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Poor Nations Unite Against Subsidies

The Group of 21 seeks open markets and an end to farm supports in wealthy countries.

September 10, 2003|Chris Kraul and Evelyn Iritani | Times Staff Writers

CANCUN, Mexico — On the eve of global trade talks, a bloc of the world's most populous developing nations including China, India and Brazil threatened Tuesday to block any new trade accord unless wealthy nations open their markets to poor countries' farm products.

At a news conference here ahead of today's opening of the World Trade Organization's ministerial conference, the "Group of 21" developing nations also announced an alliance with Oxfam, the international humanitarian aid and development group, in a bid to rally support from globalization opponents.

The announcement amounts to a bold challenge to the hegemony of the United States and European Union in setting the world's trade rules and agenda. The developing countries maintain that they have popular support on their side, as their group represents more than half the world's population and two-thirds of its farmers.

The Cancun conference, bringing together representatives of 146 governments, is the latest meeting in the so-called Doha Round of trade negotiations, named after the city in Qatar where talks started in November 2001. They are to be completed by 2005 but have stalled over agricultural issues.

Developing nations want the U.S. and EU to end farm supports and subsidies that make it difficult for poorer countries to sell in their markets. The U.S. and EU give $150 billion annually in direct support to their farmers, according to the World Bank.

The Cancun meeting is the first major trade gathering since China joined the WTO in 2001, and Beijing wasted no time in asserting itself.

"Only the full consideration of the developing members' proposal will mean success for the conference," said China's agriculture minister, Du Qinglin. The emergence of a coalition that includes China and India -- longtime rivals on the global stage -- represents a significant step, China experts said.

Still, there was skepticism among analysts that the new Group of 21 alliance could hold in the face of economic pressure that the United States and the EU were sure to apply. The wealthy countries hold the upper negotiating hand simply because their markets, even if only partially accessible, are essential to the poor countries' economies.

Margaret Pearson, a China trade expert at the University of Maryland, believes that the Group of 21 is more likely to be a pragmatic, short-term marriage rather than a "new enduring bloc."

As China has opened up its economy, its farmers have had to compete against foreign growers and seek out new markets abroad, she said. That makes China more anxious to pry open the world's largest markets.

In a boost for the Group of 21, the bloc's position on agriculture has been endorsed by the Cairns Group, a collection of agricultural-exporting countries that have also been agitating for faster liberalization of farm trade rules.

Developing countries have long complained that rich countries' farm subsidies not only keep out competition but also unfairly distort exports to other countries, said John Audley, a senior associate at Carnegie Endowment for International Peace.

Critics have singled out government subsidies totaling nearly $4 billion a year to U.S. cotton farmers. The funding eventually works to lower prices for poor African countries whose only cash export crop is cotton, Audley said.

In addition to giants China, Brazil and India, the Group of 21 -- known as the Group of 20 until the recent addition of Egypt -- comprises Argentina, Bolivia, Chile, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Mexico, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand and Venezuela.

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