Monday, September 15, 2003

CANCUN, Mexico — The United States is ready to start forging bilateral and regional trade agreements after global talks collapsed Sunday under the weight of differences between rich and poor nations.

Rich and poor countries fought to a stalemate Sunday, forcing the Bush administration’s trade team to leave Cancun without a clear mandate for new global rules on easing commerce, and developing countries to depart without winning any of the concessions they had demanded.

Developing countries may take satisfaction in having stood up to larger economic powers, namely the United States and the 15-nation European Union. But Sunday’s celebration among many poorer nations may turn to dismay as they try to negotiate agreements with the world’s largest market individually or in small blocs.

The United States will pursue closer trade ties with countries “who want to move ahead, who are interested in the future,” a senior U.S. trade official said yesterday.

Bilateral trade agreements or less extensive trade programs can include significant access to the U.S. market, which is especially important to developing countries with industries like apparel manufacturing.

But countries that opposed the United States at the World Trade Organization may have a hard time finding friends in Washington.

Sen. Charles E. Grassley, Iowa Republican and chairman of the Senate Finance Committee, which has jurisdiction over trade, said he would scrutinize the positions taken by WTO members.

“The United States evaluates potential partners for free-trade agreements on an ongoing basis. I’ll take note of those nations that played a constructive role in Cancun, and those nations that didn’t,” he said in a statement.

Many smaller nations could find themselves in the hot seat for joining a Brazil-led group of more than 20 countries, called the G-21, that made some of the strongest demands regarding U.S. and EU agriculture policies — differences that contributed to Sunday’s collapse.

Colombia and Peru, which have asked for trade agreements, as well as Costa Rica and Guatemala, which are negotiating deals as part of the Central American Free Trade Agreement, joined the G-21 bloc.

El Salvador, another CAFTA country, was a member but dropped out late Saturday.

“We will be looking at those countries that wanted to move ahead globally, and those that want to move ahead bilaterally,” the trade official said.

Egypt, another G-21 stalwart, already felt the Bush administration’s wrath. It went from a top free-trade-agreement contender to an also-ran when it dropped out of a U.S.-led case against the European Union at the WTO.

The confrontation at the WTO also means a difficult road for another major administration project, the Free Trade Area of the Americas with 33 other nations in the hemisphere. Brazil, the largest Latin American country, has said there could be no FTAA without an agreement on agriculture.

U.S. Trade Representative Robert B. Zoellick on Sunday said prospects for the FTAA were not dimmed. And U.S. officials last week said they do not seek to punish any countries for opposing U.S. trade policy.

But that is not always the perception.

“The U.S. with its policies is kind of bullying developing countries,” George Odhiambo, a policy analyst with the Kenya National Farmers Union, said yesterday in Cancun.

Kenya belonged to yet a different group of poor nations and was one of the first delegations to confirm that developing countries had walked out and that talks had collapsed.

The United States is negotiating free-trade agreements with five countries in Central America, five in southern Africa, and with Australia and Morocco. Bahrain and the Dominican Republic also are set to start formal talks.

The United States also has set up a series of trade pacts that unilaterally open the U.S. market to help developing nations. Kenya is part of a trade-preference program for African nations.

Any damage to the pact would be worth having taken a stand against larger countries, Mr. Odhiambo said.

“It might be a short-term victory for developing countries, but I don’t understand why we can’t be united to achieve another victory,” Mr. Odhiambo said.

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