World Trade Talks Collapse

After nine days of laborious negotiations, talks aimed at liberalising global agricultural trade have collapsed in Geneva.

Although there is talk of fresh discussions in September, many described the latest meeting, at the World Trade Organisation headquarters, as the last chance for the Doha trade round, launched in 2001.

The talks broke down because of a disagreement between China, India and the US over agricultural safeguards, aimed at protecting subsistence farmers in developing countries. The safeguards are a mechanism that allows poorer countries to impose a tariff on certain goods in the event of a surge in imports or a drop in prices.

China and India argued that subsistence farmers cannot compete with large-scale commodity exporters, while US negotiators insisted that the Indian and Chinese notion of a safeguard was too low and would block expansion of commodity exports.

Other big agricultural exporters, such as Australia and Brazil, tried to push the countries towards a compromise, but negotiators reached a deadlock and yesterday, WTO director-general Pascal Lamy said: "It is no use beating around the bush. This meeting has collapsed. Members have not been able to bridge their differences,"

EU trade commissioner Peter Mandelson said that the failure to reach an agreement was "a profound disappointment for the EU" and a "setback for the international trading system".

"The prosperity of all of us in the world depends on a strong, rules-based global trading system. A Doha deal would have given it a much-needed boost," he said. "We needed a Doha deal because the global economy is an uncertain place, and every bit of additional certainty, every cut and bound tariff, every strengthening of the rules and binding in of the big players is in the world's long-term interests."

Many say the collapse of the talks highlights the increasing strength of developing countries, such as China, India and Brazil, and a shift in power on the global market. Some argue that the collapse could symbolise an end to multilateral trade agreements, with countries pursuing dual agreements with other nations instead.

Lamy told journalists that the Trade Negotiations Committee would have to wait for "the dust to settle" before any decisions were made on the future of the round. "It is probably difficult to look too far into the future at this point. WTO members will need to have a sober look at if and how they bring the pieces back together," he said.

"This is certainly not going to strengthen the multilateral trading system; it will not improve the system, which has provided all its members an insurance policy against protectionism over the last 60 years.

"But I hope the system is resilient and will be able to resist the bumpy road ahead of us.

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