http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/363725/1/.html
* Trading powers reel from collapse of WTO talks*
* 30 July 2008 1020 hrs (SST)*
GENEVA: The collapse of marathon negotiations for a global trade pact left
world powers reeling on Wednesday after ministers quit emotional talks
without a deal over deadlock between India and the United States.
"It's extremely difficult to find words to express the disappointment," said
EU Commissioner Mariann Fischer-Boel in an address as top delegates filed
one by one before reporters to review the wreckage of nine days of talks.
"It is a failure with wider consequences than we have seen before," she
said, her voice breaking.
Several delegates on Tuesday hoped for further moves to salvage the
negotiating process in light of what had been accomplished in trade talks so
far. But for the moment, momentum ground to a halt.
"There is no use beating around the bush, this meeting has collapsed,
members have simply not been able to bridge their differences," the World
Trade Organization's Director-General Pascal Lamy told journalists.
Ministers had struggled for more than a week to reach consensus on subsidy
levels and import tariffs for a new deal under the WTO's Doha Round, which
has repeatedly foundered since its launch seven years ago.
"We will need to let the dust settle a bit, it's probably difficult to look
too far into the future at this point," Lamy said. "WTO members will need to
have a sober look at if and how they bring the pieces back together."
US Trade Representative Susan Schwab earlier said that hopes for a
breakthrough had been dashed.
"The package that we were able to negotiate and agree on... is not going to
carry the day," she told reporters as she left a meeting of key trading
powers, referring to an earlier breakthrough on a deal proposed by Lamy.
Delegates said negotiations stumbled on proposals for so-called SSM measures
to protect poor farmers that would have imposed a special tariff on certain
agricultural goods in the event of an import surge or price fall.
The world's economic superpower, the United States, and India, one of the
world's biggest emerging economies, were sharply divided over the SSM - the
special safeguard mechanism.
"I feel very disappointed that this had to be left unresolved in the last
miles," India's Commerce Minister Kamal Nath told reporters. "It's
unfortunate that in a developing round, the last miles we couldn't run" due
to the SSM.
India and other developing countries wanted the mechanism to kick in at a
lower import surge level than has been proposed in order to protect their
millions of poor farmers from starvation.
Others wanted it to take effect at a higher rate so as not to hurt
exporters.
Sources said after Tuesday's breakdown that the United States was stalling
for time to avoid a rift over another sticking point, cotton subsidies.
"The US cannot afford to give way on cotton, so it does not even want to go
into the issue," an Asian diplomat told AFP.
"It knows that India would not give ground on SSMs, in which case India
would be blamed in case of any collapse."
European Union Trade Commissioner Peter Mandelson said it was
"heartbreaking" that efforts collapsed due to one single element.
"Of all the failures they could have tripped up on... (the SSM) trade
restraint measure and a small gap in numbers managing to provoke this
failure is... absolutely heartbreaking," he told reporters after talks broke
down.
Mandelson said the collapse was a "collective failure."
"We worked for success, we had failure pushed upon us," he told a news
conference later. "This is a significant setback for the international
trading system."
Nath had dug in his heels over the proposed tariff thresholds, claiming the
backing of around 100 developing nations.
With both sides refusing to give way, acrimony had peaked on Monday with the
United States publicly accusing China and India of holding up progress.
"It's a truly sad day for the developing countries that had so much to gain
from the success of this round," said Fischer-Boel, who holds the
agriculture EU's portfolio at the European Commission.
Brazilian Foreign Minister Celso Amorim, a leading negotiator at the talks,
said he was "very disappointed that we were not able to close the round,"
but insisted that game was not over yet.
"We have a good package, a package that would be positive for world trade...
but especially positive for LDCs (a group of least-developed countries) and
other poor countries in Africa."
- AFP
II.
http://www.truthout.org/article/wto-talks-collapse-amidst-concerns-food-security
WTO Talks Collapse Amidst Developing Countries' Reluctance to Sacrifice
Food Security
Tuesday 29 July 2008
by: The Center for Economic and Policy Research
*Last-minute attempt to push through a WTO expansion "deal" fails.*
Washington, DC - Despite trade ministers' hopes for a last-minute deal,
World Trade Organization (WTO) negotiations collapsed yet again today, and
observers at the talks in Geneva say that the failure is not surprising,
given the reluctance of India and other developing nations to sacrifice food
security measures in the wake of the recent global spike in food prices.
