Opinion

Will change come to Cancun?

By Amitendu Palit (China Daily)
Updated: 2010-12-01 15:37

Cancun is in the news again. Seven years ago, this coastal city in eastern Mexico was the venue for the 5th ministerial meeting of the World Trade Organization (WTO). Now, it is hosting the United Nations Conference on Climate Change.

The similarity in backdrops between the two occasions is striking. The WTO ministerial meeting in 2003 followed the ministerial meeting in Doha in 2001. The Doha ministerial meeting had adopted the Doha Development Agenda (DDA), which attempted to make developing countries bigger players in global trade. World trade dynamics were never the same again with the North-South divide surfacing sharply over several issues leading to almost negligible progress on the agenda.

The Cancun ministerial meeting brought out the divide in world trade in the open with daggers sharply drawn. Though one does not know the fate of Cancun this time, like in 2003, it is convening after the tumultuous conference on climate change in Copenhagen in 2009.

The climate conference is expected to see the North and South clash over several issues, particularly the quantum of emission reduction. Developing countries have taken most by surprise by implementing large-scale emission reduction programs. China has led the efforts, followed by Brazil, India and Indonesia. On the other hand, major emitters in the developed world, the United States, Canada and Australia, for example, are yet to announce similar targets.

China's role in this regard has been similar to what it has been playing in the WTO. China's annexation to the WTO was announced at the Doha ministerial meeting in November 2001. Its entry was accompanied by unprecedented commitments to cutting tariffs and non-tariff barriers. The particularly noticeable commitments were the deep cuts in agricultural tariffs and the transitional safeguards to other developing countries for responding to sudden spurts in Chinese exports.

By the time the action shifted to Cancun, agricultural tariffs in China had been cut to nearly half of such tariffs in other emerging markets and developed countries. China has frequently cited its extensive commitments to deeper market access as example of its lasting commitment to the multilateral trade system. This has been the plank on which it has been criticizing the lack of movement by developed countries in reducing subsidies on and domestic support to agricultural exports.

In a similar vein, by announcing unconditional commitments to carbon emission cuts, China has put developed countries on the wrong foot on the climate change action agenda. There will be considerable pressure on high carbon-emitting developed countries at Cancun, particularly the US, to spell out an action plan.

China has used the changing balance in global economic power for pushing a proactive position on climate change. Developing countries have been pressing for financial assistance for fulfilling their emission cut targets. On the other hand, the US and Europe will find it hard to contribute generously to the public fund that is expected to help developing countries mitigate the effects of climate change and reduce emissions. The surplus resources with developed countries after the global financial crisis are hardly enough to ensure sincere commitments in this regard.

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China, India, Brazil and South Africa (BASIC countries) have formed a powerful coalition of emerging market economies, which is expected to take on the developed countries at Cancun on the road map for addressing climate change. The memories of G20 coalition on agriculture at WTO must be fresh in the minds of the BASIC countries. The BASIC group was part of G20 that took on the US and European Union on market access proposals on agriculture in the WTO ministerial meeting at Cancun in 2003. The aggressive posture of G20 on subsidies and special and differential treatment for developing countries led to a collapse of the talks on DDA.

Two months before the climate conference at Cancun, the BASIC countries met in Tianjin to develop a common strategy. The four countries have decided to urge developed countries to commit to ambitious reduction targets and contribute handsomely to a new global fund for meeting mitigation costs. They will also urge developed countries to fulfill commitments on technology transfers and not deviate from them on climate grounds.

The underlying circumstances at and the build-up to Cancun this time are too similar in terms of the North-South dynamics to be treated as purely coincidental. Will the outcome be the same as well?

The author is visiting senior research fellow at the Institute of South Asian Studies in the National University of Singapore.