Rich-Poor rift triggers collapse of Trade Talks by Kevin Sullivan The Washington Post 1:43pm 15th Sep, 2003   Washington Post Foreign Service    Monday, September 15, 2003;    CANCUN, Mexico, Sept. 14 -- A major global trade negotiation collapsed abruptly this afternoon when delegates from dozens of the world's poorest nations claimed that the United States, European Union countries and other rich nations had not been generous enough in their proposals.    "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 gathered at this Caribbean resort 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 big 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 thought they could just make whatever points they suggested, but not offer and give, and now they are going to face the cold reality that that strategy comes 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 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, foreign minister and key spokesman for the Group of 22 developing nations.    C. Fred Bergsten, director of the Institute for International Economics in Washington, called the collapse "serious but not disastrous."    "This is a healthy, desirable wake-up call to all the rich countries to do better," he said.    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.    Staff writer Paul Blustein in Washington contributed to this report.    © 2003 The Washington Post Company    September 15, 2003    "Breakdown blamed on rich nations"    (Published by the Age Newspaper. Melbourne. Australia).    Campaigners and lobbyists blamed an insistence by rich countries on pushing their demands against the will of developing nations for the breakdown in WTO trade talks in Mexico today.    Oxfam, the international relief agency, said it took "no delight in this failure", calling the collapse of the five-day World Trade Organisation meeting in Cancun a "missed opportunity".    "Rich countries overplayed their hand and misjudged the strength of feeling and unity of the developing world who want to make trade fair and have a stake in global prosperity," it said in a written statement.    Ministers of the 146 WTO member states had gathered in this Caribbean beachside resort in an effort to bridge differences that have so far held up progress toward a new trade liberalisation pact.    But divergences, especially over cutting farm subsidies and tariffs and on whether the WTO should embrace new rules on investment and competition policy, cast a long shadow over the meeting.    Around the time the conference was officially due to close today, reports began emerging that the talks had collapsed.    Friends of the Earth International said developing countries had refused to accept European Union demands to liberalise investment, competition, transparency in government bidding processes and trade facilitation.    "As a result of their refusal and the European Union's intransigence, the talks have collapsed," the group said in a written statement.    But it welcomed the clout mustered by developing countries, which account for about two-thirds of the WTO's membership, in making themselves heard.    "Despite intense pressure from the business lobbies, and bullying by the European Union and the US, developing countries have stood their ground," Ronnie Hall of Friends of the Earth said.    "This is a great development for people, small businesses and the protection of the environment," he said.    Public Citizen, based in the United States, said the collapse had made evident the WTO's "ever-growing crisis of legitimacy" after the United States and the European Union "stubbornly rejected" the demands of the majority of WTO members.    The United States had not represented the interests of most Americans at the conference, but rather those of large corporations, it asserted.    And it called the result a victory for global civil society and developing countries, describing the conference as "Seattle-on-the-beach", in a reference to the 1999 WTO talks in Seattle that likewise failed.    Oxfam signalled that the Cancun meeting was a turning point for global trade negotiations.    "On paper, this meeting has failed, but the new power of developing countries, backed by campaigners around the world has made Cancun a turning point," Phil Bloomer said.    "In the past, rich countries made deals behind closed doors without listening to the rest of the world. They tried it again in Cancun.    "But developing countries refused to sign a deal that would fail the world's poorest people."    WTO members launched the current round of trade liberalisation talks in the Qatari capital Doha in November 2001.    It had been scheduled to wrap up by January 1, 2005 with a new global pact outlining new free trade rules in farm products, services trade and industrial goods.    - AFP
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