Real Cancun

Real Cancun

Copyright 2003, Traffic World, Inc.

The worst event in freight transportation in the last month didn''t occur in freight transportation.

It came in the collapse of the latest round of World Trade Organization negotiations in Cancun Sept. 14 that sent a shock wave through the global trading community, a wave that will be felt across the transport world by shippers and carriers alike. The failure of the talks marked a dramatic step back from trends toward globalization of trade as well as the culmination of smaller trade-related developments that have seen countries look inward and develop barriers of trade protection.

For transport interests this is especially bad news, and not only because of the lost opportunities for greater exports and imports - basic bread-and-butter shipping, that is. Even worse, the talks fell apart with a compromise agreement on trade facilitation sitting on the table, just waiting to be signed and delivered for the benefit of just about every manufacturer and retailer in the world.

To simplify, the talks fell apart because blocs of nations, including the more-developed developing nations such as China and Brazil, were lined up against the larger industrial nations and couldn''t agree on a range of issues that included investment, competition, government procurements and agriculture protections.

Transport interests were not directly involved, although maritime and rail operators certainly will feel the pain of protections on the trade of grain and other agriculture products. But the impact will be spread around as the growth in trade draws back.

For now, the breakdown in talks will cause more nations to focus on trade relations with closer neighbors rather than global agreements through the WTO, and that may be where North America''s carriers and shippers find new opportunity.

Agreements such as the free trade pact recently signed by the United States and Chile may become more common. Such agreements may lead to more multilateral trade treaties - not necessarily in ambitious global talks through the WTO but in smaller, intermediate negotiations between blocs of like-minded countries.

Just this month, the European Union started its first negotiation as a single entity for an international aviation services treaty, meeting with the United States to hammer out an agreement to replace the many treaties Washington has with European nations. Why not bring Canada and Mexico to the table? Air carriers combine service treaties all the time, so national governments could do the same.

Such talks could provide a model not just for aviation but for larger bloc negotiations for open trade agreements between the EU and NAFTA countries or the ASEAN nations.

That could turn out to be good news for transport interests if they have more influence and exposure at scaled-down talks. They need to seize that opportunity, however.

By the way, not everyone thought Cancun was all that much of a washout. Canada''s trade minister, Pierre Pettigrew, said a lot of valuable work was done, adding, "In my mind Cancun was a lot better than Seattle."

What he means, we suppose, is that nobody threw bricks through any Starbucks'' windows in Cancun. Maybe it was the sun-drenched atmosphere, or maybe it''s that there are no Starbucks in Cancun.