WTO free trade negotiations threaten to collapse

The Doha round of free trade talks are at a grave threat of collapse after 10 years of negotiations. The talks conducted by the World Trade Organization had a goal of opening up rich nation markets to the poor nations. The differences between the rich and poor in making that happen seem to great to overcome. TheWTO will make one more attempt this week before signaling the end of talks.

From the Guardian, writers Larry Elliott and Heather Stewart give us the details.

After months of stalemate, the World Trade Organisation has set a deadline of Friday for the leading players to cut a deal in the key area of industrial tariffs. Pascal Lamy, the WTO's director general, described the situation as "grave" after seeing no signs of a breakthrough since the start of 2011.

He had said it was crucial for progress to be made by Easter if there was to be any chance of completing the round by the end of this year. In a clear warning about the state of the talks, Lamy said negotiators should "think hard about the consequences of throwing away 10 years of solid multilateral work".

"This is the diplomats in Geneva raising the white flag," said Jeffrey Schott, a fellow of the Peterson Institute thinktank and a former US trade negotiator. At the G20 summit in Seoul last year, world leaders committed themselves to completing the long-running talks, but Schott said "the G20 leaders have dropped the ball on this".

With little evidence that the leading developing nations – China, India and Brazil – are prepared to bow to US and European Union pressure to make deeper cuts in the protection offered to their manufacturers, the mood at the WTO's Geneva HQ was sombre this weekend. Lamy is expected hold a series of informal "green room" discussions on Thursday before calling trade negotiators together on Friday, but few in Geneva are expecting a breakthrough.

Europe's trade commissioner, Karel de Gucht, said "there is no reason to be optimistic at this moment in time" and that it was time to start thinking about a "plan B" should the talks collapse.

Some good news from WTO meet in Geneva

This week's meeting of the World Trade Organization has concluded. While the trade ministers did not talk about a world trade pact, there were some regional agreements made.

A group of developing nations has agreed to cut tariffs on a whole host of goods. Also Brazil promised to open up their markets, and there was an agreement to end the "banana wars" between the US and the EU.

However, there was no movement on the Doha round of talks for a world wide trade deal. For a good explanation on why the US is stopping any concessions on a deal, do to this story from IPS and reporter Sanjay Suri.

Our snippet from this Reuters article concentrates on the South-South deal. Writers Jonathan Lynn and Jason Rhodes give us more details.

Jorge Taiana, foreign minister of Argentina, said the South-South pact showed developing countries were keen to clinch deals to expand trade.

"This is a clear demonstration that the developing countries are willing to continue working on strengthening South-South trade and in a process of liberalisation compatible with development," Taiana told a news conference.

The South-South deal includes trade heavyweights Brazil, India, Argentina and South Korea but not China.

It would reduce by one-fifth the actual tariffs countries apply to 70 percent of each other's industrial goods rather than the maximum ceilings negotiated at the WTO. The precise details would be worked out by the end of September 2010.
...

The absence of a major item on the WTO ministerial agenda gave trade officials from developing countries, who rarely meet in person, the chance to hold a series of face-to-face meetings and seek to forge new regional alliances.

Ministers from India, the Mercosur group of Argentina, Brazil, Paraguay and Uruguay, and the SACU customs union of South Africa and its neighbours launched a study on a possible regional trade agreement between their countries.

The authors of this article also received quotes from the US representative who talked about completing Doha, but we can all see through that, and didn't include it in our snippet.

Calling the WTO to action, again

Before the World Trade Organization meetings began, a coalition of 100 developing nations called on the powers that be to agree to a new world trade pact. The coalition wants the WTO negotiators to pass a world trade deal by 2010, but previous deadlines have come and gone without any action.

From this AFP article that is hosted at Google News, we found out more about the coalition's statement, and who they believe is standing in the way.

Launched in the Qatari capital in 2001, the Doha Round aims at lifting developing countries out of poverty by striking an accord that will cut agriculture subsidies and tariffs on industrial goods.

However, negotiations have been dogged by disagreements on how much major trading blocs such as the United States and the European Union should reduce aid to their farmers and the extent to which developing countries such as India, China and South Africa should lower tariffs on industrial products.

"There is urgent need to translate political statements into concrete engagements in Geneva in order to accomplish the shared objective of concluding the Round in 2010," said the statement issued after a meeting between G20 ministers.

Without naming names, Brazil's Foreign Minister Celso Amorim pointed in particular to "one country which is stopping us from moving forward."

However, another Latin American diplomat was more explicit, saying: "We clearly lack an explicit position from one of the most important members of the negotiations. We are of course talking about the United States."

He added that the WTO ministerial meeting "should pressure" Barack Obama's administration to take a deeper engagement on trade talks.

The WTO meets in Geneva

The World Trade Organization always seems to bring trouble wherever it goes. This time the streets of Geneva had protests that local police had to clear away with tear gas.

The protesters opinions on why they hate the WTO are as varied as the nations that represent it. Some protest the inaction of the WTO, while others blame the WTO on making things even more unequal between the rich and the poor.

The WTO trade ministers will meet now through Wednesday. They plan to talk about the steep drop in world trade that has happened along with the global economic recession.

From this Associated Press article that we found at Newsday, writer Bradley S. Klapper summarises what is on the WTO agenda this week.

As the World Trade Organization started its first ministerial conference in four years, a familiar debate was taking place among ministers and Cabinet members from over 100 countries. They are scheduled through Wednesday to discuss efforts to stabilize and rejuvenate commerce in the face of increased protectionism, unemployment and exporting of jobs.

Security was high near the Geneva conference venue, after police over the weekend fired tear gas and rubber bullets at violent demonstrators who burned cars and broke shop windows in the city center. Geneva police arrested 14 people.

