Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-09-24-Speech-3-215"
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Trade negotiations are generally described as a win-win situation, in that success means the parties’ gains outweigh the cost of the
they offer. In the event of failure, however, the reverse is true. A successful outcome at Cancún would have meant all WTO members stood to win; the collapse of the Ministerial Conference means we all lose. That, in a nutshell, is the verdict of the Commission as the EU’s trade negotiator. Since we are responsible as negotiators to you and to the Council, my colleague, Commissioner Fischler, and I intend to report to you this afternoon on the Commission’s analysis of our stance at the talks, and the conclusions we feel able to draw of this event, at least at this stage.
The agricultural mother was also there, however, since measured by the WTO yardstick, the USA and Europe are indeed the biggest purveyors of farm support. Only up to a point, however, which was never discussed because the talks ran off the rails: there is farm support and farm support, and not all of it is disruptive of trade. This is an essential dividing line for the future common agricultural policy.
Also present at the birth of G-21 was the corpulent industrial Uncle Tariff, a rather frustrating figure for our exporters of manufactured goods and apparently in no hurry to slim down. In short, I believe that for G-21 the political achievement of making its presence felt, coupled with trade interests that were defensive, even if legitimate in the WTO context, finally outweighed the otherwise real attractions of a success on agriculture.
I complete my survey with our friends in Africa and the least-developed countries. Our analysis is that they feared the erosion of their trade preferences on EU markets – a certainty if our remaining multilateral defences were lowered even further – as a loss outweighing the prospective gains within reach in other areas. That led them to refuse the Chair’s compromise proposal that all the Singapore issues be dropped except transparency in commercial transactions and in public procurement – a refusal, incidentally, condemned by South Korea, which insisted that investment and competition remain on the table, probably to offset certain concessions on agriculture that they (and Japan) would find particularly difficult.
I hope that this rapid overview of the different stances taken by the main players will have made it sufficiently clear to you that it is an exaggeration, indeed a mistake, to attribute the failure of Cancún to a sudden North/South split in the WTO. In Cancún , there was no confrontation between the North and the South, rather the ‘Norths’ and the ‘Souths’ crossed paths without actually meeting.
Before I come to the conclusions we are drawing at this stage from this common defeat, I should like to stress once again that the EU negotiated in good faith in Cancún and added fresh concessions to those already on the table. People can criticise this good faith, but this is a question of the EU’s image and neither Mr Franz Fischler nor I are prepared to compromise on that. I have also heard, and read, complaints that we moved too slowly. Compared to what or to whom, might I ask? Compared to the total stasis of the other big players, not one of whom budged an inch? I would accept that criticism if the discussion process had gained any momentum, but I think there are enough witnesses around who can confirm that this was not the case.
This has been a major shock; there is no point in denying it. And whenever there is a political upset, like Cancún, we have to go back to essentials. That means we have to ask ourselves some questions about the EU’s international trade policy in order to see whether the fundamental assumptions on which we have built it for decades need re-examining.
The first question is: are we still looking to strike a dynamic balance between market opening and rule-making, rules without which market opening is neither effective nor in line with our values? This is a question that has to be asked, since the appetite of those seated around the WTO table for market opening is becoming dangerously selective, while modernisation of the existing rules or the adoption of new ones in areas that are dear to us such as the environment is complicated by the multiplicity of political choices that comes with the ever-greater numbers of nations taking part in international trade.
Question number two: do we still, as the presidency has just asked, give preference to the multilateral approach, hitherto the hallmark of EU external policies? Do our partners share that preference? If not, are we strong enough to get them to change their minds? Should bilateral or regional agreements still be seen as an adjunct to the expansion of multilateral measures? Could these replace multilateral measures, if a period of inactivity leaves the WTO dispute settlement mechanism to interpret an incomplete body of rules and ends up taking the place of the 148-member Ministerial Conference as international legislator?
The third question is: what about the future of our trade preference schemes, the systems generously set up to help the developing countries and carefully differentiated to ensure that the benefits are directed towards those that need them most?
My fourth and final question is: does the WTO, its ground rules and organisational principles still meet today’s needs? What about the principle that members have the same rights and obligations, flanked by rules on special and differentiated treatment in line with the asymmetry in the remaining protection between North and South? What about its increasing difficulty, as an organisation, in building consensus among an ever wider membership on issues which may be technical but now affect the lives of billions of men and women and consequently have far-reaching political implications?
