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I. Introduction back to top
It is widely known that Brazil, as a major
exporter of agricultural and agro-industrial goods, has adopted an
offensive stance in negotiations on the liberalization of trade in
agriculture taking place in the WTO, as well as in other negotiating
processes. In line with this Brazil has participated actively in the
Cairns Group — a coalition of developed and developing countries
exporting agricultural products — both during and after the Uruguay
Round. As the launching of a new multilateral round of trade
negotiations was being discussed, Brazil pushed for including in the
agenda ambitious goals related to market access and the reduction or
elimination of export and domestic support schemes. Moreover, in the
Free Trade Area of the Americas (FTAA) and EU-Mercosur negotiations,
Brazil has presented proposals consistent with those developed in the
multilateral arena.
However, in the months preceding the WTO
Ministerial Conference in Cancún in September 2003, an interesting
process of strategy-shifting took place, involving Brazil’s stance in
negotiations on agriculture.
Without breaking with the Cairns Group and
giving up its pro-trade liberalization stance in agricultural
negotiations, Brazil led the setting of an issue-based developing
countries’ coalition aimed at bargaining jointly during the
Ministerial Conference and beyond. This new coalition, the G20, brought
together developing countries which traditionally adopted differing — even opposed
— positions in the agricultural negotiations in the WTO;
the simultaneous presence of Argentina and India in the group is the
best example of this novelty.
It is worth noting that the shift in Brazil’s
negotiations strategy was driven not only by the internal dynamics of
the agricultural negotiations in the WTO, but also by a broader shift in
the country’s foreign economic policies — especially in its trade
negotiations strategy — towards a view where the North-South axis
acquired a growing relevance. Brazil’s leadership in the setting of
the G20 is perhaps the best example, at the multilateral level, of the
country’s new ‘southern’ stance in trade negotiations.
II. The local and
external players: roles and interaction back to top
One of the more interesting features of the
decision-making process leading to the establishment of the G20 was that
it involved intensive interaction between public and private domestic
actors and between these actors and external players. Even more
interestingly, the domestic and external dynamics became more and more
interconnected as the G20 was set up and became a relevant player in
agricultural negotiations at the WTO.
The ‘domestic’ interplay involved
continuous co-ordination between public agencies and between public- and
private-sector representatives, leading to the setting up of new
structures and institutions, including a non-governmental organization
(NGO) focused on technical research related to agricultural negotiations
which is financed by the main private associations of the Brazilian
agribusiness.
On the domestic front, the adoption by Brazil
of increasingly assertive and autonomous positions in agricultural trade
negotiations has been backed, in structural terms, by the impressive
modernization Brazilian agribusiness underwent during the 1990s.
By the late 1980s, agricultural exports
concentrated on primary goods — coffee, cocoa and cotton, among others
— and were strongly regulated by state-owned sectoral bodies. As a
consequence of this and until the beginning of the 1990s, the private
sector did not show a great deal of interest in trade negotiations, and
the participation of agribusiness representatives in the Uruguay Round
was very timid. During the negotiations to launch the sub-regional
integration process, the private sector adopted an essentially defensive
stance, focused on the alleged risks of competition in the domestic
market arising from the elimination of tariffs among Mercosur member
countries.
From 1995 onwards, driven by large
investments, a strong expansion of agribusiness productivity took place
in Brazil. This process speeded up at the end of the decade, and sector
representatives began to push the government to adopt more aggressive
negotiating positions in agriculture, in the FTAA and EU-Mercosur trade
talks. In the WTO, the new position taken by the private sector was
crucial for the government’s decision to ask for the setting up of
agricultural-products-related dispute settlement panels in their actions
against the United States and the European Union (EU).
In early 2003, summing up these evolutions in
attitudes, the Brazilian Minister of Agriculture called for the adoption
of an ‘autonomous position’ in the agricultural negotiations, a
position which also reflected — as shown below — some disappointment
towards the recent performance of the Cairns Group. At that time, the
main sectoral Brazilian agribusiness associations created a research
institute geared to providing technical support to the ongoing
agricultural negotiations at the WTO as well as at the preferential fora.
