from Cotonou to Cancun, and beyond: the changing dynamics of WTO
and EPA negotiations
Primack & Sanoussi Bilal
The outcome of the
Fifth Ministerial Conference of the World Trade Organization (WTO)
in September 2003 in Cancun has demonstrated that the political
will required by the developed countries to meet the ambitious commitments
made at Doha, and thus help facilitate the transition of the multilateral
trading system to a fair and equitable one, has not yet arrived.
Despite the decision
taken at the WTO's 15 December 2003 General Council meeting to reactivate
the negotiating committees, the current impasse implies a status
quo in the WTO's work programme. For the African, Caribbean and
Pacific (ACP) countries, this outcome stresses once again the imperative
for, inter alia, greater coherence in strategy between negotiations
in the Doha round and their negotiations on economic partnership
agreements (EPAs) with the European Union (EU), a more in-depth
understanding and articulation of their own trade-related sustainable
development priorities, and effective institutional structures to
manage increasing economic integration at the bilateral, regional
and multilateral levels. Whether EPAs offer a better forum for effectively
linking trade and development issues will depend in many ways on
the ability of the EU to approach them with effective capacity building,
patience, and most of all, the political will to 'walk' their pro-development
Starting first with
a consideration of the political dimensions of the Cancun outcome,
this article delves into the web of implications for the ACP countries.
Particular attention is paid to how the lack of progress at the
WTO may influence the recently commenced EPA negotiations between
the EU and various ACP regional groupings under the Cotonou Agreement.
The aim is to highlight key aspects of the changing dynamics of
WTO and EPA negotiations post-Cancun, and offer suggestions on how
the relevant actors may consider moving forward.
from Cancun: destination missed or just part of the journey?
Despite more than
20 months of virtual gridlock at the WTO between the Fourth Ministerial
Conference in November 2001 in Doha and the Fifth session this past
September in Cancun, the collapse of talks in Cancun took many observers
by surprise. While little of the delicately negotiated balance of
the Doha bargain had come to fruition by September 2003 (both in
process and substance), few expected the talks to end the way they
did - closing half a day early with no consensus on any of the agenda
items. Since the collapse, a global debate has emerged attempting
to assign blame for the outcome, as well as establish whether it
was indeed a victory for developing countries (DCs), or rather the
loss of a rare opportunity to re-balance the top rung of the international
trading architecture. Steering clear of the often unproductive 'blame-game',
it can clearly be said that the fallout from Cancun has forced all
actors and observers to reassess the process, substance and systemic
dimensions of the current multilateral trading system (MTS) and
its future direction.
From a substantive
perspective, the argument has been made that Cancun was merely a
midway checkpoint on the progress towards the ambitious commitments
laid out by Members in Doha. Granted the 'development agenda' report
card did show failing grades in terms of missed deadlines and unfilled
promises for almost all its components, the second half of the allotted
time to conclude the round still lies ahead (with arguably more
time available than initially envisaged, as few believe the conclusion
date of 1 January 2005 is attainable). As astutely noted by Rubens
Ricupero, the Secretary-General of the United Nations Conference
on Trade and Development (UNCTAD), Cancun should thus be treated
"as part of a journey, not as a destination missed." Indeed,
history shows that such a collapse during the process of ambitious
trade negotiations is not uncommon. What was to be the mid-term
review during the Uruguay Round in Montreal in 1988, ended without
agreement in all but a handful of areas, and the December 1990 meeting
in Brussels - where the round was to be concluded - ended in no
less than a disaster, with delegates walking out empty-handed. Clearly
ambitious journeys take many an unexpected turn.
Yet, as journeys
often unfold, certain moments can be pointed to as playing a pivotal
role in defining the path ahead. From a political perspective, Cancun
certainly played this role for a majority of DCs - especially for
those in the ACP.
