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Why It's Good That The Trade
Talks Broke Down

By Anuradha Mittal

Globe and Mail
19 September , 2003

'It's over. Talks have collapsed and there is no agreement," said George Ong'wen, Kenyan delegate at the World Trade Organization talks in Cancun, Mexico. His decision to stand up and walk away from the table on Sunday afternoon forced the chair of the talks, Mexico's Luis Ernesto Derbez, to declare that negotiations had broken down. Thus ended hopes that the 33 countries attending would be able to inject new momentum into negotiations on a global trade pact.

But this was not necessarily bad news: As protesters in Cancun's streets learned the news, festivities started on the barricades. They rightly saw the breakdown as proof of a new resolve and tough-mindedness among developing countries.

The talks failed -- for the second time in four years -- for a simple reason: irreconcilable differences between the rich, developed nations and the poorer and developing nations. The rich 20 per cent of WTO membership continues to ignore every promise made to the other 80 per cent. Once the rich countries' strong-arm tactics kept the poorer countries coming back to the table, ready for compromise. Those tactics just won't work any more. And understanding why is our only hope for finding a way forward.

The majority of the developing countries are opposed to launching new negotiations on the so-called Singapore rules -- proposals on investment, competition, trade facilitation and transparency in government procurement that the richest countries badly want in order to protect multinationals' interests in developing countries -- until more basic issues are resolved. These basic issues are longstanding divisions over the rich countries' agricultural subsidies.

Cancun saw the emergence of a new power group, the G21-plus -- an alliance of developing countries, with Brazil, India and China at its heart. This group demands that the U.S. and EU eliminate their agricultural subsidies, which amount to $1-billion (U.S.) a day. Dismissed as "a grouping of the paralyzed," by Robert Zoellick, the U.S. Trade Representative, the G21-plus represents more than half the world's population and some two-thirds of its farmers. Indeed, Mr. Zoellick's dismissal ensured that the group's demands were heard loud and clear.

Meanwhile, on the streets outside the talks, civil society protesters were making their own strong statements. At "Camp Lee," farmers from around the world marched day and night, among them Koreans commemorating the death of Lee Kyung Hae, who had stabbed himself on the first day of the talks while wearing the sign "WTO Kills Farmers." His death in Cancun -- along with demonstrations and national mobilizations in capitals around the world -- reinforced the G21 delegates' determination to stay true to the will of their people.

For the first three days, the conference focused mainly on the controversial agriculture issue. And, indeed, the richest countries did make some shallow concessions; texts were revised.

Then the conflict intensified over Europe's insistence on resolving the Singapore issues even without an explicit consensus from the member countries to start negotiations. The developing countries were outraged that their concerns around agriculture had been left out.

The WTO has long been plagued by secret negotiations and the use of brute power. Transparency and accountability are essential to any democratic decision-making process. So the text revisions only had the effect of intensifying rather than reducing feelings of polarization.

The collapse of talks raises fundamental questions about the future of the WTO. While various ministers have expressed their commitment to move ahead, the Cancun failure is a severe blow not just for the WTO, but also for other multilateral trade agreements such as the Free Trade Area of the Americas (FTAA).

In the press conference following the collapse of talks, Pascal Lamy, the European Trade Commissioner, branded the WTO as "a medieval organization" and called for fundamental reform of the 146-member group. He conveniently ignored the fact that following the WTO's previous talks in Doha, developing countries had put forward proposals for making future talks more participatory and transparent. It was the EU and other developed nations that blocked these proposals.

Just before Cancun, developing countries and NGOs again tried to raise the issues of internal transparency and improved participation at the WTO. However, any attempts to make the WTO democratic or accountable have been swept aside by the rich countries.

Lack of attention to the demands and legitimate concerns of the developing countries shows that the promise of free trade has failed the poorest and the most vulnerable in our society. It has also disappointed those civil society groups in the richer countries.

But Cancun is not a failure -- for it offers a lesson: Strong-arm tactics are not going to work any more. And no agreement is better than a bad agreement.

Anuradha Mittal is co-director of the California-based Institute for Food and Development Policy, also known as Food First. She was in Cancun.