WTO chief says trade talks collapse

30th July 2008, Comments 0 comments

New global trade pact has collapsed as key powers are unable to bridge their differences on food tariffs, says WTO head.

30 July 2008

GENEVA - The head of the World Trade Organisation said Tuesday that talks to broker a new global trade pact had collapsed because key powers were unable to bridge their differences on food tariffs.

"There is no use beating around the bush, this meeting has collapsed, members have simply not been able to bridge their differences," WTO Director-General Pascal Lamy told journalists.

Several delegates nonetheless maintained that in light of what had been accomplished in trade talks to date, further moves to salvage the negotiating process would be justified.

But for the moment, momentum has ground to a halt.

Lamy said that time was needed before the 153 members of the WTO could decide on how to proceed.

"We will need to let the dust settle a bit, it's probably difficult to look too far into the future at this point," he said.

"WTO members will need to have a sober look at if and how they bring the pieces back together," he added.

US Trade Representative Susan Schwab earlier said that hopes for a breakthrough had been dashed.

"The package that we were able to negotiate and agree on Friday night is not going to carry the day," Schwab told reporters as she left a meeting of key trading powers, referring to an earlier breakthrough on a deal proposed by Lamy.

Ministers had struggled for more than a week to reach consensus on subsidy levels and import tariffs for a new deal under the World Trade Organisation's Doha Round, which has repeatedly foundered since its launch 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.

"They (the United States) have refused to move on SSM. It is an issue of vital importance to us," an Indian diplomat told AFP as Tuesday's meeting of seven key countries dissolved.

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.

"The United States and India did not accept the compromise proposals, and arrived at an impasse," a source close to the talks told AFP, adding that the negotiations had broken down.

Some developing countries such as India 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.

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

Sources said after Tuesday's breakdown that the United States was stalling for time to avoid a rift over another sticking point, cotton subsidies.

"The US cannot afford to give way on cotton, so it does not even want to go into the issue on cotton," an Asian diplomat told AFP.

"By holding firm to its line on SSMs, it knows that India would not give ground on SSMs, in which case India would be blamed in case of any collapse."

India's Commerce Minister Kamal Nath had dug in his heels over the proposed tariff thresholds, claiming the backing of around 100 developing nations.

With both sides refusing to give way, acrimony had grown on Monday with the United States publicly accusing India and China of holding up progress.

Schwab described Tuesday's decisive meeting as "very disappointing".

"Throughout the last 10 days, and in the months and years prior to this, the United States have shown leadership in trying to get this done. We remain committed to the Doha round," she said.

"US commitments remain on the table, awaiting reciprocal responses. It is critical that we move forward."

But Brazilian Foreign Minister Celso Amorim, a leading negotiator at the talks, insisted that game was not over yet.

"Maybe I'm still naive," he said, but added that he believed that resuming the process at some point was still "worth ... a try."

"I think it would be a very good beginning if whatever understandings we have achieved in this one week are in one way or another captured in revised texts," India's ambassador to the WTO, Ujal Singh Batia, told reporters.

"We can't give up. We have too much at stake, we have invested too much in this round."

[AFP / Expatica]

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