Heading into Cancun,
many feared that as had historically been the norm for trade negotiations,
DCs would acquiesce to the will of the great trading powers on the
majority of their pro-development demands and accept the best deal
they could get. However, proving perhaps that the 1999 Seattle WTO
Ministerial was not as anomalous as some might have hoped, Cancun
was a political 'coming of age', signalling for once and for all
that the concerns of the smallest and poorest Members of the WTO
could no longer be drowned out at the will of their larger trading
partners. If one clear 'win' for developing countries can be said
to have emerged from Cancun, it was their ability to form broad
alliances in the defence (if not yet promotion) of their core development
interests, thus changing the dynamics of multilateral trade negotiations.
Often without realising the future impacts, developing countries
traded away vast tracts of national policymaking space during the
Uruguay Round (for example, accepting rules on intellectual property
rights, investment measures, and subsidies) in return for expected
fruits in market access (mainly in agriculture and textiles), much
of which has yet to materialise. Having learned from these painful
lessons, they now have a much greater appreciation of the importance
of understanding and articulating their own trade-related priorities,
as well as knowing the implications of disciplines demanded by others.
The increased democratisation of policymaking in many parts of the
world, and the engagement of capable domestic and international
civil society organisations, has also meant that developing country
governments could not justify accepting another bad deal. As a result,
developed countries were unable to once again offer DCs a few 'bones'
at the last minute in exchange for their agreement on a wide-ranging
agenda that did not reflect their pro-development priorities (and
that arguably contained elements antithetical to their sustainable
development priorities). The notion that 'no deal is better than
a bad deal' had come home to roost for DCs. This alone made Cancun
a watershed event in the history of North-South trade negotiations.
From this viewpoint,
Cancun was certainly not a 'destination missed', but rather a well-needed
reality check along the Doha round journey, offering a glimpse of
the kind of political will required to make the transition to a
multilateral trading system based on sustainable and equitable development.
If anything was missed, it was the opportunity for developed countries
to demonstrate the political willingness to pursue the ambitions
set out in the so-called Doha 'development agenda', and take leadership
in working towards a pro-sustainable development evolution of the
MTS. In view of the new role taken on by DCs, one can only hope
that Professor Jagdish Bhagwati was correct in saying "Cancun
will serve as a stepping stone to a successful conclusion of the
Doha Round of trade negotiations".
A shift in negotiating dynamics
The widespread use
of alliances in Cancun allowed DCs to withstand the pressures from
their major developed country partners. If this strategy can be
reproduced - as it was arguably done at the Free Trade Area of the
Americas (FTAA) Ministerial in November 2003, it has the potential
to fundamentally change the dynamics of multilateral negotiations.
To maximise this change however, and play a meaningful role in shaping
the future of the MTS, developing countries will have to demonstrate
their ability to transform defensive alliances into positive ones.
If the attainment
of negotiating power is defined as the ability to have elements
of one's agenda represented in the outcome of an exchange of commitments,
balanced alongside the interests of other parties, then it would
be difficult to argue that DCs flexed such power in Cancun. The
quick rise to stardom of the cotton initiative, like the more successful
initiative on access to medicines in Doha, offers but a glimpse
of some of the more egregious distortions in the trading system
that might be addressed when positive negotiating power is exploited
by DCs. In contrast, the debates in Cancun were alarmingly silent
on longstanding development issues such as special and differential
treatment (S&DT), implementation issues, as well as declining
commodity prices. To add insult to injury, the language in the 13
September draft text would have seen negotiations on three of the
four 'Singapore' issues move ahead - despite demands from over 70
developing country Members to the contrary. As a result of this
political coming of age however, this unacceptable text could not
be forced upon the unwilling majority of developing country Members.
These facts bear out that the shift in the role of developing countries
in the WTO represents the arrival of an important ability to block
the imposition of another's agenda. This is by no means a trivial
achievement. It is however, only a step -albeit a fundamental one
- along the path towards achieving greater participation in WTO
negotiations and greater influence in positively shaping their outcomes.
