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Wealthy farmers 300b yr subsidies { September 15 2003 } Original Source Link: (May no longer be active)
http://www.nytimes.com/2003/09/15/international/15TRAD.htmlhttp://www.nytimes.com/2003/09/15/international/15TRAD.html
September 15, 2003
Poorer Countries Pull Out of Talks Over World Trade
By ELIZABETH BECKER
CANCÚN, Mexico, Sept. 14 — World trade talks intended to help the developing nations unexpectedly collapsed today when delegates from Africa, the Caribbean and Asia walked out, accusing wealthy nations of failing to offer sufficient compromises on agriculture and other issues.
While not as disastrous as the breakdown of talks in Seattle four years ago, the failure to reach an accord today was widely regarded as a huge setback for the World Trade Organization, the 146-nation group that was presiding over the talks here. The group, based in Geneva, will now almost certainly fail to make its self-imposed deadline of January 2005 for reaching a new agreement that dismantles global trade barriers.
The failure today also means the faltering global economy will not receive a jump-start by the expansion of markets, which some economists contend would inject hundreds of billions of dollars into international commercial activity.
"We all could have gained here and now we have all lost," said Pascal Lamy, the European Union's trade negotiator, commenting on the collapse of the talks.
Robert B. Zoellick, the United States trade representative, sounded less pessimistic but still spoke with some frustration. "The harsh rhetoric of the `won't do' overwhelmed the concerted efforts of the `can do,' " he said.
Wealthy nations had hoped an agreement at the five-day talks in this resort city would help fend off a new wave of protectionism, especially in the United States, where manufacturing jobs have been disappearing by the tens of thousands. Already, questions about the benefits of unfettered world trade have infected the presidential campaign.
Supachai Panitchpakdi, the director general of the W.T.O., tried to be optimistic tonight, saying, "We must return to the task before us with renewed vigor," to complete this round of trade negotiations, which will continue at a low level at the group's Geneva headquarters.
"If we fail, the losers will be the poor and weaker nations," he said.
The immediate cause of the breakdown was proposed new trade rules for investment and government procurement, which had been promoted by the European Union but opposed by the poorer nations. But agriculture was the pivotal issue. Developing nations had established themselves as a potent force in talks here this week, challenging the earlier supremacy of the United States and Europe in trade talks.
Banding together in what was known as the Group of 21, the developing nations thought they had made their case that the $300 billion in subsidies paid every year to the world's wealthiest farmers undermined the livelihoods of millions of poor farmers around the world. But they said the proposals made by the United States and Europe to redress what the developing nations regard as a major injustice fell far short of their expectations.
Richard L. Bernal, a delegate from Jamaica, said a group of African, Caribbean, Asian and Latin countries felt they had little choice but to quit the talks. The United States and Europe, he said, were not generous enough on reducing their agriculture subsidies, on helping poor African countries dependent on cotton, or on understanding their difficulties in taking on such complex trade responsibilities as investment.
"There is nothing for us small countries in this proposal," he said. "We don't want any of this."
Yet those nations said tonight that they blamed no one for the failure and vowed to work for a trade agreement on agriculture now that the talks move back to Geneva. Celso Amorim, the Brazilian minister of foreign affairs and a spokesman for the group, said those nations had demonstrated that they were a new force in the trading organization.
"This is the real start in negotiations over agriculture," he said. "Whatever the process, the pieces will be picked up again."
Mr. Zoellick said he would move ahead on free-trade agreements with individual nations or regions, noting he had a long list of countries that wanted to negotiate with the United States. Meanwhile, he said, he would wait for things to "calm down" at the World Trade Organization.
"I hope we can help those countries come around," he said, without identifying them.
Mr. Zoellick said he believed that the talks were unlikely to reach a conclusion by their deadline. The message he heard from many members, he said, was "not now."
Mr. Lamy, the European trade commissioner, said the failure in Cancún "is not only a severe blow for the world trade organization, it is a blow to all." Still, he said, "We are going to remain committed to strengthening this rules-based multilateral trading system."
Progress toward a new agreement on trade, which was started two years ago at a W.T.O. meeting in Doha, Qatar, has repeatedly been stalled. Trade officials had missed every deadline until last month.
Then the United States broke an important political and emotional deadlock. American negotiators agreed to accept a proposal they had rejected last December to give the world's poorest countries access to life-saving medicines. That agreement — which is unaffected by the setback today — breathed life into the trade negotiations and demonstrated that the United States would join Europe in working out a compromise over initial objections from their pharmaceutical firms.
Members of some antiglobalization nonprofit groups that have been demonstrating outside the heavily guarded talks broke into song when the collapse was announced, cheering that the talks they considered unjust had failed.
But Phil Bloomer, director of Oxfam's campaign against the agriculture policies of rich nations, said he took no delight in the failure of the talks, which he said was a blow to poor nations that needed immediate relief for their farmers.
"It appears the United States and the European Union were not prepared to listen and take the necessary steps to make global trade rules work for the poor as well as the rich," he said.
If a new agreement is reached, the World Bank has estimated, global incomes would increase by as much as $520 billion by 2015, and 144 million people would be lifted out of poverty.
But developing nations said no deal was better than a bad deal.
Several delegates said they walked out today rather than negotiate new trade rules covering investment or government procurement, in part because they feared the new rules would be too intrusive and limit a country's freedom to regulate the environment or workers' rights in the face of international trade laws protecting foreign investors.
"We wanted to negotiate issues that are essential for us — agriculture subsidies, closed markets," said Yashpai Tandon, a delegate from Uganda. "Why would we now add investment? It is too much."
He singled out the dispute over cotton subsidies as a major disappointment. Four of Africa's poorest nations had asked that the subsidies given to American and European cotton farmers be reduced and the African farmers be paid $300 million in compensation for the losses they suffered because of unfair competition from wealthy farmers. Instead, a draft proposal suggested that the question be studied and that the African farmers plant other crops.
"It got to be too much for us," said Bakary Fojana, a delegate from Guinea. "The cotton offer was unjust and ignored what was demanded by African nations. Coming into this meeting everyone said, `yes, cotton is an important question; yes, agriculture is important.' But when it came down to negotiations, our daily problems were ignored."
Copyright 2003 The New York Times Company
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