Much more serious clashes have occurred at previous meetings of trade chiefs, but the coming session lacks the specific goals of conferences that sought to conclude or advance a new global trade deal. The last so-called ministerial — a summit gathering all member countries' trade representatives — was held in Hong Kong in 2005, and came after contentious gatherings in Cancun, Mexico, two years earlier and Seattle in 1999.

The WTO called the meeting of its 153 members to examine major issues at a time when global exports are falling at the fastest rate since the Great Depression and the organization's long-sought Doha liberalization round is limping into its ninth year.

What will it take to reach a global trade deal by 2010?

The latest deadline for the Doha round of world trade talks is set at 2010. The problem is, many deadlines in this round of talks have come and gone.

The head of the World Trade Organization tried to put some heat on world leaders to start talking and making concessions in remarks made today. However, hopes are dim unless world leaders especially those in Washington are serious in compromising.

From Reuters, writer Jonathan Lynn gives us this round up of opinions.

WTO Director-General Pascal Lamy said countries were making some progress in the latest intensive negotiations in Geneva in areas such as facilitating trade and the technical work necessary to implement an eventual deal in agriculture.

"But I also believe it will be difficult to get to 2010 without a serious acceleration of the pace," Lamy said.

"We need to see real negotiations emerge, not only informal consultations and discussions, but real exchanges among members," the Frenchman told the WTO's General Council.

Leaders of the G20 rich and emerging countries called at their summit in Pittsburgh last month for the Doha round, now in its eighth year, to be completed in 2010.

That was the latest in a series of calls to finish the longest running trade round, launched in late 2001 to open markets and help developing countries prosper through trade.

But the high-level political exhortations have not been matched by compromise and movement in the Geneva talks, leading many to question whether the leaders are sincere in their call for real negotiations.

"Technically the work is almost done. What we are missing now is political will," said Egypt's trade minister, Rachid Mohamed Rachid.

Rachid, echoing a view held by many emerging nations and rich countries alike, said the problem was that Washington -- the key to any deal -- was not engaging fully in the talks.

"The United States has not made their position clear yet vis-a-vis trade," he told a meeting of the Arab-Swiss Chamber of Commerce in response to a question from Reuters.

More Rich Country vs Poor Country

In another round of the battle between Rich Country vs Poor Country. A mini-meeting of ministers of the World Trade Organization is about take place in India. Ahead of the meeting, comes a statement from over 125 NGO's on behalf of the poor countries. Among the accusations listed in the statement: a failed global agricultural system, a lack of access to food, an increase in hunger, and an erosion of farmers incomes.

From the IPS, reporter Isolda Agazzi tells us more of what's contained in the statement, and it's hopes of influencing the upcoming meetings of the WTO.

The signatories to the letter argue that the WTO talks at the moment do not constitute a "development round" and that greater trade liberalisation would not help poor countries recover from the economic and food crisis.

They point out that the deregulation of trade in agriculture has led to the abolition of commodities boards that helped to manage supply and to their replacement by volatile and speculative commodity markets.

Moreover, the global agricultural system allows rich countries to subsidise their farmers. The subsidised products flow into developing countries’ markets, "representing unfair competition to local farmers", destroying livelihoods and increasing hunger.

The NGOs point out that even where export subsidy limits exist, the U.S. and the EU regularly violate them and dump their agricultural products on developing countries’ markets, ruining farming communities.

Another serious problem, according to the NGOs, lies in the global trading system that does not allow developing countries to protect and support local food production for domestic consumption. Despite this having caused the food crisis and the erosion of farmers’ income, rich countries are still pushing Southern ones to open up their markets, while refusing to reduce the subsidies they provide to their own agribusiness exports.

A coalition of more than 46 countries, called the G33, is organising the resistance to these unjust policies and activities within the WTO: they are lobbying for so-called special products and special safeguards mechanisms that would allow developing countries to adopt protective measures in times of rising imports or crisis.

"Unity among these countries – supported by an even larger coalition of more than 100 countries - is an essential step towards improving the current agricultural trade system" stress the signatories. But this is precisely what rich countries don’t want, leading to the stalling of the Doha Round in July 2008.

Not much talking being done now at the WTO

Ambassadors at the World Trade Organization says there is not a lot of negotiations going on. That is despite a G-8 pledge to complete a global trade pact by the end of next year. Not much will be done for the rest of the summer, because many WTO diplomats go on vacation in August.

From this Associated Press story that we found at the Gloucester Daily Times, we read more about the slow WTO.

"Mismatch" was the word used by ambassadors Friday at the 153-member World Trade Organization in comparing that promise to reality on the ground.

They said the current talks were falling far short of the pace and intensity needed to wrap up a deal once promised as a recipe for lifting millions of people out of poverty and adding billions of dollars to the global economy.

There is a "marked and embarrassing gap" between what world leaders and top trade ministers have called for and what is being accomplished in talks, Australia's ambassador Peter Grey told a meeting of the WTO membership.

Washington's outgoing envoy Peter Allgeier said there was "no doubt" that the slow progress of technical work was failing to match the ambition of politicians, while his Indian counterpart Ujal Singh Bhatia claimed there was a "striking lack of energy" in WTO negotiations.

Bhatia said the disconnect threatens to damage the credibility of the WTO and world leaders, who have voiced their support for the Doha round at recent summits in Bali, Indonesia; Paris; L'Aquila, Italy; and Singapore.

The global trade talks were supposed to be completed in 2004 and have been at a standstill for months.

WTO still hopes for more trade talks

The leader of the World Trade Organization recently shared what he hopes to see in the new year. The WTO Director Pascal Lamy said he wants to renew the Doha round of free trade talks. Lamy says the economic slowdown has really hurt trade between nations, and that increased trade could help developing countries.

From the Hindustan Times, this Reuters article recorded Lamy's remarks that he made while in the UK.

