July-Sept.
2003
Cancun
Ministerial
Failure:
Derailing
WTO
Amit
Sen
Gupta
and
Prabir
Purkayastha
The
final
collapse
of
the
Cancun
WTO
Ministerial
meeting
in
Cancun
without
any
agreement
is
a
defining
moment
in
the
current
phase
of
trade
negotiations.
For
the
first
time,
the
club
of
the
rich
termed
the
quad
--
the
US,
European
Union,
Japan,
Canada
--
did
not
get
their
own
way.
The
earlier
collapse
in
Seattle
had
as
much
to
do
with
the
protests
outside
as
divisions
within
the
quad,
particularly
the
US
and
EU.
This
time,
the
poorest
of
the
developing
countries,
incensed
by
the
way
their
concerns
were
treated
and
the
procedure
of
selective
consultations,
walked
out.
While
the
rich
countries
predicted
gloom
and
doom
for
the
poor
countries,
their
argument
was
quite
simple:
no
deal
is
better
than
a
bad
deal.
The
official
WTO
Ministerial
statement
after
the
Cancun
meeting,
with
six
paragraphs,
had
just
one
operative
sentence:
“We
therefore
instruct
officials
to
continue
working
on
outstanding
issues
with
a
renewed
sense
of
urgency
and
purpose
and
taking
fully
into
account
all
the
views
we
have
expressed
in
this
Conference.”
Probably
never
before
has
the
failure
of
a
multilateral
negotiation
been
greeted
with
such
exultation.
People
from
all
over
the
world
danced
on
the
streets
of
Cancun
as
this
news
came
in,
signalling
the
derailment
of
the
meeting.
They
celebrated
at
the
spot,
which
had
witnessed
the
tragic
suicide
of
a
Korean
protestor
just
four
days
back.
For
days
protestors
from
around
the
world
had
infiltrated
the
area
near
the
conference
venue
and
caused
mayhem,
blocking
traffic,
confronting
delegates
and
being
chased
around
by
a
bewildered
army
of
private
security,
conscripts
and
military
policemen.
Finally,
on
Saturday,
these
protestors
had
something
to
really
cheer
about.
The
jubilation
at
the
final
outcome
of
the
WTO
summit
--
not
just
in
Cancun
but
also
in
cities
and
towns
across
the
globe
--
is
a
pointer
to
how
hated
the
current
world
order
of
WTO
has
become.
Why
the
Failure?
The
final
collapse
in
Cancun
occurred
when
developing
country
governments
refused
to
accept
a
draft
declaration
heavily
biased
in
favour
of
the
EU
and
US
positions.
After
three
days
of
negotiations,
the
Mexican
Chairperson
produced
a
draft
that
made
no
concessions
to
the
developing
countries.
The
draft
accepted
continuation
of
agriculture
subsidies
by
the
EU
and
US
as
well
as
the
launching
of
negotiations
on
the
controversial
new
issues
known
as
Singapore
issues,
both
of
which
had
been
opposed
by
the
developing
countries.
The
Kenyan
delegation,
under
pressure
of
other
African
countries,
walked
out
of
the
Green
Room
discussions
involving
30
countries,
effectively
bringing
the
hopes
of
an
agreement
to
an
end.
Why
did
the
developed
countries
fail
to
get
their
way
in
Cancun,
as
they
have
done
so
often
in
the
past?
There
are
three
major
reasons
for
this.
The
first
and
certainly
the
most
important
is
that
after
having
conceded
so
much
in
the
Uruguay
round
of
GATT
negotiations
that
led
to
the
formation
of
the
WTO,
the
developing
countries
have
been
pushed
to
the
wall.
The
benefits
of
globalisation
have
so
obviously
gone
to
the
developed
countries
that
it
is
increasingly
difficult
for
the
ruling
elite
in
the
developing
countries
to
give
further
ground
and
yet
be
able
to
face
their
people
at
home.
There
is
no
doubt
that
the
rising
tide
of
mass
movements
and
public
opinion
in
these
countries
have
made
it
difficult
for
them
to
yield
further
without
being
able
to
show
some
reciprocal
concessions
from
the
developed
countries.
The
second
reason
for
the
failure
was
that
the
Cancun
meeting
was
held
in
the
backdrop
of
the
invasion
of
Iraq
by
US
forces.
In
the
previous
meeting
at
Doha
in
2001,
held
in
the
aftermath
of
the
World
Trade
Tower
bombing
in
New
York,
the
US
was
able
to
pose
as
a
victim
and
coerced
the
rest
of
the
world
to
show
their
sympathy
by
accepting
its
demands.
In
Cancun,
they
were
clearly
seen
as
bullyboys,
with
disdain
for
word
opinion
including
the
UN.
The
failure
at
Cancun
had
as
much
to
do
with
US
arrogance
as
with
the
EU's
attempt
to
manipulate
on
Singapore
issues
while
conceding
little
on
agriculture.
The
third
reason
for
the
failure
was
that
given
the
stagnation
of
the
global
and
their
home
economies,
the
US
and
the
EU
had
very
little
room
for
manoeuvre.
In
the
US,
Bush
already
faces
an
attack
on
his
handling
of
the
economy,
compounded
by
the
unravelling
of
his
Iraq
strategy.
For
the
Bush
administration
to
provide
any
"concession"
before
his
2004
re-election,
it
would
have
needed
much
larger
concessions
from
others.
The
EU
was
in
an
even
worse
position.
While
pushing
for
the
Singapore
issues,
they
were
not
prepared
to
make
any
concessions
on
agriculture
subsidies.
In
Cancun,
both
the
US
and
the
EU
therefore
were
looking
for
only
one-way
concessions.
The
collapse
in
Cancun
was
inevitable
once
the
US
and
EU
realised
that
the
developing
countries,
for
a
change,
were
not
going
to
capitulate.
Finally,
however,
the
abiding
image
that
will
remain
of
Cancun
is
the
united
front
that
the
developing
countries
were
able
to
forge.
Led
by
what
came
to
be
known
as
the
G21,
(group
of
21
countries
---
including
Brazil,
India,
China,
Malaysia,
South
Africa)
the
developing
countries
remained
united
till
the
end.
The
resolve
of
the
developing
countries
drew
enormous
strength
from
the
massive
worldwide
campaign
that
had,
for
over
a
year,
rallied
people
on
the
slogan
of
“Derail
the
WTO
at
Cancun”!
India,
as
a
part
of
the
G-21,
along
with
Brazil,
China
and
South
Africa
played
a
significant
role
in
these
negotiations.
They
were
able
to
rally
the
bulk
of
the
developing
countries
behind
them
and
act
as
a
counter
to
the
US-EU
led
quad
grouping.
By
all
accounts,
the
quad
attempts
to
split
the
group
through
a
carrot
and
stick
approach
failed.
With
the
WTO
Secretariat
acting
as
an
instrument
of
US-EU
interests,
and
a
compliant
Mexican
Chairperson,
the
US-EU
tried
to
ram
though
a
draft,
which
not
only
did
not
reflect
the
concerns
of
the
developing
countries
but
also
in
some
respects
was
even
worse
than
the
pre-conference
draft.
The
last
straw
was
the
contemptuous
dismissal
of
the
demand
of
five
West
African
countries
that
had
asked
for
removal
of
cotton
subsidies,
which
had
led
to
a
collapse
of
the
price
of
cotton
in
the
global
market.
They
were
asked
by
the
US
to
diversify
their
agriculture
and
this
issue
was
sought
to
be
clubbed
with
the
textile
discussions.
The
US
was
not
willing
to
budge
on
support
to
its
special
interest
lobbies
even
if
the
poorest
of
African
countries
such
as
Mali
and
Benin
were
facing
bankruptcy.
With
the
African
countries
on
the
boil,
the
conference
failed
when
the
EU
insisted
on
discussing
the
new
Singapore
issues
before
discussing
agricultural
subsidies.
Consequences
of
the
Failed
Talks
Many
have
argued
that
the
failure
of
a
multilateral
institution
such
as
WTO
would
weaken
the
bargaining
position
of
the
developing
countries:
they
now
would
have
to
face
the
rich
countries
in
bilateral
negotiations.
Already,
the
US
has
said
that
they
would
continue
with
their
agenda
in
various
bilateral
negotiations
going
on
with
14
countries.
