Schwab, NFTC decry breakdown of WTO talks

Another breakdown in multilateral trade talks in Geneva this week has left U.S. trade officials disappointed by the failure of the world's two emerging powers -- China and India -- to compromise on agricultural trading policies.

The New York Times proclaimed the latest collapse of the WTO's Doha talks Tuesday as a sign that the United States has less leverage than ever to impose its political will on the global economy. The growing clout of China and India has allowed trade officials there to stand firm in the face of European and North American clamor to cement a deal.

It is a massive blow to confidence in the global economy, Peter Power, spokesman for the European Commission, told the newspaper. The confidence shot in the arm that we needed badly will not now happen. The breakdown came after nine consecutive days of discussion and seven years after world leaders met in Doha, Qatar to hammer out WTO policies on agriculture, manufacturing and services. The talks came to a halt when Indian and Chinese leaders refused to budge over protecting their own farmers against the threat of imports from a more liberalized trade scenario. Some analysts suggest that China and India feel they have become powerful enough to avoid the multilateral process altogether and instead cement bilateral deals of their own.

In India, most political parties renewed calls to Trade Minister Kamal Nath to not accept a situation where the government was required to reduce subsidies to its farmers.

U.S. Trade Representative Susan Schwab said she was disappointed in the outcome, given the work that was put in over the past few days, and years.

Regrettably, our negotiations deadlocked on the scope of a safeguard mechanism to remedy surges in imported agricultural products, she said in a statement. Any safeguard mechanism must distinguish between the legitimate need to address exceptional situations involving sudden and extreme import surges and a mechanism that can be abused. In the face of a global food price crisis, we simply could not agree to a result that would raise more barriers to world food trade.

Certain members sought increased flexibilities that would have allowed them to apply tariffs that, in some cases, would exceed their current WTO bindings. This would have moved the global trading system backwards -- exactly contrary to the purposes of a negotiation intended to expand trade and economic growth.

The National Foreign Trade Council also voiced its disappointment with the failure of the talks. 

After seven long years of negotiations, we certainly hoped that a breakthrough on negotiating modalities and a successful signaling conference on services liberalization this week would lay the groundwork for an ambitious conclusion of the Round," said NFTC President Bill Reinsch. In the Round, the international community had a chance to come together to reject the protectionism and isolationism that seems to be creeping slow but steady across the globe, and stand together to achieve a universal goal larger than the ambitions of each individual country. It is unfortunate that not all countries at the negotiating table were committed to such an outcome.

NFTC Senior Vice President Catherine Bennett, who just returned from Geneva, said that not all countries appeared willing to make sacrifices.

Just last week it seemed that there was a basis for optimism at the Ministerial gathering, Bennett said. Ministers of the G-7 countries had come together to keep the talks intact and were working with (WTO) Director General (Pascal) Lamy to advance positions with a fair balance of demands and concessions. While the U.S. government agreed to move forward on this basis, it now seems that not all countries had the same level of commitment to the process. Unfortunately, while the spirit of cooperation and compromise had a positive effect on some, others were not moved. It is truly an opportunity lost.

Schwab said that progress was made, and the offers made by the United States during the latest talks would stand.

There should be no question, we made important progress," she said. "Even today, five of the seven countries in the leadership group were prepared to accept the Friday proposal by Director General Lamy. We gained insights into what members are prepared to offer on services at the signaling conference this weekend, greater clarity on what a modalities package might look like, and saw a constructive attitude in attempting to solve many other issues that have been preventing progress in the negotiations.

To ensure that the advances we made this week are not lost, the United States will continue to stand by our current offers, but we maintain that they are still contingent on others coming forward with ambitious offers that will create new market access. So far, that ambition is not evident.

Source: American Shipper