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Collapse Comes With Finger-Pointing

GENEVA (By Paul Blustein, Washington Post) July 25, 2006 — Nearly five years after setting out to revamp the rules of global trade, the World Trade Organization yesterday shelved the effort, dealing a potentially lethal blow to a deal that was supposed to boost global economic growth and help poor countries in particular.

In a meeting at the WTO's headquarters in Geneva, trade ministers from the United States, the European Union, Brazil, India, Japan and Australia said they remained hopelessly stalemated on crucial issues of how to lower barriers to commerce, with farm trade by far the most contentious problem. A barrage of recriminations ensued, as the Europeans and others blasted the United States for refusing to cut its farm subsidies more deeply, while U.S. negotiators put the onus on the E.U., India and Japan for balking at opening their markets for agricultural products.

The discord prompted Pascal Lamy, the WTO director general, to declare a "suspension" in the Doha round of trade negotiations, named for the capital of Qatar where the talks were launched in late 2001 in a push for international solidarity after the Sept. 11 attacks.

Although Lamy and the ministers said they hoped the negotiations might get back on track at some point, they put forward no timetable, and some of them acknowledged that the collapse of yesterday's meeting could seal the doom of the Doha talks.

"Today marks a big failure — whether it is a definitive failure, only time will tell," Marianne Fischer Boel, the European agriculture commissioner, said in a statement. She added that although the talks could resume eventually, "to be honest, I don't think this will happen very quickly." India's trade minister, Kamal Nath, described the talks as "between intensive care and the crematorium."

The negotiations had been promoted as a potential boon for the poor because the talks were supposed to end in a far-reaching agreement that would give developing countries more benefits from the global trading system. Poor nations have long complained that their main exports, notably agricultural goods and textiles, are subject to high import barriers in rich countries. The poor nations have also condemned the big subsidy payments that governments in wealthy nations give their farmers because those payments can spur overproduction that depresses crop prices for farmers around the world.

Advocates for the poor voiced anger yesterday that the chance for correcting such distortions appears more remote than ever.

"The once-in-a-lifetime opportunity to bring about an international trading system that is not rigged for the rich and hurting the poor has been put on ice," said Raymond C. Offenheiser, president of Oxfam America. "Five years of haggling and debating have ended in a sad display of political failure."

The talks had been in deep trouble before, notably after a conclave in Cancun, Mexico, that fell apart amid anti-globalization protests, and another meeting in Geneva several weeks ago that ended without progress. The outcome yesterday marked the first time that the talks have been formally suspended. Moreover, it came despite declarations issued at the Group of Eight summit in St. Petersburg this month by President Bush and other world leaders. They had instructed their trade ministers to go back to the negotiating table with new urgency and pledged their determination to bring the talks to a successful conclusion this year.

That end-of-year deadline is now unreachable, Lamy and the ministers said yesterday, a turn of events that is much more than just a psychological setback.

Bush's authority to negotiate trade deals expires in mid-2007, and Congress appears unlikely to extend it given rising skepticism among lawmakers toward such trade pacts. So negotiators have been rushing to strike an agreement on the main sticking points in the Doha negotiations by the end of this month at the latest, leaving barely enough time to fill in the thousands of pages of detail for an accord to be submitted to Congress next year. Now that that schedule has become inoperative, any resumption of talks may have to wait until after the 2008 U.S. presidential election.

"We do not expect to be able to use the current [negotiating authority] to enact a Doha round agreement if and when one comes together," Susan C. Schwab, the chief U.S. trade negotiator, said in a conference call with reporters.

Schwab and her counterparts said they intended to continue searching in coming months for possible ways to break the logjam, and they emphasized their continued fealty to the 149-nation WTO, the anchor of the system that has underpinned global commerce since the end of World War II. Many trade experts have voiced worries that a collapse could weaken the WTO and undermine its authority in settling disputes.

The main objective of the participants in yesterday's meeting was deflecting blame — and pointing a finger at other countries.

"The United States was unwilling to accept, or indeed to acknowledge, the flexibility being shown by others in the room and, as a result, felt unable to show any flexibility on the issue of farm subsidies," said Peter Mandelson, the European trade commissioner. Nath, the Indian minister, agreed, and said: "Everybody put something on the table except one country who said, 'We can't see anything on the table.' "

Schwab took strong issue with that account. She said she saw no willingness by other countries to lower import barriers for farmers in a meaningful way, and as a result she thought no purpose would be served in offering to cut U.S. farm subsidies more deeply.

"It became quite clear as we went around the room . . . that there was no 'there' there," Schwab said, citing the others' continued insistence in protecting "sensitive" and "special" products from tariff cuts.

She said that Lamy, after asking all of the six participants earlier this month to tell him confidentially the maximum concessions they would be willing to make, had concluded that the gaps in positions were too vast to forge an agreement. After the G-8 summit, he made another round of queries to see if negotiators' bottom-line stances had changed enough to offer hope. According to Schwab, she and Agriculture Secretary Mike Johanns made specific assurances that Washington was prepared to move significantly closer to the others.

"But what we saw, what became evident was that several of the others had not moved off of positions that they've held for the last four weeks or more," Schwab said.