- The Washington Times - Monday, July 24, 2006

World Trade Organization (WTO) talks collapsed yesterday, ruining prospects that global leaders would reach an agreement this year to spur commerce and help lift developing countries out of poverty.

Officials from the United States, Europe and four other major trading powers could not agree on how deeply to cut government assistance to farmers and how far to open their markets to competition. Instead, the sides suspended the talks indefinitely and quickly blamed each other for the breakdown.

“Talks have failed. There is no pretense about it anymore,” said Kamal Nath, India’s minister for commerce and industry.

Trade officials from the United States, 25-nation European Union, Japan, Australia, Brazil and India met for two days in a last-ditch effort to achieve a breakthrough in the so-called Doha round of trade talks. The negotiations began in 2001 in Doha, Qatar’s capital.

The round is meant to benefit all WTO members, but especially some of the poorest countries. Economists argue that lowering rich country farm subsidies will raise world prices, helping producers in developing countries earn more. And lower trade barriers will allow farmers and manufacturers to export more.

The trade officials had gathered after a call last week by presidents and prime ministers from the Group of Eight industrialized nations to conclude the talks this year. Instead, this week’s meeting devolved into hurling of accusations over who was at fault for the impasse.

“We were prepared to walk the extra mile if a final deal was within reach. Unfortunately, the U.S. preferred to stand still,” said Mariann Fischer Boel, the EU commissioner for agriculture.

Susan Schwab, the U.S. trade representative, said EU finger-pointing could not hide the bloc’s unwillingness to match U.S. proposals to cut subsidies and tariffs.

“They have not been a profile in political courage here,” she said.

Mrs. Schwab said the U.S. had not given up on the WTO talks. But formally the negotiations are suspended and Pascal Lamy, the WTO’s top official, did not set a date for them to resume.

“If the political will really exists, there must be a way,” he said. “But it is not here today. And let me be clear, there are no winners and losers in this assembly. Today there are only losers.”

The setback at best means that a deal will not be struck this year, leaving insufficient time for President Bush to submit new WTO legislation to Congress before his Trade Promotion Authority (TPA) expires July 1 next year.

The authority allows the White House to negotiate trade agreements and send them to Congress for a up-or-down vote with no amendments. It is considered essential if the president’s trade envoy is to negotiate a detailed package involving numerous compromises without lawmakers making multiple changes.

After yesterday’s breakdown, U.S. lawmakers called for the Bush administration to refocus on regional agreements before the TPA expires.

“Now that the clock has run out on Doha, it is time for the United States to turn its attention to trading partners and trade agreements from which we can derive results,” said Montana Sen. Max Baucus, the ranking Democrat on the Finance Committee.

Such agreements can create a patchwork of trade rules and leave most nations on the sidelines.

If the U.S. were to abandon WTO talks, it could expect other countries to file cases at the WTO charging that particular farm subsidy programs violate international rules. Brazil already has won cases against U.S. cotton and EU sugar subsidies, and other countries are eyeing U.S. rice and corn programs.


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