Don't fold up the WTO umbrella

The WTO talks in Cancun ended in failure on Sept. 14 due to the enormous divide between participants.

This outcome implies a setback in WTO's ongoing effort to push for global trade liberalization. Some Taiwanese pundits, however, are of the opinion that the failure to reach a consensus on agricultural issues is advantageous for the nation's agricultural sector as it goes through a transitional period.

The main tasks of this conference were to review the progress made since the Doha talks, provide necessary political guidance and make policies as necessary.

The conference is a failure in that the members failed to find common ground on agricultural negotiations, and whether the four issues -- trade and investment, trade and competition policy, transparency in government procurement and trade facilitation -- mapped out in the 1996 ministerial meeting in Singapore should be included in the Doha Round Negotiations.

In the closing ceremony, WTO members issued a joint ministerial statement saying that more work needs to be done in some key areas and that, "We ask the chairman of the General Council, working in close cooperation with the director-general, to coordinate this work and to convene a meeting of the General Council at senior officials level no later than Dec. 15, 2003, to take the action necessary at that stage to enable us to move toward a successful and timely conclusion of the negotiations."

This, however, indicates that WTO members have not abandoned the Doha round. It is possible that the WTO may not be able to conclude negotiations on various issues by the deadline at the end of next year. Rather, it will become a marathon negotiation like its predecessors, the Tokyo- and Uruguay-round negotiations. The deadline for the Doha round might be postponed under a consensus reached among WTO members.

Even so, with all members prioritizing their domestic political and economic interests, it will be difficult for the trade body to break through the deadlock in agricultural negotiations and carry through all the negotiation plans in the Doha round.

For example, the draft Cancun ministerial declaration, proposed by General Council Chairman Carlos Perez del Castillo, accepted the joint proposal presented by the EU and the US to cut tariffs on their agricultural imports, but it did not set up a deadline for revoking subsidies for all agricultural exports.

In response, developing countries, led by Brazil, India and China, demanded that export subsidies for all agricultural produce be canceled and domestic agricultural support be slashed on a large scale. The EU was of the opinion that this would put too great a burden on industrial countries. The US strongly opposed the proposal that industrial countries cut tariffs on agricultural produce by a larger margin than developing countries do.

This dispute underlines the big challenge in negotiating the two widely different stands between industrial and developing countries.

An feature of this conference is that developing countries formed three big blocs in opposition to industrial countries. Brazil, India, China and others formed a 21-country group. Africa, Caribbean and Pacific nations became a 52-member coalition. Thirty least-developed countries, led by Bangladesh, also formed an alliance.

In addition to advocating special and differential treatment, they also urged that no negotiations be kicked off before a clear and unanimous consensus is reached on the "Singapore" issues. This has put pressure on industrial countries.

It indicates not only the active participation by developing countries in the Doha round, but also the trend whereby forming alliances will be the major mode of interaction in the next round of trade negotiations.

The failed Cancun ministerial conference does not mean that Taiwan is immune from agricultural negotiation pressure, because pressure on developing countries to open up agricultural markets will continue.

Moreover, as countries voice doubts on global trade liberalization under the WTO umbrella, promoting bilateral or regional free-trade agreements (FTAs) will become the main strategy. If Taiwan intends to sign bilateral FTAs with trading partners such as the US, New Zealand and Japan, opening up the agricultural market is unavoidable. Therefore, the government should be prepared for further opening up of agricultural and service sectors.

As for possible developments in the Doha round, Taiwan should focus on important negotiation issues, analyze the positions of major members and study the potential impact of the various proposals on Taiwan. Moreover, it is necessary to actively forge alliances with other members.

Tsai Horng-ming is deputy secretary-general of the Chinese National Federation of Industries.

Translated by Jackie Lin