Accessibility links

Breaking News

World: Trade Talks Collapse In Cancun

The blame game has begun after the collapse of world trade talks in Mexico. The talks fell apart yesterday amid differences over proposals for new rules on foreign investment, competition, and trade. Poor countries say these were a diversion from the real issue that should have been decided -- that rich countries cut farm subsidies. What next for trade talks that were meant to help the world's poor?

Prague, 15 September 2003 (RFE/RL) -- There were cheers and songs from anti-globalization activists yesterday when world trade talks in Mexico collapsed.

They say no deal was better than a bad deal for the world's poor.

But observers say there's little to celebrate from the failure of the World Trade Organization meeting, and that it could hurt poor countries the most.

No deal means no progress in poor countries' key demand -- that rich countries cut the huge farm subsidies that lead to cheap goods being dumped on developing countries' markets.

And the talks' failure could also now prompt countries to seek bilateral trade agreements instead. That's fine if you're a big player, but not so good if you're a small country with little bargaining power. And the process can be lengthy, too.

The Cancun talks collapsed amid a rift between rich and poor countries over trade liberalization.

Rich countries, spearheaded by the European Union, wanted to reach agreement on so-called "new issues" -- improving how countries treat foreign investors and easing cross-border trade.

But developing nations feared this would benefit multinational firms to the detriment of their own.

Most of all, they said the "new issues" were a diversion from the real one they want a deal on first -- a cut in the rich countries' subsidies to domestic farmers.

U.S. trade representative Robert Zoellick said there had been too much talk and not enough compromise.

"I think one of the problems we ran into was that a number of countries just thought it was a freebie," he said. "They could just make whatever points they suggested, argue and not offer and give, and now they are going to face the cold reality that that strategy comes home with nothing."

Poor countries say they were able to salvage something from the wreckage, however. More than 20 of them banded together in a new alliance -- dubbed the G-21 -- that directly challenged the might of the wealthy nations.

Brazilian Foreign Minister Celso Amorim said, "I think we were able to show that, with unity, a group of developing countries -- united not under any political banner, but on concrete issues -- were able to present a platform on reform in agriculture, which is the most important unfinished business and I would say 'unbegun' business to a large extent in the WTO and at the same time taking into account the needs and specificities of developing countries."

Still, that's scant comfort to millions of poor these trade talks were meant to help. This was meant to be the 'development round' of trade talks to make good on pledges made in Doha, Qatar, two years ago.

It's meant to lead to a new global trade pact by the end of next year that the World Bank says could lift nearly 150 million people out of poverty.

No wonder Amy Barry of the charity Oxfam says they're not taking "any delight" in Cancun's failure: "There are things to be pleased about, namely the rise of the 'southern voice' in resisting being bullied into a deal by rich countries, [but] although they've avoided getting a bad deal they're not getting a good deal [either]. The failure is nothing to celebrate, although the strength of the developing country voice is something to be pleased about."

But not all is lost. WTO Director-General Supachai Panitchpakdi said talks will continue at the WTO's headquarters in Geneva.

"We just can't allow the round to be derailed. We have to put it back on track. And I'm still, in spite of all the setbacks, even more determined to work together with the ministers, the ambassadors, and our colleagues in Geneva to set forth a program so that, ultimately, we'll have better results."

Oxfam's Barry says she's still hopeful for a trade deal that is acceptable to developing countries.