The Doha round was launched in late 2001 to boost world trade and help developing countries export their way out of poverty, but agreement has proved elusive.

The G20 group of rich and emerging nations called in November for an outline deal by the end of 2008 to help counter the economic crisis.

But last month Lamy decided political differences were still to wide to invite ministers to Geneva to seek a breakthrough.

In his speech on Thursday he praised Britain's support for the negotiations and Prime Minister Gordon Brown's leadership.

"It is this leadership that we are counting on to ensure that the coming G20 summit in April here in London will result in a recommitment to conclude the negotiations this year," said Lamy, who also met Brown on Thursday.

Lamy said the crisis made it more urgent to reform the global trading system to help developing countries.

"There is no doubt that this crisis will have profound and possibly prolonged effects on developing countries, the least developed among them in particular, whose recent good economic performance has been largely driven by external factors," he said.

WTO Doha talks don’t spell disaster for Africa

from New Vision

By Alec Van Gelder

The recent failure of the World Trade Organisation’s Doha Round and the long-standing failure of aid need not need spell disaster for African economies. The tools for promoting growth and prosperity are in their own backyard and three of the world’s top 10 pro-growth reformers are in Africa, according to the World Bank report Doing Business 2009, released recently.

Useful reforms in Africa have increased by over 150 per cent over the past five years, helping to maintain the record six per cent a year growth of the past decade. Some countries are buoyed by high commodity prices but African economies are diversifying and expanding.

The top reformers in the whole continent, Botswana, Burkina Faso and Senegal, have focused specifically on an area of upmost importance, simplifying the procedures for trading with the rest of the world.

Redtape, logistics bottlenecks and customs corruption are trade barriers just like tariffs. “Reforms are already paying dividends for countries rich and poor but there is scope for greater improvement still,” trade analyst Daniel Ikenson of the Cato Institute says.

According to Doing Business 2009, it takes an average of 39 days before exports are allowed to leave Uganda: nine days to prepare documents, six days to clear customs and an additional six days for loading. The entire process costs exporters a tidy US$3,090—nine times the average annual Ugandan income. And most of this rigmarole applies to imports too.

In Angola it takes 68 days: the economy is booming now thanks to high prices for oil and diamonds, with annual growth over 15 per cent, but removing these trade barriers would give Angolans a better chance to prosper when those prices take a tumble.

The United Nations Conference on Trade and Development estimates that just a one per cent reduction in the cost of maritime and air transport in developing countries—easily achievable in Angola—could increase global GDP by US$7 billion.

Across Africa, a 10 per cent increase in exports to rich countries could be achieved simply by cutting export time by about four days—the regional average is a suffocating 34.7 days. Dropping these barriers would also boost the paltry level of regional trade: under 15 per cent of African trade occurs between neighbours.

So the fact that Africa’s top reformers have prioritised trade facilitation is very good news. Crucially, their reforms illustrate how any economy can move in the right direction unilaterally, without waiting for bureaucrats to agree on complicated agreements at the WTO or elsewhere.

Optimistic estimates predicted that agreement at the WTO Doha Development Round would have injected an additional US$287 billion into the global economy, half of which would have benefitted poor countries.

The proposed cuts in tariffs and subsidies would have been wonderful but the agreement was politically unachieveable.

Yet the right unilateral reforms within Africa could be even more beneficial: a recent World Bank study of 75 countries found that if below-average performers on trade obstacles, many of them in sub-Saharan Africa, could raise their scores only halfway to the average score, world trade would increase by $377b, or about nine per cent a year.

Link to full article. May expire in future.

Trade not aid the answer to poverty: economists

from Reuters Africa

More trade talks are coming this week in Ghana. The trickiest part is "food aid" allowing countries to sell surplus food to countries with out the export subsidy. - Kale

By Jonathan Lynn

GENEVA - As ministers from over 100 countries gather in Ghana to review how effective aid is in helping developing nations deal with poverty, many economists argue the answer is elsewhere -- in freeing up trade.

The meeting in Accra this week comes just over a month after talks at the World Trade Organisation (WTO) to secure a breakthrough in the long-running Doha round collapsed at the end of July.

Rich and poor countries alike have called for efforts to save the Doha round and build on the compromises that were reached in July's talks. Senior negotiators are likely to meet in September to see whether the talks can be revived.

Economists of all persuasions agree now that growth is the key to lifting people out of poverty -- a view reinforced by a major World Bank report in May on growth and development.

And the key to growth is trade, the WTO says. "Trade openness is believed to have been central to the remarkable growth of developed countries since the mid-20th century and an important factor behind the poverty alleviation experienced in most of the developing world since the early 1990s," it said in a report last month (July).

Former New Zealand Prime Minister Mike Moore, who headed the WTO when the Doha round was launched, put the case for trade in a characteristically forceful manner earlier this month. "Seven years ago, we introduced at Doha what was to be a "development round". All trade rounds are," he said. "President Kennedy, who introduced the Tokyo round, famously said: 'This will lift all boats and help developing countries like Japan.' Case made, I would have thought."

Since Japan's rise to prosperity, many other countries, such as South Korea, Chile and India, have followed a similar path.

Many developing-country leaders share the view that the solution to poverty lies in the increased economic capacity that trade can bring rather than in aid handouts. "Africa critically needs to realise development and get itself out of poverty through the establishment of fair trade rather than aid," Kenya's Trade Minister Uhuru Kenyatta, who coordinates African countries at the WTO, said after the collapse of the WTO talks.

DEVELOPMENT THE GOAL

The Doha round, launched in Qatar capital in late 2001, was expressly intended to help developing countries export their way out of poverty, by tackling the unfinished business of previous trade rounds such as the distorted global food trading system.

Many advocacy groups argue that trade negotiations are still skewed against the interests of poor countries.