Thus DCs must be mindful of the important role of alliances (and
maintaining the flexibility to arrive at acceptable compromises),
not only in defending common development interests, but also in
promoting their respective strategic objectives through concrete
*David Primack is the Programme Coordinator
*Sanoussi Bilal is a Senior Programme Officer with ECDPM
This is an abridged version of the full article taken from Trade
Negotiations Insights Vol.3 No.1 http://www.ictsd.org/tni/index.htmI
and is hereby reproduced wit their kind permission
optimism at WTO Mombasa talks
While the EU and US were united in their fronting of contentious
issues at Cancun, they broke ranks in Mombasa
and ambassadors from 15 African countries left the Serena Beach
resort in Mombasa on Kenya's coast last week with guarded optimism
after intensive discussions with EU Trade Commissioner Pascal Lamy
and US Trade Representative Bob Zoellick. Further talks between
African trade ministers and other developing country blocs are expected
as the pace towards consensus-building quickens ahead of the sixth
WTO Ministerial conference expected mid-2005.
Last week's talks,
also attended by WTO Director-General Panichpakdi Supachai, failed
to unlock the gridlock at the World Trade Organisation (WTO) since
its failed fifth Ministerial conference in Cancun, Mexico, last
September. In spite of offers by both the EU and US to meet some
of the demands of African countries, significant differences remained
on many of the contentious issues that created a stalemate in Cancun.
The Cancun talks
collapsed over an attempt spearheaded by industrialised countries
to expand the WTO trade agenda, a move stridently opposed by most
poor countries. Developed countries had sought drastic reductions
in industrial tariffs and new trade rules on trade facilitation,
transparency in government procurement, investment and competition
Analysts view last
week's meeting as significant in forging a united African negotiating
front at the WTO. At Mombasa, both the EU and US welcomed Africa's
attempts to strengthen the G90 alliance which includes the least-developed
and African, Carribean and Pacific countries. This is viewed as
an apparent move by the EU and US to counter the powerful bloc of
developing countries led by South Africa, Brazil, China and India,
which shifted the power balance at Cancun.
G90, Africa has shown a purposeful intention to engage in the multilateral
framework. This forum will help define Africa's priority agenda
at the negotiations and lay a basis for progress in reversing the
losses from Cancun," said EU Trade Commissioner, Pascal Lamy.
"At Cancun, Africa set out what it wanted but lacked a negotiating
forum. The G90 provides a useful engine through which to highlight
Africa's concerns," he added.
The Mombasa meeting,
though an informal consultation which was not expected to make any
formal decisions, was seen as significant in narrowing existing
differences and injecting political momentum for negotiations in
Geneva which have got off to a slow start. US Trade Representative
Bob Zoellick described it as "an important strategic dialogue."
Mr Lamy and Mr Zoellick
addressed the African trade ministers separately at Mr Zoellick's
request and the two only shared a common platform at a final joint
press conference with Kenya's trade minister Dr Mukhisa Kituyi.
The Mombasa meeting
showed emerging differences in the EU and US negotiating positions
in contrast to Cancun, where both shared common views, even presenting
a joint negotiating proposal on agriculture.
While the EU and
US were united in their fronting of the Singapore issues at Cancun,
they broke ranks in Mombasa. The US indicated its willingness to
drop insistence on launching negotiations on all the four contentious
issues while the EU insisted it would only cede ground on two issues
- investment and competition policy.
"We are willing
to drop insistence on the Singapore issues in order to narrow the
focus and lay the ground for real progress; 2004 should not be a
lost year," observed Mr Zoellick.
An indication by the EU of its willingness to eliminate export subsidies
on products of export interest to African countries was seen as
an important first step on one of the most divisive issues.
of export subsidies has been one of our key demands in order to
protect our farmers from the impact of dumping. As Africa, we shall
consult to determine products on which we wish to see an elimination
of export subsidies," Dr Kituyi told The East African.
