The recent Cancun breakdown exposes the great divide between developed and developing world on trade related issues. The inability to compromise and reach a consensus among nations could jeopardize the future of the multilateral trade system. Some of the developments in the global trade arena where countries are pursuing aggressive bilateral trade talks at the expense of the WTO agenda is a worrying sign. The article talks about the developments and lessons from Cancun and its implications on the future of WTO.

The collapse of the WTO ministerial meet at Cancun not only raises doubt about the future of world trade but also has thrown up some important trends and developments which can have serious implications on the future of WTO.

The Cancun meet was called to take stock on the progress made under the Doha round and carry the negotiation forward. The Doha round started in November 2001 with the new agenda known as the `development agenda'. This agenda was hoped to benefit the poor and the developing world. The Doha round, among others, discusses agriculture, which is most protected and dear to many of the developing countries. It sets the stage for an effective reduction of export subsidies on the part of the developed world and brings down the tariffs on agricultural products on the part of developing world. This would increase global trade in agricultural products and make the produce of the developing world competitive to that of the developed world. This would result in creation of wealth to the developing world and helps millions of people fight poverty. The Cancun meet was called not only to discuss on agriculture but also matters relating to the Singapore issues which include investment policy, competition policy, government procurement and trade facilitation. The Singapore issues were made part of the Doha agenda at the instance of Europe and Japan.

A good environment was created prior to the Cancun meet with some small concessions made by the developed world. After years of negotiations it was agreed to allow poor countries to import cheaper generic drugs to fight the deadly diseases. This would allow poor countries to import drugs at a competitive price in case of an emergency from any of the third world country. The EU and US announced that they have jointly arrived at a proposal for liberalizing agricultural trade. This created hype and high expectations among the developing countries.

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