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Cancun's Bitter Harvest

September 18, 2003

The 148 members of the World Trade Organization failed again last week to negotiate an agreement to open markets around the globe and to reduce domestic and export subsidies. The fiasco in Cancun, Mexico, will most injure the world's poorest countries. But the rich industrialized nations, which want to invest and sell their products and ideas worldwide, also bungled an opportunity. In addition, they exposed their huge hypocrisy in preaching a gospel of free trade while trying to protect their own subsidies.

Those who oppose the economy's globalization cheer the WTO's Cancun failure. They shouldn't, because it will only further delay granting farmers in poor countries better, fairer access to the world's richest markets, which still are protected by huge agricultural subsidies. This flies in the face of studies by the World Bank and others that conclude that liberalized trade offers the best way to lift 150 million people out of poverty.

Technically, the latest WTO negotiations broke down over a disagreement over a European Union and Japanese plan to further liberalize investment rules, facilitate trade and make clearer government procurement practices in the developing world. The problem was that most WTO members did not want to revisit these issues, raised at a previous session in Singapore. They wanted to tackle domestic and export subsidies for agriculture and found the European and Japanese diversion dilatory and disingenuous, at best.

Developing nations, demonstrating a surprising new unity and power, called the bluff of the rich countries that defend trade barriers at home while demanding open markets abroad. Brazil, India, Argentina and several African countries called for true liberalization in world trade -- a move to guarantee that emerging economies would benefit from globalization. The International Monetary Fund, for example, says $100 billion would be added to global growth if nations, rich and poor, stopped protecting agriculture.

Though the United States and other countries will negotiate bilateral trade agreements -- and they should -- the bigger issues won't go away, and there needs to be an open, fair and reasonable forum for the many nations affected to work them out and improve them.

Cancun damaged the WTO's standing, but this need not be fatal. Its work must go on. But participants should go to the sessions ready to negotiate, not just to posture. They need to remind themselves that this arcane stuff matters to lives around the globe. Good will come out of Cancun if that happens -- and if, for example, California high-tech, finance and construction firms join the clamor by developing nations for progress on trade that benefits all, not just a handful of rich, government-subsidized farmers in this country, Europe and Japan.

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