As the so-called ‘Harbinson paper’ was
made public in the WTO talks, during the first half of 2003 a working
group, created as a joint initiative by the ministries of Agriculture
and Foreign Affairs, undertook a cautious and detailed analysis of the
paper, criticizing it and formulating technically sound proposals on
each of the points it raised. Later on, the working group expanded to
integrate other ministries, governmental agencies and private
representatives related to the agriculture and agribusiness sectors.
A similar position was adopted once the joint
EU-US document on agriculture was made public, in the weeks preceding
the Cancún Ministerial Conference: ‘the day after the document was
issued, the working technical group began to work on this new proposal,
analyzing and assessing each paragraph, deconstructing it’, according
to a participant of the group from the private sector.
On the external front, the political origin of
this coalition can be traced back to the Brasilia Declaration signed
between Brazil, India and South Africa in June 2003. According to the
Brazilian Minister of Foreign Affairs, the G20 ‘was not born in
Cancún or in Geneva, during the weeks preceding the WTO Ministerial
Conference. It emerged from the political trust built up between Brazil,
India and South Africa some months earlier.’
The creation of the new coalition also seems
to be related to a growing feeling of disappointment with the Cairns
Group and its positions on agricultural negotiations before Cancún.
In the view of a private-sector
representative, the WTO informal mini-ministerial, held in Egypt in July
2003, made it explicit that Australia was exerting the strongest
leadership within the Cairns Group; however, it did not wish to adopt a
more aggressive stance in the negotiations, favouring instead the EU-US
bilateral understanding as a first step towards untying the agricultural
knot in the multilateral negotiations. According to this private sector
representative, ‘the G20 began to emerge in Egypt, when it became
clear that Australia and the Cairns Group would not seek to
counterbalance the EU and US common interests’.
The timid reaction of the Cairns Group to the
EU-US joint document on agriculture — issued some weeks before Cancún
— strengthened the incentives, on the Brazilian side, to look for
political alternatives to what was being perceived as a new Blair House
Agreement, excluding the interests of developing countries. As a
Brazilian diplomat put it, ‘Cairns was paralyzed and Brazil seized the
opportunity created by this “leadership vacuum” to gather support to
its paper in Geneva’.
However, the document prepared by the
public-private working group in Brasilia turned out to be very
aggressive as far as market access demands were concerned. In the view
of high-level officials, this stance could isolate Brazil in the
negotiations, jeopardize efforts to build a coalition around the
Brazilian paper, and compromise the objective — most valued by the
Brasilia authorities — of attracting some of the most important
developing countries to this new coalition.
One of the consequences of this, according to
a Brazilian diplomat, was that
Brazil had to reduce its ambition in market access
issues in order to gather the support of India and China for its demands
against developed countries’ domestic and export subsidies. It had
also to emphasize the idea of proportionality of concessions to be made
during the negotiations: developing countries were supposed to pay less
than the developed ones in the agricultural negotiations.(1)
The historical evolution of G20 also includes
a period of intense activity in Geneva prior to Cancún. As a Brazilian
diplomat puts it,
the group met frequently at the level of heads of
delegation in Geneva prior to Cancún. The group also met (and continues
to meet) at the technical level to discuss specific proposals in the
context of the WTO agriculture negotiations, and to prepare technical
papers in support of the group’s adopted common platform. The frequent
contacts and meetings at the ministerial level in Cancún further
consolidated the group and made it possible for the G20 to resist the
strong pressure to break its common position.
In the words of a leading negotiator,
Since its inception the G20 had established close
relationships with other groups in the WTO with a special interest in
the agricultural negotiations. The G20 is not a closed group. On the
contrary, it is open to the participation of other interested countries
that share its objectives and positions. It is thus only natural for the
group to have close contacts with other groups. A majority of G20
countries are members of the Cairns Group and there is a large degree of
coincidence between the positions of both groups which naturally support
each other and try to co-operate for their common purpose: the faithful
implementation of the Doha mandate.
