Blow to world economy as trade talks collapse
Larry Elliott, Charlotte Denny and David Munk in Cancun
Monday September 15, 2003
The Guardian
The fragile global economy received a damaging blow last night when trade
talks in Cancun collapsed after a walkout by African countries protesting at
the west's failure to open its markets to the poor.
In scenes reminiscent of the World Trade Organisation's disastrous Seattle
meeting four years ago, a day of acrimonious wrangling ended as the
chairman, the Mexican foreign secretary, Luis Ernesto Derbez, was unable to
get talks restarted after Kenya lost patience and left the negotiating
table.
The breakdown came after the EU had refused to back down on its insistence
that poor countries should pay for a better deal on agriculture by agreeing
to new global deal on foreign investment.
The Kenyan delegate, George Oduor, came out of the closed meeting saying:
It means that the conference is ended now.
WTO ministers issued a terse statement admitting that the negotiations had
broken down and that trade officials would have to try to bridge the gulf
between rich and poor countries back at the organisation's Geneva
headquarters over the coming months.
Cancun was intended to bring fresh political impetus to the talks, which
have made little progress since they were launched in Doha in November 2001.
Last night's breakdown virtually rules out the prospect of the Doha round
finishing on schedule by January 1 2005, and raises the possibility of the
talks dragging on for years.
Robert Zoellick, the US trade representative, said: Whether developed or
developing, there were 'can do' and 'can't do' countries here. The rhetoric
of the 'won't do' overwhelmed the concerted efforts of the 'can do'. 'Won't
do' led to impasse.
Mr Zoellick said that after the setback in Cancun, the US would redouble its
efforts to reach bilateral trade deals with favoured nations.
Five days of brinkmanship in Cancun had been dominated by a struggle between
the WTO's traditional powerbrokers, the EU and the US, and a new group of
militant developing countries, flexing their negotiating muscles for the
first time. Led by Brazil, India and China, they are counting on yesterday's
breakdown to put them in a stronger position when negotiations eventually
restart.
This is the first time we have experienced a situation where, by combining
our technical expertise, we can sit as equals at the table, said Alec
Erwin, South Africa's trade minister. This is a change in the quality of
negotiations between developing and developed countries.
The failure of the talks is a particularly hard blow to Britain. The trade
secretary, Patricia Hewitt, had been talking up the chances of a deal hours
earlier after the EU agreed to tone down its demands.
Ms Hewitt said: There was a deal to be done, and it is a bitter
disappointment that we haven't reached agreement.
With the world economy already fragile, analysts fear the collapse could
further damage business confidence. Chances of real progress are seen as
slim for at least the next year, given approaching elections in the US,
India and France, three of the WTO's key members.
Development campaigners said no deal was better than a bad one for poor
countries.
The blame game will start right away, but as far we are concerned, Pascal
Lamy [Europe's chief trade negotiator] is chief suspect number one and two,
said Duncan Green, policy analyst at the Catholic Agency for Development,
Cafod. He opposed the interests of developing countries right to the end
and this is the price we have to pay.
Oxfam said the refusal of the EU and US to cede any ground to developing
countries on agriculture - and Europe's attempt to force a global investment
and competition treaty on to the table - had forced poor countries to walk
out.
A small group of countries - the EU, US, China, South Africa, Brazil, India,
Malaysia and Kenya - had been locked in tense discussions for most of the
day in the hope that a deal which they agreed to could be rubber-stamped by
other members.
Countries from Africa and the Caribbean were infuriated by this tactic,
arguing it went against assurances they had received after Seattle that they
would not be excluded from the real decisions.
Under pressure from other African countries, the Kenyan delegation left the
talks at midday, blaming the EU for insisting on talks on the so-called
Singapore issues, four new negotiating areas including investment and
competition which poor countries say they are not ready to discuss.
When Mr Derbez reconvened the meeting after lunch, Europe's offer to
withdraw investment and competition, the most contentious issues, was
rejected by Botswana, speaking for the poorest countries.
Lamy, the great negotiator, pushed the talks over the brink, said Matthew
Lockwood, of Action Aid.
You ask me who is to blame, said Kenya's Mr Oduor. I would say it is
those who have been trying to manipulate the process. Those who have been
