19 January 2004	Monday	26 Ziqa'ad 1424

The World Trade Organization (WTO) is still reeling under the impact of the Cancun debacle and has failed to make any tangible headway in the negotiations held since then on any issue.

Now Switzerland is hosting an informal "mini-ministerial" meeting in the Alpine ski resort of Davos on January 23, on the sidelines of annual World Economic Forum, in an attempt to break the depressing deadlock and reactivate the stalled Doha Development Agenda talks.

But the prospects of a breakthrough are seen to be too dim as the European Union and Japan have already shown reservations saying it is too early to resume the (Doha) process. Such a meeting, they contend, can bear fruit only when the thorny issues that divide the North-South states were first sorted out and an understanding on future measures reached. Pascal Lamy, the EU Trade Commissioner, will not be attending the mini-ministerial and his absence is likely to have a negative impact on the meeting's proceedings.

Then, the Davos meeting is restricted to about 30 countries (out of 146 members). However, the key member states such as the United States, EU, Japan, China, Brazil and India will be there. A spokesman of the Swiss ministry of economy said on January 6 that the intention was to give trade ministers an opportunity to take stock of the situation and devise ways to end the stalemate and take the process forward.

Since the next General Council meeting is scheduled to take place mid-February, the mini-ministerial will also decide about the next chairman - chairmen change with the change of calendar year - and this time it is the turn of a developed country.

Japan is expected to take the seat to be vacated by Mexico. Besides, heads of various negotiating committees are also to be elected. The fate of the next ministerial meeting scheduled to be held in Hong Kong in 2005, meanwhile, hangs in balance and may have to be delayed in view of the US presidential elections. This will further push the deadline for completing the Doha round.

The prevailing stalemate is not a good omen for the future of World Trade Organization particularly for the developing countries which can prosper only if the trade is universally governed by a fair and just system of rules under a consensus. Unless the contending sides show willingness to relax their rigid positions, the danger is that even the progress made so far in various committees may be lost.

The consultations that took place during the last three months (September-December) was exclusively a Green Room process. Only 20-30 members were invited and on various occasions the excluded developing countries made no bones to show how angry they were. The US and the EU have so far shown no flexibility in their positions despite their statements to the contrary within the WTO and in public.

As expected, the last meeting of the General Council held on December 15 and 16 in Geneva was an utter failure and ended without taking any substantive decision. Chairman Carlos Perez del Castillo, in his formal statement, identified four issues as the most controversial.

These are agriculture, non-agricultural market access, the Singapore Issues and the Cotton Initiative. He and WTO Director-General Dr Supachai Panitchpakdi admitted that they have seen no real movement among member countries towards any accommodation of each other's position. To really restart negotiations, they asserted, political determination and willingness to make compromises was imperative.

Castillo held consultations with a small number of WTO members to ascertain as to what extent the Cancun Draft Ministerial Declaration, known as the Derbez text and issued on September 13, could be taken as a basis for further negotiations on agriculture and non-agricultural market access (NAMA). But the developing countries as a whole rejected the Derbez text saying it reflects only the interests of the developed countries.

The text's framework for agriculture in fact forces the developing countries to undertake severe cuts in their tariffs, while allowing the US and the EU to protect both their import and export interests. Tariffs, it may be noted, are developing countries' key instrument of defence against the dumping of rich countries' agricultural products.

Meanwhile, attempts by the western countries to break up the alliances and groups that were formed on the eve of the Cancun summit have not met much success. The G-20, in particular, came under attack from the United States and several Latin American states left the group. They are El Salvador, Peru, Colombia, Costa Rica, Guatemala and Bolivia. Despite their exit, the G-20 has not weakened.

Furthermore, the failure of the Free Trade Area of the Americas (FTAA) negotiations in Miami in November, has further strengthened the G-20 alliance in the WTO. It is worth noting that since the creation of the WTO, the developed countries have not faced such strong groups and alliances of developing countries.