CANCUN, MEXICO — As the World Trade Organization’s Fifth Ministerial Meeting was kicked-off September 10 in Cancún, Mexico, the battle on the streets began. Demonstrators and police in full riot gear exchanged blows with sticks and batons as large jagged chunks of pavement and rocks were being hurled at the police line. To everyone’s surprise the projectiles were soon returned from the opposite direction. A few globalifóbicos—as the protestors were called—blocked the rocks with "borrowed" police riot shields, while some were able to stop the rocks with their huge painted banners, others were not as lucky. It all seemed very medieval: Two masses of heavily armored groups—police in their navy riot gear and protestors clad in an array of colorful helmets and makeshift padding with only their eyes showing behind bandanas—converging on a predetermined spot to battle it out.
As expected, thousands of protestors from around the globe descended on this Mexican Caribbean beach resort to oppose the corporate-led neoliberal globalization policies of the WTO. But the strongest opposition to the WTO’s "business as usual" attitude came not from the streets, but from inside the conference walls. Trade representatives from the Global South united against the trade agenda of the E.U-U.S. and their allies. At the start of the talks one Caribbean delegate worried, "The question is not whether they can divide us or not, but rather, whether we can remain united." They did. The level of solidarity and unity among developing countries in Cancún is historically unprecedented. They resisted incredible pressure, strong-arming and bribery by the U.S.-E.U. plus Japan delegations and held firm to common positions on the most contentious issues, effectively blocking the agenda of the world’s most powerful governments.
Opposition by developing countries in the WTO had been building since the 2001 WTO Ministerial in Doha, Qatar, when at the eleventh hour of an unexpected fifth day, developing countries were practically forced to adopt a Ministerial Declaration they had absolutely no role in drafting. The declaration—titled by the WTO as the "Doha Development Agenda," and sarcastically referred to as the "Everything but Development Agenda" by developing nations—contained broad ambiguous language that did not address developing countries’ most serious concerns. It did not, for example, include any of the changes to current WTO rules, which the majority of member states agree are flawed to begin with, and it left open the continued expansion of rules into issues unrelated to trade.
Only two weeks before the meeting in Mexico, the WTO hastily played lip service to continued criticism by developing countries and approved an agreement on easing access to cheap generic drugs so poor nations can address public health crises and emergencies. The concession sought to sidestep a potentially explosive issue at Cancún that could have stalled negotiations for days. But the deal was largely cosmetic and according to Ellen ‘t Hoen of Doctors Without Borders, "[It] was designed to offer comfort to the U.S. and the Western pharmaceutical industry. Unfortunately, it offers little comfort for poor patients. Global patent rules will continue to drive up the price of medicines."
With the "drug deal" out of the way, developing countries focused on agriculture. Particularly, the estimated $300 billion a year in domestic support and export subsidies by rich countries that depress prices, diminish the export earnings of poor countries and prevent them from competing with the artificially cheap crops of the developed world. In his opening statement, Brazilian Foreign Minister Celso Amorin bluntly spelled it out: "[Subsidies] only generate dependency on the one side and deprivation on the other." It’s worth noting that independent farmers across the North-South divide oppose these massive subsidies since they mostly go to huge agribusiness corporations.
Knowing that agriculture would be an uphill battle, some developing countries had organized into negotiating blocs or groups in the run-up to the meeting and created fortified common positions on several issues. Brazil along with China and India led the charge by creating what by the end of the meeting had become the Group of 22 (G-22), constituting half of the world’s population and two-thirds of its farmers. The G-22 proved to be the strongest counterbalance to the E.U.-U.S. agenda especially on the issue of agricultural subsidies, which dominated the first days of the talks. With the playing field now leveled, the negotiations stalled and the growing rift between North and South widened.
In the meeting’s boldest agricultural initiative, the West and Central African nations of Benin, Burkina Faso, Chad and Mali proposed the immediate elimination of all subsidies on cotton. These countries obtain up to 80% of their export earnings from cotton. The initiative was primarily aimed at the United States, which subsidizes its cotton growers with $4 billion annually—more than the combined value of the four African nations’ entire cotton production. They argued that subsidies by rich countries are destroying the livelihood of millions of African farmers and impeding development in the region. This reasonable and relatively modest request was snubbed by the U.S. delegation. In response to the proposal one U.S. negotiator reportedly jeered, "Create a larger demand for T-shirts." The African cotton initiative clearly demonstrates the hypocrisy inherent in U.S. trade policy, which on the one hand requires developing countries to open their markets while it pursues protectionism on the other.
U.S. intransigence on agricultural subsidies was especially frustrating for Latin American countries, which make up the bulk of the G-22, because Washington has repeatedly told Latin American trade negotiators that it only intends to discuss agriculture in the WTO and not in the context of the ongoing Free Trade Area of the Americas (FTAA) negotiations. Argentine Foreign Minister, Rafael Bielsa, insisted that "agriculture must be at the center of [WTO] negotiations, because public opinion wants it there." Apparently, U.S. Trade Representative Robert Zoellick did not agree.
The meeting’s most numerous alliance was between the African-Pacific-Caribbean Group of States (ACP), the African Union (AU) and the Least Developed Countries (LDCs), comprising a total of 90 nations. Announcing the recently formed alliance, their spokesperson noted, "The WTO is a member-driven organization, so today I am speaking to you on behalf of a majority of the membership of the WTO. So theoretically if we read the WTO statutes properly, the weight of our proposal should be determinant in these negotiations." Again, U.S. Trade Representative Robert Zoellick did not agree.
