Deep divisions between the rich and the poor nations at the Ministerial Conference of the WTO in Cancun over a draft declaration stalled progress on the last day with developing nations like India rejecting the formulation on agriculture and Singapore issues like trade and investment.
With deadlock persisting, a last ditch effort was initiated at the so-called 'green room process' to thrash out differences among trade ministers of 146 nations.
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Chairman of the conference, Mexican Foreign Minister Luis Ernesto Derbez tried to hammer out a consensus, which appeared very difficult.
While Derbez cautioned against dangers of failure of the conference, India and several other developing countries expressed disappointment over the proposal on contentious agriculture and Singapore issues which were heavily loaded in favour of the United States and European Union.
India, along with Brazil, spearheading the developing countries' attack, criticised the draft document saying it threw to winds the development dimension of the Doha agenda producing a one-sided text to push only the concerns of EU and the United States.
Commerce Minister Arun Jaitley expressed disappointment that the revised draft has 'arbitrarily disregarded' views and concerns of developing countries and warned that the text did not lend itself to any meaningful dialogue.
"We still believe that this conference must be brought to a successful conclusion. We hope that circumstances and environment will be created to enable us participate constructively," Jaitley told the heads of delegation.
He said the draft has very little for developing countries on the contentious issues of agriculture as it favoured the EU and unbundled Singapore issues as advocated by the United States.
"We are disappointed that the draft text ignores several concerns expressed by us and many developing countries," Jaitley said.
After several of the trade ministers spoke against the draft, Derbez said he understood that ministers wanted to put their positions on the record and that did not worry him.
But he was concerned whether the ministers were willing to let the process fail. Agreement was needed in order to give the world economy a boost and if the meeting fails the only winners will be the enemies of the trading system.
Describing this as once-in-a generation opportunity, Derbez warned that if Cancun fails, the negotiations may take a long time to cover, he said.
Derbez and WTO Director General Supachai Panitchpakdi would start consultations with smaller groups of ministers called 'green room' and if they make right progress, the chairman would reconvene the heads of delegations meeting later.
The deep divisions between North and South on agriculture and Singapore issues has portended tough negotiations in the green room and opposition from the developing countries could leave the Cancun meeting without a final agreement on the declaration.
The deadlock also poses a risk of the five-day meeting failing to establish a platform for the new round of negotiations, called the development round.
US officials warned that this outcome would damage the global economic recovery. But others insist a delay in setting out the negotiating specifics would be better than a bad agreement, which the present draft is particularly to developing countries.
The draft has only led to a new form of resistance to industrialised countries and demands by big nations in the developing world, including India, Brazil, China and South Africa who along with several developing countries have formed a formidable group on agriculture, which has now swelled to 23 with Turkey and Nigeria joining it.
Speaking on behalf of the group, Brazilian Foreign Minister Celso Amrom said, "The text is very far from the point where we must arrive."
Civil societies have labelled the text as a sharp slap in the face of an array of developing countries.
Jaitley, after giving a detailed and point-by-point reaction to the text at the heads of delegation meeting before the green process started, said three issues in the draft needed to be addressed, or else India would walk out of the ministerial.
The first of the three issues was that a proposal to reduce tariffs on a number of farm products to between zero to five per cent for developing countries should be removed particularly when the distortions against which such tariffs are supposed to compensate are sought to be enhanced like domestic support.
Secondly, Investment rules and Competition policy, the two key Singapore issues, should be kept out of the negotiating table. This issue should be resolved first before taking up other differences in the draft text, Jaitley said.
He also wanted removed the provision of expansion of tariff rate quota in the text. Developed countries impose a quota on imports of certain goods at concessional tariffs.
Jaitley said the export cut subsidies in developed countries should be in all products and not in selected products as suggested in the text.
Expressing disappointment over the draft for ignoring several concerns expressed by India and many developing countries, Jaitley said, "I note that the pretence of development dimensions of the Doha Agenda has finally been discarded confirming the apprehension expressed by me at the plenary session that this is mere rhetoric."
On agriculture, not only are the distortions prevalent today being perpetuated, but a slew of new measures to increase such distortions are being proposed, he said, adding ironically the special and differential treatment have been provided in favour of developed countries instead of developing countries.
In the green room process, held after several postponements, some of the leading trade ministers, including Jaitley are trying to thrash out the differences in the draft ministerial declaration compiled from the texts supplied by the various facilitators appointed by the chairman on contentious issues of agriculture, Singapore, non-agriculture products, market access as also developmental issues.
To give some level of comfort, Chairman Derbez said the text is still a draft and its aim is to help put together all the insights gained through various modes of consultations with a view of putting together an overall package that would win broad acceptance.
India and several developing countries are now insisting that Singapore issues in the draft needed to be settled first before taking up the other main contentious issue, namely agriculture.
India and 69 developing countries were pressing for continuing the clarificatory process on Singapore issues and that the negotiations should not start now.
With the green process getting delayed beyond expectations, there is every possibility that Cancun Ministerial may go the Doha way with the five-day ministerial spilling over to Monday, sixth day, and perhaps even Tuesday, seventh day.