The Telegraph
Since 1st March, 1999
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Rich-poor split sinks trade talks
- Cancun fails, developing nations’ unity does not

Cancun, Sept. 15: The world trade talks collapsed here last night with the rich and poor nations unable to agree on the modalities for framing new rules covering a range of issues from agriculture to industrial tariffs, and services to investment.

The breakdown signalled the growing power of the developing nations, which refused to be browbeaten into submission as they had been in the past.

“I would have been happy to reach a trade agreement,” said commerce minister Arun Jaitley. “But in the end we were only able to focus attention on the issues of importance to developing nations.”

European Union 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. We lost — all of us.”

All through the week, the discussion had focused on agriculture. But in the end, the talks foundered when the developing nations refused to cave in to pressure to widen the ambit of the WTO’s agenda by including the so-called Singapore issues of investment, competition policy, trade facilitation and transparency in government procurement.

There was an air of triumph among the developing nations, which comprise more than three-quarters of the WTO’s membership, at being able to stall attempts by rich nations to change the rules of the game and frustration and anger on the other side.

“The developing countries have come into their own,” said Malaysia’s trade minister Rafidah Aziz. “This has made it clear that developing countries cannot be dictated to by anybody.”

“We are going to open up markets one way or the other,” US trade representative Robert Zoellick said ominously.

He hinted that the US would step up efforts to sew up regional free trade agreements and work on bilateral pacts with more nations.

Zoellick said it would now be very difficult for the WTO to meet its deadline of concluding a new trade deal by the end of 2004.

“The WTO remains a medieval organisation… The rules of the organisation cannot support the weight of its task. Given the way it functions now, there is no way to get 148 members to agree on contentious issues,” Lamy said.

“We need to see how we can change the way that WTO functions to make it work,” said Lamy, raising the spectre of a voting system that will give the rich more control as in the UN.

Although both the EU and the US refused to indulge in a blame game, others did.

Canadian trade negotiator Pierre Pettigrew said India and Malaysia had scuppered the talks by refusing to budge even after the EU suggested that it was ready to drop the two most contentious issues: investment and competition policy.

The British and some other European negotiators blamed Luis Ernesto Debrez, the Mexican foreign minister who was the chairman of the Cancun conference, for his “hasty and rash” decision to end the talks because there was no explicit consensus.

Lamy, however, refused to blame Debrez for calling an end to the talks but did appear to question why he took up the Singapore issue first when the talks had centred on agriculture all through.

The talks will now have to be carried forward by the ambassadors of various countries and the WTO general council in Geneva.

“I am disappointed that we have to conclude this ministerial conference in this way, but not discouraged. We need to make sure that everyone remains engaged in the process,” WTO director-general Supachai Panitchpakdi said.

Anti-globalisation activists who had criticised the proposed trade deal sang the Beatles song Money can’t buy the world after the talks collapsed and held up banners reading “We won”.

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