World Trade Organization talks collapse under diverging agendas

CANCUN, Mexico -- World trade talks collapsed Sunday amid sharp differences between rich and poor nations, a blow to the World Trade Organization that many poor countries called a victory against the West.

It was the second time WTO talks have collapsed in four years, and a major setback to efforts to regulate the world's trade. EU Trade Commissioner Pascal Lamy said the round of talks wasn't dead, "but it certainly needs intensive care."

"We could have gained -- all of us," he said. "We lost -- all of us."

An increasingly powerful alliance of poor but populous farming nations said that while they didn't achieve the trade reforms they wanted, they found a new voice to rival the developed world.

"The developing countries have come into their own," said Malaysia's minister for international trade and investment, Rafidah Aziz. "This has made it clear that developing countries cannot be dictated to by anybody."

In the end, it was the diverging agendas of 146 member countries that split delegates beyond the point of repair.

Poor nations, many of which had banded together to play a key role in negotiations, wanted to end rich countries' agricultural subsidies. European nations and Japan were intent on pushing four new issues that many poor countries saw as a complicated and costly distraction.

Bullying poor nations

Many poor countries accused the United States and Europe of trying to bully poor nations into accepting trade rules they didn't want.

"Trade ministers have been pressured, blackmailed," said Irene Ovonji Odida, a delegate from Uganda.

The United States blamed some countries, which it didn't name, that it said were more interested in flowery speeches than negotiations.

"Some countries will now need to decide whether they want to make a point, or whether they want to make progress," U.S. Trade Representative Robert Zoellick said.

His comments appeared directed at a group of mostly poor nations -- often known as the Group of 20-plus -- that emerged as the major opposition to the U.S. and European positions. The group represents most of the world's population and includes China, India, Indonesia and Brazil.

Leaders of that group said they had brought concrete issues to the table that would be the basis for future trade talks.

"We emerge from this process stronger than we came into it," Brazilian Foreign Minister Celso Amorim said.

Ecuador's foreign trade minister, Ivonne Baki, added: "It's not the end. It's the beginning."

Before the talks collapsed, delegates spent Sunday debating not the changes to farming policy that they had spent much of the conference negotiating, but instead four proposals about foreign investment and competition.

No way to build consensus

Lamy said the meeting's chairman, Mexican Foreign Secretary Luis Ernesto Derbez, proposed accepting two of the proposals and rejecting the two others, but countries were unable to agree. Derbez confirmed his account.

"I simply came to the conclusion that the consensus was not there and there was no way to build it," he said.

The announcement of the collapse took some delegates by surprise. One journalist ran into a briefing by U.S. trade officials, demanding reaction. Deputy U.S. Trade Representative Josette Shiner was visibly startled and said she would look into it.

The collapse was reminiscent of the downfall of talks in 1999, when street riots and divisions between WTO members sunk attempts to launch a new round of trade negotiations. In Cancun, there were protests as well, but they didn't gather the momentum that demonstrations did in Seattle.

The failure in Cancun was a blow to the WTO, and called into question the organization's ability to reach a global trade treaty by the end of next year -- a goal WTO members set for themselves at a meeting two years ago in Doha, Qatar.

"It's hard for me to believe that in the position we're in now we'll be able to finish on time," Zoellick said.

Lamy was harsher: "The WTO remains a medieval organization. The procedures, the rules of this organization cannot support the weight of its task."

But Amorim said real progress had been made, and that the WTO would continue to negotiate the same points in the future on the basis of advances made in Cancun.

"It's a setback not to have a result now," he said. "But we are optimistic in the long run."

WTO Director-General Supachai Panitchpakdi called for ministers to report back to him by mid-December to decide how to proceed.

In the agriculture talks, poor nations had hoped to slash subsidies that rich countries pay their farmers, making it easier for their farmers to compete in a global economy. Some countries also wanted to lower the tariffs many countries charge for importing farm goods.

Doing so could have dramatically altered farming around the world. Some farmers could have found new markets for their crops. Others would have struggled to compete without the subsidies that keep them in business. Consumers could have gotten cheaper fruits, vegetables and meat from distant shores.

Advocacy groups, who spent much of the meeting working with developing nations to make sure their voices were heard, sang and danced in the hallways of the conference center as the talks collapsed. Many hugged one another.

"Our world is not for sale, my friend, just to keep you satisfied," they sang to the tune of the Beatles' "Can't Buy Me Love." "You say you'll bring us health and wealth, well we know that you just lied."

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