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Trade Officials Say Failure of WTO Talks Not 'Death Blow'

The collapse of talks at the fifth Ministerial Meeting of the World Trade Organization, or WTO, on Sunday has led some observers to question the viability of the world body. But, insiders say the Cancun breakdown was a setback, but not a death blow.

The breakdown in the WTO talks resulted from a standoff between the rich industrialized nations and a grouping of developing nations over the issue of agricultural subsidies. The poor nations want them eliminated because they make it difficult, if not impossible, for their farmers to compete. The industrialized nations, particularly the European Union, insisted that at least some issues from a previous round of talks in Singapore should be included, something the developing nations rejected.

The developing nations bloc was led by large nations like Brazil, India and China, and came to be called the Group of 21, or G-21. As this group grew, its members began referring to it as the G-20-plus. While many ministers left Cancun disgruntled and unhappy with the lack of progress, leaders of this group expressed elation over their new-found clout.

Brazilian Trade Minister Celso Amorim told reporters that the formation of this group represents a success that overshadows the failure to come to an overall agreement. "It is not now for us to seek who is to blame for that. That does not matter much to us," he said. "What matters is that, on agriculture, which was the issue on which we united, we were able to engage in serious negotiations. We were a respected actor."

Mr. Amorim said he does not believe the breakdown in the Cancun talks really represents a profound crisis for the WTO or the future of world trade.

The Brazilian trade minister said Cancun does not represent the end, but the beginning. "Many of us have been in this field for a long time. We know that this never stops. It goes on," he said. "This is a process and we emerge from this process stronger than we came into it. We are sure that, as it continues, in Geneva, in a new ministerial meeting, the G-20-plus will continue to play a decisive role in the agricultural negotiations."

WTO officials also reject the idea that Cancun was a total failure. They say some progress was made and that even if the self-imposed deadline of having a complete agreement by January 1, 2005 is not met, the organization will continue to serve a purpose in resolving trade disputes and providing a forum for further negotiations.

But U.S. Trade Representative Robert Zoellick accused developing nations of engaging in rhetoric rather than negotiations in Cancun. He expressed hope that the damage done to the WTO could be repaired, but he said that would require serious action and not just words.

"You are not going to fix it with the sort of rhetoric I heard last night. It is easy to play to a home audience or to applause, but that will not do the hard work of negotiations," he said. "I think if you talk to the G-21, I think we made some good progress, at least for the United States in agriculture. We have always been willing to negotiate. We have some aggressive proposals out there. We can cut subsidies if we can get the EU to cut subsidies closer and if we open markets. We will open markets more than others will, but we have to open markets, which, by the way, will help the developing world as well with their trade."

Mr. Zoellick said the United States remains committed to free trade and will seek agreements either multilaterally through the WTO or with individual nations. On the immediate horizon is the attempt to form a free trade zone in the western hemisphere, known as the Free Trade Area of the Americas, or FTAA. Trade ministers from throughout the region will gather in Miami November 20-21 to begin talks aimed at lowering trade barriers in the Americas.

But several Latin American nations were part of the Group of 20 plus nations in Cancun who took a firm stand on the agriculture issue. This could also be a problem in Miami since countries like Brazil and Argentina want much greater access to the U.S. market for their sugar and citrus products. Sugar and citrus producers in the southern part of the United States can be expected to resist any lowering of barriers. So the stage for trade disputes is set, not only in the WTO, but elsewhere.