The World Bank reviews Cancun
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CTA. 2003. The World Bank reviews Cancun. Agritrade, December 2003. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52818
The September World Bank paper 'Cancun: Crisis or Catharsis'...
The September World Bank paper 'Cancun: Crisis or Catharsis' sets out the importance of a successful conclusion to the Doha Development Round to developing countries, and reviews: the coalitions which formed in Cancun around agricultural issues; the debate on the 'Singapore issues' and the positions adopted; and the implications of the failure of Cancun. In this latter regard it highlights: how Cancun illustrated that 'realising the promise of trade reforms through reciprocal bargaining is a major challenge', with successful negotiations requiring an agenda that is seen to be relevant to the needs and objectives of all parties; how 'developing countries are playing an ever more pro-active role in the WTO', with the larger developing countries demonstrating that they can put together and sustain negotiating alliances, even though national interests may differ; how 'the reciprocity dynamics of the WTO negotiating process requires that developing countries offer 'enough' to OECD countries to induce them to take on the interests that benefit from trade protection'; within developing countries the main thing they have to offer is greater market opening; how 'there is significant scope to harness the traditional WTO reciprocity dynamics to move forward on market access in goods and services; how 'research and capacity-building made a difference in enhancing the knowledge of the issues on the table and informing positions'; how 'Cancun suggests that much more work is needed to integrate development considerations into the trade policy process and to mobilise resources for trade related investments and reforms'; how Cancun raises 'questions regarding the governance and procedures of the WTO'. In terms of the way forward the paper suggests a removal of investment and competition policy from the negotiating table, since this would enable a focus on issues which matter more to developing countries, namely 'removing trade-distorting policies that hurt the poor disproportionately'. However the quid pro quo for this would need to be that governments in the South, particularly middle-income countries, accept the need to lower trade barriers. Comment: The EU maintains that it is committed to implementing agricultural policy changes which reduce trade distortions if not wholly eliminate them (the shift from price support to decoupled direct aid payments). However there are those in the developing world who believe that these policy changes simply improve the efficiency of trade distortions. The levels of both production and trade that are being generated are much higher than would be the case at the prices ruling within the EU in the absence of the direct aid payments being made from the EU budget. Unless this basic divergence of views is reconciled it is difficult to see how the debate on removing trade-distorting policies in the agricultural sector can be taken forward. In addition the priority accorded to removing trade-distorting policies would appear to be a double-edged sword for ACP countries. For example, removing trade distortions in the sugar sector (through the measures currently being discussed within the EU) will lead to large revenue losses for ACP exporters (equivalent to about € 303 million under one scenario explored in the recent Commission staff working paper), with no guarantee that they will benefit from any consequent improvement in the world market price.