So what was Cancún about? Our aim, as I told you before we set out, was to achieve half of the negotiating programme adopted at Doha in November 2001. We failed quite simply because the gap between the parties’ negotiating positions remained too wide to be bridged. This is really self-evident.
Ladies and gentlemen, honourable Members, these are the questions we need to think about before we move on, if necessary, to tactical or operational considerations; before seeking out new compromises, the compromises that are inevitable if we remain committed to harnessing globalisation in the interests of greater fairness and equity.
The European Commission is counting on you and on the Council of Ministers to help find the right answers to these questions. We are counting on all of you – and primarily, of course, those of you who were delegates in Cancún and worked with us so closely there.
We were supposed to get half way; we barely covered a third of the ground. How did this come about? Not because of poor preparation, which is what happened in Seattle, but because the negotiations never really gained momentum either in the run-up to Cancún or at the Conference itself. This momentum enables the differences to be narrowed while gradually creating the prospect of a positive outcome. This momentum causes an increasing number of delegations to realise that it is more in their interests for the talks to succeed than to fail. All of us sitting around the table at the WTO are carrying out – and know that the others are carrying out – a delicate balancing act and the slightest thing can tilt that balance. Ladies and gentlemen, honourable Members, at Cancún it was the balance of these scales that tipped success beyond our reach.
And whose fault was it? It is said that success has many fathers and failure is an orphan. I do not intend to play that game, and my answer to this difficult question is that we were all responsible. To be precise, the fault lies with the way all the assembled negotiators saw fit to fulfil their mandates.
That is a somewhat abstract proposition. To make it clearer, I shall briefly review the stances adopted by the four highest-profile players at Cancún: Europe, the United States, G-21 and the group formed by Africa and the least-developed countries. The European Union was famously keen to see the Doha programme – and hence Cancún – succeed. But that, of course, makes for an awkward tactical position when it comes to exchanging concessions or bringing in the rules we set store by. And we duly paid quite a price: at Doha, by reluctantly agreeing not to negotiate a linkage between fundamental social clauses and trade rules and by scaling down our environmental ambitions; between Doha and Cancún, by relaxing our stance on investment, competition, trade facilitation and public procurement; after reform of the CAP, by agreeing to additional multilateral measures on agricultural support to help developing countries and further opening up our agriculture market, thereby getting the United States to embark on a similar course; last but not least on access to drugs, by managing to persuade our pharmaceutical industry of the need to waive patent rights – an achievement that happily still stands, since the negotiations on this issue were part of a separate process.
Concessions can, however, only go so far. With the assent of the Council, of Member States and your delegates on the spot, we went to the limit and beyond on two issues in Cancún; investment and competition. In the absence of any significant movement from the other players the Chair of the Conference concluded that proceedings had stalled even before negotiations on the long list of subjects still on the table had really got under way.
The United States too keeps a close eye on the tilt of the scales. My feeling is that the fading prospect of any additional access to markets for farm produce or manufactured goods in keeping with their initial hugely ambitious aims upset a precarious balance. What tipped the scales the wrong way was the prospect of separate negotiations on one politically neuralgic commodity; cotton. I think they might have gone along with the demands from four African countries that believe themselves clearly injured by the US support system had the commitments on a reduction of support been part of the broader negotiations on agriculture, but unfortunately the negotiating process was scuppered before it got that far down the agenda.
The Group of 21, including Brazil, India, China, South Africa, Mexico and twelve Latin American countries, was born of two parents, a political father and an agricultural mother. The political father comes from a desire to give the developing countries a voice in the WTO in dealing with the supposed US-EU duopoly. An odd sort of duopoly, considering the long-standing differences in the American and European positions on access to drugs, the Singapore issues, geographical indications, the WTO implications of the biodiversity convention, the reform of the dispute settlement mechanism or access to agricultural markets, and there I shall end the long list.
I therefore believe that the gleam in the father’s eye, in this case, went beyond the WTO; I see the coalition as an expression of the larger emerging countries’ desire to make their mark in international debates. They did not manage in the UN in the debate on Iraq but at Cancún, on trade, they were able to do so."@en1
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