WTO Collapses in Cancun

Luis Ernesto Derbez, the commerce-minded Mexican foreign minister and the official host of the fifth ministerial meeting of the World Trade Organization, slid behind the podium of the great auditorium at the ultra-modern convention center here last Sunday evening, and, in a profoundly somber voice, proclaimed the Cancun trade summit of 148 sometimes sovereign nations adjourned without having reached agreement on any of the do-or-die issues confronting this would-be arbiter of the corporate globalization of the Planet Earth. Then, pounding his wooden gavel sharply, Derbez dismissed the remaining delegates and the sound that emerged was like that of nails being driven into the WTO’s coffin.

But not all those present were quite so funereal. Led by Oxfam, British NGOs gathered to warble Beatles’ tunes with slightly altered librettos such as “Can’t Buy My World” and, behind police barriers five miles away down Kulkulkan Boulevard, Cancun’s Rodeo Drive, ‘globalphobes’ from many nations danced a wild jig as news of the collapse spread.

“This is the WTO’s waterloo” grinned Walden Bello, the Philippino activist who has been locking horns with the Geneva-based organization since its founding in 1995. “The World Trade Organization is like a bicycle–if it doesn’t move forward, it falls down.”

The stunning fracaso in Cancun left U.S. trade rep Robert Zoellick sputtering. In a high dudgeon, the normally low-key veteran negotiator accused the developing country bloc known as G-21 of contaminating the Cancun talks with harsh “rhetoric.” With agriculture the centerpiece bone of contention in the Doha or “Development” round of WTO trade liberalization negotiations, the G-21–really 23 developing nations led by Brazil, India, and China–had demanded the abolition of huge first world farm subsidies and high agricultural tariffs, a concession the Bush administration apparently regarded as suicidal as the U.S. enters an election year.

But what Zoellick labels “rhetoric” is reality for poor and developing nations where the overwhelming majority of the world’s impoverished peoples barely survive on $1 to $2 USD daily while Japan allocates $7.50 per diem to every cow in its archipelago. With seven out of ten of the world’s poor dependent upon agriculture, hunger, disease, and illiteracy are endemic in the rural south of the world.

According to World Bank bean counters, the refusal of the U.S., the European Union, and Japan to cut subsidies and tariffs means that 144 million farmers and their families who might have been lifted out of poverty by first world concessions, will find no relief in the foreseeable future.

Orchestrated by the world’s commercial giants, the collapse at Cancun was a fracaso foretold. Arrogantly rejecting G-21 proposals, the U.S., U.E., and Japan abruptly switched agendas, shoving agriculture to the back burner when they realized they would not get their way, and substituting instead demands to open third world economies to protected foreign investment (the so-called ‘Singapore Themes’ in trade jargon), an issue viewed as a poison pill for many developing countries.

As the talks crept into their final hours September 14th, the ambiance inside the inner sanctum Green Room was reportedly aflame with mutual accusations. Sub-Saharan cotton producers like Mali and Burkina Faso which thought they had a deal to cut $3 billion annual subsidies to U.S. cotton farmers until Zoellick and his associates changed the subject, threatened walk-out. By mid-afternoon, Kenya, Uganda, and 100 other poor and developing nations abandoned the talks. When Derbez dismissed the closing session, few delegates were left in the auditorium.

Although the collapse at Cancun was hailed by anti-globalization forces as sweet victory, the real triumph was the surprising solidarity of the South, despite rampant contradictions between regions (Brazil, for example, has some of the highest cotton tariffs in the world.) But India, Brazil (under the leadership of foreign minister Celso Anorim, the real star of the show), South Africa, China, and their many co-conspirators inside and out the G-21 and the Africa-Pacific–Caribbean bloc (APC) refused to buckle before first world inflexibility. In its debut WTO summit, China, a rich country with millions of poor farmers, for once stood solidly with the developing world. The collective walk-out, much in the tradition of Latin Americans marketplace bargaining where the customer walks away and the seller soon follows with a better offer, will strengthen the G-21’s hand in future negotiating sessions–if such sessions ever evolve from the Cancun fracaso.

This new-found solidarity was forged in the face of Zoellick’s Machiavellian maneuvering to split the G-21 and their APC allies asunder and pit poor against not-so-poor economies and big agricultural exporters (the Cairns group) against very poor net food importers. The U.S. trade rep reportedly applied tourniquet-like pressure to the six countries with which Washington currently entertains bi-lateral “free trade” pacts, including Mexico, a member of G-21 which suffers grievously from grotesque U.S. ag subsidies–and which, despite the fact that 90% of its trade is with its northern neighbor, joined with the south on this issue. In fact, Zoellick was successful only in splitting tiny El Salvador, a client state, from the pack–meanwhile, third world powerhouses Nigeria and Indonesia joined the G-21.

