analyzing the cancun draft

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Message: 1
   Date: Fri, 25 Jul 2003 15:44:15 +0500
   From: Tahir Hasnain <tahir@xxxxxxxxxxxxxxxxx>
Subject: Analysis of Draft Cancun Text and its Process

Third World Network
22 July 2003
www.twnside.org.sg

Dear friends and colleagues

ANALYSIS OF DRAFT CANCUN TEXT AND ITS PROCESS

The first draft of the Cancun Ministerial Text was circulated to WTO
members on Friday 18 July.   This followed from a meeting of the Trade
Negotiations Committee (TNC) on 14-15 July.

Below is an analysis of the Text and also the processes, including the
TNC meeting and after.

It is written by Tetteh Hormeku who coordinates trade issues at the
Third World Network Africa secretariat, and also the Africa Trade
Network, a network of African NGOs and other institutions involved in
trade issues. He is currently in Geneva monitoring WTO developments.

Please check the TWN website for previous issues of TWN Info Service.

With best wishes
Martin Khor
TWN

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A SKELETON INSIDE AN UNTRANSPARENT PROCESS An analysis of the Draft
Cancun Ministerial Text and its process

By Tetteh Hormeku   Third World Network (Africa) and Africa Trade Network

1.  Introduction

The first draft of the so-called "operational text" which will form the
basis  of decisions to be taken by trade ministers when they meet at the
5th WTO  Ministerial in Cancun was released on Friday 18 July, in line
with the  announcement by Dr. Supachai Pantichpakdi, the WTO
Director-General  and Chair of the Trade Negotiations Committee (TNC) at
a two day meeting  of the TNC on 14 -15 July.  Just as  Supachai
described it at that meeting,  the Draft Ministerial Text which is now
circulating is "skeletal" in nature, with  critical gaps yet to be
filled in all the key areas of contention. However, not only does the
structure of the text seem to weigh the filling  of the gaps against the
interest of developing countries.  More importantly,  judging from the
developments at last week's TNC meeting, these gaps  are set to be
filled through an untransparent, imbalanced, and non-participatory
process, which will make it possible to secure an outcome in Cancun
suited  to the major powers of the WTO.

2.  How will the text be revised and approved?

 >From statements made during the TNC meeting by Dr Supachai and  from
positions expressed by some of the major powers, the text may  not be
formally approved or even properly discussed by WTO the representatives
at Geneva.

WTO members will have the opportunity to comment on the text, in its
current skeletal form, at the meeting of the General Council for
scheduled  the 24 and 25 July.  However, according to the present WTO
schedule, that  will be the last meeting of the General Council before
Cancun.  Thereafter  any further work to formulate and refine the text
will take place through the  informal meetings of head of delegations
and other informal meetings and  consultations where no records are kept
of the proceedings  nor the  participants known.

Demands at the TNC meeting by many developing countries for effective
participation in deciding the final shape of the text did not seem to
have  cut much ice.   At that meeting, a demand by Nigeria, supported by
Botswana  and others for a special joint-session of the TNC and the
General Council  later in August to consider further revisions to the
draft was reportedly  dismissed by the United States as impractical.

Some developing countries are expected to press the demand for another
session of the General Council when the council meets on 24 July.
Nigeria  has already submitted a letter to this effect.  There may thus
be another  General Council meeting after all, reported to be on 25-26
August.

Nevertheless, it is not known how or if the divergent views of members
will be reflected in the draft, whether  this draft will be revised
after comments  by members.  But it is now likely that the draft will
not be subject to approval  by the members but will be sent to Cancun
under the "personal responsibility" of the chairs of the General Council
and the TNC.

The draft Ministerial Text was  released by Ambassador Carlos Perez de
Castillo  of Uruguay, the Chairman of the General Council, "on his own
responsibility,  in close cooperation with the Director-General".

The gaps in the text are explained as reflecting the reality of how far
WTO  members "still have to go in a number of key areas to fulfil the
Doha mandates.

The task ahead of us in the short time remaining before Cancun is to
fill in the  gaps in this draft so that it becomes a workable framework
for action by Ministers."

Filing these gaps will be the focus of intense consultations  "centred
on the  informal Heads of Delegation process and the General Council."

The text expects that  in "some areas the discussions at next week's
General  Council on reports from WTO bodies may contribute to the
evolution of this draft.  In others, further dedicated consultations
will clearly be necessary".  The aim is  "to produce a text for
transmission to Ministers by the latter half of August.

3.  Deceptively open text

On the face of it the Draft Ministerial Text of 25 relatively short
paragraphs appears straightforward.  In the opening paragraph, Ministers
would re-affirm  the declarations  made and the decisions taken at Doha,
take note of the  "progress that has been made towards carrying out the
Work Programme  agreed at Doha, and recommit ourselves to completing it
fully, and renew  their "determination to conclude the negotiations
launched at Doha  successfully by the agreed date of 1 January 2005."

