Disappointment at failure of WTO talks

Discussions were suspended yesterday evening as it became clear that these discussions in the Doha round, already started back in 2001 and aimed at liberalising global trade, would fail. Ministers had struggled for more than a week to reach a consensus on a trade pact.

Countries involved were not able to bridge the gaps to create a more open and free world trade.

Agricultural affairs were at the heart of the discussions. Especially emerging markets like India, Brazil and China were hoping the United States and the EU would lower their subsidies for own agriculture production and lower tariff walls – offering however new opportunities and challenges.

Import rules
The negotiations failed because the United States could not agree with the emerging bigger Asian countries on farm import rules, the BBC reported yesterday. These would allow countries to protect poor farmers by imposing a tariff on certain goods in the event of a drop in prices or a surge in imports.

India, China and the US could not agree on the tariff threshold for such an event.

Washington said that the ‘safeguard clause’ protecting developing nations from unrestricted imports had been set too low.

Countries like Paraguay and Uruguay said that the proposals on the table would allow some major developing economies to close off their markets to other developing world agricultural exporters, like them – interrupting normal trade flows.

Meat imports
They mentioned Korean growth for imports of fresh bovine meat (73%), while Indian soybean oil imports are growing at 168% per year. These ‘normal’ trade flows would easily fit the criteria for a return to high tariffs.

China said the collapse of the talks was a serious setback for the world economy, while the EU described it as ‘heartbreaking’.

The WTO chief, Pascal Lamy, said he would not abandon his efforts to find an agreement.

Related news item:
• WTO talks aiming for agricultural solutions  (23 July 2008)

Related web sites:
• World Trade Organization (WTO)
• BBC

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