The frequent contacts with other groups and
coalitions did not jeopardize the identity of the newly born G20. Making
reference to the relationship between the G20 and the Cairns Group, a
Brazilian diplomat stressed that
each has its own personality. The G20 tries to
strike a balance between the interests of trade liberalization and the
development objectives of its members. Cairns is more focused on trade
liberalization. Their respective agendas and interests coincide as
regards the need to end trade-distorting policies in agriculture and for
the opening of developed countries’ markets. The difference lies in
the definition of special and differential treatment for developing
countries, especially in the area of market access. The G20 clearly
accepts the need for a dual approach to market access that fully takes
into account the needs of rural development and the situation of
countries with a large rural population. The Cairns Group acknowledges
in its platform the need for special and differential treatment for
developing countries, but defends — as is only natural due to its
composition, where major exporters of agricultural products play a
central role and where developed and developing countries are present
— a policy more committed to open markets in agriculture, in both
developed and developing countries.
As the G20 is composed only of developing
countries and as it tries to combine the broader interests of economic
and social development, especially in rural areas, with trade
liberalization, it has established strong ties to other developing
country groups: ‘the African Group recognized the existence of common
ground with the G20 in the Cairo Communiqué and some African countries
have joined the group since Cancún. Others have indicated their
interest in the group’s work and may join in the future’, according
to a high ranking diplomat.
These ties and contacts produced some
non-negligible impacts on the dynamics of the agricultural negotiations
at the Cancún Ministerial Conference: ‘At Cancún, the G20 maintained
frequent dialogues with the Cairns Group and the African Group and the
G20’s reaction to the Derbez text incorporates elements of the
position of both groups. In the case of the African Group the issue of
cotton was taken up by the G20 as part of its platform.’
III. Challenges and the outcome
back to top
The first challenge: the establishment and
the composition of the G20
The G20 was created in response to the EU-US
text on agriculture. Why the focus on agriculture? The common position
reached by the United States and the EU created the risk of reducing the
scale of ambition set in Doha with consequences, in the light of the
central role of agriculture in the Doha Development Agenda (DDA), for
the whole of the Round. And why an alliance of developing countries? The
US-EU common paper revived the North-South polarization in a crucial
area of negotiation and generated concrete risks of marginalization for
the interests of the developing countries in this central issue. The
understanding between the two major trading partners had the potential
to affect the ambitious targets set at Doha, especially as far as
developing countries’ interests and development issues were concerned:
‘developing countries from both sets of interests came together when
they realized that the EU and the United States had joined forces and
come up with a text that was highly unsatisfactory’.(2)
Hence the first challenge faced by Brazil’s
strategy was the setting up of an issue-based coalition composed
exclusively of developing countries. On the one hand, southern
coalitions — bloc-type coalitions — in trade negotiations were broad in
scope but their effectiveness has proved very limited. On the other
side, the most successful experience in the setting up of a North-South
issue-based coalition — the Cairns Group — had, in the view of Brazilian
diplomacy, run out of steam. As stressed by two analysts, ‘the
coalitions of today, including the G20, having learnt from the failings
of their predecessors, utilize some elements of both the bloc-type
coalitions and issue-based alliances’.
As emphasized by one of the leading official
Brazilian negotiators, ‘the establishment of the group and its
composition involved a political decision and sent a message to all
participants in the Round, especially the developed countries, that
there was a new factor to be taken into account in the negotiations. The
creation of the group was a political statement.’(3)
According to a representative of the Brazilian
private sector, the setting up of G20 ‘challenged not only the
agricultural policies of the developed countries, but the legitimacy of
the model adopted by those countries to negotiate in multilateral fora,
presenting their agreed position as a fait accompli to developing
countries’.
From the Brazilian point of view, the decision
to form a coalition of developing countries with heterogeneous interests
in the agricultural negotiations represented a significant shift in the
country’s negotiation position on this issue; it was now driven by the
offensive interests of a large exporter but also by the objective of
breaking the North-South protectionist front in agricultural
negotiations through the setting up of a new ‘southern agenda’ on
agriculture, albeit less ambitious than the Cairns Group’s agenda.
The second challenge: building consensus and
retaining cohesion in the G20 back to top
The second challenge faced by Brazil in the
emerging coalition involved the ability to build a consensus among
developing countries with heterogeneous interests in the multilateral
negotiations on agriculture. Cohesion of the coalition has been a major
concern of Brazilian diplomacy, and consensus-building within the G20
required that much attention be directed to the design of negotiating
technically consistent proposals in order to avoid the G20 being
labelled as a coalition that merely sought to block progress and was
uncommitted to a positive outcome for the WTO Ministerial Conference. As
a Brazilian diplomat recalled, ‘At Cancún, the group not only
presented its views and influenced the elaboration of the proposed final
text of the conference, but, also, after the presentation of this text,
it met for several hours and prepared a number of concrete amendments to
the text for the final round of negotiations which unfortunately never
took place.’