This
overlooks
that
the
WTO
came
into
existence
to
provide
teeth
to
the
trade
regime
through
a
dispute
settlement
body
and
trade
sanctions.
This,
as
the
US
is
now
discovering
in
Iraq,
is
a
lot
cheaper
than
gunboats
and
cruise
missiles.
The
bilateral
deals
have
their
limits
as
they
neither
lock
these
countries
permanently
into
an
unequal
position
nor
have
teeth
to
impose
sanctions.
It
is
this
coercive
instrument
--
among
other
things
--
that
distinguishes
WTO
from
the
earlier
multinational
GATT
as
an
institution.
While
it
is
true
that
WTO
allows,
in
principle,
the
developing
countries
to
come
together
and
negotiate,
in
practice
the
club
of
the
rich
have
ensured
through
their
control
of
the
Secretariat
and
their
ability
to
split
the
developing
countries
that
they
dictate
the
proceedings
in
WTO.
The
developing
countries
therefore
had
no
chance
of
advancing
the
development
round,
which
is
what
the
current
Doha
round
of
negotiations
is
supposedly
all
about.
Whether
the
WTO
can
be
used
to
advance
their
cause
is
a
moot
point
today:
what
were
on
the
table
were
further
concessions
on
investments,
government
procurement
and
further
cuts
in
their
tariffs.
In
this
context,
the
best
that
the
developing
countries
could
hope
for
was
a
derailment
of
Cancun.
Without
this,
there
was
no
way
that
their
concerns
would
ever
be
centre
staged
in
WTO.
In
the
correlation
of
forces
in
Cancun
this
time,
a
lot
had
changed
from
Doha.
In
this,
the
alliance
of
21
countries
--
the
G21
--
should
not
be
underestimated.
What
has
also
changed
in
WTO
is
the
entry
of
China.
While
China
did
not
play
a
high
profile
role,
the
sheer
size
of
its
market
and
its
huge
trade
surplus
with
US
makes
it
difficult
to
push
China
around.
The
unity
of
G21,
which
included
China,
held
and
they
and
other
developing
countries
showed
considerable
negotiating
skills
throughout
the
conference.
The
ease
with
which
they
dominated
the
news
and
tabled
alternative
drafts
took
the
US-EU
by
surprise.
As
the
South
African
Minister
said
that
for
the
first
time
we
were
sitting
at
the
table
as
equals.
And
it
was
deeply
disconcerting
for
the
US-EU.
Not
surprisingly,
Zoellick,
the
US
Trade
Representative
and
Lamy,
the
EU
representative
spoke
scornfully
of
how
“can’t
do’s
won
out
over
can
do’s”
and
“the
medieval
decision
making
process
of
WTO”.
Many
other
groupings
also
formed
during
Cancun,
the
one
on
Singapore
issues
being
the
most
important,
with
Malaysia
and
India
acting
as
the
spokespersons
of
the
group.
Though
India
was
willing
to
concede
on
two
of
the
four
Singapore
issues
on
trade
facilitation
and
government
procurement
--
they
did
not
publicly
break
ranks
with
others
in
the
closing
stages.
All
this
does
not
mean
that
the
developing
countries
have
won
a
major
victory.
The
absence
of
defeat
in
the
current
trade
regime
must
itself
be
recognised
as
a
step
forward.
However,
Cancun
was
a
Ministerial,
the
Doha
round
with
all
these
issues
still
continue.
What
the
quad
failed
to
do
in
Cancun
will
now
sought
to
be
done
by
bribery
and
blackmail.
The
coercive
diplomacy,
the
threat
of
bilateral
pacts
and
many
other
instruments
of
pressure
will
be
brought
to
bear
to
bring
the
developing
countries
to
heel.
The
war
still
continues,
only
a
battle
has
been
"won",
or
more
correctly
stalemated.
The
seeds
of
the
collapse
of
the
Cancun
Ministerial
were
sown
well
before.
The
WTO
came
into
existence
in
1995,
as
a
result
of
a
decade
of
negotiations.
It
was
formed
with
the
stated
objective
of
establishing
“free
trade”.
As
the
diehard
votaries
of
the
WTO
never
tire
of
telling
us,
“free
trade”
is
a
“win-win”
situation
for
everybody
--
everybody
is
supposed
to
gain
from
liberalised
trade.
The
heady
euphoria
drummed
up
in
favour
of
globalisation
with
the
coming
into
force
of
the
WTO
in
1995
and
its
so-called
“rule
based
governance”
of
global
markets
has
now
dissipated.
Eight
short
years
after
the
WTO
agreement
was
signed,
people
all
over
the
world
have
realised
that
the
WTO
stands,
not
for
free
trade,
but
for
free
exploitation
of
the
poor
countries
and
the
poor
wherever
they
live.
“Free
Trade”
has
come
to
mean
protection
of
developed
country
markets
and
the
opening
of
developing
country
markets.
The
WTO,
since
its
inception
in
1995,
has
acted
as
the
battering
ram
of
imperialism.
In
the
current
phase
of
globalisation,
characterised
by
attempts
to
integrate
capital
flows,
markets
and
production,
the
WTO
has
been
the
moving
force
in
“liberating”
the
markets
of
developing
countries
for
global
capital.
The
first
rumblings
against
the
WTO
reached
a
crescendo
in
Seattle
four
years
ago
when
the
ministerial
meeting
there
collapsed
amidst
street
protests
and
rioting.
Two
years
later,
the
developed
countries
tried
to
salvage
matters
in
Doha
in
the
backdrop
of
the
so-called
“war
on
terror”.
In
Doha,
a
modicum
of
developing
country
unity
prevented
the
full
scale
launching
of
a
new
round
that
would
link
even
more
issues
that
pertain
to
the
domestic
economy
to
trade
issues
unless
there
was
a
consensus
on
modalities
of
the
negotiations.
In
Cancun,
the
developing
countries
were
able
to
use
this
clause
in
the
Doha
agreement
to
thwart
the
US-EU
attempts
to
start
negotiations
immediately.
To
understand
why
the
WTO
is
such
a
hated
institution
today,
it
would
be
necessary
to
go
back
to
the
mid
eighties
when
the
developed
countries,
led
by
the
US,
hammered
together
an
agreement
that
linked
trade
with
issues
that
were
not
hitherto
considered
part
of
trade
negotiations.
The
attempt
was
clearly
to
use
the
carrot
in
the
form
of
enhanced
trade
opportunities
and
the
stick
in
the
form
of
the
threat
of
retaliatory
trade
sanctions
to
make
developing
countries
change
domestic
policies
that
prevented
the
complete
economic
hegemony
of
the
developed
countries.
The
WTO,
thus,
brought
within
its
ambit
issues
such
as
Intellectual
Property
Rights
(Patents,
Copyrights,
etc.),
services
including
vital
social
sectors
such
as
health
and
education,
and
investments.
The
rich
countries
had
promised
the
developing
world
during
the
Uruguay
round
of
GATT
negotiations
that
if
they
opened
their
market
to
the
rich
countries
and
lowered
tariffs,
accepted
patent
regime
favourable
to
the
MNC’s,
they
would
then
be
allowed
access
to
the
markets
of
advanced
countries
for
agricultural
goods
and
in
areas
such
as
textiles.
Instead,
the
subsidy
given
by
the
rich
countries
to
their
farmers
and
agribusiness
has
grown
from
about
$180
billion
then
to
more
than
$300
billion
now.
In
textiles,
even
the
limited
market
accesses
promised
by
the
rich
countries
have
not
been
forthcoming.
It
has
become
apparent
that
the
WTO
is
tearing
down
all
barriers
in
developing
country
markets,
while
protecting
the
developed
countries
markets.
Even
a
Jagdish
Bhagwati
one
of
the
most
well-known
advocates
of
free-market
globalisation,
states
"The
process
of
trade
liberalization
is
becoming
a
sham,"
Bhagwati
wrote
recently
in
the
Financial
Times,
"the
ultimate
objective
being
the
capture,
reshaping
and
distortion
of
the
WTO
in
the
image
of
American
lobbying
interests."
Bhagwati
continues,
"
The
developing
countries
are
scared
out
of
their
wits
now
because
they
don't
understand
what
they're
being
forced
to
sign.
