Cancun Collapse Marks Turning Point

By Jane Kelsey in Cancun

The collapse of the fifth ministerial meeting of the WTO in Cancun, Mexico marks a turning point in the geopolitics of the 'developed' and 'developing' world and in the perception that economic globalization is inevitable and irresistible.

This is a historic moment. The poorest countries of the world (the Least Developed Countries or LDCs), the Africa, Caribbean and Pacific (ACP) group and Malaysia have refused to give way to the bullying and threats that have marred every WTO meeting since the organization was established in 1995.

At Doha in 2001 it was left to India's Ambassador Maran to stand firm against the demands from the European Union and Japan for negotiations on what have become known as the Singapore issues - investment, competition, government procurement and trade facilitation. He insisted that the decision on any negotiations be made at the next ministerial meeting on the basis of an 'explicit consensus'.

In Cancun, it was made abundantly clear on the first day that there was no such consensus. A group of 71 poorer countries, including powerful voices such as China, India and Malaysia, plus the Caribbean Community and the Least Developed Countries, issued an unambiguous statement opposing negotiations on the Singapore issues.

The EU and Japan remained adamant that there must be negotiations on all four Singapore issues. They have been trying to drive these issues into the WTO since the Singapore ministerial meeting in 1996 and were determined to secure negotiations in Cancun. The Europeans called it a 'deal breaker'. And so it proved.

Similar developments on agriculture saw a powerful new grouping of 21+ poorer countries counter self-serving proposals from the US and EU. Many were members of the Cairns group whose richer members, including New Zealand, were relegated to the sidelines. While these countries made supportive noises, it was also clear that special and differential treatment meant different things to the richer North and poorer South. A group of other food importing countries created their own collective voice to insist on rules that protected their food sovereignty.

The meeting collapsed because of internal conflicts over these substantive issues. But underpinning them were more basic challenges to the anti-democratic processes of the WTO and the imposition of a global free trade model that is inappropriate to the majority of the world's people.

Challenges to the power politics of the WTO have been made repeatedly within and outside the organization. They were ignored again at Cancun. The WTO in theory operates on consensus. But the bizarre process adopted for this ministerial saw Canada's Trade Minister Pierre Pettigrew, an avowed supporter of the Singapore issues, appointed as a 'friend of the chair' to help prepare the draft ministerial text. Pettigrew played a similar role at the Doha ministerial in 2001, and was accused of extreme bias for pushing his own line and ignoring the vigorous opposition of poorer countries. He did the same at Cancun.

It was never clear whether the collective resolve would survive concerted attempts to coerce and ignore those who were considered recalcitrant. The US threatened to withdraw trade preferences, cancel bilateral negotiations and cut aid funding. President Bush reportedly rang Brazil's President Lula four times in one day.

Ultimately, the draft ministerial text was so provocative that it strengthened their resolve. This was captured in an impassioned speech from Antigua and Barbuda Minister Sir Ronald Sanders:

"My government has a duty to care for its people. Were we to accept this document we would deserve our people's condemnation. For we would not only have gained no relief for them, we would have condemned them to a life of perpetual underdevelopment. And that my delegation will not do. I have to advise that this draft does not enjoy the support of my government."

This was a tactical victory. The question remains: 'where to now?' It would be possible for the WTO leadership to adopt a more democratic process if it is prepared to blunt the influence of the major powers and their corporations. But that would not address the failure of the free trade model to provide genuine development to poorer countries and poor people.

This debate needs to go beyond the different options that were on the table in Cancun and address the challenges raised by the thousands who voiced their opposition from 'the outside'. Their message will forever be symbolized by the self-immolation of Lee Kyang Hae who died holding the slogan "WTO kills farmers". He gave his life to challenge the human cost of rules that see more than 700 farmers commit suicide in one month in just one state of India.

Where does this development leave New Zealand? The GATT and its successor the WTO is the lynchpin of New Zealand governments' trade policy. Today it faces a deep-seated crisis of legitimacy. So does the free trade model which our governments have assiduously pursued. The collapse of these talks and the crisis facing the WTO opens some new space to debate these basic policy issues and the role that New Zealand should be playing in this changing world.

Professor Jane Kelsey, from Auckland University and ARENA, in Cancun