The Poor Get Poorer.(collapse of the Cancun trade summit)(Column)

The collapse of the Cancun trade summit is best viewed from within so- called green rooms. Not until 2001 were the poor even allowed into the conference halls where the rich once gathered to write the rules of the trading world. That same year, at the summit in Doha, poor countries pushed their demands to the top of the agenda for the first time. The focus of future talks would be development--boosting exports of rice and cotton from Asia and Africa, rather than cars and computers from Europe, America and Japan. There was much hope. Yet 22 months later, resentment over decades of exile from the green room would return to explode in Cancun.

The leaders of the West seemed flabbergasted. On the face of it, the largest developing nations had torpedoed a summit from which they had the most to gain. Spearheaded by Brazil with vocal support from India and quiet backing from China, the core group founded in Doha was reincarnated as the group of 22 developing nations, or G22. They will bear the brunt of the cost of failure in Cancun, which according to the World Bank includes the lost opportunity to raise 144 million people out of poverty. In the final two days, the G22 and allied groups refused to budge even an inch from the "development agenda." After the collapse, U.S. Trade Representative Robert Zoellick denounced countries looking for "freebies," saying those "that could ask for but not give... are going to face the harsh, cold reality" that they came away with nothing. His European friend and counterpart Pascal Lamy warned that the trade talks were becoming a "medieval process."

It's even more complicated than that. For many years, says University of California, Davis, economist Colin Carter, the United States and Europe made the rules governing global trade in farm goods by themselves, and the poor were tired of it. After Doha, they looked on in dismay as America actually raised farm subsidies and the European Union dragged its feet on offering proposed cuts. The EU offer finally came in June, and attempted only to dampen the distorting influence of subsidies, not to cut them. Then, only a month before Cancun, the United States took back a more generous offer to unite with Europe on its less generous one. Even a conservative American trade expert like Brink Lindsey at the Cato Institute wondered if the United States was playing games, offering deep cuts to look like the "good guys," with no intention of delivering.

Suspicions went even deeper in developing nations, which saw America and Europe conspiring against them on the critical issue in Cancun. It was only then, just weeks before the summit, that Brazil began reassembling the front that would become the G22. University of Hawaii political scientist Christopher McNally says the turning point came when the CAIRNS group of exporting nations, led by Australia and including Brazil, Argentina, South Africa, Indonesia, Thailand and the Philippines, formed alliances with India and China. Together, these nations represented two thirds of the world's farmers and 60 percent of world agricultural output on five continents, and had the confidence to take on the West.

To many observers, the G22 looked like a throwback to the G77, the 1950s alliance of poor nations that rose up to challenge European colonialism. Hajime Ito, a senior official at the Ministry of Economy, Trade and Industry in Tokyo, says India's lead role in the G22 suggests a nation suffering "the East India Company syndrome," or fearful memory of the British trading house that once controlled its economy.

As the Cancun summit opened, most Western delegates seemed certain that the G22 would crumble under pressure into the G2: ...