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Last Updated: Monday, 15 September, 2003, 16:43 GMT 17:43 UK
Mixed feelings over Cancun collapse
By James Arnold
BBC News Online business reporter

Demonstrators in Cancun
Not everyone mourned the failure
Rich countries have expressed their regret at the failure of the Cancun global trade talks, with many calling for reform at the World Trade Organisation (WTO).

The WTO's cumbersome structure, with 146 member governments and a decision-making system based on reaching consensus, made failure inevitable, many are now arguing.

But in the developing world, where a united front formed to oppose American and European trade policies, many commentators have welcomed the collapse in Cancun.

Some governments of poor countries are concerned that it may be years before they gain access to markets in the rich world.

But most have said the unprecedented consensus among large developing economies can only be healthy.

'A severe blow'

The main tone among post-Cancun comments is, however, gloomy.

Korean demonstrators in Cancun
Both sides have blamed each other for the failure of the talks

The summit was not the final chance to hammer out a global trade deal, but was a major stepping-stone on the Doha round of global trade negotiations, launched in November 2001.

The plan had been to reach a deal - satisfying the sharply polarised views of rich and poor countries - by the end of next year.

After Cancun, many say that target is now unrealistic.

The World Bank had calculated that a well drafted pact would add $520bn to the world economy by 2015.

EU Trade Commissioner Pascal Lamy said the failure was "not only a severe blow for the WTO but also a lost opportunity for developed and developing countries alike".

Time for a change

In a separate statement, European Commission President Romano Prodi characterised the WTO as "medieval".

Demonstrators in Dhaka

"What is evident is that the organisation couldn't support the weight of the task it was given," he said.

WTO decision-making, which is intended to be as fair as possible to all participants, is not well-suited to producing contentious decisions quickly.

Many argue that the WTO now needs to re-examine its structure in order to produce results more efficiently.

In the meantime, it is likely that bilateral trade deals, especially with the US or EU as one of the parties, will be the main focus of trade talks in the near future.

Ups and downs

The mood among developing countries has been more complex.

In the initial aftermath of the collapse of talks, many delegations and governments from poorer countries were euphoric.

Governments in Africa and Asia are not used to forming a united front.

And in this instance, the failure in Cancun was interpreted as their victory over the economic might of the EU and US.

"The one success that has emerged from this conference is the unity among the developing countries," said Peter Draper, a trade research fellow at the South African Institute of International Affairs.

But at the same time, many fear that their ultimate ambition - equal or even preferential treatment for their goods in world markets - will now be postponed indefinitely.

"In the long term, we lose out," said Dennis Kabaara, head of the Institute of Economic Affairs think tank in Nairobi.

"It means that the developed world, the EU, America and Japan, will take even longer to reduce their subsidies."

The BBC's Evan Davis
"The poorer countries were not going to be pushed around"

The new politics of trade
15 Sep 03  |  Business

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