Militants flex their muscles

THE POWER: It is crunch time for the major powers and a bunch of militant nations. Just three days into the marathon meeting in Cancun, Mexico, of trade ministers from 146 nations, a stand-off between poor and rich nations on agriculture has yet to end.

Despite, or perhaps because of, the presence of 5000 delegates at a formal stocktake 18 months after the ambitious Development Round was launched in Doha, little that is concrete has emerged.

Big interests are at stake. If the World Trade Organisation delegates cannot reach agreement on a negotiating framework for agriculture, globalisation is at risk.

The militants - Brazil, China and India - are flexing newly discovered muscles. They may not have the money, but they've got numbers - more than half of humanity and 63 per cent of the world's farmers, says G21, the new group of developing nations that is fronting the case of the poor against the rich.

For days they have been socking it to the European Union and the United States, saying their farmer subsidies - of more than US$300 billion ($515 billion) in annual taxpayer payments - result in artificially low-priced agricultural goods being dumped on world markets, swamping the ability of poorer nations to compete.

The EU and the US had come to Cancun with a joint proposal to energise the round but find themselves on the other side of fierce opposition from G21.

It has been an extraordinary reversal of power. But like any fledgling weight-lifter, the G21 nations have yet to discover the point beyond which muscles should not be flexed.

WTO director-general Supachai Panitchpakdi will need all his chess-playing skills if a blueprint is to be completed by Tuesday to take back to Geneva for negotiations. It is a testy time in conference rooms and hotel meeting rooms, where WTO players are meeting 24 hours a day.

THE PLAYERS: Behind the scenes at the WTO, the world's two powerful trade tsars - Bob Zoellick (US) and Pascal Lamy (EU) - usually call the shots.

They were the men who kept transatlantic trade channels open during the stand-off between the US and Old Europe over the Iraq War. They talk on the phone all the time and each want to complete the Doha Round and leave strong personal legacies. Fit and lean, as befits committed marathon runners, they go on runs when they get together.

But personal liking goes only so far. In Cancun their joint proposal has been put to one side for now as they compete to protect their sectional interest in the face of new militancy by the G21 Group.

Zoellick, the US Trade Representative, is an expert arm-twister, skilled at exerting power through mini-ministerial meetings or at green room sessions to which only a select group of trade ministers are invited.

His deputy, Peter Allgeier, and US Under-secretary of Commerce Grant Aldonas, are running a sophisticated support operation at the summit to get traction on the investment and competition issues the US wants to offset any climb-down on agriculture.

The Zoellick team is now loudly decrying EU farm subsidies as excessive. After three days of intense lobbying the US is prepared to act dramatically on agriculture support - but only if others follow suit.

Many here, however, suspect Zoellick has an agenda to carve out regional trading blocs rather than risk a multilateral WTO deal that could severely impact on President George W. Bush's rural support base during next year's presidential elections.

EU Trade Commissioner Pascal Lamy is an extraordinarily adept navigator of the complex but shallow shoals of EU politics.

If he is to shift ground on agriculture he has to persuade his 15 constituent members to follow suit. No easy task when France is holding firm to its desire to swathe its farmers with top-class protectionist policies.

Lamy's team repeatedly emphasise that the EU is the world's largest importer of agriculture products, explicitly distinguishing the EU from developed agricultural exporting nations such as Australia, Canada and New Zealand.

Lamy is also suspected of being the subtle brains behind the concerted African-led push to overturn US subsidies on cotton.

He has also introduced another negotiating pawn, saying European concerns over food safety and animal welfare must be acted on.

Fine from people who force-feed geese, is the New Zealand response.

Brazilian Foreign Minister Celso Amorin - hauled back into the international trade frontline by President Luiz Inazio Lula da Silva to get traction on trade - is widely credited with G21's birth. Amorin, a former Ambassador to Geneva, had scores of his own to settle with the EU, which vetoed his appointment to a key WTO role some years ago.

He is now using his personable but aggressive style to great effect as he promotes G21's proposal to reduce trade barriers and keeps a ring around his members so Zoellick and Lamy cannot pick them off with sweetheart deals.

Brazil's sugar exporters face tariffs of 244 per cent on exports to the US above established quotas and its beef exporters face tough problems accessing the European market.

Amorin has struck a powerful alliance in Cancun with China's Chinese Trade Minister, Lu Fuyuan, and Indian Commerce Minister Arun Jaitley. The trio are fast developing a fearsome image but the Cairns Group wonders if they can stick the distance.

