Poor Nations Keep Heat on Trade ; after WTO Talks, the 'G-22' Group of Developing Nations Focuses on More-Open Agricultural Markets

By Smith, Patrick | The Christian Science Monitor, September 3, 2003 | Go to article overview
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Poor Nations Keep Heat on Trade ; after WTO Talks, the 'G-22' Group of Developing Nations Focuses on More-Open Agricultural Markets


Smith, Patrick, The Christian Science Monitor


Global trade negotiations may well proceed more slowly in the aftermath of the World Trade Organization's collapsed talks in Cancun, Mexico, earlier this month. But they are also likely to proceed more equitably.

As the WTO's 148 members brace for their next session, now scheduled for December, it is already clear that the sudden emergence of a coalition of 22 developing nations has turned the negotiating landscape between rich and poor countries into one that more closely resembles a level playing field.

For now, the Group of 22 intends to remain focused on the opening of global markets for farm products - the issue that divided rich and poor at Cancun and prompted the group to walk out on Sept. 14. Viewed more broadly, however, the "G-22" reflects the increasing assertiveness of developing nations - not only in the WTO but in other multilateral organizations, including the UN.

"It's too early to tell what the G-22's larger agenda will be, or even if we will have one," says Rubens Barbosa, Brazil's ambassador to Washington and a prime mover behind the group's formation. "But the political, economic, and trade circumstances are different now. There's a new balance of power, and the US and the European Union are finally going to have to face us."

Reflecting this new environment, the World Bank and the International Monetary Fund began considering ways to enhance the influence of developing nations at their annual meeting in Dubai shortly after the WTO talks failed. At the urging of the EU, the WTO itself may now review its procedures in order to save the current round of negotiations, launched in Doha, Qatar, two years ago.

Ironically, the WTO is among the most democratic of the multilateral or- ganizations. It operates on the basis of one country, one vote, and - unlike the UN - no member has the right to a veto. In practice, however, the US, Japan, and the advanced nations of Europe tend to control the agenda and overpower developing nations with skilled trade experts and superior negotiating tactics. While Brazil and China have cultivated expertise of their own, many other developing countries are too poor to afford effective representation at the WTO.

In Cancun, the G-22 coalition sought to keep the meeting focused on import barriers and industry subsidies that distort global trade in agricultural products. Collectively, wealthy nations spend some $300 billion a year to subsidize farmers who would otherwise be unable to compete in world markets.

African cotton growers had a specific complaint. The US now spends $3.6 billion annually on cotton subsidies; with almost a third of US cotton production exported, American farmers claim about 40 percent of the global market. Because they are so heavily subsidized, they also depress world prices by about a quarter.

To deflect the developing countries' position, the rich countries offered only vague commitments on farm subsidies and import barriers.

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