Lurching towards Cancun: Egypt WTO Mini-Ministerial

With a January 1, 2005 deadline for the conclusion of World Trade Organisation negotiations fast approaching, the heat is on to overcome an embarrassing stalemate before the Fifth WTO Ministerial Meeting in Cancun from 10-14 September. The state of play since the launch of the so-called Doha “Development Agenda” in November 2001, has been characterised by missed negotiating deadlines and ongoing divisions within the WTO. Some predict that Cancun could be a re-run of the 1999 Seattle Ministerial which dissolved in disarray.

Three weeks after hosting the Arab-American summit on the “roadmap” to peace in the Middle East (a formula to reshape the region to suit US transnational corporate and geopolitical interests), Egypt’s Red Sea resort of Sharm El Sheikh was the venue for a WTO mini-ministerial meeting from June 21-22, bringing together ministers from 29 countries. Another mini-ministerial is scheduled for Montreal, Canada from July 28-30, the last one before Cancun.

Such mini-ministerials attract strong criticism from several WTO member governments and many NGOs. These informal meetings embody the profoundly anti-democratic nature of the WTO. They bring together invited trade ministers from 25-30 countries (North and South) to help build “consensus” on areas of disagreement which can then be presented to all 146 members of the WTO at Cancun. Selection criteria for inviting countries to mini-ministerials are unknown. No written records are kept of the discussions. Decisions are made that affect the entire WTO membership and agendas are set on their behalf and in the absence of the majority of members.

Commenting on last November’s Sydney mini–ministerial, Zimbabwe’s Ambassador Boniface Chidyausiku said: “Unless we change the manner in which Ministerials (and the preparation for these ministerials) are conducted, we are wasting our time holding negotiations in Geneva. As deals are done and positions reached when the chosen few meet amongst themselves, the rest of the membership will be persuaded and coerced to accept such positions and deals…We are opposed to such mini-ministerials”.

Further progress in the WTO is widely believed to depend on what happens in agricultural negotiations. Many governments say that they will not make commitments in other areas without improved market access for their agricultural exports, a reduction or removal of remaining import tariffs and an end to subsidies which lead to dumping of surpluses, which undermine local farmers’ livelihoods, especially in the South.

Sharm El Sheikh did little to resolve outstanding differences. The European Union’s Euro 40 billion farm support package, its Common Agricultural Policy (CAP), with its export subsidies and support for domestic farmers. attracted harsh criticism from US Trade Representative (and former Enron consultant) Robert Zoellick: “It’s become clear that whether we move ahead or get stuck very much depends on the EU”, he said.

Australian Trade Minister Mark Vaile warned that WTO negotiations across the board hinged on whether or not the EU would significantly reform the CAP, arguing that Korea and Japan, which are also reluctant to liberalise agriculture further, might be influenced by EU moves.

Bemoaning the outcome of the Egypt talks, he said: “Montreal may well be a watershed meeting in efforts to ensure that the necessary progress is made on key issues” at Cancun. He warned that Australia and other Cairns Group (the bloc of agricultural exporting countries which advocates for full liberalisation of international trade in agricultural goods) members were likely to veto any agricultural agreement such as the one reached under the GATT Uruguay Round which had made little real change to farm subsidies. WTO Director-General Supachai Panitchpakdi emerged from the Egypt meeting “very disappointed” about the deadlock on agriculture, which followed the apparent breakdown of EU talks on CAP reform. With loud fanfare, days later, the EU announced significant reforms to its CAP. The US and Australia were more sceptical.

They demanded that the EU also slash its tariffs, and said that the reforms did not go nearly far enough. British aid agency CAFOD pointed out that the total CAP budget 43bn euro will remain in place until 2013. Others warned that the “reforms” would merely make it easier to disguise subsidy payments.

But the EU is now on the offensive. Its agriculture commissioner, Franz Fischler said: “Now it’s up to others to do their homework. For example, thinking of our American friends: contrary to what the EU has done over the last few years, they’ve resurrected a lot of the trade-distorting policies of the past and actually increased agricultural support enormously. You should really practise what you preach.”

(Bush’s post 9/11 farm packages have greatly increased government subsidies to US agriculture –mainly benefitting US corporate farmers and agribusiness.) The EU will use the CAP reform to leverage its position in negotiations and demand greater concessions from other countries in agriculture and other sectors of strategic importance to European corporations such as services, and in its attempts to get an investment agreement on the WTO agenda. The US administration remains busy batting on behalf of its agribusiness corporations for greater control over the world’s food supply. In May, the US announced it would lodge a WTO complaint against the EU moratorium on biotech crops and food.

