ACP TRADE MINISTERS SAY THERE IS NO BASIS FOR NEGOTIATING SINGAPORE ISSUES

CALL ON WTO TO ADOPT RULES FOR INCLUSIVE DECISION-MAKING IN CANCUN

TWN Report by Tetteh Hormeku (Brussels, 3 August 2003)

www.twnside.org.sg

Trade Ministers of the African, Caribbean and Pacific countries, in an ACP Declaration on the forthcoming WTO Ministerial Conference in Cancun, have stated that there is no basis for the commencement of negotiations on the Singapore Issues.

The Ministers also urged WTO members to ensure the decision-making process at the Cancun Ministerial is "transparent and inclusive" through adopting procedural rules.  They put forward four proposals, including that draft texts contain the views of various members, that Chairs of working groups be appointed by all members, and that all meetings be opened to all members.

The Declaration was adopted at the end of the Sixth meeting of ACP Trade Ministers held in Brussels on 31 July-1 August.  It was  chaired by Botswana Trade and Industry Minister, Mr. Jacob Nkate.  It was preceded by an earlier meeting of senior officials.

The meetings brought together the 77 member countries of the ACP group of states which have trade and development relations with the European Union to deliberate on a common position for Cancun.  Both meetings were marked by lively debates on several issues.

Coming after similar positions on the Singapore issues taken by Ministerial conferences of the group of least developed countries in Dhaka (June) and of African countries in Mauritius (June), the decision by the ACP ministers means that a majority of members of the WTO have proclaimed their intention not to launch negotiations on the Singapore Issues at the Cancun conference.

In fact the ACP Declaration goes further than that of the previous Ministerial Conferences of the LDCs and the African Union.  The African Ministers' Declaration noted that WTO Members do not have a common understanding on how the Singapore issues should be dealt with, and called for the process of clarification to be continued.

Similarly the Dhaka Declaration of LDCs called for continuation of technical work and studies to clarify the implications of the Singapore Issues for the development aspirations of LDCs.

The ACP Ministerial Declaration carried the argument one step more explicitly.  The Ministers reaffirmed that WTO Members have not reached a common understanding on the Singapore Issues, that the benefits of negotiating a multilateral framework for all the issues are not evident, that they had scarce resources and limited capacity in this area,   
and this "does not provide a basis for the commencement of negotiations in these areas."

At a meeting with EC Trade Commissioner, Mr Pascal Lamy, on 31 July, many of the ACP Ministers reportedly told Mr Lamy clearly that they were not in a position to accept the launch of negotiations on the Singapore issues.   The EC is the prime mover and gives high priority to such a launching of negotiations in Cancun.

The exact text of the two paragraphs on the Singapore issues in the ACP Declaration is as follows:

"We reaffirm that the discussion in the  WTO on these issues thus far confirms that each has its own peculiar aspects and complexities and that WTO members have not reached a common understanding on how any of these issues should be dealt with procedurally and substantively in a multilateral context.  We welcome all technical assistance and capacity building measures in these areas, especially those targeted to facilitating the evaluation by ACP States of the implications of adopting multilateral frameworks in these areas on our development policies and objectives.    

"We fully recognise that most ACP states do not have the capacity to meaningfully negotiate these issues, as we grapple with the implementation of existing WTO rules, and especially taking into account the expanded work programme after the Doha Ministerial.  Furthermore, the benefits of negotiating a multilateral framework for all the Singapore issues are not evident, and this, coupled with the fact of our scarce resources and limited capacity in this area, does not provide a basis for the commencement of negotiations in these areas".

The ACP trade ministers also took the calls for transparency and democracy in the WTO contained in the Dhaka and Mauritius declarations one step further by outlining specific areas in which rules of procedure should be adopted in order to make the decision-making process in Cancun transparent and inclusive. 

This reflects the growing concern of many developing countries at the WTO with the way the preparatory process for the Cancun ministerial is being handled at the moment in Geneva, and their fears that at Cancun itself there will be a repeat of the untransparent and exclusive processes that were the rule at Doha and other previous Ministerials.