The
agreements
are
going
way
outside
the
trade
issues
and
involve
a
helluva
lot
of
things
like
your
access
to
oil,
your
access
to
intellectual
property
and
capital
controls....."
It
is
in
this
context
of
deep
scepticism
of
the
developing
countries
and
the
people
around
the
world
regarding
WTO
that
we
have
to
see
the
Doha
round
and
the
Cancun
negotiations.
The
“Development
Agenda”
of
WTO
Negotiations
The
Doha
Ministerial
in
2001
concluded
with
the
promise
of
pursuing
a
“development
agenda”
within
the
WTO.
It
was
ostensibly
designed
to
address
the
“imbalances”
of
the
original
Uruguay
round
that
favoured
developed
countries.
It
may
be
recalled
that
the
Doha
meeting
had
ended
with
the
virtual
initiation
of
negotiations
on
the
“Singapore
issues”
–
essentially
non-trade
issues
that
the
US
and
EU
wanted
introduced
into
the
WTO
for
the
benefit
of
global
capital
subject
to
explicit
consensus
on
modalities
to
be
decided
in
Cancun.
However,
it
was
also
conceded
that
issues
of
vital
interest
to
the
developed
countries,
such
as
Agriculture,
Textiles,
Public
Health,
etc.
would
be
addressed
expeditiously.
Unfortunately,
it
is
precisely
on
these
issues
that
the
least
progress
has
taken
place
since
Doha.
It
is
now
clear
that
this
was
a
hypocritical
assertion
by
the
rich
countries.
Further,
there
has
been
no
discernible
progress
in
the
area
of
Special
and
Differential
Treatment
(SDT)
--
meant
to
treat
developing
countries
differently
to
cushion
the
shock
of
trade
liberalisation.
Let
us
take
a
closer
look
at
how
some
of
the
important
issues
have
unravelled
in
the
run
up
to
the
Cancun
Ministerial.
The
agriculture
sector
is
a
stark
example
of
how
the
WTO
rigged
its
rules
to
favour
the
rich
and
the
powerful.
Traditionally,
the
way
the
agriculture
sector
was
protected
differed
among
developed
and
developing
countries.
The
former
protected
their
agriculture
by
providing
subsidies
--
both
in
cash
and
through
other
incentives
--
to
their
farmers.
Further
subsidies
were
made
available
if
the
produce
was
exported.
Developing
countries,
not
being
able
to
provide
such
subsidies
as
they
were
cash
strapped,
protected
their
agricultural
market
by
imposing
high
duties
on
imports
(tariff
barriers)
and
through
quantitative
restrictions
--
that
is
by
specifying
a
ceiling
on
the
amount
of
each
product
that
could
be
allowed
to
be
imported.
The
WTO
agreement
was
so
designed
that
it
targeted
the
protections
of
developing
countries
(by
removing
quantitative
restrictions
and
reducing
import
duties)
while
allowing
the
developed
countries
to
maintain
their
subsidies.
Even
the
modest
reductions
that
the
developed
countries
were
to
make
in
their
subsidies
were
not
adhered
to
in
the
last
eight
years.
Instead,
the
subsidy
given
by
the
rich
countries
to
their
farmers
and
agribusiness
has
grown
from
about
$180
billion
then
to
more
than
$300
billion
now.
As
a
result
we
have
a
situation
today
where
each
farmer
in
the
US
receives
a
subsidy
that
is
seventy
times
the
income
of
an
average
Indian
farmer!
The
case
of
cotton,
sugar
and
cattle
bring
this
out
most
sharply.
Under
IMF
and
World
Bank
pressures,
West
African
farmers
had
to
shift
from
food
cultivation
to
a
commercial
crop,
cotton,
so
that
this
could
be
exported
to
pay
for
their
loans.
The
problem
they
face
today
is
that
cotton
prices
have
collapsed
in
the
global
market,
as
the
US
pays
$3.9
billion
in
subsidy
for
its
25,000
cotton
farmers,
more
than
the
total
worth
of
this
cotton
crop.
With
this
scale
of
subsidies
--
an
average
of
$160,000
per
farmer
--
they
can
afford
to
dump
their
products
in
the
world
market.
This
has
dealt
a
body
blow
to
the
West
African
cotton
farmers,
who
cannot
even
survive
on
the
prices
they
get
from
the
market.
Similarly
in
sugar,
the
amount
of
subsidy
that
EU
gives
its
farmers
to
grow
beet
is
higher
than
the
price
of
the
entire
surplus
sugar
of
the
developing
countries.
The
rich
countries
pay
$2
per
head
of
cattle
to
its
cattle
growers,
more
than
the
per
capita
income
of
the
farmers
in
most
of
the
developing
countries
keeping
life
stock.
Such
subsidies
not
only
keep
a
local
political
constituency
happy
but
also
help
agribusiness:
they
are
able
to
buy
cheap
and
capture
the
global
markets,
as
others
cannot
compete
at
these
prices.
Their
ability
to
capture
the
global
market
has
nothing
to
do
with
efficiency
of
production
or
costs:
it
is
simply
a
reflection
of
the
level
of
subsidy.
Not
only
is
the
US
and
EU
not
willing
to
lower
subsidies
except
cosmetically,
they
also
have
argued
that
a
large
part
of
their
subsidies
are
non-trade
distorting.
The
Agreement
on
Agriculture
(AoA)
divides
domestic
subsidies
into
“amber”,
“blue”
and
“green”
boxes,
in
which
blue
and
green
box
subsidies
are
held
to
be
non-trade
distorting.
The
"Amber
Box",
consists
of
subsidies
that
are
seen
as
trade
distorting,
and
have
to
be
reduced.
The
"Green
Box"
subsidies
are
for
production
restructuring
and
direct
payments
not
linked
to
production,
and
"Blue
Box"
subsidies,
are
not
linked
to
current
production
but
to
past
production
or
areas.
The
unscrupulous
and
manipulative
nature
of
the
GATT
negotiations
is
clear
from
the
fact
that
the
so
called
trade
distorting
subsidies
were
the
kind
that
the
developing
countries
were
providing
(and
hence
were
phased
out)
while
those
that
the
developed
countries
provided
were
supposed
to
be
non-trade
distorting
(and
hence
could
be
retained)!
The
developing
countries
were
conned
into
this
division
of
subsidies
into
so-called
trade
distorting
and
non-trade
distorting
subsidies
in
the
Uruguay
round
and
are
only
now
arguing
for
bringing
all
subsidies
in
agriculture
on
the
negotiating
table.
Unfortunately,
having
given
up
quantitative
restrictions
then,
they
have
weakened
their
own
bargaining
position
considerably.
Without
getting
back
QRs,
they
are
unlikely
to
win
major
concessions
or
be
able
to
protect
their
agriculture.
In
the
run
up
to
Cancun,
the
US
and
EU
held
their
own
negotiations
in
mid
August
to
try
and
unify
their
positions.
The
Harbinson
draft
(Harbinson
was
chairing
the
Agriculture
section
of
the
Doha
negotiations)
had
attempted
to
address
the
issues
of
export
subsidies
and
credits
and
the
Blue
Box
subsidies,
even
if
they
were
inadequate
and
did
not
touch
Green
Box
subsidies.
The
US-EU
draft
did
not
even
recognise
these
issues.
The
entire
thrust
of
their
draft
proposals
was
to
allow
for
shifting
of
the
subsidies
from
one
box
to
another.
On
other
issues,
they
wanted
steep
cuts
in
the
tariff
protection
of
the
developing
countries
while
making
very
few
concessions
on
their
side.
Their
thrust
was
to
provide
high
tariffs
to
prevail
for
a
few
items
that
will
be
designate
as
trade
sensitive,
allow
for
steep
cuts
in
tariffs
for
most
other
items
(non-linear
tariff
cuts,
i.e.,
the
higher
the
tariff,
the
steeper
the
cut)
and
have
zero
to
five
per
cent
tariffs
on
certain
items.
As
northern
agriculture
has
a
less
number
of
varieties,
protection
of
a
small
number
of
items
would
still
maintain
their
high
tariffs
for
their
products.
Southern
agriculture
spans
across
a
very
large
number
of
varieties;
they
would
have
to
undertake
sharp
reductions.
In
general,
the
developing
countries
have
a
higher
level
of
tariff
protection
if
we
take
all
products
into
consideration.
