Brussels, 09/10/2003 (Agence Europe) - With major manoeuvres prior to the return to the negotiating table beginning, from Geneva to New Delhi, the Europeans remain introspective about post-Cancun and seem unready to conclude. "The international Community, including the Union, is at a crossroads", as regards the future of a trade system based on multilateral rules and various options are being contemplated in Brussels, where a "full reflection document" has been announced for 7 November, in what could become a "vast consultation (...) at the Commission, in the Council's 133 committee, with the European Parliament and the whole of civil society". And if the Europeans take the time to check their base, agreeing on the attitude to be adopted in a system which has become "genuinely multipolar", with the same degree of commitment and expectations, as with the Doha Cycle, they also need to "know whether the World Trade Organisation members are seriously interested in returning to the negotiation table", and "whether we have reached the limit of what many or most are prepared to accept in terms of what comes under international rules", said the services of Commissioner Lamy in a preliminary note drawn up by the Director General for Trade Peter Carl, for the intention of the 133 committee, their opposite number in the Council.
In Brussels, says the author of this analytical and forward-looking note, the feeling is growing that what happened in Cancun is "down to the lesser and fallback politics of key members of the WTO, who were reluctant to accept the launch of the Doha Development Agenda". The conference ended in such a way as to delay and even endanger the useful continuation of negotiations and the development of the multilateral system governing international economic relations. It appears, added Mr Carl, that "this event was, if not premeditated, at least easily accepted by certain participants". The DDA has thus shown itself to be "both a major political and an economic project for the Union", whereas it is boiling down into "only an economic project, positive or negative" for others whose agenda, "sometimes turned towards the inside (...) which is different" from the Doha mandate. Criticising the number of organisational failures, and the "politicisation and emotional atmosphere" of the event, after an enlightening return to Cancun to "understand" what really happened, DG Trade is forwarding more detailed ideas this time but with a number of question marks:
1. Organisational reform- "the political balance and perceptions having been changed by this collective failure to forge ahead in Cancun (...) we must, within the EU and together with our WTO partners, launch a critical reflection of the Organisation's strengths and weaknesses and on what must be done to allow it to reach its objectives", from the working method to the rule of consensus. Its members are currently openly divided between those wish to keep the organisation and their own commitments unchanged, those who stand by the objectives adopted in Doha, and those who are prepared to follow an agenda based around market opening and would be satisfied with a positive result as well as nothing on the new subjects under discussion (extension of WTO activities to new areas). It also raises one fundamental question: "is it possible to make significant and exhaustive progress at the WTO on a uniquely consensual basis, or should we be thinking in terms of a two-tier WTO: WTO1, limited to the traditional GATT issues (tariff issues and a few basic rules) and WTO2, with "additional rules adopted on an optional plurilateral basis which would only be binding for its subscribers", a scenario which also raises a sizeable problem: what is to be done with the founding principle of "most-favoured nation", in virtue of which concessions made to one member are extended to all? Other, more technical changes have been suggested: - strengthening the role of the Secretariat and that of the Director General even more so, providing a "solid basis for forwarding impartial proposals and compromises" and possible also a "right of initiative- use the General Council (the organisation's decision-making body) for transparency and give substantive negotiations over to a more limited group of representatives of member countries, which would prepare the options and look for compromise; - reconsider the objective and the format of Ministerial conferences, which should perhaps focus more on fundamental political decisions; - review the method of appointing and the role of the Chairman of the Ministerial conference.
2. The future of multilateral rules- their use, modification, development and possible extension to new fields, and their impact on trade and other issue of collective preference. One basic question comes back today particularly acutely: where is the line drawn between the national and international decision-making process, and should the international commercial code remain subordinated to the interpretation of panels and of the WTO appeals body, at the risk of making these bodies into the "real decision-making authority" of the world trade system?
3. Multilateralism and other approaches: The Commission is increasingly convinced that the failure of the Cancun Conference is not a reason in itself for giving up the fundamental preferences and aims of European trade policy, including its political programme in favour of multilateralism. It is more the resolve of other WTO members to follow similar aims which should be brought into question. Also, should one prepare to review the level of ambitions and the way one seeks to achieve them, for example, on Singapore issues? And is it not appropriate to make a "critical examination and assessment of the advantages and disadvantages of the alternative approaches available, whether multilateral or bilateral, if pursuit of aims at the WTO are blocked by other participants?".
