WTO Talks Could Derail in Cancun

When U.S. Trade Representative Robert B. Zoellick left Qatar nearly two years ago after launching World Trade Organization talks there aimed at opening markets for farm goods and manufactured products, he was riding a wave of sympathy from the devastating attacks on the World Trade Center and the Pentagon.

But backlash from the Bush administration’s campaign against Iraq -- and its embrace of controversial steel subsidies and a $190-billion farm support bill -- have eroded the global reserve of good will toward America. Huge job losses and a booming trade deficit in the U.S. and sluggish growth in Europe and Japan have damped public enthusiasm for opening borders. And the election of left-leaning leaders in countries such as Brazil has bolstered skepticism of the free-trade mantra that swept the world during the last two decades.

“We’re saying, it’s rhetoric -- the U.S. says one thing and does another,” explained Pedro de Camargo Neto, a former Brazilian trade negotiator and official with Brazilian Rural Society, an influential farm group that has sought increased access to U.S. soybean, sugar, orange juice and cotton markets.

That translates into a much tougher environment for Zoellick and other trade negotiators hoping to find common ground at this week’s ministerial meeting of the World Trade Organization in Cancun. The five-day gathering in the Mexican resort city is slated to open Wednesday with a speech by Mexico’s President Vicente Fox, while thousands of Mexican farmers and peasants are expected to offer dissenting views in a protest march far from the closely guarded Cancun Convention Center.

The Geneva-based trade organization scored a victory last month when it hammered out an agreement that makes it easier for poor countries to access generic medicines for HIV and other life-threatening diseases. The U.S. refused to sign the pact until some revisions were made to protect the patent rights of pharmaceutical companies.

Two of the world’s most impoverished countries, Nepal and Cambodia, are expected to join the WTO this week.

But the widening rift between wealthy and poor countries over trade in agricultural goods is threatening to derail the talks in Cancun, according to trade experts. After several missed deadlines, WTO officials had hoped this week to finalize a blueprint for continuing negotiations. The 146-member group had set a goal of January 2005 to complete the round begun in Doha, Qatar, almost two years ago that was meant to focus on boosting trade prospects for the world’s poor.

Last month, 20 developing countries led by Brazil, India and China said they were not moving forward unless the world’s largest economies agreed to slash farm supports and give up protections for politically sensitive crops such as grain, cotton, rice and sugar.

“By failing to make adequate progress on the things the developing countries believe constituted a development round, what was a way station became a land mine,” said John Audley, a former Clinton administration official and a senior associate at the Carnegie Endowment for International Peace. “Now, survival becomes a key objective of this meeting.”

The thousands of farmers, labor advocates and citizen groups -- expected to turn Cancun into a giant protest march and anti-globalization teach-in over the coming week -- would like nothing more than to stop the WTO talks dead in its tracks.

“We would consider a good outcome to be the stalling of the Doha round,” said John Cavanagh of the Institute for Policy Studies, who is scheduled to participate Tuesday in a forum titled “Alternatives to Globalization and the WTO.”

The U.S. has urged the WTO to eliminate tariffs on manufactured goods by 2015 and substantially reduce agricultural tariffs and do away with export subsidies over a five-year period. Lowering trade barriers would be particularly advantageous for California farmers, who depend heavily on exports to Asia and Latin America.

In recent weeks, the Bush administration has played hardball, threatening to pursue free trade through bilateral and regional trade talks if this week’s discussions falter. In November, the U.S. will host a meeting in Miami to discuss progress on the creation of a North American free-trade zone.

“We’re not stopping,” Zoellick told a group of executives in Washington recently. “We’re moving with the countries that are willing to go.”

Jeffrey Schott, a senior fellow at the Institute for International Economics in Washington, said the Doha round won’t progress unless poor countries are willing to give up calls for “special and differential treatment” that are thinly disguised protectionist measures. “This is not an entitlement round where countries come in and say, ‘We’re poor, we need charity,’ ” he said.

But that kind of tough talk doesn’t sit well with advocates for the developing world. They point out that the U.S. and the European Union spent more than $150 billion on support for their farmers last year. This gives them an unfair advantage over competitors in the world’s poorest countries, the advocates say, and depresses global prices.

“The Doha round matters a great deal to the world’s poor,” said Richard Newfarmer, a World Bank economist who estimates that a trade deal could lift as many as 144 million people out of poverty by 2015. “It would be a shame if this opportunity were to slip by because of a few narrow parochial interests in countries all over the world.”

Cotton growers are among the most heavily subsidized farmers in the United States -- receiving more than $3 billion a year in subsidies, according to the World Bank. But John Pucheu, a third-generation cotton producer from Tranquillity, Calif., said he would be happy to go off the government dole if his competitors abroad would follow suit and other countries would remove barriers to U.S. cotton.

“The support programs don’t take the place of higher market prices,” he said. “They help, but we would much rather have higher prices for our commodities and not have to depend on those other things.”