Obviously,
they
would
then
have
to
open
their
markets
significantly
while
still
being
unable
to
access
the
markets
of
the
rich
countries,
which
would
be
protected
by
high
tariffs.
Though
US-EU
came
to
an
agreement
on
how
they
would
face
the
developing
countries,
they
had
some
significant
differences
with
each
other.
The
most
important
difference
is
with
respect
to
genetically
modified
(GM)
crops.
EU
has
been
opposing
the
introduction
of
GM
crops,
though
more
on
health
and
environmental
grounds.
To
the
developing
countries,
GM
crops
and
TRIPS
lead
to
agribusiness
monopoly
of
seeds
and
through
this,
the
control
of
their
agriculture.
The
US
would
perhaps
be
willing
to
reduce
subsidies
more
than
EU
provided
all
restrictions
on
GM
crops
are
removed.
The
response
to
the
agricultural
agreement
reached
by
the
US
and
EU
was
17
developing
countries
(which
later
expanded
to
the
G21)
quickly
getting
together
and
producing
a
counter
proposal
to
the
US-EU
draft.
They
showed
how
the
US-EU
draft
only
addressed
their
internal
differences
and
allowed
each
other
loopholes
for
escaping
commitments
that
would
address
the
concern
of
the
developing
countries.
Their
major
concern
was
that
by
allowing
green
box
subsidies
to
continue
without
capping
or
reduction,
the
entire
exercise
of
reducing
subsidies
would
become
a
meaningless
game
of
shifting
boxes.
They
were
also
sharply
critical
that
the
US-EU
did
not
even
consider
the
needs
of
the
poorest
of
developing
countries
and
provide
mechanism
for
some
Special
and
Differential
treatment
to
them.
The
17-member
draft
was
also
careful
to
make
proposals
that
would
align
the
Cairns
group
of
agriculture
exporting
countries
(Australia,
New
Zealand,
Argentina,
etc.),
which
wanted
ending
subsidies
and
lower
tariffs,
with
it
rather
against
it.
The
Cairns
group
later
responded
that
their
positions
were
complementary
and
not
antagonistic
to
the
G21
countries.
The
reaction
from
EU
to
the
17-nation
proposal
was
a
violent
one.
The
EU
representative
accused
the
co-sponsors
of
“confrontation,
South-North
conflict,
“all
take
and
no
give”
and
“aiming
at
the
stars
in
order
to
get
the
moon.”
While
the
US
was
publicly
more
restrained,
quite
willing
to
have
the
EU
spearhead
the
fight
against
G21,
the
stage
for
a
fundamental
North
South
divide
on
agriculture
had
already
been
set
for
Cancun.
On
issues
such
as
textiles
that
are
particularly
important
for
India,
Cancun
had
nothing
to
offer.
The
Multi
Fibre
Agreement
had
fixed
export
quotas
for
countries
such
as
India
for
the
US
and
EU
markets.
The
US
and
the
EU
admitted
that
their
domestic
industries
were
not
competitive
and
wanted
this
protection
to
continue
for
10
years.
In
this
period,
they
were
supposed
to
slowly
scale
down
this
protection
to
zero.
Unfortunately,
the
rich
countries
have
refused
to
honour
this
commitment
and
are
using
various
measures
to
continue
to
protect
their
textile
industry.
While
this
is
still
a
part
of
the
on-going
Doha
round,
it
was
not
on
the
Cancun
agenda.
Special
and
Differential
Treatment
implies
that
developing
countries
be
exempted
from
obligations,
or
be
able
to
choose
their
own
rate
of
implementing
the
obligations,
or
having
a
lower
level
of
obligations
vis-à-vis
the
different
provisions
of
the
WTO.
There
has
been
no
movement
in
this
area.
The
rich
countries
claim
that
this
has
happened
because
developing
countries
have
been
unable
to
define
areas
where
they
wish
to
avail
of
such
treatment.
In
practice,
they
have
subverted
every
attempt
to
do
so.
What
should
have
been
central
to
the
Doha
round
has
instead
become
its
forgotten
agenda.
It
may
be
recalled
that
the
Doha
meeting
of
the
WTO
had
ended
with
the
virtual
setting
up
of
a
new
round
of
negotiations,
with
the
rider
that
the
modalities
will
need
an
explicit
consensus.
While
developing
countries
had
opposed
this,
the
agenda
was
finally
pushed
through
on
the
last
day
of
the
meeting.
The
new
issues
(also
called
Singapore
issues
as
they
were
first
introduced
at
the
Singapore
Ministerial
meeting
of
the
WTO
in
1997)
are:
(i)
trade
and
investment,
(ii)
trade
and
competition
policy;
(iii)
trade
and
government
procurement,
and
(iv)
trade
facilitation.
These
issues
are
designed
to
deepen
and
intensify
the
predation
of
global
capital
and
deny
the
domestic
economy
of
those
instruments
that
the
developed
countries
themselves
have
applied
in
their
earlier
phase
of
development.
The
common
theme
of
three
of
the
issues
(investment,
competition,
government
procurement)
is
maximisation
of
the
rights
of
foreign
enterprises
to
secure
access
to
markets
in
developing
countries;
to
reduce
rights
of
sovereign
governments
to
regulate
foreign
investors;
and
to
prohibit
governments
from
measures
that
support
or
encourage
local
enterprises.
If
these
agreements
form
part
of
the
WTO,
developing
countries
will
find
it
increasingly
difficult
to
devise
their
own
policies
for
self-reliant
development.
The
developed
countries
will
press
for
the
principle
of
“national
treatment”
to
be
applied
to
these
new
areas,
which
would
mean
that
developing
countries
would
no
longer
be
allowed
to
support
their
local
industries.
These
issues
do
not
belong
in
the
WTO
as
they
are
not
issues
that
are
directly
related
to
trade.
The
developed
countries
want
to
place
them
in
the
WTO
so
that
they
can
use
the
mechanisms
of
trade
sanctions
to
enforce
rules
that
suit
their
interests.
On
the
investment
issue,
the
rich
countries
want
to
introduce
rules
that
make
it
legal
to
give
foreign
investors
the
right
to
enter
and
establish
themselves
with
100
per
cent
ownership.
Governments
then
will
lose
the
right
to
regulate
investments
in
the
national
interest
or
to
protect
for
example,
the
environment,
education
and
health
sectors
—
both
in
the
long
term
and
in
the
short
term.
Under
the
proposed
‘Agreement
on
Government
Procurement
Policy’
the
developed
countries
wants
to
introduce
a
process
in
the
WTO
whereby
their
companies
are
able
to
obtain
a
large
share
of
the
lucrative
business
of
providing
supplies
to
and
winning
contracts
for
projects
of
the
public
sector
in
the
developing
countries.
The
aim
is
to
bring
government
spending
policies,
decisions
and
procedures
of
all
member
countries
under
the
umbrella
of
the
WTO
such
that
the
governments
would
no
longer
be
able
to
give
preferences
or
advantages
to
citizens
or
local
firms.
Privatisation
in
different
sectors
will
also
be
facilitated
under
the
proposed
‘Agreement
on
Competition
Policy’.
Member
states
‘will
have
to
consider
making
reforms
to
their
regulatory
regimes’
such
that
national
regulations
should
have
four
central
attributes:
adequacy,
impartiality,
least
intrusiveness
and
transparency
towards
corporate
interests.
Distinctions
that
favour
local
firms
and
investors
would
not
be
allowed.
If
smaller
country
enterprises
are
treated
on
par
with
the
large
foreign
conglomerates,
they
would
not
be
able
to
survive.
The
North
will
insist
that
their
giant
firms
be
provided
a
‘level
playing
field’
to
compete
equally
with
smaller
domestic
companies.
Competition
of
this
type
will
invariably
lead
to
foreign
monopolisation
of
Southern
markets.
Even
the
area
of
trade
facilitation,
while
seemingly
innocuous,
is
fraught
with
problems
for
developing
countries.
The
establishment
of
multilateral
rules
in
this
area
will
make
it
difficult
for
developing
countries
to
adhere
to
the
standards
or
procedures
envisaged.
The
main
objective
of
an
agreement
in
this
area
is
to
have
uniform
rules
and
procedures.
