After Cancun, Rich Man's 'Debacle' Is the Poor Man's 'Moral Victory'

15 September, 2003
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After Cancun, Rich Man's 'Debacle' Is the Poor Man's 'Moral Victory'

By Jefferson Morley
special to
Tuesday, September 16, 2003; 11:19 AM

In the United States, the failure of the World Trade Organization meeting in Cancun, Mexico, to reach a new agreement was seen as a "debacle" that cast a shadow on the future of free trade.

The online media in the world's poorer countries had a very different view.

The editors of The Times of India call it "a great moral victory for the world's poor."

In Malaysia, the New Straits Times hails "a victory for developing countries which have come into their own."

While the European and U.S. media have been more evenhanded in assessing blame, the banner headline in the Daily Star, a leading Bangladesh daily, proclaimed the consensus of the developing world: "Cancun Talks Collapse Over Rich's Rigidity."

There isn't a lot of dispute about what happened at Cancun. The world's wealthiest countries -- the United States, the European Union and Japan -- sought to expand trade rules into new areas such as foreign investment overseas, corruption and bureaucratic reduction.

These proposals, known to policy wonks as the "Singapore issues," were spurned by the poor nations, led by India, China and Brazil. They demanded that the wealthy countries first commit to a schedule of eliminating subsidies and protective tariffs for interest groups, including Japanese rice growers, U.S. textile manufacturers, and French farmers.

With a specificity that is all too rare in the Western economic press, the People's Daily, the organ of the communist party of China, yesterday gave some specific examples of what the poor countries view as unfair.

"The tariff on the goods imported from developing countries is 4-5 times on average higher than the tariff collected between developed countries," the Beijing-based news site notes.

"For example, a shirt produced by Bangladesh workers, after high customs duties are collected from it when entering the U.S. market, is more expensive than a shirt imported from Britain. . . . American clothes imported from India are charged 19 percent tax, whereas clothes imported from France, Japan and Germany are charged only 0-1 percent tax. The average tax rate on goods imported by the United States from Vietnam is 8 percent, whereas the tax ratio on goods imported from Holland is only 1 percent."

Another example: "U.S. cotton growers get government subsidies exceeding $3 billion a year, according to figures released by the international cotton advisory committee. These subsidies have caused a 25 percent cotton price reduction on the world market. This is disastrous to the cotton growers of poor nations."

The Times of India says that "Any sign of weakness or concessions from the developing countries at the Mexican resort would only have further skewed the already lopsided terms of global trade."

"It was important to tell the western world that unless there was a time-bound commitment to end farm subsidies once and for all, there was simply no way forward. After all, in the 10 years since the Uruguay round, which gave birth to the WTO, farm subsidies in the U.S. and the EU have, instead of being scaled down, shot up: From $180 billion to more than $300 billion. With the developing countries forced to liberalize trade and open up markets, this has brought millions of Third World farmers to the brink of penury and starvation. "

There were benefits for wealthy countries out of the failure in Cancun, as Japan Today, a Tokyo news site, acknowledges today.

"The breakdown . . . saved Japan from being forced to take tougher farm-liberalization measures such as significant tariff cuts for politically sensitive rice. . . . Agricultural products, particularly rice, are highly protected in Japan as many governing party lawmakers depend on farmers for votes."

In Johannesburg, South Africa, The Independent blames the attitude of the rich countries.

"What is needed is for the U.S. and EU to acknowledge their role in the collapse of talks. It has been clear for a while that developing countries were not going to accept anything less than an agreement by the EU and U.S. to cut their massive farm subsidies," The Independent writes.

But the celebration in the poorer countries was tempered by concern that the trade barriers to markets in the wealthy countries remain in place:

"The breakdown of talks was the biggest defeat for trade liberalisation since a chaotic meeting in Seattle in 1999 was rocked by violent street protests and a similar revolt by poor countries," notes Bangladesh's Daily Star.

"There is now a danger that the talks failure could hasten the formation of regional trading blocs and country-to-country deals, which will hit the poorest nations hardest."

© 2003 Washingtonpost.Newsweek Interactive

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