26 July 2004

On the eve of the WTO General Council meeting (27-28 July) development agency ActionAid launches a new report that exposes the way rich countries are continuing to bribe, bully and threaten developing countries to get their own way over global trade talks. Divide and rule: the EU and US response to developing country alliances at the WTO, looks at what really happened at the WTO Ministerial in Cancún and how since the collapse of the meeting, the EU and US have tried to split developing country alliances and force their own interests at the expense of poor countries.

Transparency critical to success of General Council
The report comes at a crucial time, as the General Council meets to discuss the new draft framework proposals in the hope of breaking the deadlock around world trade talks. The disappointing substance of the new framework proposals demonstrates that the developing countries’ concerns are being excluded.

"It is time for radical reform at the WTO. Poor countries should remain vigilant and united during the General Council meeting. The draft negotiation framework clearly favours the rich. Developing countries withstood the dirty tricks of the EU and US during the last Ministerial in Cancún. If there is no agreement this week, rich nations and the WTO itself will have once again failed to deliver any benefits for the world’s poorest people," said Aftab Alam Khan, head of ActionAid’s Food Rights Campaign. 

Far from pursuing a development round at the WTO, the world's most powerful nations have turned against the needs of poor countries. The EU, US and other rich countries have succeeded in their endeavour to protect their agricultural sectors, while ignoring the demands of developing countries. Important agreements over products such as cotton, vital to the livelihoods of millions of African farmers, have been watered down. The text of the Non Agricultural Market Access (NAMA) proposal is based on the Canada-EU-US proposal at Cancún and threatens to undermine the prospects for industrial development in many developing countries.

Arm-twisting at Cancún
The report shows how the bullying and arm-twisting tactics of the EU and US started in the run-up to Cancún. During the Ministerial, these tactics seriously backfired when, in the face of intense pressure, developing countries formed alliances, such as the G20, G90 and G33, to defend their trading interests. Unwilling to accept this shift in power dynamics, developed countries, such as the US, adopted a ‘divide and rule’ response, with a series of aggressive attacks, designed to undermine the new alliances and pick off countries.

Since Cancún, there has been a renewed set of attacks against developing countries. Countries have been threatened with loss of trade preferences or exclusion from free trade negotiations with the US if they do not leave the G20. Most recently, rich countries’ tactics have changed and attempts to break countries away from the G20 have been replaced with a more sophisticated variant of the 'divide and rule' strategy, trying to set developing country alliances against one another. The report provides strong evidence to show that the EU’s proposal to the G90 in May 2004, offering a round for free, is an empty offer aimed at causing friction between developing country alliances.

Furthermore, the policies and practices of the EU and US continue to be dictated by the corporate interests of their own business communities. During trade talks, major international business lobbies, such as the International Chamber of Commerce, were able to exert pressure though key members, such as the EU, to push for controversial proposals such as the Singapore issues.
Divide and Rule concludes that the EU, US and other rich country governments will be able to continue to ignore the needs of the poorest countries unless basic democratic procedures are put in place at the WTO.

The report calls on all WTO members to address the negotiation procedures of the WTO as a matter of urgency. With specific regard to the General Council meeting, ActionAid recommends that:

• WTO members stop using political, economic or personal threats against other members in order to manufacture consensus in international trade negotiations
• Transparency of WTO meetings, such as the General Council, is guaranteed as far as possible: meetings are open to all members, are minuted and all meetings of exclusive groups in ‘green rooms’ are discontinued.

"Developing countries are sick and tired of having their interests sidelined in favour of the interests of rich countries and corporate lobbies. If the WTO does not act quickly to enforce fair procedures that allow all countries to have their concerns heard, not only will the Doha round have failed, but the very existence of the WTO will be called into question," said Moussa Faye from ActionAid Senegal.