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Outline the issues under discussion at Cancún - Why did talks fail?

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Introduction

Daniel Colton The Doha round of World Trade Association talks were started in November 2001, and since then every step of the way has been fraught with problems. The WTO was seen to be globally failing the poor and developing countries, and the talks were designed to change rules and redistribute some of the benefits of international trade. The vast majority of the 148 member countries of the WTO agreed that the needs of the developing countries had been neglected in the previous rounds of talks in Uruguay in 1994, which had largely been dictated by lobbying from developed countries, and Seattle in 1999, a round of talks that collapsed, mainly through the revolt of developing countries. The Cancun talks were to be taken at a very slow pace owing to the hugely differing views on every subject, the scale of what was being discussed and the number of people whom the talks affected. The failure of the talks cannot be put down to one reason, but a myriad of problems through lack of action, external pressure groups, protectionism, previous grievances and most importantly in the most part a complete lack of compromise. There were several key issues under discussion at Cancun, all of which affected a huge number of people around the world, but some were even more contentious than others. ...read more.

Middle

The US increased subsidies to its cotton farmers last year and the EU continues to fail to reform the Common Agricultural Policy, which stayed at the same level in real terms over the last year and is now $48 billion, much to the resentment of a group of countries that have formed an alliance since the beginning of the Doha round, the G21. This is a group of developing countries led by Brazil, China and India. Another issue that developing countries have found to be very detrimental is quotas that used to be in place on imports into the EU and the US. In the last round industrial countries promised to phase out by 2005 the MFA (Multifibre Arrangement), a system that set a quota on imports. The method by which this works is shown below in fig 1.3. However, the under the plan laid out, by now 75% of all the quotas should have gone, but 80% still remain in the US and 70% still remain in the EU. The only quotas that have been liberalised are quotas that never really had an effect as those goods were not really imported in large amounts anyway. Even with the tariffs gone, quotas will still exceed 15%. ...read more.

Conclusion

There was also the problem that many of the G21 who still concerned over grievances they had from previous rounds of talks, namely Uruguay and Seattle, and therefore negotiations seemed unlikely at this one. Another key problem that presented itself at Cancun was the continuation of the problems of agriculture. This had been a problem that was crucial before, during and now after the talks. America and the US had drawn up some policies to free up trade, but it was much less than what many had wanted at the first meeting of the Doha. Export subsidy issues were most important in this area. Japan also refused to reduce its 1,000% rice tariffs, and there appeared to be no likelihood of this changing in the future. G21 were particularly bitter about the lack of development in this area as collectively it represents half the world's population and two-thirds of its farmers, it acted as a powerful force, organised and professional. Although within itself it has very different views, it stood together on particular points, namely tariffs in rich countries, and subsidies which have added together to $300bn in the last 15 years. The G21 was not however the only alliance to form. There was another alliance of poor countries, mainly from Africa, who were also worried about agriculture, but for different reasons. ...read more.

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