To this end, the Ministers would in the second paragraph, agree to
adopt  a number of decisions in the various areas of the Doha work
programme,  listed in the subsequent paragraphs  Each area of work is
listed and next to it,  a formulation to the effect that Ministers agree
to proceed in the manner outlined  some other document  Those documents
are not attached, but represented by  a space in a square bracket.
Thus in the area of TRIPS and Public Health it says:

"We welcome the decision on implementation of paragraph 6 of the Doha
Declaration on the TRIPS Agreement and Public Health set out in
document [...] "  In relation to Agriculture:  "We adopt the modalities
for further commitments in agriculture set out in document [...] and
agree  that participants will submit their comprehensive draft Schedules
based  on these modalities no later than [...]".

However, the formula is different on the Singapore issues.  Here, on
each  of the issues,  the corresponding statement  refers to the work
done in the  respective working group, as well the work on the issue of
modalities at the  General Council, and offers two options both placed
in square brackets.

These are: either an adoption ".....by explicit consensus the decision
on  modalities of negotiations set out in document..."  or  another
decision denoted  by the words "decide by."   For example in relation to
investment, it  says: "Taking note of the work done by the Working Group
on the Relationship  between Trade and Investment under the mandate we
gave at Doha, and the  work on the issue of modalities carried out at
the level of the General  Council, we [adopt by explicit consensus the
decision on modalities of  negotiations set out in document ...] [decide
that ...]"

The formula of the main Declaration transferring the substantive text
to an Annexed Document appears in varied forms in relation particularly
to all the areas under contention.  In some areas, like trade and
transfer  of technology, trade and finance, where there is apparently
not much  contention, the indication of the text is that Ministers would
recommend  further work to continue.

4.  The "flesh" will be in  the annexes

Thus, on the face of it, the draft Ministerial Text appears open, with
nothing  decided, and with the crucial issues still subject to further
discussions and  negotiations.  This is deceptive, on a number of
grounds.  It also dangerously  weighs against the developing countries'
issues and their ability to influence  the text.

One of these grounds for worry relates to some of documents that will
be  used to fill in the gaps.  At the meeting of the TNC on 14 July,
Supachai  stated that the reports produced by the Chairs of the various
negotiating  groups "will support and complement this brief operational
text with analyses of key issues and priorities".

Officials of the WTO who briefed journalists during the TNC meeting
cited  the respective chairmen's draft modalities for agriculture (of
March) and for  market access in non-agricultural products (of May) as
texts to be "annexed"  to the intended operational text.   As is known,
however, controversy still  continues in the cases of both the
agriculture and non-agriculture market  access negotiations.  Here
developing countries have registered grave objections  to the proposed
modalities.  In non-agriculture market access, African countries  have
objected to the modalities proposed by the chair, and have suggested
alternatives which have yet to find their way into the text.

At the TNC, many developing countries objected to the suggestion that
reports produced by the chairmen of the negotiating groups would be
annexed to the  operational text to submitted to Ministers.  Kenya said
that the agriculture text  has not been agreed to, and therefore should
not be annexed.

Some WTO officials suggested that while it may true that the agriculture
text  is has not been agreed upon, it was the only text available and as
such would  form part of the operational text as the basis for Ministers
to frame their discussions.

If this logic is followed, then texts with which developing countries
are in  disagreement will find their way as an integral part of the text
for Cancun.

And yet the fact that there is not agreement on the Chairman's
proposals  were reinforced again at a two day informal and formal
meeting on Agriculture  held on 17 -18 July.  Here countries remained as
far apart as they were before  the meeting.

5.  Imbalances against developing countries

Apart from leaving the way for texts on which developing countries
disagree to be sent to Cancun as the negotiating text, in areas where no
such texts exist,  the draft Ministerial Text formulates an orientation
of the particular issues in  a  manner that would prejudice the view
points of developing countries.  This is the  case in relation to
Singapore issues.  In each of these areas, the text not only  refers to
work which has been done in the working group, but also on some work  in
the General Council on the issue of modalities for the negotiations.  So
far  however, there have been little or no discussion on the question of
modalities in  relation to the Singapore issues in the General Council.

As far as many developing countries are concerned,  the focus of the
work so  far carried out in the respective Working Groups on the
Singapore issues has  been on the clarification of issues, and the
question of modalities for negotiation  has not been discussed.  Even on
the clarification of issues, there has been no  common understanding of
the issues among the members, but rather a wide  divergence in almost
all the topics.  Similarly, there is conflict among the  WTO members,
mainly on North-South lines, on the very definition of modalities.

It may be that the Ministerial text foresees further work in the General
Council  on modalities on these issues.  Indeed, some documents have
been circulated  privately purporting to lay out the basis for
discussion of modalities.  Japan has  formulated its own view of the
elements of modalities, around which it is apparently  carrying out
consultations.  The chairman of the working group on competition has
also circulated a note  representing the results of his consultations
with members  on modalities in the area of trade and competition policy.

