TWN Report by Martin Khor, from Cancun 14 Sept 2003.
The WTO's Fifth Mininsterial Conference in Cancún ended this
afternoon without an agreement on the Ministerial Text.
The decision to close the meeting was announced suddenly by the
Conference chairman, Mexican Foreign Secretary Luis Ernesto Derbez, during
informal consultations involving about 30 countries (dubbed the "Green
Room" meeting) when agreement could not be reached on the "Singapore
issues." The decision to end the
meeting, without any substantive Declaration, took participants by surprise as
it had been widely expected that the meeting would continue well into the night
or the small hours of the morning, or even extended by a day.
A short closing ceremony was held, from which NGOs and the media was
barred, and to which each delegation could only send a few representatives. It
was expected to have been at the grand hall where the opening ceremony was
attended by 3,000 people. But the venue was shifted to a much smaller room and
many delegates were kept out of this closing ceremony (as well as the last
heads-of-delegation (HOD) meeting preceding it) by security guards.
This ruling on attendance was in contrast to that on official
closing sessions in all the previous four Ministerials, where all delegates, international
organizations, NGOs and media were allowed to be present.
A trade diplomat from an African country complained angrily that she
and other delegates were subjected to pushing and shoving by guards trying to keep
them from entering the room where the HOD meeting was being held.
"The collapse of the talks must have been embarrassing for the
WTO officials and leaders and they must have decided to keep as many people as possible
from the closing session to hide the embarrassment," said another diplomat.
The closing session adopted a brief and simple Ministerial Statement
in lieu of the substantive Ministerial Text that had been under discussion since
its first version appeared in Geneva in July.
The Statement expressed appreciation to the host government of
Mexico, welcomed Cambodia and Nepal for acceding to the WTO, and said all participants
had worked hard to make considerable progress under the Doha mandates, but
"more work needs to be done in some key areas to enable us to proceed
towards the conclusion of the negotiations."
The Ministers instructed their officials to continue working on outstanding
issues taking fully into account all views expressed in the Conference. "We ask the Chairman of the General
Council, working in close cooperation with the Director General, to coordinate
this work and to convene a meeting of the General Council at Senior Officials
level no later than 15 December 2003 to take the action necessary at that stage
to enable us to move towards a successful and timely conclusion of the negotiations.
We will bring with us into this new phase all the valuable work that has been
done at this Conference. In those areas
where we have reached a high level of convergence on texts, we undertake to
maintain this convergence while working for an acceptable overall outcome. Notwithstanding this setback, we reaffirm all
our Doha Declarations and Decisions and recommit ourselves to working to
implement them fully and faithfully."
From the Statement it is unclear whether the 15 December deadline is
meant to complete the negotiations on issues (agriculture and NAMA modalities,
and a decision on launching negotiations on Singapore issues on the basis of
explicit consensus) that Cancun could not. Neither is it clear what is the
status of the Cancun draft texts when discussions resume in Geneva.
There is indeed a sense of confusion on what actually happened in
the last hours of the Cancun conference, whether the talks broke down due to
any specific issue or simply the running out of time to resolve the serious divisions
on the many key issues, and also how Mr Derbez came to make his decision to
close the meeting when he did.
The immediate reason is that there could not be an agreement on the Singapore
issues in the exclusive small group consultation known informally as the Green
Room meeting.
At the early hours of Sunday, after a long HOD meeting to discuss
the revised Ministerial Text, a meeting of nine Ministers (US, EC, Mexico, Brazil,
China, India, Malaysia, Kenya, South Africa) was convened by Mr. Derbez lasting
from one to three a.m. to discuss the Singapore issues, at which the countries
reportedly kept to their known positions.
Later that morning, a larger Green Room meeting of about 30
Ministers was convened. It was meant to
discuss all the outstanding issues of the conference with the view to resolving
the differences. Mr Derbez decided to
start with the Singapore Issues. He
later explained at a press briefing that he chose this as the first item
because it had become the main issue of contention, judging by the reactions to
the revised Ministerial Text at the previous night's HOD.
