Better Touch Better Business
WTO Doha Round talks break down
The United States and India were both reluctant to back down on a deal to help poor farmers deal with the threat of a flood of imported goods, and years of talks on a new deal on global trade collapsed on Tuesday. Brazilian Foreign Minister Celso Amorim said, 'Aliens may not believe that after we have made so much progress, we cannot complete negotiations.' EU Trade Commissioner Peter Mandelson told reporters sadly, 'This is a very painful time. Failure, it set the global economy backwards at a time when we really needed good news.' He added that developing countries would be the most affected group. The breakdown of the talks, while unlikely to have an immediate impact, will at least hurt business sentiment, possibly fuel protectionist sentiment and encourage more bilateral deals. It also raises questions about how the world should deal with complex issues such as climate change and the food crisis. But WTO director-general Pascal Lamy said ministers hoped he could restart negotiations soon and that he would not 'disarm'. Last week, he summoned ministers from 35 major WTO members to Geneva to seek a breakthrough in the Doha round of negotiations. The Doha Round negotiations were launched at the end of 2001 and have been going on for seven years. The round aims to revive the global economy, help developing countries develop exports and lift themselves out of poverty. Lamy said the ministers had agreed on 80%-85% of the stated targets in the core areas of agriculture and industrial products. But it has proved extremely difficult to resolve differences between rich and poor countries and bridge the gap between exporting and importing countries. The Doha round of talks stalled on Monday and Tuesday over the 'special safeguard mechanism'. The mechanism is designed to help poor countries protect their farmers from a surge in imports. Developing countries such as India and Indonesia say they need the mechanism to protect the economic interests of millions of farmers in the country. The United States, on the other hand, fears that its agriculture will lose new markets after slashing agricultural subsidies. U.S. Trade Representative Susan Schwab said the U.S. supports continued negotiations. However, it is still up in the air whether the talks will resume. Brazilian Foreign Minister Amorim said the process would take 3-4 years. Mandelson said there is no real opportunity to address the core issues for the foreseeable future. Next year, the United States will welcome a new president, and the European Commission will also be re-elected. U.S. Democratic presidential candidate Barack Obama has said that trade negotiations should include labor and environmental standards. While ministers have said they will liberalize trade, fears persist that a breakdown in talks on Tuesday would spark protectionist sentiments.