Like the G-22 this alliance focused on negotiating improved market access for agricultural goods, yet they also had a distinct agricultural agenda that sought to protect preferential trade agreements. As former European colonies the ACP, for example, has the Cotonou Agreement with the E.U., which extends preferential trade arrangements—a guaranteed percentage of market share for a particular product or preferential tariffs—to all ACP states. Such agreements are essential to ensure the gradual and successful integration of these extremely vulnerable countries to the multilateral trading system. Many have the severe disadvantages of being small developing island states, landlocked countries, highly indebted poor countries or countries in war or post-war situations, making preferential trade agreements all the more necessary.
The G-22 and the ACP-AU-LDC alliance may not have won the offensive battle they waged on behalf of their farmers, but they did win the defensive battle against beginning negotiations on the Singapore Issues. The Singapore or New Issues, most energetically endorsed by the E.U., Canada and Japan, generally limit the ability of states to regulate foreign investment and companies. The issues are investment, transparency in government procurement, competition policy and trade facilitation.
An agreement on investment would make capital controls illegal. Capital controls prevent investments from rapidly entering or leaving a country—dubbed "hot money." Chile and Malaysia used such controls to emerge relatively unscathed from the Mexican peso crisis in 1994 and the East Asian financial crisis in 1997, respectively. Transparency in government procurement essentially means that governments would not be able to give preference to local firms or suppliers in awarding contracts for goods or services. Such preferences are often part of development strategies that reinvest state funds locally and encourage nascent or vulnerable sectors of the economy to grow. The final two, competition policy and trade facilitation, propose one-size-fits-all prescriptions without flexibility for implementation according to local needs, funds or circumstances.
The Singapore Issues marked the death knell of the Cancún Ministerial. Developing countries, especially those in the ACP-AU-LDC alliance, were practically unanimous in rejecting negotiations on these issues. The Doha Declaration clearly stated that negotiations on the New Issues could only begin "on the basis of a decision to be taken by explicit consensus." The clause was a last minute addendum included by the Ministerial Chairperson of Doha at the insistence of developing countries. In Cancún delegates reported that the E.U. with the U.S. on board was trying to link the New Issues with agriculture, making cuts in subsidies contingent on induced "explicit consensus." Indonesian Trade Minister Rini Sumarno Soewandi responded angrily saying: "Any country that tries to link the two issues [agriculture and the New Issues] is very selfish. And it is that country or group of countries that wants this round to fail." Several trade representatives explained that it was inconceivable to expand the scope of WTO rules without first addressing previously unresolved issues.
By the time Mexico’s Foreign Secretary and Ministrerial Chairperson, Luis Ernesto Derbez, abruptly announced the end to the Conference on the final day, the negotiations were far beyond salvageable. The Kenyan minister was the first to defiantly walkout of the final meeting. At this point, the Ministerial collapsed amid deadlock and outrage. A weak Ministerial Declaration was passed that merely said negotiations would continue "with a renewed sense of urgency" at the Geneva headquarters and listed December 15 as the deadline "for concrete results."
The Cancún Ministerial was widely expected to be a "make it or break it" event for the WTO’s future and for the course of multilateral trade negotiations. Editorials and conservative media sources charge that the collapse of the talks spells doom for poor countries since the U.S. will now focus on bilateral or regional trade agreements like the recently signed free trade agreement with Chile or the FTAA. But the delegates of developing countries, who repeatedly confirmed, "No agreement is better than a bad agreement," were the only ones who could confidently declare victory. If the WTO itself wants to survive, structural reforms will have to take place and the scope of the organization must be seriously reduced to matters of trade in the strictest sense of the word. Public Citizen’s FTAA Coordinator, Timi Gerson, believes "The collapse of the talks represent the rejection of a fundamentally antidemocratic trading system." The Cancún meeting also demonstrates that the multilateral trading system can in fact be multilateral, which is in itself a victory. Mark Ritchie of the Institute for Agriculture and Trade Policy echoed this sentiment: "The fact that now there is an actual negotiation taking place between a large majority of the countries of the WTO is an incredible positive outcome of this meeting."
The blame game for the collapse began even before the unceremonious end to the Ministerial. Critics of the NGOs pointed to their participation as fueling fires and "misguiding" representatives of the developing world. The negotiating positions of both sides have been called too extreme. Summing up the meeting Brazilian Minister Amorin warned, "Development goals cannot be an afterthought in rules tailored to the needs of developed countries; a footnote in agreements which largely ignore the developing world."
Washington should take heed of the Brazilian Minister’s words if it does not want the upcoming FTAA negotiations in Miami to share the fate of the talks in Cancún. Miami will be definitive in testing Latin American countries’ commitment to opposing the U.S. free trade agenda. In the FTAA the most hotly contested issues are the same as those in the WTO: agriculture and investment. Gerson commented that "They’re the same issues and the same players that led to the collapse of the WTO talks, so there’s no reason to think that those issues won’t be just as divisive in the FTAA." Especially since the proposed FTAA rules—like NAFTA’s—are far more rigid and wider in scope than the WTO’s. And in the FTAA the U.S. will once again have to deal with fortified negotiating blocs. Mercosur, the South American common market and its allies, could provide the kind of counterbalance that leveled the playing field at the WTO.
When the news of the collapse spread through the Convention Center, NGO representatives jubilantly celebrated. When the news of the collapse broke on the streets, a collective sigh of relief emanated from the weary protestors followed by a celebratory yell of victory. For five days they had tried and finally succeeded in breaking through the barricades. Once on the other side of the fence, they turned their backs to police and sat down in a symbolic act of nonviolent civil disobedience. The phrase was repeated everywhere: "Demands from the streets were finally brought to the Conference hall." And one thing was certain: the collective resistance in Cancún will continue to reverberate, not just in trade negotiations, but in international relations more broadly. The momentum is ours.
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