The next stop is the WTO Ministerial Conference in Cancún, Mexico, in September, again with a heavy agenda amid great expectations. In the run-up to these talks we thought it might be worth retracing the road to Cancún.
In 1947, the rules-based multilateral trading system was officially born with the signing of the General Agreement on Tariffs and Trade (GATT). The GATT laid down non-discrimination as a governing principle of world trade in goods and, through successive rounds of negotiations into the 1970s, cut the high tariff walls which had plagued world trade since the 1930s. We pick up the story several years later, in Japan and the build-up to the Uruguay Round.
Tokyo – April 1979 and the trading system deals, for the first time comprehensively, with non-tariff issues affecting trade in goods, like standards and technical specifications. It is “GATT à la carte” with the proliferation of plurilateral agreements in areas like subsidies, customs valuation and import licensing that apply only to those (chiefly OECD countries) who sign up to them. Developing countries negotiate for – and get – a legal basis for receiving preferential treatment.
Geneva – November 1982 and the basic principles of the Uruguay Round are laid down. Two issues block consensus: trade in agriculture and whether to include services in multilateral trade rules. Despite this, ministers adopt a work programme, including agriculture and services, as a starting point for negotiations.
Punta del Este – September 1986 and trade ministers formally launch the Uruguay Round of multilateral trade negotiations. It is the biggest negotiating mandate on trade ever agreed and, in addition to “traditional” market access (tariffs on goods), will cover: strengthening the rules of the trading system, including improving ways to address non-tariff measures; fully bringing agricultural products, textiles and clothing under the multilateral trade rules for the first time; and addressing new issues like trade in services and protection of intellectual property rights. Though originally foreseen to be completed in four years, the Uruguay Round is destined to become the longest negotiating round to date.
Montreal – December 1988 and the next stage of the Uruguay Round begins after a so-called mid-term review. Frameworks for completing the negotiations are agreed in 11 out of the 15 negotiating areas – but not those for some of the really hard issues: agriculture, intellectual property rights, textiles and safeguards against imports causing unforeseen injury to the domestic industry. Some “early harvests” are agreed, though, including some market access for tropical products; a new, streamlined dispute settlement system; and the Trade Policy Review Mechanism.
Brussels – December 1990 and the Uruguay Round should be coming to a close, but disagreements over agriculture and the embryonic stage of discussions on services and textiles bring the meeting to a halt. Negotiations are extended, but it will be almost another four years before the Round is concluded.
…to the WTO
Marrakesh – April 1994 and ministers sign the results of the seven and a half years of trade negotiations – about 60 agreements and decisions totalling around 550 pages – as the Uruguay Round is formally concluded.
GATT chief Peter Sutherland has been pushing for a new institution to replace the GATT, and the World Trade Organization (WTO) is created, with headquarters in Geneva. The new WTO will oversee new agreements on agriculture, services, trade-related intellectual property rights, technical barriers to trade, sanitary and phytosanitary measures and the phasing out of quotas for textiles and clothing.
With the WTO, all agreements are brought under one umbrella (the “single undertaking” to which all members adhere) and are subject to a new dispute settlement system with real teeth. The agreements enter into force on 1 January 1995, the official date of the WTO’s founding, with Mr Sutherland seeing in the institution as its first director-general, before handing over to Renato Ruggiero in May 1995. In the first of the “trade and…” issues, a committee on trade and environment is established.
Singapore – December 1996 and the first WTO ministerial conference sees the ranks of WTO membership swelling to over 120, with others in line to join. Taking their cue from the Uruguay Round’s “built-in-agenda” – a requirement that negotiations on agriculture and services resume within five years – some WTO members start talking about planning for a “millennium round”. With some controversy, and without prejudice to the question of negotiations, working groups are established on what are to become known as the “Singapore issues”: trade and investment; trade and competition policy; trade facilitation; and transparency in government procurement.
Geneva – May 1998 and the ministerial celebrates 50 years of the multilateral trading system in the presence of, among others, Nelson Mandela, Fidel Castro and Bill Clinton. The meeting reviews the operation of the Uruguay Round Agreements, but a number of members are looking increasingly towards a possible millennium round. Major outcomes are the extension of the mandates of the working groups on the Singapore issues and the adoption of a decision on keeping electronic commerce duty free (at least until the next WTO ministerial).
Seattle – December 1999 and the streets overflow with angry anti-globalisation protestors in what became known as the Battle of Seattle. It is a tough test for new director-general Mike Moore, who finds that things are little better inside the negotiating rooms, with major differences dividing WTO members over the shape and size of a new millennium round: should it focus on market access in agriculture, services and industrials (with a few extras) or should it be a comprehensive round, addressing new rules, including the Singapore issues? The meeting ends in failure. Talks are suspended with no clear map of where to go next. Nevertheless, talks on agriculture and services begin on 1 January 2000 under the built-in agenda, but progress is slow.
Doha – November 2001 and the fourth WTO ministerial conference manages to launch a new round of negotiations under the Doha Development Agenda (DDA). Joining agriculture and services on the agenda are a large number of other issues, like industrial tariffs, rules on subsidies and anti-dumping, and environmental questions. Particular attention is on key development concerns such as how to implement Uruguay Round agreements and special and differential treatment, as well as on possible modifications to the dispute settlement system, protection of geographical indications and – subject to modalities to be agreed at the next ministerial conference – the Singapore issues of investment, competition policy, trade facilitation and transparency in government procurement. China and Chinese Taipei join the WTO as its 143rd and 144th members. Agreement is also reached on a Declaration on TRIPs (Trade-Related Aspects of Intellectual Property Rights) and Public Health to address poor countries’ access to medicines under patent protection.
Cancún – September 2003 and the fifth WTO ministerial conference will be held in Cancún, Mexico from 10-14 September, under its fourth director-general, Supachai Panitchpakdi. The conference is expected to review progress to date on the Doha Development Agenda, and will be looking to make headway on agriculture and industrial goods; the launch of negotiations on the Singapore issues; and resolution of the issue of how to make operational the agreement on TRIPs and access to medicines, as well as agreement on the disciplines of special and differential treatment due to developing countries. It’s another big agenda and avoiding extra time will be a challenge.
For an update, read "After Cancún: The dangers of second best", on further evolutions of the Doha round, by Kenneth Heydon, Deputy Director of the Trade directorate.
©OECD Observer No 238, July 2003