Such
an
approach
totally
ignores
the
wide
difference
in
the
administrative,
financial
and
human
resources
between
the
developed
countries
and
developing
countries.
These
issues
became
the
major
bone
of
contention
in
Cancun,
especially
as
the
EU
and
US
insisted
on
them
being
negotiated
while
refusing
to
give
in
to
developing
country
demands
in
agriculture.
The
inclusion
of
these
issues
in
any
future
negotiations
in
the
WTO
should
be
resisted,
as
they
constitute
a
further
assault
on
sovereign
rights
of
countries
to
regulate
their
economies.
They
should
never,
in
the
first
place,
have
been
brought
on
to
the
agenda
of
the
WTO.
Non-Agricultural
Market
Access"
(NAMA)
The
NAMA
issues
are
of
vital
concern
to
countries
such
as
India
that
have
an
industrial
base.
Without
addressing
the
central
concern
of
the
developing
countries
that
there
has
been
de-industrialisation
in
the
developing
countries
as
a
result
of
lowering
tariff
protection
in
the
Uruguay
round,
the
rich
countries
have
pushed
for
wider
and
steeper
cuts
in
the
Doha
round.
The
Cancun
draft
text
reflected
largely
the
quad
interest
of
opening
the
developing
countries
even
further.
Not
only
was
the
number
of
items
on
which
tariff
should
be
lowered
sought
to
be
widened,
the
principle
of
non-linear
cuts
where
higher
the
tariff,
steeper
the
cut
was
also
proposed.
Further,
the
draft
text
sought
to
bind
(fix
ceilings)
for
currently
unbound
lines
and
also
proposed
that
these
also
should
be
subjected
to
the
non-linear
formulae.
And
the
draft
rejected
the
developing
countries
demand
that
which
sectors
should
be
opened
should
be
left
to
a
voluntary
approach,
insisting
instead
that
seven
or
more
sectors
should
aim
for
accelerated
reduction
of
tariff
to
zero
and
this
would
be
mandatory.
GATS:
Targeting
The
Services
Sector
While
not
a
major
negotiating
issue
in
Cancun,
the
General
Agreement
on
Trade
in
Services
(GATS)
continues
to
be
another
area
that
the
developed
countries
are
preparing
to
use
to
prise
open
the
economies
of
developing
countries.
The
full
contours
of
the
GATS
agreement
are
yet
to
be
filled
out,
but
negotiations
are
now
fairly
advanced.
Historically
trade
agreements
involved
reducing
tariffs,
eliminating
trade
barriers
like
quotas
on
imports
on
goods
produced
in
a
country
and
sold
elsewhere.
Trade
related
issues
are
therefore
related
to
what
happens
at
the
boundaries
of
nations.
The
Singapore
issues
discussed
earlier
and
GATS
are
however
related
to
the
sovereign
economic
space
of
the
country
where
the
laws
of
that
country
operate.
By
opening
them
to
multilateral
negotiations,
the
rich
countries
are
denying
of
the
developing
countries
to
use
specific
levers
such
as
capital
restrictions,
favour
domestic
industry,
encourage
industrialization,
protect
its
labour
force
and
so
on.
The
other
thrust
behind
inclusion
of
Singapore
issues
and
GATS
is
the
decline
in
developed
countries
of
manufacture
and
the
growth
of
their
service
sector.
Presently,
the
services
sectors
are
growing
at
the
fastest
rates
in
these
countries.
The
service
sectors
account
for
two
thirds
of
economy
and
jobs
in
the
European
Union
(EU),
almost
a
quarter
of
the
EU’s
total
exports
and
a
half
of
all
foreign
investment
flowing
from
the
Union
to
other
parts
of
the
world.
In
the
US,
more
than
a
third
of
economic
growth
over
the
past
five
years
has
been
because
of
service
exports.
As
the
service
sectors
of
the
economies
of
developed
countries
grew,
exports
of
various
types
of
services
increased.
Multinational
Corporations
started
lobbying
for
new
trading
rules
that
will
expand
their
share
of
the
global
market
in
services
as
governments
everywhere
spend
a
considerable
amount
of
their
budget
on
social
services.
This
is
what
the
General
Agreement
on
Trade
in
Services
(GATS)
under
the
WTO
is
targeting
today.
GATS
covers
some
160
separate
sectors,
including
areas
such
as
services
in
the
professions,
health
and
education.
The
GATS
as
in
all
the
other
agreements
contains
provisions
which
allow
further
deregulation
of
any
national
legislation
which
is
seen
to
be
hostile
to
free
trade.
GATS
identify
the
specific
commitments
of
member
states
that
indicate
on
a
sector-by-sector
basis
the
extent
foreigners’
may
supply
services
in
the
country.
The
negotiating
process
in
GATS
allows
for
countries
to
decide,
through
‘request
offer’
negotiations,
which
service
sectors
they
will
agree
to
cover
under
GATS
rules.
This
refers
to
the
extent
to
which
member
states
want
their
services
like
health
and
education
to
be
open
up
to
free
trade.
In
the
Third
World,
much
of
private
services
in
areas
like
health
and
education
were
provided
by
non-governmental
organisations
like
charities,
religious
societies
and
community
oriented
associations,
which
were
not
entirely
profit
driven.
This
will
change
when
with
the
new
dispensation
and
the
corporate
sector
is
poised
to
play
a
prominent
role
especially
in
countries
where
there
is
an
affluent
elite
willing
to
pay
or
where
there
exists
a
private
base
in
these
areas:
like
in
India.
This
move
to
open
up
the
social
sectors
to
allow
for
privatisation
and
competition
from
the
private
sector
will
mean
private
corporations
taking
over
the
social
services
of
countries
for
profit,
undermining
their
equitable
distribution.
If
developing
countries
commit
to
fully
cover
social
sectors
like
education
and
health
under
the
existing
GATS
rules,
this
will
lead
to
irreversible
changes
in
the
financing
and
delivery
of
these
services.
Governments
will
have
to
open
up
these
sectors
to
foreign
service
providers.
Foreign
providers
will
be
guaranteed
access
to
the
services
market,
which
includes
the
right
to
invest,
to
provide
these
services
from
abroad
and
to
send
professionals
to
practice.
Any
preferential
treatment
for
local
institutions
will
have
to
be
eliminated
or
given
to
foreign
service
providers.
Requirements
that
first
preference
be
given
to
locals
will
be
eliminated.
Conditions
must
be
created
for
the
private
sector
to
provide
or
supply
any
service;
the
private
sector
will
effectively
tap
funds
that
the
government
spends
on
social
sectors.
The
Indian
Government
has
shown
itself
to
be
amenable
to
commit
many
areas
in
the
service
sector
for
negotiations
under
GATS.
The
argument
put
forward
is
that
this
will
help
the
fast
growing
service
sector
in
the
country.
Even
areas
like
health
are
being
seen
as
lucrative
areas
that
could
be
opened
up
to
take
advantage
of
the
cost
advantage
that
high-end
health
services
in
India
have
as
compared
to
that
in
developed
countries.
Such
an
argument
entirely
negates
the
fact
that
areas
such
as
health
and
education
are
“public
goods”
and
submitting
these
to
trade
negotiations
compromises
the
ability
of
the
state
to
intervene
in
these
areas.
Unfortunately
this
view
of
the
Indian
state
is
in
line
with
its
policy
of
withdrawing
from
providing
social
security.
Moreover
it
legitimises
the
privatisation
and
liberalisation
that
is
already
taking
place
in
areas
such
as
insurance,
telecommunications,
transport,
education
and
health.
The
argument
is
that
if
anyway
we
are
committed
to
liberalising
in
these
areas,
what
is
the
harm
in
committing
these
areas
under
GATS.
Other
than
the
fact
that
this
“autonomous
liberalisation”
is
already
consigning
millions
of
people
to
the
mercy
of
the
market
in
vital
areas,
it
should
also
be
understood
that
there
is
a
basic
difference
between
autonomous
liberalisation
and
committing
these
areas
to
the
discipline
of
GATS.
While
liberalisation
that
is
done
by
governments
can
be
“rolled
back”
this
facility
will
not
be
available
once
specific
areas
are
committed
under
GATS
as
part
of
a
multilateral
agreement.
We
will,
thus,
end
up
by
binding
vital
areas
of
our
social
and
industrial
infrastructure
to
rules
that
will
be
dictated
by
the
developed
countries.
