The new negotiating patterns in the World Trade Organization are important not just for the pursuit of fairer farm trade, says Celso Amorim, but as a model for fairer international governance
“But still mankind listened deeply
To the harmony of the whole creation,
And aligned every action to the greater order
And not to the moment’s blind apparent opportunity.”
(Ted Hughes, Tales from Ovid, New York, 1997)
The year 2004 marked a turning point in multilateral trade negotiations at the World Trade Organization (WTO). A concrete proposal for the elimination of agricultural subsidies – as envisaged when this round of trade talks was launched in Doha in 2001 – has been agreed. If the multilateral trading system is to offer equal opportunities for all, and for developing countries in particular, the serious distortions in agricultural trade must be eliminated.
The stalemate at the talks in Cancún in 2003 may be seen, in retrospect, as a necessary step before the unblocking of the negotiating process in Geneva in July 2004. In Cancún, the outdated and antidemocratic character of the bipolar negotiating dynamics of previous rounds – in which the United States and the European Union agreed first between themselves the content of agreements which were afterwards sold to the other members as the “possible consensus” – became obvious. The most notorious example of that practice was the “Blair House Accord” at the end of the Uruguay Round in 1992, when America and Europe cut a deal on farm trade and then presented it to the rest of the world as a fait accompli.
Showdown in Cancún
What happened in Cancún was that developing countries, responsible for a great part of global agricultural output, and for a majority of the agricultural producers as well as of the world’s population, indicated that they would not accept these negotiating methods any more.
From Cancún on, it was clear that multilateral trade agreements have to meet a broad and multifaceted gamut of interests. In other words, the protectionist agricultural agenda of an extremely small number of inefficient producers in developed countries does not correspond to the expectations of the majority of WTO members – and of progressive sectors within the developed countries themselves – as represented in the negotiating mandate of the Doha Ministerial Meeting. The legitimate aspiration of so many peoples and countries for international trade to act as a driving force towards economic and social development was upheld.
United we stand
This vision – supported by developing countries – is based on principles that lie at the core of the WTO. By applying to agricultural trade the norms that regulate trade in industrial goods, social justice will be brought to trade liberalization. The countries of the south, united in the G20 and the G90, which are pragmatic groups without any ideological bias or spirit of confrontation, have acted to ensure that agriculture remains at the heart of the Doha Round.
Held together by a nucleus of large developing countries, the G20 has managed to reconcile the different priorities of individual members that, up to then, had not necessarily acted in a coordinated fashion. The motivation for this cohesion among nations that compete keenly in world markets, and among others that are rightly concerned with protecting the living conditions of millions of small rural producers is the common fight against subsidies and other distortions in the international trading system.
The same spirit prevails in the productive dialogue established between the G20 and the G90 – a coalition that includes African countries, the Asia-Caribbean-Pacific group and the least developed countries. If on previous occasions the G20 and G90 might have been perceived as acting at odds with each other, the present coordination effort stems from the perception that agricultural trade liberalization will bring tangible benefits for all. I have been to two G90 meetings (in Guyana and Mauritius) to tell them that, in spite of differences on specific topics, the negotiating framework desired by the two groups is the same.
More than promoting the trade interests of its members, the G20 has been responsible for the introduction in the trade arena of an element of multipolarity. Previous rounds, even if they included all members, have, in practice, consolidated the interests of a minority. In truth, the main driver behind those negotiations was the so-called QUAD – the United States, the European Union, Canada and Japan. The post-Cancún framework incorporates developing countries as active interlocutors to negotiate a real Development Round. Within the negotiating process, a multipolar environment has been created which allows for a more effective functioning of multilateralism.
In the agricultural negotiations, the QUAD was replaced by the NG5 (“non-group of five”), also known as FIPs (“five interested parties”), which included not only the United States and the European Union, but also Brazil and India (representing the G20) and Australia (for the Cairns Group of 17 agriculture exporting countries). An essential element in the behaviour of the two G20 representatives was the permanent exercise of transparency, not only as regards other G20 member, but also vis-à-vis other developing countries. Initially criticized as divisive, the action of G20 countries, in particular of Brazil, came to be seen as capable of galvanizing other nations and promoting consensus.
The fruits of free farm trade
The results in Geneva, almost one year after Cancún, are encouraging as they offer all developing countries the prospect of a trading system that is more open and balanced, without exceptions dictated by the protectionist interests of developed countries. It is important to maintain the momentum that helped to achieve the Geneva Framework Agreement in July 2004.
The potential of international trade to contribute to the eradication of poverty and hunger has not yet been fully assessed. Recent studies estimated that an additional $200 billion of annual revenue – enough to take more than 500 million people out of poverty – would be generated if agricultural trade were liberalized. Even if these estimates are too optimistic, there seems to be no doubt that poorer countries will greatly benefit if given the opportunity to compete in a world market free of distortions.
Improved access to markets and the end of agricultural subsidies will constitute powerful instruments to promote development strategies in economies heavily dependent on agricultural exports. The real integration of agriculture into the multilateral trading system may pave the way for more fragile economies to grow and to enjoy fairer income distribution.
Brazil has been working to strengthen its trade ties with developing countries in general, in parallel with the multilateral trade negotiations. In our region, we have been working for the deepening of the Mercosur, South America’s biggest trade bloc, while, at the same time, promoting a true economic-commercial integration in South America, based on free trade agreements and large infrastructure projects. We are gradually extending these efforts to other Latin American and Caribbean countries. Mexico has already indicated its willingness to negotiate a free trade agreement with Mercosur.
Outside our region, we have been promoting the commercial dimension of the India-Brazil-South Africa Dialogue Forum (IBSA), an innovative mechanism for closer relations among three great democracies of the south. Group negotiations, however, do not eliminate our interest in deepening our trade relations with individual countries like China – with which our annual trade may soon reach $10 billion. Countries such as Egypt and Morocco, among others, have already started or are about to begin negotiations with Mercosur, strengthening this south-south network.
The improvement in trade relations among developing countries may offer an effective contribution to production and job creation. So a new round of trade liberalization negotiations of the General System of Trade Preferences – which promotes trade preferences among developing countries – was launched during a UN Conference for Trade Aid and Development (UNCTAD) meeting in June 2004, in São Paulo.
A model for cooperation
The spirit of collective self-esteem, which underlies the establishment of the system, some two decades ago, remains valid. The profile of Brazilian trade relations justifies such optimism. Today, almost half of our exports go to developing countries (over $34 billion in the first nine months of 2004).
The negotiations or the Doha Round will reshape the dynamics of international trade relations in the decades to come. Wasting the opportunity to build a truly democratic global trading system is not a viable option for countries that believe in the human capacity to gather efforts in favour of freer, fairer and more prosperous societies. In the same vein we have been trying to mobilize diplomatic support for the promotion of constructive means of cooperation for development and peace, both in the United Nations and at the WTO, and in other international fora where a minimum balance among nations might be expected to prevail.
The promotion of more democratic means of decision-making is at the core of current debates on political and economic governance. It is worth remembering the words of Brazilian president Luiz Inácio Lula da Silva: “Multilateralism corresponds in the international sphere to the democratic system within nations”. Perfecting multilateralism must become the goal of every nation that values its own democracy. When we promote new, more inclusive negotiating patterns at the WTO, we are investing in a more democratic, just and peaceful world.
Celso Amorim is Brazil’s foreign minister.