The failure of the marathon talks in Geneva has been confirmed by Pascal Lamy, the head of the World Trade Organisation. Their aim was to liberalise global trade, and China, India and the US have been blamed for the talks’ collapse, as they failed to agree on import rules.
The result was “heartbreaking”, said Peter Mandelson, EU Trade Commissioner.
Launched in 2001 in Doha, the talks were seen as providing a cornerstone for future global trade.
Farm import rules were the main stumbling block. In the event of a drop in prices or a surge in imports, they allow countries to protect poor farmers by imposing a tariff on certain goods. But India, China and the US could not agree on the tariff threshold for such an event.
The “safeguard clause”, which protects developing nations from unrestricted imports, had been set too low, said Washington.
As trade officials gathered for a ninth day, the negotiations floundered.
“There’s no use beating around the bush, this meeting has collapsed”, Mr Lamy said.
Terms of access
“Members have simply not been able to bridge their differences.”
In order to determine “if and how” WTO members could end the stalemate, time was needed.
Initially started in 2001, the Doha development round of trade talks aimed at remedying inequality so that the developing world could benefit more from freer trade.
Yet, repeatedly the talks have collapsed, because developed and developing nations failed to agree on terms of access to each others’ markets.
While the US and EU want greater access to provide services to fast-growing emerging countries, like China and India, developing countries want greater access for their agricultural products in Europe and the US.
An end to multilateral trade agreement could be symbolised by the collapse of the Doha talks, said analysts.
Preferring to focus on their own requirements rather than a more common negotiating goal, nations could instead pursue dual agreements, with partner nations.
And recent increase in the price of food and fuel has also complicated the talks in Geneva.
Protests have been prompted in both developed and developing nations, against higher prices, which makes it harder for negotiators to reach a compromise on opening up their markets to greater competition, analysts said.
Blaming the collapse on a “collective failure”, Mr Mandelson warned that the “consequences would not be equal”, predicting that the countries that would be hit hardest are those who needed more help.
“They [the consequences] will fall disproportionately on those who are most vulnerable in the global economy, those who needed the chances, the opportunities most from a successful trade round”, he said.
Although on Friday, trade officials had struck an optimistic tone, it evaporated over the weekend amid acrimonious exchanges with the US accusing India and China of blocking progress.
They are being overly protective towards their own farmers and are failing to do enough to open their markets, said the US.
The charge has been rejected by Kamal Nath, India’s commerce minister, who said that “the US is looking at enhancing its commercial interests whereas I am looking at protecting the livelihood of farmers”.
Mr Nath has been echoed by Chen Deming, Chinese commerce minister, saying the US was “asking a price as high as heaven”.