1 Joint Committee on Foreign Affairs Sub-Committee on Development Co-Operation __________ Dé Céadaoin, 12 Samhain 2003. Wednesday, 12 November 2003. __________ The Sub-Committee met at 12.25 p.m. __________ MEMBERS PRESENT: Deputy T. Dempsey, Senator B. Ryan. Deputy M. Higgins, Deputy M. Noonan, Deputy D. Wallace, SENATOR M. KITT IN THE CHAIR. 2 Business of Sub-Committee. Chairman: Apologies have been received from Deputy Liz O'Donnell. The minutes of the meeting of 8 October have been circulated with the agenda. Are the minutes agreed to? Agreed. I wish to note one item of correspondence from the Minister of State at the Department of Foreign Affairs, Deputy Tom Kitt, regarding the sub-committee's recommendations for a commitment to annual incremental increases in ODA and a multi-annual budget approach. Members have been circulated with a copy of the letter from the Minister of State. WTO Ministerial Meeting in Cancún: Presentation. Chairman: I welcome the delegation from the Trade Matters Group, a group of development NGOs and the solidarity committee of the ICTU. Present today are Mr. Colin Roche from Oxfam Ireland, Mr. Oisín Coghlan from Christian Aid Ireland and Mr. Conall Ó Caoimh from Comhlámh. Members will recall that the Trade Matters Group appeared before the committee earlier this year in advance of the WTO conference in Cancún to discuss development aspects of Ireland's trade policy, in particular, the need for it to reflect our positive commitment to the reduction of global poverty. The outcome of the WTO conference in Cancún was disappointing to say the least and today's presentation will centre on the outcome of the WTO meeting for Ireland's trade and development policies. Members of the delegation attended the WTO meeting and will also take the opportunity today to provide feedback for the committee on the proceedings in Cancún. After the presentation we will have an opportunity for a question and answer session with the delegation. I invite Mr. Roche to begin the presentation. Mr. Colin Roche: I thank the Chairman and the sub-committee for inviting us. As we feel it is extremely important that Parliament has an opportunity to get some feedback on the WTO 3 ministerial meeting and its implications for broader trade policy, we are happy to be here to give Parliament the opportunity to hear our views on the outcome of the Cancún meetings. As members of the Irish Government delegation to Cancún, where we were not negotiators but observers, we hope other members of the delegation will also have the opportunity to feed back into the Oireachtas. We will begin with what happened in Cancún and then look at the implications for Irish policy and European policy. We will split up the presentation between the three of us. I will describe briefly, if that is possible in a short period, what happened in Cancún. The negotiations took place from 10 to 14 September, a five day negotiating period. Delegations had begun to arrive during the previous few days. The expectation was that though the talks were due to finish on the Sunday, they would finish, as is usually the case with such negotiations, on the Monday. From our point of view, one of the most significant things to happen took place at one of the press conferences. There were a number of press conferences on the Tuesday before the talks, one of which brought together what was known as the G20, which involves China, India, Brazil, South Africa and a range of other developing countries. For the very first time, therefore, we had representatives of over half the world's population sitting together on a platform taking a position relating to trade. Their common position was on agriculture and they made it very clear that agriculture was their number one priority at the talks. That was a very significant development, certainly for the WTO and perhaps more broadly too for the multinational system. Negotiations began on the Wednesday when five working groups were set up by the chairperson to look at the areas of agriculture, non-agricultural market access, development, "special and different" treatment and miscellaneous issues. A chairperson was appointed for each of the five areas to conduct bilateral and plurilateral negotiations among members. The working groups were to meet and feed back to the plenary group the progress on these negotiations. We had shadow boxing over about three days when very little happened in the working groups. There were, by and large, restatements of the positions with which the teams had come to 4 Cancún. There seemed to be very little coming from the closed bilateral and multilateral negotiations. Then, on the Saturday, a draft ministerial declaration was issued by the convener of the talks, the Mexican Foreign Minister, Mr. Derbez. The idea of the text was to bring together the positions of the various delegations and provide a draft for the final ministerial declaration to come out of Cancún, which would represent the talks progress and a common position of all members. That text came out on the Saturday afternoon, a day before the talks were due to finish. Across the major areas under discussion, particularly agriculture and the Singapore issues which we have discussed here before, from our point of view and that of many developing countries, the draft text was biased towards the position of rich, developed countries. When we saw the text, it was obvious to us that three of the four Singapore issues, which over 100 developing countries had asked not to be negotiated at Cancún, were still in the text. On agriculture, the draft text very much reflected a deal done by the European Union and the United States during the summer, bringing their positions together. The draft text was very much aligned to that EU and US deal. On cotton, another issue that arose during the talks, there was very little progress. It became a major issue in Cancún, since ten million people in west Africa depend on cotton production for their livelihood. Meanwhile, in the United States, 25,000 producers are subsidised to the value of over $3 billion. That has led to the dumping of expensive US cotton on world markets, thereby affecting the livelihoods of ten million people in west Africa. Four west African countries have brought a case to the WTO. It was a major issue for developing countries in Cancún that it be addressed, and a special working group was set up chaired by Mr. Supachai, the director of the WTO, to address the issue. In the draft text issued that Saturday the cotton issue was essentially dealt with by referring it back to Geneva, meaning that, from the point of view of developing countries, there had been no real progress. Across those three issues, one could say that the atmosphere was very much poisoned. It certainly made for a negative ambience going into the final day of talks. 