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World: EU Official Says Poorest Countries Biggest Losers In Collapse Of WTO Talks

The European Union today portrayed the collapse of global trade talks in Cancun as a "lose-lose" result for everyone involved. But the EU's trade commissioner, Pascal Lamy, says that first and foremost, it was an "opportunity lost" for poorer countries.

Brussels, 16 September 2003 (RFE/RL) -- The European Union's trade commissioner, Pascal Lamy, gave reporters today a few examples of what he means when he says the collapse of World Trade Organization talks in Cancun, Mexico, at the weekend was a "lose-lose" situation.

-- India failed to exact from richer nations vital cuts in textile import quotas.

-- Cotton-producing West African nations left "empty-handed" as better-off nations did not agree to slash subsidies to their own cotton producers.

-- China, which has gone a long way in opening its own market, failed to persuade other economies to do the same vis-a-vis itself.

-- Brazil, Mexico, and other leading agricultural exporters in the world "lost out" through a lessening in the pressure on the United States to carry out quick farm reforms.

-- Most developing countries, as well as the United States, failed to benefit from a package of farm concessions offered by the European Union, as well as proposed cuts of industrial tariffs and a possible partial opening of the bloc's service sector.

-- The EU lost out, Lamy said, as it failed to secure greater market access for its products.

Lamy said the greatest losers, however, were the poorest countries of the world.

"In terms of [comparing who loses most], I just said that in a system like the one we live in -- the name of which is market capitalism, which has a certain tendency to reproduce a situation where the strong get stronger and the weak weaker -- the fact that we can't make one big step forward in terms of rules maintains an imbalance which we should correct. And that is an 'opportunity cost.' And I think we need more rules to make the system more balanced. And who loses if we don't create more rules? I think [the] developing countries lose."

Lamy is referring here to the key item on the EU agenda in Cancun -- to establish a body of "transparent" global rules it says are an essential accompaniment to the opening of markets.

Central to EU concerns until the very end of the WTO meeting was a demand to have universally binding rules cutting red tape and corruption in cross-border trade. Additionally, the EU -- together with some other developed nations -- wanted similar global guidelines for competition policy, investments, and government procurement.

Some of the less-developed countries welcomed the collapse of the talks as evidence of their growing strength in relation to the EU, the United States, and Japan.

Yet, analysts quoted by Reuters estimate that developing countries stand to gain twice as much from trade liberalization as they receive annually in development aid.

Responding to concerns that the world's richer nations might now opt for bilateral or regional trade deals with selected neighbors and partners, Lamy said the EU would remain committed to a multilateral approach.

But, he warned, a resumption of talks does not appear possible until WTO negotiation practices are radically revamped.

"I don't think it's dead, but for sure it's in intensive care, which is somewhere in between. Should the discussion in Geneva [at the ambassadorial level] resume only after we have revised procedures? I mean, whichever idea about revamping WTO procedures we will put on the table needs to be unanimously agreed as a problem by [146] countries, and then it needs to be negotiated. It's going to take quite a lot of time."

Lamy said that, in his view, what he called a "sit-in" of more than 140 ministers debating sensitive issues affecting the lives of billions of people "visibly doesn't work."

In a so-called "letter from Cancun" issued during the meeting, Lamy noted he considers the WTO a "medieval organization." He added that "there is not a way to structure and steer discussion" among 146 members in a manner conducive to consensus.