CANCUN, Mexico — Developing countries spoke with a unified voice at the opening session of the World Trade Organization’s meeting here Tuesday, and the message to rich countries was loud and clear: Eliminate agriculture subsidies as quickly as possible.
On day one of a gathering that could determine the fate of a global trade treaty, trade ministers from around the world reflected on the differences dividing them and the common ground that continues to bind them.
Although the differences far outweigh the agreements, the ministers appeared poised to work through the next four days in an attempt to achieve a consensus on broad blueprints defining how to eliminate tariffs and subsidies on agriculture and industrial goods.
Mexican President Vicente Fox, who gave the keynote address at the Convention Center in the heart of Cancún, emphasized the need to balance trade flows between rich and poor countries.
“Poor countries need to grow, and trade could be the vital engine of growth,” Fox said. “But we must fight to eliminate subsidies in agriculture, which are unjust and which constitute unfair trade practices to the benefit of no one.”
Fox accused developed countries of giving with one hand and taking with another, an echo heard from the continent of Africa to South Asia and beyond.
“On the one hand, donor countries transfer aid to the beneficiary countries, but on the other hand, they hamper progress with trade restrictions,” Fox said.
Farmers in developing countries such as Mexico claim they cannot compete with the multimillion-dollar subsidies in developed countries such as the U.S., and they took to the streets of Cancún by the thousands to protest the current round of WTO talks.
Mexican authorities have barricaded the convention center with a red metal structure that snakes around its circumference, and they also shut off streets around the building to protesters, but that didn’t stop a group of about 30 antiglobalization protesters from crashing the opening-day session.
Holding signs that read, “WTO obsolete” and “WTO is anti-development,” the protesters chanted “shame” and disrupted the meeting for about 15 minutes, although Luis Ernesto Derbez, Minister of Foreign Affairs of Mexico, did not pause in his opening remarks.
Led by such groups as Public Citizen, Third World Network and several European nongovernmental organizations, the protesters claim the WTO is “nothing but an instrument of corporate power” that benefits companies and does nothing to alleviate poverty and inequality in developing countries.
Despite the rising tensions on the first day of the meeting, where scorching temperatures and thick, humid air underscored the heaviness of the discord inside, some WTO leaders claimed the obstacles are not insurmountable.
“We are not under the illusion that reconciling the interests of 146 member states is a delicate and complex exercise,” said Supachai Panitchpakdi, director general of the WTO. “The challenges are tough, but they are not insurmountable.”
He said the give-and-take of the negotiations in Cancún needs to produce a “balanced” outcome. However, finding a broad consensus on agriculture and industrial goods will be difficult enough. Cotton subsidies, which serves as a microcosm of the difficult battle on agriculture separating rich and poor countries, surfaced as a lightning rod issue on Monday in advance of the WTO meeting.
The African countries, Mali, Benin, Burkina Faso and Chad, have called on the WTO to approve a total ban on subsidies for cotton farmers by 2006. In the interim, the countries want a system of compensation payments for losses caused by what they claim are the sale of subsidized cotton on world markets.
U.S. Trade Representative Robert Zoellick said Tuesday that the U.S. has proposed dealing with cotton issues and tariff reductions for textiles and apparel in one sectoral approach, as reported. They are currently being negotiated in two separate sets of talks.
Mahamar Oumar, director of CMDT (the Malian Company for Development of Textiles) said in an interview Wednesday before the opening session that cotton prices are too low due to developed countries’ subsidies, particularly those in the U.S.
“In Mali, we have about 200,000 farmers, and they need support,” Oumar said. “We lost about 40 percent of our revenue last year, and we cannot compete.”
He said he is encouraged the U.S. is trying to find a solution, but he noted African countries need immediate relief.
“The price of a pound of cotton is now about 6 cents, but without subsidies, our cotton could get $1.00 or $1.20 a pound,” he said. “In the short term, developed countries need to set up a fund to compensate for the losses.”
Kamal Afsar, secretary of commerce for Pakistan, said he supports the African position on cotton.
“They have a point there,” he said. “These subsidies have to be phased out, and there will be a time lag, so countries need to be compensated in the interim.”
Afsar said the primary issue for Pakistan is agriculture.
“We find that the developed countries are dragging their feet there,” he said. “The onus is on the developed countries now. They have to think in terms of implementing previous commitments and do something for developing countries in a big way.”
From a U.S. textile perspective, Gaylon Booker, past president and a consultant to the National Cotton Council, said a number of factors effect cotton prices worldwide and the impact of the U.S. cotton program on prices is minimal. He said the NCC supports the USTR’s proposal to look at cotton prices in the overall context of manufacturing.
He called “unfortunate,” the African countries’ efforts “to dismantle the U.S. cotton program and put a bullseye on it instead of treating it as a total agricultural package.”
Augustine Tantillo, Washington coordinator of the American Manufacturing Trade Action Coalition, said developing countries will make a lot of unilateral demands in Cancún and try to capitalize on the “development” round because they believe “they are entitled to unilateral concessions.”