WTO Debacle Shows Power Of Poorer Nations When United

by Gustavo Capdevila

The negotiations in the Mexican resort of Cancun, Sept. 10-14, ended without producing any agreements, but gave an indication of new alignment among the 146 members of the WTO -- a Ônew realityÕs that will be evident when trade talks begin again in Geneva

The Cancun debacle represents "a very strong call to attention" because it puts in evidence the fact that "we can no longer operate like we did before," commented Alfredo Chiaradia, Argentina's permanent ambassador in Geneva and chief negotiator at the WTO

An important factor emerging from the Cancun conference is the negotiation through explicitly defined groups representing different interests, particularly the groups of developing countries, he said

Chiaradia was talking about the so-called Group of 22 (G22), consisting in Cancun of Argentina, Brazil, Bolivia, Chile, China, Colombia, Costa Rica, Cuba, Ecuador, Egypt, El Salvador, Guatemala, India, Mexico, Pakistan, Paraguay, Peru, Philippines, South Africa, Thailand, Turkey and Venezuela

This bloc began to form in the weeks just prior to the WTO Fifth Ministerial Conference as a counterweight to the European Union and United States

A month prior to Cancun, the two trade powers, with highly protectionist regimens for their farm sectors, had presented an initiative in which they said they would cede some of those measures and open their markets to agricultural products from developing countries

But the developing world's leaders argued that the initiative did not go far enough, and set to creating their own bloc for negotiating farm trade issues

More than 51 percent of the world's population and 63 percent of farmers live in the G22 countries, which produce more than a fifth of global agricultural output and more than a quarter of farm exports

After the consolidation of the G22, the positions became clear, said Rubens Ricupero, secretary-general of the United Nations Conference on Trade and Development (UNCTAD)

In that respect, the Cancun ministerial meet was "beneficial," said Ricupero, adding that he is optimistic that the process to continue in Geneva will take the new power reality into account

The EU-US proposal had served as the basis for the draft declaration that the WTO authorities presented to the negotiators in Cancun

The G22, however, kept its sights set on greater liberalization of farm trade through deeper cuts in subsidies, noted Chiaradia

During the Cancun debates, other blocs of countries from the developing world adopted common positions, including the African Group, the Africa, Caribbean and Pacific Group (ACP), and those the United Nations has categorized as Least Developed Countries (LDCs) Another sector of WTO members, united by their vindication of protectionism for their agricultural sectors, also acted in a coordinated effort in Cancun. These countries include Iceland, Norway, South Korea and Switzerland

With the materialization of these groupings, in particular the G22, the WTO's system for making decisions should change, noted Chiaradia

The trade powers thought they could continue getting everything they wanted from the ministerial conferences of the WTO, an institution in which they wield heavy pressures and a great deal of influence, but this time was different, said the Argentine diplomat

This is the lesson of Cancun, where nobody won and in a certain sense everybody lost, but it was left clear that the WTO members "must come up with real agreements," he added

Ricupero praised the role played by the G22 during the ministerial conference, underscoring the solid proposal the group presented, when he spoke this week about the results of the Cancun meet in an address to diplomats from developing countries

The ministerial conference ended late Sunday, when Mexico's foreign minister Luis Ernesto Derbez, who presided over the meeting, announced that it no longer seemed possible that the member countries would finalize any agreements

A controversy immediately erupted about the motive for the decision, which some sources attributed to the bloc of African countries, which steadfastly opposed starting new talks on the so-called Singapore issues, promoted by the EU in particular

These issues include competition policies, protection for foreign investment, trade facilitation and transparency in government procurement, pending since the Second WTO Ministerial Conference, held in Singapore in 1996

UNCTAD chief Ricupero said the failure of this year's conference was due largely to the fact that the EU and United States refused to give up much ground when it came to farm trade issues

Washington's conservative attitude on subsidies for U.S. cotton growers had a great deal of influence on the outcome of the meet, he said

Benin, Burkina Faso, Chad and Mali demanded WTO intervention to prevent the harm caused their cotton farmers by the estimated $4 billion the U.S. spends on subsidies for its own cotton producers, which ultimately brings down the price for this commodity on world markets

Argentina's Chiaradia maintains that the responsibility for the failure of the Cancun conference falls squarely on "those who have held control of the WTO" for years

Non-governmental organizations critical of the WTO allege that the governance of the institution has always been in the hands of the four trade powers: United States, European Union, Japan and Canada

The debate about the causes behind the failure of the Fifth WTO Ministerial Conference will continue in the days ahead as the diplomats and officials who participated in the meet return to Geneva

Uruguayan negotiator Carlos Perez del Castillo will pick up his duties again Monday as chairman of the WTO General Council, the highest authority in the organization when the ministerial conference is not in session

Perez del Castillo is expected to convene the council before Dec. 15 to conduct an assessment of the Cancun fiasco

Meanwhile, negotiations at the WTO will enter into a dark period, and everything will operate with incredible slowness until there is a final evaluation of what occurred in Cancun, predicts Chiaradia