New Zealand Trade Minister Jim Sutton's down-on-the-farm drawl belies a determination to keep the big boys honest. His "we can negotiate the how and when but not the ifs" message on the first day's meeting had heads nodding.

Sutton has won respect for not jumping ship from the Cairns Group when G21 came calling. Instead he had his officials broker a strong alliance with the new group.

"I couldn't leave Australia out on a limb," he explains.

Sutton's diary has been chock-full as he seeks to protect New Zealand's interests and the Cairns Group. But he warns: "Numbers are not everything. This is not a voting system."

QUESTION MARKS: Singapore's tough-talking Brigadier-General George Yeo has been called in to sort out the agriculture mess. Supachai promised WTO delegates that Yeo would adopt " a free-floating approach" so anyone who wanted to join in agricultural discussions could do so.

But Yeo immediately got offside with the Cairns Group. And no one is fooled that the shape of a negotiating framework would be lined up in anything other than the traditional WTO way - in secret as the deadline approaches.

There are questions over whether Yeo, who also led farm trade talks at the WTO Seattle meeting, has learned from his past failure.

Australian Trade Minister Mark Vaile has had his powerbase cut out from under him.

Vaile is still Cairns Group leader. But when Brazil stepped out and brought India and China in to form the nucleus of the new G21, Vaile risked being sidelined. He still aggressively promotes agriculture liberalisation in Cancun, but he is not the main focus. Amorin has taken that spot.

THE POSTURING: EU spokesmen, like their US counterparts, somehow manage to keep straight faces as they call on G21 to stop posturing and making "cheap propaganda" and move on to the substantive issues.

G21 counters that the EU says it is not going to budge from its position anyway.

The circular arguments go round and round, a bit like a slow Kabuki dance as the players stake out their positions.

The G20 and Cairns Group demonise the EU and US as bogeymen stopping the total elimination of agriculture subsidies.The reality is that both the EU and US have offered to make a substantial reduction in their agriculture protection. It just does not go far enough.

The EU says developing nations should cut their own tariff barriers.

"Eight per cent of the gains in trade liberalisation will come from south-south liberalisation," said a spokesman. "We should not create a situation where developed countries pay everything and others cash in."

World Bank estimates are trotted out. They say a good agriculture deal could lift incomes by as much as US$520 billion by 2015, lifting 144 million people out of poverty.

Beneath the posturing is a mounting concern that developing countries have woken up to a negotiating ace. The debt they owe to the world's largest banks runs into hundreds of billions of dollars. If they do not get what they want they could simply default.

THE PROTEST: Anti-globalisation mobilisations are standard fare at world trade talks but people of both sides of the fences were taken aback when an aggrieved South Korean farmer stabbed himself to death in a protest against the WTO's agricultural agenda.

Lee Kyung-Hae, who headed South Korea's Federation of Farmers and Fishermen, was one of 50 Korean activists present in Cancun.

"We are all saddened by this death," Supachai said.

Away from the disturbed fringes, NGOs ranging from the respected Oxfam through to Christian groups and pro-free trade business groups, ceaselessly work the convention centre corridors competing for the attention of politicians and journalists.

Friends of the Earth took journalists on a bus tour to show how globalisation affects the poor of Cancun. The pro-trade Competitive Enterprise Institute teamed up with others to deliver two tonnes of food to a village to show how free trade could improve their lot. Their invitation said that while anti-WTO protesters are massing outside the conference to oppose globalisation, free trade and GM foods, NGOs will be delivering food bought at local grocery stores that has been genetically altered.

British rock band Coldplay presented Oxfam's Make Trade Fair petition to G21 members.

Singer Chris Martin said: "I'd like to persuade Bush to take on the agriculture lobby. I'd love to have 10 minutes with him to have a game of ping-pong and talk about the world. But I think we'll have to sell a lot more records to do that."

The riots in downtown Cancun inevitably grabbed TV airplay. But the WTO convention centre might be just as dangerous, especially for female delegates, workers and journalists.

Security briefings by one well-placed embassy - unconfirmed by police - said a serial rapist was on the loose who had claimed six victims since the summit began.

Tomorrow protesters will again take to the street for a mass demonstration - they may be safer on that side of the fence.

* MFAT, Fonterra and the NZ Trade Liberalisation Network are contributing to Fran O'Sullivan's trip to Cancun.