One mark of the U.S.’s desperation: on the eve of calamitous disagreement, assistant trade rep Peter Allgeier cited a previously unheard-of ‘Group of 32′ (he could only remember one country–Honduras–as being a member) which purportedly did not endorse the G-21/APC demands. Under reporters’ incessant questioning, the new group was unmasked as a Bush administration invention.

The White House is quite right to be in a sweat over the Cancun debacle. George W. Bush’s failure to foist a bad deal on the WTO will only swell the U.S.’s record-busting $100 billion trade deficit. Moreover, this latest blow to Washington’s plans for the commercial domination of the globe comes at a difficult economic moment for the U.S. Commander-in-Chief who is seeking to browbeat congress into tacking nearly $100 billion onto an already unprecedented half trillion dollar budget deficit to finance his no-light-at-the-end-of-the-tunnel wars in Iraq and Afghanistan.

The Cancun blow-up will also set back predicted trade job gains as the U.S. unemployment rate soars to its highest levels since the first Bush was forced out of the White House. Like the father, the dismal state of the U.S. economy may well dump the son in 2004.

The fall-out from Cancun also threatens Bush’s cherished Free Trade Area of the Americas (or ALCA in its Spanish acronym.) Reverberations from the WTO revolt will surely surface at the upcoming FTAA ministerial meeting this December in Miami. The key role played at Cancun by Brazil, now governed by ex-steel worker Luis Inacio da Silva, “Lula”, who has been the most adamant obstacle to projected FTAA 2005 start-up, is not a good omen for U.S. plans to extend the dubious benefits of the North American Free Trade Agreement (NAFTA) all the way to Tierra del Fuego. Failure to implement the FTAA by 2005 will mean expiration of the White House’s “fast track” negotiation authorization, without which no deal can be struck.

The Cancun collapse also torpedoes time tables for the Doha round and seriously compromises the WTO’s credibility. Technical talks are scheduled to resume in mid-December in Geneva where the big power Quad (the U.S., U.E., Canada, and Japan) may ask for rule changes to limit groups of countries like G-21 from blocking consensus. “The WTO operates like a medieval institution” grumbles U.E. trade minister Pascal Lamay.

One underlying reason the U.S. and its accomplices were unable to impose their will upon the rest of the world in Cancun was palpable resentment at the White House’s unilateral aggression in Iraq, predicated as it was on the diminishment of the United Nations as a multilateral forum. The subsequent hate waves that have spread throughout the third world since Bush’s Shock & Awe show over Baghdad, were translated into commercial rejection on the Mexican Riviera. Having burned multilateralism in Iraq, Bush was burned by multilateralism–with a distinctly southern flavor–in Cancun.

As in Iraq, Zoellick’s blunt response to the failure to reach agreement was that the U.S. would go it alone, imposing bi-lateral “free trade” treaties upon its client states, if the WTO does not soon come to its senses.

On the opening day of the Cancun conclave, a despondent Korean farm leader, Lee Kyung Hae, climbed a police barrier and thrust a dagger deep into his heart. Shocking as it was, Mister Lee’s suicide is not uncommon amongst farmers all over the world–in India’s Karmataka state, over 200 poor farmers have reportedly taken their lives since crops failed in April and a Mexican campesino recently set himself on fire.

The Korean farmer’s suicide cast him as an instant icon of agrarian desperation in the third world and more than metaphorically, proved to be a dagger to the heart of the Cancun talks. According to delegates interviewed as they exited the convention center last Sunday, Mister Lee’s death stiffened the resistance of poor and developing nations and ultimately produced historic rejection of Washington’s imperial imperatives.

The Cancun collapse is unquestionably a victory for those who oppose corporate globalization but it is not one to get drunk on. The lack of an agreement only sharpens contradictions between rich and poor agricultural producers and allows the first world to continue to lavash $300 billion in annual subsidies that are flattening the farmers of the south.

Mexican campesinos know well this dark side of the money. Washington’s hand-outs to its big farm combines allows them to dump 6,000,000 tons of below-cost, mostly genetically-modified corn on this side of the border. Unable to compete in the internal market, campesinos abandon their plots and migrate north. Since NAFTA, that beacon of globalization, kicked in ten years ago, over 3000 Mexicans, many of them displaced farmers, have died trying to get across the U.S. border, more than the number of those who lost their lives in the 9/11 terror attacks on New York and Washington.

JOHN ROSS’s chronicle of the WTO debacle, “Mister Lee Comes to Cancun” will be released shortly.


JOHN ROSS’s El Monstruo – Dread & Redemption in Mexico City is now available at your local independent bookseller. Ross is plotting a monster book tour in 2010 – readers should direct possible venues to johnross@igc.org