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Developing Nations Have Little Hope for Trade Forum

Tessie Borden
September 7, 2003
Republic Mexico City Bureau

Original Article: http://www.azcentral.com

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MEXICO CITY - This week's World Trade Organization meeting in Cancun will pit developing vs. developed countries in the fight over opening a place for small farmers in the world market.

Few believe the meeting of trade ministers will yield a real compromise.

"I'm not optimistic about what will happen in Cancun," said John Audley, head of the Trade, Equity and Development Project at the Washington , D.C.-based Carnegie Endowment for International Peace.

"They'll probably come up with some sort of patch over their differences so they can declare it a success, but they really won't get to underlying issues."

Resistance developing

The United States wants the 147 member countries to sign on to a trade and tariff deal to open markets for its products. But developing nations, which for years followed the open-market dictates of the World Bank and International Monetary Fund to get loans, are banding together, saying free trade only makes the rich richer and the poor poorer.

They say the trade group's rich countries subsidize large agricultural concerns so they can dump their grains at below-cost prices and undercut small farmers from poor countries, which are barred from subsidizing their farm sectors. Small farmers go broke and poor countries then face high unemployment and dependence on rich countries for food.

The trade group deals have to be reached by consensus. If a large segment of members does not sign on to this week's final trade document, the talks could collapse. They have before.

When the organization met in Seattle in 1999, rioting anti-global protesters in the streets got much of the press coverage. But what made the meeting a failure was a walkout by representatives of Third World countries who felt their concerns were being ignored.

The next meeting, in Doha, Qatar, was much quieter, but grim-faced officials had to promise that the next trade round, leading up to this week's Cancun meeting, would be dedicated to helping poor countries mitigate the damage free trade had done, particularly to their farm sectors.

Tariffs should drop across the world, they said. And rich nations should stop subsidizing their agribusiness. They also should stop dumping their corn, wheat and coffee on the world market.

None of that has happened.

Critics point to Mexico

Mexico, nearly 10 years after the North American Free Trade Agreement, has turned out to be a perfect showplace for free-trade critics. Its farm sector, composed almost entirely of small producers on minimal plots, could not compete with efficient, mechanized American farming that maximized production of yellow corn and other grains.

NAFTA opened Mexico to the grain imports, and the protected internal market the farmers had till then, when they sold their grain to the Mexican government, collapsed. Similar crises have hit coffee and orange farmers.

At the same time, Mexico dropped most farm supports, leaving only programs that have benefited Mexican agribusiness. Critics say the United States continued subsidizing agribusiness after NAFTA, which was supposed to end those supports.

With no way to feed their families at home, the farmers headed to the United States to take up jobs that NAFTA promised but never created in Mexico, joining what has become one of the largest and most sustained migration waves in history.

Developing countries don't want a retreat from free trade, said Anuradha Mittal of Food First, a progressive trade think tank. They simply want fairer rules and a way to enforce them, even on influential rich countries like the United States and Japan and on the European Union. They want the things promised at Qatar.

"They are trying to give us a new check when the old check has already bounced on us," Mittal said. "The fact that they are already saying this is not an end deal, and that negotiations will continue means this is the third successive failure for the WTO."

During an August conference call, Deputy U.S. Trade Representative Peter Allgeier said the U.S. goal is "to seek a high level of ambition in opening markets and expanding trade for all countries."

No final deal expected

Allgeier said that agriculture is key to the success of the meeting but indicated that he does not expect a final agreement to come out of Cancun.

"We don't expect people to agree on what we want the agreement to look like at the end," Allgeier said. "It's very important to realize that this is the midpoint, and so the idea is to ensure that you've got the opportunity to negotiate high-ambition results."

At the trade organization, an alternative fair will promote "fair trade" measures, including coffee and cocoa produced in Mexican farm cooperatives that sell the products as socially responsible alternatives. Mexican Foreign Minister Ernesto Derbez will speak at the fair, and organizers hope that will lend it a higher profile.

But it's doubtful ministers from the rich countries will pay much attention. Mark Ritchie of the Institute for Agriculture and Trade Policy, said they have little incentive to change their practices, and it's natural for each country to seek an advantage for its interests in any trade deal.

Critics saw some reason to hope for a compromise a week ago, when trade-group countries reached a tentative deal to allow poor countries to bypass patent rights to buy or produce lifesaving medicines for critical problems like AIDS.

The United States had blocked such an agreement in deference to pharmaceutical companies, which argued that their patents, on which they rely for profits, would be endangered by freer access. The details of the new deal are to be worked out in Cancun.

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