WTO-CANCUN: EU Considers Ending the Multilateral Way

By IPS Correspondents Reprint | | Print |

Stefania Bianchi

BRUSSELS, Sep 17 2003 (IPS) - Pascal Lamy, European Union Trade Commissioner has called on the EU to review its commitment to multilateral trade talks following the collapse of the trade ministers’ meeting in Cancun last weekend.

Pascal Lamy, European Union Trade Commissioner has called on the EU to review its commitment to multilateral trade talks following the collapse of the trade ministers’ meeting in Cancun last weekend.

The EU has traditionally been a strong multilateralist, but Lamy says this policy should be reconsidered.

The EU will soon table a proposal on reforming the 146-member World Trade Organisation (WTO), he indicated.

The WTO talks ended Sunday (September 14) after rich and poor countries were unable to repair irreconcilable differences.

Developing countries refused to open negotiations on proposals from the EU and Japan that purport to liberalise investment markets, make government contracts more transparent, cut red tape and harmonise competition rules.

EU officials now blame the "antiquated" decision-making procedures of the WTO. Both the EU and U.S. have argued that the WTO is not well suited to producing contentious decisions quickly, and that it therefore needs to re- examine its structure.

This could lead either to an attempt by them to change those structures, or turn increasingly to bilateral and regional efforts.

There was no indication from EU officials, however, that their own position on subsidies and tariffs could be an obstacle to progress, rather than a multilateralist approach or the decision-making process.

Lamy called the WTO "medieval", while president of the European Commission Romano Prodi said "the organisation couldn’t support the weight of the task it was given."

Lamy says the Cancun collapse should make the EU and the world think about two main issues.

First, whether multilateralism should be maintained. He said, however, that this decision could only be made at the highest level and would depend also on what the other trading partners think about it.

Secondly, he called on world trade diplomats to think whether the current working method of the WTO should be kept as it is.

"I am still a believer in it [multilateralism], and believe that this should be a priority, but circumstances are such that when we get a bit of a shock of this sort, we have to stop and think, and make sure that we all actually still agree on this," he said.

He said one of his main concerns is the WTO’s consensus-driven approach. "I think it’s above dispute that the principle of the permanent sit-in of 146 trade ministers in order to take a number of very detailed decisions…is a theory that visibly does not work."

Lamy indicated that the issue would have to be evaluated by the European Commission, the executive arm of the EU, by member states and the European Parliament.

Elly Plooij-Van Gorsel MEP and spokeswoman for the European Liberal Democrat group in Cancun welcomed Lamy’s call.

"The WTO must not yet be declared dead – we must try to breathe new life into the talks," Gorsel told IPS. "On the substance, our offer remains on the table, but at the same time we must look at ways of reforming the WTO negotiation procedure in order to avoid such failures in future."

WTO officials are due to meet at a general council December 15.