Forcing them to open up their markets to provide more export opportunities to Western businesses could threaten the livelihoods of millions of subsistence farmers and snuff out infant industries.

The Manila-based Focus on the Global South said the collapse of the Doha talks was a welcome respite for poor countries. "The aggressive push by the rich countries led by the U.S. and the EU for more trade liberalisation at a time of global crises of food and fuel (became) too blatant for developing countries to stomach," it said.

But many changes sought by developing countries -- such as cuts in the multi-billion-dollar U.S. and EU farm subsidies -- have been on hold since the Doha talks collapsed.

Developing countries also recognise that they benefit from the rules-based multilateral trading system the WTO represents, not least because of the power it gives small and weak members.

African countries would much rather tackle U.S. cotton subsidies that squeeze them out of the market in a comprehensive WTO trade round rather than sit round the negotiating table with just with the United States.

For developing countries, many of which are in unstable areas, the security aspects of trade are also important.

The prosperity and contacts promoted by trade foster peace, and when trade rules affect major economic sectors, such as West African banana growers, they must be negotiated carefully. "If goods cannot cross borders, armies will," said U.S. Franklin Roosevelt's World War Two Secretary of State Cordell Hull who won the Nobel Peace Prize for his contribution towards the creation of the United Nations.

Link to full article. May expire in future.

Bread for the World supports India in trade talks

from New Delhi News

This is the first that I have heard from a third party on the failed Doha free trade talks. The NGO Bread for the World sides with India. - Kale

'We need a global economy that works for everyone, rich and poor alike, and not just for a wealthy few,' David Beckmann, president of Bread for the World, a Christian organisation that strives to end hunger worldwide, said in a statement in Washington Monday.

Beckmann warned that the recent collapse of the Doha Round of talks in Geneva would adversely affect the world's hungry and poor people in more ways than the negotiators realise.

'The trading nations of the world put protectionism ahead of hungry and poor people, and it worsened their plight,' said Beckmann.

'That is the real tragedy of the collapse of the Doha Round during this global hunger crisis.'

The Doha Round talks reached an impasse after the US disagreed with the stance of India and China that developing countries can impose emergency tariffs on products like sugar, cotton and rice in case of a sudden rise in imports.

The US wanted to allow emergency tariffs when a country's imports rapidly increase by 40 percent, while China and India insisted that this threshold should be 10 percent. They offefred to settle for 15 percent.

'This latest Doha Round was a golden opportunity to reduce trade-distorting farm subsidies in wealthy nations, especially in light of soaring crop prices and record prosperity among European and American farmers,' Beckmann said.

The UN Food and Agriculture Organisation estimates that 862 million people across the world go to bed hungry.

Link to full article. May expire in future.

After Doha, What’s Next?

the Center for Global Development

This is an interview with Randall Soderquist of the Center for Global Development. It explores where global trade talks can go fom here. - Kale

The collapse of the Doha Round of multilateral trade negotiations last week was a major setback for developing countries and rich countries alike. Policymakers are now trying to make sense of what went wrong and salvage what goodwill remains. Randall Soderquist, CGD’s new senior program associate for trade, says that developing countries stand to lose the most from last week’s events, as the fragmented regional and bilateral trade agreements that will likely succeed Doha will undermine their bargaining power. In a new Q&A, he explains Doha’s impact on poor countries, discusses shifting political attitudes toward trade, and offers recommendations on steps toward a new trade agenda.

Randall previously served as director for the Economic Policy Program and the Trade and Poverty Forum at the German Marshall Fund of the United States. His work there and his eight years working on trade issues on Capitol Hill bring a wealth of policy experience to CGD’s ongoing investigation of how rich-country trade policies can be improved to make it less difficult for poor people in the developing world to escape from poverty. Welcome Randall!

Q: Is the Doha Round really “dead”? Has a global agreement just been put on hold?

A: Some argue that it’s still possible to salvage the Doha Round, noting that the Uruguay Round that preceded it was put on hold for two years before it was completed and eventually signed in Marrakesh in 1994. But lots has changed since then. Before, developing countries sat on the margins, accepting the agenda offered by the so-called Quad (EU, U.S., Japan and Canada). Emerging economies like Brazil, China, and India had none of the influence they wield today. This shift in the WTO power structure and the emergence of what is in effect a multi-polar trading system make it really hard to reach a consensus. Then, too, the issues are more expansive and complex, but the WTO continued to approach this as a single undertaking—where nothing is agreed until everything is agreed. Finally, there is the changing political context in the rich countries: with growing anti-trade sentiment few politicians are willing to make trade a priority. With the upcoming elections in the United States and India and the appointment of a new Commission in the EU, there is simply not a whole lot of room to maneuver.

Q: So what happens next?

A: I suspect we will see some posturing by the key players about the need to lock in portions of the Doha Round agreement so that the talks can be revived later. Personally I think that’s unlikely. Instead I expect that the Doha Round will simply fade away as countries pursue specific sectoral and regional trade agreements that serve their individual economic interests.

Q: So, is the idea of trade for development also off the table?

A: Certainly not. There seems to be an understanding in the international trade community—public, private, and non-profit sectors alike—that poverty alleviation and economic opportunity need immediate attention. U.S. Trade Representative Susan Schwab, for example, stated that some components of the package might be moved forward on a multilateral basis. She cited duty-free quota-free access on most products for the poorest countries, trade facilitation, and environmental goods and services. So development is clearly on her radar screen. The idea has been floated among her counterparts, and from what I can tell there have been discussion on the side about how to “harvest” what is ripe right now. But India has objected to this approach. Since it would require consensus among all WTO members, it is hard to imagine this happening in the context of the Doha Round. It is unfortunate that India—which has gained so much from market access for its exports through existing multilateral agreements—now appears to be standing in the way of developing countries who want to make similar progress. It is a very odd and disconcerting turn of events.

