‘Victory’ at Cancun

ONE positive development of the failed world trade talks at Cancun is the emergence of developing countries as a united front to offset the traditional dominance of the wealthier block of nations. Looking back, in fact, the confrontation at Cancun seems almost inevitable in light of the determined reluctance of First World countries, mostly the United States and European Union states, to deal adequately with the major issue holding up another round of  multi-lateral trade agreements, that is the massive subsidies and export incentives they award their farmers, to the detriment of Third World producers.

This has been a standing grievance of developing countries for most of the three decades since the World Trade Organisation was launched, and the progress made in other areas had eventually brought it at the top of the agenda for the Cancun deliberations. Hopes of a settlement of this burning issue, however, were dashed when it became clear that the developed countries were still not prepared to make the kind of subsidy-cutting adjustments that would give farmers in developing countries a decent chance to compete. Indeed, true to their pattern of WTO dominance, the rich countries sought to sideline the farming issue by demanding instead negotiations on expanding the WTO rules aimed at protecting foreign investment and cutting out red tape and corruption in trading transactions.

This time, however, it seems the WTO chieftains did not bargain for the convergence of interest and strength among the poorer member countries born out of the long period of frustration and pressure experienced by their farmers. The First World countries clashed with a new Third World block, the so-called G21 grouping representing more than half of the world’s population and some two-thirds of its farmers. The G21 states are united by their common commitment to getting the West to unwind subsidies running at nearly $1 billion a day. In the end, the G21’s new found influence was not put to the test as the WTO insistence on dealing with its new rules led to the total collapse of the Cancun meeting.

Inspite of the failure of the round, there was no mistaking the fact that something critical and vital  had happened at the Mexican resort. Australian Trade Minister Mark Vaile, whose country shares many of the Group’s criticisms of the EU and the United States, noted that emergence of the G21 marked “a significant shift in the dynamic” of the WTO. Brazil’s Foreign Minister Celso Amorim observed:” It was not possible to get a concrete result. But we think we have achieved some important things. Firstly, the respect for our group.” The Confederation of Indian Industry, a top business lobby, declared that the confrontation at Cancun had changed the shape of trade negotiations. “These will never be the same again,” a spokesman said. “The developing countries are now a force to be reckoned with.”

It seems unfortunate, yet perhaps necessary, that the “showdown” at Cancun should have ended this way. We agree entirely with the proposition that, in this case, no deal was better than a bad deal. Where do the world trade talks go from here? We can only hope that the wealthier countries, which have had their way in the WTO since its inception, will now adjust themselves to the need to deal seriously with the united force of the developing world. It would be foolhardy and counter productive for them to retreat from the free trade movement as they cannot afford to ignore the vast majority of the planet’s population. The global economy can only grow when trade is free among all the world’s countries. So it’s back to the WTO headquarters in Geneva where the search for a deal must continue.