archives: WTO InfoWTO Tries to Stay the Course for Cancun Ministerial and Beyond
International Trade Reporter
Volume 20 Number 3
Thursday, January 16, 2003 Page 126
ISSN 1523-2816
2003 OutlookTrade Outlook
WTO Tries to Stay the Course for Cancun Ministerial and Beyond
The road to the World Trade Organization's Cancun ministerial in September will be anything but smooth, even though the United States and the European Union--despite their bilateral disputes--agree that their top trade priority this year should be the success of the WTO negotiations. But along the way to Cancun, the United States is exploring regional and bilateral avenues to liberalized trade by scheduling free trade agreement talks with a number of countries-- Australia; Morocco; the Southern African Customs Union (Botswana, Lesotho, Namibia, South Africa, and Swaziland); and five Central American countries (Costa Rica, El Salvador, Nicaragua, Honduras, and Guatemala). The Bush administration has also proposed an initiative for creating a network of bilateral FTAs with members of the Association of Southeast Asian Nations. In Congress this year, consideration of the Chile and Singapore FTAs is expected, but export controls and Customs Service issues will remain subject to the vagaries of the war on terrorism.
GENEVA--Members of the World Trade Organization are expected to have a busy first half in 2003 focusing on their most pressing objective: keeping the organization on course for a successful fifth ministerial conference in Cancun, Mexico, in September, and, by extension, keeping the WTO on the road to a successful conclusion of the Doha Round trade talks by the prescribed January 2005 deadline.
But first members will have to pull themselves out of the ditch they drove themselves into at the end of 2002 by failing to meet end-of- year deadlines for reaching deals on several issues of interest to developing countries, in particular the politically sensitive issue of improving access to essential medicines in poor countries.
The failure to reach deals on the medicines issue as well as improving provisions in existing WTO agreements on special and differential treatment for developing countries has delivered a psychological blow to the organization, which faces looming deadlines over the next six months on more difficult issues related to the Doha Round negotiations, including market access for industrial goods, services, and especially agriculture.
Also looming is an end of May deadline for agreeing on reforms to the WTO's Dispute Settlement Understanding, the WTO's rule book for resolving trade disputes.
As a result, few trade diplomats in Geneva are willing to predict a successful outcome to the Cancun meeting, which is not only slated to address the state of negotiations in agriculture, services, and market access but is also expected to decide the contentious issue of whether to launch new negotiations on WTO rules for investment and competition policy.
Canadian Ambassador to the WTO Sergio Marchi, the chairman of the General Council, said the priority for WTO members in the coming months will be to meet the pending deadlines and resolve the medicines issue in order to avoid overloading the Cancun meeting agenda. The ministerial is scheduled to take place on Sept. 10-14.
"One thing we have to try and avoid is backlogging too many issues on the Cancun agenda, because that's the model of Seattle," Marchi said in reference to the WTO's failed 1999 ministerial gathering in Washington state. "That's where we took virtually everything and threw it at ministers for a decision. Our job in Geneva in the coming months is to do justice to these deadlines and leave a manageable number of issues for ministers to consider."
Marchi said the deadlock on the medicines issue "certainly doesn't help preparations for Cancun," given the high public profile given to the issue as well as its importance to developing countries.
"It will be interesting to see how we re-engage on this," he declared. "It won't be easy because we were so close to a deal on Dec. 20. It's tough sometimes to bring back the momentum."
The chairman of the TRIPS Council (overseeing the Agreement on Trade- Related Aspects of Intellectual Property Rights) is due to report back on the state of the medicines negotiations at a General Council meeting on Feb. 10-11, as members hope to clinch a deal by that date.
In an interview with BNA, WTO Director-General Supachai Panitchpakdi said his strategy was to secure enough progress over the coming months so that failure in Cancun would be considered too costly to contemplate.
"In going to Cancun, we have to accumulate a certain amount of capital which could be realized in order to have a successful meeting," he declared. "If we don't have a successful Cancun meeting, everything will be washed away."
"So I want to build up that capital as much as I can going into Cancun. ... If members miss the full round, the costs would be so large that it would justify for everyone to stay involved in the round," he said.
Supachai said he would push hard in the coming months for further progress on the three major Doha Round issues of agriculture, services, and nonagricultural market access. "On services I think the momentum is there, on nonagricultural market access also, I think the momentum is beginning to build up nicely," he said.
Difficult Agriculture Talks
Supachai admitted that the agriculture talks were not moving at the same pace. "Things may be a bit delayed, but we still have a few months to work on this," he said in reference to the end-of-March deadline for agreeing on negotiating modalities. "As we go along, countries can begin to put up some deals." "The positions are still far apart, but at least we still have some quantitative goals to work toward," the WTO chief added. "People have put up some numbers, and some are ambitious; some are less ambitious than others. But at least we have at the moment full contributions from all countries concerned, including the European Union."
A senior Latin American trade diplomat from a Cairns Group country told BNA that agriculture will be the key issue in the coming months, given that it has been identified by the major players as the central issue in the Doha Round talks. But recent developments such as the French government's declaration that it will oppose any further near- term reform of EU agriculture policy as well as the new U.S. emphasis on bilateral trade deals has raised concerns about the willingness of Brussels and Washington to make major concessions on the multilateral front.
Another concern is the U.S. threat to initiate a WTO dispute settlement complaint against the EU's continued moratorium on food imports containing genetically modified organisms. "This could affect the negotiations," the official noted. "Anything which impacts EU- U.S. relations on agriculture has the potential to affect the negotiations."
Marchi described the end-of-March deadline for negotiating modalities on agriculture--which would set out the framework for the preparation of initial offers by members--as "pivotal" for the negotiations. "I hope everybody recognizes that, including the big players."
Supachai said further advances in other areas such as services and market access for industrial goods could help push the agriculture negotiations along. The deadline for modalities on market access for industrial goods is the end of May. WTO members are also due to submit initial offers on services by the end of March, although other offers can come in later without penalty.
"The progress in other areas might motivate other countries to move more on agriculture," he declared. "That's why I welcome the ambitious proposals in the market access negotiations because that level of ambition will help to drive up the ambitions in other areas as well."
The WTO chief said he would help the process along by holding more frequent meetings of the Trade Negotiations Committee (TNC), the WTO body responsible for overseeing the negotiations, possibly once every month in the run-up to Cancun.
Supachai said he would also try to convince WTO members to make the TNC meetings more substantive. "I want to convince our members that we do not have to go through all the negotiations in the TNC, but to focus on some issues where we lag behind and become more interactive [and] to drive forward countries' positions in the TNC," he declared.
And in a bit of bad news for WTO secretariat staff and Geneva-based trade diplomats, Supachai said the organization was expected to work through its traditional August recess in order to prepare for the Cancun meeting in September.
"I don't think there will be a summer holiday for our people here and not for the delegations," he warned. "I think we have to work up until the last day of August before we go to Cancun."
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This report was prepared by staff editors Gary G. Yerkey (European Union, Russia, Africa, and Export Controls); Rossella Brevetti (FTAA, Central America, Canada, Chile, Customs Service, and Steel); and Christopher S. Rugaber (China, Japan, Australia, ASEAN, and Export Financing). Special correspondents Daniel Pruzin (Geneva), Genevieve Wilkinson (ASEAN), Peter Menyasz (Canada), and John Nagel (Mexico) also contributed. Copy Editor: Jane Winebrenner.
By Daniel Pruzin
Copyright © 2003 by The Bureau of National Affairs, Inc., Washington D.C.
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