The WTO Round in Cancun

von: Christian Nitschke

Table of Contents

Executive Summary

1 The WTO Minister Conference at Cancun  1

1.1 What happened?  1
1.2 The Way forward  1
1.3 Preliminary Remarks  2
1.4 Theory of Trade  2

1.4.1 Economics  2
1.4.2 Comparative Advantage  3

2 The underlying Issues – before Cancun  4

2.1 Political & Economic Challenges  4
2.2 The Benefits of Market Liberalization  6
2.3 Key Issues before Cancun  7

2.3.1 Agriculture  7
2.3.2 Services (General Agreement on Trade in Services – GATS)  9
2.3.3 Developing Country Issues  11

2.3.3.1 Market Access  11
2.3.3.2 TRIPS  11
2.3.3.3 New Rules  12
2.3.3.4 Special & Differential Treatment  13

3 What now – A streamlined Agenda?  13

4 References  16

Executive Summary

The meeting of WTO Ministers in Cancun/Mexico ended without reaching a consensus in September 2003. But this is not the end of the WTO. The general advisory board of the World Trade Organization is called up for December 2003 to work with the negotiated text of the conference as a discussion basis. Key Issues for the 5th WTO Round were Agriculture, especially market access and subsidies issues, and Development Issues – over three-quarters of WTO members are developing countries.

While the aims of the Doha negotiating round had not changed, the political and economic conditions in which the negotiations were taking place had changed enormously in the last year. This included a slowdown in the world economy, currency instability, geopolitical differences, outstanding trade disputes, and the proliferation of bilateral and regional trade agreements. An agreement on agriculture would have been a precond ition for success for the round of WTO negotiations. Issues were the dismantling of export subsidies, the reduction or removal of market access restrictions that block imports or exports of agrifood products, harmonization of regulations and the reduction of regulatory barriers with respect to phytosanitary standards and genetically-modified organisms, and a re-definition of antidumping to reflect real costs of production (before and after subsidies) in all countries. Another key point of Cancun was the General Agreement on Trade in Services – GATS. Before the round the developing countries called for the implementation of measures agreed under the last Uruguay round of negotiations: market access for agricultural and nonagricultural goods, as well as services, rules for governing special and differential treatment, procurement, and interdependence – the linkage of progress on trade negotiations with the resolution of other issues like agriculture and access to pharmaceuticals under TRIPS. One response to the failure of the meeting has been to call for a reduction in the number of subjects that are on the negotiating table in the Doha Round. The principal target is typically the Singapore Issues and, since the collapse of the Cancun Ministerial meeting, calls for their removal have intensified. And, second, that negotiating and implementing any WTO agreement on the Singapore Issues would be both too complex and too expensive.

1 The WTO Minister Conference at Cancun

1.1 What happened?

On September 14th 2003, the meeting of WTO Ministers in Cancun/Mexico ended without reaching a consensus. According to press reports and subsequent statements by those present at that meeting, the apparent and proximate cause of the Ministerial’s collapse was a failure to agree on launching formal negotiations on the so called Singapore Issues. Others, however, have put forward alternative explanations for the meeting’s failure including a failure to agree on the modalities for negotiations on agricultural trade barriers, export subsidies, and domestic support policies; the inability of many WTO members to negotiate or discuss many issues simultaneously during and before the WTO Ministerial meeting; and a perception that some national representatives in Cancun were not prepared to go beyond predetermined demands of others and showed little propensity to "negotiate seriously" with other delegations (Lamy, 2003).

1.2 The Way forward

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