Cancun in context: CARICOM’s firm stand

The collapse of the 5th World Trade Organisation Ministerial Conference in Cancun in September in many ways heralded a new era in the global trading system. Although the Cancun Ministerial ended in a stalemate, the Caribbean and other developing countries came away winners after taking a firm stand against unfair trade policies of major world powers, namely the United States and the European Union. The Caribbean delegations felt strongly that no deal at Cancun was better than a bad deal, which would have devastated our economies and restricted our ability to safeguard the future development and prosperity of our respective societies.  The region recognises the need for free trade and trade liberalisation, however, we hope to engage in these practices to benefit our countries and not devastate them. Trade liberalisation has been fraught with questions regarding “freer trade for whom, and for the benefit of whom.”  The supporters of trade reform suggest that freer global trade would assist in narrowing the gap in wealth between rich and poor countries. However, the fact is, the opposite has been happening; the disparity in wealth and standards of living has been increasing as developed countries continue to adopt trade policies that tilt the playing field increasingly in their favour, hurting the agriculture and manufacturing sectors in developing countries.

A major player in this globalisation process is the World Trade Organisation (WTO). The WTO was established in 1995, with the sole responsibility for the administration of the rules governing trade between countries. The Ministerial Conference is the WTO’s highest-level decision-making body. In reality, the scope of the WTO goes far beyond trade in merchandise goods and even trade issues, covering areas such as Services, Investment, Balance-of-Payment-Restrictions, Competition, Intellectual Property and the Environment. The Trinidad and Tobago delegation to the Cancun Conference was led by the Minister of Trade and Industry, the Honourable, Kenneth Valley.  Going into the Cancun meeting, the negotiations were already deadlocked. In the months preceding the conference, developed countries remained unsympathetic to the cries from developing Members for special consideration to be given to their concerns with regard to poverty alleviation, food and nutrition security, increased market opportunities in the North and the need for financial assistance to allow for adjustment to trade liberalisation and increase the competitiveness of their industries.

In an effort to alleviate concerns with regard to the lack of transparency with which the WTO conducts its affairs, the Conference was structured to facilitate consensus in a manner that was fully inclusive and flexible. An intensive process of consultations was undertaken in which open-ended meetings of Heads of Delegations constituted the primary forum in the consultative process. These informal Heads of Delegation Meetings proceeded in parallel with the formal plenary session, where members made their formal statements to the conference. Throughout the conference, the CARICOM delegations held daily caucus meetings, where emerging issues were discussed and strategies developed. However, as the conference progressed, it became clear that a confrontation was inevitable as the divide between the rich and poor began to widen, and delegations remained unyielding.  Developed and developing countries were at odds regarding matters to be discussed on the agenda. The developed countries sought to discuss issues from the Singapore round, which are not currently on the WTO agenda for discussion.

However, the developing countries insisted that the meeting address issues of important priority, namely, the high levels of subsidies that the EU and the US provide to their farmers that place farmers in the poorer countries at a disadvantage.   In fact, it is estimated that the EU provides 45 billion euros a year in agricultural subsidies and last year the US farm bill was US$17 billion. Additionally, payments made by the US to its cotton farmers have literally decimated the West African cotton industry (Benin, Burkina Faso, Mali and Chad), driving farmers out of business and exacerbating poverty levels. For example, in 2003 Mali’s cotton industry dramatically slashed its profit forecast by 67 percent. Before long, it had become apparent that the prospects for progress were dim, which led the Chairman to announce that the conference had collapsed. After the closing ceremony CARICOM ministers held a press briefing and expressed the view that the Caribbean came of age at Cancun, specifically, that its standing in the multilateral trading system had indeed increased, given the solidarity and strength it displayed on issues that were central to developing countries during the course of the Conference. Ministers shared the view that the Caribbean countries should be allowed to play a greater role in setting the multilateral trade agenda, given that it accounted for ten percent of the WTO membership.

In the final analysis, ‘the collapse at Cancun’ was as much a consequence of the united stand amongst the ACP Group in general and CARICOM countries in particular on the need to ensure that trade liberalisation becomes a vehicle for development. To this end, Trinidad and Tobago will seek to build on the solidarity developed with other like-minded developing countries in order to secure concessions from developed nations that would allow for a commensurate share of the gains to be derived from increased global trade to accrue to small developing countries like ours. With the stalemate in global trade negotiations, the Free Trade Area of the Americas (FTAA) and bilateral trade agreements may emerge as a better means of achieving the trade-led sustainable growth, development and prosperity that CARICOM countries in general, and Trinidad and Tobago in particular are desirous of achieving. The 2002 edition of the Global Competitive Report has ranked Trinidad and Tobago in the fourth position in terms of macro-economic competitiveness in the hemisphere. The United States, Canada and Chile are the only countries ahead of us in the Western Hemisphere.

However, Trinidad and Tobago continues to actively and aggressively put systems in place to ensure our sectors are adequately prepared to compete in international fora when these Agreements come into effect. These initiatives include the Government’s Trade Sector Reform Programme, the activities of the Business Development Committee, the increased synergy being fostered between the State and the Private sector in an attempt to create the required enabling environment for the latter and the articulated trade-related legislative agenda. McLean is charged with the responsibility of coordinating Trinidad and Tobago’s participation in the negotiations of the World Trade Organisation (WTO). McLean holds an MSc. Degree in Agricultural Economics from the Department of Agricultural Economics and Extension, UWI, St Augustine.