The gathering will assess the prospects for the World Trade Organisation's Doha round of market-opening talks, launched in the Qatari capital in November 2001 and ambitiously scheduled to be wrapped up by the end of next year.

The omens could be better.

True, the talks got a confidence booster on Saturday when WTO envoys in Geneva agreed to let poorer nations import cheap generic drugs.

But countries remain far apart on the issue that will make or break the Doha round: how far to lower barriers to business in manufactured products, services and, crucially, farm goods.

With 70 per cent of the world's poor dependent on agriculture, developing nations insist they will block the Doha round unless rich states get serious about cutting farm subsidies.

"Those that have more should be in a position to listen to those that have less," says Thomas Aquino, the Philippine Under Secretary for international trade.

And there's the rub.

Many independent experts believe that global trade rules as they now stand mean the rich get richer and the poor get poorer.

COSSETED COWS

Rich countries spend some $300 billion a year on farm subsidies, about six times more than on development aid.

The European Union cow is not the most pampered: the average Japanese cow receives $7,50 in subsidies, says the World Bank.

Japan also provides support to its rice farmers that comes out to seven times more than the cost of production.

The United States funnels more than $3 billion a year in subsidies to its cotton farmers, three times its aid to Africa.

"Agricultural trade rules are among the most distorted in the world.

They tilt precipitously in favour of rich countries," the Carnegie Endowment for International Peace, a Washington-based think tank, concluded in a recent report.

The World Bank estimates that scrapping farm protection in rich countries would boost global agriculture production by 17 per cent, adding $60 billion a year, or six per cent, to the rural incomes of low and middle-income states.

The relief agency Oxfam points to Mexico, next week's host.

It calculates that US corn growers receive an effective subsidy for exporting to Mexico of $105 million to $145 million a year.

GRAND BARGAIN Any grand bargain, then, in Cancun would need to involve more radical farm reforms than proposed so far by Washington and Brussels.

In return, western firms would be given easier access to sell banking and telecommunications to poor countries.

Yet many developing countries are reluctant to lower their barriers even to each other.

Latin America imposes average tariffs on manufactured goods from the continent that are seven times higher than tariffs in industrial nations.

"The real value-added from this round is developing-country liberalisation," says Razeen Sally of the London School of Economics.

The thousands of anti-globalisation protesters expected in Cancun will disagree, but academic evidence suggests that countries open to trade grow faster than those that are not.

North Korea was once richer than South Korea: after 50 years of hermit economics, it is now 16 times poorer.

If the Doha round fails, Sally says the WTO could become an irrelevant talking shop and trade deals would be increasingly struck between pairs or groups of governments.

Countries in sub-Saharan Africa would be the big losers if that were to happen: they would either have to accept tough conditions for improved market access or find themselves driven to the margins of the world economy.

-Nampa-Reuters

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