Economy & Trade, Global, Global Geopolitics, Headlines

TRADE: Mexico Exhorts US and EU to Avert WTO Fiasco in Cancun

Gustavo Capdevila

GENEVA, Jul 9 2003 (IPS) - Mexico is placing the onus on the United States and the European Union to prevent the failure of the World Trade Organisation (WTO) ministerial conference to take place in September in the Mexican resort city of Cancún, says the host country’s trade negotiator Sergio Pérez Motta.

"Mexico is not going to be the guilty party in the case of a Cancún fiasco. It all depends on the 146 states party to the WTO, but in particular on the political will of the White House and of Brussels," the diplomat told IPS, referring to the executive branches of the United States and EU.

The negotiations in the lead-up to the ministerial meet, in which WTO members should be taking decisions crucial to global trade liberalisation, have become bogged down at the WTO’s Geneva headquarters because of apparently irreconcilable differences on agriculture and poor countries’ access to low-cost essential medicines.

"At two months before the conference we have very little to show; almost nothing. We lack agreements on most of the issues being debated," a trade official said in comments to Spanish-language reporters convened in this Swiss city by the Friedrich Ebert Foundation, of Germany.

The delegations of the 146 WTO countries "are not yet disposed to negotiate," said the official. "We await signals in agriculture, but also in the relations between the United States and the European Union."

Washington blocked an agreement in December that would have provided a possible solution to the matter of providing generic drugs – cheaper than the name brands patented by the big pharmaceutical laboratories – to poor countries that do not have the capacity to manufacture much-needed medications themselves.

And the EU, which spends around 50 billion dollars a year on subsidies for its agricultural market, is being pressed to issue a proposal for incorporating its farm sector to the market liberalisation process that already includes merchandise and service, the other areas that the WTO oversees.

But Mexican trade official Pérez Motta noted that the question of access to medications needed to protect public health, and its relationship to pharmaceutical patents, is squarely "in the hands of the White House."

U.S. Trade Representative Robert Zoellick has sent signals of willingness to reach an agreement, said the Mexican trade negotiator. However, a political decision is needed by U.S. President George W. Bush, he stressed.

Meanwhile, settling the farm trade matter depends on Brussels, home to the EU executive branch, according to Pérez Motta.

The EU will have to make "a difficult decision", and so will Switzerland, Norway, Japan and South Korea, he said, listing countries that most actively employ trade-distorting subsidies for farmers and agricultural exports.

Pérez Motta called upon the EU heads of government to "tell us what the decisions adopted (two weeks ago) by their agricultural ministers entail."

The top farm officials from the 15 EU countries met in June to modify the Common Agricultural Policy that regulates the bloc’s expenditures on farm subsidies.

The EU announced that it would gradually withdraw support for production volumes in order to shift resources towards rural development, livestock and other subsidies that would be less likely to distort the farm markets.

The Europeans "must translate" those decisions into comprehensible terms for the agricultural trade negotiations taking place under the auspices of the WTO, stated the Mexican official.

If the issues of agriculture and access to low-cost drugs are not resolved, said Pérez Motta, he predicts that "we are going to see a very complicated meeting" in Cancún.

Other trade officials say that in addition to signals in the farm trade arena, they await favourable signs from the United States and EU for unblocking all areas of negotiations, especially the issues of special and differentiated treatment for poor countries and the implementation of previous agreements that are aimed at benefiting developing nations.

The negotiators stressed that progress in the negotiations on the way to Cancún depends greatly on the status of "trans-Atlantic relations", which involve the trade superpowers: the EU and United States.

The WTO ministerial conference provides a unique opportunity for this generation, commented Pérez Motta. "If we fail, we will have squandered the chance to consolidate the multilateral trade system."

The top officials of the WTO – the director-general, Supachai Panitchpakdi, and the General Council chairman, Carlos Pérez del Castillo – are working to complete a draft of what is to be the Cancún meeting’s final declaration. They are to present the text to the WTO delegations in Geneva late next week.

The General Council, the WTO’s maximum authority when the biannual ministerial meetings are not in session, is to discuss the draft document at its next meeting, Jul. 24-25. The following week, an informal gathering of select trade ministers will study the text in Montreal.

The trade negotiators acknowledge that the WTO is under pressure because of the lack of time for producing an agreement on the text that the ministers are then to sign at the end of the conference in Cancún.

Furthermore, the institution’s activities will be interrupted for two weeks by the summer break, to begin again Aug. 12.

"An incomprehensible break," said one diplomat, noting that 10 days before the Cancún meet gets underway the documents must be finalised so that translations and copies are ready for the ministers.