The co-ordination between technical experts
from the Brazilian government and the private sector, and the experience
accumulated in Brasília during the months preceding Cancún played here
a central role, allowing Brazil — and then the G20 — to develop a sound,
substantive position dealing with the complex issues involved in the
agricultural negotiations.
The battle to maintain the cohesion of the G20
was described by one of the main Brazilian negotiators at Cancún as
follows:
Even before the Ministerial Conference, some
developed countries tried to dismiss the group, by refusing to take its
proposals seriously and by accusing the group of trying to introduce an
ideological dimension in the negotiation, by importing into the WTO
positions and tactics that had their origin in the North-South dialogue.
This reflected a sort of annoyance with an attempt by a group of
developing countries to try to interfere with the agreement between the
EU and the United States which should represent the basis for the
results on agriculture at Cancún. The attempts by many countries from
the G20 and other groups to change the bilateral deal to better reflect
their interests were met with a negative reply.
Once the G20 was set up, another battle began at
Cancún, as some developed countries attempted to divide the Group and
to create difficulties in its relations with other groups in the WTO,
especially the Cairns Group and the African Group. In spite of strong
pressures put on members of the group, the G20 remained united during
the whole of the conference, with the withdrawal of only one delegation
from the group. Another delegation, Nigeria, joined the group in the
final stages of the meeting. After Cancún a small number of countries
also left the group, but others became members, for example Tanzania and
Zimbabwe.
The outcome: a high level of legitimacy and
Brazil becomes a major player in agricultural negotiations
In spite of criticisms from developed
countries and the fact that no agreement on agriculture was reached at
the end of the day in Cancún, the G20 was perceived by public opinion,
in both the North and the South, as a legitimate and constructive effort
by developing countries to advance their interests in the WTO
negotiations and to defend the idea, officially agreed in Doha, of a
development round.
Since Cancún, the G20 has been widely
recognized as a major new player in agricultural negotiations, and one
whose interests should be taken into account if some agreement on this
issue is to be reached in the WTO. In December 2003 the EU’s chief
negotiator, Pascal Lamy, participated in the G20 ministerial meeting,
held in Brasília, implicitly confirming this understanding. Another G20
ministerial meeting was held in São Paulo in June 2004, and during the
first half of 2005 the group embarked on technical and political
consultations with a view to injecting momentum in ongoing agricultural
negotiations.(4)
The G20 is clearly today an important partner
in the agricultural negotiations in the WTO and the five main partners
remain in the group. The failure of the Cancún Ministerial Conference
and the consolidation of the G20 help to explain the Non-Group-5 (NG-5),
created in March 2004, which put together three major developed players
in the agricultural negotiations (United States, EU and Australia — the
leader of the Cairns Group) with Brazil and India, respectively the most
liberal and the most protectionist member of the G20.
In the view of Brazilian diplomats and
representatives from civil society organizations, once the period of ‘blame-shifting’
that followed Cancún was left behind, the initiative of setting up the
NG-5 reflected the recognition that the process of decision-making in
agricultural negotiations had to change to integrate the G20.
Beyond that, the setting up of the NG-5 is
considered to be a very important initiative, as the technical and
political work of its members paved the way for concrete proposals which
proved essential to consensus-building in Geneva on the negotiations
framework. As one NGO representative put it, ‘After the meeting of the
NG-5 in São Paulo in June 2004, consensus was reached among members as
far as the export and domestic subsidies were concerned, and the market
access issues remained as the only area of dissent. A very important
step was made in this meeting, making the work carried out in Geneva in
July 2004 easier.’
According to Brazil’s Minister of Foreign
Affairs, ‘The G20 has produced a change in the dynamics of
agricultural negotiations, which migrated from the Blair House model to
the NG-5 model as far as decision-making is concerned…. It is not by
chance if the text on framework presented for discussion in July 2004
represents a progression from the G20 point of view as compared with the
text presented at the beginning of the WTO Ministerial in Cancún.’
