Untangling Cancun

“Special and differential treatment provisions must be crafted to facilitate structural adjustment and promotion of the development of small, developing economies, in particular, the small island developing states.”

Jamaica Prime Minister
PJ Patterson

Developing countries worldwide, including those in the Caribbean, are heading towards next week’s World Trade Organisation (WTO) Fifth Ministerial Meeting in Cancun, Mexico with a great degree of pessimism. And there’s justifiable reasons for it. Two years after the fourth Ministerial in Doha, Qatar where an over-ambitious agenda was adopted, rich developed nations have yet to demonstrate their commitment of putting development at the heart of the WTO rule making. The Doha round of trade talks covered issues such as agriculture, industry, services, environment, special and differential treatment for poor countries, problems of implementation of past agreements, subsidies, anti-dumping duties and much more. Various deadlines were drawn up as milestones for the completion of the talks by 2005

but none of the issues have moved forward and no progress made. Deadlines on the important areas of agriculture, special and differential treatment, implementation issues and industrial tariffs have all been crossed without any agreement. In fact agriculture which became the central focus of Doha - the so-called Development round - has been the subject of accusations and counter-accusations between countries that provide large subsidies and those wanting to liberalise global trade in this sector. Trinidad and Tobago’s Minister of Trade and Industry Ken Valley who will attend the Cancun meeting said even within the Caribbean Community (CARICOM) there’s a “real split” on the issue of agriculture. “At one level, we benefit from subsidised agriculture. We’re net importers and there are others who say if there’s no subsidy, we will be competitive in certain areas so that there is no hard consensus nor unanimity in the case of agriculture even within Caricom....Quite frankly I don’t know whether one can be hopeful on agriculture/WTO,” said Valley.

With countries at loggerheads and the usual North-South divide, developing nations throughout the world could find themselves in a more disadvantaged position as there are no signs that many of the key issues that affect them will be settled at the September 10 to 14 ministerial meeting in Mexico’s popular tourist resort. The WTO, established eight years ago as a successor to the General Agreement on Tariffs and Trade (Gatt) to reduce tariffs and other barriers that inhibit fair trade practices, would no doubt have to defend itself against severe criticism from members particularly from the developing  world for its obvious double standards. The best example is seen in the inability of the developed countries to agree to provisions that would provide special and differential treatment to the developing countries and modify the problems in existing GATT/WTO agreements. Jamaican Prime Minister P.J. Patterson has already called upon regional leaders to work together to ensure that the rules and pace of multilateral, hemispheric and inter-regional trade arrangements take full account of the goals and disabilities of small, developing countries, such as those in the Caribbean. “ Special and differential treatment provisions must be crafted to facilitate structural adjustment and promotion of the development of small, developing economies, in particular, the small island developing states,” he said. “This unity of purpose and action has never failed the region, but it is needed now more than ever,” Patterson emphasised. Already CARICOM in a lengthy Declaration on the upcoming WTO meeting has sounded a caustic note of dissatisfaction over the treatment of rich developed countries to the developing member states.

The sub-regional grouping said it is “ disappointed by the lack of appreciation by some powerful countries for the acute vulnerability of small Caribbean economies and the harmful implications of their actions as they pursue their claims through WTO dispute settlement and the insensitive  manner in which rulings have been implemented disregarding their damaging effects on the livelihoods of thousands of farmers, agricultural employees and their dependents, as the ruling on bananas illustrates. “ With no firm decisions to take forward to Cancun, the odds that the ministerial will end in disarray is increasing. Commonwealth Business Council director of trade policy, Dr Razeen Sally said if this happens, the multilateral WTO could quickly lose its importance as countries turn to bilateral and regional free-trade arrangements. Developing countries could also find it harder to get a stronger voice if bilateral arrangements take center stage in world trade, he added. “ The US and the EU have their insurance policy. If the WTO doesn’t work, they can negotiate bilaterally and regionally, which is what they have done in the past and may do more in the future,” Sally said. Already bilateral and regional FTAs have been increasingly popular - one just has to look at the US - as the WTO seems to be progressing at a snail’s pace since the Doha ministerial meeting. Since Cancun will be the last ministerial meeting before the January 2005 deadline, analysts believe the direction of the conference, particularly on the deadlock over agriculture and industrial tariffs will indicate whether or not the Doha round can be completed on schedule. With the Doha debacle, its now left to be seen whether Cancun will end in chaos and confusion.