5 When the final day arrived, discussion centred around the Singapore issues, on which the vast majority of developing countries had said that they did not want to begin negotiations. In the other camp were the European Union, Japan, Korea and other countries which were asking for all four issues to be negotiated. Discussion centred on those issues on the Sunday morning, followed by a break in the talks. Delegates came back to a green room where there were representatives of the various groupings and attempted a compromise. The European Union came in and offered to drop two issues. However, that was not good enough for various countries around the world. Some wanted all four issues to be taken off the table and others all four issues to remain. At that point, the chairperson of the talks stopped them. That is what happened as far as we can tell. I am sure our officials from the Department would give members a greater insight from the point of view of the European Union. That is where it was left. Now come the theories why it happened. Some would say it was the fault of the European Union for pushing the four issues. Others would say the developed countries were not prepared for the strength of feeling and organisation among developing countries to stand up for their interests. The development of the G22 was one such instance of great organisation among them. Despite the various theories, there is no doubt that the talks failed. We failed to get a deal or progress on the development round. We failed to get a deal on key issues for developing countries such as agriculture and special differential treatment. From our point of view, it was very much a failure. I will hand over to Mr. Ó Caoimh who will talk about lessons for Ireland. Mr. Conall Ó Caoimh: I thank the Chairman and members for the opportunity to speak this morning. I would like to examine the lessons that Ireland can learn from Cancún. There are many levels on which lessons could be learnt, for example, to do with WTO processes and mechanisms and how well they operate, the European Union's negotiating tactics and how the Council relates to the European Commission. There are also probably particularly valuable 6 lessons to be learnt about the rise of the group of 22 countries, including India, China, Brazil and several others, united around the issue of agricultural market access. There are probably big longer-term lessons to learn there. The overarching lesson that we feel Ireland must learn, and on which we wish to speak this morning, concerns coherence. Members will remember that just a year ago, in the 2002 Ireland Aid review, the Government stated efforts should be made to ensure the position Ireland takes in international negotiations on, among other matters, agriculture and trade are congruent with what the country is attempting through its development programme. In the Ireland Aid review, the country's commitment to coherence is set out. What we are trying to achieve in the development programme should not be undermined by what we are doing on trade, the environment, foreign affairs and so on. However, regarding Ireland's position going into the trade talks, we heard repeatedly from the Department of Enterprise, Trade and Employment that the Irish position was the EU position. We, therefore, never get to see what contribution Ireland made to shaping it, something that leaves us with some difficulty. The talks had been set up as a development round that would redress the disadvantage of developing countries in the trading system. The EU position was that all four new issues should be added to the role of the WTO. It would not open its markets to agricultural products, which are of most interest to developing countries, though it sought significant access for our service industries to theirs. At various levels, it sought to remove tariffs that are for some countries the principal source of their government revenue. They are not necessarily about protecting any national interest but about securing revenue for governments which do not have the bureaucracy for income tax or PAYE or the other mechanisms that we have here. The European Union also resisted mechanisms that would allow farmers in developing countries to accord some level of protection to their farmers, though it would have been only a fraction of that available to ours. That was all supposedly in the context of a development round. We must conclude that we could not see in the Irish or EU positions, which seem to be the same, any element that reflects a development agenda. There were a few pieces at the edge, 7 for example, that we would support a reduction in cotton subsidies but that is not a significant crop to the European Union and we knew fairly well that the United States would not agree to it. We are sorry to say Development Co-operation Ireland has not changed the content of Ireland's or the European Union's position at all. More importantly, before we could ever see that, we would also need to see Development Co-operation Ireland's input into those positions. Judging from a request made under the Freedom of Information Act during the summer, there was only a very low level of communication between Development Co-operation Ireland and the Department of Enterprise, Trade and Employment regarding Committee 133 of the European Union that develops the European Union's position. There is an unfortunate lack of technical staff in Development Co-operation Ireland committed to examining trade, our biggest single way of relating to developing countries. Before the Joint Committee on Enterprise and Small Business, the Department of Enterprise, Trade and Employment delegation said in June that a special safeguard instrument should be devised to protect key food crops in developing countries. It is about allowing them to protect some