Last Updated: Tue Nov 02, 2010 12:22 pm (KSA) 09:22 am (GMT)

WTO talks collapse over protecting poor farmers

Indian Trade Minister Kamal Nath speaks to reporters as he leaves WTO headquarters in Geneva
Indian Trade Minister Kamal Nath speaks to reporters as he leaves WTO headquarters in Geneva

Marathon talks for a new global trade deal collapsed on Tuesday after a clash over agriculture between the United States, the world's biggest economy, and emerging heavyweights.

The breakdown came on the ninth day as the United States and India failed to find a compromise on measures intended to help poor countries protect their farmers against import surges, a diplomat said.

"We were so close to getting this done," U.S. Trade Representative Susan Schwab told reporters at World Trade Organization headquarters.

"The U.S. remains committed to the Doha round. This is not a time to talk about a round collapsing," said Schwab, who looked frustrated and distressed. "The U.S. commitments remain on the table, awaiting reciprocal responses."

Safeguard mechanism

However failure of the talks to find agreement on the core agriculture and industrial goods chapters of the Doha trade round could delay any final accord on trade liberalization for several more years.

Washington had opposed a push from India, China and Indonesia to secure measures to protect their farmers if faced with sudden surges of cheap farm imports. With both sides refusing to give way, acrimony had grown on Monday with the United States publicly accusing India and China of holding up progress.

Some developing countries, including India, wanted the so-called special safeguard 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.

The impasse derailed substantial progress that had been made on other agricultural, manufacturing and services trade issues. Ministers had struggled for more than a week to close differences on subsidies and import tariffs to forge a new deal under the WTO's Doha Round, launched seven years ago.

Uncertain future

As failure looked likely, New Zealand's trade minister, Phil Goff, held out hope for Doha talks continuing at a later date. "I hope ... that what we've achieved this week can be used at least to build on as a foundation for the future," he said.

But as he left the meeting Goff confirmed that talks had collapsed. "We won't see a conclusion to the round this year."

The negotiations for a global deal trade have lurched from crisis to crisis and risk further years of delay without a breakthrough now because of the U.S. presidential election in November and other factors.

Economists said the failure was a blow.

"I think it's a strong negative and it really follows on the heels of a retreat from globalization and trade that were really the building blocks for the prosperity of the last several decades. It's scary," said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut.

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