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Don't Cry for Cancun

Bhagwati, Jagdish N.

The World Trade Organization's (WTO) 2003 meeting in Cancun, Mexico, which collapsed in acrimony, can be considered both a failure and a success. The failure lay in the here and now, in the bad press and in the fact that no actual agreement was reached. But the meeting also represented a success, which will soon become apparent; it will serve as a stepping-stone to a successful conclusion of the Doha Round of trade negotiations, under way since November 2001. The collapse of the meeting in Cancun is being compared with the breakdown of the WTO meeting in Seattle, Washington in 1999. Yet, the comparison is entirely inappropriate. Three main differences can be drawn between the breakdowns in Seattle and Cancun. The breakdown of the WTO meeting in Cancun was a result of a multitude of mistakes made by all parties. Developing countries' perception that protectionism is beneficial must be corrected because numerous studies demonstrate that trade protection makes it harder to achieve prosperity, whether a country is rich or poor. Reciprocity is a useful tool--whether developing nations recognize this fact or not. On competition policy, the United States and the European Union had several disagreements, with the U.S. antitrust division under U.S. President Bill Clinton opposed to pursuing competition policy in the WTO, while the European Union wanted matters handled there.

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Foreign Affairs

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Economics
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February 7, 2013