Ann McKechin MP

Labour Member of Parliament for Glasgow North

World Trade Organisation - 30 October 2003

I welcome the International Development Committee's report, which was both timely and well received in many quarters. I also concur with the comments made by the hon. Member for Banbury (Tony Baldry). The Committee's report is as relevant after the failed Cancun summit as it was before it. As has been mentioned, I had the privilege of attending the parliamentary conference in Cancun as part of the Inter-Parliamentary Union delegation. That conference ran parallel to the main ministerial conference, and accordingly I was able to view the summit at close quarters, although I left just before it collapsed.

There has been much comment on why the talks failed, and what should be done next, and I would like to offer my own reflections on my visit. To be honest, few people were optimistic before Cancun, beyond an earnest hope that we could keep multilateralism alive in the current global political climate, and perhaps make some modest progress. As the hon. Gentleman said, the World Trade Organisation director general, Dr. Supachai, intervened personally to try to make progress on cotton subsidies for some of the world's poorest nations in west Africa, as a symbol that the conference was concerned about the needs of the developing world in this trade round—but even he failed with that modest proposal.

On the question of process, we must undoubtedly stop future summits being the trade equivalent of a travelling circus. With the failure to meet any of the agreed negotiating deadlines, the summit was immediately burdened with an overloaded agenda, which encouraged a game of high poker among the participants. That situation particularly worked against less developed countries as their priority issues, such as special and differential treatment, were downgraded in the talks.

All states must commit themselves to ensuring that most of the hard negotiating is carried out throughout the year, back in Geneva. The ministerial conferences should be viewed principally as an opportunity for Ministers to meet, exchange views and discuss future priorities, rather than as a high-stakes negotiating forum. Such a change in process would also permit greater democratic input and scrutiny from nation state members and increase the transparency of negotiations. If there is one thing the WTO needs, it is surely to improve its public image and strive for greater democratic legitimacy.

At the summit there was a feeling of chaos, with moods swinging from modest optimism to sudden failure. The first couple of days were wasted in posturing rather than genuine talks, and there was unhappiness that the process was driven by chairmen rather than by member nations. Many poorer nations felt that the chairs of the initial working groups failed to reflect the concerns of developing nations in the draft text, and were very annoyed about the attempt to link investment talks with agricultural issues. The African parliamentarians' statement said: "The Green Room negotiations remain undemocratic, non-transparent and highly exclusionary to many developing countries and yet critical decisions are being taken there. It is difficult to know who is involved, what is being discussed, where these meetings are being held and the implications of the outcome of such meetings."

The move at the summit to leave the working groups open to all members is certainly welcome, but much more should be done. The WTO should in future ensure that the facilitators of working groups are neutral, the chairs are elected, and there is far greater transparency in the mechanics of the negotiations.

As well as an overloaded agenda, the central problem was that both the European Union and the USA came to the negotiating table with comparatively little to offer. Accordingly, the Doha approach of ensuring that poor countries' priorities were resolved first, rather than forcing them to make damaging trade-offs, was unlikely to succeed. I spent some time attending the plenary session of the ministerial summit; admittedly, it was not the most exciting occasion. Many of the major players did not stay for long, but smaller and often poorer nations attended it as they waited for the draft text. The language of the speeches, especially those of the EU Ministers and the accession states, was interesting. There were far too many defensive arguments about common agricultural policy reforms, rather than about the needs of developing countries.

The French Trade Minister spent much of his speech arguing about the cultural value of French agricultural life and the possibility of referring it to UNESCO; the Italian Trade Minister argued about the unique quality of Italian soil. I am afraid that such language continued into the parliamentary conference, where Mr. Daul, the chair of the European Parliament's Agriculture Committee, tried to defend current EU policy. He said that the EU should not blush, because it was part of nature that required it to subsidise its agricultural policy.

I congratulate the hon. Member for Banbury, who by good fortune was the first person from the floor to be called after that speech, because he said, "Mr. Daul is quite right. We should not blush, we should just hang our heads in shame, because in a period of two weeks we subsidise farmers in the EU as much as all the aid that is given to Africa." One does not have to wonder how all that must have sounded to delegates from the poorest nations, where agriculture represents the main source of employment for overwhelming numbers of their people. In contrast, I congratulate the Minister for Trade and Investment, who placed great emphasis on the need to concentrate on the development agenda, and did not mention the Singapore issues. Sadly he was just about the only exception to the rule. The EU must consider the language used by its member states, as well as by the Commission, if it wants trust in the negotiating process to be restored.

