Don't Cry for Cancún

Jagdish N. Bhagwati

From Foreign Affairs, January/February 2004

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Summary:  Despite the dramatic collapse of the recent trade talks in Cancún, things aren't nearly as bad as they seem. Cancún was no Seattle, as will soon become clear when progress resumes on Doha Round negotiations. Fault for the conference's breakdown lies with all the major parties, but the damage can quickly be remedied.

Jagdish Bhagwati is University Professor at Columbia University and Andre Meyer Senior Fellow at the Council on Foreign Relations.

AFTER THE FALL

Once, when asked by a student radical whether he agreed with Mao Zedong's assertion that a statement could be both true and false, the philosopher Sidney Morgenbesser famously replied, "I do and I don't." Something similar could be said about the recent trade talks in Cancún, which collapsed in acrimony: they were truly both a failure and a success. The failure lay in the here and now, in the bad press and in the fact that no actual agreement was reached. But the talks also represented a success, which will soon become apparent: Cancún will serve as a stepping stone to a successful conclusion of the Doha Round of trade negotiations, underway since November 2001.

The Cancún talks collapsed abruptly on September 14 of last year, when Mexico's foreign minister, Luis Ernesto Derbez, pulled the plug following a stormy meeting. Immediately, nongovernmental organizations (NGOs) began to celebrate, and TV screens worldwide flashed scenes of Walden Bello, an eminent Filipino sociologist, dancing joyfully with fellow activists.

Less joyful were the two major players at the talks, the United States and the European Union, who responded to the breakdown by letting recriminations fly. The heads of both delegations -- Robert Zoellick, the U.S. trade representative (USTR), and the EU's trade commissioner, Pascal Lamy -- had hoped for an agreement at Cancún that would let the Doha Round finish on time, in January 2005, when they both expect to still be in office. When no such agreement occurred, both rushed their grievances into print. Zoellick threatened in the Financial Times to shift Washington's focus away from multilateral pacts and toward bilateral agreements with "will-do" nations instead -- a threat that made him sound like the Donald Rumsfeld of trade policy, intent on forgoing multilateral institutions in favor of ad hoc coalitions of the willing. Zoellick laid blame for the breakdown of Cancún on the "Group of 22" developing countries (G-22) that had emerged at the talks, deploring their "transformation of the World Trade Organization into a forum for the politics of protest."

Meanwhile, Lamy responded to the end of the Cancún negotiations by suggesting darkly that the EU would not return to the trade talks anytime soon. As the Financial Times reported six weeks later, Lamy warned against a "rush to relaunch talks" and suggested that the World Trade Organization (WTO) negotiating process was deeply flawed. With both major players deploring multilateralism and many NGOs celebrating the collapse of Cancún, parallels with the disastrous WTO meeting held in Seattle, Washington, in late 1999 were perhaps inevitable.

Yet these comparisons were entirely inappropriate. Cancún was no Seattle. The latter will go down in the history of the WTO and of free trade as a failure. The collapse of Cancún, on the other hand, will soon be forgotten, overshadowed by the successes that still should come.

THREE CONTRASTS

Three main differences can be drawn between the breakdowns in Seattle and Cancún. To begin with, Seattle was paralyzed by protests, whereas ...

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