CANCUN, Mexico — The global trade talks collapsed here Sunday afternoon, crushed by the weight of the divide separating rich and poor countries.
A unified group of developing countries declared the talks over at about 3:30 p.m. central standard time as the specter of the 1999 global talks in Seattle hung in the room.
The convention center erupted in total pandemonium when the developing countries broke the news about the collapse of the meeting. Antiglobalization groups, claiming victory, sang and chanted in the press center, while African delegates held court with hordes of reporters around a fast-food area.
“The talks have collapsed,” said George Odour, a member ofthe Kenyan delegation. “It’s over.”
“This is a moment of certain circumspection,” said Brazilian Foreign Minister Celso Amorim at a news conference Sunday night. “We would have preferred to complete with results, but that was not the result. Whether or not we are finished or continue the talks, whatever the process, the pieces will be picked up again just after they were in Brussels, just after they were in Seattle. The negotiations will go on.”
U.S. Trade Representative Robert Zoellick said at a news conference Sunday night, “Some countries spent too much time being inflexible and making inflammatory remarks. As a result, everyone walked away empty handed,” he said, referring to the countries that broke off the talks.
Zoellick, looking exhausted and disappointed, noted a number of developing countries were trying to move forward on agriculture but were stopped short by the other issues. “The final break today was the Singapore issues, but the seeds were planted much earlier,” he said.
Asked what the collapse meant for the future of the Doha Round and fate of the World Trade Organization, Zoellick said: “It is hard for me to believe we are in a position now to finish on time.”
“The cold hard reality is…countries will go home with nothing,” Zoellick said.
Developing countries fought a bruising battle with developed countries over the past five days, and in the end it was talks on new and divisive issues such as government procurement, trade facilitation, cross-border investment and competition that brought the Doha Round to its knees.Trade ministers were unable to overcome differences on this group of topics known as the “Singapore issues” before they could even get to the equally divisive issue of agriculture.
“Developing countries refused to cede ground on the Singapore issues and the European Union and U.S. refused to cede ground on agriculture,” Odour said. “Developing countries feel that every time they come to a ministerial they get a check and when they go to cash the check, it bounces.”
Odour’s words were echoed by Yashpal Tandon, a member of the Ugandan delegation.
“It’s a deadlock,” said Tandon. “Uganda, Kenya, Gambia, Zimbabwe, Botswana and the group of Caribbean countries and all of the least developed countries agree.”
It is unclear whether the 148 member states of the WTO will resume the talks aimed at opening global markets to trade in Geneva at another time.
“Today we stalled because of the Singapore issues, but the larger lesson of Cancún is that useful compromise among 148 countries requires a serious willingness to focus on work — not rhetoric — to attain the fine balance between ambition and flexibility,” said Zoellick.
The talks were deadlocked all day Sunday as WTO trade delegates refused to make painful concessions to save the new global trade accord from imploding here.
The tension in the convention center was as palpable as the humid, tropical air flowing outside this host city dotted with upscale hotels and white sand beaches stretching from one end of the peninsula to the other. Delegates from around the world faced intense arm-twisting Sunday as they continued to try to bridge a gap over vast differences on opening markets to foreign trade in agriculture and industrial products.
Mexican Foreign Secretary Luis Ernesto Derbez, conference chairman, issued a compromise draft document Saturday afternoon but it fell with a big, resounding thud in every corner of the world. All countries have found something to complain about in the draft, but developing countries were complaining the loudest, claiming rich countries have not gone far enough towards eliminating export subsidies on agricultural exports.
Agricultural issues, including a clash over cotton subsidies, also broke the back of the entire round of negotiations.A group of developing countries known as the “Group of 21” and led by Brazil and India, called for more radical agricultural cuts in subsidies than the joint proposal offered by the U.S. and European Union. Farmers in poor countries claim they cannot compete with the multimillion dollar subsidies in developed countries such as the U.S., which depress global cotton prices.
Tens of thousands of farmers and antiglobalization protesters rallied around the issue and took to the streets of Cancún, where one South Korean farmer fatally stabbed himself to protest WTO policies.
