A group of 16 countries led by Malaysia and India with the support of 30 LDCs had sought further clarification on Singapore issues rather than giving a negotiating mandate. In addition, a group of 74 African, Caribbean and Pacific region countries also sought to continue with the clarificatory process. However, in utter disregard to these submissions, the revised draft ministerial text issued on September 13, wanted to give negotiating mandate on all these issues except for competition. Incidentally, competition was dropped because of the unwillingness of the US to negotiate the same.

On agriculture, developing countries, led by Brazil, India and China, formed an effective coalition of 17 countries that had submitted a counter-proposal in Geneva to the US-EU proposal. This coalition not only held together in Cancun but also grew to 21 at the start of the ministerial and to 23 by the second day. Before the end of the ministerial, 10 more countries came forward to support this coalition despite attempts by the US and EU to break them with both carrots and sticks. The Cancun meet thus signalled the growing power of the developing nations and their firm resolve to stick together against all odds.

While Brazil provided the lead in holding the G-22 together, Malaysia played a crucial role in thwarting the game of developing countries to thrust the Singapore issues into the negotiating mandate. The walk-out by African countries over the issue of cotton subsidies of $3 billion in the US and $1 billion in the EU provided the final trigger for the collapse of the talks. For West Africa, which has some of the poorest countries in the world such as Chad, Mali and Burkina Faso, export of cotton is the only route to integration with the world market.

Issuing a veiled threat to the developing nations, the US Trade Representative, Mr Robert Zoellick said: "We have free trade pacts with six countries and plan to work on similar pacts with 14 others." Simultaneously, the US Senate Finance Committee Chairman, Senator Chuck Grassley said: "I will take note of those nations that played a constructive role in Cancun and those that did not".

The anger and disappointment of the US and EU representatives is understandable. For the first time, the developing countries have put up a joint front and stayed together despite various kinds of pressures and threats from the rich countries. India's Commerce Minister, Mr Arun Jaitley, played an important role in shaping the course of negotiations and in ensuring that the developing countries remained united unlike in the past. At the Doha meet in 2001, India found itself isolated as the US and EU succeeded in breaking the unity of developing countries, but this time around, it received overwhelming support.

In the past, developed countries have not kept the promises given to developing countries during the Uruguay Round of trade negotiations. In some cases, they implemented their obligations under specific agreements in such a way as to delay as long as possible the benefits of enhanced market access opportunities for developing countries. This is particularly true in the case of agreements on textiles and clothing. At the same time, pressure was maintained on developing countries not to make full use of the transitional periods granted to them to comply with their part of the obligations.

In the 10 years since the Uruguay Round, which gave birth to the WTO, farm subsidies in the UE and the EU have, instead of being scaled down, shot up from $180 billion to more than $300 billion. As experts have pointed out, with the developing countries forced to liberalise trade and open up markets, this has brought millions of Third World farmers to the brink of penury and starvation. Against this background, it is not surprising that the 2004 edition of the Global Economic Prospects issued by the World Bank of September 3 once again says that the global trading system is still very much biased against the poor. For example, the report points out that the average poor person faces twice the level of trade tariffs than the average rich person. Moreover, industrial countries charge each other much less in trade than they do developing countries.

The World Bank report has estimated that a good agreement could boost incomes anywhere from $270 billion to $520 billion by 2015, depending on the assumptions. Developing countries would stand to benefit anywhere from half to two-thirds of the total benefit that could help lift some 144 million people out of poverty. Unfortunately, however, this may have to wait till the developed world is prepared to address the genuine concerns of the poor.

So far as the developing countries and the LDCs are concerned, most experts have expressed the view that no deal at Cancun is better than the grossly iniquitous one-sided deal that the US and the EU were trying to push through. Now what next?

First of all, it is important for the developing and the least developed countries to stay united and insist on the removal of inequalities of earlier agreements before taking up the Singapore issues. It needs to be emphasised that trade has to be a two-way street and that there is a need for clear, transparent and rule-based agreements. Fortunately, the World Bank is committed to supporting a pro-poor Doha outcome helping developing countries to take advantage of any new market access that emerges from the multilateral negotiations.

In the case of agriculture, pressure should be maintained on rich countries to prune both direct and indirect subsidies drastically. In the negotiations on non-agricultural products, the G-23 should insist on discussing the issue of protectionism in an integrated manner by tackling both tariff and non-tariff barriers (NTBs). Currently, the developed nations have put up various NTBs such as health standards, technical standards, labour standards and sanitary and phytosanitary measures that block access of developing country products into developed countries.

The developing countries should make it clear that they would lower tariffs only if there is a commensurate lowering of NTBs by the developed countries. They should also insist that tariff liberalisation should be linked to a member's stage of development. They should put up a united front to fight the relentless demands from the `Quad' of developed countries and trading blocks (the EU, the US, Canada and Japan) to open their economies to wider trade and investment without offering any reciprocal concessions.

India should move ahead with economic reforms, financial liberalisation, liberalisation of FDI policy, and higher infrastructure investments aimed at making the domestic industry internationally competitive. Greater attention must be paid to increase agricultural productivity and creation of exportable surpluses. Indian agriculture needs more public investment and policy support in several areas, including rural infrastructure, research and development and institutional credit. Far-reaching changes are needed in our land ceiling laws to enable farmers to development economic holdings. Economically, viable land holdings are necessary to encourage flow of private investment in the sector and for diversification of agriculture to produce commercial crops.

On the trade front, India should make serious efforts to raise its share in world exports to at least two per cent over the next five years from the present abysmally poor 0.8 per cent if it has to step up its GDP growth rate and play a legitimate credible role in the world trading system. At the same time, it should be more open to South-South trade and try to extend bilateral assistance to LDCs. For some of the issues raised by LDCs at Cancun against the developed countries, are also raised by them against India, which is a large and relatively more developed economy.

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