World Bank, Washington, September 16: It may be more than a year away, but the US presidential election is already throwing a long shadow. Here in Cancún this week, it was enough to touch off a walkout by delegates from developing nations at the WTO talks who were convinced that it was hopeless to expect any realistic negotiations with the Americans this year on farm subsidies, the International Herald Tribune and the New York Times report.

Robert B. Zoellick, the US trade representative, had promised that Washington was prepared to cut its multibillion-dollar farm subsidies. But the compromise proposal essentially left that farm program intact. It also gave American cotton farmers a reprieve despite appeals from four of Africa’s poorest nations. The farm states voted heavily in favor of Bush in the 2000 election, and were the backbone of the states that gave him the bulk of his electoral votes. Agribusiness, which profits from the low cost of corn, soybeans and other crops subsidized by American taxpayers, has shifted its allegiance to the Republican Party.

The American farm provisions, while the central issue, were not the only reasons for the Group of 21’s decision to quit the talks. Europe’s demand that the world trading body negotiate new rules covering investment, trade facilitation and two other areas were also cited. In the long run, whether the Group of 21 gains or loses as a result of the breakdown in negotiations may be beside the point. What counts, its members asserted, was the statement that had been made. They said they had established themselves as a power bloc to be reckoned with.

In an interview in La Tribune (France), Jean-Marie Metzger, Director of the OECD’s Trade Directorate, explained the conference failed because of the inflexibility of certain members of the WTO. (?) Certain countries adopted hard-line positions accepting concessions from their partners and demanding always more.

Another reason for the failure of the WTO talks, is that the »WTO is a medieval organization«, <b>Le Figaro</b> (France) quotes EU trade commissioner Pascal Lamy as saying. The French daily notes that Cancun failed because of a certain lack of transparency in the drafting of proposals.

Le Monde (France) meanwhile reports that the Chairman of the Conference, Luis Ernesto Derbez, the Mexican Minister for Foreign Affairs, was widely criticized for »deliberately neglecting the opinion of many developing countries. This is an attempt to impose the will of some on the greater majority«, said India’s Trade Minister, Arun Jaitley.</p>

<p>The <b>Hindu</b> (India) notes that Jaitley said the [WTO] meeting could not end with a ministerial declaration because the draft text that the Ministers had been asked to approve „did not reflect the concerns of the developing and least developed countries“.</p>

<p>The <b>Washington Post</b> notes that whatever the cause [of the breakdown], one of the effects will clearly be an intensified effort by the Bush administration to negotiate bilateral free-trade accords with individual countries and groups of countries, similar to the North American Free Trade Agreement. A senior US official, briefing reporters yesterday on the condition that she not be named, pointedly emphasized that „we will continue to move ahead on the regional and bilateral level.“ Although the official emphasized that the administration remains as committed as ever to securing a WTO deal, she acknowledged that Cancun raised serious concerns about the prospects.</p>

<p>In an analysis of the WTO talks, the <b>Financial Times</b> writes that poorer countries stand to lose most from the collapse of the Doha talks much hyped by wealthy countries as a „development“ round. Although modest, the gains on offer at least offered the prospect of a fairer deal. However, the world is unlikely to stand still while the Doha round treads water. Some observers are worried that now governments no longer feel under pressure to negotiate, constraints on their trade policy actions will weaken. Some senior European Commission officials fear that France and some other EU governments will use the Cancun debacle as a pretext to try to reverse June’s farm subsidy reforms. Failure to extend beyond the end of this year the „peace clause“ sheltering US and EU agricultural regimes from legal challenge could also unleash a torrent of WTO disputes cases. There is also a risk that some governments will find it harder to resist domestic protectionist pressures.</p>

<p><b>Neue Zürcher Zeitung</b> (Switzerland) also notes that poor countries are likely to lose most from the WTO breakdown. With their stubborn attitude, following the lead by Brazil and India, poor countries are going back home with empty hands. Still, in some way, developed countries are losers too. On the one hand, the Singapore issues are now on hold. On the other hand, coming up with a compromise on agriculture would have accelerated the badly needed reform of the sector in industrialized countries too. Finally, the global economy is another loser. In the short-term, a successful outcome in Cancun could have given the global economy boost, both at the real and psychological level.</p>

<p>In another piece, the <b>FT</b> reports that Brazil’s delegation may have been one of the few leaving the WTO meeting in Cancún yesterday with some sense of achievement. The South American country, which led the Group of 21 developing nations at Cancún, insisted the agricultural issues it defended did not cause talks to collapse. In fact, Roberto Rodrigues, minister for agriculture, said there had been some progress in forging common ground towards a draft proposal on reducing agricultural subsidies at Cancún.</p>

<p><b>Handelsblatt</b> (Germany) writes that the breakdown of the talks is particularly bad for German industry, which invested about $24.5 billion abroad last year. With 126 bilateral agreements, Germany is tied to multiple industrial locations around the world. The now failed attempt to replace this bilateral jungle with one single agreement could have substantially reduced the information costs of companies. In addition to increased transparency, the Federal Association of the German Industry BDI also hoped that the an international, legal agreement could have improved the legal security for investors.</p>

<p>Meanwhile, the <b>Guardian</b> (UK) reports that the EU yesterday urged a radical overhaul of the WTO after the embarrassing collapse of trade liberalization talks for the second time in four years. With Washington threatening to extend its „go it alone“ strategy in global politics to trade deals, Lamy said that although the break down in Cancun, Mexico, did not mean the negotiating round was dead, it was in need of „intensive care“.</p>

<p><b>IL SOLE 24ORE</b> (Italy) notes that Adolfo Urso, Italian Vice Minister for Foreign Trade, announced Monday that the Italian Government will propose to the EU a review of WTO mechanisms with the aim of rendering these simpler. According to Urso, an intermediate body could be the solution, a structure „where delegations from geographic regions are represented on the model of the restricted ministerial meetings which showed their effectiveness in the Doha-to-Cancun leg.? The point is that „the G21 is now aware of its power, so those developing countries will remain together“, said Gianni Alemanno, Italian Minister for Agriculture.</p>

<p>The <b>South China Morning Post</b> notes that Hong Kong is set to host the next WTO ministerial meeting but may have to wait three months just to find out when it will be held. The city was confirmed as the only candidate during the talks in Mexico. But their collapse now means that fresh meetings are needed to forge a new path to negotiations?and fix the date for talks. Those meetings must be held by mid-December.</p>