The day after the Egypt mini-ministerial ended, on June 23rd, Bush addressed BIO 2003 (the annual Biotechnology Industry Organization convention) in Washington, DC attacking the EU moratorium, masquerading as a champion of the poor and hungry, while saying: “Our biotechnology industry is the strongest in the world, and we need to keep it that way”.

Meanwhile the US Administration’s Ministerial Conference and Expo on Agricultural Science and Technology in Sacramento promoted biotechnology, industrial agriculture, and agricultural liberalisation to countries of the South but was eclipsed by a major mobilization against biotechnology, free trade and corporate agribusiness. And while Bush spoke in DC, Zoellick addressed the Global Reconciliation Summit in Jordan, an extraordinary annual meeting of the World Economic Forum.

There he outlined details of the Bush Administration’s vision for the Middle East, promising US support for WTO accession for “peaceful” Middle Eastern countries, its intent to negotiate bilateral investment and free trade agreements with countries in the region, and the melding of these into a regional Middle East Free Trade Agreement (MEFTA) by 2013. Meanwhile, Daniel Amstutz, former Cargill Vice-President and US trade negotiator on agriculture settled into his new USAID-appointed role presiding over the “reconstruction” of Iraqi agriculture.

The global peasant and small farmers’ movement, Via Campesina believes that another “Blair House Agreement” between the US and the European Commission – may be under negotiation. This agreement broke the standoff between the US and EU during the Uruguay Round, and maintained support for corporate, export-oriented agriculture at the expense of small farmers, peasants, and food producers worldwide. Indian officials have also recently expressed fears of a deal on agriculture being cut between the EU and US.

The contentious “Singapore issues”- investment, government procurement, competition policy, and trade facilitation were put on the agenda in Egypt by the EU and Japan which want a multilateral investment agreement at the WTO.

Despite intense pressure from the industrialised world, opposition from Southern governments to this initiative remains strong. Expressing concerns about impacts of a WTO investment agreement on sovereignty and policy space, India’s Commerce and Industry Minister Arun Jaitley strongly opposed expansion of the WTO into these new issues. He also warned that developing countries expected a meaningful response to their requests on implementation issues relating to existing WTO commitments which have been repeatedly ignored by most industrialised countries, special and differential treatment provisions to protect farmers of developing countries in any agricultural negotiations and resolution of the TRIPS (Trade-Related aspects of Intellectual Property rights) and public health dispute.

Many developing countries demand an agreement by Cancun based on promises made at Doha that TRIPS should be interpreted in a way that supports governments’ rights to protect public health and promote access to medicines for all. Many want poorer countries to be allowed to import cheaper generic copies of patented drugs to fight health care problems like AIDS, TB and malaria and legal certainty that they will not face court challenges should they do so.

In Egypt, this matter was not resolved. Zoellick claimed to be “building trust” between the US pharmaceutical industry (major backers of the TRIPs agreement, and major Bush campaign donors) and the developing world to address these concerns. Last year, under industry pressure the US government rejected an agreement which would have allowed imports of generic drugs in certain circumstances. Drug TNCs claim they are worried that drug-manufacturing countries like India and Brazil will take advantage of any concessions in this area to steal their markets. Bush’s trip to Africa and his statements about US support for AIDS victims will be used as a bargaining chip to force further concessions from African countries at the WTO – whether or not there is any substance to the claims, and notwithstanding the continued US hardline stance on patent protection for its pharmaceutical corporation.

Not to mention recent legislation which ties US aid for HIV/AIDS treatment with recipient countries’ acceptance of US food aid which may contain genetically modified organisms. Meanwhile, outrage from many Southern governments and Indigenous Peoples about the way that TRIPS facilitates the patenting of lifeforms and the appropriation of traditional knowledge for private profit remains ignored.

A week after the Sharm El Sheikh meeting, the Bush Administration lashed out against its Egyptian host and “friend” for backing away from its previously stated support for the US-led WTO complaint against the EU biotech moratorium. Before, Zoellick praised Egypt as the “heart of the Arab world”, and the lynchpin of the proposed MEFTA. After Egypt’s decision not to join the WTO complaint, he claimed that it was backsliding on economic reforms, saying that a free trade agreement “isn’t going to be handed to them just because Egypt is a big and important country”.

Egypt’s significant trade ties with the EU led to strong political and business opposition to moves to join the US in its WTO case. Egypt remains the largest Arab recipient of US overseas aid, but is clearly now on the punishment block for displeasing Washington which wants as many Southern countries as possible to front industry claims that biotechnology will feed the poor and that the EU moratorium starves the hungry.

And it is yet another reminder of the fact that for all the “free trade = prosperity for all” promises, for all of the claims of the Doha “development agenda”, Southern governments are expected to remain pawns in a WTO powerplay between the world’s two most powerful economies.

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