The Declaration on WTO re-affirmed decisions at earlier gatherings in which members of group participated, including the declaration of the LDCs trade ministers in Dhaka, the Mauritius declaration of African trade ministers which was endorsed by the African Heads of State in July in Mozambique, as well as the decisions of the Conference of the Heads of Government of the Caribbean Community adopted in Jamaica, also in July.

The Ministers expressed concern about the slow progress in implementation of the Doha work programme, and that important deadlines on issues of particular interest to developing countries (such as TRIPS and public health, special and differential treatment, implementation and agriculture modalities) have been missed.

They warned that "the lack of meaningful progress on these issues has the potential to undermine the confidence of ACP States in the multilateral trading system."

The ministers re-iterated the "importance of reforming the multilateral trading system to remove the existing imbalances which impact negatively on ACP member-states".  Furthermore they called for flexibility in the rules and their application, and for greater policy space for developing, least-developed, small and vulnerable countries.  "We stress that it is urgent and essential to address the development issues that have been placed at the centre of the Doha Work Programme", they added.

On the decision-making process, the ministers "re-iterated the critical importance of creating a transparent, democratic, and all-inclusive and consultative decision-making process in the WTO, as this is vital to the enhancing the credibility of the WTO and the multilateral trading system".  They urged members of the WTO to ensure decision-making at the upcoming Ministerial Conference in Cancun is transparent and inclusive through the adoption of procedural rules. 

Those rules, they added, should ensure among other things that:

(a) proposals of the various members of groups of members are reflected in the draft texts that form the basis of negotiations,

(b) appointment of the Chairpersons of working groups is made by a decision of all members;

(c) all WTO members are informed of all meetings and are entitled to participate in them, and

(d) issues of importance, including consideration of a proposal to extend the length of the Conference, should be put before all WTO Members for a decision.

The above proposed measures mark the first time a Ministerial Declaration of so many countries belonging to the WTO have put forward concrete steps to reform the unsatisfactory processes surrounding WTO Ministerial meeting.

The Mauritius Declaration of African Ministers had expressed concern about "the lack of transparency and inclusiveness in the WTO negotiations and decision-making processes" and called for measures, without spelling these out,  to ensure effective participation of African countries before, at and beyond Cancun. 

The list of procedural measures in the ACP Declaration clearly refer to the series of unsatisfactory and improper practices in 2001 in the run-up to and at the 4th WTO Ministerial Conference in Doha.  At that time, the then Chairman of the General Council, Ambassador Stuart Harbinson of Hong Kong submitted a draft ministerial declaration to Doha,  which excluded the explicitly stated views of the majority of the developing countries members on many areas (especially on the Singapore Issues) and despite the opposition of those countries, voiced at General Council meetings in Geneva.

Once in Doha, the draft text was adopted as the basis for negotiations at the ceremonial Opening Ceremony, denying members the opportunity to contest the propriety of the text.  Then a number of so-called "friends of the chair", all of whom were in favour of views contrary to those of the majority of the developing country members, were appointed by the Conference chairman, on the basis of unknown criteria, and with no input by the members as whole. 

Then in the final stages of the conference, a decision was taken (up to now, it is not known by who) to extend the meeting by a day, without prior information to the members most of whom had already made arrangement to leave on the scheduled final day of the conference.  And the two revised drafts produced at Doha to an even greater extent excluded the views of most developing countries.

Many believe that all these practices combined to make the outcome one that was suited to the interests of the developed countries.

Since Doha, there have been many calls by developing countries for the adoption of proper working and decision-making procedures in the WTO.  In February 2002, several developing countries submitted a formal proposal detailing an appropriate set of procedures, but most developed countries, citing the need to maintain "flexibility" for Ministers to make decisions, have been unwilling to adopt these proposed procedures. 

