items for new WTO
agreements.
In short, the deadlines on development issues have been missed
and the assurances that development concerns will be "fully taken
into account" have been discarded and what we face is a DADA
instead of a DDA.
AGRICULTURE
[for this section see separate posting today on agriculture]
NON-AGRICULTURE MARKET ACCESS (NAMA) ("INDUSTRIAL TARIFFS")
Developing countries could suffer immense damage to their
industrial sectors if the Chairman's Cancun draft is accepted.
There is already much evidence of de-industrialisation (closure
of local firms and loss of jobs) in many developing countries due
to past liberalization. The Cancun draft, if adopted, will make
the situation even more critical. This draft basically reflects
the US-EC-Canada position, put forward in August in Geneva, which
is aimed at a steep and quick cut in developing countries'
industrial tariffs. The pious rhetoric of the Doha Declaration
that the "negotiations shall take fully into account the special
needs and interests of developing countries and LDCs including
through less than full reciprocity in reduction commitments" has
been set aside by the rich nations (and the Chairman) by putting
in place proposals giving the opposite effects.
The dangerous elements in the Cancun draft (Annex B) include: (a)
Commitment to a "non-linear formula" approach, in which the
higher the tariffs, the higher the reductions (since most
developing countries have higher bound tariffs, they would be hit
much harder than developed countries where most tariffs are low;
(b) Mandating developing countries to increase the coverage of
their tariff bindings to at least 95%, and then reducing the
tariffs; (c) Bringing presently unbound tariff lines or products
under reduction discipline by multiplying the present applied
rates by two and then subjecting them to reduction by the formula
approach; (d) Committing all members to a "sectoral initiative"
of bringing tariffs to zero through fast track time frame for
seven sectors. These proposals were objected to by developing
countries generally during the Geneva negotiations, but they were
included nevertheless in the Cancun draft. If they are accepted,
then the policy space for industrial development will be very
much reduced, and the viability of many firms and industries in
the South -- and millions of industrial jobs -- would be
threatened.
What Should Be Done: The Cancun draft on NAMA should not be
accepted. In the past, developing countries have not been
subjected to a "formula approach" and certainly not to a
"non-linear formula". They have been able to choose the coverage
of bindings (i.e. for which products to make binding commitments)
and the rate of liberalization. This flexibility should be
retained. In any case, Cancun should not adopt decisions to
commit developing countries to a non-linear approach, sectoral
tariff elimination, and near-100% coverage of tariff bindings,
nor the binding of presently unbound tariffs at twice the applied
rates.
THE SINGAPORE ISSUES
This is likely to be Cancun's politically most contentious
question to resolve. Since the 1996 Singapore Ministerial, there
has been a fierce North-South tussle, with developed countries
pushing for WTO to take on new agreements on investment,
competition, transparency in government procurement and trade
facilitation, and most developing countries resisting. The issues
have since been "discussed" with no commitment to "negotiate" new
agreements. At Doha, the rich countries made headway (through
manipulative tactics) with a Declaration that states that
negotiations on the four issues will begin after the Fifth
Ministerial (i.e.Cancun)-but this decision will have to be taken
on the basis of an explicit consensus on modalities of
negotiations.
Since Doha, the disagreements have continued (and indeed
increased) in the discussions on each of the issues. This led
most developing countries to take the position that there is no
common understanding of the issues, and thus no basis for even
discussing modalities (let alone having a consensus on them),
that issues would have serious implications for their
socio-economic development if they have to undertake new
obligations, that there is no basis for starting negotiations and
that Cancun should decide instead that the issues be further
"clarified" instead. The rich nations (led by EU and Japan) argue
the opposite: that an irreversible decision was made in Doha to
start negotiations after Cancun, and this should be affirmed on
the basis of "modalities" they have put forward.
These two options - to start negotiations, or to only continue
discussions - are in the Cancun draft. But the "start
negotiations" camp has an unfair advantage in that their version
of modalities is included in Annexes, even though this is
objected to by developing countries. Meanwhile, many hundreds of
social organizations around the world have campaigned against
negotiations on these issues, which they believe have no place in
the WTO which after all is a trade organization (and at least
three of the issues are non-trade issues). New agreements in
these issues will lead to unprecedented new powers for
multinational corporations andcalamity for developing countries
as well as for many citizens in developed countries.
What Should Be Done: The best option is to decide to take these
issues out of the WTO negotiating agenda once and for all. The
second best option is to decide that the issues need further
discussion and clarification, and thus negotiations should not
begin. If the worst option is taken, i.e. to start negotiations,
it would be a disaster for development, social rights and for the
multilateral trade system itself.
THE UNDEMOCRATIC AND MANIPULATIVE DECISION-MAKING PROCESS
Although many developing countries have prepared themselves
before Cancun, they will face an uphill (some say almost
impossible) battle to have their views reflected in the texts
that form the legal results of Cancun. They already had a bad
experience in Geneva during the preparatory process: despite the
many consultations, the texts on many areas ignored their views.
At previous Ministerials -- except Seattle-the rich countries got
their way.
The main reason is that Ministerials are run in ways that suit
the major powers. There are no rules nor proper procedures on how
Ministerials are run - very strange indeed for an organization
that prides itself for "transparency" and being rules-based.
There is no transparent or participatory procedures for drafting
and revising texts-indeed it is not known to Members in general
nor to the public how the drafts of the Declarations are made.
Thus, even if Ministers and officials are called to attend
consultations and "informal meetings" (for which there are no
minutes), the views of many or most developing countries are
ignored in the texts, which ultimately is what counts. Some of
the most crucial meetings (known as Green Rooms) are very
exclusive, with only a few Ministers called. Decisions on key
issues such as which text to adopt as the basis for negotiations,
who should be made Chairs of various negotiating groups, whether
to extend the conference, have previously been made through
non-participatory and untransparent methods.
Many developing countries have made proposals to have proper
rules for WTO Ministerials, but these were rejected by the rich
countries that claim that thee must be "flexibility" in the
running of Ministerials (which is a code for wanting leeway to
continue the manipulative processes). The terribly undemocratic
and manipulative WTO processes is now the subject of an
international NGO campaign. But that will not stop the attempts
by the major powers to use the same kind of processes in Cancun.
Unless the WTO changes the rule-less way it operates, it and its
decisions --- including the Cancun outcome -- will not enjoy
public legitimacy.
Selected additional Sources
WTO coverage and links from allafrica.com
http://allafrica.com/business
The Cunning Bully - EU bribery and arm-twisting at the WTO
By Fatoumata Jawara,
http://www.corporateeurope.org/cunningbully
Alternative Informationa and Development Centre (South Africa)
http://aidc.org.za/web/readon.php?ID=1
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Date distributed (ymd): 030912
Region: Continent-Wide
Issue Areas: +political/rights+ +economy/development+
The Africa Policy E-Journal is a free information service
provided by Africa Action, including both original
commentary and reposted documents. Africa Action provides this
information and analysis in order to promote U.S. and
international policies toward Africa that advance economic,
political and social justice and the full spectrum of
human rights.
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