However, the EU
did not indicate the range of products on which it would be willing
to eliminate export subsidies, leaving it upon African countries
to self-select. Any list submitted by African countries is expected
to be subject to negotiation with the EU.
With no criteria
established on taking decisions on elimination of export subsidies,
African countries are expected to face resistance from the EU on
certain strategic agricultural products like sugar and powdered
African civil society
representatives at Mombasa cautiously welcomed the EU offer, warning
that it fell short of multilateral commitments agreed upon three
years ago. "This concession, though an important first step,
still falls short of what was agreed at the Doha WTO Ministerial
conference under which industrialised countries committed to elimination
of all export subsidies, including all forms of export credits,
that promote export dumping," said Irungu Houghton, Oxfam's
Pan Africa Policy Advisor.
But the US was less
candid than the EU on making offers on agriculture. It failed to
commit itself to ending its huge domestic support for agriculture,
which was raised to a record $180 billion over a 10-year period
under the 2002 Farm Bill.
It was also less
forthcoming on ending its annual $3 billion cotton subsidies, which
have pitted it against the four West African cotton producing countries
of Benin, Burkina Faso, Mali and Chad. These countries have argued
that US subsidies harm the livelihoods of African farmers and cut
world cotton prices by at least 25 per cent.
The four countries
have sought a rapid timeframe in eliminating the cotton subsidies,
which the US rejected in Cancun. Instead, the US said it favoured
a sectoral approach under which, in consultation with the World
Bank and IMF, it would consider providing technical support for
development of the textile industry.
At Mombasa, the
US showed little willingness for a rapid solution to the cotton
issue by linking progress to overall reforms in agriculture.
a complete elimination of export subsidies and reduction in domestic
subsidies within the frame of an overall reduction in agricultural
support. Cotton will benefit from this overall package on agricultural
products,” Mr Zoellick said.
*Gichinga Ndirangu is a Kenyan –based
writer on globalization and trade issues
This article first appeared in the East African newspaper and is
hereby reproduced in its entirety.
Time for EU and US to deliver
As trade ministers
and ambassadors from 15 African countries gathered in Mombasa last
week to chart a way forward for the WTO negotiations, EU and US
came empty handed to the meeting. It was obvious that they had no
offer of real benefit to African countries to put on the table.
The Kenyan trade
minister Dr. Mukhisa Kituyi had invited them to the meeting at a
crucial point in time. The World Trade Organization (WTO) negotiations
have been stalled ever since the collapse at Cancun in September
last year. And five months after Cancun the heavily criticized,
undemocratic and untransparent process of WTO still continue to
be applied. Following the collapse of the Ministerial Conference,
the talks moved back to Geneva in the form of informal consultations,
which excluded many WTO members, such as a majority of the African
The Mombasa meeting
clearly showed the willingness and flexibility of African trade
ministers to provide political leadership and help bridge differences
in order to get the WTO talks back on track. However, it is obvious
that this flexibility is still lacking among the two major powers,
EU and US.
Agriculture is probably
the most crucial area and it is widely acknowledged that without
any moves in agriculture, nothing else in the WTO negotiations will
move either. In Mombasa, EU reiterated its offer to end export subsidies
on products of particular interest to developing countries. Although
this is now presented as a major concession from EU’s side,
it is not a new offer – it was included already in a joint
proposal by EU and US on agriculture in August last year for Cancun.
And it is certainly backtracking from the commitment in Doha three
years ago, where countries committed themselves to eliminate all
forms of export subsidies. And EU still refuses to discuss time
frames and an end date for the elimination of the export subsidies.
The US, for that
matter, did not put any concrete proposals to reduce trade distorting
domestic support or the subsidy components of their export credits
before the African ministers in Mombasa. In a letter written by
the US Trade Representative Robert Zoellick to all WTO members in
January, US stresses their willingness to get negotiations back
on track and assures that 2004 shall not be a lost year, despite
the US elections. The letter is an evident shift in tone from the
threats and accusations towards developing countries just after
Cancun. But the real substance is lacking.
