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Battle Lines Drawn At Cancun

By Stephen Castle

Independent, UK
10 September 2003

Europe and the United States - so often economic enemies - arrive at crucial world trade talks today lined up against some of the poorer nations, insisting that developing countries must make their share of concessions.

The Mexican beach resort of Cancun will host delegations from the 146 nations represented in the World Trade Organisation who face the task of breathing life into flagging talks on global trade.

Yesterday the first protesters marched in the streets a little way from the five-star hotels occupied by diplomats and politicians. About 15,000 activists are expected. One of the first protests was staged on a beach when activists stripped and spelt out "No WTO" in the sand with their bodies.

Behind the security cordon most delegates are determined to avoid a repeat of the deadlock of the Seattle summit four years ago, something that the EU's trade negotiator, Pascal Lamy, says with understatement would "not be good news for the world economy". But to keep alive hopes of an overall deal by the end of next year, the delegates will have to overcome a host of obstacles. And the negotiation is polarised between rich and poor nations as never before.

Better organised, and galvanised by the sympathy for their case felt by voters in the West, the developing nations have become assertive. Nations such as Brazil, India, China, South Africa and Egypt are now recognised as big players.

The most crucial battleground will be agriculture with ministers being asked to agree an outline framework to liberalise trade. Developing nations want tariff-free access to rich countries' markets and a reduction in their huge farm subsidies, with little reciprocation.

The EU and the US agreed joint proposals in August. These measures, which would reduce farm production and export subsidies in the developed world, have been rejected by the developing nations as too timid. They are opposed as too ambitious by Japan, a country so protectionist that it has a rice tariff of nearly 500 per cent.

A group of 20 poorer nations has put together its own plan which would see the eventual elimination of subsidies and opening of rich countries' markets. This, in turn, has been attacked by the EU. It argues that while Brazil may be a developing country, it is one of the world's most competitive agricultural exporters.

Franz Fischler, the EU's agriculture commissioner, warned the developing world that it should "not reach for the stars in order to get to the moon" or it might end up with nothing.A similar debate is going on over non-agricultural products, such as textiles, where poorer nations want tariff-free market access without reciprocating. Developing nations oppose EU and Japanese moves to open economies to more foreign investment, and for environmental provisions which critics call "green protectionism".

Finally the EU is on the back foot over its attempt to protect "geographical indications" or products such as champagne produced in specific areas to high standards.

The big picture will be one of conflict between the rich and poor economies, with the richer nations on the defensive. Nick Clegg, trade spokesman for the Liberal Democrats in the European Parliament, said: "There is a great gulf between the developing world on the one hand and the EU and US on the other. The question is whether the latter can give enough to keep the former on board."