As the preparations for Cancun have got under way, problems similar to that of the pre-Doha period have surfaced, and many developing countries have voiced their concerns.  And in July, a group of non-governmental organisations working on trade issues launched a campaign to expose the undemocratic practices and to improve the process.

Non-governmental organisations and other observers at the ACP Ministerial meeting pointed out that the open and all-inclusive manner in which the meeting was conducted was in great contrast to the procedures at the WTO . 

The ACP draft text was prepared in an open manner by the officials in Geneva and then at a two-day meeting before the Ministerial two days earlier.  All countries were able to place their views.  At the Ministerial, all the Ministers assisted by their experts were able to discuss and also to re-open the text. 

Where there was serious disagreement, the contending parties were invited by the Chair, in the full view and knowledge of all other  members, to work on a compromise which was was then brought back to the full assembly for further debate and approval. 

This contrasted sharply with the way matters proceed in the WTO, where in the name of efficiency, critical decisions are taken at meetings of small groups unknown to the rest of the members, and the result then brought to the others to accept.  As many officials and observers noted, the manner the ACP meeting was conducted reflected the norm of many inter-governmental meetings on issues as complex as trade negotiations, and the it was the WTO that was unusual and stuck out like a sore thumb for its undemocratic practices. 

In a section on trade preferences, the ACP Declaration, called on  WTO members to provide for the maintenance and security of the ACP preferences, through flexible rules and modalities that allow for exemptions based on special development needs.  In addition, the erosion of preferences must be addressed through compensatory and other mechanisms, including measures to promote exports. It called on WTO Members not to take measures which would further erode preferences.

On special and differential treatment, the Ministers said it was a core WTO principle and an important instrument for mainstreaming development in the trade system. it is necessary to strengthen and operationalise existing SDT provisions, introduce new effective provisions, and entrench mandatory and binding SDT provisions during present and future negotiations.  They called on developed countries to show political will to address the S&D proposals and reach concrete results before Cancun.

On Implementation Issues, the Ministers noted with concern, that despite the commitment in the Doha Declaration to give the "utmost importance" to implementation-related issues, there has been little progress, and that the majority of the issues remain unresolved long past the end of 2002 deadline.  They called for political will to address all outstanding issues before Cancun.
 
On agriculture, the Ministers said the missed deadlines represent a major setback. They were concerned at the little movement on key outstanding issues such as formula for reducing tariffs and special provisions for developing countries.  Ministers also noted that  "the Harbinson text on draft modalities does not adequately deal with the structural problems of the Agreement on Agriculture".  

Specific demands included:   improved market access for all agricultural products of ACP states, and measures to enhance the supply capacity of ACP agricultural sectors;  the need to address export subsidies and domestic support in line with the Doha Declaration, while preserving existing preferential arrangements; the need for developed countries to eliminate export subsidies and reduce trade-distorting domestic support on certain products of interest to developing countries;  a financial compensatory mechanism to cover revenue losses resulting from developed countries' export subsidies.

They also called for the agriculture modalities to take account of the aims of food security, rural development, livelihood security.  bound duty free and quota free market access to all LDC products; action to build on the proposals in the Harbinson text to address the issue of erosion of preferences.  "We emphasise that the new Special Safeguard Mechanism (SSM), Strategic Products (SP) and the special needs of NFIDCs are of priority interest to developing countries and reiterate the need for these to be appropriately provided for in the agriculture negotiations," said the Declaration.

The Ministers also urged developed countries to provide bound duty-free and quota free market access to all imports from LDCs,  including agricultural products in their primary, semi-processed and processed forms.  Further they reiterated that LDCs are exempt from reduction commitments, in accordance with Article 15.2 of the Agreement on Agriculture.

They strongly welcomed proposals on preferences in the Harbinson text and asked  WTO Members to address the erosion of preferences, including through an appropriate formula for tariff reduction.

They also supported the initiative by West and Central African countries to address urgently the negative impact on them and other cotton producing ACP Group Members of export and production subsidies on cotton.  The Cancun conference should take a decision to rapidly eliminate cotton subsidies on cotton and compensate adversely affected countries.

