[WTO Talks Doha round] Trade talks collapse as nations play blame game

from Ireland On Line

World Trade Organisation members have shelved more than five years of free trade talks as differences over farm aid proved unbridgeable.

Pascal Lamy, director-general of the WTO, said a deal billed as a recipe for lifting millions of people out of poverty would not be reached by the end of the year and there was no new timetable for completing the round.

“We are in dire straits,” Lamy said in Geneva, Switzerland, yesterday, after six of the WTO’s most powerful members failed to agree on steps toward liberalising trade in farm and manufactured goods. He said he did not intend to propose any new deadlines or a date for negotiators to resume meeting.

The 25-nation European Union criticised US intransigence over agricultural subsidies for the breakdown, while the US blamed Brazil and India for being inflexible on cutting barriers to industrial imports and the EU for refusing to make deeper cuts in its farm import tariffs.

Last week, presidents and prime ministers from the Group of Eight leading industrialised countries called a new trade deal a top priority. But that promise did not translate into real negotiating action during two days of meetings facilitated by Lamy between Australia, Brazil, the EU, India, Japan and the US.

Now the whole process of agreeing to a binding treaty may have to be put on ice until after US presidential elections in 2008 because President George Bush’s “fast-track” authority to strike trade deals expires next year.

Without that measure, which requires an up or down vote without amendments, it would be much harder to gain congressional approval in the US, the world’s largest trading nation.

Analysts have warned that a failure of the Doha round will lead to more bilateral trade pacts between nations, which are not expected to bring as many economic benefits as the multilateral deal.

Some ministers also warned yesterday that the suspension of the Doha talks, which were launched in Qatar’s capital in 2001, might also cause an increase in the number of trade disputes being brought to the WTO.

“This is a serious setback, a major setback,” said Brazilian foreign minister Celso Amorim,

“It is somewhere between intensive care and the crematorium,” India’s trade and industry minister Kamal Nath said of the Doha round, which aims to boost the global economy by lowering trade barriers across all sectors, with particular emphasis on helping poorer countries develop their economies through export growth.

Nath said “it could take anywhere from months to years” to restart the negotiations, which stalled as poorer countries demanded that the EU and US offered greater cuts in support for their farmers.

The US and EU, in turn, want major developing countries like Brazil and India to allow more foreign competition in their industrial and services sectors.

But at times, the almost incessant sniping between the EU and the US has appeared the greatest obstacle.

“The US judged that it would be better for the process to be discontinued at this stage,” said EU trade chief Peter Mandelson, adding that he was disappointed that the flexibility Bush indicated at the G8 summit was not realised in negotiations.

“Surely the richest and strongest nation in the world, with the highest standards of living in the world, can afford to give as well as take,” Mandelson said, adding that the stoppage in negotiations “was neither desirable nor inevitable. It could so easily have been avoided”.

But US trade representative Susan Schwab said Lamy told US negotiators there was not enough movement among other countries to put additional US offers on the table. She said the EU was trying to protect itself by blaming the US

“The finger-pointing can’t hide the fact that their average tariff is twice as high as ours and that their farm subsidies are more than three times what ours are,” Schwab said on a conference call.

US agriculture secretary Mike Johanns said proposals by other countries “appeared to be getting lighter and lighter in the last few weeks”.

“There was just simply nothing there,” he said.

The US indicated to its trading partners that it could make greater cuts in its agricultural subsidies, Johanns and Schwab said. But both declined to say whether Washington had made a concrete proposal.

Mandelson said the meeting broke down when the US maintained its hardline stance on farm support programmes after all others had outlined where they could compromise.

“The US was unwilling to accept or indeed to acknowledge the flexibilities being showed by others in the room and as a result felt unable to show any flexibility on the issue of farm subsidies,” he said.

Advocacy groups criticised both the EU and the US for spending more time fighting one another and less time concentrating on the needs of poorer countries.

“You could give this four weeks, for months, four years or four centuries. It doesn’t make a difference,” said Matt Grainger, spokesman for international aid agency Oxfam. “The US and the EU refuse to accept that they have to cut their agricultural support."