Who Killed Cancun?
After the WTO talks broke down fingers were pointing every which way. Whose fault was it really? (And does the WTO have a future?)
12:00 AM, Sep 23, 2003 • By IRWIN M. STELZER
THE HUNT for the assassins is on. With the corpse of the Cancun meeting of the World Trade Organization now moldering in its grave, those who hoped to push the round of trade-opening measures forward are accusing the usual suspects--and some unusual ones--of inflicting the death-dealing blows.
The usual suspects, agricultural protectionists in developed countries, profess their innocence. The United States and the European Union say they would have offered to cut back the $300 billion in annual agricultural subsidies doled out to their already-rich farmers had they been given an opportunity to do so. They point the finger of guilt at a group of 22 developing countries, led by Brazil's foreign minister, Celso Amorim, and at Mexico's foreign minister, Luis Ernesto Derbez (who was also chairman of the meeting). The inexperienced chairman, say the developed countries, adjourned the meeting before any serious discussions of agricultural policies had begun. And the so-called Group of 22 (which includes India, China, Indonesia, and South Africa) stormed out of the meeting before the richer countries had an opportunity to make their final offer on agricultural subsidies.
The poorer nations respond with a heated "not guilty." They say they have little to gain from still another agreement that opens their markets to the goods of the rich nations while those countries' markets remain closed to their cotton, sugar, and other crops.
Some are even blaming O.J. No, not Simpson, but orange juice. It seems that the president's brother and governor of Florida, Jeb Bush, pressed United States Trade Representative Robert Zoellick to continue protection of his states' orange growers lest they be subjected to "predatory competition" from foreign farmers. Whether Ambassador Zoellick succumbed to that specific pressure we do not know. But we do know that the leaders of America's protectionist farm block professed themselves mightily pleased with the ambassador's overall performance at Cancun. "He did his very best. The ambassador has done an excellent job," Robert Stallman, head of the American Farm Bureau, told the press. Not a testimonial Zoellick is likely to frame and hang on his office wall.
All of which is bad news--to some. Supachai Panitchpadki, director-general of the WTO, claims that "the losers will be the poor and weaker nations," and that renewed efforts to hammer out an agreement are crucial to world economic prosperity. No surprise: the head of a large bureaucracy that is in the process of being marginalized cannot be expected to think that such a development is a good idea. Indeed, with this defeat the WTO joins the United Nations and, after Sweden's robust rejection, the Euro, among the international concoctions that just ain't what they used to be.
THEN THERE ARE the economists who believe that free trade, by permitting the international specialization of labor, increases efficiency and the material well-being of all the participants in trade. Economists at the World Bank estimate that a global deal would raise worldwide incomes by $520 billion by 2015 and lift 144 million people out of poverty. They may be right, but George W. Bush can hardly be expected to follow the lead of Senator Henry Clay, who in 1839 grandly announced, "I would rather be right than be president."
The dirty little secret is that the collapse of the Cancun meeting is rather good news for the White House. Of course, the U.S. delegation could hardly join the developing countries in popping the champagne corks when the conference collapsed. Those countries made no secret of their pleasure at the fact that they had finally united to make it clear that there would be no more worldwide agreements until their legitimate demands for freer trade in agricultural products are met.
But the White House is hardly mourning the death at Cancun. With a presidential election now looming, free trade is hardly the rallying cry that Bush's advisers will select as his campaign theme. America has lost millions of manufacturing jobs since the Bushes moved into the White House, most of them in states the president must win if he is to avoid his father's fate. Voters tend to forget the cheap sneakers, cars, T-shirts, and other products that are made for them in Asia, and remember the factories, call centers and other job-giving enterprises that have pulled stakes and moved to China, India, Mexico, and other low-wage countries. The last thing the administration needs is some agreement that can be made to seem to increase pressure on the U.S. manufacturing sector.
And farmers, who voted for Bush in overwhelming numbers in 2000, would hardly have rewarded the president with their votes again had he opened them to competition from African, Caribbean, South American and other growers, even if the concession had been made in return for an agreement by the poorer countries to open their markets to American manufacturers and providers of financial and other services.
So any tears shed by the White House at the Cancun funeral are of the crocodile variety. Zoellick, although probably more annoyed at the conference's failure than the White House politicos, can take solace from the fact that he can still pursue his alternative strategy of negotiating bilateral trade agreements with countries who find it to their advantage to do so. Pascal Lamy, the E.U. trade commissioner, says he might abandon his long-held opposition to such bilateral deals and reluctantly follow Zoellick's lead. But although farmers account for only 5 percent of the European Union's population and 2 percent of its GDP, they are sufficiently potent politically to prevent E.U. negotiators from offering the concessions necessary to forge significant bilateral deals.
Perhaps most encouraging of all was the failure of the developed countries' proposal to expand the reach of the WTO by handing it authority over the competition and government procurement policies of its member states. Any conference that prevents a multinational bureaucracy from expanding can't be called a complete failure.
Irwin M. Stelzer is director of economic policy studies at the Hudson Institute, a columnist for the Sunday Times (London), a contributing editor to The Weekly Standard, and a contributing writer to The Daily Standard.