Global trade deal looks cloudy as Doha collapses - again

By Lorraine Heller

- Last updated on GMT

Related tags: World trade organization, International trade, Us

The latest negotiations to try to build a global trade agreement
have collapsed two days ahead of schedule.

Ministers from the European Union (EU), India, Brazil and the US, who met in Potsdam, Germany, this week, were yet again unable to reach an agreement in the troubled Doha trade talks. The US and EU blamed the collapse on Brazil and India showing a "lack of flexibility"​, and not opening up their markets to Western manufactured goods. Brazil and India in turn said that the US and EU were demanding too many concessions without making enough leeway in terms of agriculture. The so-called G4 group had hoped to have agreed certain compromises, which could then become the basis for a wider negotiation among all members of the World Trade Organisation (WTO) in Geneva. This week's talks had been seen as the last real chance for a breakthrough before the WTO's deadline for a draft agreement at the end of July. But US trade representative Susan Schwab and Europe's trade commissioner Peter Mandelson said there is still hope for the Doha Round, but they stressed that they could not negotiate with themselves. Schwab stated that "unless and until there is sufficient new market access in agriculture and manufacturing and services, the Doha Round will never meet its development promise"."If you're serious about generating economic growth, you need to see market liberalization and disciplining of subsidies in the developed world, but you also need to see some measure of market opening in the developing world."​But according to the Brazilian foreign minister Celso Amorim, the negotiations broke down as "it was useless to continue discussions based on the numbers that were on the table". ​ The aim of the Doha Round, launched in November 2001, was to free global trade by cutting industrial and agricultural tariffs and by reducing farm subsidies, with specific focus on achieving concrete benefits for developing countries. However, a conclusion to the talks has proved elusive over the past six years, with the EU and the US in particular being accused by many in the developing and developed world as failing to move far enough to reduce farm support. If a basic agreement is established, it will take months for WTO number-crunchers to finalize its details, meaning that a general accord must be completed before the summer if the end-of-year deadline is to be met. If this does not happen, most negotiators believe the Round is likely to be put in cold storage until at least 2010. Few expect the US to be willing to discuss subsidy and tariff concessions during its elections in 2008, and the following year will see the Indians going to the polls. The EU food industry has consistently expressed its disappointment at the WTO's failure to achieve any agreement to the trade talks. It believes that a successful conclusion to the Round would help secure continued industry investment in Europe, push trading partners into reforming their agricultural systems and provide greater trading opportunities for food and drink manufacturers.

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