UNCLAS SECTION 01 OF 02 THE HAGUE 002335

SIPDIS

USDOC FOR 4212/USFCS/MAC/EUR/OWE/DDEFALCO
USDOC FOR 3133/USFCS/OIO/OWE/ESLETTEN/PBUCHER

E.O. 12958: N/A
TAGS: ETRD NL WTRO EUN
SUBJECT: WTO MINISTERIAL: DUTCH DISAPPOINTED AND DISMAYED BY
CANCUN BREAKDOWN



1. Summary and Comment: The immediate official Dutch
reaction to the breakdown of the WTO Ministerial in Cancun
is similar to the USG's with ministers decrying developing
country and NGO tactics. The Netherlands sees talks
resuming only after the negotiating climate improves but
think it will take another ministerial to get substantive
talks moving again; the earliest possible date for a follow
on ministerial, they believe, would be July 2004. Ever the
strategist, Economics Minister Brinkhorst apparently began
to sketch out thoughts on restarting negotiations while on
the plane home. Dutch officials are eager for any USG
thoughts on next steps. Meanwhile, the Dutch press seems
ready to blame developed countries for Cancun's failure.
End Summary.


2. Following the abrupt termination of the WTO Ministerial
in Cancun, Economics Minister Brinkhorst and Trade Minister
van Gennip expressed to the Dutch press their dismay at the
turn of events. Brinkhorst was bluntly critical of the G-
21 calling its members - especially India and Brazil -- a
"destructive force" and accusing former European colonies of
following after the G-21 like "lemmings" with no regard for
their own interests. G-21 statements, Brinkhorst claimed,
were more centered in geopolitics that trade; van Gennip
noted the bizarre Cancun negotiating atmosphere more akin,
she thought, to a soccer match than a serious negotiation
with the developing countries breaking out in cheers
whenever one of their number criticized the United States or
EU.


3. Brinkhorst had particular scorn for NGO's whom he
accused of being more interested in profiling themselves
than in promoting the true interests of the poor. Both
ministers were critical of WTO DG Supachai who in his
chairmanship of the cotton working group "let himself be
dictated to by the United States." (Note: A Dutch trade
official explained that Supachai's "quickly" replacing his
paragraph on cotton with a U.S. drafted one contributed to
the breakdown in the negotiating climate. However, this
official hastened to add that even if cotton issues had been
quickly agreed, the conference would have broken down over

something else. End note). They also had mixed feelings
about conference chair Derbez "who decided to terminate the
conference while the EU was still conferring." Van Gennip
accused the EU of poor internal communications, and
Brinkhorst declared that the WTO has become "an old-
fashioned organization," a fact partly attributable to its
location in Switzerland, "a country where the cuckoo clock
is the latest invention. It isn't Brussels or New York."
Brinkhorst was pessimistic about a rapid resumption of the
negotiations noting that a climate must first be created in
which the talks can be resumed.


4. A senior Dutch trade official told us Cancun
essentially was a power struggle between the EU/US on the
one hand and the developing countries, led by Brazil and
India on the other. The latter wanted to show that the WTO's
agenda is no longer controlled by the rich developed
countries. They succeeded, this official stated, but at the
price of a failed Ministerial Conference. "The real
negotiations," he said, "simply started too late."
Hopefully, once they have sobered up, this official
declared, the G21 will realize that just saying no to
whatever is proposed by the other side does not deliver the
results one is striving for.

5. Our contact thought that a future ministerial will be
needed to put the negotiations back on track again as the
"string of unmet deadlines after Doha clearly demonstrated
that civil servants in Geneva, acting on instructions from
capitals, are simply incapable of striking deals on matters
which are politically sensitive." The Dutch foresee no
possibility for another ministerial before July 2004 but
hope that another can take place before early 2005. Meeting
the 1 January 2005 deadline for finishing the round, the
Dutch believe, now seems impossible, not only because of the
need to build confidence after Cancun but also because of
the U.S. elections and the appointment of a new European
Commission after the elections for the European Parliament.
The Netherlands would be very interested in known the USG's
thoughts regarding next steps.

5. The Dutch media has initially decided to assign
developed countries the responsibility for the failure at
Cancun however. The NRC HANDELSBLAD (an influential
Rotterdam-based evening daily) editorialized that there are
three lessons from Cancun: "Firstly, the EU and the U.S.
need to cut their agricultural subsidies much more
drastically. Secondly, the upcoming countries - India,
China, Brazil - cannot be ignored. Thirdly, the WTO's
structure needs to be changed drastically. It is impossible
for 146 countries to reach unanimity on every technical
detail. Daring initiatives are required, and soon." DE
VOLKSKRANT (an influential slightly left of center daily)
took a different but still critical tack writing that: "The
American delegation in Cancun once again showed that the
Bush government has little affection for multilateral
agreements. Time and again the U.S. shows that it prefers
bilateral agreements with (developing) countries, tuned in
to American interests. Five years ago, the U.S. thus
frustrated the trade talks in Seattle. This time however,
the developing countries managed to form one block."
Sobel