IGNORING THE CONCERNS OF DEVELOPING
COUNTRIES WAS THE CAUSE FOR FAILURE OF THE CANCUN MINISTERIAL
CONFERENCE: JAITLEY
Mr. Arun Jaitley,
Minister of Commerce & Industry and Law & Justice, has
said that the Fifth Ministerial Conference of the World Trade
Organisation which concluded in Cancun on 14 September 2003 could
not reach a consensus on various issues, in particular on the
four Singapore issues, because the draft ministerial declaration
that the Ministers had been asked to approve did not reflect the
concerns of the developing and least developed countries. Speaking
to the media on the deliberations held at Cancun, Mr. Jaitley
said that India would have preferred a declaration addressing
its concerns, but this did not happen. Had the draft ministerial
declaration better reflected the concerns of developing countries,
the Conference would have had a chance of success. Lack of political
will on part of certain developed countries to reduce distortions
in trade of agricultural products coupled with onerous demands
on developing countries to make steep market access commitments
was another reason for collapse of the trade talks, Mr. Jaitley
added. In this perspective it was better not to have an agreement
rather than a bad one which would haunt all countries in future.
The Ministerial Conference
concluded with the Ministerial Statement which recognizes that
more work needs to be done in some key areas to enable WTO member
countries to proceed towards the conclusion of negotiations under
the Doha mandate. The Ministerial Statement has instructed the
officials to continue working on outstanding issues with a renewed
sense of urgency and purpose and taking fully into account all
the views expressed in the Ministerial Conference. The Chairman
of the General Council of the WTO, working in close coordination
with the Director General has been asked to coordinate this work
and to convene a meeting of the General Council at senior officials
level no later than 15th December 2003 to enable successful
and timely conclusion of the negotiations.
Highlighting the
positive aspects of the Cancun Ministerial Conference, Mr. Jaitley
said: "We actively engaged in the negotiations and brought
the concerns of developing countries at the centre stage of the
trade talks. The two coalition of developing countries on agriculture
and Singapore issues were active during the entire Ministerial
Conference and succeeded in collectively projecting and protecting
their interests till the end of the Conference. The developed
countries would now find it difficult to ignore these concerns,
if the Doha Work Programme has to make any meaningful progress."
On Singapore issues,
namely investment, competition policy, government procurement
and trade facilitation, Mr. Jaitley highlighted that ignoring
concerns of the developing countries, the draft ministerial declaration
proposed launch of negotiations in trade facilitation and transparency
in government procurement. The section on investment assumed that
negotiations would commence on the basis of a General Council
decision to be taken later. The text on competition policy on
the other hand referred to possible negotiations, an obvious attempt
to accommodate the interest of some developed countries. Further
there was no reference to explicit consensus either in the paragraphs
on investment or competition policy. There was no headway even
after the European Commission, the main proponent, offered to
take permanently out of WTO its proposal for negotiations on multilateral
agreements on investment and competition policy. Certain countries
refused to agree on negotiations on trade facilitation on the
ground that uniform customs procedures would impose heavy costs
and require administrative skills that were beyond their ability.
On the other hand some other countries opposed the removal of
investment and competition policy from the WTO Work Programme.
While the differences among the WTO Members made it difficult
for the Chairman of the Ministerial Conference to reach a consensus
on Singapore issues, Mr. Jaitley was of the view that some of
these issues should now be removed from the WTO agenda as suggested
by the European Commission.
Giving details of
subsidies and domestic support provided by the developed countries
in agriculture, Mr. Jaitley pointed out that these subsidies are
not targeted to keeping small struggling family farms in business
but to provide hefty rents to large farmers or corporates. In
many developed countries, the average income of farmers is higher
than the national average, reaching almost 200 per cent of the
average in certain cases. Subsidies to cotton growers in a developed
country totaled US$3.7 billion last year, which is three times
that country's foreign aid to Africa. The net effect of subsidizing
agriculture in developed countries at the expense of products
of the relatively poor in developing countries is to aggravate
global income inequalities. On the other hand, against equity,
justice and fair play, developing countries were being asked to
liberalize their agriculture.
Against this background
Mr. Jaitley stated that the draft ministerial declaration would
not only perpetuate the existing distortions, but would also introduce
a slew of new measures that would increase market distortions.
The continuation of blue box in an enlarged form without any commitment
to significantly reduce and phase out these subsidies in future
was a case in point. India also opposed the continuation of distorting
subsidies in the amber box, which would otherwise result in the
developed countries subsidizing export of agricultural items.
India expressed concern at the heightened ambition on market access
pillar which ironically provided for Special and Differential
Treatment in favour of developed countries and was viewed to be
extremely insensitive to the large number of people living in
poverty in developing countries. India’s position on agriculture
found broad based support among other developing countries.
Elaborating on market
access in non-agricultural products, Mr Jaitley emphasised that
India supported the formula devised by the Chairman of the Negotiating
Group as it recognised and incorporated certain elements for the
developing countries as mandated by the Doha Declaration, while
achieving significant reduction in the tariffs of all Members.
India opposed the proposal for mandatory tariff harmonisation
and elimination as this would entail substantial contribution
by the developing countries. On sectoral proposals, India expressed
the view that not all the seven sectors were of export interest
to all developing countries. It was also expressed that being
at different stages of development, the developing countries did
not have the capacity to undertake binding obligations in all
the seven sectors.
Turning to development
issues Mr. Jaitley stated that at Cancun India expressed deep
disappointment at the lack of progress in resolving development
issues. India has now sought resolution of all outstanding Implementation
issues by March 2004. On the issue of phasing out cotton subsidies,
of particular concern to certain African countries, he pointed
out that draft ministerial declaration sought to deflect attention
from the specific course of action suggested by Benin and three
other countries by seeking to address the impact of distortions
that exist in the trade of cotton, man-made fibres, textiles and
clothing to ensure comprehensive consideration of the entirety
of the sector.
Looking to the future,
Mr. Jaitley was cautiously optimistic about the completion of
the on- going work programme at the WTO. "There is never
a last day as far as the calendar of trade negotiations are concerned.
India has been engaging constructively in the negotiations and
is optimistic that in spite of the failure of the Cancun Ministerial
Conference, it would be possible to move ahead in the weeks to
come. Agriculture has been the core of the negotiations. It is
important that the negotiations in this area are concluded in
a manner which not only lead to increased market access but also
remove the distortions and inequities in the trade of agricultural
commodities caused by the extremely high levels of subsidies in
the developed world. The onus is now on the developed countries
to deliver on their promise of the WTO Work programme being a
‘development agenda’, if the negotiations are to conclude by the
end of 2004. This can be achieved through a process of decision-making
at the WTO which is both transparent and inclusive without ignoring
the sensitivities of the developing countries ", he added.