Q: What will be the impact of Doha’s collapse on poor people in developing countries?

A: The real impact of the collapse is unclear as there was so much that remained to be negotiated. But if the question is whether what was on the table would have provided significant economic benefits to those living in poverty, the short answer is no. Granted the U.S. offer would have forced some real constraints on subsidies available under the current farm legislation. Similarly, reforms that are being undertaken in the EU’s Common Agriculture Policy would have been locked in. And some benefits would have been derived from cuts to bound tariff rates. But most of the important issues for developing countries remained undecided. Subsidies on cotton; tariffs on bananas, textiles, and clothing (so-called “sensitive” products excluded from tariff reductions); preference erosion on key exports; and, of course, safeguards all remained unresolved, so it is difficult to calculate whether there would have been a net gain or a loss as a result of the agreement. Indeed, one of the most sensitive issues—anti-dumping—was not even mentioned. Nonetheless, developing countries had far better leverage to negotiate with rich countries as a group in a multilateral forum like that in Geneva than they do individually. The asymmetries they will face in a post-Doha world -- asymmetries in power and in negotiating capacity -- will not necessarily be conducive to economic development or poverty alleviation.

Q: What should rich countries be doing with respect to trade policy to help developing countries in lieu of a multilateral deal?

A: The next step requires innovative approaches that will allow developing countries to better integrate themselves into the global supply chain and, in this manner, obtain the investment they need to exploit trade opportunities and promote economic growth. This means taking a critical look at existing trade agreements and preference programs and examining what works and what doesn’t. In particular we should be looking for opportunities for poor countries to leapfrog past old industries and into new technologies of the future. Rich countries should work to coordinate the preferences they offer to developing countries to try to ensure that benefits obtained from one country are not squelched by another. Rich countries should also integrate their trade agreements, preference programs, and development assistance programs so that they reinforce each other. In short, there is quite a lot we can and should do, even without a Doha Round.

WTO talks collapse: the poor and farmers lose

from the Australian

This story has some opinions from farmers and poor advocates in Australia. They say the trade deal would have given the poor a chance in the worsening economy. - Kale

FARMERS and the world's poor will be the losers from the collapse of world trade talks in Geneva overnight, advocates say.

The World Trade Organisation talks, which aimed to salvage a global free trade pact, collapsed after the US, China and India failed overnight to agree on when poor countries could raise import tariffs on farm products.

National Farmers Federation president David Crombie said the breakdown would prevent farmers from selling into new and expanded markets.

"The breakdown of negotiations in the Doha Round of WTO trade talks is another dismal result for Australia's farmers and agricultural exporters," Mr Crombie said.

Agricultural domestic support limits among OECD countries would not be reduced and market access would not be improved.

With the world food shortage biting hard, Mr Crombie warned developing countries would be the "biggest long-term losers" from the world trade impasse.

Oxfam acting executive director James Ensor blamed rich countries for the impasse, saying it was not fair for them to force poorer countries into heavy trade concessions.

"They defended vested interests and put poor countries under intense pressure to make concessions that have no place in a development round," Mr Ensor said.

Link to full article. May expire in future.

WTO Talks collapse: in battle over farm aid

from the Washington Post

This story serves as an overview of this round of talks, and the issue that ended them. - Kale
By Anthony Faiola and Rama Lakshmi

International talks aimed at ushering in a new era of free trade collapsed in Geneva yesterday during a bitter split between developed and developing countries over the future shape of global commerce.

The failure of the talks after nine days of intense negotiations underscored what is likely to be the biggest challenge in coming years to expanding world trade: the reluctance of emerging juggernauts such as India and China to risk their newfound success by offering rich nations greater access to the hundreds of millions of consumers rising out of poverty in the developing world.

High-level delegations from the United States and the European Union showed fresh willingness at the World Trade Organization talks to make concessions that would have gradually curbed the subsidies and tariffs they have long employed to protect First World farmers. But India and China dug in their heels, insisting on the right to keep protecting their farmers while accusing the United States and other rich countries of exaggerating the generosity of their concessions.

"The breakdown of these talks is bad news for the world's businesses, workers, farmers and most importantly the poor," said Thomas J. Donohue, president of the U.S. Chamber of Commerce. "It's ironic that this blow . . . came from two of the chief beneficiaries of worldwide trade. India and China are emerging powers, but with great power comes great responsibility. They missed an opportunity to show leadership as key players in the global trading system."

The result is what most experts concede is at least a temporary mothballing of the Doha Round of trade talks, so named because a group of nations agreed to work toward dramatic new cuts in subsidies and trade tariffs in Qatar's capital, Doha, in 2001. The talks have floundered for the past seven years, with negotiations falling apart each time trade ministers have gathered to try to hash out an accord.

The WTO meeting of more than 35 nations in Geneva that ended yesterday had been described by officials as a "do or die" moment for the round, with the lack of agreement postponing the $50 billion to $100 billion injection such a deal was expected give the global economy. The sense that the failed talks may not get another chance anytime soon is linked to the pending exit of the pro-trade Bush administration, rising opposition to farm concessions in Europe and an upcoming changing of the guard of several key trade officials who have worked on this agreement for years.

Some analysts said the spread of free trade for now is likely to shift toward more modest bilateral agreements, or the expansion of regional trading blocs such as South America's Mercosur and the Association of Southeast Asian Nations. Yet even bilateral deals have recently faced stronger resistance during a growing global wave of protectionism, including in the United States, where free trade agreements with Colombia, South Korea and Panama are being held up by opposition in Congress.

"We are heading toward the fragmentation of the global trading system into individual trading blocs -- regional and bilateral -- which offer no guarantee for the economic benefits we have seen in the post-War era," said Randall Soderquist, senior trade program associate for the Center for Global Development.

