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Dark day for WTO after talks collapse in acrimony by Alan Beattie in London and Frances Williams in Geneva

Published: July 25 2006 on www.ft.com 

The stumbling "Doha round"of trade negotiations fell into indefinite suspension yesterday after last-ditch talks ended in recrimination.

An emergency meeting in Geneva of the talks' six core negotiators - India, Brazil,the US, EU, Japan and Australia - collapsed over irreconcilable differences about farm liberalisation.

The US continued to argue for big cuts in farm import tariffs to open up markets for its farmers, a demand fiercely rejected by the EU, Japan and India, which said the US had first to go further in offering to cut agricultural subsidies.

The Doha round, which began in November 2001, will now enter indefinite suspension unless and until a consensus in the World Trade Organisation's 149 member countries can be found to revive it.

The White House's authority from the US Congress to negotiate entire trade deals expires next year, meaning the end of this month was in effect a deadline for a WTO deal on farm goods and manufactures.

Most experts and officials think Congress unlikely to renew that authority, rendering any near-term agreement impossible.

Four of the six countries present rounded on the US as the culprit for the collapse in the talks, which started on Sunday and ended yesterday.

Peter Mandelson, EU trade commissioner, told the Financial Times: "If the US continues to demand dollar-for-dollar compensation in market access [cutting tariffs] for reducing domestic support, no one in the developing world will ever buy that, and the EU will not either."

Even Brazil, which shares some of the US's interest in reducing farm tariffs, identified American intransigence on subsidies as preventing an agreement.

Kamal Nath, the Indian trade minister, said of the US: "Everybody put something on the table except one country who said, 'We can't see anything on the table.' "

The US has become increasingly frustrated by what it says is the gutting of its proposals to cut farm tariffs. Rich WTO members such as the EU, Japan and Switzerland, and poorer countries such as India, Indonesia and the Philippines, have sought to protect a wide range of agricultural products from tariff cuts.

Susan Schwab, US trade representative, said such exemptions would defeat the object of the talks, to create trade flows. "As we went through the layers of loopholes . . . we discovered that a couple of our partners were more interested in loopholes than in market access," she said.

The Group of Eight rich countries' meeting in St Petersburg last weekend raised fresh hopes that the round could be completed. George W. Bush, US president, and José Manuel Barroso, president of the European Commission, promised to give negotiators more flexibility.

The suspension brought one of the darkest days to the WTO since its creation as a negotiating and arbitrating system in 1995.

 

 

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