of their crops that are most vulnerable to surges of imports from other countries. The Department said it would follow up on this but there was no further sign of it. In that light, we put before members our first recommendation, which we hope the committee might suggest. It requests that the Minister of State at the Department of Foreign Affairs with responsibility for overseas development, Deputy Tom Kitt, set out a strengthened mechanism for coherence, regularly bringing together the Departments relevant to Ireland's trade policy. Recently we were very pleased to hear Development Co-operation Ireland announce that it would set up a development unit. We understand it will initially be a single individual. It would be a coherence unit whose function would be to look at what is happening in other Departments and see if there might be a link between that and development policy. That is a very good instrument but it must be accompanied by others, and we ask that the Minister set out what others will be there, particularly at interdepartmental level. 8 The second area to which we wish briefly to refer is the national trade policy statement, currently being prepared by Forfás. From our initial investigations, it seems there has been very little contact between Forfás and Development Co-operation Ireland in that regard. The position that Forfás developed before going to Cancún expressly stated it did not have a development perspective in it. It is particularly important that, if we are developing a national trade policy statement, which will presumably be in place for several years, Development Co-operation Ireland have significant input. We also recommend that this committee make time to consider that national trade policy statement. Trade is the most significant way that Ireland relates to developing countries. Our trade relations far outweigh our aid relations with them. We have, therefore, encouraged the committee to consider that policy statement before its finalisation in order that Forfás can take its views into account. Mr. Oisín Coghlan: I will briefly refer to what should happen at European level and the lessons for the European Union as a result of the failure of the Cancún talks. The European Union styles itself as the main advocate of a multilateral system for regulating trade. We welcome this. Equally, it was the main demandeur or proponent, of adding those four new issues to the talks in Cancún, something that we feel very much over-burdened the talks and distracted attention from the main issues. The failure in Cancún stems from a misunderstanding or fudge in Doha two years ago. On the part of the richer countries, there was a misunderstanding about what the words "development round" really mean and there was also perhaps a mismatch of expectations. Our understanding of what was agreed in Doha was that the poorer countries had agreed to a new round of trade talks on the basis that they would ultimately lead to a liberalisation in the area of trading services and tariffs on industrial and manufactured goods and, in return, several issues would need to be addressed by the rich countries, particularly agriculture, where subsidies are distorting the market and affecting poor countries' chances of trading. There were also issues such as drips and access to HIV medicines, outstanding implementation issues from previous rounds which 9 were not working properly and special treatment which took into account the particular position of developing countries. Those were the issues of interest to developing countries. They understood the deal to be that they would further open their markets to services and industrial goods if they got progress on them. Even in Doha, the European Union was pressing for those four new issues to be added. The outcome of Doha as far as the European Union was concerned was that it was assumed that those things would be negotiated after Cancún. However, as far as the other countries were concerned, it would only happen after Cancún if there were explicit consensus in Cancún to launch negotiations. That misunderstanding or misinterpretation helped undermine the talks. The lesson for the European Union and us now is, first, that multilateralism has been questioned. Are global trade deals the best way to manage trade for the good of all parties? The United States, for example, is much less committed to multilateralism in trade, as in other policies, than the European Union. Though the European Union has been very committed, it is now questioning everything and is in a period of reflection. The first lesson is that multilateralism remains the best way to deal with trade negotiations. In a bilateral context, developing countries are at the mercy of the larger trading partners. Any hope of access to the large market depends on their giving large numbers of concessions to the larger country. In a global agreement, there can be a package of trade-offs and developing countries can make a collective deal with the richer countries that benefits everyone. We hope the European Union will recommit to multilateralism as the way forward and, as a consequence, make the necessary moves to ensure multilateralism and talks at the WTO continue. The United States, for example, is not so committed. In practice, this means that the European Union must recognise that what was agreed to in Doha was a development round in which issues of concern to developing countries - it was agreed, not simply by NGOs on the sidelines, but by the negotiators - would be at the centre of the talks. They must, therefore, agree to take off the agenda for the duration of the Doha development round the distraction of the Singapore issues, investment and competition. They 10 should be taken from the table for now. They can return to them later if they wish. Instead, they must focus on the agreed key priorities of the Doha development agenda - agriculture, access to medicines and drips, special treatment for developing countries and the outstanding issues from previous rounds whose implementation was not satisfactory. In return, there would be further liberalisation in services and agriculture. There is a possibility of a deal which would be good for everyone. It would work for development and the poor. This can be achieved in the next few years but if the European Union continues