But with only one or two more meetings of the General Council remaining,
it is  most unlikely it can achieve common understanding on the
modalities. Thus,  before Cancun, the major powers in the WTO are
planning for most discussions  to be taken in the informal process and
in bilateral discussions, where the  preferences of developing countries
are likely to side-lined. In this connection,  it may be indicative of
the way the drafters of the Ministerial text wants to go that,  although
the text puts forward two options, it does not actually state, as the
counter to the possible decision adopting explicit consensus on the
modalities,  the opposite option declared by most developing countries
to the effect that the  process of clarification in relation to the
Singapore Issues must continue.

Since the Geneva process is so unlikely to resolve the stark differences
on  the Singapore Issues, it is certain that this set of issues will be
decided at Cancun.

And the very pressurised and untransparent process of Ministerials will
again act  against the developing countries that are opposing these
issues.

Finally, there is a double standard in the treatment of issues.  On
issues  like agriculture and non-market access where existing texts are
biased  against the developing countries, as well on the Singapore
issues, the draft  Ministerial Text envisages that concrete decisions
will be taken at Cancun.

On the other issues of interest to developing countries,  it envisages
only  continuation of further work and for report at a subsequent, sixth
WTO  Ministerial.  Thus, on the issue of implementation, the  text would
commit Ministers to note that while progress has been made under the
Doha mandate,  a number of outstanding issues and concerns remain.  "We
instruct the WTO  bodies concerned to redouble their efforts to resolve
these issues, and instruct  the General Council to report on progress at
our next [i.e. the 6th Ministerial]  Session".

On S&D the formula is split.  On some S&D issues, that are relatively
minor, some decisions are to be taken as set out in a document to be
attached.  Even on this set of issues an informal meeting on 21 July of
Head of Delegations on the S&D shows dissatisfaction by developing
countries.

Indeed, the LDCs and the African group expressed concern that they have
been given little time even to study the proposals being put to them.

Apart from these issues on the table, the  major, contentious cases
related to S&D will be be decided before or at Cancun.  Instead, they
are to be referred back for further work and be reported at the next WTO
ministerial  conference.

6.  Who decides and how?

The key question now is this:  What processes will be adopted on further
work on the draft Ministerial Text in preparation Cancun?   One aspect
of this is the   pressure to "consult" on so many documents
simultaneously, in order for them  to fill in the skeleton of the
Ministerial Text, and in so little time.  The  developing countries and
their small, sometimes one-member delegations  are once again being put
at a disadvantage.  For example, the LDCs and  African countries have
already found themselves short of time to consider  the Chairman's
suggestions on how to treat their own original proposals  on S&D.

Then there is the problem of informality of the process and how the
conclusions,  carried out in the informal consultations are arrived at.
What is the state, say,  of the  text on Agriculture, and how should it
be treated in the declaration?

How about non-agriculture market access?  And implementation?  Whose
word counts in deciding  how much progress has been made in all these
areas:   the entirety of the membership of the relevant group, or the
Chairman of the group who can then proceed on his own responsibility?
And after all these  individual questions have been decided, who decides
on their ultimate shape  in the draft declaration -- the membership,
meeting formally to examine and approve the draft, or the Chairman of
the Trade Negotiating Committee, closely co-operating with the Chair of
the General Council, supported by the army of  friends of the Chair(s),
all supposedly acting on their own responsibility?

At the TNC meeting, Supachai appeared determined not to give ground on
his  approach that after the upcoming general council, further work will
only take  place in informal meetings, consultations, and bilateral
exchanges.  Indeed,  his insistence on this approach, in the case of the
particular issue of implementation,  led to one of the most awkward
moments (diplomatically put) in the TNC meeting,  and provides an
indication of the extent to which he would go.

As reported in the SUNS No. 5386, near the end of the meeting, Supachai
in summing up discussions on the issue of implementation, indicated
that  he would hold further consultations, including with negotiating
bodies which  had been dealing with these issues.  When India, following
similar statements  earlier made by Kenya and China,  objected to this
approach and asked for the  issue to be sent to a special session of the
TNC to be convened later, Supachai  tried to isolate India suggesting it
was only the latter who had difficulties.   India  then noted that their
concerns were shared by China and Kenya among other,  whereupon Supachai
turned to the Kenya seat.  But the Kenya delegate, who  had made the
statement, was not in his seat, having gone to attend another  meeting
being held simultaneously.    When the India delegate insisted that  it
had instructions from its capital on the importance that the
implementation  issues must be dealt with at the level of the TNC,
Supachai asked the India  delegation to consider going back to the
capital,  presumably to get a  fresh mandate more in tune with
Supachai's views.

All these came at the end of  two days of meeting of the TNC in which
many developing countries returned again and again to the question of
"process".  It is clear that for the developing countries, the process
of  decision-making is most unsatisfactory.  They are still seeking a
process  in which they can effectively participate in drafting, revising
and approving  the draft texts that form the key decisions before and at
Cancun.

Thus resolving the issue of process will be the key aspect to the
outcomes in Cancun

--

Tahir Hasnain
Project Coordinator-International Trade
TheNetwork for Consumer Protection (TheNetwork)
40-A, Ramzan Plaza, G-9 Markaz
Islamabad-Pakistan.
Ph.: +92-51-2261085
Fax: +92-51-2262495
URL: www.thenetwork.org.pk