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World Trade Talks Collapse Over Farm Subsidies


World trade talks have collapsed amidst recriminations as to who was to blame for the failure. World Trade Organization chief Pascal Lamy suspended the five year old trade negotiations after failing to break a deadlock over farm subsidies.

WTO chief Pascal Lamy decided to call it quits after trade ministers from the European Union and five other powerful trading nations, known as the G-6, failed to reach a deal that would have allowed the global trade talks to continue.

Australian Trade Minister Mark Vaile calls this a very disappointing outcome, especially for colleagues in the developing world. But he says this does not mark the end of the WTO, nor necessarily of the talks, known as the Doha round.

"No, it is not the death blow of Doha. The round is not dead," he said. "The round is put in a state of suspension until we can find the ingredients that will carry it forward and deliver on the mandate of Doha. What I'm saying is that no member of this organization should be prepared to get an outcome that is anything less than what we set as an objective in Doha. We certainly are not."

The aim of the Doha Development Round was to boost the world economy and lift millions of people out of poverty by lowering trade barriers across all regions. One of the major goals was to open markets to exports from developing countries.

In the end, countries could not agree on what steps were needed to let the trade talks move ahead. It did not take long for the blame game to begin. The European Union blamed the failure on the United States, saying it showed little willingness to compromise. EU Trade Commissioner Peter Mandelson said the United States had been unwilling to reduce government subsidies paid to American farmers.

But Washington said the EU and other WTO members had not done enough to lower farm tariff barriers. U.S. officials also blamed Brazil and India for refusing to cut barriers on industrial imports.

U.S. Trade Representative Susan Schwab expressed her disappointment that the G-6 ministers were not able to reach an agreement when they met Sunday.

"While the United States was prepared to do more, yesterday's focus on the loopholes in market access, on the layers of loopholes, revealed that a number of developed and advanced developing countries were looking for ways to be less ambitious, to avoid making ambitious contributions," said Schwab. "But that does not mean the United States is giving up. 'Doha Lite' has never been an option for the United States; it is still not an option."

Schwab says WTO members must figure out how to move forward from this setback. Otherwise, a unique opportunity to help developing countries and to spur global economic growth will have been missed.

Many countries believe it could take anywhere from months to years to restart the negotiations. The World Bank estimates a trade deal could pump at least $96 billion into the global economy and lift 66 million people out of poverty.

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