The official view in Brazil on the 1 August
‘package’ is quite positive, although it is widely recognized that a
lot of work remains to be done. The adopted framework is perceived as a
text which respects the Doha mandate and its level of ambition, and
represents a substantial improvement as compared with the text submitted
in Cancún as far as agricultural negotiations are concerned.
IV. Learning from the
experience back to top
The assessment of the strategy of setting up
the G20 is widely positive in Brazil, despite the setback of the WTO
Ministerial Conference where the coalition made its début. Brazil
continues to participate in the Cairns Group, and has made significant
efforts to keep the G20 coalition alive and has involved itself — with
India — in the NG-5, which put together the major players in the
multilateral negotiations on agriculture.
Many lessons can be learnt from the Brazilian
experience of setting up the G20, but two will be emphasized here. The
first relates to the importance of the domestic dimension in the
formulation of the national position on a negotiation issue central to
Brazil. The domestic dimension is about political negotiations involving
groups with different views and interests as far as trade negotiations
are concerned: in the case of Brazil, these negotiations played an
important role in shaping the option of building a coalition with other
developing countries and in balancing liberalization goals and
development objectives.
The technical and institutional component of
the domestic dimension in setting up the G20 are worth highlighting.
Technical preparation and permanent co-ordination among public agencies
and with the private sector helped to build domestic consensus
supporting the official position in the negotiations. These mechanisms
have been kept active before, during and after the Cancún Ministerial,
and it seems correct to assert that they have become more and more dense
and complex. Capacity-building initiatives in the private and public
sector made their contribution in this way: the Ministry of Agriculture
has created a specific institutional structure to deal with trade
negotiations in a systematic manner; agribusiness sectoral associations
have supported a research institution charged with presenting technical
proposals for agricultural negotiations, and they have participated in
the Brazilian Business Coalition — a forum representing industrial,
agribusiness and services sectors in trade negotiations.
The second lesson refers to the convenience
(or not) of replicating the coalition-setting initiative in the area of
non-agricultural market access. The assessment of one leading negotiator
is clear-cut on this point:
After Cancún, and in the light of the role the
G20 played at the conference, there have been some suggestions that the
group could perhaps play a larger role encompassing other areas of the
WTO agenda or even the broader agenda of co-operation for development.
Perhaps this is only natural and reflects the need that is felt in many
quarters for a new coalition to revitalize the debate on development
issues in international fora. This is even more true in the light of
growing fatigue with orthodox adjustments, self-regulating market forces
as an answer to development problems and the negative aspects of
globalization. Nevertheless, the G20 is perhaps not the answer and to
try to expand the mandate of the group would possibly jeopardize its
unity. One of the strengths of the G20 is its ability to combine a
political stance with a focused approach to agricultural negotiations.
Bibliography back to top
Brazilian Mission in Geneva (2003 and 2004), Carta
de Genebra, various issues
Hugueney Filho, C. (2004), ‘The G20: Passing Phenomenon or Here To
Stay?’, processed
Jank, M. S. and M. Q. Monteiro Jales (2004), ‘On Product, Box and
Blame-Shifting: Negotiating Frameworks for Agriculture in the WTO Doha
Round’, ICONE, 14 May
Narkilar, A. and D. Tussie (2003). ‘Bargaining Together in Cancún:
Developing Countries and their Evolving Coalitions’, mimeo
NOTES:
1.- It is worth noting that, within the
Brazilian Government, divergent positions did exist as far as the
agricultural negotiations were concerned: the ministry in charge of the
agrarian reform and issues relating to the small-scale agriculture
supported defensive positions in these negotiations, while the Ministry
of Agriculture had a strongly pro-liberal stance, supported by the
modern agribusiness sectors. Hence, the G20 platform, less ambitious in
the market access issue and more attentive to developing countries’
concerns related to food security and small-scale agriculture, helped to
generate a broad domestic consensus around the official position. back to text
2.- Narlikar and Tussie (2003). back to text
3.- Idem. back to text
4.- A G20 website was recently created and a link to this website
can be found on the homepage of Brazil’s Ministry of Foreign Affairs. back to text
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