World trade talks seen as vital for the global economy collapsed on Sunday after rich and poor states failed to bridge deep divisions over issues ranging from farm reform to new trade rules.
Agriculture was the main bone of contention throughout the five-day World Trade Organization meeting, but in the end it fell apart when developing countries refused to discuss new rules to cut the red tape that shackles trade.
The breakdown of the talks, aimed at injecting momentum into stalled free trade negotiations at the Geneva-based WTO, underscored the growing clout of developing countries, which make up three-quarters of the trade body's membership.
"We are elated that our voice has now been heard," said Philippine Trade Secretary Manuel Roxas.
U.S. Trade Representative Robert Zoellick said it would now be very difficult for the WTO to meet its self-imposed deadline for concluding a new trade deal by the end of 2004. The World Bank says a good agreement could add $520 billion to global incomes by 2015 and lift 144 million people out of poverty.
"It is hard for me to believe, in the position we are now, that we will be able to finish on time," Zoellick said.
Poor states, which already felt existing trade laws were rigged against them, had served notice that they could not contemplate new ones aimed at cutting red tape.
They said the rules would be costly to implement and would impinge on their freedom to make economic policy.
Malaysia's trade minister, Rafidah Aziz, said rich states had refused to heed the warnings.
"We have always alerted people that unless they listen to the developing countries ... this is what will happen," she said. "They kept demanding things that others couldn't deliver."
South Korea, Taiwan, Japan and Switzerland had joined the European Union pressing for talks on new rules on investment, competition, government procurement and cutting red tape that holds up trade -- known as trade facilitation in WTO jargon.
The four issues were not of paramount importance to the United States and, realizing the ferocity of developing countries' objections, the EU was prepared to compromise and launch talks on the single issue of trade facilitation.
But Botswana, speaking on behalf of a large group of African countries, said even that was too much.
EXCESSIVE DEMANDS
The collapse brought back memories of the dramatic failure of WTO ministers four years ago in Seattle, when a revolt by developing states blocked a first bid to launch the free trade talks. That deadlock was only broken two years later in Doha, the Qatari capital, where the round was finally launched.
Officials said they would meet in Geneva once the dust had settled to see whether the talks could be revived.
But with U.S. elections looming in November 2004 and the EU preoccupied by the admission of 10 new members next year, diplomats said it would be difficult to summon up the political energy needed to conclude a deal on time.
"It is successful for developing countries to have put forth their voice in a united and disciplined manner so that what was not heard for the last two years in Geneva has now been heard," Roxas, the Philippine minister said.
In the short term, ministers stressed that progress in Cancun would be a much-needed confidence booster for the still-fragile global economy. But developing countries had repeatedly said that no deal would be better than a poor deal.
Anti-globalization activists who had criticized the proposed trade deal sang "Money can't buy the world" after the talks collapsed and held up banners reading "We won."
Trade experts said the risk for poor countries was that powerful rich states would now seek to forge country-to-country trade deals with each other, marginalizing developing states that most need the WTO's protection.
Sekou Oumar Tall, an agricultural business leader in Mali, said: "We in Africa have lost but the powerful countries have lost too. It is a shame for everyone."
(China Daily September 15, 2003)
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