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Last Updated: Monday, 15 September, 2003, 09:37 GMT 10:37 UK
World trade talks collapse
Protesters in Cancun, Mexico
World leaders shut their ears to the poor, say protesters
World trade talks in Cancun, Mexico, have collapsed amid serious differences between rich and poor nations.

The breakdown of talks could be a major setback for the world economy, which has been teetering on the brink of recession for the past two years.

The main sticking point - after four days of wrangling - was the refusal of rich countries to cut huge subsidies they give to their farmers.

Developing nations were also angry about European proposals for new rules on foreign investment, which they feared would open their industries to control by foreign multinationals.

In other developments:

  • Ministers agreed to reconvene in Geneva by 15 December to reassess the future of the trade talks
  • Rich and poor countries blamed each other for the breakdown
  • The deal to provide cheap medicines to developing countries will still go through

There is now a danger that the world trade system will fragment into regional and bi-lateral agreements, which will hit the poorest nations hardest.

There are only losers
Pascal Lamy
EU trade commissioner

The World Bank has estimated that a new global trade deal would lift 144 million people out of poverty.

The US trade representative at the Cancun talks, Robert Zoellick, said the collapse had been caused by too many delegates pontificating, rather than negotiating.

"The differences were very wide, and it was impossible to close the gap," said Kenyan delegate George Odour Ongwen.

And EU trade commissioner Pascal Lamy said: "There are only losers, in the same way that everyone would have emerged as a winner if we had been able to reach agreement at Cancun."

The blame game

Recriminations came quickly.

Ugandan delegate Yasphal Tondon said: "The blame for the collapse must go to the Western countries, because they insisted on putting their issues first."

WINNERS AND LOSERS

Dave Timms of the British development lobby group, the World Development Movement, agreed, telling BBC News Online: "The collapse of the talks was the only option for the developing countries - walking out was better than the deal on the table. It is the EU that must take responsibility for the failure."

Rafidah Aziz, Malaysia's trade minister, said rich countries "kept demanding things that others couldn't deliver".

For once, a coalition of developing countries, led by Brazil, China and India, worked as a bloc to counter-balance the weight of the much richer US, EU and Japan.

"It was not possible to get a concrete result," said Brazilian Foreign Minister Celso Amorim, "but we think that we have achieved some important things: firstly, the respect for our group."

HAVE YOUR SAY
Fair trade, equal treatment to all nations has to be the base of globalization
Samuel Davila, Mexico

However, Argentina's chief negotiator, Martin Redrado, said: "When there is a failure, one has to blame everybody".

The US said too many countries were unwilling to make concessions.

"Whether developed or developing, there were 'can do' and 'won't do' countries here. The rhetoric of 'won't do' overwhelmed the concerted efforts of the 'can do'," said Mr Zoellick.

New issues - and old

The deadlocks centred on the four so-called "Singapore issues", pushed by Japan and the European Union, which were first proposed at an earlier meeting in 1998.

The four issues are:

  • How countries treat foreign investors
  • Standards for anti-monopoly and cartel laws
  • Greater transparency in government purchasing, which might help foreign companies win public sector business
  • Trade facilitation - making things like customs procedures simpler

The issues were passed to Cancun from delegates at the last WTO meeting in Qatar because they were so contentious.

Developing countries balked at including these issues in the trade talks, especially investment rules, because many want to retain control over their own key industrial sectors.

They also argued that the complexity of negotiating in completely new areas would leave them at a disadvantage compared to the rich countries who would be able to take advantage of their greater technical expertise.

Echoes of Seattle

Some movement had been achieved in Cancun with the EU agreeing to some of the Singapore issues from the final communiqué.

But Brazilian Foreign Minister Celso Amorim said some developing nations would not accept even one of the issues in the text.

The developing nations wanted much more movement on the issue of rich nations paying subsidies to farmers but delegates said that failure to achieve success on the Singapore issues scuppered any progress there.

A draft communiqué circulated on Saturday called for an end to export subsidies on farm products of special interest to developing countries, but fell far short of the elimination of all subsidies urged by the G21 group of developing nations.

The failure echoes a similar result at the infamous WTO talks in Seattle in 1999 where divisions between rich and poor nations were accompanied by violent street protests.

In Cancun, thousands of protesters armed with stones and shields and chanting "WTO murders" marched on Saturday to denounce the talks - but were kept away from the conference centre.


WATCH AND LISTEN
The BBC's David Loyn reports from Cancun
"In the chaos, poorer countries said there was just not enough on the table for their farmers"



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