4. Singapore issues, agriculture, access to industrial markets: On the first series of subjects, the DG Trade speaks of a serious breach of collective trust in so far as a number of countries acted in Cancun as if these four issues were not undeniably a part of the Doha Development Agenda and the single commitment to take at the end of the trade round. The EU now has the choice of giving up all or just a few of these matters, of continuing to promote the launching of negotiations on all or part of the package or carrying out negotiations outside the DDA Single Commitment. The second solution is problematical as the WTO is an organisation where decisions are taken by consensus, which it currently does not have, and the Commission is ostensibly leaning in favour of the innovative approach followed in the case of the Multilateral Agreement on information technologies which was launched, negotiated and concluded on a multilateral base, from WTO infrastructure, including its Secretariat. On agriculture, where a great opportunity to move forward before the beginning of the electoral campaign in the United States was wasted, vexation is still ostensible and the DG Trade comes back to the "major breakthrough" represented by the transatlantic agreement this summer, and also with some ill humour to the G-21 counter-proposal which is only a "repetition of well-known stances". There is also perplexity, mainly regarding the "de facto break in the Doha contract" and tactics that are "difficult to understand" of the group whose leaders "have far less economic interest in making the negotiation move forward", in particular India "because of its largely defensive goals, and Brazil whose highly competitive position makes it clearly more at ease than any other major net exporter of food products". The first stage must consist in bringing negotiations back within the framework established in Doha, essential issues for Europeans such as non-trade concerns and geographic indications being pushed to the sidelines by the G-21 proposals. Also, should one keep the proposals currently on the table? The other participants should for this "understand that negotiations are a two-way affair" in terms of concessions. Finally, on access to non-agricultural markets, opposition to any improvement has been conducted, unsurprisingly, by developing countries which have the most highly restrictive policies on imports, namely India and Brazil, who have managed to focus on the controversy on agriculture and, at the same time, make one forget that the increase in trade in industrial and fishing products is by far the biggest contribution that it is possible to make in the short, medium or long term to international growth. This being so, the Commission prefers for now to put to one side the draft compromise put forward before Cancun - the "Perez del Castillo" text which should be "substantially improved" in order to tackle "different approaches to be considered in the light of other objectives".
Within the Committee 133, where the debate focused on the roads put forward by Peter Carl, the majority of members above all recommend any initiative to successfully conclude the reflection that has been under way for several weeks (F, NL, CZ, Poland, Malta and Slovakia), while others agree to reflect, but not too much for fear of losing impetus (Austria, Slovenia), it is stressed by sources familiar with the discussions. Holding extreme opinions are: Germany, with its wait-and-see attitude, that hardly took part in the debate except to suggest that the initiative should only be taken up again if the WTO is not in crisis mid-December, and, on the other hand, Italy, the United Kingdom and Denmark who now wish to "get back in the saddle". Regarding the multilateral approach to which the Commission hopes to continue to give preference, while re-examining the lay out with others (multilateral, bilateral, regional), most Member States say they wish to continue, but with slight differences. However, the other opportunities that arise, such as the projects for free trade aereas, should not be missed, many countries say, including Poland, Finland, Ireland and Portugal. The same is true for Austria, for which the EU must also explore the other solutions, which appear "useful" to Spain and Lithuania (perhaps also tacitly), or "complementary" according to the circumstances of the United Kingdom or Slovakia. At the other extreme, scepticism takes the leading place, with above all Malta, which raises the question of the potential of multilateralism, Estonia which hopes to see the bilateral dimension as part of the European strategy, and Latvia which, without even mentioning the multilateral dimension, suggests the advantages and the disadvantages should be weighed for bilateral and regional cooperation.
On the subject of WTO reform, most admit that seeking to do too much, too early, risked more delays or starting from zero. The institution still worked according to modes of consensus. Some Member States think that on the round itself, the Union has to conserve tactical levels to ensure that the USA agrees to substantial reform in the agricultural and other areas, where they are still stuck or on the defensive. Many mentioned the expiry at the end of the year of the peace clause, which committed members of the WTO to not attacks what they had promised to tolerate in 1995. The Commission confirmed that Brazil and Argentina were already prepared to open fire at the dawning of 2004, while saying that they were convinced that through its reforms, the Union would become less and less prone to attack whereas the USA would still have things to worry about. With regard to Singapore Questions, Member States appear divided: some are insisting that they stay on the negotiating table, either in a package (Denmark and Slovakia) with flexibility (Germany), while the others, quite clearly, less numerous, are ready to give them up.