The two subsidy
superpowers continue to subsidise their own farmers to the tune
of $1 billion a day. They are able to maintain this massive support
to their farmers through shifting their support measures to boxes
which are supposed to contain measures that do not distort trade.
It is however clear that the EU and US have their own view on what
is trade distorting. But for the African farmers whose livelihoods
are threatened by the dumping of subsidized agricultural products,
it is all too clear what is trade distorting.
area is the so called Singapore issues – investment, competition,
government procurement and trade facilitation. African countries
have been opposing negotiations on these issues ever since the beginning
of the WTO, because of concerns of the serious negative effects
it would have on their local economies and domestic industries.
In Cancun, the European Trade Commissioner Pascal Lamy offered to
drop three of the issues (investment, competition, government procurement)
from the WTO agenda. EU is now backtracking from this proposal and
in Mombasa Pascal Lamy kept pushing for negotiations on government
procurement and trade facilitation.
The US has more
carefully read the mood of developing countries and stated in Mombasa
that they are willing to drop the insistence on the Singapore issues.
However, they still stress that they are ready to go along with
For African countries,
‘dropping’ the Singapore issues means dropping them
off the WTO agenda completely, once and for all. But it is obvious
that EU is playing tricks here.
They offer to drop
investment and competition from the Doha round, but it is clear
that they want to keep them on the WTO agenda, so that they can
pick them up at some later time or launch negotiations on a voluntary
The question is
if African countries are being asked to pay again for some of these
so called concessions. EU and US cannot keep asking developing countries
to always pay twice. “We have been flexible for so long and
if we still continue to be flexible, we shall be breaking our backs”’
said the Tanzanian Trade Minister Juma Ngasongwa in Mombasa.
If the Doha agenda
is ever to become a true development round, there is an urgent need
to put development at the forefront of the negotiations. The rich
countries have kept dragging their feet on development issues that
are crucial for African and other developing countries.
Both Pascal Lamy
and Robert Zoellick have their own personal ambitions to stitch
together the Doha round, since they both leave office later on this
year. Zoellick has suggested a high level WTO meeting involving
some ministers in Geneva by this summer, to get done what was not
done in Cancun.
If this is to be
achieved, the rich countries have to start moving from their rhetoric
to concrete actions. The time has come for EU and US to deliver
on the promises they made at the WTO Ministerial in Doha in 2001.
Gregow is a Liaison Officer with EcoNews Africa, based in Kenya
Editorial: Agriculture is key to unblocking
the Doha Agenda
The EU Trade Commissioner
Pascal Lamy and the US Trade Representative Robert Zoellick are
running out of time. They want to see some positive developments
before they get out of their chairs. But positive developments can
only come when they make the first moves. Political rhetoric alone
cannot achieve anything unless if it is backed by concrete steps
and action towards new negotiating positions.
A lot of activities
have been happening since the beginning of the year particularly
those that have been initiated by the two major trading blocks,
the EU and the US. Africa has also been in the limelight when Kenya
organised a meeting of African Ministers of trade in Mombasa, which
has been attended by Zoellick, Lamy and the Director-General of
the World Trade Organisation, Supachai Panitchpakdi. These meetings
and activities are being held to resolve differences on agriculture
and other issues that blocked a possible agreement on a final negotiating
framework in Cancun.
by the mood of African Ministers and the EU and US in Mombasa, it
is the agriculture stalemate that is key to unblocking negotiations
on all the other issues contained in the Doha development agenda.
It is however the casual approach that the EU and US are employing
that is failing to lift the spirits of their developing countries
partners. Although the US and the EU have signalled a renewed commitment
to the Doha round and a willingness to compromise, this will remain
rhetoric unless they give specific indications in terms of eliminating
agricultural subsidies and dropping the Singapore issues as demanded
by the developing countries.
