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World trade talks collapse

Latest update : 2008-07-30

After more than a week of bitter wrangling, WTO talks on a new world trade pact broke down in Geneva, largely due a disagreement between the US and India over agricultural import tariff measures. (Picture: Susan Schwab, US Trade Representative).

After nine days of negotiations between the principal members of the World Trade Organization (WTO) in Geneva, the latest Doha Round talks have failed. The members had hoped the talks would lead to an agreement on the liberalisation of world trade.


According to sources close to the negotiations, the United States and India were not able to accept the compromise proposals on safeguard mechanism measures that can impose agricultural tariffs, thus resulting in the impasse.


The delegates from the principal member countries will now have to step back and assess the breakdown of the trade negotiations.  WTO Director General Pascal Lamy has addressed all 153 member countries about the latest failed talks and hopes to revive the Doha Round. The Doha Round, launched in 2001 shortly after the September 11 attacks, was originally expected to end in 2004.


The safeguard mechanism measures that were at the heart of the collapse would allow a country to apply exceptional tariffs on agricultural goods in the event of an import surge or price fall. The measures, called SSM measures, are intended to protect poor farmers. Delhi, backed by other developing countries, wanted the threshold for imposing SSM measures to be placed rather low but Washington opposed it, with the belief that the measures would become a protectionist tool.


According to Jean-Bernard Cadier, international relations specialist at FRANCE 24, “the negotiations stumbled as a result of the protection the Indian peasants and the Chinese receive during difficult times, as there is large-scale importation. The question is if the Indian and Chinese governments have the right to increase custom duties and by what amount.”


If the disagreement between India and the US contributed to the breakdown, the position of the EU also posed a problem, according to Stephanie Antoine, FRANCE 24’s economic specialist. “Certain European countries also wanted to preserve their interests against a greater liberalisation of trade,” she added. Indeed, nine European countries including Italy joined France in opposing the measure to lower customs duties on agricultural products proposed by Peter Mandelson, the European delegate to the WTO.


According to Christian de Boissieu, deputy chair of the Council of Economic Analysis, the safeguard clause is “interpreted differently by all” and is not the only reason the talks failed, because “there are multiple causes.”


He explained on FRANCE 24 that questions arose, not only between North-South as expected but also between “South-South, such as the debate between Thailand and India, or that between India and China around cotton” and he pointed out that these debates “are as important as the North-South questions.” As a result “the negotiations went in all directions.”


FRANCE 24’s Jean-Bernard Cadier believes that today “we are likely to face a time of protectionism the world has never known. From now on, nothing prevents a country from being hyper-protected.”


As he left the meeting in Geneva, New Zealand Trade Minister Phil Goff told the press: "We won't see a conclusion to the round this year."


The Doha Round already faced failure in September 2003 at the Cancun (Mexico) conference, which resulted in a North-South confrontation about agricultural regulations.


Date created : 2008-07-30