Cancun joins Seattle as the venue of two failed ministerials of the World Trade Organisation (WTO) since it came into existence on the first day of 1995. The WTO, whose stoic exterior is designed to block the views and positions offered by civil society organisations, was venue of an abject collapse instigated by its own members from the South. Determined to stand up against the unilateral outcomes of multilateral forums, member states from the developing world refused to accept the draft declaration. The so-called 'Quad' of international trade–the US, the EU, Japan and Canada–were taken aback by the vehemence of the Southern resistance as they realised that this time around they could not muscle their way through and engineer declarations to suit their convenience. The failure of the Cancun Ministerial, however, may generate a backlash and strengthen the Quad's determination to engage in more ruthless manipulations to get their way.
Developing countries have learnt the dictum of international trade the hard way, for having being the victims of hard-headed lobbying, coercion and deft manipulations. Having learnt the lesson, they gave an exemplary demonstration of their will not to be brow-beaten into global agreements that work to their disadvantage. Their anger and 'insubordination' has already caused the biggest derailment so far of the market-led development agenda. And rightly so. Developed country agriculture has so far enjoyed a unique 'special and differential' treatment that was in reality meant for the developing and least developed countries. The impregnable wall that was being built since the days of the Uruguay Round negotiations (1986-94), is not so easy to scale.
Just before the Cancun Ministerial, President Amadou Toure of Mali was a co-signatory to a letter to the New York Times condemning the cotton subsidies in America that have been devastating for West African countries — Burkina Faso, Mali, Chad and Benin. His colleague, President Blaise Compaore of Burkina Faso, had spoken in a similar vein to the Trade Negotiating Committee of the WTO in June. They voiced their concern at the way direct financial assistance by a number of exporting countries, including US, European Union and China, to the tune of 73 percent of the world cotton production, destroyed millions of livelihoods in West African countries. As a result, African cotton producers realise only 60 percent of their costs, although their cost of production is less than half of that incurred in the developed countries. More for mollifying public sentiments than for rectifying it's the fraudulent economics, the WTO did consider the contentious issue of cotton subsidies, as if it was an isolated case of exploitation of developing country farmers.
The lack of fairness can be gauged from the quantum of state support that goes into this industry alone. In 2001, the 25,000 odd US cotton growers received roughly USD 3.9 billion in subsidy payments, for producing a cotton crop that was worth only USD 3 billion at world market prices. One Arkansas cotton grower received USD 6 million, equal to the combined annual earnings of 25,000 cotton farmers in Mali. The story is similar in the case of the European Commission (EC). The new EU Common Agricultural Policy reform proposals, announced prior to the Cancun Ministerial, made no attempt at radically reducing commitments, which is what is needed. Operating on the same principle as the US does, it too has shifted most of the 'blue box' subsidies (the category of government support which allows direct payments under production-limiting programmes) to 'green box' (which allows government support with no or minimal trade distorting effects).