Public
Health
Charade
in
Geneva
As
the
Cancun
Ministerial
meeting
of
the
World
Trade
Organisation
drew
near,
a
charade
was
played
out
in
the
name
of
public
health.
In
end
August,
the
TRIPS
Council
of
WTO
endorsed
an
agreement
in
Geneva
that
theoretically
allowed
the
poor
countries
to
import
cheap
drugs
that
were
still
under
Patents
but
bound
them
in
red
tape
in
away
that
the
provision
would
virtually
be
useless.
In
2001
the
Doha
declaration
on
Trade
Related
Intellectual
Property
Rights
(TRIPS)
and
Public
Health
had
required
that
a
solution
be
found
that
would
enable
countries
with
no
manufacturing
capabilities
to
import
drugs
at
low
prices
that
may
be
produced
in
countries
like
India.
In
the
last
two
years,
the
global
pharmaceutical
majors,
with
the
support
of
the
US
government,
had
systematically
scuttled
all
proposals
designed
to
ensure
this.
The
Doha
declaration
had
said:
“We
recognize
that
WTO
Members
with
insufficient
or
no
manufacturing
capacities
in
the
pharmaceutical
sector
could
face
difficulties
in
making
effective
use
of
compulsory
licensing
under
the
TRIPS
Agreement.
We
instruct
the
Council
for
TRIPS
to
find
an
expeditious
solution
to
this
problem
and
to
report
to
the
General
Council
before
the
end
of
2002”.
Most
developing
countries,
unlike
India,
have
no
manufacturing
capability.
So
the
TRIPS
agreement
(and
the
clarification
in
the
Doha
declaration)
did
not
enable
them
to
access
cheaper
drugs
because
they
cannot
get
these
drugs
produced
cheaply
in
their
country
even
if
a
compulsory
license
can
be
granted.
Subsequently,
for
almost
two
years
now,
the
TRIPS
Council
has
been
supposedly
grappling
with
this
issue.
Some
international
NGOs
(like
Medecens
Sans
Frontieres
and
Oxfam)
had
proposed
that
a
way
to
get
around
the
above
problem
would
be
for
the
TRIPS
council
to
give
an
“authoritative
interpretation”
that
exports
to
countries
with
no
manufacturing
capability
would
be
deemed
as
“exception
to
patentatibility”
(under
Article
30
of
TRIPS)
and
could
be
done
automatically
without
authorisation
from
the
original
patentee.
This
would
have
meant
that
a
company
in
India
could
be
granted
a
licence
to
produce
a
patented
drug
that
is
required
for
a
country
in
Africa,
which
has
no
manufacturing
capability.
The
import
of
this
drug
from
the
Indian
manufacturer
would
not
then
constitute
a
violation
of
the
TRIPS
accord.
The
developed
countries,
led
by
the
US,
and
including
the
European
Union,
Japan,
Canada
and
Switzerland,
however,
refused
to
consider
this
and
other
suggestions
designed
to
address
this
issue
for
the
last
two
years.
The
argument
put
forward
by
the
US
and
its
allies
was
that
this
would
allow
companies
in
India
and
other
developing
countries
with
manufacturing
ability
to
circumvent
the
TRIPS
accord
and
manufacture
patented
drugs.
The
developed
countries
have
also
expressed
the
fear
that
once
these
patented
drugs
are
manufactured
under
a
licence
and
enter
the
market,
there
is
no
guarantee
that
they
would
not
find
there
way
to
other
countries,
for
whom
the
exports
were
not
intended.
Therefore,
the
US
has
been
arguing
that
the
number
of
diseases
that
is
covered
by
this
facility
should
be
restricted
to
a
handful:
only
a
few
infectious
diseases
like
HIV/AIDS,
Malaria,
T.B.,
etc.,
and
should
not
cover
diseases
such
as
heart
disease,
diabetes,
etc.
Further
the
US
wanted
that
the
TRIPS
council
should
have
the
powers
to
decide
which
disease(s)
constitutes
an
emergency
in
a
particular
country.
It
further
wanted
strict
procedures
and
special
labelling
that
would
monitor
the
export
of
each
consignment
that
is
imported,
to
ensure
that
the
drug
is
used
only
for
the
purpose
for
which
it
was
licensed.
The
US
proposal
clearly
prompted
by
its
pharmaceutical
lobby
(there
are
more
lobbyists
for
the
pharmaceutical
industry
in
Washington
than
there
are
Congressmen!),
was
an
obvious
attempt
to
make
this
part
of
the
Doha
Declaration
entirely
useless.
The
Doha
Declaration
had
clearly
stated
that
individual
countries
have
the
right
to
decide
what
constitutes
a
national
public
health
emergency
or
a
matter
of
urgency.
The
US
proposal
wanted
to
take
this
right
away
from
sovereign
countries.
Moreover
the
Doha
declaration
had
not
set
a
limit
on
the
number
or
the
kind
of
diseases
that
would
be
covered
by
the
facility.
Further,
the
US
proposal
that
each
consignment
would
be
monitored,
seeks
to
put
in
place
regulatory
mechanisms
that
would
be
overseen
not
by
the
sovereign
countries,
but
by
a
supranational
body
that
derives
authority
from
the
TRIPS
Council.
In
other
words,
if
the
US
proposal
were
to
be
agreed
upon,
the
TRIPS
council
would
have
powers
to
“police”
local
legislations
--
a
power
that
even
the
TRIPS
accord
does
not
provide
for.
So
the
Doha
Declaration,
far
from
increasing
the
scope
of
flexibilities
available
for
developing
countries,
would
be
turned
into
an
instrument
for
greater
control
of
national
legislations
by
the
WTO.
The
intransigent
attitude
of
the
US
delayed
the
formulation
of
any
discussion
text
that
would
be
acceptable
to
all
countries.
Finally
on
December
16,
2002,
a
draft
was
circulated
in
the
TRIPS
Council
meeting.
This
draft,
known
as
the
Motta
text
(called
so
after
the
Mexican
Ambassador
to
the
WTO
Eduardo
Perez
Motta,
who
was
instrumental
in
drafting
the
document)
was
supposed
to
be
a
compromise
document.
Not
surprisingly,
given
the
WTO
record
for
such
drafts,
this
so-called
compromise
document,
actually
was
designed
to
accommodate
virtually,
all
the
demands
made
by
the
developed
countries.
While
the
EU
and
other
developed
countries
supported
this
draft,
the
US
contributed
to
the
drama
by
rejecting
even
this
compromise
document.
The
Motta
Text
constituted
a
total
dilution
of
the
spirit
of
the
Doha
Declaration
on
Public
Health.
The
question
that
could
then
be
asked
is,
if
the
text
was
so
restrictive
and
biased
in
favour
of
developed
countries,
why
did
the
US
not
agree
to
it?
Possibly,
the
answer
is
to
be
found
in
the
manner
in
which
the
discussion
on
the
Motta
Text
proceeded
after
the
US
decided
to
oppose
it.
The
emphasis
shifted
from
finding
a
better
solution
than
the
Motta
text
to
attempts
to
“save”
the
Motta
Text.
The
focus
shifted
from
how
bad
the
Motta
text
actually
was
to
start
with,
to
the
apparent
success
of
getting
the
US
to
agree
and
tom-toming
this
as
a
great
victory
for
the
poor
countries.
The
US
would
have
got
something
in
return
for
doing
nothing!
And
this
is
exactly
what
finally
happened.
The
text
agreed
upon
in
Geneva
in
August
is
not
very
different
from
the
original
Motta
Text.
The
only
concession
that
the
developing
countries
were
able
to
win
was
that
there
was
no
explicit
limit
on
the
number
of
diseases
for
which
the
provisions
of
the
agreement
could
be
used.
But
the
whole
agreement
is
so
restrictive,
that
it
makes
use
of
its
provisions
virtually
unworkable.
In
some
ways
it
goes
far
beyond
the
TRIPS
agreement
by
allowing
a
supervisory
role
to
the
TRIPS
Council
in
deciding
which
drugs
can
be
imported
and
which
countries
are
qualified
to
use
the
facility.
For
a
country
like
India,
whose
interest
would
lie
in
its
ability
to
export
cheaper
versions
of
Patented
drugs
to
other
developing
countries,
the
agreement
is
actually
a
step
back
from
the
TRIPS
Agreement.
