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Cancun: Can the G22 survive
success?
By Diego Cevallos
MEXICO CITY - The triumphant group of developing
countries that emerged as the G22 or G20+ to defend
their interests in the face of the world's rich nations
at this month's WTO ministerial meeting may have an
ominously short life expectancy, say trade analysts.
The tension that marked the four-day conference
in the Mexican resort of Cancun, which ended on
September 14 with no agreement among the 146 World Trade
Organization (WTO) member nations, left rifts within the
new grouping, which was led by India and China. Thirteen
of the member countries are Latin American.
Government officials and observers consulted by
Inter Press Service in several Latin American countries
said their nations might decide to pull out of the
informal grouping and seek bilateral trade deals with
the United States, a concern voiced by many economists
in the wake of the failed talks.
Without the
imprimatur of the global trade forum, the concern is
that the developed nations could pick off the poorer
countries one by one as the developing world economies
beggar their neighbors, as Asia Times Online reported on
September 20 (see Poorer nations celebrate trade talks
failure).
El Salvador had already
withdrawn from the Group of 22 (G22) just before the WTO
meeting came to an end. Representatives of that nation
in Central America - a region that is currently
negotiating a free-trade agreement with the United
States - said the G22, one of whose leaders is Brazil,
did not represent its interests.
"The G22 - or
G21 without El Salvador - is barely hanging together,
and the most likely scenario is that it will soon start
breaking up," predicted German de la Reza, a professor
of integration issues in several Mexican universities.
The only members that would stick together, at
least in negotiations of a regional nature, would be
Argentina, Brazil, Cuba and Venezuela, which see eye to
eye on a number of political issues and share similar
commercial interests, he said.
Bolivia, Ecuador
and Paraguay have expressed doubts as to whether to
remain in the G22, as well as interest in signing trade
agreements with the United States. Washington has
implied that those who form part of the bloc will not be
considered for future bilateral trade negotiations.
Republican Senator Charles Grassley said: "I
will use my position as chairman of the Senate Finance
Committee, which has jurisdiction over international
trade policy in the US Senate, to carefully scrutinize
the positions taken by many WTO members during this
ministerial.
"I will take note of those nations
that played a constructive role in Cancun, and those
nations that did not." Based on that analysis,
Washington will decide which countries it continues to
see as potential partners for trade agreements, he
added.
In Cancun, the G22 demanded in bloc that
the industrialized countries begin to phase out
protectionist measures in agriculture, while setting
forth other demands that also ran into resistance from
the rich nations. The meeting was unable to overcome the
largely North-South deadlock, and failed to reach an
agreement.
The end of 2004 is the deadline for
the 146 WTO member countries to begin to implement a
series of pending accords that would benefit developing
nations.
The agreements include slashing the
more than US$300 billion a year in farm subsidies
shelled out by the governments of industrialized
countries, which the WTO admits have a negative impact
on poor countries.
Observers say the failure in
Cancun has also cast doubt on the possibility of meeting
WTO timetables and targets, and that many countries will
put new - or renewed - efforts into seeking regional and
bilateral trade agreements, especially with the United
States, the region's biggest importer.
Another
consequence of the fiasco is the possible delay of the
Free Trade Area of the Americas (FTAA), which is to be
created by January 2005.
"The outcome of the
meeting will have an impact on all regional
negotiations, including the FTAA talks and timetable,"
said Venezuelan Minister of Production and Trade Ramon
Rosales. "One of the predictions, which has also been
referred to by the United States, is that countries will
turn more and more to a search for bilateral accords."
In the negotiations for the creation of the
FTAA, which would create a free trade zone stretching
from Alaska in the north to Tierra del Fuego in the
south, encompassing all countries in the hemisphere
except Cuba, conflicts over farm subsidies and the
dismantling of anti-dumping (the export of products at
prices deemed artificially low) measures were
transferred to the WTO, where no progress has been made.
World Bank president James Wolfensohn said the
emergence of the G22, led by big agricultural exporters
such as Brazil, India and China, has given rise to a new
paradigm of global financial relations for the 21st
century, and has demonstrated that poor countries can
act as an effective counterweight to the rich.
The failure to reach an agreement in Cancun,
where the WTO hoped to move forward on the Doha
Development Agenda, which arose from the last
ministerial meeting, was wildly celebrated by the
activists who had flocked to Mexico from all over the
world.
The activists gave the G22 the credit for
standing up, with determination and unity, to the might
of the industrialized nations and transnational
corporations, and foresaw a promising future for the new
grouping.
But that unity, and the new paradigm
of which Wolfensohn spoke, may not last, according to
observers in Latin America.
Venezuela's populist
left-leaning President Hugo Chavez said the G22 "is
merely a possibility that is emerging, that is just now
being born, and one that is not free of contradictions.
It would be desirable to work towards its consolidation,
to take it beyond the question of agriculture, and into
other issues like that of intellectual property, for
example."
Colombian Trade Minister Jorge Botero
said his country would remain in the G22 "only as long
as the group does not become a factor of political
confrontation with the United States."
Researcher Hector Moncayo at the Latin American
Institute of Alternative Legal Services in Bogota said
Colombia's participation in the G22 "is very strange,
and contradictory".
"If you think about it in a
cynical manner, you might say Colombia entered the G22
because it was interested in hurting the [WTO] meeting,
because by harming the conference, and the FTAA project
along with it, the possibility of achieving the
bilateral trade agreement it is seeking with the United
States would be strengthened. But that would be too
Machiavellian," he said.
Chilean Foreign
Minister Soledad Alvear, whose country has already
signed a free trade deal with the United States, said
that in Cancun "some poor countries failed to understand
that flexibility is essential in trade negotiations in
order to achieve accords".
Mexico, which along
with Canada and the United States is a member of the
North American Free Trade Agreement (NAFTA), joined the
G22 for merely pragmatic purposes, and trade negotiator
Eduardo Perez insinuated that his country could pull out
at any time.
IPS correspondents heard similar
views in other countries as well.
"We are allied
with the G22 only with respect to the liberalization of
trade in farm products with the developed countries,"
said the director of the Paraguayan Foreign Ministry's
Office on Multilateral Economic Bodies, Igor Pangrazio.
What virtually everyone agrees is that the
multilateral negotiations must now be shored up to
prevent the collapse of the Doha Round of talks.
However, each country has a different take on the
consequences of what occurred in Cancun.
Chilean
Agriculture Minister Jaime Campos agreed with the
National Agriculture Association that the failure to
reach an agreement in Cancun was unfortunate, but
irrelevant to Chile.
"Chile has already resolved
the questions of market access and farm export
subsidies, due to the free trade treaties we recently
signed with the European Union, the United States, the
European Free Trade Association and South Korea," said
Campos.
Argentine Deputy Foreign Minister Martin
Redrado said that in the end, something positive emerged
from Cancun, where his country found "a coalition of
interests which in the future will give greater
political strength" to the common demands set forth by
developing countries.
(Inter Press Service)
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