to insist on the four Singapore issues, it will undermine not just this round of negotiations but the WTO itself and the whole concept of multilateralism in trade negotiations. In content, that is the main recommendation. There are one or two issues regarding the transparency of the process. One of the obvious outcomes of the WTO talks in Cancún was that it was clear that members of the WTO themselves were not in control of the talks. Far too much was under the control of the chairman of the talks, the Mexican Foreign Minister. For example, he took the decision to discuss the Singapore issues first - though everyone knew that they were the most polarised politically and that there was likely to be disagreement - rather than agriculture, on which there was some hope of progress and on which progress itself would have aided progress on the Singapore issues. People had made progress on the Singapore contingent on agriculture, yet the focus was on something that polarised matters further. The decision was taken to end the talks quite abruptly, something that took the European Union and other delegations completely by surprise, when they could have switched and talked about agriculture at that point. Something must be done to allow the WTO members themselves more control over the agenda, how the negotiations are run and the negotiating texts. Those texts are produced after consultations, not by the members, but by one or two people meeting in rooms. Most of the time the negotiations were not between the G22 and the European Union. They involved the chair of a working group talking to people here and there and then going away and writing text up on his own. The WTO abandoned the UN style because it wished to be more efficient but that has now 11 led to two collapses out of three meetings. In the UN style of negotiations, everyone's point of view is written down on a piece of paper with square brackets where they are not in agreement and over days and weeks, they negotiate and take away the square brackets as they get agreement. That would have been much more transparent and efficient for producing texts in which people felt they had some stake. The majority of countries felt that they had no stake in the text produced on the Saturday afternoon. There is a definite need for reform inside the WTO and the European Union. It is extraordinary that, six weeks, or almost two months, after the collapse of the Cancún talks, there is still no clarity in the European Union about what it offered at the last minute to move talks on. It is not clear whether they offered to drop two or three issues from Singapore. That is because Committee 133 of the European Union meets in secret. We never see its minutes or agendas and do not know what is discussed. The members of the committee even do not appear to know what has been decided at meetings. If the meetings were minuted and we could see those minutes after the negotiations were over, it would allow a much more transparent process. These are examples. There are other examples of how the decision making could be both streamlined, in a sense, and made more transparent. Primarily, from a development perspective and for the sake of the WTO, we believe this committee should recommend that Ireland supports the removal of those Singapore issues from the table for the duration of this development round and focuses on what were the agreed priorities for this particular series of negotiations. We can also look at how to make those negotiations more transparent and democratic and accountable. Senator Ryan: I will make a point that is not directed at anybody in this room. It seems everybody in Ireland who has an interest in development issues, except the Oireachtas, was represented in Cancún. It is not right. If there are journalists here who wish to quote me as saying we should have been on a junket to Cancún, so be it. I believe it was wrong and I am grateful to the delegation for bringing us up to date with an independent view. It is nevertheless 12 wrong that lobby groups - I do not include the NGOs - such as farming and employers' groups were represented there but not the Oireachtas, and we have to rely on reports from others, regardless of how good they are. That said, there are a number of matters I would like to clarify. I thank the delegation for a coherent presentation and will try to be brief. Before moving on to the substantive points the delegation has made, which make good sense, there has been much reporting in the media, post-Cancún, about moves to bilateralism, particularly by the United States. There is a suggestion that a number of developing countries have broken away from the G22 and begun to deal bilaterally with the United States and perhaps the European Union also. Do the witnesses have any more information than we do on this? I know I should not rely on The Economist but it nevertheless is a worthwhile newspaper to read. It has been particularly critical of NGOs. I actually wish NGOs had as much influence as The Economist thinks. The world would be a quite different place if they did. The point it made in one on the pieces on Cancún was that among the highest tariff barriers, or barriers to trade, in the world are those between developing countries. I can understand why that might be the case but is there any sign that the developing countries accept the need for trade liberalisation between themselves? Much of the talk has focused on trade between developing and developed countries. That seems a valid point to raise, whatever the source of the opinion. I do not want us to go off on a tangent about the Singapore issues but why, in particular, do the witnesses believe the European Union is pushing this agenda even more so than the United States? It is difficult for any of us to find out why the European Union is doing things, as has been said. It would be appropriate, Chairman, either at this or another meeting, for us to begin a campaign to ensure Committee 133 of the European Unions develops some degree of parliamentary accountability. We were under the illusion in this country that post-Nice treaty, we had put together a regime of much greater accountability between domestic parliaments and the European Union. This particular committee appears not to have heard about this. It is time we took this up. I fully 