Perspectives on the Collapse of the WTO Talks

Since the collapse of the fifth WTO Ministerial Conference talks on September 14, each of the nations involved, especially those that played a key role in preventing a deal, have been quick to put their own spin on the events as either a disaster or great victory.

According to U.S. Trade Representative Robert Zoellick, poorer countries had "unrealistic ideas" about what sort of concessions they could win from, chiefly, the Americans and the European Union. "A number of countries just thought it was a freebie," Zoellick said. "Now, they're going to have to face the cold reality of that strategy and come home with nothing."

Other media reports quote an unnamed U.S. trade official claiming that during the last day of the meeting, shortly before talks collapsed, the U.S. and other wealthy nations "were bending over backward to try to help developing nations. They [the developing nations] just consistently said no to everything."

These comments echoed those made by Pascal Lemy from the EU, as well as those of other European officials in interviews given before the talks even opened.

However, Brazil's foreign minister, Celso Amorim gave a different interpretation. "While it was not possible to get a concrete result, … we think that we have achieved some important things. Firstly, the respect for our group," he said, referring to the G21 alliance of 21 poorer countries, including Brazil, India, China, Nigeria and Malaysia, that tried to put forward a united front of demands on the two key issues on the agenda at the talks: agriculture and the Singapore issues.

The U.S., along with the EU and Japan, were reportedly adamant on not moving an inch on domestic and export subsidies to their agricultural producers, subsidies which total almost $1 billion (U.S.) per day and dwarf the economies of many of the 146-member nations of the WTO. Instead, they are said to have demanded several concessions on market access, both for agricultural products and industrial goods.

This is despite the fact that at every major trade negotiation since the WTO was founded in 1995, the wealthy countries that highly subsidize their agricultural production have made commitments to reduce the levels of payments to farmers. They have then simply ignored these commitments. In fact, in some countries in Europe, subsidies have actually increased, as will be the case in the U.S. once the Farm Bill passed last year begins to take effect in 2004-05.

At the same time, during this period, poorer countries have moved ahead to reduce tariffs, open up market access, ease restrictions on foreign investment and implement a number of commitments they had made in trade talks.

Besides agriculture, talks at the WTO meeting ran into problems on the Singapore issues. These are a series of proposals on rules for investment and competition policies, government contracts or procurement and the enigmatically named "trade-facilitation", which were first put on the WTO agenda in 1996. The EU, Japan and Switzerland took a very strong stand that without major concessions on these issues from developing countries, there could be no deal. They charged that, in particular, nations in Asia and Africa were using corrupt contracting practices and policies favouring national or regional suppliers to the detriment of global free trade. (On this issue, the Americans were quite silent).

Opposition to the Singapore issues was led by the G21 members India and Malaysia. They argued that concessions would undermine the ability of governments to set their own economic policies and that developing economies needed special protection to prevent them from falling into extreme crisis.

When the Cancun talks collapsed, Malaysia's trade minister, Rafidah Aziz, told reporters it was to be expected. "We have always alerted people that unless they listen to the developing countries, this is what will happen."