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Deadlock in WTO as rich and poor nations clash

Developing nations opposed bypassing contentious subject of agriculture as rich nations tried to steamroll ahead on trade issues.

business Updated: Sep 15, 2003 14:19 IST

The conference of the World Trade Organisation currently underway in Cancun was caught in a deadlock over attempts by the rich nations to steamroll their way on trade and investment issues as developing countries, including India, stoutly opposed bypassing the contentious subject of agriculture.

India and 15 other countries got into a new league G16 to oppose the conference taking up Singapore issues like investment and competition policy rules, trade facilitation and transparency in Government procurement.

Commerce Minister Arun Jaitley and Malaysian Trade Minister Rafidah Aziz told a joint press conference that they would in no way to agree to starting negotiations on the four Singapore issues as they dealt that the clarification process should continue.

"I am afraid there are only two options on the issue -- to either start negotiations or not to start and there is no third or soft option. We have decided that it should not be started at Cancun as there is no explicit consensus on the modalities for starting the negotiations," Rafidah said immediately after the first meeting of the grand alliance.

"The countries who do not want negotiations are in majority. The countries who want to launch are in minority," she said ruling out any unbundling of the four issues as a compromise.

The new alliance of G16 includes China, Egypt, Bangladesh, Indonesia, the Phillipines and Zambia.

The two ministers said there is no trade offs or concession. Rafidah said the group of developing countries is for decoupling of issues and was against EU proposal to link time-bound elimination of farm subsidies to starting negotiations on Singapore issues.

As the minister got into the nitty-gritty of negotiations past midnight, five facilitators, appointed by the conference chairman and Mexican Foreign Minister Louis Ernesto Debrez to resolve contentious issues like agriculture and Singapore, swung into action having parleys with member countries and pressure groups.

On the contentious Singapore issues which provides for among other things working out investment and competition rules within WTO, the facilitator, Canadian Trade Minister, Pierre Pettigrew (Canada) said that at the end of the first day that a number of developing countries including India have pointed out that it was evident that there was no consensus negotiations on Singapore issues.

"There are two options -- either to agree to launch a negotiations or refer the issue back to Geneva for clarification," he said on behalf of some members that have submitted a paper identifying points for further clarification.

Pettigrew said a number of developing countries said that it is evident there is no clear consensus to start negotiations as required by the Doha Declaration, and thus the issues have to be sent back to Geneva. They said there is a need to clarify the impact of WTO rules in these new areas.

A smaller group of developing countries said that each Singapore issue should be considered on its own merits. They supported negotiations on two issues -- trade facilitation and transparency in Government procurement -- that it said are more ripe for negotiations in comparison with investment and competition policy, he said adding the informal meeting will continue on Saturday.

On Agriculture where developed and developing countries are sharply divided, Singapore Trade Minister, George Yeo Yong-Bon, who has been appointed as facilitator, threatened to come out with his own draft if various groups having divergent views did not have a meeting point by Saturday.

He reported that on Friday he had held three encounters: the Group of 21 and EU; the G-21 and US; and the US and EU. He apologized for not having enough time to organise other combinations.

He stressed that the encounters were not negotiations but a means for him to sound out positions. He said there was some indication of flexibility, but delegations were still mainly keeping their cards close to their chests.

He hoped that by Saturday members would be able to help close the gaps. Failing that, he will submit a text later on Saturday. He said he hoped of "making a good guess of what is acceptable, but cannot be absolutely sure".

The text will be a hybrid -- members will be able to identify parts that come from Geneva, he said. And he asked members not to make set speeches, but to focus on helping him close the gaps.

However speakers largely focused on established points of concern, he said.

First Published: Sep 12, 2003 16:48 IST