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Cancun to be milestone for WTO targets
2003-09-05
Trade ministers of all 146 World Trade Organization members will gather in Cancun, Mexico, this month for the organization's fifth ministerial conference.
The meeting is a key milestone in the Doha development agenda, the latest big round of international trade negotiations launched in the Qatari capital Doha in November 2001. Cancun is not the end of this process - far from it - but is an intermediate stage where negotiators will take stock and make sure that the round is on target for completion at the end of 2004 as scheduled.
It is a big undertaking, with around 20 separate issues and 146 economies, including China, to decide how to handle them.
As the European trade commissioner, I represent 15 European Union (EU) members plus 10 future members and, of course, my primary task is to defend European interests, as all the other delegations will be defending theirs.
But I think everyone agrees that the focus has to be on development and how we integrate developing economies into the world trade system.
But what are these big questions and how are we going to handle them?
There is no question that trade in agriculture is a hot-ticket item. Our objective is simple: to find a balance between market opening and the preservation of a viable countryside and not just in the EU but around the world. We in Europe and many others, including a number of developing countries, have made a political choice to support our agriculture because it is not just another economic activity.
It plays a part in conserving the rural culture, the environment, food safety and in animal welfare.
Despite critics saying the EU is "protectionist," we put an ambitious package on the table in January. We proposed reducing customs duties by 36 per cent, reducing export subsidies by 45 per cent and reducing trade-distorting aid by over 55 per cent.
Then, in June, came a further reform of the EU common agricultural policy that enables us to continue supporting our agriculture but moving further away from trade-distorting practices.
Most recently of all, in mid-August, the EU and the United States agreed to present a common initiative on agriculture, to pave the way for progress in Cancun towards an overall agreement in the Doha negotiations.
A short flashback - "trade" used to be largely about industrial goods. That was the focus of the first trade rounds: tariffs and quotas. We have steadily reduced them ever since. But there is still work to be done, and it is pretty urgent for all WTO players as manufactured goods account for over 70 per cent of developing countries' exports.
Clinching agreement on an overall approach will be one of the priorities in Cancun.
Trade in services is another big item on the negotiating agenda. Services are at the heart of the EU economies: information technology, advisory services, banking, insurance, distribution, transport, tourism and so on.
Services are also crucial for the economies of other members. They account for 50 per cent of developing countries' GDP, for instance. A remarkable but little-known fact is that 15 of the world's 40 leading service exporters are from developing countries.
However, their share of international trade does not always reflect the crucial and growing role they play in the world economy. Developing countries are pressing for an opening of these markets, including the temporary movement of professional service providers.
It seems self-evident that people suffering from the three major communicable diseases - AIDS, tuberculosis and malaria - should have access to medicines. However, WTO members were divided for many months on this issue, with the United States most reluctant to agree to a solution.
Broadly speaking, the idea is to make an exception to intellectual property rules, which rightly protect pharmaceutical research, by authorizing developing countries to produce or buy generic medicines (medicines not under patents) more cheaply. The outstanding issue involved developing countries with no capacity to produce medicines and that therefore need to import generic drugs.
Finally, on the eve of Cancun, an agreement has been reached.
The United States has finally rallied round the consensus found in December 2002 by the remaining 145 WTO members. This is a strong signal of our collective ability to regulate globalization. It is a clear sign that the WTO can take a practical, pragmatic approach to help save lives.
We are talking about new rules to ensure the benefits of open trade are evenly spread: investment, competition, trade facilitation and transparency in government procurement.
It is not about standardizing but rather establishing a minimum set of rules for everyone that are non-discriminatory, transparent and predictable - something that is particularly important for developing countries.
We realize the additional negotiating effort this exercise demands from developing countries. Hence there is an emphasis on technical assistance to help them adjust their domestic legislation later.
Pascal Lamy is European commissioner for trade.
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