The talks in Geneva at times took on a highly charged, personal tone that immediately cast the negotiations as a power struggle between the developed and developing worlds. Within 24 hours of landing in Geneva nine days ago, Brazil's foreign minister, Celso Amorim, infuriated First World negotiators, comparing their efforts to hype their proposed trade concessions to Nazi propaganda. His comments drew sharp reprimands, particularly from Washington's top negotiator, U.S. Trade Ambassador Susan C. Schwab, the daughter of Jewish Holocaust survivors.

Yet Brazil would later show far more flexibility than India or China, casting the Asian nations as the principle holdouts.

Schwab said negotiators were "so close" last week in reaching an agreement. But the talks fell apart over the insistence by developing nations to reserve the right to protect their farming sectors against sudden surges in cheap food imports. India's chief negotiator and commerce minister, Kamal Nath, may have played the biggest role in undoing the talks, repeatedly blocking attempts by developed nations to win greater access to India's burgeoning market.

Nath's inflexibility was cheered as heroic in India, where his refusal to offer major concessions to rich nations was being portrayed as a classic David vs. Goliath case.

"I kept saying 'No, I don't agree' at every point," Nath said in a telephone interview from Geneva yesterday. "I come from a country where 300 million people live on 1 dollar a day and 700 million people live on 2 dollars a day. So it is natural for me, and in fact incumbent upon me, to see that our agricultural interests are not compromised. You don't require rocket science to decide between livelihood security and commercial interests."

Opposition to the talks had been building in India since June, when 35 farmers groups from across that nation gathered at a conference in New Delhi to discuss the implications of the trade negotiations with trade and food policy activists. They called upon wealthy nations to remove their farm subsidies, saying such assistance to First World farmers denies a level playing field to subsistence-farming nations such as India.

Link to full article. May expire in future.

WTO talks collapse: Reaction from World Leaders

from the Raw Story

Here is another story on the WTO talks collapse. This story gathers reaction from leaders across the globe. - Kale

World powers reeled with regret and emotion on Wednesday from the collapse of WTO negotiations for a global trade pact, warning that the poorest countries would suffer.

"It is particularly distressing for us that we find ourselves without an agreement today," US Trade Representative Susan Schwab told a news conference, as delegates reviewed the wreckage of nine days of talks.

She lamented that tense talks had broken down on deadlock over special import tariff measures, after certain countries rejected WTO proposals.

"It would have worked, and yet there were others who demanded more. and more included a tool to close markets," Schwab said, without naming names.

Delegates who went into many late nights in an attempt to reach a deal affecting the lives of populations around the globe, said that deadlock had centred on a row between the United States and India over tariffs.

Kenya's trade minister meanwhile warned that the breakdown of talks "gravely undermined" efforts by African countries to fight poverty.

Ministers had struggled for nine days to reach consensus on subsidy levels and import tariffs for a new deal under the WTO's Doha Round, which has foundered repeatedly since it was launched seven years ago.

Delegates said negotiations stumbled on proposals for so-called SSM measures to protect poor farmers that would have imposed a special tariff on certain agricultural goods in the event of an import surge or price fall.

"Africa's opportunity to achieve fair trade has... been gravely undermined by the lack of progress in these negotiations," the minister, Uhuru Kenyatta, told a news conference, speaking on behalf of a grouping of African countries at the World Trade Organization talks here.

"Africa critically needs to realise development and get itself out of poverty through the establishment of fair trade rather than aid," he said.

Several delegates hoped on Tuesday for further moves to salvage the negotiating process in light of progress that had raised spirits over the weekend. But momentum seemed to have ground to a halt.

"It's extremely difficult to find words to express the disappointment," said EU Commissioner Mariann Fischer-Boel in an emotional address on Tuesday. "It's a truly sad day for the developing countries that had so much to gain."

"We will need to let the dust settle a bit," the World Trade Organization's Director-General Pascal Lamy said. "WTO members will need to have a sober look at if and how they bring the pieces back together."

The world's economic superpower, the United States, and India, one of the world's biggest emerging economies, were sharply divided over the SSM -- the special safeguard mechanism.

"I feel very disappointed that this had to be left unresolved in the last miles," India's Commerce Minister Kamal Nath told reporters. "It's unfortunate that in a developing round, the last miles we couldn't run" due to the SSM.

India and other developing countries wanted the mechanism to kick in at a lower import surge level than has been proposed in order to protect their millions of poor farmers from starvation. Nath said that about 100 developing nations backed his position.

Others wanted it to take effect at a higher rate so as not to hurt exporters.

Ministers avoided publicly pointing the finger of blame. European Union Trade Commissioner Peter Mandelson said on Tuesday that the collapse was a "collective failure."

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WTO talks collapse: a reaction on how it effects Africa

from AFP via Google

The WTO talks have collapsed due to an arguement between India and the US. Here is a reaction on how the absence of an agreement will effect Africa. - Kale

GENEVA — The breakdown of talks on a world trade pact has "gravely undermined" efforts by African countries to fight poverty, Kenya's trade minister warned on Wednesday.

"Africa's opportunity to achieve fair trade has... been gravely undermined by the lack of progress in these negotiations," the minister, Uhuru Kenyatta, told a news conference, speaking on behalf of a grouping of African countries at the World Trade Organization talks here.

"Africa critically needs to realise development and get itself out of poverty through the establishment of fair trade rather than aid," he said.

"Most of the key issues of interest to the African continent were not even discussed, especially the issue of cotton."

WTO Director-General announced on Tuesday that the latest negotiations for a much-delayed trade liberalisation deal under the so-called Doha Round had broken down after nine days due to unresolved differences.

Delegates said the deaddlock centred on a row between the United States and India over special tariff measures to protect poor farmers from surging imports or price falls.

