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Failed Cancun talks throw up new trade power

An alliance of developing nations, with Brazil, India and China at its heart, has emerged as a force.

business Updated: Sep 15, 2003 14:11 IST

As weary ministers fly out of this glitzy beach resort on Monday following the dramatic collapse of world free trade talks, one group at least feels it has something to smile about.

A new alliance of more than 20 developing countries, with Brazil, India and China at its heart, emerged as a major force during five days of ultimately fruitless discussions at this Mexican beach resort and looks set to stay a power in world trade politics.

The World Trade Organization's 146 member states must now try to rescue something from the wreckage of the Cancun summit, which had been intended to inject new momentum into the WTO's stalled global free trade negotiations.

States remain deeply divided, notably over how far and how fast to reform world farm trade to cut the massive subsidies that rich states pay their farmers and which developing countries say stop them competing.

The European Union's main trade negotiator, Pascal Lamy, and other top officials were adamant that the search for a deal, which could give a multibillion boost to a sluggish world economy, would continue back at WTO headquarters in Geneva.

And the new alliance of developing nations was equally firm that its newfound voice would continue to be heard loud and clear.

"It was not possible to get a concrete result. But we think that we have achieved some important things. Firstly, the respect for our group," said Brazil's foreign minister, Celso Amorim.

The so-called G21 grouping, which represents more than half the world's population and some two-thirds of its farmers, is united by a common commitment to getting the West to unwind subsidies running at nearly $1 billion a day.

It countered the traditionally huge weight the United States and the European Union wield within the WTO by combining a hard line towards the rich states with calls for more understanding of the problems of the world's poor farmers.

Australian Trade Minister Mark Vaile, whose country shares many of the group's criticisms of the EU and the United States, said the emergence of the G21 marked "a significant shift in the dynamic" of the WTO.

Some Western envoys had expressed skepticism that the G21 would survive long because countries such as Brazil and Argentina, efficient farm goods exporters, appeared to have little in common with India, a protectionist nation of 650 million poor farmers.

By the end of the Cancun meeting, Nigeria and Indonesia, the world's most populous Muslim state, had joined the initial 21 countries in the group.

In the end, the G21's newfound influence was not put to the test because the talks fell apart before final bargaining on agriculture could begin.

African countries rejected a rich state demand to launch negotiations on new rules to cut out red tape and corruption in trade, ruling out the possibility of deals elsewhere.

But Amorim vowed the battle would continue in Geneva.

"The pieces will be picked up again and the negotiations will go on...from the point where they stopped," he said.

First Published: Sep 15, 2003 14:11 IST