13 agree there are times when groups have to meet in private but post hoc properly kept records of decision making and the availability of documents - much in the way our freedom of information regime operates - after the event, would be of great help both to NGOs and ourselves. I have no problems with the three proposals from the delegation but would like to hear more about developments post-Cancún. There has been a degree of almost gloating in the media that the NGOs are now beginning to regret the collapse of Cancún, having to a degree celebrated it at the time. Perhaps we could hear if the there is a change in outlook as regards how the NGOs should have done their business in Cancún. As I said, I do not think they have as much influence as The Economist believes. Deputy Noonan: Senator Ryan has made a valid point that if everyone relevant from Ireland was in Cancún, with the exception of representatives of Dáil Éireann and, in particular, the Joint Committee on Foreign Affairs, that should be remedied in future. On the other hand, with the briefing we have received one would almost be pleased not to have been present, if Commissioner Lamy's description of Cancún is accurate, where he described it in a speech to the European Parliament as "milling around the various players from North and South, without any real meeting taking place". I do not suppose he was talking about representatives of the NGOs in describing that particular situation. In so far as the recommendations from the delegation are concerned, I do not have any difficulty with the first two proposals. They are proposals of merit. I do not know enough about the intricacies of the negotiations or the positions adopted by the stronger players to know whether the removal of the Singapore issues from the table would reinvigorate the talks. I do not know what degree of support is behind those and, as a consequence, I cannot comment on this. I thank the three witnesses for a good briefing. I hope we can continue to have an interchange of ideas in the months ahead. Let us hope that this will be successful. 14 Chairman: I also support the proposal put before us by the witnesses. We have had many debates in House about agriculture. The Fischler proposals go back to last June. The Minister for Agriculture and Food, Deputy Walsh, has said in both Houses that there are markets in Europe for the developing countries which represent a considerable amount of imports. Has that featured at all in the discussions in Cancún? We will have to return to this with reference to the agricultural issue, which the delegation indicated was something we could make progress on. Perhaps this could be addressed as well as the other points made. Mr. Roche: We will answer the various questions between us. I should make clear there were good contacts between ourselves and Ministers in Cancún and the officials, in particular. They were open to discussions on a daily basis. I thank, in particular, the Irish officials at the Embassy in Mexico who were excellent. That should be noted. We all noticed that when we were in Mexico. On the substantive question, I agree with Senator Ryan that The Economist has an inflated opinion of the influence of NGOs. We were mentioned in particular as regards Cancún. We wish we did have as much influence as The Economist maintains we have. On the question of bilaterals, it is true that immediately after the talks had collapsed, the US trade representative, Robert Zoellick, had a press conference, where he emphasised they would press ahead with bilateral negotiations with developing countries. We touched upon this when we appeared before the committee some weeks ago to talk about aid. The Free Trade Area of the Americas conference takes place at the end of this week in Miami. It represents a key meeting for global as well as hemispheric trade because it gives the United States the opportunity to push forward with its bilateral proposals for the Latin American marketplace, with Canada, Mexico, etc. That is an important date in the global diary as to how motivated the United States may be to re-enter multilateral trade talks on a serious basis. Some bilateral arrangements have been announced - Peru and Colombia, in particular. It should be noted that among the G22 - I am not sure how many countries are involved currently - the major countries such as China, India, Brazil and South Africa have not entered into bilateral 15 arrangements. The strength of numbers that they showed at Cancún is still potentially present. We will see how that works out as the negotiations, hopefully, get back on track. From our viewpoint one of the key things the European Union should do is reassert its commitment to the multilateral system of trade talks. We have a policy created towards multilateralism on behalf of the European Union and the Irish Government. Now is the time to reassert this and say that this should be the primary vehicle for international trade talks. We can, hopefully, construct a deal where everybody benefits and not simply the more developed countries. I will end my remarks there. My colleagues will answer the rest of the questions. Mr. Ó Caoimh: I welcome the members' support for the recommendations. As regards the question of parliamentary representation, it is noteworthy that that there were significant delegations from African parliaments present in Cancún. The opportunity for the Oireachtas to follow up and continuously monitor trade policy would primarily be exercised in these rooms. It is good that the committee has made time available to us to report on Cancún. We do not have to wait for the next biennial ministerial meeting because the talks are ongoing at Geneva. It would be good to follow up on this. On the question of bilaterals and the NGOs' approach, when the word percolated downstairs that the talks had collapsed a cheer went up in the concourse of the building. I can say I did not join in. Some were delighted and there was glee on some faces at the talks collapsing. None of the delegates from the Irish NGOs joined in the cheering because we are all too conscious of the consequences of continued collapse. There was Seattle four years ago, and now Cancún. If the multilateral process presents too many difficulties, then the big powers - the United States is already doing it - will tend to look for bilateral agreements. The European Union is doing this also. The European Union has a number of bilateral agreements with the Euromed area and with South Africa. It is currently negotiating one with the Africa, Caribbean and Pacific, ACP, group. Therefore, Europe is also a bilateral actor. More and more eggs will be taken out of the multilateral basket and put into the bilateral basket if there is difficulty. 