The Ministers also recognised the urgent need to pay priority attention to the serious problem of commodity dependence, continuous declines and sharp fluctuations in the prices of commodities of export interest to ACP States.  They supported initiatives taken within the WTO to resolve these problems.

They stressed the importance to the ACP of sugar preferential arrangements and regretted the recourse to the WTO dispute settlement procedures by Australia, Brazil and Thailand against the EU Sugar regime which, if upheld, would adversely affect the ACP countries.
 
In the area of services, the declaration noted that the gains derived from services liberalisation have accrued primarily to developed countries, and underscored the need for measure to redress the imbalances and inequities that currently exist.  To this end, Ministers reiterated the "need to respect the principle of progress liberalisation, in particular, the flexibility provided to ACP states to open few sectors, in line with their national development objectives, and the liberalisation by developed countries in sectors and modes of export interest to ACP countries, particularly through the movement of natural persons".

They also stressed that ACP states have not been able to actively take part in the current request and offer negotiations as there are few sectors in the other countries in which local enterprises from ACP states can meaningfully participate.  In the light of this, ministers urged other WTO members "to refrain from making excessive demands on members of the ACP group in this regard".   "We further urge that due respect must be given to the right of members ... to regulate trade in services and liberalise according to their national policy objectives."

On Market Access for Non-Agricultural Products, the Ministers said the negotiations should facilitate industrialization in their countries and thus give attention to:  (i) providing market access for products of export interest to ACP States;  (ii) ensuring that ACP States are allowed to choose their own rate and extent of future import liberalization, so as not to cause further adverse effects on local industries; (iii) addressing the problems that ACP States will  face from erosion of preferences;  and (iv) addressing the need for ACP States to build their supply capacity so that they can take advantage of any increased market access opportunities. 

The Ministers welcomed the Chairman's proposal to exempt LDCs from making reduction commitments but are deeply disappointed that the draft elements of modalities proposed by the Chairman of the Negotiating Group "do not take these issues into account and in fact contain other provisions, including the complete elimination of tariffs in specific sectors that are likely to have serious negative consequences for ACP States. We therefore urge that the revised text on modalities take fully on board the elements proposed by the ACP States.

They also called for a tariff reduction formula that provides sufficient flexibility and scope to enable ACP States to continue to have adequate and effective levels of preferences to maintain their competitiveness. Only such an approach would guarantee balance, equity and benefits for all WTO members in the outcome of the Doha Round.  Moreover, any tariff reduction adversely impacting on revenues of ACP States should be adequately compensated.

"We call for the operationalisation of the concept of "less than full reciprocity in reduction commitments. . ." for developing countries as expressed in the Doha Declaration.  In that regard, the modalities should enable ACP States and other developing countries to decide their own rate, pace and scope of liberalisation, undertaking commitments only to the extent consistent with their individual development, financial and trade needs."
 
On TRIPs and Public Health, the Ministers underscored the commitment in Doha that the TRIPS agreement "can and should be interpreted in a manner supportive of WTO's members right to protect public health, and in particular to promote access to medicines for all".  They re-affirmed that the Declaration on TRIPS and health "clarifies the relationship between the TRIPs agreement and Public Health policies and are deeply concerned by the impasse in finding a solution to the issues identified in paragraph 6 in that declaration."   They urged WTO members to forge a "sustainable, simple , predictable and legally binding multilateral solution, without restrictions and according to the manner outlined in the Declaration, before the Ministerial Conference."

On TRIPS, the Ministers continued to urge that the review of Article 27.3(b) of the TRIPS Agreement "should conclusively clarify that all living organisms including plants, animals and parts of plants and animals, including gene sequencing and biological and other natural processes for the production of plants animals and their parts should not be patented. "  

They supported the LDC Dhaka Declaration that WTO members "shall select their own sui generis system for plant variety protection, including recognising traditional knowledge and the rights of farmers to use, save, re-sow, exchange or sell seeds", and the position of the Africa Group, that Members have the right and the freedom to determine and adopt appropriate regimes in satisfying the requirement to protect plant varieties by effective sui generis systems and any sui generis system adopted should enable Members to retain their right to adopt and develop measures that encourage and promote the traditions of their farming communities and indigenous peoples in innovating and developing new plant varieties and enhancing biological diversity.
 
