The Telegraph
Since 1st March, 1999
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Clenched fists after empty hands
- US will have its way, says Zoellick

Cancun, Sept. 15: The collapse of the Cancun talks on Sunday prompted the United States to issue a veiled threat to the developing nations that it would start looking at other ways to prise open world markets.

“We are going to open up markets one way or the other,” US trade representative Robert Zoellick told reporters soon after trade negotiators walked away empty-handed from the negotiating table.

Zoellick said the US had come to Cancun ready to negotiate on the basis of the Geneva text and later the Cancun text prepared by Luis Ernesto Debrez, Mexico’s foreign minister and chairman of the fifth ministerial conference of the World Trade Organisation.

However, he said the developing nations did not appear to be keen to abandon their “inflammatory rhetoric and tactics of inflexibility” on the issues under discussion — specifically the four Singapore issues of investment, competition policy, trade facilitation and transparency in government procurement — thereby undermining any chance of an agreement.

“Now, they are going to face the cold reality of adopting such a strategy,” Zoellick said.

He hinted that the US sew up regional free trade agreements and work on bilateral pacts with more nations to work round the pitfalls of multilateral trade negotiations. “We have free trade pacts with six countries and plan to work on similar pacts with 14 other nations,” he said.

Most of these nations are in South America like Brazil and Ecuador who are members of the G-22 and have refused to buckle under threats. It now remains to be seen whether they will be able to stand committed to the G-22 alliance when the US reopens talks with them.

Both Zoellick and US agriculture secretary Ann Veneman said agriculture had been the lynchpin of the discussions — but the chances of an accord had foundered on the Singapore issues. Zoellick said he found it hard to believe that a new global trade accord would be ready by the scheduled date of January 1, 2005, and the collapse of the Cancun talks would ensure that we will “never finish in time”.

The US trade representative tried to drive a wedge through the G-22 by suggesting that China’s commerce minister Lu Fuyuan, who was heading the Chinese delegation at the Cancun talks, had not participated in all the deliberations of the developed nations’ grouping and had instead sent a Chinese vice-minister in his place.

He indicated that China had been prepared to break ranks with India and Malaysia and reach some form of accord after the EU agreed to drop two issues — investment and competition policy — from the portmanteau labelled the Singapore issues.

Meanwhile, US Senate finance committee chairman senator Chuck Grassley said: “I’ll take note of those nations that played a constructive role in Cancun, and those that didn’t.”

India, which has foreign exchange reserves of over $87 billion has little to worry about because it isn’t seeking funds from the US as it once did. However, others may not be so fortunate.

“The US Congress authorised President Bush to negotiate a trade agreement under the auspices of the World Trade Organisation. But this authority is set to expire in June 2005. While this authority can be extended, it is by no means certain that the US Congress will agree to do so...

“As a result of Cancun, President Bush and the administration will have to press on other fronts while the authority remains available,” Sen Grassley said in a press note issued soon after the talks broke down.

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