Cancun Attitude

The collapse of the Cancun WTO talks represents a pivotal moment for trade between the rich and poor. The poor have, wisely or not, pushed back.

At issue, basically: Farmers in the developed nations get $300 billion a year in subsidies, breaking the backs of poor farmers in much of the “third world.” That said, it doesn’t help those farmers all that much, either. So it’s not necessarily about rich and poor nations, but about food producers everywhere and the bankers who have always controlled their fate.

The crux of the trade talk collapse? As recounted in the Salt Lake Tribune,"Before the talks collapsed, delegates spent Sunday debating not the changes to farming policy that they had spent much of the conference negotiating, but instead four proposals about foreign investment and competition." How wonderfully protective of our fast disappearing outsourced jobs and how helpful to family farmers, vs. giant agribusiness and multinationals these late-night debated proposals would have been is anyone's guess.

Turns out that the Group of 21, the developing nations’ organization that pulled out of the talks, may have even been a better friend to U.S. farmers than their own Administration negotiators. OF course, small farmers aren't donating thousands to Bush's reelection funds, so that should come as no shock. According to the Bismarck Tribune: “The deal on the table would hurt North Dakota producers,’ said Sen. Kent Conrad, D-N.D. Farmers in the United States should be glad the talks collapsed.”

But hey, I don’t begrudge people for trying to cut deals that favor themselves. It would be unrealistic to fight against such a basic human instinct. And it is no surprise that the financial sector would rather trade talks focused on their interests than those of the farmer. Their interests are mainly that these foreign markets are stable and open and let them invest there so that they can exact unspeakably high returns on the grossly underpaid human capital and undervalued raw materials there.

It’s worth noting that the Administration spokespeople are decrying the strong-arm tactics of underdeveloped countries. They emphasize how much it will hurt the noble efforts we are putting forward to raise these people out of poverty. They also are busy working hand-in-glove to “protect” the welfare-dependency of American farmers. But the boon goes to the biggest and the biggest are represented ably by the farm lobby. As cited by Elizabeth Becker in the New York Times, “political contributions from agribusiness jumped to $53 million in 2002 from $37 million in 1992, with the Republicans' share rising to 72 percent from 56 percent, according to figures compiled by the Center for Responsive Politics.” Those are the States Bush needs to win again if he has any hope at all of retaining the White House in 2004.

What’s really amusing in all of this is that the formation of this power bloc of the G21 should be viewed as such a tragedy by avowed free traders and globalistas, as we allegedly now have in the present Administration. Consider one of its many mouthpieces in the Senate, Sen. Charles E. Grassley, Iowa Republican. He’s chairman of the Senate Finance Committee, which has jurisdiction over trade, and had this to say in a statement about the G21, “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.”

The group, by the way, includes the following countries:
. Argentina
· Bolivia
· Brazil
· China
· Chile
· Colombia
· Costa Rica
· Cuba
· Ecuador
· Egypt
· Guatemala
· India
· Mexico
· Pakistan
· Paraguay
· Peru
· Philippines
· South Africa
· Thailand
· Venezuela
· Nigeria.

What’s wrong with a group getting together to exert leverage to get the best deal they can for their members? Isn’t that what the developed countries do? Don’t we ensure that our tariffs protect those who keep us in power?

The Administration suggests that it will now proceed with bilateral agreements with selected countries, like El Salvador, which dropped out of the G21 at the last minute when the country was offered a favorable trade relationship with the U.S.

Interesting move. Playing a little trade hardball. A bit of the old divide and conquer. Well, maybe the sauce that is good for the goose is also good for the gander, then? Maybe we should applaud the application of negotiating power and collective bargaining on the part of the G21, instead of doing our best to disparage it. And maybe these 21 nations, all potential markets for each other, will decide to cut favorable deals with each other now, ultimately bypassing the financiers of the U.S. and the EU. The law of unintended consequences suggests that we will only know later what impact forcing the third world to trade without the first world will have.

What it suggests is an early, but tangible, sign that the bridge to the 21st century has been crossed. The poorest are banding together, reasoning, quite rightly, that they can’t suffer much worse than they already are. Consider that India is on the brink of producing drugs at much cheaper prices than our U.S. firms to sell to third world countries.

The third world has finally decided that “no deal is better than a bad deal,” as many of their leaders have said. This is, in fact, a good, solid, pragmatic beginning of civilized compromise and bargaining…a far better relationship that one of brute force of military and terrorist arms between competing factions around the globe.

Moreover, it is not so easy for America to do without the third world. Thanks to its cheap labor and workers we get to buy cheap sneakers and outsource U.S. jobs to boost multinational corporations' profits, thus causing their stocks to go up. Good for investors and good for consumers. (Maybe not so good, however, for workers, which is to say wage earners, here in the U.S., but that will only become clear down the road.)

So good for the G21. Let the whining continue from the U.S. and the EU faux-free-traders. They, like the empires before them, were also “blocs” that for centuries controlled the playing field on which raw materials and manufactured goods and capital, both human and monetary, were exchanged.

Now these G21 countries are exerting the first sensible capitalistic strategies that will get them a bigger share of the pie. Ironically, in the heartland of this country, the smaller farmers may also benefit from the G21. If this group succeeds, it will wean them from welfare-subsidies and eventually level the agricultural trade playing field and open new markets…to the benefit of food producers everywhere. After all, how many small family farms in this country are doing so well the way things are now? ¶ 12:51 PM