They reaffirmed that WTO Members should develop mechanisms that require, as a condition for the grant of a patent, patent applications to disclose the country or area of origin of any biological resources and traditional knowledge used or involved in the invention, and to provide confirmation of compliance with all regulations in the country of origin, including prior informed consent, and access and benefit sharing arrangements.  The TRIPS Agreement should be supportive of and not run counter to the objectives of the Convention on Biological Diversity, which is is essential for fair and equitable benefit sharing.

They noted, however, that such disclosure requirements, cannot address the basic concern that patents on plants, animals, micro-organisms and their parts, as per Article 27.3(b) give patent holders exclusive rights over the use of the resources and thus, denies communities the ability to determine the conditions for their use.
 
On regional trade agreements, they urged that the clarification of existing rules and disciplines should allow sufficient flexibility to developing country parties to RTAs.  In this regard, the ACP group requires the preservation of the Enabling Clause and the revision of Article XXIV to include S and D treatment for developing countries.

On Trade, Debt and Finance, the Declaration said problems arising in the trade area (such as decline in commodity prices, lack of market access opportunities, and over-rapid import liberalization) can lead to increased trade deficits which contribute to debt and financial problems.  On the other hand, continued indebtedness or financial crises can hinder the ability of developing countries to trade.

The Working Group should continue its work beyond the Ministerial Conference.   The Highly Indebted Poor Countries (HIPCs) be treated as if they were LDC States and be given S and D treatment afforded to LDC States in all trading agreements and arrangements.
 
On Trade and Transfer of Technology, the Ministers were disappointed that the WTO has yet to significantly contribute to technology transfer to developing countries and that some WTO rules may hinder the technology transfer process, whereas technology transfer is a necessary requirement for development.

They insisted the various WTO provisions pertaining to transfer of technology be operationalised to make technology easily accessible.  The Working Group should continue its work beyond Cancun.
 
On Technical Cooperation and Capacity Building, Ministers stated the programmes could improve through better collaboration between ACP states and the programme organisers "in determining the course content and in the selection of resource persons, who should have a sound understanding of development, and, as far as possible, come from developing countries".  Technical training and capacity building should also support not only effective negotiation especially on view of the heavy work load of the Doha programme, but must include the include building supply capacity of members of the ACP group, and increase the productivity of local producers so that they can better face the challenges of globalisation.

On coherence in global economic governance, the declaration called for strengthening cooperation and coherence among the WTO, UNCTAD, other UN agencies, the IMF and the World Bank.

However, the Ministers warned that attempts to achieve greater coherence should be aimed at expanding, not narrowing, the policy space for development in developing countries.  "They should further promote, without cross-conditionalities or additional conditions, consistent and mutually supportive policies that will contribute to improved co-ordination of technical and financial assistance, reduction of cancellation of the debt burden, recognition of autonomous liberalisation, and eradication of poverty."
 
In another document, Conclusions of the ACP Trade Ministers' meeting, the Ministers appointed the Botswana Trade and Industry Minister, Mr Jacob Nkate, as the ACP Group's overall spokesperson for the Cancun Ministerial.  He was mandated to consult with the Chair of the Ministerial to clarify the modalities for the conduct of the Conference.

The ACP Group in Geneva was mandated to prepare a vademecum containing detailed ACP positions on all issues on the Cancun agenda.  The Declaration and vademecum will serve as a reference for the overall spokesperson and spokespersons on various subject areas.

The Ministers also agreed to build alliances and hold joint meetings with the African Union and the LDCs during the Cancun Conference and joint positions and alliances could also be developed with other groupings.