Given President Bush's lame duck status, negotiators had been called to
Geneva to try to push through a last-minute deal before Bush left office.
Because negotiators need about six months after a deal on the major issues
to complete the details of the agreement, this possibility has now
evaporated.
"Given what's been on the table, no deal is better than a bad deal. A
Doha conclusion would have had major negative impacts for workers and
farmers in developing countries. The tariff cuts demanded of developing
countries would have caused massive job loss, and countries would have lost
the ability to protect farmers from dumping, further impoverishing millions
on the verge of survival," said Deborah James, Director of International
Programs for the Center for Economic and Policy Research, who has been
observing the talks in Geneva.
It is unclear why negotiations were proceeding, given the fact that the
U.S. delegation does not have a mandate to conclude negotiations, as made
clear by a letter from Senators Feingold and Byrd sent to President Bush
last week. In addition, cuts in subsidies agreed to by the U.S. are also
incompatible with the new U.S. Farm Bill passed by Congress, and over-riding
a veto by President Bush.
Many developing nations not invited to participate in the exclusive
"Green Room" meetings in Geneva this past week are likely to continue strong
opposition to a deal in the midst of a global economic downturn and
increasing concerns over food security.
At a time when many countries are seeking to reduce dependence on
troubled economies in the U.S. and Europe, and as fears of a global
recession loom, many nations are questioning the development gains to be
achieved from trade liberalization. The projected gains from the Doha Round
offer developing countries very little in potential gains. According to
World Bank modeling, developing country benefits would be just 16 percent of
total world gains, or 0.16 per cent of GDP. This works out to less than a
penny per day per capita in the developing world. Poverty reduction - which
in itself would be very limited - would reach only 2.5 million people.[1]
These projections do not include many of the costs of implementing the Doha
Round, which UNCTAD estimates to be as much as four times the projected
gains.
The Doha Round could also increase world prices for food.[2] Since most
developing countries are net food importers, the recent increase in food
prices has led some developing country governments to reconsider food
security mechanisms such as tariffs and domestic subsidies, which the WTO
seeks to reduce. A number of countries have also imposed restrictions on
exports, in response to the food crisis.
"There just hasn't been much to gain for developing countries in this
round - or for that matter, the majority of people even in the rich
countries," said CEPR Co-Director and economist, Mark Weisbrot. "The
attempts by the rich countries to reduce policy space for developing
countries in manufacturing are widely seen as 'kicking away the ladder' that
rich countries like the United States used when they were developing
countries.
"The whole process of subordinating national policy to special
commercial interests - whether in agriculture, telecommunications,
pharmaceuticals (one of the most powerful interests and gainers in the WTO),
or the financial sector - has gone way too far. Growth and development in
most countries has been hurt, and they are pushing back. In the United
States, too, rising inequality and now an economic downturn have provoked a
backlash."
Throughout the negotiations, some developing nations promoted trade
policies and objectives at odds with the Doha Round's objectives of opening
developing country markets, including commitments to food sovereignty and
defending policy space for alternative forms of economic development.
In a written statement, Bolivian president Evo Morales said that, "The
WTO negotiations have turned into a fight by developed countries to open
markets in developing countries to favor their big companies."
[1] Kevin P. Gallagher and Timothy A. Wise, "Back to the Drawing Board:
No Basis for Concluding the Doha Round of Negotiations." Research and
Information System for Developing Countries Issue Brief. No. 36, April 2008.
[2] Sandra Polaski, "Winners and Losers: Impact of the Doha Round on
Developing Countries." Carnegie Endowment for International Peace, March
2006.
--------
*The Center for Economic and Policy Research is an independent,
nonpartisan think tank that was established to promote democratic debate on
the most important economic and social issues that affect people's lives.
CEPR's Advisory Board of Economists includes Nobel Laureate economists
Robert Solow and Joseph Stiglitz; Richard Freeman, professor of economics at
Harvard University; and Eileen Appelbaum, professor and director of the
Center for Women and Work at Rutgers University.*
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