WTO talks break down as blame is being pushed around

from the Florida Times Union

A tiny issue has stalled global trade talks. One that is hardly worth even arguing about .... sigh... - Kale

by BRADLEY S. KLAPPER

GENEVA — The world's largest commercial powers came into crucial talks on a new global trade pact pledging to assume the shared responsibility needed for solving planetary problems from climate change to food and energy prices.

But they are close to letting an arcane dispute over a seldom-used safeguard on farm imports spoil a trade deal worth billions of dollars to the global economy.

With huge question marks remaining on provisions to open up farm and industrial markets, the World Trade Organization's leading members on Monday were sharply divided over an issue worth practically nothing to the global economy.

A number of trade officials described the debate pitting the United States against China and India as one of principle — and not just hard economics.

"This is an issue that really concerns the livelihood of many developing countries," said Sun Zhenyu, China's WTO ambassador.

India, heavily criticized by the United States and Latin American countries Monday, said the standoff was the result of unreasonable demands from the U.S. and other rich nations.

"If blocking means not accepting whatever the developed countries say, so be it," Trade Minister Kamal Nath told reporters, adding that he has made his position clear on the subject since last week.

He said the idea of a "special safeguard" to deal with a sudden surge of imports or drop in prices had wide support: "It's not only India. We have 100 countries saying the same thing. It's the large economies that are isolated."

Earlier, the United States slammed the two emerging powers, saying they were threatening to scuttle the entire Doha trade round launched in the Qatari capital in 2001.

David Shark, a U.S. trade official, told the WTO's 153 members that the United States has "swallowed hard and accepted" a compromise proposal that includes tighter limits on farm subsidies to American farmers.

But he criticized India for rejecting a package of provisions laid out by WTO chief Pascal Lamy, and China for backing out of terms it committed to last week.

"Their actions have thrown the entire Doha round into the gravest jeopardy of its nearly seven-year life," Shark said.

While farm import safeguards currently exist in rich and poor countries, they are rarely used. The dispute over the current proposals concerns the threshold for when developing nations could spike their tariffs, and how high those taxes could rise.

Shark accused China and India of insisting on allowances to raise farm tariffs above even their current levels. That violates the spirit of the trade round, the U.S. and other agricultural exporters argue, because it is supposed to help poorer countries develop their economies by boosting their exports of farm produce.

But China and India were not alone. Faced with rising food prices, a number of developing nations have sought wide loopholes against opening up their farm markets — either by blocking certain strategic products such as rice or grains or through rules that would allow them to raise tariffs sharply if faced with a sudden flood of imports.

Farming in the developing world is "not like manufacturing," said Trade Minister Mari Pangestu of Indonesia, the world's fourth most populous country. "It's not a machine you can just turn on or off."

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An update on the WTO talks: some progress

from Report on Business, Canada

Agreement on the global trade pact could ad anywhere between $60 to $300 billion to the world's economy. - Kale

by JULIANE VON REPPERT-BISMARCK

GENEVA — World trade ministers appear to be finally making progress in seeking a sweeping new global trade agreement.

Although critical to a deal, disputes in several areas still did not prevent a sense of optimism over the multiyear process as officials continued week-long negotiations at the World Trade Organization in Geneva yesterday.

"We're closer to an outcome than we've ever been before," New Zealand Trade Minister Phil Goff told reporters after an evening session of talks. "People have differences. We need to work through those differences."

Protection for farmers in developing countries, U.S. cotton subsidies, European Union banana duties and industrial exports to China were still holding up a deal that has been seven years in the making, diplomats said yesterday at the end of a day spent in one-on-one and group negotiations.

U.S. Trade Representative Susan Schwab and negotiators from China warned a deal can still unravel given extreme sensitivity over opening up trade in national staples such as food and industrial products. Decisions at the WTO are made by consensus and can break down if one country dissents.

Tensions have been high during the past week, with rich nations refusing farm aid cuts and developing countries wanting to keep industrial tariffs in place. Brazil's negotiator, Celso Amorim, angered many by denouncing rich-country tactics as worthy of Nazi propaganda chief Joseph Goebbels, and Indian Industry Minister Kamal Nath almost walked out of a meeting.

A compromise plan drafted by WTO chief Pascal Lamy on Friday averted a breakdown that could have postponed a WTO deal for several years. According to this plan, the EU would cut trade-distorting farm subsidies by 80 per cent and the United States by 70 per cent, bringing the U.S. aid ceiling to about $14.5-billion (U.S.) from more than $48-billion now.

The plan would allow developed and developing countries to exempt parts of their farm sectors from high tariff cuts. It also suggests sudden import surges should trigger temporary tariff hikes, a move designed to protect vulnerable farm sectors.

The compromise would allow developing countries such as China and India room to protect to a limited extent industries such as textiles and car production - markets the United States and EU want to tap.

Negotiators praised the plan for averting disaster. On Saturday, ministers unveiled for the first time promises to open up global-services trade that makes up almost three quarters of gross domestic product in rich countries - from telecoms and banking to energy and the booming global shipping sector.

Yet negotiators still want changes to the farm and industrial trade plan. More than 80 countries, including China and India, are calling for stronger protection against sudden surges in farm imports.

Diplomats - many showing signs of exhaustion - spoke of horse trading going on behind closed doors. European negotiators are considering a financial sweetener for Caribbean banana planters hurt by European import tariffs, according to trade officials and diplomats.

The United States is resisting pressure from poor African cotton farmers to cut its annual $2-billion in cotton subsidies, calling on China to first admit U.S. cotton, a trade official said.

Brazil - the world's biggest ethanol producer - is pushing for access to the United States and Europe's booming biofuel markets. Beijing's negotiators are at odds with EU car and textile exporters who want cuts to steep Chinese tariffs.

Representatives of Canadian poultry and dairy farmers insist exemptions to tariff cuts available to developed economies be broadened from the 4 per cent currently on the table to 7.3 per cent.