The
TRIPS
Agreement
(under
Art.
31(f))
allows
Patented
drugs
to
be
produced
under
a
compulsory
license
by
other
manufacturers,
which
should
be
sold
“predominantly
in
the
domestic
market”.
In
other
words
the
TRIPS
Agreement
allowed
drugs
produced
under
a
compulsory
license
to
be
exported.
The
new
agreement
makes
this
more
difficult
by
introducing
another
layer
of
supervision
by
the
TRIPS
Council.
The
Public
Health
Agreement
just
before
Cancun
was
hailed
by
the
US
and
EU
as
a
major
concession
for
developing
countries.
They
had
hoped
that
this
would
allow
them
to
extract
concessions
from
developing
countries
in
other
areas
in
Cancun.
Fortunately,
developing
countries
realised
that
the
Public
Health
Agreement
did
not
give
them
anything,
and
thus
refused
to
allow
it
to
be
used
as
a
bargaining
chip
at
Cancun.
Unfortunately
this
realisation
came
too
late
to
salvage
the
agreement
on
public
health.
One
intriguing
question
is
why
did
the
Indian
Government
not
fight
harder
on
this
issue?
It
must
be
understood
that
the
Indian
pharmaceutical
companies
do
not
think
of
the
poor
African
countries
as
a
major
market:
they
are
not
willing
to
buck
the
US
and
EU
on
this
issue
as
they
are
far
more
interested
in
the
lucrative
generic
markets
of
the
developed
countries.
That
is
why
the
Indian
Government
was
lukewarm
at
best
in
opposing
the
scuttling
of
the
public
health
provisions
of
Doha.
The
WTO
structure
and
decision
making
has
come
up
for
sharp
criticism
from
all
sides.
The
US
Trade
Representative,
Robert
Zoellick,
at
his
post-Cancun
press
conference
declared:
“if
countries
want
to
behave
like
in
the
UN
and
only
make
demands
instead
of
negotiations,
making
inflammatory
rhetoric,
then
trade
negotiations
are
not
possible.”
This
is
a
position
that
has
been
echoed
by
other
developed
countries.
On
the
other
hand,
developing
countries
continue
to
point
at
the
complete
dominance
of
the
viewpoints
of
rich
countries
in
the
drafts
and
decisions
in
the
WTO.
The
major
change
that
has
taken
place
in
WTO
from
that
of
its
predecessor
GATT
is
that
it
has
increasingly
become
Secretariat
and
Chairperson
driven
instead
of
member
driven.
General
Council
or
group
Chairs,
with
the
help
of
the
Secretariat,
produce
drafts
what
in
their
view
should
be
the
“consensus”
and
not
what
the
countries
say
during
the
consultations.
These
drafts
predominantly
reflect
the
viewpoint
of
the
US
and
EU,
the
block
of
the
rich.
This
is
coupled
with
developed
countries
arm-twisting
countries
and
their
ministers/
ambassadors
to
agree
to
the
so-called
consensus
draft.
If
this
were
not
enough,
WTO
routinely
uses
Green
Rooms
where
selected
delegations
are
herded
in
and
asked
to
submit
to
the
dictates
of
the
rich
countries.
This
"agreement"
in
such
smaller
gatherings
is
used
to
ask
the
general
council
to
submit
to
a
"consensus".
Any
country
that
stands
up
is
threatened
with
bilateral
action
or
courted
secretly
with
carrots.
The
run-up
to
Cancun
continued
with
all
the
ingredients
that
have
made
WTO
so
unpopular
for
the
developing
countries.
The
text
for
Cancun
was
produced
on
Sunday,
24th
August
by
Ambassador.
Castillo
of
Uruguay,
who
then
asked
for
responses
from
the
country
delegations
by
Monday
25th.
The
draft
refused
to
recognise
the
development
issues
that
were
projected
in
Doha.
In
agriculture,
Green
Box
subsidies
were
not
touched
and
Blue
Box
subsidies
were
actually
increased
for
countries
such
as
the
US
Export
credits
and
subsidies
committed
to
be
brought
down
to
zero
within
a
time
bound
period
in
Doha
were
allowed
to
continue
indefinitely.
All
"concessions"
for
the
developing
countries
in
terms
of
special
and
differential
treatment
was
left
to
the
"best
endeavours"
of
countries
and
not
as
binding
commitments.
Deep
across
the
board
cuts
were
proposed
in
agriculture
and
for
industry,
with
higher
Swiss
formulae
of
non-linear
cuts
(the
higher
tariff,
the
deeper
the
cut)
being
proposed.
Finally,
on
Singapore
issues,
through
the
draft
recognised
two
alternate
positions
--
one
for
an
immediate
start
to
negotiations
and
the
other
for
continuing
further
studies
on
these
issues
--
but
the
Castillo
draft
only
included
the
Annexures
from
the
US-EU
position
and
not
that
of
the
developing
countries.
This
despite
about
90
countries
stating
that
Singapore
issues
needed
to
be
studied
further
and
no
negotiations
should
start.
On
addressing
the
special
problems
of
countries
hit
by
the
Uruguay
round,
the
draft
had
not
only
nothing
to
offer,
it
virtually
reduced
this
concern,
supposedly
the
major
focus
in
Doha
to
a
footnote
in
the
negotiating
draft.
From
the
beginning,
the
EU
has
been
playing
a
game
in
WTO.
It
was
prepared
to
discuss
agriculture
provided
the
developing
countries
were
willing
to
start
negotiation
on
Singapore
issues.
The
Castillo
text
also
linked
the
Singapore
issues
to
the
negotiations
on
agriculture.
The
Castillo
draft
drew
a
sharp
reaction
from
the
delegations.
Country
after
country
criticized
the
draft
and
asked
Castillo
to
incorporate
their
views
in
the
draft.
All
such
suggestions,
including
that
of
the
G-17
(by
that
time
G19)
were
rejected,
Castillo
claiming
he
preferred
a
clear
text
and
changes
should
be
a
part
of
the
Cancun
negotiations.
The
question
is
how
are
drafts
and
such
texts
to
be
made?
Why
do
the
developed
countries
persist
with
a
secretariat
or
a
chairperson
driven
agenda?
The
answer
to
this
is
that
the
rich
countries
wield
disproportionate
influence
over
the
WTO
Secretariat
though
the
Secretariat
is
headed
by
a
Director
General
from
Thailand,
one
of
the
developing
countries.
In
practice
the
Secretariat
is
very
much
under
the
US-EU
influence
and
plays
a
key
role
incorporating
the
US-EU
texts
as
the
"draft
texts"
for
discussions.
No
amount
of
criticism
from
the
developing
countries
has
managed
to
change
the
stranglehold
that
the
rich
countries
exert
over
the
process.
Similarly,
a
chairperson
driven
draft
discussion
text
allows
the
rich
countries
to
either
bully
or
win
over
by
other
means
the
chairpersons.
Individual
countries
are
far
more
vulnerable
to
such
bullying,
while
individuals
are
open
not
only
to
pressure
but
to
blandishments
and
indirect
bribery
as
well.
Once
such
a
text
is
put
forward,
the
rich
countries
get
into
the
act
of
isolating
the
opposition
and
bringing
to
heel
the
rest.
Delegate
after
delegates
have
given
first
hand
accounts
of
such
tactics.
Finally,
those
that
hold
out
are
termed
as
"spoilers"
and
singled
out
for
economic
and
political
blackmail.
The
rich
countries
therefore
want
that
the
process
of
creating
such
drafts
be
opaque
and
narrowly
located.
If
is
always
easier
to
coerce
the
few
and
then
browbeat
the
rest.
That
is
why
the
WTO
process
remains
the
only
one
in
such
international
bodies
that
is
without
procedures
and
modalities
for
preparing
documents.
Coupled
with
this
completely
non-transparent
and
behind
the
scenes
procedure,
is
the
brinkmanship
that
these
countries
are
playing
in
WTO.
The
drafts
are
released
at
the
last
minute,
translations
are
quite
often
not
available
and
a
number
of
consultations
held
simultaneously.
The
result
is
that
smaller
countries
are
at
a
disadvantage:
they
neither
have
the
expertise
nor
the
numbers
to
look
at
complex
drafts
within
the
few
hours
given
to
them.
