The World Trade Organization (WTO) ministerial meeting in Cancun ended without accomplishing its main objective: adoption of a detailed negotiating framework for completing the Doha Development Round by early 2005. The schedule for completing the round was already considered tight, and without the Cancun framework, completion will almost certainly be postponed. The current situation is reminiscent of events during the Uruguay Round. After the breakdown of talks at the 1988 ministerial meeting of the General Agreement on Tariffs and Trade (GATT) in Montreal, Uruguay Round negotiations barely moved for several years. And then as now, disagreements on agriculture played a major role in the impasse.

But important differences distinguish the two rounds. One change has been the creation of the WTO as an international institution that, in contrast to the less-structured GATT Secretariat, allows communication, analytical work, and even low-key negotiations to continue beyond the ministerial meetings. At the same time, however, the increase in member countries renders those talks more complex. Cambodia and Nepal, the first least-developed countries to accede to the WTO, were accepted as members during the Cancun Ministerial, pushing the total to 148.

The Uruguay Round was completed basically when the United States and the European Union agreed on a framework for agriculture in the so-called Blair House agreements and sold the deal to (or, some would say, imposed the deal on) the rest. In Cancun a similar U.S.-and EU-sponsored framework came early, but the original U.S. position calling for substantial increases in market access, elimination of export subsidies, and control of domestic support appeared to have been watered down significantly to accommodate the Europeans and to allow more room for countercyclical payments under the U.S. 2002 Farm Act.

The U.S.-EU proposal faced fierce resistance from a group of developing countries called the G-21, whose membership kept shifting and growing during the talks. The emergence of this group was a significant event in the negotiations, because for the first time developing countries from different groups agreed on a common framework for agriculture. The group included developing countries from the Cairns Group (such as Argentina, Brazil, South Africa, and Thailand), original country sponsors of the development box (Cuba and Pakistan), and other key countries such as China, India, and Mexico. Altogether these countries represent close to two-thirds of all world farmers.

The G-21 proposal called for tightening domestic support restrictions for developed countries (elimination of export subsidies, more ambitious targets and timelines for reducing amber box subsidies, elimination of the blue box, and a cap and strict criteria for the green box). The group also requested more flexibility for developing countries under the special and differential treatment provisions. A key question for the future is whether the groups of developing countries will continue to consolidate around this tough position for agricultural liberalization.

The divergent negotiating proposals of both the developed and developing countries left little room for agreement in the short time available. The United States was willing to adjust domestic support to agriculture only in return for increased access to markets in Europe, Japan, and developing countries. The European Union, Japan, and South Korea insisted on agreement on other topics (the so-called Singapore issues of investment, competition policy, transparency in government procurement, and trade facilitation) as a condition of more agricultural liberalization. With regard to agriculture specifically, the European Union argued that the requests of the G-21 went too far in capping domestic support, and the Europeans would not consider eliminating export subsidies except for products of particular interest to developing countries. African and least-developed countries strongly opposed any additional commitments on the Singapore issues that would burden their weak public sector institutions. The issue of U.S. cotton subsidies also proved to be highly controversial with African and other developing countries.

During the Cancun process, developing countries made some gains on health issues, but if talks are not back on track soon, these countries will continue to lose billions of dollars in agricultural income and exports because of the policies of industrialized countries. Developing countries should also consider the fact that asking for protectionist policies in agriculture for themselves is not the best approach to solve poverty and hunger.

What's next? The breakdown in Cancun is a setback for the world economy. In December the WTO member countries will have another opportunity to put the negotiations back on track during the meeting of the General Council. The round needs to be salvaged by committed players, in developing and developed countries, that understand the importance of strengthening a rule-based trade system that considers the needs of the poor and vulnerable.