At the meeting, the developing countries opposed to starting
negotiations reiterated their position that further clarification of all the
issues should be undertaken. Derbez
reportedly proposed that for two issues (trade facilitation and procurement)
negotiations could begin, but that the other two issues (investment and
competition) would be dropped from the agenda.
EC Trade Commissioner Pascal Lamy reportedly agreed that the two
issues of investment and competition could be dropped, giving the impression
that these would be removed from the WTO altogether (and not just from Doha mandate
of starting negotiations on the basis of consensus). The other two issues would then proceed to negotiations.
Many countries said they had difficulty accepting negotiations on
the trade facilitation and procurement. Derbez then adjourned the meeting for more
than an hour to enable Ministers to consult with their constituencies on
whether they could accept this formula of dropping two issues and negotiating
the other two.
During the break, a combined meeting of the ACP, LDC and African
Union members decided that they would not change their mandate that
negotiations should not start on all four issues.
When the Green Room reconvened, some developing country Ministers (including
those representing the ACP-LDC-AU groupings) reported they were unable to
accept negotiations on any of the issues.
Korea reportedly said it could not accept the dropping of any
issue. Derbez then said a consensus
could not be reached on the Singapore issues, and thus there was no consensus
possible for the whole package of issues.
He then made the decision to close the Conference, without having an
agreement on any issue, and ended the Green Room meeting.
When news of the breakdown reached the canteen, the lobby and the
media room, there were scenes of excitement as everyone tried to find out the actual
situation. Many NGO representatives
broke into cheering and singing, as they celebrated the non adoption of what
they considered a Text which would have led to adverse consequences.
A HOD meeting was convened, shortly followed by the official closing
session.
The lack of consensus on Singapore issues may have been the
immediate cause, but the meeting's collapse had broader and deeper roots. For the first three days, the conference
focused mainly on the controversial agriculture issue, with the main
protagonists being the EU and US on one side, and the G21 developing countries
led by Brazil and India on the other side, and a grouping of 32 other
developing countries emerging as an Alliance for Special Products and Special
Safeguard Mechanism championing stronger S and D elements.
The revised Text, issued at lunchtime on Saturday, had the effect of
intensifying rather than reducing the polarization in the Conference. The developing countries were unhappy that
the agriculture text did not answer their concerns. They were outraged with the sections on Singapore issues, as the
views and formal proposals of 70 of them (to continue the clarification process
and not launch negotiations) had been swept aside. And they were also outraged at the poor treatment of the cotton
initiative (which had attracted widespread support) in the text, which one
Minister proclaimed to be an insult to Africans and unworthy of the WTO.
The atmosphere was already on the boil when one by one the
developing countries took the floor at the HOD meeting to criticize the Text,
and at their own regional and national meetings, expressions of their dissatisfaction
was even more pronounced.
The issue of the manipulative decision-making process, particularly
in the drafting of texts, was then coming to he fore.
"Here we are with 70 or more developing countries speaking up
clearly in the consultations, having a consensus document with language on the Singapore
issues, clearly expressed, and the revised Text just ignores their position and
takes the opposite position," said a Caribbean country's Minister on
Saturday night, while having a coffee break. "What kind of organization is
this? Who does it belong to? Who does the drafting? Who appointed
them? Why waste our time engaging
seriously in consultations only to find our views not there at all in the
draft?"
In the end it was the WTO's untransparent and non-participatory decision-making
process that caused the "unmanageable situation" that led to the
collapse of the Cancun Ministerial.
In Singapore (1996), most Ministers had been shut out of the
negotiations as only 30 countries were invited to the Green Room that operated throughout
the meeting. The uninvited Ministers
were angry when they were told at a last informal plenary that they should
agree to a Declaration they had no hand in drafting. They reluctantly agreed
only after the Director General promised that exclusionary meetings would not
happen again.
In Seattle (1999), the Green Rooms operated again from the start to
the end of the meeting. Ministers of
the ACP and Africa groups were so outraged at being shut out that they issued a
statement they would not join the consensus on any Declaraton. The talks collapsed.
At Doha (2001), many informal consultations were held, and the
Ministers and officials were kept busy.