Neither
are
they
consulted
during
the
process
of
creating
the
drafts,
which
is
generally
a
closed
exercise
between
the
Secretariat,
the
Chairpersons
and
a
privileged
set
of
countries.
Cancun
was
no
different;
in
fact
the
partisan
nature
of
the
Secretariat
and
the
brinkmanship
practised
by
the
rich
countries
was
even
greater
here.
Observers
have
called
the
brinkmanship
practiced
in
which
the
actual
negotiating
position
is
exposed
at
the
last
minute
as
"political
blackjack".
Undoubtedly,
amongst
other
things
this
political
black
jack
also
backfired
in
Cancun
as
concessions
given
were
too
little
and
too
late.
Conclusions
Where
do
we
go
from
Cancun?
There
have
been
two
kinds
of
responses
to
WTO,
both
of
which
to
our
mind
are
problematic.
One
set
of
experts
have
argued
that
WTO
represents
the
best
bet
for
the
developing
countries.
Any
weakening
of
this
multilateral
sector,
according
to
these
experts,
would
expose
the
developing
countries
to
only
bilateral
fora
and
a
far
greater
degree
of
pressure
there.
Much
of
these
arguments
could
have
had
merit
if
these
experts
did
not
also
preach
submission
in
WTO
to
the
dictates
of
the
rich.
If
the
developing
countries
in
order
not
to
submit
bilaterally,
have
to
submit
to
deals
in
such
multilateral
forum
that
are
going
to
ruin
them
anyway,
it
seems
to
be
an
argument
for
accepting
the
death
sentence
and
only
choosing
the
mode
of
execution.
This
approach
fundamentally
refuses
to
look
at
the
way
the
WTO
is
functioning.
The
WTO,
unless
it
becomes
a
more
democratic
institution,
open
to
the
views
of
the
developing
countries,
will
continue
to
be
another
platform
where
the
rich
countries
attempt
to
impose
unequal
obligations
on
the
developing
world.
If
countries
such
as
India
are
not
to
submit
to
the
dictates
of
the
rich,
is
their
only
option
to
walk
out
of
WTO?
Here
again,
two
sets
of
arguments
(not
mutually
exclusive)
are
advanced
on
quitting
WTO.
One
is
based
on
localism:
the
self-reliant
village
economy
(the
tribal
or
forest)
is
the
ideal.
Here
the
enemy
is
perceived
to
be
globalisation
itself,
with
imperialism
as
only
another
name
for
globalisation.
The
other
view
supporting
the
quitting
of
WTO
is
that
Indian
economy
(and
other
developing
countries
economies)
is
perceived
to
be
neo-colonial:
quitting
WTO
is
in
some
sense
seen
to
be
freedom
from
imperialism.
In
this
view,
the
rulers
of
the
developing
countries
are
seen
to
be
lackeys
of
imperialism
and
therefore
incapable
of
fighting
imperialism
even
in
a
limited
sense.
In
reality,
such
views
–
whether
the
one
advocating
submission
in
WTO
or
the
one
demanding
leaving
WTO
–
disregard
the
possibility
of
resistance
within
WTO
against
the
onslaught
of
global
capital.
The
Cancun
Ministerial
shows
that
the
local
and
global
resistance
to
global
capital
and
imperialism
is
possible.
The
pressure
of
the
people
on
their
governments
is
mounting
and
the
manoeuvrability
of
these
governments
is
getting
more
and
more
circumscribed.
As
one
African
Government
is
supposed
to
have
told
its
minister
that
if
you
come
back
after
signing
this
draft,
you
need
not
bother
coming
back,
people
will
throw
you
out.
Jaitley
also
conceded
in
private
that
while
economically
India,
he
felt,
could
concede
on
lowering
of
agricultural
tariffs,
politically
it
was
difficult.
The
issue
here
is
not
whether
WTO
can
be
reformed
but
using
the
WTO
also
as
a
terrain
of
struggle.
If
WTO
continues
as
an
instrument
of
global
capital,
it
will
de-legitimise
itself.
Therefore,
the
fight
is
for
either
de-legitimising
WTO
or
dismantling
it.
Leaving
it
intact
while
we
walk
out
of
it
is
to
put
oneself
at
an
even
greater
disadvantage
of
negotiating
bilateral
agreements
with
all
the
countries
separately.
The
US
has
already
made
its
intentions
clear.
The
US
Trade
representative
Robert
Zoellick
said
at
the
post
conference
press
conference:
“The
U.S.
trade
strategy,
however,
includes
advances
on
multiple
fronts.
We
have
free
trade
agreements
with
six
countries
right
now.
And
we’re
negotiating
free
trade
agreements
with
14
more.
All
our
free
trade
agreement
partners,
some
quietly,
some
more
actively,
tried
to
help
over
the
course
of
the
past
couple
of
days.
The
results
are
very
revealing
to
me,
that
over
the
past
few
days,
a
number
of
other
developing
countries,
that
are
committed
to
opening
markets
and
economic
reforms,
expressed
their
interest
in
negotiating
free
trade
agreements
with
the
United
States”.
What
Zoellick
basically
said
is
that
if
the
WTO
does
not
allow
the
US
to
ride
roughshod
over
other
countries
it
will
do
so
by
negotiating
with
individual
countries
or
smaller
groups
of
countries.
Through
agreements
such
as
the
NAFTA
(North
American
Free
Trade
Agreement)
and
the
FTAA
(Free
Trade
Agreement
of
the
Americas)
the
US
is
already
seeking
to
impose
conditions
on
its
neighbouring
countries
that
are
far
more
onerous
than
what
is
demanded
of
by
the
WTO.
The
opposition
to
such
arm-twisting,
in
order
to
be
effective,
would
require
a
strengthening
of
the
developing
country
unity
that
was
seen
in
Cancun.
The
Cancun
derailment,
thus,
by
no
means
implies
a
victory
of
the
developing
countries
or
the
people.
It
is
at
best
a
temporary
reprieve
as
the
rich
and
powerful
band
together
to
try
and
win
through
behind
the
scenes
manoeuvre
what
they
could
not
win
in
Cancun.
The
three
months
cooling
off
period
before
the
negotiations
start
again
will
be
used
to
blackmail
or
arm-twist
the
ringleaders.
Jaitley’s
position
was
that
we
were
close
to
an
agreement:
India
was
willing
to
concede
on
two
of
the
Singapore
issues
and
negotiate
on
the
rest.
The
people
will
need
to
mount
pressure
on
the
Indian
Government
that
they
stand
firm
and
not
yield
in
Geneva
what
the
rich
countries
could
not
secure
in
Cancun.
References:
It
would
be
difficult
to
identify
all
the
references
we
have
used
for
this
article.
Most
of
the
background
material
has
been
taken
from
three
websites
that
have
extensive
coverage
of
WTO
issues.
These
three
and
the
Delhi
Science
Forum
website
where
our
earlier
articles
on
this
issue
are
archived
are
given
below:
1.
Third
World
Network:
http://www.twnside.org.sg/
Martin
Khor’s
and
Chakravarti
Raghvan’s
backgrounders
and
articles
have
written
extensively
on
the
run-up
to
Cancun
and
the
course
of
the
negotiations.
The
briefing
documents
have
been
extremely
useful.
2.
Focus
on
the
Global
South:
http://www.focusweb.org/
Walden
Bello,
Nicola
Bullard,
Aileen
Kwa,
Raghav
Narsalay
and
Shalmali
Guttal
have
written
a
number
of
articles
on
Cancun
and
the
Doha
round
of
discussions.
3.
Macroscan,
an
Alternate
Economic
Webcentre:
http://www.macroscan.com/
The
articles
by
C.P.Chandrasekhar,
Jayati
Ghosh,
Prabhat
Patnaik
and
Utsa
Patnaik
provide
not
only
information
but
also
an
analytical
framework
to
understand
the
WTO
issues.
4.
Delhi
Science
Forum:
http:/www.delhiscienceforum.org/
We
are
also
grateful
for
the
help
we
have
received
from
S.P.Shukla,
the
Convenor
of
the
WTO
Virodhi
Jan
Abhiyan,
whose
writings
and
discussions
have
helped
clarify
a
number
of
issues
for
us.