Rich-Poor Rift Triggers Collapse of Trade Talks

Rich-Poor Rift Triggers Collapse of Trade Talks
By Kevin Sullivan
Washington Post Foreign Service

Monday 15 September 2003

CANCUN, Mexico, Sept. 14 - Global trade talks collapsed abruptly this
afternoon in an unprecedented uprising by scores of the world's poorest
nations against the United States, European Union countries and other
wealthy nations.

"They were not generous enough; there was just not enough on the table
for developing countries," said Richard L. Bernal, a delegate from
Jamaica, as anti-globalization activists cheered and sang nearby. "If
the developed countries had offered more to the developing countries, it
would have created an atmosphere more conducive to a settlement."

The impasse among the 148 nations of the World Trade Organization
threatens to derail prospects for a global trade agreement that was
supposed to be concluded by 2005. Negotiations were launched two years
ago in Doha, Qatar, to lower trade barriers with special emphasis on
increasing development in poor nations.

Talks at this Caribbean resort were intended to further that process;
instead, their failure has exposed a deep philosophical rift between
rich and poor nations about the effects of the trade liberalization that
has swept the world in recent decades.

The United States and other rich nations argue that free trade has
created jobs and wealth around the world, and that reducing more
barriers to trade would expand that success. But poor nations argue that
the rules of global trade have been tilted too heavily in favor of major
industrialized nations, causing some of the world's most vulnerable
people to fall deeper into poverty.

The rich nations' view has long dominated discussions at the WTO, a
global body formed nine years ago to help harmonize trade rules and
practices in an increasingly interconnected world. But here in Cancun,
for the first time, developing nations were able to unite to turn their
growing frustration into a powerful counterbalance against the United
States and Europe.

"We won't move forward unless we do something for these poor people who
have so much to lose," said Ivonne Juez de Baki, a delegate from
Ecuador, which is a member of a group of 22 nations - - including
Brazil, China and India - - that played a key and contentious role this
week in pressing the United States and the European Union for
concessions.

Their main complaint was over the $300 billion in annual subsidies that
rich governments provide to their farmers, which they say leads to
overproduction that floods world markets with artificially cheap food
and costs millions of farm jobs in Africa, Latin America and parts of
Asia.

"We have won a lot; it's not the end, it's the beginning of a better
future for everyone," Juez de Baki said at a news conference.

"In the past, rich countries made deals behind closed doors without
listening to the rest of the world," said Phil Bloomer of the British
organization Oxfam. "They tried it again in Cancun. But developing
countries refused to sign a deal that would fail the world's poorest
people."

U.S. Trade Representative Robert Zoellick said the conference failed
largely because some countries used "rhetoric as opposed to
negotiation." He said the United States had been prepared to make deep
cuts in subsidies but that other countries, which he did not name, had
not been willing to negotiate the tariff reductions and other measures
the United States was seeking.

"Whether developed or developing, there were 'can-do' and 'won't-do'
countries here," Zoellick said in a statement. "The rhetoric of the
'won't-dos' overwhelmed the concerted efforts of the 'can-dos.' "

At a news conference later, Zoellick said: "A number of countries just
thought it was a freebie; they could just make whatever points they
suggested, argue, and not offer and give. And now they are going to face
the cold reality of that strategy: coming home with nothing. That's not
a good result for any of us."

Sen. Charles E. Grassley (R-Iowa), chairman of the Senate Finance
Committee, called it "a sad day for the global economy" and said he
would use his position to "carefully scrutinize" countries' behavior in
Cancun. "The United States evaluates potential partners for free trade
agreements on an ongoing basis. I'll take note of those nations that
played a constructive role in Cancun, and those nations that didn't."

Delegates at the talks approved membership for two additional nations,
Nepal and Cambodia.

Delegates and analysts here said the failure of the Cancun talks was a
setback for the WTO and for global trade. But almost all predicted that
the negotiations were not mortally wounded and would continue.

"The pieces will be picked up again, and the negotiation will go on,"
said Celso Amorim, Brazil's foreign minister and key spokesman for the
Group of 22 developing nations.

J. Bradford DeLong, an economics professor and trade expert at the
University of California at Berkeley, said today's failure meant that
relations between rich and poor nations are stalled where they have been
since the mid-1990s. But he said the overall volume of world trade would
continue to increase.

"The world will become a more integrated place, with more goods traded
across borders," he said. "It's just not going to do so under freer
trade rules, at least not for a while."

The final straw in the negotiations was the insistence of rich
countries, mainly from the European Union, that developing countries
accept global rules in a variety of new areas, including foreign
investment and government procurement. Poor nations and activists argue
that those rules meddle in domestic affairs and should not be part of
WTO negotiations.

Many anti-globalization activists, who say the WTO is stacked against
poor countries, were almost gleeful about today's result. To the tune of
the Beatles' "Can't Buy Me Love," they sang "Money can't buy the world"
and danced in the convention center.

But the mood among most delegates was one of resignation.

"This was not an antagonistic environment. This was just a fundamental
disagreement over certain key issues," said Bernal, the Jamaican
delegate. "Everybody has to take some of the blame."

But "no deal is better than a bad deal," he said.