"Any deviation from our position would be extremely negative for poultry and dairy farmers and for rural areas of Canada," said Peter Clarke, Director of the Canadian Egg Marketing Agency.

Barring the collapse of talks, ministers are expected to reach an agreement by Thursday. But the shape of any final treaty is still unclear and unlikely to emerge before the end of 2008. Services, trade and other issues must be formalized. U.S. commitments must pass congress, while France and Italy have threatened to veto a deal that threatens European farmers.

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U.S. offers farm subsidy cut, is asked for more

from the Washington Post


A concession is being proposed by the US to try to save the global trade talks. - Kale
By Doug Palmer and William Schomberg

GENEVA - The United States sought to kickstart efforts to rescue a global trade deal on Tuesday by offering to cut a ceiling on its contested farm subsidies, but leading developing countries said it was not enough.

U.S. Trade Representative Susan Schwab announced Washington was ready to cap its trade-distorting farm subsidies at $15 billion a year, on condition countries like Brazil and India also make concessions to save the World Trade Organisation talks.

"This is a major move, taken in good faith with the expectation that others will reciprocate and step forward with improved offers in market access," Schwab told reporters.

The long-awaited U.S. move came on the second day of a week-long push by ministers for a breakthrough on farming and manufacturing -- core trade issues that have dogged the WTO's nearly seven-year-old Doha round of world trade talks.

Developing countries have long complained that huge U.S. subsidies squeeze their farmers out of the market, reducing food supplies and contributing to the recent spike in global prices.

But high prices have lowered U.S. spending on farm programs that encourage production -- which distort trade -- to about $7 billion last year, well below the $48.2 billion allowed under existing WTO rules.

Schwab said Tuesday's offer would require the U.S. Congress to rewrite new farm legislation. President George W. Bush vetoed a 2008 law that boosts subsidies but was overridden by Congress.

Tom Harkin, head of the Senate's Agriculture Committee welcomed the U.S. move, saying in a statement it showed the United States was ready to negotiate in good faith and complete the round but other countries now had to make concessions too.

Stressing the value of the new offer, Schwab said U.S. trade-distorting support was $18.9 billion in 2005 and close to $25 billion in both 1999 and 2000, before the food price surge.

But the move failed to impress some WTO players key to the complex trade-offs needed this week to prevent the Doha round being put on hold, possibly for a couple of years.

Supporters of a WTO deal say it could send a morale-boosting signal to the slowing global economy.

OFFER FAILS INDIA'S "LAUGH TEST"

"My immediate response is it doesn't pass the 'laugh test'," a senior Indian official told Reuters.

Brazil said it wanted deeper cuts. "This is only the second day of the talks here, so we imagine there is room for maneuver to reduce them further," a Brazilian diplomat said.

Brazil and India are key to the negotiations because the United States and the European Union want big developing economies to open up their markets in industrial goods as well as farm products in return for their agriculture reforms.

The EU said the U.S. offer was reasonable but could go deeper depending on how this week's trade talks progress.

After around 30 ministers met to discuss the U.S. proposal and other areas of the talks, European trade chief Peter Mandelson said the emphasis was shifting to industrial goods where "there is a lot of disagreement, a lot of heat but where we have to find an outcome in order to get a deal."

Costa Rican Trade Minister Marco Vinicio Ruiz said ministers would split into small groups on Wednesday to try to find a breakthrough. Senior trade officials said the talks were likely to overshoot their original end date of Saturday.

Proposals by a WTO mediator proposed capping U.S. spending on farm subsidies at between $13 billion and $16.4 billion.

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Trade powers struggle to save WTO round

from the Financial Express

Wealthy nations are under pressure to cut tariffs, but many still want to keep tariffs in place for most products. It could be the undoing of trade negotiations going on now. - Kale

The United States, the European Union and emerging economic heavyweights will try again on Tuesday to line up the long-elusive trade-offs needed to save a deal to dismantle export barriers around the world.

The United States resisted calls on Monday to announce a cut in its ceiling for farm subsidies as a critical week of talks opened, saying it was ready to act as long as others do likewise, especially developing economies like Brazil and China.

The World Trade Organisation's Doha round of negotiations risks years of further delay without a breakthrough this week.

But some top trade officials doubted that would be possible, given the range of issues to be resolved and the fundamental differences that still separate rich and poor countries.

"I have to say that after today's meeting I am less optimistic than before," said Egyptian Trade Minister Rachid Mohamed Rachid after WTO chief Pascal Lamy summoned more than 30 ministers to spell out what they can do to secure a deal.

He said more talks might have to be scheduled in the coming two weeks, before Europe shuts down for the summer.

After that, the US presidential election campaign is likely to put the Doha round on ice and it could be a year or two before it can be revived, officials say, dashing hopes for a rare piece of good news for the slowing global economy.

The round was launched shortly after the Sept. 11, 2001 attacks on the United States to bolster the global economy and offer a chance to poor countries to export more and fight poverty.

But the negotiations remain bogged down, largely because many poor countries insist their rich counterparts must bear the brunt of the concessions by scaling back farm protections while Brussels and Washington are leaning increasingly on big emerging nations to open up their economies.

TRADE NOW, CLIMATE TOMORROW?

The battle at the WTO is seen by many as a test of how other global deals can be done, notably next year on climate change, given the shifting balance of power as new heavyweights such as India and China grow in confidence.

Many ministers in Geneva will be seeking a lead from the United States on Tuesday when it will again come under pressure to say how far it will lower its ceiling on farm subsidies.

"I'm sure it will come tomorrow...Otherwise it will be difficult to move a bit forward," said European Agriculture Commissioner Mariann Fischer Boel.

But US trade chief Susan Schwab said Washington would not be rushing into playing its key card in the negotiations without signs that the big emerging economies were ready to move too.

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