The calm before the storm: upcoming Cancun WTO conference likely to blow through with few results.

In mid-September, the sunny beach resort of Cancun will become ground zero of the global trade free-for-all.

Beleaguered trade delegates--fresh from failing at last-minute negotiations to resolve some of the bigger contradictions putting a stress on global commerce--will attempt to patch up in four days what couldn't be done in the nearly two years since the so-called "development round" of talks began in 2001.

Egging them on to failure will be the increasingly active anti-globalization movement, which promises to invade Cancun with battalions of enraged farmers and pierced punks.

In short, the prospects for success at the World Trade Organization's fifth ministerial meeting are not heartening.

FROM QATAR TO CANCUN

On Sept. 10-14, delegates from the 144 WTO member nations will try to forge ahead toward the ideal of free and fair trade. The last ministerial meeting in Doha, Qatar, in 2001 ended with a pledge by developed countries to take the concerns of poorer nations seriously.

Rich nations promised to cut a deal over agricultural subsidies, textiles and patented medicines in order to appease poorer nations that feel they are being left out of the potential prosperity of global trade. In Doha, the United States, the European Union and Japan said that they would put an end to double talk, like promoting five trade while maintaining trade-distorting subsidies, tariffs and export credits.

But since then, negotiators have missed all major deadlines to reach agreements on the established agenda.

A new agreement on farm subsidies was supposed to be finished by March, while a deal on non-agricultural, goods was supposed to be wrapped up by the beginning of June. The negotiations are not set to conclude until the beginning of 2005, but more than half of the established time frame has been used with little to show for it. If delegates don't move forward in Cancun, many warn that hope may be lost.

Non-governmental organizations (NGOs) and delegates from developing countries have been quick to blame the developed world for the lack of progress. The British-based development NGO Oxfam said the draft agreement for Cancun is little more than a list of the same troublesome issues established in Doha, without any solutions.

"We are laying the blame at the feet of the U.S., the EU and Japan," Oxfam said in a statement following a last-ditch meeting to reach consensus on agriculture subsidies by key WTO delegates in Canada at the end of July. "The rich trading nations promised to put development at the heart of the round but are pursuing their short-term commercial interests as ruthlessly as ever."

Another threat to the WTO's legitimacy is the rapid proliferation of bilateral and regional trade agreements. The WTO holds these deals are taking resources and momentum away from greater multi lateral talks. After clinching bilateral agreements with Chile and Brazil, Robert Zoellick, the U.S. trade representative, said in August that the United States would go "on offense," seeking more such agreements, in order to pressure the European Union and Japan to open their markets.

Darkening the clouds further, there has been a spat of complaints before the WTO. Early in August, the United States declared it was going to take the EU to the WTO over an EU ban on bio-engineered food. Shortly thereafter, a WTO panel sided with the EU that steel subsidies put in place by the U.S. administration last year were protectionist and unfair. While the appeal process could take up to a year, the ruling opens the possibility Europe could impose billions of dollars in sanctions on U.S. imports. Meanwhile, Mexico complained to the WTO over U.S. cement tariffs, while the United States threatened a suit over a Mexican tax on high fructose corn syrup designed to protect its sugar farmers.

DOLLARS VERSUS HEALTH

The one area where negotiators are at least alluding to the possibility of compromise is on international drug patent regulations. Poor nations without domestic pharmaceutical industries are demanding to import cheap generic versions of drugs--especially those to treat HIV and common diseases related to malnutrition and poverty. Many of these drugs are locked under patent by big U.S. drug companies.

European and Mexican delegates were playing up the possibility that a deal in this area could be reached, saying little stood in the way of allowing African countries to import genetic drugs from Brazil or India.

FIRST WORLD FARMERS STYLED

On the agricultural front, the U.S. juggernaut is joined by the equally immovable European Union and flanked by Japan.

These three economic powerhouses protect their farmers by restricting access to their markets with protective tariffs, while also subsidizing domestic agricultural production and providing export credits that allow producers to dump food on the world market at below the cost of production.

The developed world currently funnels more than US$300 billion a year into an array of farm subsidies, export credits and protective tariffs. According to the World Bank, the EU subsidizes each cow by over two dollars a day. Meanwhile, U.S. cotton subsidies are blamed for knocking a quarter off the world price of cotton, leaving more efficient but unsubsidized African producers in the lurch.

The United States has proposed cutting subsidies to 5% of total agricultural output while significantly reducing tariffs, but the EU says the cuts are too drastic. While both say they will reduce subsidies when the other side is also willing, both also bolstered their protectionist programs last year.

"Agriculture remains the linchpin of the round," WTO director Supachai Panitchpakdi said in a recent speech. "At the moment, we are seeing positions on agriculture that are still very, very far apart, and there is no convergence in sight. If agriculture does not move and remains stalled up until Cancun, we may have great difficulties in advancing other parts of our negotiations."

WALKOUT FEARS

In all, protectionist measures blocking access to developed markets cost poor countries US$100 billion dollars a year--more than double the amount provided in aid by wealthy countries, according to the World Bank. If poorer nations--now backed by Australia and New Zealand--don't see the trade barriers coming down, they may walk away from the table like they did in Seattle in 1999. Under WTO rules, it's all or nothing, and if some countries pull out and prevent a consensus, Cancun will fail.

Despite developed nations' lack of progress on their Doha promises, they are still pushing ahead their own agenda of four fronts known as the "Singapore issues," namely investment, competition policy, transparency in government procurement and trade facilitation.

While multinational corporations want uniform rules to govern direct foreign investment across the globe, critics say the investment rules would limit developing nation's autonomy and deny them the ability to nurture and protect their domestic industries.

"It is unacceptable for WTO members to be pushing investors' rights when so little progress has been made on the development agenda and on reducing the threats that crude free-market globalization poses to social and environmental progress all over the world," said Guy Ryder, general secretary for the International Confederation of Free Trade Unions (IFCTU) in an August communique.

PROMISE OF PROTEST

If internal pressures weren't enough, protestors are promising a "counterattack in Cancun." Mexican NGOs and campesino groups will march on Cancun with the backing of a host of foreign supporters. For these groups, the WTO appears to be working only for the good of wealthy nations and big corporations at the expense of the poor and the environment.

"We are going to shut the meeting down," said Gabriela Rangel, a spokeswoman for the Mexican Action Network Against Free Trade. "We will derail the corporate agenda, and put in place the people's agenda."

Michael O'Boyle is a Mexico City-based freelance writer.