As for negotiating tactics, the EU must quickly learn some hard lessons from the summit's failure. I believe that the resolve of the newly formed G21 grouping was underestimated by EU negotiators, as was the anger of the less developed countries at the lack of real progress on their priorities. It was clear from the declarations of the mini-Ministerial conferences earlier this year in Africa and Asia that there was absolutely no support for the Singapore issues from the majority of member states. Despite the statement in the Government's response to the Select Committee report that a substantial number of developing nations see the potential benefits of framework agreements, 90 states indicated their opposition to those issues at the summit. They were viewed by many as a distraction from the main issue—agriculture. However, Mr. Lamy and many individual EU states attempted to use them as the key to achieving a settlement, in a high-risk strategy which, as we know, did not work. I welcome the Government's commitment to dropping two of the most contentious issues. However, given the current fraught relationships within the WTO, perhaps I could ask them to consider dropping the remaining Singapore issues until the developmental priorities have been dealt with. They are viewed by many member states as an obstacle to progress, and the EU should instead concentrate on how to tackle issues such as export subsidies better.

As the hon. Member for Banbury said, there was a similar lack of political will from the US side. As I said earlier, even the efforts of Dr. Supachai himself could not broker a deal on cotton for west Africa that would have amounted to a mere 5 per cent. of current cotton subsidies. Frankly, that was a disgrace, and will probably lead directly to thousands of African cotton farmers facing bankruptcy—although prevention would have been easier than trying to find a cure. US negotiators made it clear that they did not envisage any other substantial concessions in this round until after the next presidential elections; in the meantime they will revert to relying on bilateral negotiations that will inevitably weaken the ability of the poorest nations to negotiate.

What of the way ahead? The Cancun collapse is a symptom of the instability of the WTO system as it has been emerging lately. A multilateral system must be based on the perception by its members of shared benefits. Once a large proportion of the membership feel that the system demands only "give" from their side without any possibility of "take", the system is bound to become unstable. Instability in the system will hurt all the member countries, whether big or small. Restoring trust in the system is vital.

All sides must recognise that, with agriculture in particular, there is now a south-south divide as well as a north-south divide. The G21 emphasises the need to reduce tariffs and export subsidies, but the main priority for the poorest, least developed countries will remain special and differential treatment. Any settlement must take into account both sets of needs. The emergence of the G21 and its ability to show a united front at the summit should force both the EU and, in time, the US to recognise the need to change their negotiating positions. The forthcoming expiry of the deadline on the peace clause will probably concentrate minds more rapidly in the EU, as the prospect of a damaging referral to the WTO disputes panel is unlikely to be far away. Given the current political make-up of the US Administration, and its tendency to isolationism, it is vital for the EU to recommit itself to a multilateral system of negotiation and reject proposals to concentrate on bilateral negotiations. It should instead press for a new timetable in which the priorities of developing countries are tackled first, and it must show political will in considering substantially greater offers. A fixed timetable on ending the dumping of agricultural produce should be a priority. The effect on the US is not likely to be so immediate. However, although the US may have a multitude of bilateral and regional arrangements, when it comes to enforcement of commitments regarding goods and services, it has to take shelter in the WTO framework. It has made tremendous gains in the Uruguay round in all those areas and it continues to enjoy those gains. Given that background, the threat by the US to give up or underplay the WTO route does not appear serious, if the business community there holds any sway over Government policy.

The WTO secretariat, too, must change its approach and style of functioning. A clean text, as used in Cancun, can facilitate negotiations only if the preparation process has been open and transparent and there is a fair and objective balance between the differing positions. The institutional machinery of the WTO must show, without a trace of doubt, that it is not influenced by the major developed countries. It must be neutral and objective, and clearly appear to be so. Much damage has been done by the perception that the machinery is used by the major developed countries to advance their own narrow interests. The machinery should work for the system, not for individual countries, however powerful.

In the longer term, the WTO must work towards far greater cohesion of its policies with those of other international bodies, such as the International Monetary Fund and the World Bank, particularly as they affect developing nations. It should consider adopting the millennium development goals as a guiding principle and start a process that allows it to review existing policies and assess new proposals independently on the basis that development needs are truly a priority, both now and in future.

I share the Government's disappointment at the failure of the talks, but like them, I recognise that Cancun was not the end of the process. This has been a difficult year to promote international agreement in any field, but the needs remain and the arguments for fairer trade are just as strong. I urge the Government to meet the challenges ahead and to restore the process so that it can work for all.


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