Final attempts to save Cancun after South rejects draft

Discussions between trade ministers have been on all night with the developing and developed worlds sticking to their positions. There were unconfirmed reports that the conference could be extended.

The developed countries are now trying break the alliance of 22 developing countries, hoping to isolate them while applying pressure for a compromise resolution.

WTO members have agreed to try to cobble together a global trade treaty by the end of next year, but they have missed several important deadlines and a failure to agree in Cancun could jeopardise negotiations.

‘‘This text as it currently stands is not acceptable to anyone,’’ WTO spokesman Keith Rockwell told reporters. ‘‘Positions seemed to be more firmly entrenched.’’

Addressing a plenary session after the draft was circulated, Commerce Minister Arun Jaitley said that the pretence of development dimension of the Doha agenda had finally been discarded.

‘‘Not only are the distortions (in trade) prevalent today being perpetuated, but a slew of new measures to increase them are being proposed,’’ Jaitley said to a round of applause by trade ministers of different countries. Noteworthy was the appreciation expressed by the head of the Pakistan delegation.

The draft, prepared by the chairman of the WTO Ministerial, Mexican Foreign Minister Louis Ernesto Derbez, provides very little for developing countries on agriculture with the developed world making no commitments to cut farm subsidies completely or fixing a time frame.

The G-22 group of developing countries, led by India, Brazil and China, asked for the elimination of all subsidies for goods being exported and major cuts in subsidies for domestic farm products. But the proposal appears to fall far short of what these countries demanded.

The document does not set a date for the elimination of export subsidies which the developing countries have been seeking. It also offers smaller reductions (than was demanded by developing countries) on domestic subsidies given to farmers in developed countries and responsible for distortions in trade.

The draft only states an intention to reduce subsidies on ‘‘certain products of interest to developing countries’’ but fails to elaborate who would decide what this list would be. It also keeps a window open for developed countries for introducing subsidies under new heads.

To top it, the draft includes beginning of negotiations on what are called the Singapore issues which include freeing of foreign investment rules in countries, competition, trade facilitation across borders and transparency in government procurement. This is something that India, Malaysia and a group of 17 countries have opposed vehemently.

But what is more damaging for India is the fact that it tends to link the opening up of foreign investment and competition to negotiations on agriculture and industrial goods.

What has also come as a blow to Indian industry is the fact that the draft seeks to begin negotiations on cutting tariff of industrial goods in seven sectors: auto components, textiles, leather, footwear, gems and jewellery, fish products and electrical and electronic components. India has been opposing cuts in tariff of these products.

‘‘For the credibility of the WTO, the final text cannot look like this,’’ Hegel Gourties, a spokesman of the grouping of African, Caribbean and Pacific nations, told reporters.

‘‘We still believe that this conference must be brought to a successful conclusion. We hope that circumstances and environment will be created to enable us to participate constructively,’’ Jaitley told the meeting of heads of delegation to discuss the draft.