Om oversendelse af EU-papirer med relation til WTO-forhandlinger.

Spm. nr. S 824

Til udenrigsministeren (21/11 03) af:

»Vil udenrigsministeren oversende Kommissionens konkluderende papir og andre eventuelle opsamlende dokumenter, f.eks. referat, om mødet i Artikel 133-komitéen den 7. november 2003?«

Papiret har betydning for et samrådsspørgsmål, der ønskes besvaret i forbindelse med mødet i Europaudvalget den 28. november 2003.

Vedlagt fremsendes Kommissionens sammenfattende papir efter WTO-ministermødet i Cancun og den videre vej frem. Papiret findes alene på engelsk. Der udsendes ikke referater til EU-medlemslandene fra møderne i artikel 133-komitéen.

The Cancun failure is a considerable setback for the DDA. An opportunity has been missed to liberalise trade and strengthen the multilateral system. All members of the Organisation stand to lose from this situation, developing and developed alike. The only winners are the protectionists, the unilateralists, and the opponents of greater international co-operation.

Although the preparatory process for Cancun had been efficient and transparent, resulting in a text that was an acceptable starting point for most delegations, the gaps between Members proved, in the event, to be wider than could be bridged during a five-day conference, for reasons of substance, tactics and organisation. The former and the latter are explained below.

With the benefit of hindsight, differences in substance were too great to be bridged during the Conference, particularly when combined with the organisational mistakes that also occurred. The principal substantive reasons for failure were:

• Agriculture.
On agriculture, the joint EU-US proposal of August, had it been accepted at least as a starting point for Cancun, would have been a basis for substantial further reform and reductions of trade-distorting subsidies, in particular in the US and the EU, and for negotiations on market access leading to substantial increases in favour of developing countries. This proposal also allowed developing countries considerable leeway with respect to reducing their own subsidies. The EU was ready to remove all forms of export subsidies on a list of products of particular interest to developing countries, an offer which was attracting positive attention in Cancun. A great opportunity was thus missed, due in part to the refusal before and at Cancun of the demandeurs in agriculture to negotiate.
• Cotton:
It proved impossible to reach agreement on the justified African demands for very substantial reduction of trade-distorting subsidies on cotton, due to the de facto rejection of this request by the United States. The manner in which this rejection was conveyed through a Chairman's draft text reflecting a a position virtually identical to that of the United States, clearly contributed to the feeling amongst the Africans and the LDCs of their views being ignored.
• Singapore Issues.
The DDA had established a commitment to launch negotiations on the basis of »explicit consensus« on modalities in Cancun. In spite of this commitment, and the extensive substantive work done on each issue, in the preparatory phase sharply divergent opinions emerged regarding the readiness of many Members to pursue negotiations in the WTO. In a major concession aimed at bridging differences, the EU floated, at the beginning of the Conference, the idea of »optional participation«. Members would be free to decide whether to participate in the results of the negotiations. For reasons which are not clear, no Member took up this offer. Towards the end of the conference, the EU indicated its readiness, in the context of an overall Cancun declaration, to drop investment and competition definitively from the negotiating agenda. Even this major concession proved unacceptable to the African group and to the least-developed countries, who rejected negotiations on all four Singapore issue, so nothing was agreed on the Singapore issues at Cancun. The EC is disappointed that other Members ignored the commitment at Doha to launch negotiations. Such a breach of faith is unhealthy for the system and for mutual confidence that such formal commitments are not respected.
• Non agricultural market access.
The EC similarly regrets that a successful outcome on modalities was not possible. The texts under negotiation could have produced a good basis for modalities that would lead to further liberalisation, both for North-South as for South-South trade, while still maintaining a margin of preference for ACP partners. Again, an opportunity has been missed to reduce protection on products of interest to developing country and ACP exporters.

The Conference did not get into its stride until the last 48 hours, by which time it was too late to resolve the major difficulties remaining. Despite good preparatory work, the volume and importance of the many issues on the agenda made it difficult for most delegations to analyse and modify positions rapidly. New groupings of countries that appeared at Cancun did not have the means of decision-making allowing rapid appreciation of issues or ability to compromise. Instead they were cumbersome coalitions able at the end only to agree on the lowest common defensive or highest common offensive denominator.

More fundamentally, the whole format of a Ministerial Conference presented with a large volume of highly technical but intrinsically politically burning questions of major importance for most participants cannot be expected to resolve such issues with the present type of organisation of the WTO.

The absence of any kind of steering committee, and the sudden decision to call an end to the work of the Conference when several important issues were waiting to be discussed and resolved, may also have played a role.

Simply returning to the negotiating table as if nothing had happened will not produce a significantly different result: it cannot just be business as usual in the coming months. The failure of the Cancun ministerial was the result in part of basic differences between Members regarding the future role and scope of WTO work and these differences cannot disappear overnight. An in depth reappraisal of the situation is therefore needed.

The successful resumption of negotiations requires flexibility on all sides. The EU was the only delegation in Cancun that showed flexibility on virtually all issues. We hope that others will now start moving away from entrenched positions.

The EU considers it necessary therefore for all Members to reflect on what kind of DDA they want to pursue. From the EU’s perspective, its own evaluation is now being carried out and will address the following questions, which our WTO partners also need to answer:

• What are the prospects for the resumption of negotiations, and if so within what timeframe and with which scope? It is highly unlikely that the negotiations can now end on schedule. Regarding the point of departure for future work in Geneva, it is not clear which texts or proposals presented before 14 September, if any, might constitute a generally acceptable basis for negotiations. What is the view of others? And where are they ready to show willingness to compromise on the key issues? There has been precious little indication of that.
• What is the scope in future for negotiating new multilateral rules, in particular covering the so called Singapore issues? Judging from Cancun, but also contrary to the Doha Declaration, there is no consensus to pursue multilateral negotiations on these issues. This needs to be verified with all Members, not only those who participated in restricted discussions in Cancun. We all need to reflect also on the systemic and political implications, in terms of the overall balance of the DDA, of removing issues from the single undertaking. The WTO Membership as a whole has to reflect on this.
• The EU maintains a strong preference for multilateral approaches and solutions, but wants to ascertain the degree of interest of other Members in multilateral liberalisation and rule making. In any event, the EU must now reassess its bilateral and regional trade agenda, to see whether greater priority and emphasis should now be given to this. And given the defensive posture at Cancun of many developing countries due to their reliance on preferential market access, we will at the same time look at the question of preferential agreements in view of their impact on the multilateral agenda.
• Finally, the WTO as an organisation seems increasingly incapable of facilitating consensus-building and taking decisions. An in depth assessment is needed of the prospects for changing its modus operandi. In reply to those Members who have said that the question of WTO reform should not become a distraction from negotiations on substance, the EU does not disagree but would add that, to the extent that the failure at Cancun can be attributed to institional weaknesses, these clearly need to be remedied if substantive negotiations are to be any more successful in future.

October 10 2003