The Cancun Meeting Will End Without An Agreement On The Ministerial Text.

13 September, 2003

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Statement by the Third World Network on the events of the final day of the Cancun Conference
14 Sept 2003

The Cancún meeting will end without an agreement on the Ministerial Text.

The immediate reason is that there could not be an agreement on the Singapore issues in the exclusive small group consultation known as the Green Room meeting.

Many developing countries, including the African Carribean and Pacific (ACP) Group, the African Union, the LDC Group and Asian countries such as India and Malaysia made it clear at the Green Room meeting that they would like the Ministerial to decide not to launch negotiations on the Singapore issues (investment, competition, government procurement, transparency trade facilitation). Although they were under pressure (by the EC in particular) to agree to launch negotiations on at least some of the issues, the developing countries stuck to their position.

The reasons they gave was that: negotiating these issues would divert scarce human and negotiating resources from directly trade issues such as agriculture and industrial products; agreements on these issues will have serious implications for their economy and development prospects; and there is no consensus on the modalities of the negotiations. They requested that discussions continue on the issues instead of starting negotiations for new treaties.

Unfortunately, the major developed countries and in particular the EU kept on pressing the developing countries to accept negotiations. This was the main reason for the deadlock situation that developed.

The deeper reason for the situation is the untransparent and undemocratic system of drafting of texts in the WTO. Although about 80 developing countries formally submitted their position that they would not want negotiations to start, the Facilitator and the conference Chairman came out with a draft that decided to launch negotiations in three areas (procurement, trade facilitation, investment).

This led to frustration and unhappiness, even outrage, at the bias shown against the developing countries, which they expressed at the HOD meeting on Saturday night and at the Green Room meeting.

This situation has brought the WTO to the brink of a crisis of confidence. The following now needs to be done if confidence is to be regained, and if the trade system is to be put back on the right track.

1. It is time to recoconsider whether the Singapore Issues belong to the WTO, since they are non-trade issues and the attemnpts to bring them into the system has caused so much acrimony and division for the past many years.

2. The developing countries have organized themselves better this time and have shown that they are not ready to be bullied into accepting decisions which they are against. The developed countries should respect this emergence of the developing countries in the system and re-think the way they operate in what was once a rich man’s exclusive club.

3. The decision-making system in the WTO should be reformed so that there is more transparency and democracy, so that developing country members can participate more effectively, especially in the drafting of texts. A special committee should immediately be set up in the WTO to carry out these democratic reforms, which were promised after Seattle but never carried out.

The way the Cancun meeting has ended without an agreement and with such strong divisions is another wake up call for the system. It is now urgent that measures be taken to turn the WTO into an organization that truly respects the developing countries and their development objectives (both in the rules and in the decision-making system). This is perhaps the last chance to embark on the reforms. If these reforms do not take place, there can only be more crises and loss of legitimacy and confidence in the system. And the developed countries, which have been so resistant to change, would have to carry the blame.

Martin Khor
Director, Third World Network
14 Sept 2003


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