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World: Ministers Gather For WTO Summit Crucial To Settling Free Trade Pact

  • Sergei Danilochkin

The World Trade Organization (WTO) is holding a meeting in Cancun, Mexico on 10-14 September in an attempt to make progress on a global trade liberalization pact. RFE/RL reports on the expectations for the summit.

Prague, 9 September 2003 (RFE/RL) -- Trade ministers from around the world, as well as thousands of anti-globalization protesters, are gathering in the Mexican resort of Cancun for a major conference of the World Trade Organization.

The key issues of the five-day summit -- due to begin tomorrow -- are the expansion of trade in farm produce, industrial goods, and services in order to help the countries of the developing world.

A treaty on free trade is expected to be reached by the end of next year, but poorer nations are warning that failure to achieve progress in the reduction of agriculture subsidies by richer nations could doom advances in other areas.

The WTO's 146 trade ministers are desperately looking for ways to achieve real progress.

John Audley is a senior researcher at Washington's Carnegie Endowment for International Peace: "[Cancun] was originally designed as a way station along the way towards the conclusion of [trade] negotiations scheduled for 2005. But a lack of progress on subjects of particular importance to developing countries has actually turned this way station into a crisis center, and the government officials now must simply survive this crisis so they can work towards the conclusion of negotiations."

WTO spokesman Keith Rockwell said the conference needs "without any question" to make progress on agriculture issues. He said it is an issue on which "progress in all other areas hangs."

Jeffrey Schott from the Institute for International Economics in Washington believes the talks in Cancun are simply one stop on the road toward a final trade agreement:

"The Cancun meeting is part of the ongoing process of negotiations. And the meeting is not designed to reach final agreements but to give the political guidance to the negotiators from their ministers so that they can accelerate the pace of negotiations in Geneva," Schott says.

The major focus in Cancun is the liberalization of farm trade to give developing nations bigger benefits from trade and reduce their dependence on aid from the richer countries. These poor nations make up almost three-quarters of the WTO's 146 members.

In November 2001, at the WTO's conference in Doha, Qatar, rich countries promised to open their markets, especially in agriculture goods and textiles. Poor nations, as well as some aggressive farming producers such as Australia, complain of unfair competition because of the large subsidies paid to farmers, especially in the United States, the European Union, and Japan.

In fact, the developed world spends roughly $300 billion on farm subsidies a year -- about $1,000 a year per household. The World Bank recently published a statistic showing that an average cow in the European Union receives about $2.5 a day in government subsidies, while about half of the world's population lives on less than $2 a day.

Many negotiation deadlines set up in Doha have been missed, so trade ministers in Cancun will try to compromise after almost two years of stalemate. That seemed to be an impossible task until the U.S. and the EU reported last month that they had reached an agreement on reductions of farms subsidies. A deal was also announced on allowing poorer nations to import cheaper generic drugs to fight diseases such as AIDS and malaria.

The U.S. and the EU are still in disagreement over many issues, however. "The United States and the European Union are at odds over a series of issues whether or not and if so, how to support agriculture; whether or not genetically modified organisms should be considered for trade when countries' consumers don't want to consume them; and how to ensure that developing countries have access to life-saving medicines when they can't afford to purchase them themselves and don't own the patents to manufacture them even if they could," Audley of the Carnegie Endowment says.

The debate about ways to reduce trade barriers on industrial goods follows a similar pattern. Import tariffs on industrial products in wealthy countries are generally lower than on farm produce but still dramatically affect exporters of textiles and footwear in many developing countries.

According to the Oxfam nongovernmental organization, the U.S. applies a 14 percent tax on imports from Bangladesh, compared to only 1 percent on French products. Import duties in developing countries are also high, reaching 30 percent to 40 percent in nations such as Brazil and India, where they are a vital source of government revenue.

What is a likely outcome of the Cancun summit? Analysts differ in how much progress will be achieved.

"I'm not optimistic that the kind of progress that will put these negotiations back on the development path is within reach of these ministers now," Audley says.

Schott from the Washington Institute for International Economics is slightly more optimistic: "Cancun is part of a process. The negotiations will likely continue regardless of how much is achieved in Cancun. But the test will be whether negotiations can accelerate because of the guidance provided by the ministers. The talks could accelerate and come closer to success if the ministers can achieve the breakthroughs in some of the important areas, such as agriculture and industrial market access."

Meanwhile, anti-globalization protesters gathered on a Cancun beach, removed their clothes, and spelled out "No WTO" on the sand with their bodies. Thousands have gathered in the city for the conference and say they will do their best to disrupt the talks through peaceful means.