16 We do not like the rules the World Trade Organisation has made. We do not like the process through which it makes those rules but want a rules based system in the interests of the poorest countries; not these rules, but a rules based system is necessary. At present the WTO is the only show in town. We think it needs to be changed in a number of serious ways that go all the way towards changing its mandate. Its current mandate is only concerned with the "progressive liberalisation" of trade. That is a key phrase in its mandate and needs to be balanced with other considerations such as social equity, environmental questions and gender issues. These need to be brought into it. It is feared that if bilateral agreements continue to be made the rich states will cherry pick those poor countries with which they want to do deals for a mixture of economic and political reasons. They will cherry pick the ones they want to favour and the others will be excluded and have to face the full vicissitudes of a weak rules based system. We, therefore, did not join in the delight felt by others at Cancún. We were immediately fearful. It did not take a month of sobering up to arrive at that position. It was our immediate response. On the question of agriculture, the development groups and the farming groups have got themselves into something of a tizzy and need to find a way out. The media have probably hyped up and led us towards that position. We have met farmers' groups a number of times over recent months. We are beginning to find that there is plenty of common ground. Some of the spaces where there could be common ground and which need to be explored urgently, pivot on the fact that the progressive liberalisation of trade is a route that will neither serve Irish farmers nor their counterparts in the developing countries. What is needed are specific targeted measures to favour developing country farmers. That can mean that Irish farmers do not need to be terribly disadvantaged. The threat to Irish farmers comes particularly from multilateral agri-business based in a number of large developing countries. The everything but arms - EBA - agreement only reaches to the poorest 43 countries but agriculture in the poorest 80 or so states is not a threat to European agricultural markets and there ought to be mechanisms in place to enable them to develop their 17 market access without endangering the interests of Irish farmers. That is one area that could lead to common ground. We are at the initial exploratory stages but it calls into question the process of a single direction in which the WTO is going, without allowing more targeted measures to develop that would enable the developing countries to prosper. Mr. Coghlan: I will start with an issue on which my colleagues have not touched, the why of Singapore, as asked by Senator Ryan. It is somewhat of a mystery because, even the industry associations which come at it from a different perspective to us, have not been pushing for the Singapore issues commensurate with the degree to which the Commission has. Neither have the member states. Even before Cancún a number of member states, including Britain, said they were not a priority. Since Cancún, the Secretary of State for Trade and Industry has gone on record in the House of Commons to say investment and competition should now be off the agenda. Last Friday, however, when Committee 133 met, it still pushed forward with proposals that would keep all four issues on the table. The degree to which that is still a negotiating tactic to be traded away for something else, we do not know. However, it is not the way to reinvigorate the talks or the confidence that needs to be rebuilt. It appears to be an agenda closely associated with Commissioner Lamy. There are definitely industry and business interests which are keen on some aspects, particularly trade facilitation, which may well have a place in WTO negotiations when there is the space, time and capacity to negotiate them. Why was there an obsessive focus on all four before Cancún? It does not make sense and the EU's post-Cancún analysis admits they should no longer be bundled together as four issues, as was insisted on beforehand. Neither should they be seen any longer to be necessarily part of a single undertaking, a single packaged deal to be agreed, supposedly by the end of next year or whenever; they could be taken at different paces and in different ways. However, that is to admit that they have been mistaken up to now. We believe they should go the final few yards and opt to do the core business first, coming back to these issues later. Perhaps it will change when Lamy goes. It does not appear, 18 however, that the member states are prepared to argue that this approach has not worked and ask for it to be varied and nuanced. That has not yet come through. Going back to The Economist, it is interesting that the Financial Times and the International Herald Tribune had an analysis that was very close to the analysis of the NGOs, that the European Union and others had underestimated the interest and cohesion of the developing countries, and that the European Union and the United States had to deal with issues like cotton and agricultural subsidies that were absurd in the context of a trade liberalisation organisation. It was The Economist, in particular, which had this inflated opinion of NGOs. I do not know why. On south-south trade, we agree that there is potential for increased trade. Southern countries should look at a way that allows this to be facilitated to a maximum, within a WTO structure. Irish parliamentarians should have been there and should be there in the future. To rely on all the interest groups is important, because to rely on us, no matter how good our analysis is, is not enough, as we are no more of a legitimate interest group than the farming business. On agriculture, we have looked at the