Cancun Collapses:
Certainly, the failure to reach an agreement is a pity, and I don't mean for the rich countries necessarily, but more for the developing world. There is some silver lining however:

1) The press has widely acknowledged that some special interests were obviously standing in the way of long term progress. History shows that in industrial trade, these forces have wilted away in the face of overwhelming opposition. These same forces (agribusiness, etc) will attempt to show that it is the poor, subsistence farmer and the pastoral lifestyle of the peasant that will be at risk.

Agribusiness is huge in Europe and the US, and it is big business with its hold on their domestic markets that is really at stake. the press and the rest of the business community knows it.

2) the emergence of the G21. Now usually, you don't want to pull for the other guy when its your own country/region that is at the trade table, but the emergence of a coherent voice of the large developing world can only be a good thing. for starters, wto meetings are strangely unwieldy because of the sheer amount of delegates from all the countries. if uganda doesn't like the tariff, but angola wants a quota...etc...

so, the have an equal to the EU and the US/NAFTA trading blocks. some think this 'regionalization' can only be bad. Why? it means countries are forming trading blocks that can trade effectively with other trading blocks. isn't that better than 160+ countries all chattering at the same time trying to get their voices heard? its just common sense. If at least Mercosur/SA can get their act together, then maybe the FTA will have a chance. in the meantime, the G21 is a step in the right direction for the little guy.

--->question remains, however: why am i pulling for the small countries over canada?

same reason people wanted NAFTA: jobs, progress, increased trade, diversification, etc....

First off, a little trade theory. NAFTA pulled down barriers to trade which meant some industries were less protected than others when it came to increased trade (chiefly with the US...our Mexican trade being very low even today)...so some industries got competitive, some companies went out of business, and others were hugely successful because of their access to new markets.

the net effect?

Consumer prices went down on all kinds of goods, while some people lost jobs in uncompetitive industries, others got jobs in new emerging markets...meanwhile, canada got more specialized in areas where it did well, and became more competitive in some areas as well.

So, the money consumers did not spend on costly 'canadian goods' was spent elsewhere. the boom of the nineties in north america was not unrelated to NAFTA. And there was a boom: corporate profits skyrocketed. there is a shadow over this time in history now because of the stock market bubble and because of the impending terrorist attacks we should have seen coming.

getting back on topic...

So what does increased trade etc have to do with the G21? if the trade subsidies from the EU/US/Can are axed, loads of agribusiness will head out of those areas since most of the farmers are high cost producers propped up on massive subsidies from their governments. One article said that one *small* farmer got about cdn $500,000 from his gov't every 3 years just for being a farmer.

(can i get $1m/yr just for being me?)

....one issue: political considerations. bush owes the heartland for his votes in 2000....so he pushed subsidies right along side his tax cut.

...secondly: europe is caught up in the idea of its pastoral farmers, working the land, etc....so it will be hard to get france/germany to give up these subsidies...despite the fact their populations are overwhelmingly urban they want to pay some people way too much to work the land. strange....and i guess lucky if you're a farmer.

so...what if all subsidies are dropped?( yeah right)....
well, africa, having no other competitive advantage other than the cheap food it can grow (okay, besides the diamonds it harvests), will have massive inflows of money as western farmers are undercut by the africans...western food prices will be drastically cut, the farmers will struggle or fall, and the africans standard of living will rise dramatically.

Overall, though, the wests' standard of living will go up as we will have more money for other things...and the farmers..not all, some...will be forced to find work in other more competitive industries.

this is the basic challenge of opening up trade, you might say *the* fundamental challenge: how can we ease the transition from closed, to open markets? It has to be done in the long run, as basic economic education will tell you that the current position of world trade is untenable. we need to progress, growth, rising standards of living and africa's plight must cease.

the western farmers will suffer in the short run, but the entire world will benefit in a big way. we have to make this work. the west knows that its own interests are at stake when they don't come to an agreement as well.