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TRADE: Noisy Collapse for Doha Round

Gustavo Capdevila

GENEVA, Jul 24 2006 (IPS) - The breakdown in talks among the leading actors in the World Trade Organisation (WTO) triggered the downfall of the Doha Round Monday, nearly five years after the multilateral trade negotiations were launched – and the European Union and developing countries blamed the United States.

The final rift between the ministers of the Group of Six (G6), made up of the United States, the European Union, Australia, Brazil, India and Japan, was sparked by the question of agriculture – the same issue that has made the climate of the talks tense from the very start.

The EU, especially, but also India and Brazil – the coordinators of the Group of 20 (G20) developing countries that share common agricultural interests – held the United States responsible for the failure of the talks because of its refusal to cut the subsidies shelled out to U.S. farmers.

EU Trade Commissioner Peter Mandelson said “the United States was unwilling to accept, or indeed to acknowledge the flexibility being shown by others and, as a result, felt unable to show any flexibility on the issue of farm subsidies.”

For his part, Brazilian Foreign Minister Celso Amorim said “I don’t want to find culprits, but one has to recognise that the area (in which) we were lagging behind was domestic support.”

“If leadership was shown on domestic support, there was a strong possibility everything would fall into place, with one or two points here or there,” said the Brazilian negotiator.

Indian Minister of Commerce and Industry Kamal Nath said the EU “did make a movement” by modifying its proposal on farm import tariffs. “Everyone put something on the table except for one country which said it could not see anything on the table,” he stated, alluding to the United States.

The Indian minister provided a different angle to the causes of the fiasco, however.

Nath said “This is a significant failure because it’s not a failure of a gap of numbers, the failure is inherently because of the gap in mind set. And until and unless we are able to bridge this gapàthere seems to be no future for this round. ”

The minister said that while completing the round of talks is important, the content of the talks, “which must demonstrate new opportunities for developing countries,” is just as important.

First and foremost, he maintained, the negotiations have to demonstrate market access for developing countries in industrialised countries.

“This round is not to perpetuate the structural flaws in global trade, especially in agriculture,” he declared.

Echoing the demands of non-governmental organisations that have criticised the talks, Nath said “This round is not to open up markets in developing countries, displacing millions of subsistence farmers to enable developed countries to have market access for their subsidised agriculture products.”

WTO Director-General Pascal Lamy said the situation is “very serious,” and announced that on Thursday he will recommend that the organisation’s 149 member states suspend the negotiations, which were scheduled to end in December, after a two-year delay.

The possible resumption of the Doha Round has not yet been seriously discussed by the delegates. “There is no possibility of this happening around the corner,” said Mandelson.

Lamy reflected the views of the majority of the negotiators when he said that “I cannot hide the truth: we are in dire straits

To stress the gravity of the situation, Amorim pointed out that “The Doha Agenda is not limited to trade issues. It touches upon issues like the fight against hunger and poverty, political governance, world security, and economic development with social justice.”

Amorim suggested that, because these elements are essential to peace, which transcends the sphere of the WTO itself and is of direct concern to other bodies, the United Nations in particular, “We may want to consider the possibility of engaging Secretary General Kofi Annan in the gathering of political momentum to overcome the challenges we now face.”

He told IPS that although he was not interested in shifting the burden to Annan, “This does affect the credibility of the multilateral system and our capacity to resolve these questions.”

“Something is wrong” if the G6 heads of state and government meeting in St. Petersburg last week were given the mandate to quickly reach an agreement and “after just one day in Geneva we admit that an accord is impossible,” said the Brazilian minister.

“When I talk about Annan, I’m referring more to his role as a leader who can talk to other leaders and tell them: ‘friends, let’s throw a little more political vision into this, rather than just a few tons of meat and other products’,” said Amorim.