Geoffrey Lean: To you, it's just a chocolate bar. To them, it's a recipe for disaster

Rich countries soon backtracked on their Doha pledges to lift 320 million people out of dire poverty
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The Independent Online

Twenty-two long years ago I spent a miserable few days by Cancun's white sands, turquoise seas and monstrous concrete hotels witnessing a little-remembered turning point in modern history.

It was the moment when talks between rich and poor nations about a fairer world economic system finally broke down. About 20 leaders, including Margaret Thatcher, Ronald Reagan and Tanzania's Julius Nyerere, met in the Mexican resort and killed off the once promising negotiations.

Even at the time it seemed clear that Third World debt, poverty, insecurity and terrorism would all be growing threats to the world economy. One by one, our predictions have come true.

This week the next act in the tragedy looks like being played out on the same stage, at the Cancun World Trade Organisation ministerial conference. Again the stakes are high.

Patricia Hewitt, the Trade Secretary, says that failure at the "absolutely crucial" meeting would be "disastrous for the world economy" and would undermine the fight against terrorism.

The WTO is the latest manifestation of a 50-year international campaign to promote free trade, to prevent a reprise of the ruinous beggar-my-neighbour protectionism of the interwar period. Its predecessor, the General Agreement on Tariffs and Trade (Gatt) gradually opened markets and presided over a 12-fold increase in global commerce.

But the benefits have largely bypassed the poorest countries which, with 40 per cent of the world's people, share 3 per cent of its exports. The richest, with 15 per cent of the population, enjoy 75 per cent of the world's trade.

The rich keep it that way by erecting barriers to their markets against poor-country goods. The US taxes shirts made by Bangladeshi women, for example, at 20 times the rate it imposes on imports from Britain; Mongolia has to pay about the same total in tariffs as Norway, though its trade is worth 30 times less.

If national taxation were organised like that, Oxfam says, "single mothers on low incomes would be facing the highest rates, while corporate executives would operate in a virtually tax-free zone".

Worse, the tariffs increase with the level of a product's processing - chocolate, for example, is taxed much more heavily than cocoa powder - suppressing Third World industry.

The more powerful WTO, which took over from the Gatt eight years ago, has made things worse still, forcing poor countries to scrap the barriers they erect to protect their much more vulnerable economies, while doing little to make the rich reduce their protectionism. And it has extended its reach into new areas - slapping down precautionary measures taken to protect health and the environment as "restraints to trade", threatening vital international agreements to regulate trade in toxic waste, combat global warming and the destruction of the ozone layer.

Frustration boiled over in protests at Seattle four years ago, which forced the WTO to abandon a conference designed to launch a new round of trade negotiations. Sobered by that experience - and 11 September - ministers met in Doha, Qatar, in 2001and agreed to make the round concentrate on what should always have been the WTO's priority: making trade fairer for developing countries. They produced measures calculated to add $2,800bn to world output over the next decade, and lift 320 million people out of dire poverty.

The change of heart brought jubilation, but it hasn't lasted. The rich countries quickly backtracked on their pledges to the poor, and the WTO reverted to business as usual. Last week, an Oxfam report concluded: "Almost two years on, none of the promises made at Doha have been honoured. Cancun could be the last chance for rich countries to deliver."

There seems little chance of that. Take agricultural subsidies - which Supachai Panitchpakdi, the WTO director-general, says are the "centrepiece" of the Cancun negotiations and are widely regarded as the test of the rich nations' intentions. Industrialised countries spend $1bn a day subsidising their farmers, mainly the wealthier ones. The subsidies cost each family more than £650 a year. And poor Third World farmers are driven to destitution when rich countries dump subsidised food on their markets.

There could be no clearer example of what the WTO is supposed to stop, and at Doha the EU and the US promised to abolish their subsidies. Since then France and Germany have forced the EU to keep them at much the same level for the next decade, while the US is to increase them by $180m over the same period.

They are now offering much more limited cuts, in return for Third World concessions. Developing countries have attacked this as too little, too late. The EU retorts that if they continue to object, they will get nothing.

Yet, instead of concentrating its fire on issues such as these, the WTO - at the urging of countries such as Britain and the US - is trying to extend its malign influence even further at Cancun by introducing rules that will make it hard for Third World governments to control the destructive activities of multinational companies.

With developing countries increasingly resisting, there is a real chance that thetalks will collapse. The protesters massing in Cancun would rejoice, but such a failure could only make things worse. The rich nations are likely then to make even more exploitative bilateral deals with Third World countries, and step up competition between themselves. Catastrophic trade wars could well be the result.

The WTO's more thoughtful critics - such as Dr Claude Martin, director general of WWF International - are pressing not for its abolition but for "fundamental reform", to return it to the purpose for which it was designed. After all, the rewards of implementing the Doha agreements would be great for both rich and poor alike.

But it is more likely thisweek that the commercialised sandpit off the Yucatan coast will witness another stage in the downward spiral to poverty, insecurity and economic disaster.