Campaign 2004 is key in WTO collapse

Poor countries say there's no way to negotiate farm subsidies now

by Elizabeth Becker ,

The anticipation that Bush might win in 2004 was one of the factors that led to the walk-out of poor countries in the WTO negotiations in Cancun.


NEW YORK TIMES September 16, 2003– CANCUN, Mexico – It may be more than a year away, but the U.S. presidential election was close enough in Cancun this week to touch off a walkout by developing nations, convinced it was hopeless to expect realistic negotiations with the Americans this year on farm subsidies.

Opinions were divided about the effect of the decision by the developing nations known as the Group of 21 to reject a draft proposal in which they would have opened up their markets to foreign investment in return for cuts in agricultural subsidies. But there was widespread agreement – outside the United States – that they had little choice.

A few trade experts did question the wisdom of the developing countries. Stefan Tangermann, the agriculture export at the Organization for Economic Cooperation and Development, said he feared the countries had given up a rare opportunity to start cutting down the $300 billion in annual agricultural subsidies that distorts world trade and undermines the poorest farmers around the world. “It is a very deplorable outcome,” he said, shaking his head.

But several senior delegates from advanced countries with little at stake in the agricultural talks said the Group of 21 – which is led by Brazil and includes China, India, South Africa, Egypt and Indonesia – had little choice but to walk out given the restraints caused by the upcoming presidential campaign.

Robert Zoellick, the U.S. trade representative, had promised that Washington was prepared to cut its multibillion-dollar farm subsidies. But the compromise proposal essentially left that farm program intact. It also gave U.S. cotton farmers a reprieve despite appeals from four of Africa’s poorest nations.

“Bob Zoellick is a master at strategy, and I think he had little room here,” a senior delegate who asked to be anonymous said. “President Bush was not going to upset his farmers before his re-election.”

Before the talks broke off, U.S. farm groups said they were pleased Zoellick was able to protect most of the farm bill passed in 2002, which raised subsidies by $40 billion.

“He did his very best,” said Robert Stallman, head of the American Farm Bureau Federation.

The farm states voted heavily in favor of Bush in the 2000 election and were the backbone of the states that gave him the bulk of his electoral votes. Agribusiness, which profits from the low cost of corn, soybeans and other crops subsidized by U.S. taxpayers, has shifted its allegiance to the Republican Party.

Political contributions from agribusiness jumped to $53 million in 2002 from $37 million in 1992, with the Republicans’ share rising to 72 percent from 56 percent, according to figures compiled by the Center for Responsive Politics.

Peter Gaemelke, the head of the European farmers group and the counterpart of Stallman, said Zoellick had done his job a little too well.

“This should not be a meeting just to elect Mr. Bush,” he said.

Zoellick rejected such calculations when he said the United States was one of the “very few countries” prepared to negotiate big changes favoring developing nations.

“They missed the opportunity to cut our subsidies,” he said.

In fairness, the U.S. farm provisions, while the central issue, were not the only reasons for the Group of 21’s decision to quit the talks. Europe’s demand that the world trading body negotiate new rules covering investment, trade facilitation and two other areas were also cited.

What really counts, members of the Group of 21 asserted, was the statement that had been made. No longer a fringe group, they said, they have established themselves as a power bloc with which to be reckoned. “This is a change in the nature and quality of negotiations between developing and developed nations,” said Alec Irwin, South Africa’s trade negotiator. “While we are disappointed, there is no doubt today we are all optimistic in the medium and the long run.”