The Bush administration’s anti-environmental trade agenda is put on ice.

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The Cancun WTO talks collapsed today when a bloc of 70 developing countries led by Malaysia pulled out over the question of adding “new issues” to the WTO negotiating agenda. Among the new issues was “investment,” which under NAFTA has opened the door to corporate lawsuits against governments that enforce environmental standards. For instance, under NAFTA investor provisions, a Canadian chemical company has sued US taxpayers for $1 billion in an effort to overturn a crucial California clean water law. Such lawsuits could have increased many-fold under a WTO investor regime.

The collapse of the Cancun talks creates new hurdles for the proposed Free Trade Area of the Americas (FTAA). Brazil, the leader of a second bloc of 22 developing countries which demanded deep cuts in US and European agricultural subsidies, insists that agriculture subsidies must be on the table in the FTAA. But the US refuses to negotiate away its agriculture subsidies in the FTAA because it wants to retain a bargaining chip for global farm trade talks. Brazil also opposes including NAFTA-style investor provisions in the FTAA. The United States wants the FTAA primarily to obtain these investor provisions for US companies.

The result is that neither the WTO negotiations nor the FTAA are likely to be finished by their 2005 deadlines.

US Trade Representative Robert Zoellick blamed unnamed developing countries for the collapse and threatened to pursue one-on-one free trade agreements that shut out countries that don’t want to play along with the United States.

In these dangerous times, the United States needs more friends and fewer enemies in the world. Amb. Zoellick’s arrogance is not likely to restore the international cooperation on which our security ultimately depends.

At the end of the day, the collapse of the Cancun talks is good news for the environment. If trade talks are later resumed in the WTO, developing country demands for deep cuts in subsidies to agribusiness will gain a more respectful hearing. Provided resources shift to conservation of rural land and to family farmers, such cuts could help protect America’s landscape and reduce pesticide runoff that pollutes our water.

Second, the WTO is likely to become a more democratic and more balanced institution due to the new-found feistiness of developing countries.

Finally, NAFTA-style investor rules that allow private corporations to undermine environmental laws have been dealt a serious blow. The talks collapsed today because developing countries decided that aggressive, pro-corporate investor rules are not necessary to attract the investment they need for development. As a welcome side effect of developing country resolve on the issue, US safeguards for our air, water, and land are more secure tonight than they were 24 hours ago.

The collapse of these talks is a blow to Bush administration foreign policy. In the last year, we’ve been forced to relearn bitter lessons on the limits of American power and the value of international cooperation. We can only hope that the President can take these lessons to heart.

For more information, visit www.sierraclub.org/trade, or contact Dan Seligman at (202) 675-2387.