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Can the WTO Survive? - 2003-09-15

Trade specialists say the failure of the World Trade Organization meeting in Mexico to overcome differences between rich and poor nations has underscored the need for change within the organization, if it is to survive. Some of those involved in the negotiations say intransigence on both sides has hampered real negotiation.

U.S. Trade Representative Robert Zoellick says the failure in Cancun means the WTO will not meet its January 2005 deadline for completing work on a new trade agreement.

The WTO launched the new round of negotiations on liberalizing trade two years ago. The meeting in Cancun, attended by over 140 WTO members, was to assess progress in expanding free trade rules into more areas, including services, investments, and agriculture.

The four-day meeting was marked by bitter disagreements between developing and developed countries over what to do about agricultural subsidies given out in rich countries, primarily the 15 European Union nations, the United States and Japan.

Frank Vargo, who represented the U.S. National Association of Manufacturers in Cancun, says he is surprised and disappointed at the collapse of the meeting. He blames developing countries for the failure, particularly the newly formed "Group of 21", which now comprises around 25 countries.

"It's easy for a group of 21 countries to get together and say, 'no.' It is more difficult for them to take their diverse views and form a position they're prepared to negotiate on," he said. "So, they created themselves too close to the ministerial [meeting], and they were unable to say 'yes' to anything. And in my view that is why it collapsed."

The developing countries, led by Brazil and India, insisted on a rapid rollback of farm subsidies in the rich countries, and refused to open their markets to freer trade in services.

Jim Berger, the publisher of a trade newsletter in Washington D.C., says the Bush administration is likely to respond to the setback in Cancun by pushing ahead with bilateral free trade agreements. Along with Europe, the United States is the primary advocate for further trade liberalization.

"The U.S. trade representative pointed out in the final press conference yesterday [Sunday] that the United States is going to liberalize one way or the other," he said. "He mentioned a growing list of countries that are interested in free trade agreements with the United States."

The United States has already negotiated bilateral free trade agreements with Canada, Mexico, Chile, and others.

Anuradha Mittal, the head of a third world advocacy group in Oakland, California, called Food First, says the failure of the Cancun meeting amounts to a wake-up call for the rich nations. Speaking from the Mexican resort where the talks were held, Ms. Mittal said rich countries can no longer dominate and set the agenda of the WTO, which she says now must change.

"Well, I'm sure the negotiations will continue in Geneva. But the way it [the WTO] has operated so far, it is definitely dead," he said. "And if they [the rich countries] have not yet learned that trying to subvert the will of developing nations, of ignoring the concerns of the farmers, indigenous people and the working poor around the world who are affected by trade agreements, if they continue to do so, it is a dead organization."

Frank Vargo of the National Association of Manufacturers is similarly pessimistic about the future of the WTO, for a different reason. He says, unless a method is found to make the WTO more efficient, the organization could lose its relevance.

"Developing countries have got to recognize that this is a trade liberalization organization. That's all it does. It liberalizes trade," he said. "And if they come to meeting after meeting just to say 'no,' not to sit down and negotiate, then I think we will have to rethink the whole concept of the WTO and see if a new organization should be created for those countries, developing and developed, who truly want to liberalize trade and leave the others out. Or do we turn to regional agreements?"

The World Trade Organization has become a lightning rod for mostly leftist anti-globalization protests around the world. Protests disrupted the 1999 WTO meeting in Seattle, Washington, which like Cancun, collapsed in disarray.