But the drafting of the various versions of the Declaration were
undertaken in an untransparent and exclusionary manner, starting with the
General Council chair Stuart Harbinson submitting an unpopular draft
"under his own responsibility" and ending with a last draft on the
last extended day which everyone was urged to adopt as there was no alternative
at the late hour.
The practice of Chairs writing and submitting texts "under
their own responsibility" became widespread after Doha, even though many
developing countries voiced their unhappiness with it, as the major countries
found it convenient to get their positions adopted through this undemocratic practice.
The drafts for agriculture and NAMA modalities, and later for the Cancun Text
itself, were all drawn up by Chairs and not by the members. All it needed, to suit the interests of the
majors, were: a Chair coming from the
circles of the majors or compliant to their views; a Secretariat willing to
condone or promote it; and a membership
that was willing (or unable to successfully object) to be part of the process.
The drafting bv Chairs shifted the WTO from a member-driven to a Chair-driven
organization. Instead of negotiating
with one another, members were negotiating with the Chair.
But the drafts, because they usually reflected the views of the
powerful minority, lacked the support of most of the developing country members
(who were often outraged that the texts were one-sided in favour of the Quads
and did not reflect their positions) or public legitimacy.
In Cancun, this Chair-driven process continued and became the
norm. The appointed (and thus
unelected) Facilitators became all powerful as they not only conducted
consultations but were responsible for drafting of reports and texts. The Conference Chair became responsible for
the revised Ministerial Text.
No one among the participants is sure how the drafting is done, or
who does it. It is known that the
Secretariat plays a major role. And
when the revised Text came out on Saturday at 1pm, it again revealed biases (some
of them blatant) towards the developed countries.
By now, there were only 28 hours to the scheduled end of the
Conference. It was evident from the HOD
meeting and later at the Green Rooms that the developing countries were this
time much better organized (through their own regional and national processes)
and better prepared to face the processes and substantive debates.
An attempt to reproduce a Doha ending (i.e. ram through an unpopular
text on ground that there is no alternative, and that a "collapse" of
a Ministerial would lead to the breakdown of the trading system and the global
economy) would have led to an open revolt by developing countries.
Thus, the Mexican Minister made a rational decision that the best
option is to close the Conference with a simple statement instead of risking a real
catastrophe.
With the Cancun Ministerial collapse, the issue of the WTO's decision-making
and text-drafting process has again emerged to the fore. That the Ministerials are run without rules
and proper procedures can no longer be ignored if the system is to survive.
Having a failure rate of two out of three of the most recent
Ministerials is not a record any organization can be proud of.
Pascal Lamy, at a closing press conference, himself termed the WTO
as having a "medieval organization" and a "not so rules-based organization"
But it is one which he has himself used to great effect in Doha to great effect,
to ram through the unpopular decision on Singapore issues.
Lamy called for reforms to the decision-making system of the
WTO. He forgot to mention that after
the Doha experience, many developing countries had put forward a set of
proposals (in February 2002) on establishing procedures for Ministerials and
their preparatory process, and that the EU with other developed countries had
blocked a decision based on these proposals.
Just a few weeks before Cancun, developing countries again tried to
raise the issue of the need to have proper procedures for Ministerials, including
for drafting texts. Several
international NGOs also launched a campaign for internal transparency and
participation in the WTO.
But these attempts for more democracy in the WTO house were swept
aside by the major developed countries.
Their argument had been that Ministers must be given the
"flexibility" to run Ministerials the way they want without being
hampered by procedures. In reality,
they would like to retain their grip over the drafting of texts and the
operation of Green Room meetings, and repeat the Doha experience of pushing
developing countries into adopting last-minute Texts.
If this system continues, then each Ministerial would be a poker
game, whose fate depends on last-minute brinkmanship, with powerful countries trying
their luck and using various methods to push their way through, and developing
countries organizing themselves to resist the pressures.
In Doha it worked for the majors.
In Cancun it didn't. If things
don't change, it will be another gamble in Hong Kong or wherever the next Ministerial
is held (since the proposal to hold the next Ministerial in Hong Kong was never
adopted in Cancun).
Holding the trade system hostage to the poker-like game of
brinkmanship is however full fraught with risks, as the record of two failures
out of three meetings shows.
The ultimate lesson of Cancun is that the organization must change or perish.