July 31, 2008


Rising clout of emerging markets scuttles WTO talks


The Doha round of the WTO talks, seven years in the making, look set to drag on as once again the 153 countries involved failed to reach an agreement. 


Discussions, held in Geneva, Switzerland, were suspended yesterday evening as it became clear that talks would fail as key countries such as the US, China, India and the EU failed to come to an agreement on agricultural issues. Ministers had struggled for more than a week to reach a consensus on a trade pact.


Emerging markets like India, Brazil and China were hoping the US and the EU would lower their subsidies for own agriculture production and lower tariffs.


The US, however, could not agree with the emerging Asian countries on farm import rules. These would have allowed the countries to protect poor farmers by imposing a tariff on certain goods in the event of a drop in prices or a surge in imports.


India, China and the US could not agree on the tariff threshold for such an event Washington said that the 'safeguard clause' protecting developing nations from unrestricted imports had been set too low.


Countries like Paraguay and Uruguay said that the proposals on the table would allow some major developing economies to close off their markets to other developing world agricultural exporters, like them - interrupting normal trade flows.


China said the collapse of the talks was a serious setback for the world economy, while the EU described it as 'heartbreaking'.


The WTO chief, Pascal Lamy, said he would not abandon his efforts to find an agreement.

USGC President and CEO Ken Hobbie released a statement saying that although the USGC was disappointed in the WTO's inability to reach an agreement in the Doha Round trade talks, the US negotiators were to be commended in refusing to accept a trade deal that would have worked against US export interests.
He further added that the USGC support US Trade Representative Susan Schwab's stance on the rules for Special Safeguard Mechanisms (SSM). Hobbie said the proposed deal on SSM would have allowed developing countries a virtually unchecked ability to close their markets to any further growth in trade in agricultural products almost at will.

France meanwhile blamed big emerging nations for the failure of the talks, but said the collapse of talks in Geneva was "not the end of the world."
Two French ministers also questioned whether the framework of the WTO negotiations was the most appropriate for handling all trade-opening issues, and notably agriculture, at once.
French Agriculture Minister Michel Barnier, a former European Union Commissioner, said: "There had to be a balanced agreement" and big emerging economies had not made the necessary "efforts."
Barnier told French RTL radio that the EU was prepared to reduce duties on products which enter Europe by 54.0 percent and suppress EU support for exports on condition that it was reciprocated.
Barnier also questioned whether the WTO was the best forum for discussion of matters on agriculture and called for alternative ways in which issues of food and agriculture  could be discussed adding that the talks risk neglecting the poorest countries.
He said "the poorest countries have been progressively forgotten."
The new factor was that "the big emerging countries such as China, India and Brazil are capable of facing up to the United States and Europe," he added.
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