The final minutes of the World Trade Organization session in
Cancun were symptomatic of the whole meeting: we stalled after representatives
of the least developed, African, and Caribbean countries reported that their
colleagues had rejected any negotiation to update the 1947 rules on customs
procedures.
The breakdown occurred over measures that would have simply
facilitated trade and helped land-locked countries by ensuring prompt release
of goods, publication of procedures, and timely and fair rulings on customs
questions. These commonsense steps are in the interest of all; their rejection
was a political statement. Sadly, this decision was emblematic of a broader
culture of protest that defined victory in terms of political acts rather than
economic results.
As Luis Ernesto Derbez, Mexico's foreign minister and
chairman of the meeting, closed the session, representatives of influential
developing countries finally rushed forward to say they wanted to keep going.
They correctly recognised that the draft text offered an excellent opportunity
to press the European Union to eliminate agricultural export subsidies; to
achieve big cuts in farm subsidies in the US, EU and other countries; to impose
a ceiling on unbelievably high Japanese tariffs; and to open agricultural
markets for developed and developing countries alike. Yet they were too late.
The previous evening, country after country had scorned the
draft text, the negotiating process and other countries. The United Nations
General Assembly has its role, but it does not offer an effective model for
trade negotiations. A few ministers pointed out that increasingly radical
rhetoric would make it harder for all - especially developing country groups
with many smaller members - to consider realistic compromises. Countries that
feel victimised are unlikely to agree to anything.
Cancun could have followed a different course. Only weeks
before, we had worked together to resolve the difficult issue of ensuring that
poor developing countries could gain access to low-cost, life-saving medicines
while protecting intellectual property. But at Cancun the naysayers' tactics
thwarted those who would have cut agricultural subsidies and tariffs,
triggering reform of farm policy in the US, EU, Japan, Canada and elsewhere.
They passed up an opportunity to open developing country markets gradually to
other developing countries. They stymied global sourcing and production
networks, which integrate developed and developing country businesses to mutual
benefit. And they walked away from rules on openness and transparency that
fight favouritism and corruption.
Key mid-level developing countries employed the rhetoric of
resistance as a tactic both to put pressure on developed countries and to
divert attention from their own trade barriers. India's average bound
agricultural tariff is 112 per cent, Egypt's 62 per cent and Brazil's 37 per
cent - compared with a US average of 12 per cent. Their average bound tariffs
on manufactured goods are at least 10 times larger than the US average of 3 per
cent. We should be able to reduce these barriers while protecting the poorest
nations and providing flexibilities for special sensitivities in the bigger
countries.
After the US pressed the EU to develop an agricultural
framework that could achieve farm subsidy and tariff cuts far beyond those
achieved in the last global trade negotiation, we asked Brazil and other
agricultural powers to work with us. Brazil declined, turning instead to India,
which has never supported opening markets, so as to emphasise north-south
division not global agricultural reform.
Smaller developing countries resisted the reduction of US and
EU tariffs because they calculated that they would lose the advantages offered
by special US and EU programmes that eliminate tariffs only for their exports.
Unfortunately, these well-meaning trade preference programmes have undermined
the push for two-way openings, perpetuating dependency.
Four African countries insisted on "compensation"
of between Dollars 250m and Dollars 1bn (Pounds 153m and Pounds 610m) annually,
and unilateral elimination of cotton subsidies. Over the course of 50 years,
global trade negotiations have progressed because countries could trade off
cuts across products and even sectors to achieve a balanced result. The US has
no export subsidies on cotton and proposed the elimination of all export
subsidies. We committed to cut domestic cotton subsidies as part of an overall
package that would also have reduced European and Chinese cotton subsidies,
along with all agricultural subsidies. Instead of making cotton a symbol, we
wanted to make development a reality through concrete results for cotton
farmers, exporters and manufacturers of cotton products, along with all
farmers.
The tactics of confrontation included an assault on one of
the few devices that the WTO can use to prod its 148 members towards consensus:
presenting a chairperson's text for discussion and negotiation. Brazil, India
and others refused even to work off an agricultural text drafted by the
Uruguayan WTO chairman and forwarded by the WTO's Thai director-general. Even
after Singapore's tireless minister had worked non-stop with all parties to
prepare a new agricultural draft reflecting a balanced compromise, Brazil and
its colleagues presented a massive list of required changes. If they were
serious about negotiating a compromise for 148 countries, they overplayed their
hand by failing to signal that intention. They returned home without any cuts
in subsidies and tariffs.
As Chairman Derbez closed the Cancun meeting, he asked
countries to reassess prospects by December 15. We know well what developing
countries are demanding, but have not heard whether more competitive developing
economies will cut their high barriers. We do not know whether other developing
countries that blocked action in Cancun will now accept packages that ask
little or nothing of them. The US stands ready to work with the draft text
across the full agenda. As the Doha negotiations drift into next year, however,
we recognise that a new European Commission may reflect different perspectives
