Action Briefing Oct 2003 - Nov 2003
	The Newsletter of Birmingham Friends of the Earth

Cancún Showdown

Cancún, Mexico: the fifth Ministerial meeting of the World Trade Organisation (WTO) collapsed on Sunday 14th September when delegates stormed out after four days of acrimonious trade talks. They could not have chosen a better venue: in the local Mayan language, Cancún means a snakepit.

The Doha trade round launched in Qatar in November 2001 featured grand rhetoric about freeing up trade in agriculture by reducing trade-distorting farm support, slashing tariffs on farm goods and eliminating agricultural-export subsidies.

Disappointingly, the draft framework, when it finally emerged in August, was much less ambitious than Doha had implied. Export subsidies, for example, were not to be eliminated after all. Given the havoc that their farm policies create, rich countries should have done far more.

The EU and the US promote free trade yet continue to subsidise their farmers at a rate of $1 billion a day while also demanding that developing countries cut their tariffs. The effect is to expose already vulnerable small farmers in the South to grossly unfair competition that impoverishes millions as cheap Western food is “dumped” on global markets. Mexican corn prices are reported to have fallen by about 70% since 1994 in the face of subsidised US imports.

Angered
Angered by the lack of ambition on agriculture, a new block of developing countries, the ‘Group of 22’ (G22), got together at Cancún to demand cuts in import barriers, caps on all rich-country farm payments and an end to the subsidies on exported food that let cheap western products flood global markets. They also staunchly defended the right of developing countries not to open their markets to the same degree as the rich countries. Yet the talks collapsed before the real negotiations on agriculture had even begun.

A group of four West African countries managed to get the issue of cotton onto the agenda. West African cotton farmers are being crushed by the $4 billion-plus a year that America lavishes on its 25,000 cotton farmers, depressing prices and wrecking the global market. The West African four wanted an end to these subsidies and compensation for their losses.
On Saturday, the chairman, Mexican foreign secretary, Luis Ernesto Derbez, issued a fresh draft negotiating text but, under the influence of American negotiators fiercely defensive of their own growers, the new draft’s promises on cotton were timid and grudging, with no mention of eliminating subsidies or of compensation.

Singapore Sling
By now, backed by powerful multinational corporations, Europe, Japan and South Korea wanted to move on to negotiations on the four new ‘Singapore issues’ of investment, competition policy, trade facilitation, and transparency in government procurement.

The poorest countries insisted that they were not ready to move into these areas. They were concerned especially about investment rules, because many want to retain
control over their own key industrial sectors.

A last-minute decision by the EU Trade Commissioner Pascal Lamy to drop investment and competition, the most controversial of the four issues, failed to appease the African states. Japan and Korea declared they would only debate on all four issues, or else none of them. In response, Kenya led a walkout of poorest African, Caribbean and Asian countries, and that was that. Derbez said he saw no basis for compromise and declared the meeting over.

Wrecked
So, it looks like the rich countries wrecked the talks by pushing too hard on the Singapore issues and giving too little on agriculture. Developing countries felt that what was on offer, in terms of access to Western markets and agricultural reform, wasn’t a fair deal.

The G22 are united (for now) against an unjust and inconsistent set of trade rules, procedures and practices that dominantly reflect the interest of a few rich countries. If they stick together, their union could provide the sort of balance urgently needed to prevent superpowers from dictating the terms of trade, aid and international policies to their own advantage. However, in the long term future of the G22 is less certain. El Salvador had pulled out even before the talks ended, and the South African countries look likely to pull out of the informal grouping and seek bilateral trade deals with the US. Washington has hinted darkly that those developing countries that adopted “anti-American” positions at Cancún may find their aid and trade relations adjusted accordingly.

The Bush administration likes rules when they protect US interests, but rejects them when they don’t. The WTO, like the United Nations over Iraq, has become a victim of America’s multilateralism of convenience. Having engineered a massive trade deficit, Bush could easily drag the US into a new era of protectionism at home and aggressive export expansion overseas as poor countries desperate for access to the US market enter into risky bilateral and regional deals. For the poorest countries in particular, the chances of getting from a bilateral deal what they failed to get from the Doha round are nil.

Crisis
The WTO faces a real crisis of legitimacy. It cannot go on ignoring its critics for the sake of “efficiency” and liberalization for its own sake when millions of lives are at stake. The first step should be to scrap the Singapore issues. On agriculture, the EU reform of the common agricultural policy (CAP) should be reopened, along with a clear commitment to stop agricultural dumping. The world needs new proposals based on fair and sustainable economies for everyone.

James Botham