The idea that trade equals development came under fire last week at the inauguration of the World Trade Organisation’s (WTO) Fifth Ministerial Conference in Cancun, Mexico with criticisms from the likes of UN Secretary-General Kofi Annan, and from activists who burst onto the scene shouting “Shame!”
“We are told that trade can provide a ladder to a better life and deliver us from poverty and despair […] Sadly, the reality of the international trading system today does not match the rhetoric,” Annan said in a statement read at the opening session of the five-day WTO conference.
According to the mandate of that meeting, the 146 member nations of the WTO have until the end of 2004 to enact several accords for international trade, with liberalisation of farm trade being the most contentious area.
But if members were looking for a happy ending to the fifth meeting they walked away with only an agreement to meet again before the deadline.
The Cancun Ministerial Conference aimed to promote compliance with the agreements signed at the last conference, held in 2001 in Doha, Qatar.
The members including Canada hope to conclude a new worldwide deal on freer trade, but are stalled over the issue of how much to reduce agricultural subsidies.
Developing countries formed an alliance, headed by Brazil and backed by India and China, to refuse to open their markets any further unless rich countries, primarily the United States and the European Union, agree to substantial cuts in the $300 billion U.S spent annually on agricultural subsidies.
Protesters who gained unauthorized access to the opening ceremonies shouted “Shame!” and held up signs that read “WTO undemocratic”, “WTO anti-development” and “WTO obsolete.”
“It is shameful that the WTO considers trade the key to fighting poverty, because the truth is that the organization only creates poverty,” Anuradha Mittal, co-director of the humanitarian organization Food First, said in a low-key press conference broadcast over the Internet.
The Doha Agenda, which sets January 2005 as the negotiation deadline, aims to bring developing countries closer to the presumed benefits of free trade through measures that must be adopted unanimously by the 146 WTO members.
If the Doha Agenda is implemented and if the farm subsidies applied by the nations of the industrialized North are gradually eliminated, global welfare would improve to the tune of $748 billion, says the WTO in its 2003 annual report.
Trade growth associated with the reduction of agricultural subsidies -which amongst the rich nations of the North total almost a billion dollars a day – would allow a reduction in poverty world-wide of no less than 13 per cent by 2015, according to the WTO.
But Canadian Trade Minister Pierre Pettigrew warned that wealthy WTO member countries have still not demonstrated they are serious about lowering farm trade barriers that hurt poorer countries-a major stumbling block in negotiations.
In July, key issues such as reform of agricultural trade was discussed at an informal “mini-ministerial” meeting headed by Pettigrew in Montreal.
Twenty-five trade ministers from rich and poor countries failed to reach any agreement in principle, but said Montreal was a good launching pad for Cancun.
But after the Cancun meetings negotiations are still pending and time is running out for any pre-2005 accord on agricultural issues.
Gobind Nankani, vice-president of the poverty reduction network of the World Bank, says the success of the talks in Cancun was of “crucial importance because it could make a difference for millions of poor people around the world.”
“A Cancun agreement on reducing farm subsidies is essential,” he said, noting that the sums the rich countries give their farmers is greater than the combined gross domestic product of Africa and is six times the total spent on development aid world wide.