Trade Talks Collapse Over Aid for Farms

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The New York Sun

GENEVA — WTO members called a halt to more than five years of commerce liberalization talks yesterday as differences over farm aid proved unbridgeable.

Pascal Lamy, director-general of the World Trade Organization, said a deal billed as a recipe for lifting millions of people worldwide 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,” Mr. Lamy said after six of the WTO’s most powerful members failed to agree on steps toward liberalizing 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 criticized American intransigence over agricultural subsidies for the breakdown, while America blamed Brazil and India for being inflexible on cutting barriers to industrial imports and the European Union for refusing to make deeper cuts in its farm import tariffs.

Last week, presidents and prime ministers from the Group of Eight leading industrialized 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 Mr. Lamy between Australia, Brazil, the E.U., India, Japan, and America.

Now the whole process of agreeing to a binding treaty may have to be put on ice until after American presidential elections in 2008 because President 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 America, 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,” Brazilian foreign minister, Celso Amorim, said.

“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.

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

America and the E.U. in turn want major developing countries like Brazil and India to allow more foreign competition in their industrial and services sectors.

The New York Sun

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