differences and should now begin to look at common ground - the relationship of family farmers, and farmers in general, to agri-business and where the profit goes in the value chain. Obviously, most of it does not go to the small farmer in Ireland, or any farmer in Ireland, or to the small farmer in Kenya; it goes to the large multinationals and the seed producers. There are also issues around the patenting of seeds and farmers not being allowed to use them the following year. These are issues that Irish farmers will find resonating with them, as well as being of life and death importance in developing countries. Like others, we did not celebrate the end of the talks; it is true to say though that what was on the table was a bad deal and would have made the situation worse. In that sense, NGOs agree that no deal was better than a bad deal. What we should have had was a deal that moved the process forward and was true to the spirit and the letter of the Doha development agenda. 19 Senator Ryan: For information's sake, the witness mentioned that emerging from Doha, among other matters, were implementation issues. I read a good deal about this but I am afraid I do not have a clear idea on what the things are that the developing world is not satisfied about - presumably previous decisions. Mr. Coghlan: The most famous example is the one relating to drips. I am not sure if it was technically categorised at Doha as being an implementation issue. It was so large as to be a separate category. It was an example of where the agreed rules either were not being enforced properly or they had not foreseen the need for generic drugs for HIV-AIDS. On the implementation issues, that category relates essentially to promises made under Doha that developed countries have not kept. They have not led to the benefits for developing countries that had been expected. At Doha, the richer countries agreed to look again at aspects of the Uruguay Round that had not been implemented in as beneficial a way to developing countries as they were supposed to be and agreed to strengthen those mechanisms or insist that they be implemented more effectively. There has been no progress on those issues; they got downgraded as time went on. Mr. Ó Caoimh: One example is that at the end of the Uruguay Round it was visible that net food importing countries would incur extra costs for the food they were going to import as a result of the Uruguay Round. Therefore, the poorest net food importing countries would be compensated financially for their need to import food more expensively. No country ever received compensation. Therefore, one of the implementation issues would be to see that through. Mr. Roche: One concern on implementation would be the multifibre agreement whereby the changes in tariff and quota regimes have all been backloaded to the end of the implementation period by the European Union. What they have done is to take a number of tariff and quota 20 schedules and implement them where there were no previous imports or no likely changes on the ground. One of the problems with the multifibre agreement is that they have left it so late that when the changes come about there will have to be significant adjustments made in developing countries to deal with the new regime. Obviously, that will make it more difficult for developing countries to adjust to the new regime, which is another issue of implementation. Deputy M. Higgins: I was, unfortunately, speaking on the deployment of troops to Liberia, which is ongoing and was the reason I could not be here. It is very valuable that the delegation is able to be here and that we move on positively in regard to these issues. It would be very easy to take a purist position on this but it would not necessarily be of benefit in the medium to long term. That is why I am interested in this motion. I support this motion and propose that the sub-committee adopt and recommend it. I say "purist position" because I have had the greatest difficulty about what took place at Cancún because of the manner in which structurally contradictory models were being brought forward at the same time. The contradiction arises from what was taken, at face value, as an unequivocal commitment to development in Doha, a commitment that the round would be a development round. That, translated by anybody speaking on behalf of those countries seeking development, meant that it would have to be fundamentally different to the Uruguay Round that cost the developing world about $3 billion. One could quantify what had been lost in Uruguay and anticipate what might, at least, not happen again in Cancún. One would be led to that conclusion by Doha. Practically every serious academic advised that the introduction into the preparation for the talks of the Singapore issues would drive on the alternative model. Of course, the alleged pragmatic cleverness of that position was that there could be a trade-off between development gains and concessions on the neo-liberal economic model. I am completely depressed about sub-committees, even this one. The other day I was looking atdevelopment committees all over the European Union and the western world to see where UNCTAD's report, the United Nations Conference on Trade and Development, was discussed in 21 any parliament or parliamentary committee. I could not find one. At the same time I looked at the United Nations Commission on Europe, the United Nations Commission on Latin America and the United Nations Commission on Africa, which has the best theoretical work on economics, available from their office in Geneva but no parliament discusses them. At the same time there is an uncritical forwarding of a single model of development. The Chairman is now chairing a sub-committee on development where sooner or later the bubble has to be pricked. It has to be realised that we are not here to facilitate the introduction of the next phase of neo-liberal concessions in respect of intellectual property or anything else. Our sub-committee has been established to look after the development issue and these world trade talks are only one part of the issues facing us; there are also issues arising from the report that we do not have on the position taken by Ireland at the World Bank and the International Monetary Fund. Remember, we made commitments that we were