19th March 2008
Cancun Update
Prospects for Cancun
As predicted by most observers of the WTO’s agricultural negotiating process, WTO Members were unable to adopt agricultural modalities by the end-March 2003 deadline set by trade ministers in Doha.
However, since a farm deal at Cancun will be the deal-maker, or -breaker, of the whole Doha Round, both the membership and Chair Harbinson of the agriculture negotiations have been involved in efforts since the end of March to bridge the many wide gaps in positions. After weeks of intense high-level negotiations, two key players in the debate — the EC and the US — arrived at a “Joint Text” on 13 August, setting out the parameters for reduction commitments and related disciplines for the key outstanding negotiating issues. Although the text did not offer concrete numbers, it showed there was immense political will to find a compromise, with the aim to finally trigger more substantive talks on commitments. And indeed, for the first time in the three-and a- half-year process, real negotiations have started, with the EC and US — as well as other Member coalitions — willing to move from their initial positions.
However, whether a framework text, along the lines of the EC-US ‘soft’ deal, would be acceptable to all actors in the negotiations remains to be seen. With the WTO now counting 146 Members (of which the EC comprises 16), the days of the Blair House 1992 Agreement - where a bilateral deal hammered out between the EC and the US subsequently served as the basis for the multilateral Agriculture Agreement and the conclusion of the Uruguay Round single undertaking - are certainly over. It is also uncertain whether developing country Members are willing to take on new - rather ambitious - commitments in other areas such as industrial goods, or ‘New Issues’ without clear knowledge of what they will gain in agriculture. In particular, it seems doubtful that the four West- and Central African least-developed countries (LDCs) Benin, Burkina Faso, Chad and Mali could continue supporting the ongoing trade round without receiving clear and binding commitments at Cancun from major cotton subsidisers such as the US and EC to phase out all subsidies related to cotton in the medium term.
However, while both finding a way to deal with the cotton problem and determining concrete numbers for the agricultural modalities by or at Cancun seems doable, the question remains whether the large agricultural exporters would agree to an approach along the lines of the joint EC-US proposal. Under this approach, weaker countries would benefit more from new market openings than others. Moreover, it remains unclear whether the “significant net food exporting [developing] countries” such as Argentina, Brazil, Chile and Thailand could accept getting less special and differential (S&D) treatment than would be granted to other countries of the South, as proposed by the EC and US in their new text. However, if like-minded developing countries such as Sri Lanka and Pakistan as well as the African Caribbean and Pacific group would accept the EC-US model, it would - at the end of the day - be difficult for the Cairns group and others to make the political case against such a differentiated approach, especially if this jeopardised gains in S&D for the rest of the developing country membership.