Indian and Brazilian ministers spoke out Saturday night on the draft, claiming it did not provide enough in the way of subsidy cuts.
The U.S. and European Union were also unhappy with the draft although the top negotiators said they were committed to moving the process forward with the aim of forging a global treaty by the end of next year.
The credibility of the WTO was on the line in Cancún, which was the halfway point in the Doha round of global trade talks launched in November 2001. The entire Doha Round is in jeopardy now.
The divergences kept the 148 WTO member states from launching skeletal blueprints for eliminating subsidies and tariffs on agricultural products and reducing and eliminating tariffs on industrial products such as textiles and apparel.
The draft declaration also drew fire from most corners of the U.S. textile, retail and apparel import world for vastly different reasons. A new global treaty would have determined how and where U.S. apparel and textile makers, as well as retailers, will operate around the globe for decades.
Josette Shiner, deputy U.S. Trade Representative, said Sunday morning the U.S. was ready to negotiate from the draft text but noted the U.S. “like everybody else, has significant problems with the text.” She refused to discuss the problem areas. “There have been a lot of demands and harsh rhetoric,” she said. “We must all take seriously what is at stake here. It is the world’s most vulnerable economies that will be hurt the most if we leave empty handed.”
European Trade Commissioner Pascal Lamy said the draft was an “acceptable” basis for further discussion, although he noted the EU has “big problems, medium problems and small problems” with the text. Lamy said the draft is too vague, lacks ambition and has serious loopholes in several key areas, including agriculture subsidies, the cotton initiative that became a lightning rod in Cancún and industrial tariffs, among other issues. “But it is an acceptable basis for constructive discussion,” Lamy said.Despite the criticism, the trade ministers hunkered down Sunday hoping to find common ground that never came before the meeting ended.
In the meantime, one U.S. textile representative said he was overjoyed the talks collapsed.
“The talks collapsed because they went past the point where our government would go,” said Jock Nash, Washington counsel for Milliken & Co. “Even though the U.S. did not walk away, certain other countries were not negotiating on anything. The WTO is an inadequate model for trade. It presupposes a one-size-fits-all and obviously it does not.”
Retail, textile, and apparel importer groups were all concerned about the draft declaration, which is now in limbo.
“This is becoming a development charity round and not a market access round,” said Nash. “It reaffirms our beliefs that this [round of global talks] will prevent us from getting the damn access we need to India, China and any other country.” Nash and Augustine Tantillo, Washington coordinator of the American Manufacturing Trade Action Coalition, said Sunday they were concerned about the areas in the draft dealing with developing and least developed countries. According to their interpretation of the text, developing countries will have too many loopholes and will also be excluded up to a certain percentage, from cutting their own tariffs on products, including apparel and textiles. The premise of the Doha round is based on helping developing countries, and all sides knew going into Cancún that “special and differential” treatment would be given to the poor countries.
But some didn’t expect big loopholes. Amir Khosru M. Chowdhury, minister of Commerce of Bangladesh, who is leading a group of LDCs in Cancún, said least developed countries are seeking immediate duty-free and quota-free access to the developed world in terms of agricultural and manufactured goods. Bangladesh, a major apparel supplier to the U.S., could be devastated by the removal of quotas at the end of 2004, when China is expected to annihilate foreign suppliers that do not have vertical infrastructures. “There is no other way to increase our market share unless duty-free access is given,” said Chowdhury. “It is the only way we can come out of this vicious circle where we have gone from having 3 percent of the market in global trade to a 0.4 percent share,” he said.U.S. trade officials have maintained they will not give duty-free access to Bangladesh or any other country without some reciprocity. “The U.S. continues to insist on reciprocal market access,” said a U.S. trade official involved in the industrial tariff negotiations here, who spoke on condition of anonymity. “We insist that all major producers agree to reciprocity. They have to give us the market access we are willing to give them.” But how much reciprocity the U.S. is demanding from other countries is still unclear. Tantillo said one provision in the draft will allow countries like China, India and Pakistan to shelter some of its tariffs, at its own discretion, from formulaic cuts. “That could hurt President Bush in his reelection efforts next year,” said Nash.
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