Recent remarks from
both the EC and the US suggest that the task of reaching an agreement
on at least a framework for agriculture modalities could be accomplished
by August this year. Granted but the EU must be genuine in their
offers when they say they are “willing to eliminate export
subsidies on products of export interest to African countries”.
Concerns have already been raised that since the EU did not indicate
the range of products on which it would be willing to eliminate
export subsidies, African countries are expected to face resistance
from the EU on certain strategic agricultural products like sugar
and powdered milk. Given such a scenario immediate questions like
who defines which products are of interest to African countries
would arise? In real terms is this really going to be beneficial
to African countries or other developing countries? If it is the
Africans themselves who should decide then the issue should not
be negotiable if the EU is genuine in making this commitment.
The US has recently
been playing an active role seeking to move agriculture talks forward,
in marked contrast to its positioning in the lead-up to the Cancun
ministerial conference. However the posturing kind of Cancun mood
is still prevailing on the part of the US.
In a press conference
on 20 February in Geneva, Bridges Weekly reports that Zoellick said
that if the EU and the G-10 countries (which includes Members such
as Japan, Switzerland and Norway who maintain relatively high protection
for their farm sectors) accepted to eliminate agricultural export
subsidies, the US could agree "tomorrow" to "eliminate
the subsidy element of export credits" and to discipline its
food aid programmes. Zoellick also stated that the US was comfortable
with the idea of capping product-specific Amber Box support, a proposal
put forward by many non-subsidising WTO Members that found its way
in the Derbez agriculture framework text drafted in Cancun. "We
can support that, I don't know whether Europe can," Zoellick
Another area that
the US has been insisting on is the issue of market access. In Mombasa,
Zoellick told the 15 African Ministers that there must be some substantial
improvements in market access and the same should happen to the
elimination of expert subsidies. In Cancun Zoellick used the same
tactic to persuade the developing countries to agree on the issue
of market access if they wanted him to agree on the elimination
of all forms of subsidies. His concerns are also shared by other
groups including the G20 and the Cairns group, which have some overlapping
member of the Cairns Group) Trade Minister, Mark Vaile has been
quoted as saying the Cairns group would do what it can to ensure
genuine, long-term reform and liberalisation in the agriculture
"As a leading
voice for agricultural reform since its formation in 1986, the Cairns
Group has a central role to play in getting the agriculture negotiations
back on track to deliver a strong outcome that meets the ambitious
reform objectives set out in the Doha Declaration which launched
WTO negotiations in 2001.”
"We will discuss
strategies to accelerate progress on agriculture and will look at
ways to keep maximum pressure on all sides especially the major
users of agricultural subsidies to work constructively for an outcome
that delivers substantial improvements in market access…”
His comments are
coming against a background of the inistence by the G20 countries
and the Cainrs group of the need for their exports to to gain easy
access to both developing and developed countries’ markets.
But this would mean a lot of sacrifice on the part of the developing
countries as they would need to lower tariffs substantially.
The developing countries
should fight hard for the EU and the US to eliminate the billions
worth of subsidies without giving in on the market access issue.
The agriculture sector of the developing countries have been hit
to the extent that they cannot afford to trade on the market access
in exchange of subsidies elimination.
Cancun failed largely
because the US and EU proposed to do too little on agriculture and
the insistency by the EU mostly to start negotiations on the four
called Singapore issues. Because developing nations' economies tend
to be agriculture-based, major cuts to farm subsidies could help
lift 144million people out of poverty. In addition, there is a lot
of work that has been placed on the shoulders of developing countries
in the WTO and this work most of it has not yet been started. There
is no need to add more work on the WTO agenda in the form of Singapore
issues until a number of issues have been concluded.
The Doha development
agenda should be seen to be moving forward. But this can only happen
if the EU and the US show some practical commitments by setting
up dates on which subsidies should be eliminated. Agriculture is
the sticking point in the Doha Development agenda because it touches
on the very roots of existence of the majority of people in the
machemedze is a Senior Analyst with SEATINI