OTTAWA -- If coming World Trade Organization talks in Mexico stall, key players such as the United States may decide to focus their energies elsewhere, hobbling a 17-year quest to open global commerce, Chilean President Ricardo Lagos says.
"If you have a failure in Cancun, the failure in Cancun means something very bad because the U.S. will go bilaterally all over the world," he said in a recent interview.
"This, I don't think, is the best even [for] the interests of the United States," said the South American leader, who visited Prime Minister Jean Chrétien in central Quebec last week.
Mr. Lagos's caution comes as wealthy and poor countries try to salvage WTO talks scheduled for early September in the Mexican resort city of Cancun.
The meeting is at risk of failure because developing countries, which dominate its membership, are angry about unfinished business.
Poor countries feel they got "a raw deal" in the previous round of talks that concluded in 1994, when they granted access to their own markets and agreed to freer global trade rules. They want more concessions to "rebalance" the playing field, said veteran Ottawa trade consultant Peter Clark.
Developing countries want the same thing they asked for before the most recent major WTO meeting: They want rich countries to drop barriers to farm products trade that shut them out of wealthy markets, and they want easy access to cheap medicine in the event of public health crises ranging from AIDS to malaria.
The September meeting will be the first big get-together of the 140-member global trade body since November, 2001, when the countries launched a broad round of talks in Qatar to expand global commerce, a move aimed at dampening rising protectionist sentiment as the economic outlook darkened.
The so-called Doha round in Qatar got off the ground only after industrialized countries pledged greater action on medicines and agriculture.
But little progress has been made since Doha. The United States angered many countries by unveiling another $190-billion (U.S.) in farmer subsidies and slapping huge tariffs on foreign steel to protect its industry, and the European Union has pledged limited reforms.
The United States is busy lining up one-on-one trade deals with countries all over the world and has suggested it will barrel ahead with bilateral deals if Cancun fails. Trade watchers fear such a scenario could undermine the multilateral trading system if the biggest player, Washington, pours its energies into bilateral deals that win precedent-setting concessions.
But U.S. Trade Representative Robert Zoellick said his country has no choice but to strike out on its own if the WTO bogs down.
"So what should the United States do if other nations choose protectionism over free trade? Under the WTO's procedures, one nation can block progress. It would be a grave mistake to permit any one country to veto America's drive for global free trade," Mr. Zoellick wrote in The Wall Street Journal on July 10.
Washington trade lawyer John Magnus said this threat actually will help to build consensus in Cancun. "I think it makes people more likely to come to Cancun and pony up because they can see that Uncle Sam has an alternative to the WTO. That's exactly the way the last round got sewn up, because of the [Canada-U.S. free trade agreement] and NAFTA," said Dewey Ballantine's Mr. Magnus.
Anti-globalization protesters are heading to Cancun to try to disrupt talks as they did in Seattle in 1999; they appear more likely to have an impact than they did in Qatar, a tightly controlled Muslim kingdom.
"I think if Cancun becomes a sort of . . . Seattle, I think it could really sort of sour the situation in a substantial way," said Columbia University professor Jagdish Bhagwati, part of an expert group writing a report on the future of the WTO for director-general Supachai Panitchpakdi.
He said the United States uses bilateral deals "nakedly for political purposes . . . playing favourites, punishing people" around the world.
He added that one-on-one agreements allow Washington to reward corporate lobbies to the detriment of the developing world in a way that multilateral talks don't.
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