The World Trade Organization’s ministerial meeting in Cancun collapsed Sept. 14 after a newly-formed alliance of developing nations said the U.S., European Union (EU) and Japan had failed to make acceptable proposals on agriculture and other trade issues.
The so-called Group of 22, led by Brazil, China, India and South Africa, took the lead in demanding that the U.S. and EU end the huge government subsidies to agribusiness in their countries, and open their markets to agricultural products from developing countries.
In the end, over 80 countries joined in rejecting the WTO proposals, leaving the two sides far apart on farm subsidies, market access, and convening of new talks on foreign investment, competition policy and related matters. Observers said the balance of trade power had shifted sharply away from the wealthy countries, in the most significant change in world trade relationships in half a century.
Throughout the five-day meeting, the developing countries called for deeper cuts in the wealthy nations’ subsidies to agribusiness – annually worth over $300 billion – which they said causes the world market to be swamped with excessive produce, slashing prices and cutting chances for farmers from poor countries to sell their products.
Though four West African countries – Burkina Faso, Mali, Chad and Benin – have asked the U.S. to cut its $4 billion annual subsidy to just 25,000 cotton farmers, the WTO meeting spoke only of further consultations, with no deadlines and no compensation to African farmers.
Proposals for new talks on foreign investment and competition policy foundered on developing countries’ fears that they could be prevented from setting rules for foreign transnational corporations.
Brazil’s Foreign Minister Celso Amorim, who acted as spokesperson for the group of countries with nearly two-thirds of the world’s people who make their living from agriculture, emphasized that the failure at Cancun was not the end of the multilateral trade process, but rather a much needed stop on the way to fairer agreements for the developing countries.
“We will repair the process,” he told a press conference where he spoke together with colleagues from Argentina, Ecuador, South Africa and Egypt. “We have tried to demonstrate the unity of the developing countries on concrete themes, and agriculture is the most important of the unfinished tasks.”
“The failure of the talks can be laid firmly at the door of the EU and U.S.,” Adriano Campolina Soares of the development organization ActionAid told the Guardian of London. “Throughout the meeting, the rich countries maintained an aggressive stance and were reluctant to offer anything of real benefit to developing countries.”
Guy Ryder, general secretary of the International Confederation of Free Trade Unions, said the collapse of the conference further undermined the WTO’s credibility. “This crisis will continue as long as WTO members refuse to tackle development, poverty, employment, and workers rights,” he added.
After the talks collapsed, the U.S. and EU reportedly offered concessions on agriculture to several developing countries, if they would lift their veto on new talks about investment and competition. But Malaysia, India, Kenya and South Africa said they had been taken in by such promises before, and would not respond unless the U.S. and EU spelled out their position in detail.
A significant factor in the development of the new alliance is the role of China, which joined the WTO in 2001. The Chinese have said they will work within the world body to uphold the rights of developing countries.
The author can be reached at cpusainternat@mindspring.com
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