to have an annual report discussed. This was to have included debt and international aid issues. I am beginning to wonder what miraculous intervention will open up the process of looking after aid. Aid no longer exists as a word. There is a new canon of language which refers to development co-operation. No one knows anymore how anyone works for this, or who works on contract, part-time, full time; is it increasing or decreasing? There are rumours of a consultative organisation which is in existence which may have met once. We know that the former Deputy O'Malley chairs a review group of the committee which sat under the chairmanship of Professor John Jackson. Frankly, since I began sitting on the Joint Committee on Foreign Affairs as part of my interest in development issues, they have actually gone far from transparency. This is the least transparent time on the development side. It is a time of no transparency on the debt side, which is not discussed. In respect of the agencies and accountability to the Parliament and its sub-committees, it is as dead as a doornail. When it comes to something like this, I have been informed and I appreciate that Deputy Noonan may have a difficulty about the removal of the Singapore issues or whatever. I respect his view, but if one keeps the Singapore issues in, one 22 is lining up in favour of an attrition process that ultimately, faced with an all or nothing scenario, there will be concessions on the development side to facilitate an unaccountable, non- transparent form of international versions of the neo-liberal model. I am clearly making a formal proposal that this resolution - the text as it has been submitted to the committee - be proposed to the main committee, the Minister for Foreign Affairs and the Department of Foreign Affairs. Chairman: Before the Deputy joined us, I said I would support that. Senator Ryan: There is a figure here and I just want to confirm that I have got it right: 25,000 US cotton producers get a subsidy of $3 billion which, according to my rough arithmetic on the back of an envelope, is $125,000 per producer. Mr. Roche: We produced a report on the cotton subsidy system. One agri-business farm entity has gained over $6 million in one year as a result of the US cotton subsidy. Senator Ryan: Could we have a copy of that report? Mr. Roche: Yes. Senator Ryan: It is not the biggest issue but I have seen the figures before and they have always intrigued me. Mr. Ó Caoimh: During the Luxembourg negotiations on the reform of the Common Agricultural Policy, there had been in the initial draft presented by Commissioner Fischler a ceiling of €200,000, in Europe, as the most anyone could receive in subsidies. In the course of the negotiations which would have been an equity element ensuring the funding would go to 23 poorer farmers, this was removed by pressure from some of the mainland European countries, reducing any equity pretensions that the reform might have had. Mr. Coghlan: In response to Deputy Higgin's comments on UNCTAD, it might be of interest to the committee that the 11th UNCTAD takes place next June during the Irish Presidency of the European Union. Development Co-operation Ireland, being responsible for development, will have a role in co-ordinating the European Union's position and its contribution to that UNCTAD meeting. It might be an opportunity for the committee to take an interest. Deputy M. Higgins: Just to clear up this little matter once and for all, the thinking is as follows. I propose that before that happens we have a discussion of the UNCTAD report here. We should have a meeting before or during the Presidency. The view is simple, it is that real international finance is done in the Department of Finance. It does not read UNCTAD; it acutally quotes the OECD reports which have poor economics. I attended some of these meetings and knew exactly what I was saying when I said earlier that the better qualified economists, with the most independently refereed publications, most open to different models of development, including things like the energy requirements of the European Union and the transition of the Russian economy, were working in places like the United Nations Commission in Geneva on these different areas I mentioned. The OECD is what could be called numerate journalism. The studies are flimsy, short term, the vast majority of the forecasts have been proved wrong and it has become the single tool of reliance in the Department of Finance which likes to look at Foreign Affairs, and particularly the development part of it, as some kind of soft issue. The point is that I am perfectly willing for them all to come in from the Department of Finance to tell me what they read but I am explicitly stating that what they read, rely on and quote is coming from a flimsy source. I would be perfectly happy for a professor of economic theory, who is contemporary and from any of the third level institutions in Ireland, to come here and take that assertion I am making and debate it. 24 Chairman: We will get back to the Deputy on that. Senator Ryan: As regards Committee 133 of the European Union, can we begin a process of trying to find out how this committee works, what it does, how it reports, where its reports are and why it believes it has to be in secret? This is a complicated one but I believe it is a genuine issue about EU policy and our policy which this committee should begin to deal with by writing to the various bodies asking them what is going on, who represents us, what they do and at least begin the process of trying to dig something out of it. Chairman: That is agreed. Mr. Ó Caoimh: The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, has promised us that during Ireland's EU Presidency the Department of Enterprise, Trade and Employment will publish the agendas of Committee 133, in advance, on the Presidency website. That is one of the things which came from the Dáil debate last June. It probably needs to be followed up to be implemented. Chairman: I thank the witnesses again for their presentation. It has been very informative. They have raised a number of pertinent issues which we, as a committee, will bring to the attention of the Minister for Foreign Affairs. The sub-committee adjourned at 1.30 p.m. sine die.
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