EU 'heart-broken' over trade talks collapse

LEIGH PHILLIPS

30.07.2008 @ 09:28 CET

Global trade talks have collapsed as divisions between the US and India over emergency protections for poor farmers proved insurmountable.

The so-called Doha Round of World Trade Organisation talks, which had limped into their second week of what had widely been described as "gruelling" negotiations, were derailed late on Tuesday (29 July) due to disagreement between the US and China and India over a "special safeguard mechanism" that would allow developing countries to temporarily protect their farmers from sudden surges in imports by raising tariffs.

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The US blamed the two countries for rejecting a compromise on the mechanism devised by WTO secretary-general Pascal Lamy and further developed by negotiators over the weekend.

The special safeguard mechanism has long been a key demand of the G33, a group of developing countries including China, India, Nigeria, Indonesia and Turkey.

European Union trade commissioner Peter Mandelson warned that any world trade agreement was not likely any time soon.

"I have to say...in all honesty, I don't think there's any realistic chance of modalities being agreed this year or in the foreseeable future," said the commissioner, speaking to reporters.

Mr Mandelson called the collapse "heart-breaking" and a "collective failure," saying he did not want to point the finger in any particular direction.

However, he did have strong words for a bill recently passed by the US Congress offering $289 billion to the American farm sector over five years, far above the $15 billion maximum a year that was on the negotiating table in Geneva. He called the US legislation "one of the most reactionary farm bills in the history of the US," according to the Financial Times.

European Commission President Jose Manuel Barroso also lamented the break-up of talks: "The failure to reach an agreement in Geneva is a profound disappointment for the EU."

"We did absolutely everything we could to reconcile the different views and find compromise," he said.

"The present failure does not remove the case for progress, most obviously for the benefit of developing countries," he added, saying that he would now recommend to EU member states that they make preparations for "re-engagement" with "major partners" at a later date.

China dishes out blame

China, for its part, blamed wealthier countries for protecting their agricultural sectors while demanding poor countries cut tariffs on industrial goods and liberalise their financial services markets.

"This selfishness and short-sighted behaviour has directly caused the failure of this WTO ministerial meeting, which will have a number of serious consequences," read a commentary in state news agency Xinhua.

US trade representative Susan Schwab described developing country demands that their farmers be protected "unconscionable" in the face of the food crisis.

"It's ironic that the debate came down to how much and how fast could nations raise their barriers to imports of food," she said.

'Welcome respite'

However, Stop The New Round Coalition, a grouping of 49 third world development NGOs, advocacy groups and trade unions, welcomed the collapse, calling it "a welcome respite for poor countries."

"The aggressive push by the rich countries led by the US and the EU for more trade liberalisation at a time of global crises of food and fuel was too blatant for developing countries to stomach," the group, which included the Hong Kong and Korean Confederations of Trade Unions, Jubilee South Africa and Attac Morocco, said in a statement.

"Now is the time to seriously think outside the WTO-box and move towards an alternative global trading system that puts poor peoples' interests at the centre," it added.