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Alliances of convenience proliferate

AFP, Cancun
The ongoing WTO conference here has spawned a spate of alliances of convenience among member states that have come together to promote their vision of how to reform the world trading system.
New blocks or groups seemed to emerge each day at this five-day gathering.
The United States and the European Union set the stage for the trend a month before the conference when they put aside deep philosophical differences on other trade matters to draft a common statement on reducing government subsidies to farmers.
As agriculture is the number one hot issue here, the US-EU tie-up prompted the formation of the Group of 21 developing countries, or G-21.
Spearheaded by Brazil, India and China, the group is demanding an end to government farm subsi-
dies in rich countries that flood world markets, drive down prices and cripple the capacity of farmers in developing nations to compete globally.
The United States is also advocating an end to agricultural export subsidies on condition that other countries agree to take steps to open their markets to foreign competition.
Long an opponent of export subsidy elimination, the EU now says it is prepared to do so for certain products deemed critical by developing countries.
US officials have said they are "perplexed" by the G-21, as it embraces countries that until now have had divergent positions on trade. An EU official noted that Brazil is a major exporter while India has traditionally been protectionist.
Several members of the G-21 also belong to the 17-nation Cairns Group that includes rich countries such as Australia and Canada,
which are big boosters of free trade.
In addition, according to a source close to the WTO, China -- which was admitted to the Geneva-based body in 2001 -- is urging that new members be exempt from taking on additional commitments in the new round, a stance opposed by Mexico, which fears that without new measures its markets would be vulnerable to Chinese exports.
The source added that Brazil should have every reason to hope for a successful conclusion to the Cancun conference, since a failure of the multilateral trading system would force Brazil to confront free trade pacts that the United States is negotiating with several other Latin American nations.
Not all developing countries share the strategy of the G-21. Thirty-three of them, led by Indonesia, have appealed here for special WTO measures to help small farmers whose interests have been harmed by trade liberalisation.